Allied Asia Holdings (Aust) Pty Ltd v Australian Securities & Investments Commission
[2002] FCA 566
•29 APRIL 2002
FEDERAL COURT OF AUSTRALIA
Allied Asia Holdings (Aust) Pty Ltd v Australian
Securities & Investments Commission [2002] FCA 566INTERLOCUTORY INJUNCTION –application to restrain respondent from publishing press release publicising decision refusing to renew applicant’s registration as general insurance broker – whether applicant’s right to apply for stay of decision under the Administrative Appeals Tribunal Act 1975 (Cth) supports the grant of an interlocutory injunction – decision required by statute to be published in the Gazette – remedy of self-help available
Insurance (Agents and Brokers) Act 1984 (Cth) s 21(5)
Administrative Appeals Tribunal Act 1975 (Cth) s 41(2)Australian Broadcasting Corporation v LenahGame Meats Pty Ltd (2001) 185 ALR 1 at [105] applied
ALLIED ASIA HOLDINGS (AUST) PTY LTD v AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
V 245 OF 2002HEEREY J
29 APRIL 2002
MELBOURNE
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
V245 OF 2002
BETWEEN:
ALLIED ASIA HOLDINGS (AUST) PTY LTD
ACN 068 501 799
APPLICANTAND:
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
RESPONDENTJUDGE:
HEEREY J
DATE OF ORDER:
29 APRIL 2002
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
1.The application is dismissed.
2.The applicant pay the costs of the respondent.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
V245 OF 2002
BETWEEN:
ALLIED ASIA HOLDINGS (AUST) PTY LTD
ACN 068 501 799
APPLICANTAND:
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
RESPONDENT
JUDGE:
HEEREY J
DATE:
29 APRIL 2002
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
The applicant Allied Asia Holdings (Aust) Pty Ltd has since 1995 carried on business as a general insurance broker trading as Allied Asia Wholesale Insurance Brokers and Allied Asia Underwriting Agencies. On 26 April 2002 the respondent, the Australian Securities and Investments Commission (the Commission) by its delegate made a decision under s 21(2)(c) of the Insurance (Agents and Brokers) Act 1984 (Cth) (the IAB Act) to refuse to renew the applicant’s registration as a general insurance broker. On the same day the Commission notified the applicant’s solicitors by letter that it intended to publish a press release recording this fact and the findings made by the delegate.
The applicant brings an application under s 39B of the Judiciary Act 1903 (Cth) and ss 19 and 23 of the Federal Court of Australia Act 1976 (Cth) (the FCA Act) seeking interlocutory and permanent injunctive relief to restrain the Commission from publishing the press release until the decision to refuse to refuse renewal of the registration has been reviewed by the Administrative Appeals Tribunal (the AAT). This application is opposed by the Commission.
The relevant application for renewal was lodged by the applicant with the Commission on 11 July 2001. There were various dealings between the Commission and the applicant which are not relevant for present purposes, except that there was an issue about the applicant placing insurance with an overseas insurer, which was said not to be incorporated or registered. The Commission published a press release as to this. The applicant complained about the press release and a second press release was issued by the Commission. The merits of that dispute are not relevant. The applicant only says that it is an illustration of how press releases issued by the Commission can circulate within the insurance industry and thus have harmful effects on the applicant’s business.
A hearing was conducted by a delegate of the Commission on 10 April 2002. The applicant was represented by solicitors and counsel. The findings of the delegate make some serious adverse findings against the applicant. These are reflected to some extent in the terms of the proposed press release, which it will be now convenient to set out in full:
“ASIC REFUSES TO RENEW MELBOURNE INSURANCE
BROKERS REGISTRATIONThe Australian Securities and Investments Commission (ASIC) has refused to renew the registration of Allied Asia Holdings (Aust) Pty Ltd (Allied Asia), a Melbourne-based insurance broker specialising in general insurance, including public liability policies with overseas insurance companies.
ASIC determined that it was not appropriate to renew Allied Asia’s registration as an insurance broker after finding that Allied Asia had failed to discharge the ordinary obligations of an insurance intermediary.
ASIC also found that Allied Asia had acted in a false and misleading manner in dealing with its clients.
Under the Insurance (Agents and Brokers) Act, an insurance broker is required to disclose brokerage and any additional fees or charges to its clients.
ASIC found that Allied Asia arranged policies for clients after increasing the premium quoted to Allied Asia by the insurer. The increased premium was charged to clients without the knowledge or consent of the clients or of the insurer that issued the policies. Allied Asia retained the difference in the premium quoted by the insurer and the premium paid by the client, in addition to the commission it was entitled to receive from the insurance company.
Allied Asia also failed to lodge audited accounts for the financial year ended 30 June 2001, and it failed to lodge audited accounts within the extended timeframes for the years ended 20 June 2000 and 30 June 1999. Under the Insurance (Agents and Brokers) Act an insurance broker is also required to lodge annual audited accounts with ASIC.
Allied Asia has the right to seek a review of ASIC’s decision before the Administrative Appeals Tribunal”.
As counsel for the Commission observed, the press release is a somewhat watered-down summary of the findings. For example, in relation to the failure to lodge audited accounts, the actual finding of the delegate was that the applicant had “seriously, recklessly and repeatedly breached the ordinary obligation to exercise reasonable skill and care in relation to carrying out the business of an insurance intermediary, namely to lodge the audited accounts within the time required by the act”.
The applicant by a letter dated 26 April 2002 stated that if the Commission proposed to issue the press release, application would be made to the Federal Court for an injunction. The basis of the application as set out in the letter were to be as follows:
“1. ASIC’s decision is pending review by the AAT;
2.such a press release will have a catastrophic effect on AAH’s business;
3.such a press release is likely to result in Philippine Pryce Assurance Company reconsidering its decision to effect cover through AAH in Australia thereby placing at risk the cover of approimately 300 insureds;
4.such a press release will compound and aggravate the damage caused to AAH’s business by ASIC’s earlier misleading press releases; and
5.the public interest will not be compromised by delaying the issue of a press release by ASIC until the AAT’s review of ASIC’s decision has been completed.”
The applicant is essentially a wholesale broker, in the sense that its clients are other brokers, rather than companies and individual members of the public. It has some 225 clients and a premium income of about $4.5 million per annum, which I was told would result in commission revenue of approximately $2 million.
Turning to the issue of jurisdiction, the High Court has recently emphasised that interlocutory injunctions must be linked to some legal or equitable cause of action. In Australian Broadcasting Corporation v LenahGame Meats Pty Ltd (2001) 185 ALR 1, at [105], Gummow and Hayne JJ, discussed the statutory power of the Supreme Court of Tasmania to grant interlocutory injunctions in cases in which it appeared to the court to be just and/or convenient to do so, which is similar to the power conferred on the Federal Court by s 23 of the FCA Act. Their Honours noted that power was “not at large” and said:
“The statute did not confer on the Court power to make an order on the application of Lenah other than in protection of some legal or equitable right of Lenah which the Court might enforce by final judgment.”
Gaudron J at [58] agreed with the judgment of Gummow and Hayne JJ.
The material before me does not raise a serious issue to be tried in relation to any private law cause of action. It is not contended that the proposed press release is untrue, misleading or deceptive, or otherwise unlawful. (It would no doubt be defamatory, but subject to defences including justification, fair comment and qualified privilege. The application’s submissions did not refer to any proposed cause of action in defamation.) If there is any jurisdiction at all, it could only be founded on an argument that the right of the applicant to apply for a stay of the decision under s 41(2) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act) pending an appeal to the AAT could support the grant of an injunction.
Assuming, without deciding, that jurisdiction could be founded on such a basis, there are some serious problems in the applicant's path. First, there is no material to suggest that there are any reasonable prospects of success before the AAT. True it is the appeal would be by way of rehearing, but notwithstanding the specific and adverse findings of the delegate referred to in the proposed press release, there is no material whatsoever advanced to suggest that the applicant might do any better before the AAT.
Secondly, s 41(2) of the AAT Act gives the AAT power to
“[m]ake such order or orders staying or otherwise affecting the operation or implementation of the decision ... for the purpose of securing the effectiveness of the hearing and determination of the application for review.”
It is difficult to see conceptually how that jurisdiction would extend to making a positive order for the renewal of registration.
Thirdly, there is no proper material before me as to when an application for a stay might be made to the AAT, when such an application might be heard and the prospects of success. I do not think I should proceed on the basis that a stay would be automatic once an appeal had been filed. The Commission would have the right to object to the granting of the stay: see s 41(4)(a) of the AAT Act.
I turn now to some matters which are more of a discretionary nature, and which also support a conclusion that the injunction sought should not be granted. First, it needs to be kept in mind that what I am concerned with is not the registration status or otherwise of the applicant, but the giving of information about the fact that, as from last Friday, 26 April, it has not been registered. The letter from the applicant’s solicitors argues in point number 3 that the proposed press release would be likely to result in the named insurance company reconsidering its decision to effect cover, thereby placing at risk the cover of approximately 300 insureds.
The reasonable inference is that if an injunction is granted and the press release not issued, the applicant is not going to tell the Philippine Pryce Assurance Company or its insureds of the fact of its registration being refused. In other words, an injunction would aid non-disclosure.
Further, there is the statutory obligation imposed on the Commission by s 21(5) of the IAB Act, which provides:
If ASIC:
(a) …
(b) …(c)refuses to renew the registration of an applicant;
(d)…
ASIC must publish notice of it in the Gazette.
It would seem pointless to issue an injunction if the same result would follow by the publication of notice of refusal in the Gazette. Section 21(5) appears to me to be in quite clearly mandatory terms, and I do not see how it could be affected by the grant by the AAT of any stay, which, after all, could only affect the operation or implementation of the decision to refuse, not the fact that that decision has been made.
Finally, there is a remedy of self-help available to the applicant. As already mentioned, its client list is reasonably confined and known to it. It is open to the applicant to put forward to its clients, or more generally, if it sees fit, reasons why it would be successful in an AAT appeal and why the findings of the Commission are wrong.
So for those reasons, the application is dismissed. The applicant must pay the Commission’s costs.
I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. Associate:
Dated: 6 May 2002
Counsel for the Applicant: Mr C J Oxley Solicitor for the Applicant: Minter Ellison Counsel for the Respondent: Mr R Attiwill Solicitor for the Respondent: Self represented Date of Hearing: 29 April 2002 Date of Judgment: 29 April 2002
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