Callychurn and Australian Securities and Investments Commission
[2015] AATA 726
•18 September 2015
Callychurn and Australian Securities and Investments Commission [2015] AATA 726 (18 September 2015)
Division
Taxation & Commercial Division
File Number
2015/1419
Re
Meenakshi Callychurn
APPLICANT
And
Australian Securities and Investments Commission
RESPONDENT
File Number
2015/1420
Re
Unique Mortgage Services Pty Ltd
APPLICANT
And
Australian Securities and Investments Commission
RESPONDENT
DECISION
Tribunal Prof R Deutsch, Deputy President
Date 18 September 2015 Place Sydney The application to have Deputy President Deutsch recuse himself is refused.
...........................[sgd].............................................
Prof R Deutsch, Deputy President
CATCHWORDS
PRACTICE AND PROCEDURE – Application for recusal on grounds of apprehended bias – stay and substantive applications heard consecutively on same day – consideration of prospects of success in oral decision refusing stay – common law principles of natural justice applied – whether failure to accord procedural fairness – whether pre-determination of substantive issues – application refused
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth) ss 2A, 19D, 21A (repealed)
CASES
Andelman v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs (2011) 121 ALD 242
Re Kowalski and Repatriation Commission [2009] AATA 807
Re Mellor and Australian Postal Corporation [2010] AATA 288
Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337
Minogue v Human Rights and Equal Opportunity Commission (1999) 84 FCR 438
Palmer Tube Mills (Aust) Pty Ltd v Semi Semi [1998] 4 VR 439 at 452Leon Holdings Pty Ltd v O’Donnell (2009) 25 VR 569
REASONS FOR DECISION
Prof R Deutsch, Deputy President
18 September 2015
BACKGROUND TO THIS APPLICATION
Under sections 80 and 81 of the National Consumer Credit Protection Act 2009 (Cth) (“the Act”) the Respondent made a banning order prohibiting Mrs Meenakshi Callychurn from engaging in credit activities for a period of five years.
Under section 55 of the Act, the Respondent cancelled the Australian credit licence held by a related company, Unique Mortgage Services Pty Ltd (“UMS”).
The Applicants sought review of these decisions with this Tribunal. Mrs Callychurn and UMS also applied under section 41(2) of the Administrative Appeals Tribunal Act1975 (Cth) (“the AAT Act”) for a stay of these decisions.
On 2 June 2015 I presided over both an interlocutory hearing of the stay applications and a substantive hearing of the reviewable decisions outlined above.
I heard these two proceedings together on the same day. This procedure, which was perhaps somewhat unusual, was adopted with the consent of both parties.
Mrs Callychurn advised at the beginning of the hearing that the Applicants no longer had legal representation but that the solicitor previously acting, Ms Willis, was available and would, if permitted by the Tribunal to do so, provide some assistance to the Applicants.
The Tribunal enquired of the Respondent’s counsel whether he had any issues with Ms Willis being involved in this way and he indicated that he did not.
Ms Willis remained at Ms Callychurn’s side throughout the hearing and appeared to provide input into the running of the case. The exact nature and extent of Ms Willis’ input is not known to the Tribunal.
Being conscious of the urgency that surrounded the stay application, I reviewed the relevant material and delivered an oral decision on the stay application only on 18 June 2015. Written reasons were subsequently provided on 5 August 2015.
I declined to grant the stay after having had regard to the generally accepted principles outlined by Downes J in Re Scott and ASIC [2009] AATA 798 regarding matters which are to be properly taken into account. In reaching my conclusion, I applied these principles to the circumstances of this particular case.
One such factor was the Applicants’ prospects of success in the determination of the substantive applications for review. In that regard I made the following statement:
“Without seeking in any way to conclude the matter at this stage, it is my firm belief that the case for a banning order of some duration in respect of Mrs Callychurn and the cancellation of the licence held by UMS is substantial”.
Following my oral decision in regards to the stay, on 24 June 2015 Mrs Callychurn made a request for me to “recuse [myself] from determining the matters before the Tribunal”. The request was made pursuant to the former section 21A of the AAT Act. In accordance with the proper procedures outlined in this provision, I sought submissions from both parties in regards to this request and referred the matter to the President of this Tribunal. By letter to the parties dated 13 August 2015, the President declined to take the requested action and made clear that he would not intervene so as to require a reconstituted Tribunal.
Mrs Callychurn has now made an application to this Tribunal to have me recuse myself largely, as I understand her submissions, on the ground of apprehended bias. More specifically, I understand Mrs Callychurn to be saying that:
·I failed to provide procedural fairness in the conduct of the hearing; and
·I have pre-determined the substantive matters and not taken into account all of the Applicants’ submissions.
I will now deal with all these matters.
GENERAL PRINCIPLES
As outlined above at [11], the application seeking my recusal was initially made under the former section 21A of the AAT Act. Although that section was repealed and replaced with section 19D prior to the determination of the recusal application, in declining to action the Applicants’ request the President noted that the amendments were not of any consequence to the general approach taken in determining applications based on assertions of apprehended bias.
It is clear from the decided case law that an application for reconstitution based largely on the alleged bias of the member constituting the Tribunal is not a matter of public importance such as to invoke the operation of the former section 21A: Andelman v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs (2011) 121 ALD 242; Re Kowalski and Repatriation Commission [2009] AATA 807; Re Mellor and Australian Postal Corporation [2010] AATA 288.
Instead, the question of recusal on the grounds of actual or apprehended bias is a matter to be dealt with by the decision maker at first instance in accordance with common law principles of natural justice: Andelman at [30]. Hence, Mrs Callychurn was advised that the appropriate course was to make an application for recusal to me personally as the member constituted to determine the matter.
As indicated by the High Court in Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at [6], in determining an application for recusal on the grounds of apprehended bias:
“the governing principle is that …….. a judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide”.
As can be seen from the discussion below, I take the view that a fair-minded lay observer could not reach this conclusion. I have gone to considerable lengths to ensure that the Applicants have been accorded procedural fairness. I have consciously avoided pre-determining the matter even though I was called upon by necessity to give a preliminary assessment of the prospects of success on the substantive application in considering the stay application.
ALLEGED FAILURE TO PROVIDE PROCEDURAL FAIRNESS
The Applicants’ written submissions indicate Mrs Callychurn holds some concerns as to the way in which I conducted the hearing in this matter.
The appearance for the Applicants at the stay and substantive hearings was complicated. The Applicants appeared to be self-represented by Mrs Callychurn in the sense that she advised the Tribunal at the outset that the solicitor on record was no longer appearing as such in the proceedings. Mrs Callychurn then advised the Tribunal that the same solicitor, Ms Willis, would remain at her side throughout the proceedings so as to assist her.
This was somewhat of an unusual protocol to follow but after some discussion and consideration, I decided that for reasons of procedural fairness I would allow Ms Willis to remain and assist in the way that had been suggested. Counsel for the Respondent raised no objection to this course of action and accordingly the matter proceeded on that basis. It remains my view that this was the appropriate course to follow so as to minimise any disadvantage that would otherwise accrue to the Applicant in being self-represented: Minogue v Human Rights and Equal Opportunity Commission (1999) 84 FCR 438 at [26] - [29].
I invited Mrs Callychurn to open and she did so with what began as an opening address but quickly turned into a submission of evidence from the bar table. Apart from being inappropriate in terms of process, this course of action suffered from the defect that it was effectively evidence being given otherwise than under oath or by way of affirmation. I nonetheless allowed this to continue even though some of the evidence went beyond the matters raised in Mrs Callychurn’s sworn affidavit.
This was also the case with Ms Callychurn’s closing address which similarly opened up new lines of evidence. Again in the interests of allowing Ms Callychurn a fair hearing, I gave her considerable latitude in this respect, even despite some objection from counsel for the Respondent.
Mrs Callychurn also indicated during cross-examination that she had sought to explain her position fully in her affidavit: see Transcript, 2 June 2015, p 24.
Ms Callychurn now argues that I should have informed her that at the end of her cross-examination she could rebut, clarify or elucidate anything that was said during the cross-examination (see ‘Application pursuant to Administrative Appeals Tribunal Act 1975, s 21A’ at [11]) and not merely have asked her whether she wished to add to anything that was said in cross-examination.
A number of matters are relevant to this suggestion.
First, Ms Willis was there to assist and she appeared to provide Mrs Callychurn with some verbal guidance apparently so as to ensure that matters arising from the cross-examination were properly addressed: see Transcript, 2 June 2015, pp 46 and 48.
Second, I provided Mrs Callychurn with an explanation as to what a re-examination can involve and she gave every appearance that she understood: Transcript, 2 June 2015, p 45. My explanation was in my view entirely appropriate and sufficiently detailed to give Mrs Callychurn every opportunity to conduct an adequate re-examination, especially with the assistance that Ms Willis could and apparently did provide.
Mrs Callychurn also complains that the Respondent was given an opportunity to file supplementary written submissions in relation to the substantive application following the conclusion of proceedings and was then given an extended time frame for the filing of this material upon request.
The Applicants were afforded the opportunity to respond and were granted a similar extension of time to file written submissions in this regard.
The matters on which the Respondent was required to file further submissions concerned the operation of their computers, specifically with reference to the problem concerning the Applicants’ filing and nothing else. The Applicants’ responsive submission was similarly directed to deal with that issue alone.
I see nothing wrong with the process I adopted in relation to these submissions and certainly do not believe that I acted in a manner which in any way prejudiced the Applicants or demonstrated any bias against them.
ALLEGED PRE-DETERMINATION OF THE SUBSTANTIVE MATTER
The thrust of Mrs Callychurn’s submissions in this regard appears to stem from the fact that I concluded in relation to the stay application that “it is my firm belief that the case for a banning order of some duration in respect of Ms Callychurn and the cancellation of the licence held by UMS is substantial”.
In this regard I would make the following points.
First, I prefaced those words with the qualification “Without seeking in any way to conclude the matter at this stage” thus emphasising the point that the matter in my mind was by no means concluded. I was simply making the point that having reviewed the evidence for the purpose purely of making the decision on the stay I was and still am of the view that the case for the ban and the cancellation is strong. I have not made a definitive decision on the point and will not until I write the final decision on the substantive applications. Until then the possibilities of no banning/cancellation order or a reduced ban remain extant.
Secondly, in making the decision on the stay, it is appropriate that I had regard to the prospects of success of the substantive application: Re XTWK and Australian Securities & Investments Commission (2007) 98 ALD 131; Re Zarfati and Australian Securities & Investments Commission (2008) 106 ALD 225. Normally, where the stay application is heard sometime before the substantive hearing, this is done on the basis of the evidence available only at the conclusion of the stay hearing. In this case, where both the stay and the substantive applications were heard together, it was impossible for me as the decision-maker to completely ignore the evidence provided in relation to the substantive hearing. Nonetheless I made the decision on the stay based on the evidence I had available but remain open-minded as to what a more detailed review of the evidence may reveal when I come to make my decision on the substantive matters.
Thirdly, the view I took that Mrs Callychurn’s behaviour was at the very least misleading was not a conclusive view of the matter. Rather it was an assessment at the stay stage that the Applicants were unlikely, based on the evidence, to be able to demonstrate that no banning order should be imposed.
Fourthly, I took into account all of the Applicants’ submissions and materials that were relevant to the stay application, including all the screen shot information which indicated, as was confirmed by the Respondent, that there was a deficiency in the Respondent’s computer system. Nonetheless, Mrs Callychurn signed a form and lodged it with the Respondent which in my view was incorrect in a material particular. Even accepting that this was partly the Respondent’s fault, inasmuch as its computer system was defective, the consequence in my view was that Mrs Callychurn was always unlikely to succeed in having the banning order completely overturned.
APPLICATION TO FILE FURTHER SUBMISSIONS
In the conduct of this case to date, both the Applicants and the Respondent have been given ample opportunity to present their respective cases, both orally and in writing.
As far as the Applicants are concerned they have been given the opportunity to provide the following material in relation to the stay and substantive review:
(a)Pre-hearing submissions, including an Outline of Submissions on the Stay Application dated 29 April 2015, a Statement of Facts and Contentions and an Outline of Submissions on Reviews both dated 18 May 2015, and a Reply to the Respondent’s Statement of Facts, Issues and Contentions dated 1 June 2015;
(b)Affidavit evidence, being a sworn affidavit of Mrs Callychurn dated 29 April 2015;
(c)Evidence and oral submissions provided at the stay and substantive hearings on 2 June 2015; and
(d)Post-hearing supplementary written submissions which were provided in the form of written submissions dated 4 June and 17 June 2015. These later supplementary written submissions were intended to be responsive to the Respondent’s submissions dated 16 June 2015, but arguably they go well beyond being merely responsive in the fashion suggested. An affidavit sworn by Mr David Fu was also provided to the Tribunal.
As I understand, Mrs Callychurn has also submitted that, if her application for recusal is unsuccessful then in making my substantive decision all the matters which she sought to raise after the hearing through her various submissions, including those filed in support of her recusal application, should be taken into account.
The Respondent has objected in part to this course, particularly in relation to Mrs Callychurn’s submissions of 11 August 2015 on the recusal application, on the basis that the majority of the submissions go towards substantive matters and are in effect “an attempt to re-ventilate and restate their case”.
If I were to to take the course proposed by the Applicants, I would then need to accord to the Respondent the opportunity to respond and this could open up new lines of argument which were not contemplated at any stage during the hearing of this matter.
When I invited the Respondent to make a submission after the hearing of the substantive applications, and for the Applicant to comment on that submission, it related to one and only one matter which needed further clarification - namely the question as to whether the Respondent‘s system was defective in the way that Mrs Callychurn had indicated at the hearing.
Essentially the response received from the Respondent was that it was indeed defective in the way it was explained by Mrs Callychurn at the hearing and quite frankly that is the end of the matter. Mrs Callychurn has been vindicated on that point and, there was not then and there is not now, any further comment required from either party in relation to the substantive applications.
It is an accepted principle that procedural fairness requires that a party be given a reasonable opportunity to present its claims: Palmer Tube Mills (Aust) Pty Ltd v Semi Semi [1998] 4 VR 439 at 452; Leon Holdings Pty Ltd v O’Donnell (2009) 25 VR 569 at [67].
In the circumstances it is difficult to accept an argument to the effect that the Applicants were deprived of the opportunity of presenting their case in full. In my considered view, both the Applicants and the Respondent were provided with ample opportunities to present their case at the hearing.
Further, the Tribunal’s objective in carrying out its functions is to provide a mechanism of review which is:
(a)accessible, fair, just economical, informal and quick;
(b)proportionate to the importance and complexity of the matter; and
(c)promotes public confidence and trust in the decision-making of the Tribunal: section 2A of the AAT Act.
Allowing the parties to continue to re-ventilate and restate issues relating to the substantive review applications would not accord with these objectives.
Accordingly, the post hearing submission from the Respondent confirming that the Respondent’s system was defective will be taken into account as part of the evidence as will any comment made by Mrs Callychurn in response to that submission which is in respect of the Respondent’s system but all other matters that were raised after the hearing will not be considered.
I am satisfied that the parties have been fully heard and the Tribunal can move forward towards making a conclusive decision on the substantive application.
CONCLUSION
The application to have Deputy President Deutsch recuse himself is refused.
I certify that the preceding 53 (fifty - three) paragraphs are a true copy of the reasons for the decision herein of Prof R Deutsch, Deputy President ..............................[sgd]..........................................
Associate
Dated 18 September 2015
Applicant In person Counsel for the Respondent Mr P D Herzseld Solicitors for the Respondent Ms A Rees, of Australian Securities and Investments Commission
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