Catena v Australian Securities and Investment Commission
[2010] FCA 598
FEDERAL COURT OF AUSTRALIA
Catena v Australian Securities and Investment Commission [2010] FCA 598
Citation: Catena v Australian Securities and Investment Commission [2010] FCA 598 Parties: ROBERTO GERALD CATENA v AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION File number: WAD 118 of 2010 Judge: BARKER J Date of judgment: 4 June 2010 Legislation: Administrative Appeals Tribunal Act 1975 (Cth) s 44A
Corporations Act 2001 (Cth) s 920A, s 920B
Federal Court of Australia Act 1976 (Cth) s 50Cases cited: Australian Investments and Securities Commission v Administrative Appeals Tribunal (2009) 181 FCR 130; [2009] FCAFC 185
John Fairfax v Local Court (1991) 26 NSWLR 131
Re Opes Prime Stockbroking Ltd (No 2) [2008] FCA 1578Date of hearing: 4 June 2010 Place: Perth Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 26 Counsel for the Applicant: Mr TO Coyle Solicitor for the Applicant: Lavan Legal Counsel for the Respondent: Mr D Gilbertson Solicitor for the Respondent: Australian Securities and Investments Commission
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
WAD 118 of 2010
BETWEEN: ROBERTO GERALD CATENA
Applicant
AND: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
Respondent
JUDGE:
BARKER J
DATE OF ORDER:
4 JUNE 2010
WHERE MADE:
PERTH
THE COURT ORDERS THAT:
1.Orders 1, 2 and 4 of the Order of Justice Barker made 18 May 2010 be revoked.
2.The appeal be listed for hearing before Justice Barker on a date to be fixed.
3.The appellant pay the respondent’s costs of this application.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
WAD 118 of 2010
BETWEEN: ROBERTO GERALD CATENA
Applicant
AND: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
Respondent
JUDGE:
BARKER J
DATE:
4 JUNE 2010
PLACE:
PERTH
REASONS FOR JUDGMENT
ORDER MADE
On 18 May 2010 the applicant moved and I ordered that:
·The order of the Administrative Appeals Tribunal made by Senior Member Penglis on 7 May 2010 be suspended up to and including 4 June 2010.
·Until and including 4 June 2010 the applicant not engage in the activities of an authorised representative within the meaning of the Corporations Act 2001 (Cth).
·The name of the applicant not be published subject to further order of the Court.
The motion was then adjourned to 11.15am on Friday 4 June 2010 to provide the applicant with time to file and serve an amended application, an amended notice of motion and an amended notice of appeal in the proceeding.
At the hearing on Friday 4 June 2010 I dismissed the applicant’s amended notice of motion and revoked the orders made on 18 May 2010. At the time, I gave oral reasons for decision. These reasons are an edited form of those reasons given orally.
BACKGROUND
The applicant is an ‘authorised representative’ within the meaning of the Corporations Act 2001 (Cth) (CA) and has worked in that capacity since 1997.
On 4 February 2009 a delegate of the Australian Securities and Investments Commission (ASIC) made an order pursuant to sections 920A and 920B of the CA prohibiting the applicant from providing any financial services for a period of five years.
The applicant sought review of this decision in the Administrative Appeals Tribunal (AAT). On 6 March 2009 the AAT ordered that the order of the delegate of ASIC be stayed and the decision of the delegate of ASIC not be published until the determination of the review.
On 7 May 2010, Mr S Penglis, sitting as a Senior Member of the AAT, affirmed the decision of the delegate of ASIC and ordered that the stay and non-publication orders made 6 March 2010 stand revoked as of 10 days post judgment. Consequently, the stay and non-publication orders were to stand revoked on 18 May 2010.
On 18 May 2010 this matter came before me, an appeal (with little detail) having been lodged, and I ordered the stay and non-publication orders be extended to 4 June 2010.
On 4 June 2010 the applicant sought orders from the Court extending the stay and non-publication orders until the appeal could be heard in this Court.
THE STAY ORDER
In oral argument before me counsel for both the applicant and the respondent accepted that the Court’s power to make a stay order in relation to a decision of the AAT is to be found in s 44A of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act).
Section 44A(2) of the AAT Act relevantly provides:
(2) Where an appeal is instituted in the Federal Court of Australia from a decision of the Tribunal, that Court or a Judge of that Court may make such order or orders staying or otherwise affecting the operation or implementation of either or both of the following:
(a) the decision of the Tribunal or a part of that decision; and
(b) the decision to which the proceeding before the Tribunal related or a part of that decision;as that Court or Judge considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the appeal.
Counsel also accepted that on applications for stay orders under s 44A of the AAT Act courts have regard, generally speaking, to the same sorts of considerations that they might consider on an application for an interlocutory injunction.
The applicant in written submissions argued that should the banning order not be suspended the applicant’s appeal rights may be rendered nugatory. He might succeed on the appeal but his reputation and livelihood may be affected detrimentally in the meantime by publication of his name and the operation of the order of the AAT. For that reason, the applicant submits that, there being a serious issue to be resolved on appeal, the balance of convenience favours a continuation of the suspension order pending the outcome of the appeal.
In response to this the respondent says that the appellant’s prospects on the legal issue on appeal are slim and that matters of general public policy, including the importance of the public at large being informed of the banning decisions of ASIC, tip the balance of convenience away from the applicant. In this regard, the respondent cites the decision of the Full Court of this Court in Australian Securities and Investments Commission v Administrative Appeals Tribunal (2009) 181 FCR 130; [2009] FCAFC 185 (ASIC v AAT) where the Court considered the power of the AAT to make a stay order under the AAT Act.
In ASIC v AAT the majority (Downes and Jagot JJ) at [51] noted that persons who may be affected by a review of a banning order include not only the recipient and his or her dependents, associates and employees but also that person’s existing and potential clients, as well as the public at large. At [52] their Honours recognised that in determining whether to stay a banning order these potentially competing interests must be resolved and in resolving them “the scheme embodied by the legislation under which the banning order is made is central”. Their Honours concluded that the scheme disclosed that banning orders are intended to protect the public.
At [54], their Honours continued:
Moreover, information is the key to effective trading in any market. It takes the place of regulation in ensuring fairness. A market which is not fully informed is not operating properly. Is not an investor who is about to deposit funds with a person providing financial services entitled to know that a banning order has been made against the person? If the order has been stayed on substantial grounds the person is also entitled to know that. The informed investor may continue with the proposal. If the investor does not, then that is just an example of the operation of the market place. The critical matter is that the market is fully informed. If the banning order is not disclosed, but subsequently upheld, is not the investor entitled to complain that all the circumstances should have been made public?
Moore J explicitly agreed with these statements of the majority: see [1].
The respondents further say that in considering the balance of convenience regard should also be had to the fact the applicant has already been given the chance to his put case as to why he should not be banned and has twice been unsuccessful. The applicant put his case to the ASIC delegate as contemplated by s 920A(2) of the CA and further availed himself of the right to review of that decision in the AAT. These are, the respondent submits, the legislative mechanisms in place to protect the applicant and he has been afforded them.
At this stage, I don’t need to say terribly much about the strength of the appellant’s case. The arguments have briefly been rehearsed before me. It is certainly not a case where, on the face of it, there is some unanswerable point of law that has been raised by the appellant. I understand the way the case is put. It will, I think, from what I have seen at this stage, require a proper consideration of what the reasoning process of the Tribunal was in addressing the statutory criteria as to whether there was insider trading. I do not seek to rate the case as a strong case, a weak case, or somewhere in the middle. It is enough to say there appears to be something to be argued.
However, so far as the general justice of the case is concerned, it is apparent that we are dealing with an altogether new stage in the proceeding, now that an appeal has been made to this Court. This Court is not involved in some additional stage of the earlier administrative and regulatory process. It seems to me that the administrative decision-making processes having been completed, in this appeal a different range of considerations apply to the applications made. I think it is reasonable to say in these circumstances that the public right generally to know what the decision of the AAT is, is compelling. I am not satisfied on the basis of any material put in front of me that that decision should be made inoperative. The applicant has indicated a willingness to maintain an undertaking earlier given not to engage in his business as an authorised representative, so not staying the AAT order is not going to affect him in this regard. The appeal should also be heard in a relatively quick period of time. Consequently, I do not see any compelling basis to make the AAT order inoperative.
Though I accept there is a serious question to be determined on appeal I do not, having regard to the comments of the Full Court in ASIC v AAT, think that the balance of convenience favours granting a further extension of the stay order. Here, the interests of a properly informed investing public are central to the legislative scheme pursuant to which banning orders operate. Even though the AAT does not consider that the applicant personally poses a threat to the public, the general deterrence of an AAT banning order should not be underestimated. The public are entitled to know of it and to know the industry knows of it. I therefore decline to extend the stay order granted on 18 May 2010.
CONFIDENTIALITY
As to the question of confidentiality, which probably from the applicant’s point of view is much more important than the stay order because he fears the effect on his reputation of any report of the AAT decision becoming public, it is clear on all of the authorities that courts today hold strongly to a view that justice must be administered openly and transparently.
The application for an order suppressing the applicant’s name is made pursuant to s 50 of the Federal Court of Australia Act 1976 (Cth) (FCA). Section 50 of the FCA relevantly states:
(1) The Court may, at any time during or after the hearing of a proceeding in the Court, make such order forbidding or restricting the publication of particular evidence, or the name of a party or witness, as appears to the Court to be necessary in order to prevent prejudice to the administration of justice or the security of the Commonwealth.
Suppression orders, so called, are sometimes issued by courts so that any concurrent or associated criminal proceedings are not prejudiced. However, that is not this case. A case such as the present will only result in a suppression order being granted where it can be shown that the interests of justice will really be put at risk. Mere embarrassment or unfortunate financial effects on an appellant or their dependants or other persons are usually not sufficient: see John Fairfax v Local Court (1991) 26 NSWLR 131 at 142; Re Opes Prime Stockbroking Ltd (No 2) [2008] FCA 1578 at [11]. In essence, these are the complaints of the applicant. He is concerned about the effect publication of the AAT decision will have on his future prospects to resume in his industry. This is not a sufficient reason for the Court to grant the confidentiality orders sought.
CONCLUSION AND ORDERS
For the foregoing reasons I declined to extend the stay and suppression orders made 18 May 2010.
The orders of the Court will be:
1.Orders 1, 2 and 4 of the Order of Justice Barker made 18 May 2010 be revoked.
2.The appeal be listed for hearing before Justice Barker on a date to be fixed.
3.The appellant pay the respondent’s costs of this application.
I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker j. Associate:
Dated: 14 June 2010
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