Chief Executive Officer of the Australian Transaction Reports and Analysis Centre v Westpac Banking Corporation
[2020] FCA 410
•30 March 2020
FEDERAL COURT OF AUSTRALIA
Chief Executive Officer of the Australian Transaction Reports and Analysis Centre v Westpac Banking Corporation [2020] FCA 410
File number: NSD 1914 of 2019 Judge: ALLSOP CJ Date of judgment: 30 March 2020 Date of hearing: 30 March 2020 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Category: No Catchwords Number of paragraphs: 15 Counsel for the Applicant: Mr S White SC and Mr D Tynan Solicitor for the Applicant: Australian Government Solicitor Counsel for the Respondent: Mr J Sheahan QC and Dr R Higgins SC Solicitor for the Respondent: Allens ORDERS
NSD 1914 of 2019 BETWEEN: CHIEF EXECUTIVE OFFICER OF THE AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE
Applicant
AND: WESTPAC BANKING CORPORATION ACN 007 457 141
Respondent
JUDGE:
ALLSOP CJ
DATE OF ORDER:
30 MARCH 2020
THE COURT ORDERS THAT:
1.The matter be stood over to a date to be fixed for further case management.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
(Revised from the transcript)ALLSOP CJ:
In this matter, the Chief Executive Officer of AUSTRAC, as applicant, seeks declarations as to contravention, and penalties under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (the Act). The matter was filed in this Court on 20 November 2019. It involves what is said to be the longstanding and systemic failure of the respondent to comply with its legislative obligations under the Act and the underlying Rules. The matter has a significant degree of complexity, and importance.
The applicant commenced proceedings by originating application, concise statement and statement of claim. One feature of the statement of claim is the difficulty faced by the pleader in reducing the large body of almost infinite detail into a coherent taxonomy of facts and particulars to support a traditional pleading. I am not, in the slightest, intending to be critical of the drafter and pleader of the concise statement and the statement of claim. Once one comes to grips with the content of the concise statement and pleading, it becomes apparent that there is a sea of detail underneath both documents which must be organised, understood, agreed upon or debated.
The parties have for some time been in negotiation in mediation. It goes without saying that those negotiations are entirely private between the parties, facilitated by a mediator or mediators. At the first case management hearing before me last year, counsel were confident that there would be a significant degree of agreement between the parties and there was some reasonable confidence displayed as to the matter being the subject of an agreed penalty hearing.
The mediation has been adjourned. From the note in the draft short minutes propounded by the Chief Executive Officer, it appears that the mediation is ongoing and the parties have not given up hope of resolving the whole matter, at least amongst themselves, so that some position, substantially or wholly joint, can be put to the Court as to the resolution of the matter by penalty.
One matter that concerned me before I came on the bench for this case management hearing was the idea that such effort as has been put into mediation, if it is unsuccessful, is lost. I would urge the parties that, even if they cannot reach a resolution of the matter, such that it is, for want of a better expression, an agreed penalty hearing, they should not waste the time and effort that they have undertaken.
This leads me to the difference between the parties in the short minutes that they suggest. Westpac, the respondent, suggests that by 8 May 2020, the parties file a statement of agreed facts and admissions. Leave aside the date, it may take a little longer than that, put that to one side. I do not understand that statement of agreed facts and admissions to be, nor would I contemplate it to be such in any order of the Court, a statement of agreed facts and admissions that are being negotiated in the toing and froing of the mediation. What I understand it is intended to be is a statement, as far as it is able to be drawn, of facts that Westpac will agree to and admissions that Westpac will agree to, should there be no resolution of the matter by negotiation, which facts or admissions are acceptable, to the extent that such agreement is relevant, to the applicant.
The parties are sufficiently experienced and sophisticated to be able to draw the distinction for themselves between facts that will be, come what may, admitted and facts that might be admitted, should some other hoped-for negotiating position be agreed to by the other side. The Court is not interested in ordering, and will not order, the parties to file a public document as to the latter. But, as I understand it, Westpac is suggesting that a document containing the former be filed so as to clear the way for the filing of a defence, in order that the defence can be seen within the context of that agreement of facts and admissions. Facts and admissions, once admitted, can always be withdrawn, but only for good reason, and with the leave of the Court.
The reason why I think that approach has merit is that the proceeding does not lend itself easily to the pleading division between material facts of a cause of action and particulars. It is only the former that needed to be pleaded to. Indeed, the rules are to the effect that the latter should not be pleaded to. The division between material facts and particulars need not detain me in this judgment. However, many modern regulatory provisions calling for a penalty do not aptly lend themselves to this taxonomical nineteenth-century pleading division.
If all the Court does is order that a defence be filed, there is a risk that the document that will be genuinely produced is not particularly helpful in illuminating what the case will involve by way of disputes. That is so because the explication of the paragraphs in the statement of the claim come in voluminous and sometimes disjointed particulars. In using the words voluminous and disjointed, I am not intending to be critical or disrespectful of the drafting. Reading the document, one understands the volume, and the disjointed features, of the underlying facts. They do not aptly lead to simple patterns that can be expressed in elegant language or simple form.
I think there is utility in undertaking the task as described by Westpac in its suggested short minutes. I have said enough about what I understand the statement of agreed facts and admissions to be. It is not requiring anyone, let alone the CEO of AUSTRAC, to make concessions for the public hearing of this matter that are inappropriate. Whether or not the CEO or Westpac are prepared to go further in another document later to be made public if full agreement is made is another matter and is neither here nor there, with respect.
To a degree I am comforted by the fact that Westpac is prepared to put forward a statement of facts that it agrees and admissions it makes and is not assuming the position that, if the CEO does not settle, every last jot and tittle of the case must be proved. Thus, there is utility in the course suggested by Westpac.
I would suggest that the parties consider paragraph (b) of the draft, and what its terms should be, making it clear that there is a freedom in the defence to address matters slightly more widely than the material fact in the pleaded paragraph being the subject of the defence, and I would give the parties an opportunity this afternoon to discuss timing.
The parties should not assume that this case won’t be heard for a year. There was mention of that in the submissions that the case should wait for other regulators to see the full consequence of the alleged contraventions of Westpac. The Court will of course hear the parties about when this case should be heard. Part of that will depend on what can be agreed. But the parties should not assume it will be winter 2021 when this case comes on for hearing. They should assume something more like summer 2020–2021.
For those reasons, I would make orders in due course broadly in accordance with the suggested orders of the respondent. I will give the parties until tomorrow afternoon to agree upon the timing of those matters. In taking into account the timing of those matters, I do not want to affect the resources of the parties that are being directed toward mediation and if that is a factor the parties should recognise that. As long as the mediation has utility and reasonable prospects, the Court is content with a more relaxed timetable than would otherwise be the case.
So, the only order I will make is standing the matter over to a date to be fixed for further case management and I will make more full orders when I receive a document or documents reflecting what the parties think is an appropriate crystallisation of these reasons and orders.
I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Allsop. Associate:
Dated: 1 April 2020
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