Clinnick and Australian Securities and Investments Commission (Taxation)
[2021] AATA 71
•1 February 2021
Clinnick and Australian Securities and Investments Commission (Taxation) [2021] AATA 71 (1 February 2021)
Division:TAXATION AND COMMERCIAL DIVISION
File Number(s): 2019/0699
Re:James Edward Clinnick
APPLICANT
AndAustralian Securities and Investments Commission
RESPONDENT
DECISION
Tribunal:Deputy President Bernard J McCabe
Date:1 February 2021
Place:Sydney
The Tribunal refuses the applications for reinstatement and an extension of time, made under ss 42A(1) and 29(7) of the Administrative Appeals Tribunal Act 1975 (Cth) respectively.
...............................SGD.........................................
Deputy President Bernard J McCabe
Catchwords
PRACTICE AND PROCEDURE – application for reinstatement under section 42A(1) of the Administrative Appeals Tribunal Act 1975 – application for extension of time under section 29(7) of the Administrative Appeals Tribunal Act 1975 - whether application dismissed in error – whether the effect of incorrect legal advice and medical conditions amount to an error under s 42A(1) – whether an examination for relevant circumstances support the granting of an extension of time – applications refused.
Legislation
Administrative Appeals Tribunal Act 1975 (Cth)
Cases
Goldie v Minister for Immigration and Multicultural Affairs [2002] FCAFC 367
Hunter Valley DevelopmentsPty Ltd v Minister for Home Affairs and Environment [1984] 3 FCR 344
Wiegand v Comcare No 2 [2012] AATA 623REASONS FOR DECISION
Deputy President Bernard J McCabe
1 February 2021
The Australian Securities and Investments Commission (ASIC) made a reviewable decision to ban James Edward Clinnick from providing financial services for a period of four years. The decision was communicated to Mr Clinnick on 15 January 2019. Mr Clinnick promptly applied to the Tribunal for a review of the decision. He subsequently instructed his lawyer to withdraw the application for review before the review was completed.
The Tribunal is taken to have dismissed the proceedings without proceeding to a review: s 42A(1B) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act). Mr Clinnick now wants to reinstate the application for review. He lodged an application to that effect on 22 September 2020 after speaking with a lawyer who agreed to act pro bono. Alternatively, Mr Clinnick has asked for an extension of time under s 29(7) of the AAT Act to bring a fresh application for review. ASIC opposes both applications.
The evidence provided in support of the application for reinstatement
Mr Clinnick provided two affidavits in support of the present applications. In those affidavits, he explained how the banning order impacted on his financial circumstances and his health. He provided letters from his treating doctor describing the mental health issues that arose in the wake of the reviewable decision and discussed the impact on his functioning around the time of the original proceedings and subsequently. The affidavits also included:
(a)information about the applicant’s personal circumstances and those of his family; and
(b)copies of correspondence between the applicant and his former solicitor which are said to explain the context in which the applicant gave the withdrawal instructions to the solicitor.
I will discuss the details of that evidence below.
The application for reinstatement under s 42A of the AAT Act
The applicant initially argued the Tribunal had power to reinstate under either ss 42A(9) or 42A(10) of the AAT Act. At the hearing, Mr Horowitz, the applicant’s counsel, said he would not press the argument in relation to s 42A(9).
The power to reinstate in s 42A(10) is available where “it appears to the Tribunal that an application has been dismissed in error”. The Full Federal Court made clear in Goldie v Minister for Immigration and Multicultural Affairs [2002] FCAFC 367 that it was inappropriate to read down the power so that it was only available in the event of an administrative error made by the Tribunal. Wilcox and Downes JJ explained (at [29]) the error in question might have been made by the applicant or his or her representative. All that was required was that the act of dismissal was attended by error (at [28]).
Mr Clinnick identified two possible errors that attended the dismissal. The first related to what he said was poor legal advice received from his lawyer at the time he withdrew the earlier application. The second error arose out of his medical circumstances and state of mind when he instructed his lawyer to withdraw.
The affidavit of 1 December 2020 exhibited an email exchange between Mr Clinnick and his lawyer. The lawyer was seeking Mr Clinnick’s instructions on how to proceed in the face of outstanding directions. On 28 June 2019, the lawyer wrote:
…I know you don’t want to think about this AAT situation – but we need to make a call on what we are going to do today.
I am concerned that if you do nothing today things could get nastier.
We need to tell the AAT and ASIC:
·That we have no more evidence to put on but you are proceeding; or
·We wish to withdraw our appeal.
If you do neither it will look very bad. Also if you don’t withdraw now, but withdraw later, ASIC will get costs awarded against you.
Can you please call me urgently.
The next day, Mr Clinnick replied by email. He wrote:
…Sorry I didn’t get back to you. We are going to have to withdraw the appeal for health reasons. I just cannot proceed in my current state. My brother has offered to help me out financially for a very short time so I need to find a job and start paying you back.
As it is a withdrawal due to ill health do we have option of going back at a later date? Are there any time restrictions for the AAT?
Mr Clinnick said his lawyer did not give him proper advice in several respects, and that he was led into error as a consequence – an error that attended the dismissal. He said his lawyer should have discussed with him the alternative of seeking an adjournment from the Tribunal in light of Mr Clinnick’s poor health. Mr Clinnick also said the lawyer did not respond to the question posed in the second paragraph of Mr Clinnick’s email about “going back” to the Tribunal. I would add the letter from the lawyer is incorrect insofar as it warned of a potential costs penalty if Mr Clinnick delayed making his decision to withdraw. Proceedings before the Tribunal do not usually give rise to costs’ orders.
I note Mr Clinnick’s email, when read in its entirety, suggests the applicant had made up his mind to withdraw before asking his lawyer, as an afterthought, whether he could “go back” at some future date. It is not clear from the email or the other evidence that Mr Clinnick’s decision to withdraw was contingent upon the unanswered question he posed to his lawyer. It follows it is unclear whether Mr Clinnick’s decision to withdraw was the product of being led into error by his lawyer in these respects. It is also unclear whether Mr Clinnick was aware of the mistaken advice about costs; that may only have come to light during the reinstatement hearing. The costs issue was not otherwise mentioned in his materials.
What of the lawyer’s supposed failure to advise about the possibility of an adjournment? There may have been a gap in the lawyer’s advice, but it is not clear the applicant would have made a different decision if that alternative was explained. Once again, it is doubtful he was led into error by the lawyer in a way that materially affected his decision to withdraw from the proceedings.
The real problem for Mr Clinnick is that the error in question was an error in judgment that he made when he issued the instructions to withdraw. The fact Mr Clinnick subsequently came to the view he made a mistake in withdrawing does not necessarily mean the Tribunal’s decision to dismiss (as opposed to the applicant’s decision to withdraw) was in error in the sense intended in s 42A(10). For better or worse, the Tribunal did not misunderstand what the applicant’s lawyer asked it to do, and the lawyer did not misunderstand or miscommunicate the instructions from his client. The applicant’s decision to withdraw might have been a mistake, and the mistake may have been induced or influenced by poor advice, but it is unclear how the decision to dismiss was attended by error in the sense intended in s 42A(10). I acknowledge the reasoning in Goldie said there was no need to read down the word ‘error’, but I am not convinced it would be appropriate to treat an applicant’s error of judgment when making a choice about withdrawal as an error for the purposes of the sub-section. Extending s 42A(10) to include mere errors of judgment of this kind would be inconsistent with the legislative policy evident in s 42A when read as a whole.
The section recognises reinstatement should be available on a discretionary basis when proceedings were dismissed for non-appearance because an applicant might have a good excuse that was not apparent at the time of the dismissal. Otherwise, the section adopts a relatively rigid approach to dismissals and reinstatements that makes clear applicants should get on with their case or withdraw – and if they withdraw, that is ordinarily an end to the matter. While it makes sense to have a flexible power to reinstate in case of error, the discretion in s 42A(10) was not intended to be exercised in a way that effectively permitted any applicant to undo the finality of the Tribunal’s processes through the simple device of claiming they realised upon reflection they made an unwise decision to withdraw.
The answer might be different if the medical evidence provided by the applicant clearly suggested he lacked the capacity to make a rational decision when he purported to instruct the lawyer to withdraw from the proceedings. The medical evidence certainly confirms the applicant was experiencing severe stress and other psychiatric symptoms. There is also a suggestion in the letter from the medical practitioner dated 1 December 2020 that the applicant exhibited symptoms which might have affected his decision-making capacity at some point – but that letter does not confirm the applicant experienced any want of capacity at the time he instructed his lawyer to withdraw in 2019. I note there is no suggestion of a want of capacity in the medical practitioner’s earlier letter of 15 September 2020.
I am not satisfied there was an error that attended the dismissal that would enliven the discretion in s 42A(10). But in case I am wrong about that, I will consider the factors that would be relevant to the exercise of the discretion below. As it happens, those factors are essentially the same as those I must consider in relation to an application for an extension of time under s 29(7) of the AAT Act.
The application for an extension of time
Applicants can always ask the Tribunal to review a decision that has already been the subject of review. Even assuming the second application for review is filed in time, the request may not get very far: while it is often said there is no principle of res judicata or issue estoppel in Tribunal proceedings,[1] there might be a number of procedural responses which ensure an applicant does not waste everyone’s time. Where the second application is filed out of time – which is what usually occurs if the earlier review proceeded to a hearing and resolution – the Tribunal will have an early opportunity to exclude applicants who waste public resources through futile and repetitive applications for review. In some cases, the second application for review might come after the first review concluded without reaching a decision on the merits. That is what happened here. I note s 42A(1B) says “the Tribunal is taken to have dismissed the application without proceeding to review the decision”.
[1] For a useful discussion of this issue, see Matthew Paterson, ‘Res Judicata at the Administrative Appeals Tribunal: Re-opening the Case’ (2019) 30 Public Law Review 58, 62; see also Wiegand v Comcare No 2 [2012] AATA 623, [29].
There is no doubt ASIC made a reviewable decision in this case. It has never been suggested otherwise. The applicant would ordinarily have 28 days to file his application for review. (Mr Clinnick did meet that time limit when he commenced proceedings on the first occasion, but that is not in issue here.) If an applicant failed to comply with the time limit, he would be entitled to ask the Tribunal for an extension of time pursuant to s 29(7) of the AAT Act.
The power to grant an extension of time is discretionary. The sub-section does not specify what factors should be considered, but they are generally well-known. Examples of relevant matters have been discussed in cases like Hunter Valley DevelopmentsPty Ltd v Minister for Home Affairs and Environment (1984) 3 FCR 344. The factors referred to in Hunter Valley Developments at pp. 348–9 should not be applied slavishly, of course: the ultimate objective is to achieve the correct or preferable outcome having regard to the justice of the case. That is ultimately a different way of saying the Tribunal should make its decision on the application having regard to its objective in s 2A of the AAT Act.
The applicant’s withdrawal of the earlier proceedings means the Tribunal has not adjudicated the merits of his case. The applicant is entitled to make a fresh application provided he can persuade the Tribunal it would be appropriate to grant an extension of time having regard to any relevant factors.
The applicant has offered several related excuses for his delay in re-applying. The letters provided by his treating doctor confirm he was suffering from significant health problems at the time of the decision to withdraw. Those health problems persisted for some time beyond that, although it is not clear precisely when his health improved to the point he could make an application for review. I note one of his children was also experiencing ill-health; happily, it appears the child’s health has improved in more recent times, but I accept it was an obstacle for at least some of the time.
Mr Clinnick also referred to financial hardship as a consequence of the banning decision. The decision meant he could not work, and the lack of work meant he could not afford a lawyer to manage his case. But that is not, in and of itself, a good reason for delay. Many applicants cannot afford legal representation and still make a reasonable fist of their review.
While I accept Mr Clinnick’s ill-health (and that of his child) explains part of the delay, it seems he only made the decision to resume the contest after he came into contact with a lawyer who offered to represent him pro bono. It seems likely Mr Clinnick was able to approach the Tribunal at an earlier date if he wanted to do so.
I am satisfied Mr Clinnick had a good excuse for at least part of the delay between the withdrawal and the date on which he approached the Tribunal to take up where he left off. I should add the absence of a good excuse for the whole period of delay is not inevitably fatal: but it is a factor.
Mr Clinnick has rested on his rights. The withdrawal of his application clearly signalled to the decision-maker that Mr Clinnick was done with the review. ASIC was entitled to assume the dispute over the decision was concluded. Having said that, it is unlikely ASIC will experience significant prejudice if the proceedings were to resume. Mr Knowles, counsel for ASIC, properly conceded it could dust off the ‘T documents’ that were prepared following the original application for review, and new proceedings could effectively take up where the discontinued proceedings left off. Yet any unnecessary delay has the potential to complicate the Tribunal’s task: memories fade, documents are lost and witnesses become harder to corral.
There is no reason to assume there would be any prejudice to other individuals if Mr Clinnick were permitted to proceed with a review. There is also no evidence that the public interest would be prejudiced. But what of Mr Clinnick’s interests? On the face of it, Mr Clinnick’s interests are best served if he were allowed to proceed. The ban has had serious consequences for him and his family. Having said that, he has already served almost half of the period of the ban; if he were permitted to proceed with the review, it is likely additional months would pass before a decision would be given on the merits. It stands to reason that vindication on review – if that were the outcome – might still be of value even if he had served a significant part of the ban.
That brings me to the question of merit. It is relevant to consider the applicant’s prospects of success if he were permitted to go ahead – although any assessment of the merits is necessarily superficial. The applicant says there is a dispute on the facts which resulted in the original banning decision, and insisted there were reasonable prospects of at least varying the duration of the ban. It is difficult to reach a view on the material before me about the likelihood of the Tribunal setting aside the decision; there may be more prospect of persuading the Tribunal to exercise the discretion differently so that it varies the decision by reducing the period of the ban. In the circumstances, I am not prepared to say it is a hopeless case although it is unclear whether it is especially meritorious.
Conclusion
On balance, I am not persuaded it is appropriate to extend time under s 29(7) of the AAT Act in all the circumstances. While I am conscious the applicant has experienced a good deal of personal hardship which may explain his decision to withdraw in the first place, the fact is he had an opportunity to press his case and he declined to do so. Even after his circumstances improved, he did not press forward at the earliest opportunity. He rested on his rights until a lawyer friend suggested he renew the fight. While I have indicated I accept the case is not hopeless, the merit of the case is not clear either. The absence of obvious merit certainly does not count in the applicant’s favour. On balance, I am not satisfied the discretion to reinstate should be exercised in the applicant’s favour. I would reach the same conclusion if I were to exercise the discretion under s 42A(10), given the relevant factors are essentially the same.
The applications for reinstatement and for an extension of time are refused.
I certify that the preceding 28 (twenty-eight) paragraphs are a true copy of the reasons for the decision herein of Deputy President Bernard J McCabe
.............SGD..................
Associate
Dated: 1 February 2021
Date(s) of hearing: 27 January 2021 Counsel for the Applicant: Mr Jethro Horowitz Counsel for the Respondent: Mr Patrick Knowles Solicitors for the Respondent: Self-Represented
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