Confidential and Australian Prudential Regulation Authority

[2005] AATA 350

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 350

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2005/12
  No N2005/31
  No N2004/1685

GENERAL ADMINISTRATIVE DIVISION		)
Re		CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL

Applicant

And AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Respondent

INTERLOCUTORY DECISION

Tribunal Justice Garry Downes, President

Date19 April 2005

PlaceSydney

Decision I decline to refer the questions of law identified in para 2 of the Reasons for Decision to the Full Federal Court.

..............................................

President

REASONS FOR DECISION

Justice Downes, President

Introduction

1. Section 25A of the Insurance Act 1973 authorises the Australian Prudential Regulation Authority to disqualify persons if it is satisfied that the persons are not fit and proper persons to be or to act in a number of positions.  Those positions are identified in s 24(1) of the Act and are as follows: 

“(a) A director or senior manager of a general insurer (other than a foreign general insurer); or

(b) a senior manager, or agent in Australia for the purpose of section 118, of a foreign general insurer; or

(c) a director or senior manager of an authorised NOHC.”

2. The Australian Prudential Regulation Authority has relevantly disqualified six persons. Those persons have commenced proceedings in the Tribunal for review of the decisions. Three of the persons, the applicants, have made application to the Tribunal to refer questions of law, which arise in the proceedings relating to them, to the Full Federal Court of Australia pursuant to s 45 of the Administrative Appeals Tribunal Act 1975.  The questions they seek to have referred are as follows:

“Question 1. Does the power to make a disqualification decision under s 25A of the Insurance Act 1973 exist only in relation to persons who hold or act in a position specified in s 24(1) at the time of the disqualification?

Question 2. Does the power to make a disqualification decision under s 25A of the Insurance Act 1973 extend to a power to disqualify a person who

(a) does not hold or act in a position specified in s 24(1); and

(b) who is ordinarily resident overseas?

Question 3. Does the power to make a disqualification decision under s 25A of the Insurance Act 1973 extend to a power to disqualify a person who

(a) does not hold or act in a position specified in s 24(1); and

(b) has no intention of holding or acting in a position specified in s 24(1)?

Question 4. Does the power to make a disqualification decision under s 25A of the Insurance Act 1973 extend to a power to disqualify a person

(a) who does not hold or act in a position specified in s 24(1); and

(b) where there is no real likelihood that the person will hold or act in a position specified in s 24(1) at some time in the future?”

3.      The applicants recognise that some preliminary findings of fact will be necessary before these questions of law can be addressed and, in addition, request the Tribunal to hear and determine preliminary questions of fact as follows: 

“(a) Do any of the applicants intend to hold a s 24(1) position or act in such a position at some time in the future?; and 

(b) Is there any real likelihood that the applicants will seek to hold or to act in a s 24(1) position at some time in the future?”

4.      There has been some argument before me this morning as to the legal questions which are posed by the four proposed questions.  That argument has not been full argument which would enable a determination of the issues.  However, I am prepared to proceed on the basis that the four questions do raise questions of law, even difficult questions of law which will have to be decided as part of the review process.  Accordingly, I will proceed on the basis that questions of law do arise in this case which are of a kind which might be the subject of a determination of the Full Federal Court.

5.      The questions of law which arise in the present case are all associated with the construction of provisions of the Insurance Act 1973  and other legislation.  Questions of construction of legislation are often mixed up with questions of application of the legislation to the facts of the relevant case.  The present case is no exception.  It is really for that reason that the applicants recognise that it will be necessary for there to be at least some preliminary findings of fact made, if agreement cannot be reached, before any reference could be made to the Full Federal Court. 

6.      It seems to me that although there are at least theoretically some questions of law that can be referred to the Federal Court in the present case, in practical terms it would be inappropriate for me, at this point of time, to exercise my discretion in favour of such a reference.  I say that for the following reasons. 

7.      First, it is important to remember that this Tribunal is exercising the administrative power of the Commonwealth and not the judicial power of the Commonwealth.  When it reviews the decisions it will be necessary to make findings of fact and those findings of fact should be made at the time of the ultimate decision. 

8.      It seems to me that if the Tribunal makes preliminary findings of fact complications could arise insofar as it has an obligation to make findings of fact at the time of its ultimate decision.  It may be that as a result of the decision in the Federal Court no real further fact finding is necessary, but that is not the inevitable result of the matter going to the Federal Court.  Problems relating to fact finding might arise even though it is likely that the facts to be found would be identical. 

9.      The problem is that, at least technically, some of the facts that are sought to be found are associated with the state of mind of the applicants.  That means, necessarily, however unlikely this may be in fact, that they could change.  It is not as if the facts I would be required to find would be facts, such as a finding of fact relating to a past event, which would be incapable of changing. 

10.     The history of referring questions of law to a Full Court has not been a happy one.  Attempts to shorten proceedings by referring a question which may dispose, or help in disposing, of a case has often, in the past, resulted in more complexity rather than less complexity.  I fear that this case may be a further example of those experiences.  That is another reason why I think it is not appropriate for me to refer the questions of law. 

11.     It is also true to say that appellate courts have on a number of occasions said that they value a primary decision, including the views of a primary decision-maker on the questions of law arising, as a kind of filtering process which enables the appellate court to more satisfactorily come to grips with the issues.

12.     It also seems to me that it would be desirable, because of the common issues in the six cases, for the case management to proceed together and that process may be difficult if, in three of them, questions of law are referred to a Full Federal Court.  I accept that a possibility would be for the three other proceedings to await a hearing until after any decision in the Federal Court, but it does not seem to me that that is satisfactory either.  Whatever be the view of the applicants in those cases I am required to be guided by s 33 of the Act which provides that the Tribunal shall deal with matters before it "with as much expedition" as the circumstances will permit.  As an endorsement of this approach I note that in legislation passed in the Parliament less than 3 weeks ago, which has not yet been proclaimed, a further obligation has been imposed upon the Tribunal to be "quick". 

13.     For all these reasons I think that to refer the questions of law posed or any of them to the Federal Court of Australia would create as many problems as it would solve. 

14.     I note that there is nothing in the Act which requires me now to make a final decision relating to the question of referring one or more of its questions to the Federal Court and I expressly say that in the future management of these cases towards hearing and in the hearings themselves I will be prepared to consider a further application should it emerge that it would be appropriate to refer one or more questions of law to the Federal Court.

15.     I propose that the six matters before me this morning should be the subject of directions which will seek to achieve a regime of preparation of the matters for hearing which will be efficient but which will also take into account the interests of the disparate applicants.  As far as possible, the parties should not be put in a position where they are required to, for example, be present at parts of the hearing or any case management exercise which is not strictly relevant to the proceedings so far as they are concerned.

I certify that the 15 preceding paragraphs are a true copy of the reasons for the decision herein of Justice Downes, President

Signed:     ............................................................................
                  Peter Pikis, Associate

Date of Hearing  8 April 2005
Date of Decision  8 April 2005

Counsel for the Applicant                  Mr S D Rares SC
  Dr J G Renwick    
Solicitor for the Applicant                   Australian Government Solicitor

Counsel for the Respondent             Mr J R Sackar QC

Ms N L Sharp

Solicitor for the Respondent              Allens Arthur Robinson