"Confidential" and Australian Prudential Regulation Authority - [2002] AATA 661

DECISION AND REASONS FOR DECISION [2002] AATA 661

ADMINISTRATIVE APPEALS TRIBUNAL )

) No N2002/874

GENERAL & ADMINISTRATIVE DIVISION    )         No N2002/916
           Re      "Confidential"
  Applicant
           And    Australian Prudential Regulation Authority
  Respondent

DECISION

Tribunal Hon Justice Garry Downes AM Mr W McLean Ms C Prime

Date4 July 2002
PlaceSydney

Decision      No N2002/874 The application for a stay of, and non-publication order regarding, the Respondent's Decision of 13 June 2002 is refused. The application to tender further evidence in support of such a stay order is refused. No N2002/916 The application for a stay of the Respondent's decision of 2 July 2002 is refused. Without prejudice to the question of any power to award costs, costs reserved.
  ..............................................
  President

REASONS FOR DECISION

Justice G Downes Mr W McLean Ms C Prime

THE PRESIDENT:

On 26 June 2002 the applicant commenced proceedings in this Tribunal for the review of a decision made by the Australian Prudential Regulation Authority. That decision if implemented would have had the effect that as from 30 June, 2002 the applicant was unable to write new insurance business. At the same time as it commenced its application for review of the decision the applicant sought interim relief under section 35 of the Administrative Appeals Tribunal Act 1975 relating to the publication of the decision and under section 41(2) of the Act for interim relief.

The matter was listed before me for directions on 27 July 2002. Because of requirements of the legislation relating to the constitution of the Tribunal in reviewing such a decision of APRA it was not possible for an appropriately constituted Tribunal to be assembled prior to 1 July 2002.
It followed that during the time at which the hearing of the application for interim relief was taking place the existing decision, unless something was done about it, would be in force precluding the applicant from writing new business.
When the matter was before me for directions I asked the solicitor then representing APRA whether APRA would be prepared to take some course which would preserve the position and permit the applicant to continue to write insurance business during Monday, 1 July, 2002. After seeking instructions this course was agreed to. I accordingly made a decision on 27 June 2002 which included a statement that:

The Tribunal: (1) notes the agreement of the respondent to take such steps as are necessary to permit the applicant lawfully to write insurance until midnight at the end of Monday, 1 July 2002;

In fact APRA made a new determination in place of the existing determination. The prospect of its taking this course was not the subject of any consideration in the directions hearing before me.
The new determination had the effect of permitting the applicant to continue to write insurance. However, when the matter was called on for hearing before a fully constituted Tribunal on 1 July 2002 and when the Tribunal for the first time was informed of the new determination counsel for APRA also informed the Tribunal that the new determination had been made solely for the purpose of carrying the agreement given on 27 June 2002 into effect and that if the application for interim relief was unsuccessful APRA would consider making a further determination in accordance with the terms of the prior determination.
The Tribunal heard argument on the matter throughout Monday, 1 July and reserved its decision on the applications under ss. 35 and 41 of the Act late that day. The Tribunal inquired of APRA whether it would be prepared to allow the determination as it then was in force to continue until the Tribunal was able to give its decision in the matter today, so that during that period the applicant could continue to write new insurance business, but APRA declined to give such an undertaking. The Tribunal expressly stated in response that it granted no stay during the period between the time its decision was reserved and the time its decision would be given.
The Tribunal has prepared and was proposing to give a decision in writing relating to the application it heard last Monday when it assembled this morning. However, before the decision was given it was informed that the applicant wished to make two applications. It appears that on 2 July last APRA made a fresh determination relating to the applicant. That determination did not reinstate the determination that had been in place prior to the directions hearing before me on 27 June but made a fresh determination which in terms permitted the applicant "only [to] conduct insurance business in Australia for the sole purpose of discharging liabilities that arose under policies entered into prior to 2 July 2002". On 2 July 2002 fresh proceedings were commenced in the Tribunal by the applicant for the review of this decision. The first of the applications made to us this morning by the applicant was for interim relief with respect to this decision.
At the same time, and for the first time, the applicant sought to rely on s. 26 of the Act and to suggest that the effect of that section was that no valid determination had been made on 2 July 2002 because the determination of that date amounted to an alteration of the most recent determination of APRA which had not been expressly authorised by legislation or consented to by the parties and the Tribunal.
It is not for this Tribunal to determine the rights at law of parties in dispute. This Tribunal reviews administrative decisions. However, the Tribunal is entitled to express a view on matters of law necessary to its determination. In the view of the Tribunal the determination of APRA made on 27 June 2002 would offend against s. 26 if the later decision offended against s. 26. The consequence must be that although the parties proceeded on a different basis in the hearing on 1 July 2002 the determination of APRA made earlier in June was likely then still to have been in force.
The Tribunal considers that nothing that it did last Monday amounted to a consent by the Tribunal to the making of any alteration to the earlier determination. It follows, in the opinion of the Tribunal, that if there is substance in the argument now raised by the applicant under s. 26 of the Act the consequence is no more than that what the Tribunal was obliged last Monday to address was the substantive question of whether a stay of proceedings relating to the original determination of APRA should be granted or not. As will appear from the written reasons which we will shortly publish that is precisely the way in which we addressed the issues that were argued before us on Monday.
If we are now asked to consider the question of a stay relating to the decision of 2 July 2002 on the basis that that decision is now effective we consider that the issues raised are identical to the issues that were raised before us on Monday and again the written decision which we have prepared can be taken to address them. Accordingly the first issue raised by the respondent does not cause us to consider that the substance of the reasons for decision we have prepared are affected by the issues that that throws up.
The second application that was made before the Tribunal this morning was an application to re-open and tender fresh evidence. We have been taken through a folder of material containing the evidence sought now to be relied upon. That evidence is in two categories. The first category is evidence of a historic nature showing activities and matters associated with the applicant in the past. For example, the material includes board minutes showing deliberations and decisions relating to the application for re-authorisation.
The second category is entirely new material. Indeed it is associated with an application dated 3 July 2002 to APRA for re-authorisation. The presentation of this material accords with an observation we have made in our written reasons for decision that it is open to the applicant to make a further application for re-authorisation. However, as we see it, the letter of 3 July addressed to APRA is an application to APRA which it will be the obligation of APRA to consider as part of its duties as the relevant regulatory authority. At the end of the hearing on Monday the Tribunal made some observations about the opportunity that the delay in decision would present to the applicant to put further material before APRA if it wished to do so. On one view the letter of 3 July can be seen as a response to this suggestion.
In addition to the letter of 3 July there is other new material supporting the applicant's claim for re-authorisation. For example, there was a meeting of the board of the applicant on 3 July 2002 and there are letters and undertakings by various persons relating to the future business of the applicant. There is other material as well.
As we see it, and this is consistent with the written reasons for decision that we are about to deliver, all this material is appropriately material to go before APRA, but is not appropriately material to be put before us at this point in time. We would add that on the brief opportunity we have had to examine the material we are not at all satisfied that it deals with all of the matters raised in our written reasons for decision. However, this is a very complex matter and although two members of the Tribunal have a wealth of experience in the insurance industry it may be that upon detailed examination of the material by APRA it will be considered that the material is sufficient to justify re-authorisation. However, that is a matter for APRA.
We simply conclude by saying that we do not find the material presented at this late stage including as it does much new material leads us to take any different view from the view that we have taken in the written decision that we have prepared.
That leads me to the written reasons for decision that have been prepared by us and those written reasons lead to the conclusion that the applicant's applications must be refused. As I have said notwithstanding the material put before us this morning, we adhere to that conclusion. It follows that both the application made in the original application for review for interim relief will be refused as well as any application in the matter commenced most recently.
For completeness we note that the applications that are refused are applications for interim orders under section 41(2) of the Act and for non-publication orders. Once we refuse the applications for interim relief we see no basis for granting any relief relating to publication.
I accordingly in a moment propose to publish written reasons for decision. I should first of all say however, that the result that I have announced including the result associated with the applications made this morning is a result that is agreed to by the other two members of the Tribunal. However, those members of the Tribunal have not until they heard me speak, heard the enunciation of the reasons that I proposed relating to that decision. So I propose to ask my fellow members of the Tribunal whether they wish to disagree with or add to or otherwise make any comment about the reasons that I have just given orally.
MR McLEAN:
I agree and would add for the purpose of clarity that the term, new business, referred to by the President includes the renewal of existing insurance business by the applicant.
MS PRIME:
I agree.
THE PRESIDENT:
Without prejudice to any question as to whether there is any entitlement to costs or any power on our part to make an order for costs we reserve the question of costs.
I certify that the 23 preceding paragraphs are a true copy of the reasons for the decision herein of the Tribunal.
Signed:         .....................................................................................
  Associate to Justice Downes
Date/s of Hearing  1 and 4 July 2002
Date of Decision   4 July 2002
Counsel for the Applicant        Mr R Horsley
Solicitor for the Applicant         Gillis Delaney Brown
Counsel for the Respondent    Mr P Biggins
Solicitor for the Respondent    Australian Prudential Regulation Authority