CPAC Residential Pty Ltd and Australian Securities and Investments Commission

[2016] AATA 428

CPAC Residential Pty Ltd and Australian Securities and Investments Commission [2016] AATA 428 (24 June 2016)

Division	TAXATION & COMMERCIAL DIVISION
File Number	2016/2326
Re	CPAC Residential Pty Ltd
APPLICANT
And	Australian Securities and Investments Commission
RESPONDENT

DECISION

Tribunal	Deputy President Bernard J McCabe
Date	24 June 2016
Place	Brisbane

The Tribunal does not have jurisdiction to review the application.

...............................[sgd].........................................

Deputy President Bernard J McCabe

Catchwords
JURISDICTION – whether reviewable decision – ASIC decision to register Form 504 appointment of receiver –– administrative process – not reviewable

Extension of time request refused – Stay request refused

Legislation
Administrative Appeals Tribunal Act 1975 (Cth); ss 3(3), 25, 29, 41, 42B,

Australian Securities and Investments Commission Act 2001 (Cth); 244

Corporations Act 2001 (Cth); ss 418A, 1274, 1317A, 1317B, 1317C, 1322,

Cases

Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321

Re Gallivan Investments and Australian Securities Commission (1991) 24 ALD 611

REASONS FOR DECISION

Deputy President Bernard J McCabe

24 June 2016

1. The applicant has asked the Tribunal to review a decision made by an officer of the Australian Securities and Investments Commission (ASIC) to make an entry on one of ASIC’s registers noting the appointment of a receiver to property of the company. The applicant’s director, Mr Harold Upton, says the appointment of the receiver was invalid and ASIC should have paid closer attention when it accepted the relevant forms from the third party appointing the receiver. He wants ASIC to correct the register, or at least remove the information about the appointment of a receiver.

2. The application raises a number of questions. The first is one of jurisdiction. Is the decision in question a reviewable decision that is properly before the Tribunal? Depending on the view I take on that question, I must also decide whether an extension of time should be granted, and (assuming the Tribunal has jurisdiction to deal with the matter and grants an extension of time) I must consider whether the decision under review should be stayed pending the outcome of the review proceedings.

3. As it happens, I am satisfied:

   ·The Tribunal does not have jurisdiction to entertain the review;

   ·Even if I were satisfied the Tribunal had jurisdiction, I would not grant an extension of time under s 29(7) of the Administrative Appeals Tribunal Act 1975 (the AAT Act); and

   ·Even if I formed the view an extension of time were appropriate, I am not satisfied I should order that the operation or implementation of the original decision to make entries on the register should be stayed pursuant to s 41(2) of the AAT Act.

4. I explain my reasons below.

   The background to the dispute

5. Mr Upton is a director of CPAC Residential Pty Ltd (CPAC). The company owns real property that is subject to a mortgage in favour of Westpac. The mortgage secures an advance to another company which was a trustee for an investment scheme. Westpac explained in correspondence with ASIC dated 8 September 2015 (exhibit one at p 70) that the trustee was replaced by CPAC without Westpac’s consent in default of the trustee’s obligations. Westpac subsequently appointed receivers to the property on 23 January 2014. On 24 January 2014, its solicitors informed ASIC of the appointment in a Form 504 notice. A copy of the notice is found in exhibit one at p 19-22. As I understand it, ASIC duly noted the appointment on a register it maintains pursuant to s 1274 of the Corporations Act 2001 (the Corps Act). ASIC did not make any further enquiries about the appointment even though it has power to do so under s 1274(9). It did not, for example, ask to see the instrument under which the appointment was made or require other records that would verify the lawfulness of the appointment. The record of the appointment is there on the register for all to see.

6. The applicant says the appointment was not valid. It says ASIC should not have accepted the notice and made an entry on its register. The applicant is worried the receiver will shortly sell the property and that any buyer will be misled by the register as it stands. That is as may be, but the applicant’s real objective is to have the register changed, at least in the short term, while the applicant’s questions over the validity of the appointment of the receiver can be ventilated. Mr Upton told me at the hearing that the applicant was confining its challenge to the decision to accept the information in the Form 504 and note it on the register. But such a limited review would not resolve anything of substance. There is no utility in simply reviewing the process by which the form came to be accepted and recorded on the register.

7. The applicant might challenge the appointment of the receiver in a court of competent jurisdiction pursuant to s 418A of the Corps Act. It could seek declarations. It could also ask the Court to make an order directing the rectification of the register pursuant to s 1322(4)(b). But Mr Upton says the applicant cannot afford to do any of those things. He argues this Tribunal should compel ASIC to remove the note about the appointment of external administrators from its register so that Westpac will have no choice but to seek a declaration in court to clarify the situation.

8. I doubt that is a sensible plan. I also have some concerns over whether an application to the Tribunal with that end in mind amounts to an abuse of process. If the applicant wishes to challenge the appointment of a receiver, it should do so in the usual way.

   Does the Tribunal have jurisdiction to review this decision?

9. It almost goes without saying that the Tribunal does not have a general power to review the work and processes of administrative decision-makers. We do not investigate or provide a remedy for maladministration per se. That is the role of the Ombudsman. The Tribunal has jurisdiction to deal with particular decisions that are designated in an enactment as being reviewable decisions for the purpose of the AAT Act: s 25. Not every decision that may be amendable to judicial review is a reviewable decision that is potentially before the Tribunal.

10. Section 244 of the Australian Securities and Investments Commission Act 2001 (the ASIC Act) is one possible source of jurisdiction in relation to decisions made by ASIC. But s 244 does not refer to a decision to accept a form and enter the contents on a register, so the AAT’s jurisdiction in this case is not conferred by the ASIC Act. Mr Upton says it can be found in Part 9.4A of the Corps Act. Section 1317B says the Tribunal has (subject to the balance of the Corps Act) jurisdiction to review decisions of the minister, ASIC or the Companies Auditors and Liquidators Disciplinary Board that are made under the Corps Act. The applicant points out s 1317A says ‘decision’ in this context has the same meaning as in the AAT Act. Section 3(3) of the AAT Act defines ‘decision’ very widely, and includes ‘doing or refusing to do any….act or thing’. Mr Upton says ASIC’s behaviour in uncritically publishing the information contained in the form provided by Westpac’s agents amounts to doing an act or thing, and is, without more, a reviewable decision.

11. ASIC takes a different view. Dr Bender, ASIC’s counsel, pointed out the High Court said in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 that an “essential quality of a reviewable decision is that it be a substantive determination”: at 337 per Mason CJ. (The High Court in that case was considering the language of the Administrative Decisions (Judicial Review) Act 1978, but it acknowledged the same approach was appropriate to the virtually identical language in the AAT Act: at 374-375 per Toohey and Gaudron JJ.) Mason CJ said the narrower approach was required to avoid “a fragmentation of the processes of administrative decision-making and set at risk the efficiency of the administrative process”: at 337. His Honour then explained:

    a reviewable "decision" is one for which provision is made by or under a statute. That will generally, but not always, entail a decision which is final or operative and determinative, at least in a practical sense, of the issue of fact falling for consideration. A conclusion reached as a step along the way in a course of reasoning leading to an ultimate decision would not ordinarily amount to a reviewable decision, unless the statute provided for the making of a finding or ruling on that point so that the decision, though an intermediate decision, might accurately be described as a decision under an enactment.

12. Dr Bender said ASIC’s conduct in this case did not involve a decision in the sense discussed in Bond, even if the conduct appeared to answer the statutory description of ‘doing or refusing to do any act or thing’. Dr Bender went on to refer to the Tribunal’s decision in Re Gallivan Investments and Australian Securities Commission (1991) 24 ALD 611 to argue ASIC’s conduct in accepting the form and making entries on the register cannot be seen in isolation from the larger administrative process. To use the language of Deputy President McMahon in Gallivan, accepting the form and making an entry on the register “is more in the nature of a step of an administrative nature, not in itself determinative, but leading towards a final resolution of the controversy between the parties”: at 615. That is a problem, as DP McMahon explained (at p 614) because:

    …unless the Commission’s decision can be regarded as the ultimate or operative decision determining the substantial issues between the parties, it cannot be regarded as a reviewable decision…

13. ASIC is right. ASIC discharged an administrative function when it accepted the form and recorded the information on a register. It was a step in a process that did not require the exercise of judgment or discretion. The substantive dispute lies elsewhere – in relation to the validity of the appointment, most obviously. But that appointment was not made by ASIC, and the substantive remedy in the event of an irregularity lies with the Court, not the Tribunal.

14. I would add the decision in question – if that is what it is – would in any event be an excluded decision within the meaning of s 1317C. Section 1317C qualifies the general language of s 1317B. Section 1317C sets out a number of specific decisions that are deemed not to be reviewable decisions before the Tribunal. At the top of the list, at
    s 1317C(a), there is a reference to:

    a decision in respect of which any provision in the nature of an appeal or review is expressly provided by this Act

15. Section 1322(4)(b) authorises the court to review and correct irregularities in ASIC’s registers. The Tribunal is not a court. The fact the court is invested with responsibility for reviewing and amending irregularities in the register effectively ousts the Tribunal’s jurisdiction to conduct a review to the same end. I cannot order ASIC to withdraw or amend the entries it has placed on the register. That means the decision is excluded from review, but it would in any event suggest the review was frivolous within the meaning of s 42B of the AAT Act. The Tribunal may dismiss an application for review that is frivolous.[1]

    [1] ASIC did not ask that the matter be dismissed under s 42B, and I did not discuss that possibility with the parties at the jurisdiction hearing. In those circumstances, it would be inappropriate to deal with the matter under s 42B at this juncture.

16. It follows I am satisfied the Tribunal does not have jurisdiction to entertain this review because there is no reviewable decision. But even if I am wrong about that, I would not grant the applicant an extension of time pursuant to s 29 of the AAT Act. The extension is required because the Form 504 was lodged with ASIC on 24 January 2014. The applicant was aware of the decision by mid-2015: I note Mr Upton’s complaints to ASIC are recorded in an email dated 17 June 2015 (exhibit one at p 72). The application for review was received by the Tribunal on 18 April 2016. It follows the application is out of time.

17. The principles that apply to applications for an extension of time are well known. In the circumstances, the following matters are relevant to the discretion:

    ·The applicant’s excuse: Mr Upton said the applicant was not resting on its rights before it lodged the application for review. Mr Upton had complained to ASIC. I accept that is so. While that would not ordinarily be a good excuse, I accept an application to the Tribunal was not the most obvious way of vindicating any rights the applicant may have had. The delay is reasonably lengthy but I do not think the quality of the excuse counts against him.

    ·Prejudice: I am not satisfied ASIC would be unfairly prejudiced if the application were to proceed despite the delay. Equally, though, I am not satisfied the applicant would be prejudiced if an extension were denied given it has more obvious remedies open to it.

    ·Merit: I have already explained the Tribunal is unable to provide any sort of meaningful relief because it cannot direct that the register be amended. That is a matter for the court, not the Tribunal. The review is futile.

18. In all the circumstances, I do not accept it would be appropriate to grant an extension of time.

19. That leaves only the question of a stay. That question would only arise if the Tribunal accepted it had jurisdiction and allowed an extension of time – and it does not. I will address the question briefly in any event.

20. The Tribunal has the power to stay the operation or implementation of the decision under s 41(2) of the AAT Act “for the purpose of securing the effectiveness of the hearing and determination of the application for review”. The power is a discretionary one. It can only be exercised where the Tribunal is satisfied it is desirable to do so after considering the interests of anyone who might be affected.

21. I have not been provided with any information about the attitude of persons who will obviously be affected by the review, including the receivers and the bank that appointed them. That creates a practical though not insurmountable obstacle to the exercise of the stay power. But there is more. The applicant is not seeking the stay in order to preserve the effectiveness of the hearing. He is seeking it to force Westpac to react. That is not an appropriate reason for exercising the power.

22. It is also unclear precisely how a stay would operate. Mr Upton assumes the power can be exercised to order ASIC to amend the register, at least temporarily – but that would result in the Tribunal directing ASIC to do something that is properly within the jurisdiction of the Court under s 1322 of the Corps Act. That course seems fraught with difficulty.

23. There is one further consideration. ASIC says there is no dispute that a receiver has been appointed. If the register were to be amended, it would effectively misrepresent reality. That is a terrible idea: the investing public rely on the accuracy and integrity of those registers. As it happens, Mr Upton says he believes the receiver was not validly appointed so the register would not misrepresent the true position – but he cannot be confident of that assertion in the absence of a declaration from the Court. Even if the Tribunal had the power to amend the register, it would be inappropriate for it to ‘take sides’ in a dispute between the applicant and the receiver by amending the register.

24. In all the circumstances, I could not be satisfied it is desirable to stay the decision in question if I accepted it was a reviewable decision and I allowed an extension of time.

    Conclusion

25. The Tribunal does not have jurisdiction to review the application.

26.     I certify that the preceding 25 (twenty-five) paragraphs are a true copy of the reasons for the decision herein of Deputy President Bernard J McCabe

......................[sgd]................................

Associate

Dated             24 June 2016

Date of hearing	15 June 2016
Date final submissions received	15 June 2016
Advocate for the Applicant	Harold Upton
Counsel for the Respondent	Dr P Bender
Solicitors for the Respondent	ASIC - Administrative Law, Chief Legal Office