Dimitropoulos and Australian Securities and Investments Commission

[2018] AATA 2160

Dimitropoulos and Australian Securities and Investments Commission [2018] AATA 2160 (9 July 2018)

Division:Taxation & Commercial Division

File Number(s):      2017/3749

2017/3754

Re:John Dimitropoulos

APPLICANT

AndAustralian Securities and Investments Commission

RESPONDENT

DECISION

Tribunal:Senior Member Linda Kirk

Date:9 July 2018

Place:Sydney

The Tribunal sets aside the summons issued on 14 February 2018.

........................[SGD]................................................

Senior Member Linda Kirk

CATCHWORDS

PRACTICE AND PROCEDURE - summons issued to the respondent - set aside or revoke summons - section 37 of the Act - relevant principles - whether appropriate to issue summons - summons set aside

LEGISLATION

Administrative Appeals Tribunal Act 1975 (Cth)

Corporations Act 2001 (Cth)

CASES

Ehrenfeld and Australian Securities and Investments Commission [2017] AATA 883

Re General Merchandise and Apparel Group Pty Ltd and CEO, Customs [2009] AATA 988; (2009) 114 289
Re Perpetual Trustee Co (Canberra) Ltd and Commissioner for ACT Revenue (1993) 29 ALD 817
Re Radge and Commissioner of Taxation [2007] AATA 1317; (2007) 95 ALD 711

SECONDARY MATERIALS

AAT Practice Direction Lodgement of Documents under sections 37 and 38AA of the AAT Act

REASONS FOR DECISION

Senior Member Linda Kirk

9 July 2018

INTRODUCTION

1. Mr Dimitripolous (‘the Applicant’) applied to the Tribunal for review of decisions made by a delegate of the Australian Securities and Investment Commission (‘ASIC’) under the Corporations Act 2001 (Cth) on 23 June 2017 permanently prohibiting him from providing any financial services and engaging in any credit activities. 

2. The proceedings have reached the stage at which ASIC have filed and served T-documents pursuant to section 37 of the Administrative Appeals Act 1975 (Cth) (‘the Act’).

3. At the request of the Applicant, the Tribunal issued a summons to ASIC seeking production of various documents.  ASIC objected to this summons, and in response the Applicant’s representative advised that the Applicant sought a narrower range of documents to be produced pursuant to the summons.  ASIC maintained its objection to the summons and seeks an order from the Tribunal revoking it or setting it aside.

   RELEVANT PRINCIPLES

4. The Tribunal may set aside or revoke a summons it has issued on the basis that it is oppressive or otherwise improper.[1]

   [1] See Re General Merchandise and Apparel Group Pty Ltd and CEO, Customs [2009] AATA 988; (2009) 114 ALD 289 and Re Perpetual Trustee Co (Canberra) Ltd and Commissioner for ACT Revenue (1993) 29 ALD 817,

5. Section 37(1) of the Act requires a decision-maker to lodge with the Tribunal every document in its possession or control that is relevant to the review of the decision by the Tribunal.  Section 37(2) provides that, where the Tribunal is of the opinion that particular other documents, or other documents included in a particular class of documents, may be relevant to the review, the Tribunal may, by written notice, require lodgment of those documents.  ASIC is thus obliged under section 37 of the Act in this matter to produce relevant documents and, if such documents are not produced, the Tribunal has the power to order their production. 

6. Existing Tribunal authority supports a finding that it is inappropriate for the Tribunal to issue a summons requiring production of documents by the parties to review proceedings, including the respondent agency. In Re Radge and Commissioner of Taxation [2007] AATA 1317; (2007) 95 ALD 711 Deputy President Forgie stated at [78]:

   ... [G]enerally, I do not consider it appropriate to use the Tribunal’s power to summons documents to obtain documents from the parties themselves. It is a power that should generally be reserved to obtain documents from third parties. The documents will then be available to both parties as well as to the Tribunal. In the case of the decision-maker, relevant documents will generally be produced under s 37 of the AAT Act. If they are not or if it later appears that there are other documents that may be relevant to the review, the Tribunal has power to order their production under s 37(2). That section has effect notwithstanding any rule of law relating to privilege or the public interest in relation to the production of documents, and so is a more extensive power than that available to the tribunal under the summons power.

7. The obligation imposed by section 37 on the respondent agency (ASIC) is ongoing throughout the review proceedings, and it is therefore obliged to file supplementary T-Documents as and when necessary.[2]  ASIC also is subject to its model litigant obligations and the obligation under section 33(1AA) of the Act to use its “best endeavours to assist the Tribunal to make its decision in relation to the proceeding.” These obligations are imposed to assist the Tribunal to fulfill its statutory objective in section 2A of the Act, namely to provide a mechanism of review that is “fair, just, economical, informal and quick” and “proportionate to the importance and complexity of the matter.”

   [2] See sections 37 and 38AA of the Act and para [6.1] AAT Practice Direction Lodgement of Documents under Sections 37 and 38AA of the AAT Act

   EVIDENCE BEFORE THE TRIBUNAL

8. The review proceeding has not yet progressed to the point of the Applicant filing and serving his statement of facts, issues and contentions.

9. ASIC has to date filed and served 22 folders of T-Documents pursuant to its obligations under section 37 of the Act.  These documents include a witness statement of and documents related to the following individuals:

   ·Albert Murphy;

   ·Lincoln Naish; and

   ·Dany Dona.

10. The Applicant seeks by way of summons (as amended) production by ASIC of the following:

    Any transcript or recording of, or file notes made by any ASIC officer during, any interview or examination (whether formal or informal) conducted by ASIC of any of: 

    a) Albert Murphy; 

    b) Lincoln Naish; 

    c) Dany Dona, 

    relating to ASIC’s investigations into the affairs of Sunpac Finance Pty Limited and/or Heritage Financial Solutions Australia Pty Limited. 

    CONSIDERATION

11. The Tribunal has considered the relevant principles above and the submissions of the parties at the interlocutory hearing, and finds that the summons should be set aside for the following reasons.

12. As Deputy President Forgie observed in Re Radge and Commissioner of Taxation it is generally inappropriate for the summons power to be used to obtain documents from the parties, and in the case of the decision-maker, section 37 of the Act requires production of every document in its possession or control that is relevant to, and at all stages of, the review. If such documents are not produced, the Tribunal can order their production.

13. In Ehrenfeld and Australian Securities and Investments Commission [2017] AATA 883 at [34] Senior Member Toohey considered the use of a summons to produce documents issued to ASIC at a stage of the proceeding when the Applicant had not yet lodged his statement of facts, issues and contentions. She accepted an argument by counsel for ASIC that the summons be set aside and that the Applicant be allowed to lodge “a statement of issues facts and contentions and any evidence on which he sought to rely and, if he could identify particular documents in ASIC’s possession that had not been produced and which were relevant to the decision to be made by the Tribunal, he could ask for an order under s 37(2).”

14. The Tribunal adopts the same approach in the present matter.  Once the Applicant has lodged his statement of facts, issues and contentions and any evidence on which he seeks to rely, if he can identify particular documents in ASIC’s possession that it has not produced which are relevant to the decision to be made by the Tribunal, he can ask the Tribunal to make an order under section 37(2) of the Act for production of these documents.  As Deputy President Forgie noted in Re Radge and Commissioner of Taxation, the power under section 37 “is a more extensive power than that available to the tribunal under the summons power”.  This approach reflects, as Senior Member Toohey noted in Ehrenfeld and Australian Securities and Investments Commission at [31], “the centrality of s 37 to the [review] proceeding” and the obligations imposed on the parties under the Act to assist the Tribunal to make its decision in relation to the proceeding in accordance with its statutory objectives.

    DECISION

15. The Tribunal sets aside the summons issued on 14 February 2018.

I certify that the preceding 15 (fifteen) paragraphs are a true copy of the reasons for the decision herein of Senior Member Kirk

...........................[SGD].............................................

Associate

Dated: 9 July 2018

Date(s) of hearing:	22 May 2018
Solicitors for the Applicant:	Mr A Cheshire - Mills Oakley
Counsel for the Respondent:	Mr S Free