DKZN and and Australian Securities and Investments Commission

[2009] AATA 517

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2009] AATA 517

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2008/6233

GENERAL ADMINISTRATIVE DIVISION		)
Re		DKZN

Applicant

And Companies Auditors and Liquidators Disciplinary Board

First Respondent

And Australian Securities and Investments Commission

Second Respondent

DECISION

Tribunal Mr. G. L. McDonald, Deputy President

Date8 July 2009

PlaceMelbourne

Decision The Tribunal does not have jurisdiction to review the costs order made under s 223 of the Australian Securities and Investments Commission Act 2001 by the first respondent.

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Deputy President

CATCHWORDS – PRACTICE AND PROCEDURE – whether the Tribunal has jurisdiction to review a decision made under s 223 of the Australian Securities and Investments Commission Act 2001 – Tribunal does not have jurisdiction

Australian Securities and Investments Commission Act 2001 s 223

Corporations Act 2001 s 1292

Young and Companies Auditors and Liquidators Disciplinary Board and Australian Securities and Investments Commission [2000] AATA 488

REASONS FOR DECISION

8 July 2009 Mr. G. L. McDonald, Deputy President

1. A directions hearing was conducted in this matter on 5 June 2009. Among the issues for decision was whether the Tribunal has jurisdiction to review the decision of the first respondent in so far as it relates to costs under s 223 of the Australian Securities and Investments Commission Act 2001 (the Act).  On 19 June 2009 the second respondent requested written reasons for the decision the Tribunal made at that directions hearing in regard to the jurisdiction to review the costs order.  These are the reasons for that decision.

2. On 22 December 2008 the first respondent made two decisions that the applicant has asked this Tribunal to review. The first was the cancellation of the applicant’s registration as an auditor in accordance with powers under s 1292 of the Corporations Act 2001. The second decision required the applicant to pay $150,000 to the second respondent, being part of the second respondent’s costs of and incidental to the hearing by the first respondent.

3.      In a letter to the Tribunal and the applicant dated 8 January 2009, the second respondent submitted that the jurisdictional basis for the application for review of the decision regarding costs was unclear.  The second respondent subsequently challenged the Tribunal’s jurisdiction to review the costs decision.[1]

[1] However, the second respondent also considered that it would not be necessary to pursue that challenge if the applicant decided that he no longer sought a review of the costs decision.

4.      At a previous directions hearing, the parties initially agreed that the issue regarding whether the Tribunal has jurisdiction to review the costs decision would be left until the substantive hearing on the oral undertaking that the respondents would not enforce the costs order.  Subsequently, however, a directions hearing was held on 5 June 2009 to determine the jurisdiction issue and discuss other procedural matters.

5.      At that directions hearing, the applicant referred to Young[2] and submitted that if the Tribunal overturned, in full, the substantive decision then the costs order would go with it and did not pursue the matter any further than that submission. Counsel for the second respondent said the applicant’s proposition seemed correct, because it appeared that s 223 was expressed in such a way that the exercise of power to cancel or suspend is a precondition to the award of costs. Counsel submitted that the first respondent may decide to maintain a costs order despite its founding decision being set aside but that that was a matter for the first respondent. Counsel maintained it was an issue the Tribunal could not concern itself with as there was no legislative mandate investing it with jurisdiction. In any event there was no reason to suggest that the second respondent would act in bad faith and not have regard to the ultimate decision reached by the Tribunal when considering the enforcement of any earlier made costs award. Counsel then asked the Tribunal to dismiss the application to review the decision on the basis the Tribunal has no jurisdiction to review decisions made pursuant to s 223 of the Act.

[2] Young and Companies Auditors and Liquidators Disciplinary Board and Australian Securities and Investments Commission [2000] AATA 488.

6.      The Tribunal agrees with the submission of counsel for the second respondent.  Additionally, in accordance with the decision in Young, this Tribunal does not have jurisdiction to review a decision made under s 223.[3]  The Tribunal agrees with Deputy President McMahon’s statement that if the Tribunal, at the substantive hearing, decided the decision under review should be set aside, that is the applicant’s registration as an auditor should not be cancelled, then the sub-stratum of the power to award costs would disappear.[4]  However, that is a matter for the first respondent, as counsel for the second respondent submitted.

[3] [2000] AATA 488 at [86].

[4] [2000] AATA 488 at [86].

7.      The Tribunal also notes that there was no substantive opposition on behalf of the applicant to the submissions made.

8. Therefore, for the reasons outlined above, the Tribunal does not have jurisdiction to review the costs order made under s 223 of the Act by the first respondent.

I certify that the 8 preceding paragraphs are a true copy of the reasons for the decision herein of
Mr. G. L. McDonald, Deputy President

Signed:         .....................................................................................
  Associate                  Grace Horzitski

Date of Hearing  5 June 2009
Date of Decision  8 July 2009
Solicitor for the Applicant  Mr S Apostolou, Mason Sier Turnbull
Counsel for the Second Respondent       Ms D Mortimer SC

Solicitor for the Second Respondent        Australian Securities and Investments Commission