DKZN and and Australian Securities and Investments Commission

[2009] AATA 406

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2009] AATA 406

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

Date4 June 2009

PlaceMelbourne

Decision The application to have the confidentiality order lifted is refused.

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

Deputy President

CATCHWORDS – ADMINISTRATIVE LAW – application to have confidentiality order lifted – potential damage to applicant’s reputation – application to have confidentiality order lifted refused

Administrative Appeals Tribunal Act 1975 s 35

Corporations Act 2001 s 1296

REASONS FOR DECISION

4 June 2009 Mr G. L. McDonald, Deputy President    

1.      A stay hearing was conducted in this matter on 30 April 2009.  The stay application was subsequently refused and written reasons for the decision were handed down on 5 May 2009.

2. During the stay hearing the second respondent requested the confidentiality orders in place, made pursuant to s 35(2) of the Administrative Appeals Tribunal Act 1975, should not be continued.  In its reasons for decision for refusing the stay application, the Tribunal did not address the issue of the confidentiality orders.  On 11 May 2009 the second respondent requested written reasons.

3.      The Tribunal now provides the following reasons for continuing the confidentiality orders.

4.      At the hearing, Mr Hopkins, for the second respondent, submitted there was no longer any basis for confidentiality, particularly if the stay was not granted.  Mr Hopkins submitted that the confidentiality order was initially made because of the applicant’s ongoing audits and the work he was doing with a larger group of entities.  At the hearing, the applicant sought to be permitted to complete audits for a smaller group of entities.  Since the rejection of the stay application, the applicant is now unable to complete those audits.  Mr Hopkins submitted the issue was now limited to a reputational issue and there was little evidence concerning the effect on the applicant’s reputation if the confidentiality order was lifted.

5.      Mr Hopkins may be correct to state that the confidentiality order now merely comes down to the applicant’s reputation.  However, reputation is a reasonable issue for somebody who has been, in the case of the applicant, an auditor for over 25 years.  There is a distinction between the applicant suffering damage to his reputation as the result of the Tribunal refusing the stay.  The circumstances relating to the stay involved only thee organisations and the applicant was not obliged to give any reason for withdrawing from auditing them.  The applicant is a qualified accountant.  While he may have disposed of his accounting firm, it may be that he wishes at some time in the future to recommence in practice.  If he was to succeed in his substantive application before the Tribunal, adverse publicity issued before the hearing concerning his professionalism, albeit in a different context, could be unduly damaging.  If, in fact, the Tribunal finds in his favour in the substantive application and the confidentiality order were lifted before then, he would have a stain over his reputation despite the decision in his favour.

6.      Mr Hopkins produced to the Tribunal some newspaper articles referring to a particular company the applicant was an auditor of and referring to the applicant by name.  However, those articles are limited and do not reveal that the applicant is involved in a proceeding before this Tribunal.

7.      The Tribunal is unable to see that the second respondent is adversely affected as the result of the continuation of the confidentiality order until the conclusion of the substantive hearing and the determination has been issued.  The Tribunal notes the requirement that the first respondent publish information concerning any ban in the government Gazette and is able to otherwise publicise the decision (s 1296(1)(c) and s 1296(1B) of the Corporations Act 2001 respectively).  Such publication is designed to notify people and put them on alert that the person banned is no longer able to practise.  The applicant is, until the hearing is concluded, no longer able to practise.  He is well aware that should he do so this would breach the currently operating ban and would likely be fatal to his having the application succeed.  In those circumstances, the Tribunal is satisfied that the public are adequately protected in the meantime.

8.      The Tribunal is well aware of the desirability in the public interest to have the case heard in public.  It has addressed this concern in allowing the public access to the hearing subject to not disclosing the information which may identify the applicant.  If the applicant is unsuccessful, then publicity will follow in accordance with the terms of the Corporations Act 2001.  If the applicant is successful then there is no statutory mandate for his identity to be published and it would be unfair and detrimental to do so.

9.      In the circumstances the confidentiality order should remain in place.

I certify that the nine preceding paragraphs are a true copy of the reasons for the decision herein of

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

Date of Hearing  30 April 2009
Date of Decision  4 June 2009

Counsel for the Applicant  Ms K Judd SC and assisted by

Mr J Brereton

Solicitor for the Applicant  Mason Sier Turnbull
Counsel for the Second Respondent     Mr N Hopkins

Solicitor for the Second Respondent     Australian Securities & Investments Commission