Farrelly and Australian Securities and Investments Commission

The applicants, directors of property development companies, sought a stay of the publication of a two-year disqualification order made by the Australian Securities and Investments Commission (ASIC) under section 206F of the Corporations Act 2001 (Cth). The disqualification arose from the liquidation of at least five companies within the group between 2019 and 2021, with outstanding debts including tax liabilities, and reports from liquidators indicating potential mismanagement. The applicants disputed the characterisation of the companies' failures, attributing them to bona fide disputes or external factors rather than poor management. The matter came before Deputy President McCabe of the Administrative Appeals Tribunal.

The primary legal issues before the Tribunal were whether it was appropriate and desirable to grant a stay of the publication of the disqualification order under section 41(2) of the Administrative Appeals Tribunal Act 1975 (Cth), and whether it was appropriate to make orders under section 35 of that Act. The applicants argued that publication of the disqualification would impede their ability to secure necessary refinancing for a near-completion property development project, as potential financiers would require personal guarantees, and they would be exposed to financial risk without direct management control. They contended that remaining in control was essential to completing the developments and obtaining the required finance.

Deputy President McCabe considered the objectives of the legislation, including consumer protection and transparency, and the regulator's objectives in making the disqualification decision. The Tribunal found that while the applicants' commercial purpose was clear, granting a stay, even a limited one without suppression orders, would not necessarily achieve the purpose of securing the effectiveness of the hearing and review. On balance, the Deputy President was not satisfied that it was appropriate to order a stay under section 41(2) of the Administrative Appeals Tribunal Act.