Hancock Prospecting Pty Ltd and Australian Securities and Investments Commission
[2012] AATA 365
•15 June 2012
[2012] AATA 365
Division GENERAL ADMINISTRATIVE DIVISION File Number
2012/1233
Re
Hancock Prospecting Pty Ltd
Hancock Minerals Pty Ltd
Hope Downs Iron Ore Pty Ltd
APPLICANTS
And
Australian Securities and Investments Commission
RESPONDENT
ORDER
Tribunal Deputy President S D Hotop
Date 15 June 2012 Place Perth The application of Jeffrey John Knapp, made under s 30(1A) of the Administrative Appeals Tribunal Act 1975 (Cth) on 18 April 2012, to be made a party to this proceeding is refused.
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S D Hotop
Deputy PresidentCATCHWORDS
PRACTICE AND PROCEDURE - application by person to be made party to proceeding - joinder applicant not a person whose interests are affected by decision under review - discretionary power to make joinder applicant a party to proceeding not enlivened - if discretionary joinder power were enlivened relevant considerations militate against grant of joinder application - application to be made party to proceeding refused
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth), s 30(1) and s 30(1A)
CASES
Re Control Investments Pty Ltd and Australian Broadcasting Tribunal (No 1) (1980) 3 ALD 74
Re McHattan and Collector of Customs (NSW) (1977) 1 ALD 67
REASONS FOR ORDER
Deputy President S D Hotop
15 June 2012
introduction
On 29 March 2012 Hancock Prospecting Pty Ltd, Hancock Minerals Pty Ltd, and Hope Downs Iron Ore Pty Ltd (“the applicants”) applied to the Tribunal for review of a decision of the Australian Securities and Investments Commission (“the respondent”), dated 2 March 2012 (“the decision under review”).
The decision under review is a decision refusing to make an order under s 340(1) of the Corporations Act 2001 (Cth) (“the Act”) relieving each of the applicants of the obligation under Chapter 2M – specifically, s 319(1) in Part 2M.3 – of the Act to lodge with the respondent a financial report for each of certain financial years, namely, the years 2008, 2009 and 2010 in the case of Hancock Minerals Pty Ltd and Hope Downs Iron Ore Pty Ltd, the year 2010 in the case of Hancock Prospecting Pty Ltd, and “for future financial years” in the case of each of the applicants.
On 18 April 2012 Jeffrey John Knapp (“Mr Knapp”) applied, in writing, to the Tribunal to be made a party to this proceeding, pursuant to s 30(1A) of the Administrative Appeals Tribunal Act 1975 (Cth) (“the AAT Act”).
By letters dated 18 April 2012 an officer of the Tribunal notified the applicants and the respondent of Mr Knapp’s application for joinder and sought their responses.
By letter dated 1 May 2012 the applicants notified the Tribunal that they opposed Mr Knapp’s request.
By letter dated 1 May 2012 the respondent notified the Tribunal that it opposed Mr Knapp’s request.
Pursuant to directions made by the Tribunal on 4 May 2012, Mr Knapp filed and served written submissions and a bundle of documents in support of his application for joinder, and the respondent and the applicants filed and served written submissions in support of their opposition to Mr Knapp’s application for joinder.
Mr Knapp’s Case for Joinder
Mr Knapp’s case for his being joined as a party to this proceeding (as set out in his application for joinder and in his submissions) may be summarised as follows:
· he is a university lecturer in financial accounting and his performance as a lecturer is evaluated by his employer in relation to his teaching, administration and research activities;
· he has an active research interest and is undertaking a research program in respect of the financial reports of large Australian companies, including the granting by the respondent of relief to such companies from the requirement to lodge annual financial reports and accounts with the respondent;
· he is using the annual financial reports of Hancock Prospecting Pty Ltd for the purpose of writing “a case study for potential submission to the journal ‘Accounting Perspectives’ published by Wiley-Blackwell”, and he has already accessed from the respondent’s public database Hancock Prospecting Pty Ltd’s annual financial reports for the years 2006–2009 for the purpose of that research project and he also wishes to access the annual financial reports of Hancock Prospecting Pty Ltd for the years 2010 and 2011 for that purpose but is unable to do so because those financial reports have not been lodged with the respondent and are therefore not publicly available;
· his interests are affected by the decision under review because that decision affects the abovementioned research project on Hancock Prospecting Pty Ltd’s financial reporting that he is currently undertaking with a view to publication in an academic journal;
· Hancock Prospecting Pty Ltd is obliged by s 319 of the Act to lodge its annual financial reports for the years 2010 and 2011 with the respondent, and the respondent has a “constructive obligation” to ensure that those financial reports are lodged with it and made available on its public database in the event that the decision under review is affirmed by the Tribunal;
· the respondent has not exercised its power under s 321 of the Act to require Hancock Prospecting Pty Ltd to lodge its annual financial report for 2010 and is thereby currently providing Hancock Prospecting Pty Ltd with “de facto relief” in respect of its annual financial report for 2010;
· he is concerned that the respondent is “prepared to give ground to” Hancock Prospecting Pty Ltd as regards the decision under review “by reversing their original position during the Tribunal proceedings or by otherwise making arrangements with [Hancock Prospecting Pty Ltd] that would shield their annual financial reports for 30 June 2010 and 30 June 2011 from [his] access”, and the respondent’s decision to refuse Hancock Prospecting Pty Ltd “de jure relief” would be “worthless” if the respondent is “prepared to act in a calculated way to provide [Hancock Prospecting Pty Ltd] with de facto relief”;
· he supports the decision under review, namely, the respondent’s decision to refuse Hancock Prospecting Pty Ltd’s application for s 340 relief from the requirement to lodge its annual financial reports for 2010 and 2011.
In support of his application for joinder Mr Knapp filed a large bundle of documents comprising copies of the following:
·Hancock Prospecting Pty Ltd’s annual financial reports for each of the financial years 2006, 2007, 2008 and 2009;
·Parliamentary Joint Statutory Committee on Corporations and Securities, Report on Aspects of the Regulation of Proprietary Companies (March 2001);
·ASIC Media Release 10 – 186AD, “Large proprietary companies must lodge financial reports” (8 September 2010);
·Michael West, “Rinehart company fails to file accounts”, The Sydney Morning Herald (14 March 2012);
·ASIC Media Release 12 – 64AD, “Statement on Hancock Prospecting” (5 April 2012);
·Michael West, “Mystery flight of Ansett accounts”, The Sydney Morning Herald (21 November 2011);
·Jeffrey Knapp and Fiona Poon, “Instruments of individual financial reporting relief: The case for ASIC disclosure” (2011) 29 Company and Securities Law Journal 73.
Mr Knapp tendered this bundle of documents in evidence (Exhibit 1).
The Relevant Statutory Provisions
Section 30 of the AAT Act relevantly provides:
“ …
Parties
(1)Subject to paragraph 42A(2)(b), the parties to a proceeding before the Tribunal for a review of a decision are:
(a)any person who, being entitled to do so, has duly applied to the Tribunal for a review of the decision;
(b)the person who made the decision;
(c)…; and
(d)any other person who has been made a party to the proceeding by the Tribunal on application by the person in accordance with subsection (1A).
…
Person whose interests are affected may apply to be a party
(1A)Where an application has been made by a person to the Tribunal for a review of a decision, any other person whose interests are affected by the decision may apply, in writing, to the Tribunal to be made a party to the proceeding, and the Tribunal may, in its discretion, by order, make that person a party to the proceeding.
…”
The Issues
The issues for the Tribunal’s determination, for the purposes of s 30(1A) of the AAT Act, are:
·whether Mr Knapp is a “person whose interests are affected by” the decision under review; and, if so
·whether it is appropriate for the Tribunal, in its discretion, to order that Mr Knapp be made a party to this proceeding.
Consideration
Is Mr Knapp a “person whose interests are affected by” the decision under review, within the meaning of s 30(1A) of the AAT Act?
The interpretation of the phrase “person whose interests are affected by the decision”, within the meaning of the AAT Act, was comprehensively considered by the Tribunal in Re McHattan and Collector of Customs (NSW) (1977) 1 ALD 67 and in Re Control Investments Pty Ltd and Australian Broadcasting Tribunal (No 1) (1980) 3 ALD 74.
In McHattan Brennan J (President), in relation to s 27(1) of the AAT Act which refers to persons who may make an application to the Tribunal for review, said (at 69–70):
“ The interest of which s 27(1) speaks is an interest which is affected by the decision to be reviewed, not by the review. … The relevant ‘interests’ do not have to be pecuniary interests or even specific legal rights: … Restrictions of that kind are incompatible with the variety of decisions which are subject to review – some decisions affecting legal rights, others being unlikely to do so. …
However, a decision which affects interests of one person directly may affect the interests of others indirectly. Across the pool of sundry interests, the ripples of affection may widely extend. The problem which is inherent in the language of the statute is the determination of the point beyond which the affection of interests by a decision should be regarded as too remote for the purposes of s 27(1). The character of the decision is relevant, for if the interests relied on are of such a kind that a decision of the given character could not affect them directly, there must be some evidence to show that the interests are in truth affected.”
In Control Investments Davies J (President) said (at 79):
“ In their context in ss 27 and 30, the words ‘interests are affected’ denote interests which a person has other than as a member of the general public and other than as a person merely holding a belief that a particular type of conduct should be prevented or a particular law observed. The interest affected need not be a legal interest nor need the person seeking joinder establish legal ownership of the interest. …
However, a person seeking joinder must be able to identify a relevant interest which is his. In other contexts, dicta in cases have used the adjectives ‘real’, ‘genuine’ and ‘direct’ to describe the relationship required between the decision and the interest. Sections 27(1) and 30(1) [the statutory predecessor of s 30(1A)] do not make use of adjectives but they do require that the applicant demonstrates genuine affection of an interest which attaches to him. The nature of the interest required in a particular case will be influenced by the subject matter and context of the decision under review. …”
Davies J also referred (at 80) to the requirement of “a specific interest which belongs to the person seeking joinder”, and he added (at 81):
“ … interests may be affected by a decision either adversely or beneficially and they may be so affected whether the decision was right or wrong. A person whose interests are affected by a decision is entitled to be joined as a party to proceedings reviewing that decision so as to put forward a view that the decision should not be set aside or changed.”
Having regard to the abovementioned principles enunciated in McHattan and Control Investments and to Mr Knapp’s case for joinder, the Tribunal is not satisfied that Mr Knapp is a “person whose interests are affected by” the decision under review, within the meaning of s 30(1A) of the AAT Act, for the following reasons.
In general terms, the decision under review is a decision by the respondent, pursuant to s 340(1) of the Act, refusing to grant an application made by each of the applicants under s 340(3) for relief from its obligation under s 319 of the Act to lodge with the respondent a financial report for each of certain financial years. Clearly, the only persons whose interests are directly affected by that decision are the applicants.
The question, however, is whether Mr Knapp has a sufficient interest which is sufficiently affected by that decision such that he is a “person whose interests are affected by” that decision, within the meaning of s 30(1A) of the AAT Act. It is relevant to note in this connection that, as Mr Knapp supports the decision under review, the question is whether Mr Knapp has a sufficient interest which is beneficially affected by that decision.
Having considered Mr Knapp’s submissions and the abovementioned supporting documentation which he provided (Exhibit 1), it seems to the Tribunal that the interest of Mr Knapp in relation to the decision under review is an interest of an intellectual and professional or vocational nature. That interest, in the Tribunal’s opinion, is not a specific interest which belongs to Mr Knapp; rather, it is an interest of a general nature which he has in common with numerous other members of the public, including academics in accounting and finance, academics in corporations and securities law, business and finance journalists and bloggers, and like persons who have a professional or vocational interest in the subject matter of the decision under review.
Furthermore, it seems to the Tribunal that the thrust of Mr Knapp’s submissions does not relate so much to his interest in supporting the decision under review, but rather relates to his asserted conviction that Hancock Prospecting Pty Ltd must fulfil its obligations under s 319 of the Act to lodge its annual financial reports with the respondent in accordance with that section, and to his concern that the respondent does not regard itself as having a duty or responsibility to enforce that obligation against Hancock Prospecting Pty Ltd and, accordingly, cannot be relied upon to seek to enforce that obligation against Hancock Prospecting Pty Ltd. However, in the Tribunal’s opinion, Mr Knapp’s belief that s 319 must be observed by Hancock Prospecting Pty Ltd and that the respondent has a duty or responsibility to enforce s 319 against Hancock Prospecting Pty Ltd does not, of itself, constitute an “interest” for the purpose of s 30(1A) of the AAT Act, and it certainly does not constitute an “interest which is affected by” the decision under review for the purpose of that subsection: Control Investments (above) at 79.
As regards Mr Knapp’s submission that his interests are affected by the decision under review in that that decision “affects a current research project on [Hancock Prospecting Pty Ltd’s] financial reporting that [he is] undertaking with a view to publication in an academic journal”, the Tribunal does not accept that Mr Knapp’s “current research project” constitutes an “interest” for the purpose of s 30(1A) of the AAT Act. Furthermore, even if that research project did constitute such an interest it is clear that it is not directly affected by the decision under review, and, in the Tribunal’s opinion, Mr Knapp has not demonstrated by his submissions and supporting documentation that that research project is otherwise sufficiently affected by the decision under review for the purpose of s 30(1A) of the AAT Act. Mr Knapp has merely asserted that the decision under review affects that research project, but he has not explained – and it is not apparent to the Tribunal – how, or to what extent, that decision, namely, a decision to refuse to grant relief to the applicants from their statutory obligation to lodge annual financial reports with the respondent, affects that research project.
In short, the Tribunal is of the opinion that Mr Knapp’s interest is merely an interest in the present application for review and in his participating in that proceeding, and that he does not possess a sufficient interest which is sufficiently affected by the decision under review itself which is the subject of that proceeding.
Conclusion
For the above reasons, the Tribunal concludes that Mr Knapp is not a “person whose interests are affected by” the decision under review, within the meaning of s 30(1A) of the AAT Act. It follows that the discretionary joinder power conferred by s 30(1A) of the AAT Act is not enlivened in this case and that, accordingly, Mr Knapp’s application under that subsection to be made a party to this proceeding cannot be granted.
The discretionary power, conferred by s 30(1A) of the AAT Act, to make a person a party to a proceeding
The conclusion of the Tribunal, set out in the preceding paragraph, makes it unnecessary for the Tribunal to determine whether it is appropriate to exercise the discretionary joinder power conferred by s 30(1A) of the AAT Act in Mr Knapp’s case. The Tribunal will, nevertheless, briefly consider that issue.
In the Tribunal’s opinion, relevant discretionary considerations which clearly militate against making Mr Knapp a party to this proceeding include the following:
·the joinder of Mr Knapp would necessarily increase the cost and duration of this proceeding and would, in the Tribunal’s opinion, be unlikely to assist the Tribunal ultimately to reach the preferable decision in this proceeding;
·the Tribunal is satisfied that the case for affirming the decision under review (which Mr Knapp supports) will be conscientiously and adequately presented by the respondent and that the respondent’s presentation of that case does not require, and would be unlikely to benefit from, input from Mr Knapp;
·the Tribunal is of the opinion, having regard to Mr Knapp’s abovementioned submissions, that input from him would be likely to have a tendency to focus inappropriately on ss 319 and 321 of the Act and the regulatory role of the respondent rather than on the most important provisions of the Act for the purpose of this proceeding, namely, ss 340 and 342, and thereby to distract the applicants, the respondent and the Tribunal from their proper focus, resulting in a waste of resources, time and money.
Furthermore, Mr Knapp’s asserted concern that the respondent is “prepared to give ground” to Hancock Prospecting Pty Ltd in respect of the decision under review “by reversing their original position during the Tribunal proceedings or by otherwise making arrangements with [Hancock Prospecting Pty Ltd] that would shield their annual financial reports for 30 June 2010 and 20 June 2011 from [his] access”, is, in the Tribunal’s opinion, purely speculative and lacking in substance, and the Tribunal gives no weight to it.
The Tribunal, as presently advised, is not satisfied that there are any substantial considerations or factors which militate in favour of making Mr Knapp a party to this proceeding.
Accordingly, if the discretionary joinder power conferred by s 30(1A) of the AAT Act were enlivened in this case, the Tribunal would not consider it to be appropriate to exercise that power so as to make Mr Knapp a party to this proceeding.
Order
For the above reasons, Mr Knapp’s application under s 30(1A) of the AAT Act to be made a party to this proceeding is refused.
I certify that the preceding 26 (twenty six) paragraphs are a true copy of the reasons for the decision herein of Deputy President S D Hotop. .............[sgd D Brodie]...............
Administrative Assistant
Dated 15 June 2012
Date of interlocutory hearing 13 June 2012 Counsel for the Applicants Mr A Hershowitz Representative of the Respondent Ms M Adofaci Representative of Mr Knapp Self-represented
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