Hermes and O’Brien and Australian Securities & Investments Commission - [2023] AATA 286

Hermes and O’Brien and Australian Securities & Investments Commission [2023] AATA 286 (22 February 2023)
Division: TAXATION AND COMMERCIAL DIVISION
File Number(s): 2022/3513
Re:Neil Hermes and Rory O’Brien
APPLICANTS

AndAustralian Securities & Investments Commission
RESPONDENT

Decision
Tribunal:Member W Frost
Date of decision: 22 February 2023
Place:Canberra

The Tribunal decides:
1.pursuant to subsection 42A(4) of the Administrative Appeals Tribunal Act1975, to dismiss the application without proceeding to review the decision because it is satisfied that the decision is not reviewable by the Tribunal; and
2.the Applicants do not have standing to make an application to the Tribunal because they are not persons whose interests are affected by the decision made by ASIC as required under subsection 27(1) of the AAT Act.

.................[SGD]...........................................
Member W Frost
Catchwords
INTERLOCUTORY APPLICATION – Jurisdiction question – Australian Securities and Investments Commission – where the Applicants made complaints to AFCA – systemic issues – Corporations Act (2001) – section 1052C(1) – where ASIC declined to make a direction to AFCA – reviewable decision – jurisdiction of the Tribunal – no jurisdiction to review – no standing – application dismissed pursuant to section 42A(4) of the AAT Act
Legislation
Administrative Appeals Tribunal Act (1975) (Cth), ss 3, 25, 27, 42A, 42B
Australian Securities and Investments Commission Act 2001 (Cth), ss 13, 244
Corporations Act (2001) (Cth), ss 716A, 912A, 1050, 1051, 1052, 1052A, 1052B, 1052BA, 1052C, 1317B, 1317C
Administrative Decisions (Judicial Review) Act 1977 (Cth), referenced.
Treasury Laws Amendment (Putting Consumers First – Establishment of the Australian Financial Complaints Authority) Act 2018 (Cth), referenced.
Cases
Allan v Transurban City Link Ltd (2001) 75 ALJR 1551
Alphapharm Pty Ltd v SmithKline Beecham (Aust) Pty Ltd (1994) 49 FCR 250
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321
Australian Foreman Stevedores’ Association v Crone (1988) 20 FCR 377
Australian National University v Burns (1982) 43 ALR 25
Birdseye and ASIC [2003] AATA 138
Bittman and ASIC [2006] AATA 732
Break O’Day Council v Resource Management and Planning Appeal Tribunal [2004] TASSC 122
Brisbane Airport Corporation Ltd v Wright [2002] FCA 359
Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd (1979) 24 ALR 307
Director-General of Social Services v Hales (1983) 47 ALR 281
Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409
DWQ16 v Minister for Immigration and Border Protection [2018] FCA 1916
Kim v Minister for Immigration (2008) 167 FCR 578
Kowalski and Repatriation Commission [2014] AATA 141
Lees v Comcare (1999) 56 ALD 84
Minister for Immigration, Local Government and Ethnic Affairs v Gray (1994) 50 FCR 189
Moorabbin Airport Corporation Pty Ltd and Minister for Infrastructure and Regional Development and Ors [2014] AATA 101
Nickson and Australian Securities and Investments Commission [2005] AATA 859
NVCV and Secretary, Department of Infrastructure, Transport, Regional Development and Communications [2020] AATA 2662
Re Control Investment Pty Ltd and Australian Broadcasting Tribunal (No 1) (1980) 50 FLR 1
Re Lofthouse v ASIC [2004] AATA 327
Right to Life Association Inc v Secretary, Department of Human Services and Health (Right to Life) (1995) 56 FCR 50
Sanderson and Decision Maker [2021] AATA 284
Secretary, Department of the Prime Minister and Cabinet and Treasurer of the Commonwealth and Superannuants Association of NSW Incorporated [2014] AATA 485
Sillars and Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] AATA 994
Sullivan and Australian Securities and Investments Commission [2002] AATA 1331
SZGME v Minister for Immigration and Citizenship [2008] FCAFC 91
Tebbie and Decision Maker [2021] AATA 1459
The Estate of the late Sarah Isabella Stewart [2014] AATA 161
Tokich and ASIC [2007] AATA 1192
Yilmaz v Minister for Immigration and Multicultural Affairs (2000) 100 FCR 495
Zubair v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 139 FCR 344
Secondary Materials
ASIC Regulatory Guide 267: Oversight of the Australian Financial Complaints Authority
Explanatory Memorandum to the Treasury Laws Amendment
REASONS FOR DECISION
Member W Frost
22 February 2023
INTRODUTION

The Applicants, Mr Neil Hermes and Mr Rory O’Brien, made complaints to the Australian Financial Complaints Authority (AFCA) regarding conduct arising from the acquisition of Bankwest by the Commonwealth Bank of Australia (CBA) in or around 2008 and, specifically, the resultant effect on financial lending to their businesses. In 2020, the Applicants requested that AFCA conduct a review. AFCA declined to do so.
In January 2021, the Applicants then requested the Australian Securities & Investments Commission (ASIC) ‘take action against AFCA’ for failing to undertake a review of alleged misconduct by the CBA and Bankwest in the period 2009 to 2013, to make a direction to AFCA under section 1052C of the Corporations Act 2001 (Corporations Act) to undertake a ‘systemic review’ and to report a systemic issue to regulatory authorities.[1] In March 2021, ASIC confirmed to the Applicants that AFCA’s decision not to commence a systemic issues investigation was a matter for AFCA, that ASIC has no role in individual complaints handling, and that it would not intervene in AFCA’s decision-making processes.[2]
[1] Exhibit 1, page 82.
[2] Exhibit 1, pages 116-117.
Following a further request from the Applicants in January 2022, ASIC in March 2022 confirmed that it would not be making a direction to AFCA under subsection 1052C(1) of the Corporations Act.[3] The Applicants subsequently applied to the Administrative Appeals Tribunal (Tribunal) for review of this purported decision of ASIC to refuse to give a direction to AFCA. The preliminary issue before the Tribunal was whether it had jurisdiction to review ASIC’s decision the subject of the application made by the Applicants.
[3] Exhibit 1, pages 177-186 and 9-10.
Following directions made by the Tribunal, both parties provided written submissions regarding the jurisdiction of the Tribunal in this application, which have been carefully considered by the Tribunal in reaching this decision. The Tribunal also held an interlocutory hearing on the issue of whether the Tribunal has jurisdiction and the Tribunal has considered the submissions made at that hearing. For the following reasons, the Tribunal dismisses the Applicants’ application pursuant to subsection 42A(4) of the Administrative Appeals Tribunal Act 1975 (AAT Act), because it is satisfied that the decision is not reviewable by the Tribunal. The Tribunal also decides that the Applicants do not have standing to make the application pursuant to subsection 27(1) of the AAT Act.
ISSUE
The issue for the Tribunal was whether it had jurisdiction to review the application made by the Applicants.
BACKGROUND
AFCA is an independent, non-government, external dispute resolution service established by Commonwealth legislation to provide assistance to resolve complaints involving financial firms.
On 16 December 2020, AFCA sent a letter to the Applicants responding to their request for AFCA to conduct a ‘systemic issue investigation’ under Rule A.17 of the Rules (described below in these reasons) into ‘the conduct of Bankwest and the CBA in relation to its treatment of existing commercial borrowers with Bankwest at the time of its sale to CBA’.[4] In its correspondence, AFCA told the Applicants that it ‘has formed the view that it will not commence a systemic issues investigation into the matters raised’ and provided reasons for that position.[5]
[4] Exhibit 1, pages 105-115.
[5] Ibid., page 105.
On 12 January 2021, the Applicants sent a letter to AFCA again requesting it undertake a systemic issues investigation into ‘CBA/Bankwest systemic misconduct’.[6] The Applicants also sent a letter to ASIC regarding AFCA’s refusal to undertake a ‘systemic review of the likely misconduct by CBA/Bankwest in the period 2009-2013’.[7] Relevantly, the Applicants wrote that:[8]
[6] Exhibit 1, page 88.
[7] Exhibit 1, pages 82-87.
[8] Ibid., page 82.
Our issue is that AFCA has failed to
1. identify a systemic issue
2. report to authorities a systemic issue that may have affected up to 26,000 Bankwest customers and
3. undertake a Section A17 systemic review of the likely misconduct by CBA/Bankwest in the period 2009-2013.
AFCA claims that it is not required to report to authorities or to do a Section A17 review based almost completely on the RG 267.87 and RG 267.88 and citing the Banking Royal Commission (BRC) as the other fora which has dealt with the matter.
We have provided detailed documentation to AFCA which shows beyond doubt that the BRC did not determine one way or another whether CBA/Bankwest committed systemic misconduct on 26,000 Bankwest customers in the period 2009-2013.
Our request is that ASIC take action against AFCA for these breeches [sic] and issue a direction to AFCA.
…
We have proven in compelling terms that the BRC did not deal with the Bankwest issue. We have provided that comprehensive proof to AFCA. AFCAs position is untenable, we have established a position that far exceeds that needed for reasonable belief by a reasonable person that the BRC did not resolve the systemic misconduct by CBA/Bankwest. Therefore, AFCA is compelled under its Rules to immediately commence a systemic review and report the matter to the regulator. Failing either of these steps AFCA is in breach of its regulations and ASIC is required to act against AFCA accordingly.
On 16 January 2021, the Applicants sent a letter to AFCA, and copied to ASIC, regarding matters they said did not ‘concern the specifics of our cases before AFCA nor any other operational matter’ [emphasis in original], but rather a ‘strategic matter’ of:[9]
[9] Exhibit 1, page 92.
a position taken by AFCA staff to ignore overwhelming evidence, which they have, that the Banking Royal Commission (BRC) did not deal with the misconduct caused to Bankwest customers in the wake of the CBA takeover. As a consequence of this failure, AFCA staff have resolved not to undertake a systematic [sic] review as AFCA is obliged to do.
10.On 18 January 2021, the Applicants sent a letter to AFCA, and copied to ASIC, regarding an email from AFCA to the Applicants on 15 January 2021, in relation to their request for AFCA to conduct a systemic review, which email from AFCA reportedly stated that, ‘I have made my final decision on this matter and communicated this to you. We are not re-visiting this’.[10] The Applicants’ letter of 18 January 2021 responded that ‘the facts demand otherwise and it is our position that the staff of AFCA have completely failed us in this matter and denied us our rights’ and further stated that ‘a systemic review could serve a great practical purpose for victims if they receive overdue compensation and could rebuild their shattered lives’.[11] The Applicants also made the following allegations:[12]
1. AFCA hides behind the obviously and fatally flawed BRC [Banking Royal Commission] to deny justice to Bankwest victims.
2. AFCA hides behind BRC to deny justice to Bankwest victims, again.
3. AFCA is biased in favour of the CBA.
4. AFCA deliberately conflates and confuses issues and then delays to conceal vital arguments.
5. AFCA had a predetermined position on the BRC which is not affected by facts to the contrary.
6. AFCA refuses to accept responsibility for our Legacy issue.
[10] Exhibit 1, page 98.
[11] Ibid.
[12] Ibid, pages 98-99.
7. AFCA provides vague factors to dismiss the obvious need for a systemic review.
On 21 January 2021, AFCA sent a letter to ASIC regarding AFCA’s position in relation to the Applicants’ request that AFCA conduct a ‘systemic issues investigation into matters arising out of CBA’s acquisition of Bankwest in 2008’.[13] It confirmed that ‘AFCA has come to the decision that it is not appropriate for AFCA to conduct a systemic issue investigation’, it had received further correspondence from the Applicants since that decision was communicated, but ‘AFCA has not changed its position’.[14]
[13] Exhibit 1, pages 103-104.
[14] Ibid., page 103.
On 10 March 2021, ASIC wrote to the Applicants in response to their letter of 12 January 2021 and relevantly stated that:[15]
AFCA is an independent external dispute resolution scheme established under the Corporations Act 2001 (CA). Under this framework, the AFCA Board is responsible for ensuring AFCA complies with the mandatory requirements for the scheme. The AFCA Board is also responsible for its internal processes and the management of complaints; including its systemic issues role and reporting obligations.
ASIC has an oversight role in relation to AFCA, however ASIC has no role in individual complaints handling and will not intervene in AFCA’s decision-making processes.
…
It is AFCA’s proper role to identify and decide whether an issue is systemic and therefore reportable to regulators. Relevantly, RG 267.46 states:
“The primary purpose of the reporting requirement in s1052E is to require AFCA to give information to a regulator so that it may consider whether regulatory action—beyond the resolution of any underlying complaints—is necessary.”
In compliance with its statutory obligations and ASIC policy, AFCA must identify potential systemic issues. In doing so, it will consider submissions from the parties, and weigh relevant factors in its determination as to whether an issue may be systemic. We understand that this has occurred in your case, but that AFCA has declined to commence a systemic issues investigation. This is a matter for AFCA, having had regard to the material you put before it and any other factors it considers relevant to its decision. [emphasis in original]
[15] Exhibit 1, pages 116-117.
On 25 November 2021, one of the Applicants sent an email to ASIC regarding the role of the AFCA Board in relation to ‘systemic issues’.[16]
[16] Exhibit 1, pages 173-174.
On 23 December 2021, ASIC responded to the abovementioned correspondence and relevantly noted that:[17]
The AFCA Board does have ultimate responsibility for scheme governance and operations, in accordance with the legislative mandate and AFCA scheme Constitution. However, the Constitution also requires the Board to appoint a CEO and Chief Ombudsman who is responsible for the day-to-day management of the scheme in accordance with the scheme Rules. This would include the resolution of individual complaints and other operational matters such as AFCA’s systemic issues role.
[17] Exhibit 1, pages 175-176.
On 12 January 2022, the Applicants’ solicitors wrote to ASIC requesting that it:[18]
[18] Exhibit 1, pages 177-186.
exercise its powers to issue a direction to the Australian Financial Complaints Authority. We contend that AFCA has misapplied the Australian Financial Complaints Authority Complaint Resolution Scheme Rules resulting in its wrongly excluding a systemic complaint that Mr N Hermes and Mr R O’Brien lodged with it.
…
ASIC has supervisory responsibilities over AFCA. It cannot stand by and see AFCA misinterpret and misapply its own Rules. To allow that to happen jeopardises, the effectiveness, independence, and integrity of the entire scheme.
An appropriate response to remedy the situation would be for ASIC to issue AFCA a direction in the following or in similar terms designed to achieve the same outcome.
AFCA is directed to:
a) reconsider its decision whether to exclude the systemic complaint lodged by Mr N Hermes and Mr R O’Brien against Bankwest and the Commonwealth Bank of Australia dated XXX;
b) that in reconsidering this issue AFCA is to consider:
i. the nature of the alleged systemic conduct or practices.
ii. the number of people who may potentially have been adversely affected by the alleged conduct or practices;
iii. the ability of AFCA to provide the people who may have been adversely affected by the conduct or practices with a remedy against the banks concerned, if such a remedy is justified; and
iv. the ability of those people who may have been affected by the alleged conduct or practices to obtain a remedy without the examination and possible intervention of AFCA.
On 20 January 2022, the Applicants wrote to ASIC regarding their solicitors’ aforementioned correspondence requesting ASIC to give a direction to AFCA and relevantly stated that:[19]
This is the next stage of our planned and comprehensive strategy to expose CBA for its misconduct against us in 2009 as a result of the actions taken during the Bankwest takeover. We will continue to pursue this injustice vigorously.
…
We have now provided ASIC the our [sic] advice, that AFCA failed in its consideration of our cases and that ASIC has a duty under the Corporations Act to “direct” AFCA to direct CBA to resolve our cases.
[19] Exhibit 1, pages 187-188.
On 24 February 2022, the Applicants again wrote to ASIC regarding their solicitors’ correspondence of 12 January 2022, which ASIC had not yet responded to, and relevantly referred to ‘our request for a direction to have AFCA direct CBA to compensate us for our outstanding loses [sic]’.[20]
[20] Exhibit 1, pages 189-197.
By letters dated 28 February and 18 March 2022, the Applicants wrote to CBA requesting an ‘immediate resolution’ of their issues and informing CBA, relevantly, of their request for ASIC ‘to direct AFCA to address significant systemic issues by CBA already established’.[21] In the latter correspondence, the Applicants also stated that they ‘continue to pursue other rights CBA and its Board has [sic] denied us’.[22]
[21] Exhibit 1, pages 198-199.
[22] Exhibit 1, page 199.
On 17 March 2022, ASIC sent a letter to the Applicants’ solicitors, which relevantly stated that:[23]
We refer to the following:
[23] Exhibit 1, pages 9-10.
·     Your clients’, Neil Hermes and Rory O’Brien’s, correspondence to the ASIC Deputy Chair dated 1 March 2022, 24 February 2022, and 20 January 2022, following your letter dated 12 January 2022 copying in the ASIC Chair;
·     E-mails dated 18 November 2021 and 25 November 2021 from Mr Hermes addressed to the ASIC Deputy Chair; and,
·     Correspondence from Mr Hermes and Mr O’Brien, received 13 January 2021, 20 January 2021, 25 January 2021, and 28 January 2021, addressed to the ASIC Deputy Chair.
In these successive rounds of correspondence, you have raised issues about alleged misconduct of the Commonwealth Bank of Australia (CBA), BankWest and potential procedural failures by the Australian Financial Complaints Authority (AFCA). Your most recent correspondence has been referred to me for response.
ASIC records show that your clients have raised similar concerns and corresponded with us about these concerns on multiple occasions since 2012. ASIC has previously carefully considered this information and the further information provided has not changed ASIC’s position.
Your most recent correspondence substantially relates to concerns regarding the conduct of AFCA. ASIC has also previously considered these issues and communicated our decision.
AFCA’s systemic issues investigation and ASIC’s Power to Issue a Direction
We have considered the issues raised in relation to AFCA and ASIC confirms that we will not be making a direction under section 1052C(1) of the Corporations Act 2001.
ASIC’s outcome in relation to your clients’ reports of misconduct and requests to access information
ASIC has considered the issues your clients have reported since 2012 and we have decided not to commence regulatory action.
…
If you have concerns about ASIC’s management of your matter you can lodge a complaint with the Commonwealth Ombudsman [emphasis in original]
On 28 April 2022, by way of an ‘Application for Review of Decision’ lodged with the Tribunal, the Applicants sought review by the Tribunal of the purported reviewable decision of ASIC dated 17 March 2022.[24] In an attachment to the application, the Applicants set out why they claim the decision was wrong, relevantly as follows:[25]
[24] Exhibit 1, pages 3-8.
[25] Ibid., page 8.
ASIC was in error in its decision in its letter to us (via our legal representative) on 17 March 2021 in the following;
1.     ASIC was in error in not advising us of our rights to seek a review of their decision from the AAT and that there was a 28 day deadline in that process
2.     ASIC was in error when it deceptively suggested that our only recourse to their decision for us was to the Commonwealth Ombudsman
3.     ASIC was in error in not allowing us to respond to the letter to seek reasons for ASICs decision
4.     ASIC was in error by attempting to justify its decision by referring to unrelated correspondence from us which included multiple requests to meet with ASIC
5.     ASIC was in error by attempting to justify its decision by incorrectly stating it had previously decided on the issue and refers to previous letters to us
a.     10 March 2021 which actually dealt with an unrelated issue of whether AFCA should conduct its own review into the systemic issues
b. 23 December 2021 which actually dealt with an unrelated issue of whether the AFCA Board was responsible for the mandatory conditions of the Corporations Act or it could delegate this to staff.
6.     ASIC was in error when it incorrectly states that it had previously reviewed issue and provided decision, which it had not.
7. ASIC was in error in failing to address the specific issues raised in our letter (via our legal representative) of 12 January 2022 that is the responsibility that AFCA had to merely forward known systemic issues to CBA for them to answer.\ASIC has been vague on the matter of whether the AFCA Board or the AFCA staff are responsible for mandatory condition of the Corporations Act concerning investigations in systemic issues and has not provided the legal basis, if there is any, on which the right to delegate these matters has been given to the AFCA Board
AFCA [sic] should be required to give the direction we recommend to AFCA under section 1052C(1) of the Corporations Act 2001 and answer each of the points above.
As stated in ASIC Regulatory Guide RG57 AAT’s jurisdiction to review decisions of ASIC made under the Corporations Act is broader as it is not confined to specified decisions (see s1317B of the Corporations Act). We note that s1317B does not exempt this ASIC decision.
Misconduct by CBA in the Bankwest takeover has been exposed by several public government enquiries and summarised in our senior legal opinion but that despite it being their role no public agencies are prepared to support the actions of bank victims.
…
The decision letter from ASIC is disingenuous, misleading and incorrect. We should be able to reply [sic] on public servants to provide us with at least a fair and honest hearing. We are appalled to find that public officials are going out of their way to conceal and block our access to our rights. They are actively protecting big business and actively disadvantaging bank victims. [emphasis in original]

On 15 June 2022, and four subsequent occasions as a result of requests for extensions of time, the Tribunal made directions for ASIC and the Applicants to provide written submissions on its jurisdiction. These submissions were ultimately received from ASIC and the Applicants on 19 July 2022 and 4 October 2022, respectively.
On 17 October 2022, ASIC applied to the Tribunal for a further direction to allow it to make submissions in reply to the Applicants’ submissions dated 4 October 2022. The Applicants opposed this request, and the Tribunal declined to make such a direction, listing an Interlocutory Hearing to hear oral submissions from the parties regarding jurisdiction.
On 18 November 2022, the Tribunal held an interlocutory hearing in relation to jurisdiction.
LEGISLATIVE INSTRUMENTS & POLICY
AAT Act
Section 3 of the AAT Act provides that:
(3) Unless the contrary intention appears, a reference in this Act to a decision includes a reference to:
(a) making, suspending, revoking or refusing to make an order or determination;
(b) giving, suspending, revoking or refusing to give a certificate, direction, approval, consent or permission;
(c) issuing, suspending, revoking or refusing to issue a licence, authority or other instrument;
(d) imposing a condition or restriction;
(e) making a declaration, demand or requirement;
(f) retaining, or refusing to deliver up, an article; or
(g) doing or refusing to do any other act or thing.
Section 25 of the AAT Act relevantly states that:
(1) An enactment may provide that applications may be made to the Tribunal:
(a) for review of decisions made in the exercise of powers conferred by that enactment…
The Tribunal has no general power or jurisdiction to review decisions. The effect of subsection 25(1) of the AAT Act is that the Tribunal can only review decisions if an ‘enactment’, relevantly being an Act of Parliament or an instrument (including rules, regulations or by-laws) made under an Act, specifically provides the Tribunal with jurisdiction. This is for the purpose of reviewing a reviewable decision, it is not given powers that may be exercised at large: Lees v Comcare (1999) 56 ALD 84 at [39]. In determining jurisdiction, the Tribunal must relevantly consider whether an enactment confers it with jurisdiction.[26]
[26] Pearce, D., Administrative Appeals Tribunal, 4^th edition, LexisNexis Butterworths, 2015, p. 20.
Subsection 42A(4) of the AAT Act provides that the Tribunal may dismiss an application without proceeding to review the decision if the Tribunal is satisfied that the decision is not reviewable by the Tribunal.
Corporations Act
Chapter 7 of the Corporations Act relates to ‘Financial services and markets’. Part 7.6 in Chapter 7, at section 912A of the Corporations Act, requires a financial services licensee providing those services to retail clients to have a dispute resolution system which includes being a member of the AFCA scheme.
To this end, Part 7.10A of the Corporations Act refers to ‘External dispute resolution’, with Division 1 authorising a financial services external dispute resolution scheme. Section 1050 of the Corporations Act, in Part 7.10A, provides that the Minister may, by notifiable instrument, ‘authorise an external dispute resolution scheme’. The Note to this legislative provision states that once the authorisation of an external dispute resolution scheme comes into force, the scheme is known as ‘the AFCA scheme and the operator is known as AFCA (AFCA is short for Australian Financial Complaints Authority)’, pursuant to the definition in section 761A of the Corporations Act.
Subsection 1051(1) of the Corporations Act provides that the ‘mandatory requirements’ for an external dispute resolution scheme are:
(a)the organisational requirements under subsection (2);
(b)the operator requirements under subsection (3);
(c)the operational requirements under subsection (4); and
(d)the compliance requirements under subsection (5).
Subsection 1051(4) of the Corporations Act relevantly states that the ‘operational requirements’ are that:
(a)the complaints mechanism under the scheme is appropriately accessible to persons dissatisfied with members of the scheme; and
(b)complaints against members of the scheme are resolved (including by making determinations relating to such complaints) in a way that is fair, efficient, timely and independent; and
(c)appropriate expertise is available to deal with complaints; and
(d)reasonable steps are taken to ensure compliance by members of the scheme with those determinations; and
(e)under the scheme, determinations made by the operator of the scheme are:
(i)binding on members of the scheme; but
(ii)not binding on complainants under the scheme…
Division 2 of Part 7.10A of the Corporations Act provides for the regulation of the AFCA scheme. Section 1052 of the Corporations Act states that AFCA must ensure that the mandatory requirements for the AFCA scheme under section 1051 are complied with. Section 1052A of the Corporations Act relevantly states that ASIC may, by legislative instrument, issue to AFCA regulatory requirements relating to ‘compliance with the mandatory requirements for the AFCA scheme under section 1051’.
Pursuant to sections 1052B, 1052BA and 1052C of the Corporations Act, ASIC may give AFCA written directions to increase limits on the value of claims that may be made under the scheme or the value of remedies under the AFCA scheme; ensure that the operations of the AFCA scheme are sufficiently financed; and regarding specified matters under the AFCA scheme.
In particular, section 1052C of the Corporations Act provides as follows:
Notice of intention to issue a direction
(1) If ASIC considers that AFCA has not done all things reasonably practicable to ensure compliance with:
(a) the mandatory requirements for the AFCA scheme under section 1051; or
(b) a condition of the authorisation of the AFCA scheme imposed by the Minister under paragraph 1050(5)(b); or
(c) regulatory requirements issued under section 1052A;
ASIC may give AFCA written notice that it intends to give AFCA a specified direction under this section.
(2) The notice must set out:
(a) the specific measures that the direction will require AFCA to take to comply with the requirements or condition; and
(b) the reasons for ASIC’s intention to give the direction.
Issuing a direction
(3) If, after receiving the notice:
(a) AFCA does not take those specific measures; and
(b) ASIC still considers that it is appropriate to give the direction to AFCA;
ASIC may give AFCA the direction, in writing, with a statement setting out the reasons for giving the direction.
(4) The direction must deal with the time by which, or the period during which, it is to be complied with. The time or period must be reasonable.
(5) A direction made under this section is not a legislative instrument.
Compliance
(6) AFCA must comply with a direction made under this section.
Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).
(7) If AFCA fails to comply with the direction, ASIC may apply to the Court for, and the Court may make, an order that AFCA comply with the direction.
Varying or revoking a direction
(8) ASIC may vary a direction made under this section by giving written notice to AFCA.
(9) The direction has effect until ASIC revokes it by giving written notice to AFCA.
(10) ASIC may revoke the direction, by giving written notice to AFCA, if, at the time of revocation, ASIC considers that the direction is no longer necessary or appropriate.
Part 9.4A of the Corporations Act provides for the review by the Tribunal of certain decisions. In this part, ‘decision’ has the same meaning as in the AAT Act. Subsection 1317B of the Corporations Act states that:
Subject to this Part, applications may be made to the Tribunal for review of a decision made under this Act by:
…
(b) ASIC…
Section 1317C of the Corporations Act sets out those decisions to which section 1317B does not apply and an application to the Tribunal is therefore excluded.
Explanatory Memorandum
The legislation which provided for the established of AFCA was the Treasury Laws Amendment (Putting Consumers First – Establishment of the Australian Financial Complaints Authority) Act 2018 (AFCA Act).
The Explanatory Memorandum accompanying the Bill that became the AFCA Act relevantly stated that:[27]
[27] Exhibit 1, pages 12-81.
1.12 On 9 May 2017, the Government announced the creation of a new framework for dispute resolution with a ‘one stop shop’ EDR [External Dispute Resolution] scheme which will be known as AFCA. AFCA will replace FOS [Financial Ombudsman Service], CIO [Credit and Investments Ombudsman] and the SCT [Superannuation Complaints Tribunal] and will consider certain disputes about products and services provided by Financial Firms.
1.13 A key benefit of a one stop shop is that it enables consumers to approach a single scheme to resolve all financial complaints.
1.14 The Government announced that AFCA will be based on an ombudsman model and will be established by industry as a company limited by guarantee.
1.15 Financial Firms will be required to be members of AFCA. AFCA’S members will be contractually bound to comply with AFCA’s operating rules, which will be included in AFCA’s terms of reference (ToR).
…
1.21 Under the new EDR framework, the broad conditions under which the AFCA scheme must operate will be dealt with in legislation. However, the way the AFCA scheme operates will be determined by AFCA’s board and set out in its ToR. This will allow the scheme to be flexible where operational improvements can be implemented more quickly than would otherwise be the case if a legislative change was required, which is a key benefit of an ombudsman model.
Strengthened regulatory oversight
1.22 As the new EDR framework will involve a shift to a single EDR scheme (known as the AFCA scheme), there will be enhanced oversight and monitoring by ASIC. ASIC will have a new power to issue regulatory requirements that AFCA (being the operator of the AFCA scheme) must comply with.
1.23 ASIC will also have the power to approve material changes to the AFCA scheme by giving written notice to AFCA.
1.24 ASIC will also have a directions powers so that it can:
• increase the limits on the value of claims or remedies that can be made under the AFCA scheme; and
• require AFCA to comply with legislative or regulatory requirements that apply in relation to the AFCA scheme.
…
Summary of new law
…
1.31 Division 2 of Part 7.10A is about regulating the AFCA scheme. This includes establishing an enhanced regulatory oversight regime by giving ASIC the power to:
• issue regulatory requirements regarding the performance of the scheme functions;
• approve any material changes to the scheme; and
• issue directions to AFCA requiring it to:
– increase monetary limits for the value of claims or remedies;
– comply with a mandatory requirement;
– comply with a condition of authorisation; or
– comply with ASIC regulatory requirements.
…
Regulating the AFCA scheme
…
1.60 While ASIC will have an enhanced oversight role over AFCA, AFCA will remain independent and responsible for its own internal processes and management of disputes. ASIC will have no role in complaints handling and will not intervene in the decision-making processes of the AFCA scheme.
…
ASIC’s general directions power
1.73 ASIC will also have a general directions power which permits it to direct AFCA to act in a particular way in relation to the AFCA scheme. A general directions power is required to ensure that AFCA complies with legislative and regulatory requirements.
1.74 The directions power is intended to be used as a last resort and can only be used by ASIC if it considers that AFCA has not done all things reasonably practicable to comply with:
·     the mandatory requirements;
·     any condition the Minister specifies in the authorisation for the AFCA scheme; and
·     any regulatory requirements issued by ASIC for the AFCA scheme.
1.75 Prior to issuing a direction, ASIC must advise AFCA that it intends to issue a direction. The advice must set out the specific measures that AFCA will need to undertake to comply with the direction.
1.76 In addition, ASIC must state the reasons for its intention to give the direction, which may include any relevant information about AFCA’s failure to comply with the relevant conditions.
1.77 In the event that AFCA fails to undertake the specific measures outlined in the written advice, and if ASIC still considers that it is appropriate to give the direction to AFCA, ASIC may issue a written direction which requires ACA to carry out those specific measures.
1.78 The written direction will include a statement of reasons and may also include the time by which ACA must comply with the direction, or the period of time during which the direction is to be complied with. Any timeframe provided by ASIC to carry out the specified direction must be reasonable.
1.79 The directions power allows ASIC to determine the level of corrective action which is required to rectify any non-compliance with one or more of the compliance requirements that the AFCA scheme is required to meet.
…
1.82 AFCA must comply with any direction issued by ASIC, as a failure to comply is an offence (see subsection 1311(1) of the Corporations Act) and ASIC may seek a court order to enforce compliance with a direction. Failure to comply with a direction may also result in the Minister revoking the authorisation of the AFCA scheme. [emphasis in original]
ASIC Regulatory Guide 267
In September 2021, ASIC issued the most recent ‘Regulatory Guide 267’, titled ‘Oversight of the Australian Financial Complaints Authority’ (Regulatory Guide), which superseded an earlier version issued in June 2018.[28] The Regulatory Guide sets out how ASIC will perform its ‘oversight role’ in relation to AFCA.[29] The principles of the governance framework and ASIC’s powers are set out in Section C of the Regulatory Guide and relevantly state that:[30]
[28] Exhibit 1, page 119.
[29] Ibid., page 118.
[30] Ibid., pages 131-133.
RG 267.23 Stakeholder confidence in the independent and effective operation of AFCA is supported by a robust and transparent accountability and governance framework. This framework comprises Ministerial authorisation and ongoing AFCA board and ASIC oversight. It will also be supported by:
(a) a forward-looking, responsive and independent organisational culture;
(b) a public commitment to continuous learning and improvement; and
(c) systems and reporting arrangements that create trust and confidence in AFCA.
RG 267.24 We will approach our oversight responsibilities in a way that:
(a) ensures compliance with the mandatory requirements;
(b) is consistent with the Ministerial authorisation and conditions;
(c) respects the operational independence of AFCA; and
(d) supports AFCA to deliver independent, timely and fair decisions for consumers and financial firms.
…
RG 267.29 ASIC has a range of powers in relation to AFCA under the Corporations Act. These include powers to:
…
(b) issue directions to AFCA if we consider that AFCA has not done all things reasonably practicable to ensure compliance with the relevant legislative requirements (s1052C);
…
RG 267.30 The Explanatory Memorandum confirms that while ASIC has an enhanced oversight role over AFCA, the scheme remains independent and responsible for its own internal processes and the management of complaints. ASIC has no role in individual complaints handling and will not intervene in the decision-making processes of AFCA.
RG 267.31 Our regulatory requirements form part of the compliance requirements for AFCA. If AFCA fails to comply with any regulatory requirement, we may issue specific directions (under s1052B or s1052BA) or a general direction (under s1052C) to AFCA requiring it to comply.
RG 267.32 We will use these directions powers as a last resort, and give AFCA adequate notice of any intention to issue a direction (as required by the Corporations Act).
In relation to ‘systemic issues’, the Regulatory Guide notes that:[31]
RG 267.198 In resolving an individual complaint, or series of complaints, AFCA may identify a systemic issue. This is an issue that may:
(a) affect more than one complainant-for example, where there is a mistake in how interest is calculated or in how a fee is applied;
(b) involve many complaints that are similar in nature;
(c) affect all current or potential complainants at a particular firm-for example, where a firm’s IDR complaints handling processes are poor or inadequate; or
(d) affect more than one firm.
[31] Exhibit 1, pages 158-159.
AFCA Complaint Resolution Scheme Rules (Rules)
The Rules, dated 13 January 2021, set out the rules and processes that apply to all complaints submitted to the AFCA scheme.[32] The Rules state that AFCA is ‘an external complaint resolution scheme established to resolve complaints by Complainants about Financial Firms’.[33] It is operated by ‘an independent not-for-profit company that has been authorised to do so by the responsible Minister under the Corporations Act’.[34] The Rules ‘form part of a contract between AFCA and Financial Firms and Complainants’.[35] The Rules also note that a person is not obliged to use the AFCA complaint resolution scheme to pursue a complaint against a financial firm and may instead institute court proceedings or use any other available dispute resolution forum.[36]
[32] Exhibit 1, pages 200-255.
[33] Ibid., page 205.
[34] Ibid.
[35] Ibid. See also Australian Capital Financial Management Pty Ltd v Australian Financial Complaints Authority Limited [2021] NSWSC 1577 per Ball J at [3]-[4] and Australia Capital Financial Management Pty Ltd v Australian Financial Complaints Authority Limited [2022] NSWCA 204.
[36] Ibid.
Under the Rules, AFCA can investigate potential systemic issues in respect of a financial firm, refer the issue to the firm for remedial action, monitor the matter until an acceptable resolution has been achieved and require the firm to do or refrain from doing any act which AFCA considers ‘reasonably necessary’ to achieve certain specified objectives, including remedying loss or disadvantage suffered by consumers.[37] For completeness, the Rules specifically provide as follows in relation to systemic issues:[38]
[37] Ibid., page 219.
[38] Ibid.
A.17.1 A systemic issue is an issue that is likely to have an effect on consumers or Small Businesses in addition to any Complainant.
A.17.2 AFCA will investigate potential systemic issues. In doing so, it:
a) must raise the potential systemic issue with the relevant Financial Firm and give it a reasonable opportunity to respond;
b) can require the Financial Firm to provide any information and documents AFCA considers necessary to investigate the issue
A.17.3 If AFCA identifies a systemic issue as a result of its investigation, it will:
a) refer the issue to the relevant Financial Firm for remedial action;
b) obtain a report from the Financial Firm as to the remedial action undertaken; and
c) continue to monitor the matter until a resolution has been achieved that is acceptable to AFCA.
A.17.4 As part of investigating and referring a systemic issue to the Financial Firm for remedial action, AFCA can require the Financial Firm to do or refrain from doing any act which AFCA considers reasonably necessary to achieve any one or more of the following objectives:
a) facilitating AFCA’s investigation of the systemic issue;
b) improving industry practice and communication;
c) remedying loss or disadvantage suffered by consumers or Small Businesses (whether or not they have complained about the systemic issue);
d) preventing foreseeable loss or disadvantage to consumers or Small Businesses;
e) minimising the risk of the systemic issue recurring; or
f) efficiently dealing with multiple complaints related to the systemic issue.
A.17.5 In accordance with the Corporations Act, the Privacy Act and any other relevant obligations, after identifying a systemic issue AFCA must report the issue to:
a) ASIC,
b) the Australian Prudential Regulation Authority,
c) the Commissioner of Taxation,
d) the Office of the Australian Information Commissioner, or,
e) any other appropriate body.
AFCA Operational Guidelines to the Rules (Operational Guidelines)

The Operational Guidelines, dated 5 October 2021, provide guidance in relation to the application of the Rules.[39] The Operational Guidelines describe AFCA’s role in respect of systemic issues as follows:[40]
We identify systemic issues that have implications beyond the immediate actions and rights of the parties to a complaint. Where we do so, we refer the issues to the relevant Financial Firm for a response and report the issues to ASIC. However, we are not a regulator of the financial services industry. Any regulatory action is appropriately addressed by the relevant regulator or the OAIC. The Rules and these guidelines to the Rules explain how we will comply with our systemic issues obligations.
…
We are obliged by legislation,[41] ASIC Regulatory Guide 267, and our Rules to report systemic issues to regulatory and other bodies. The primary purpose of this reporting requirement is to enable the recipient body to consider whether regulatory action is necessary.
[39] Exhibit 1, pages 256-433.
[40] Ibid., pages 338 and 340.
[41] Subsection 1052E(1) of the Corporations Act.
In this regard, the Tribunal notes that the ASIC Regulatory Guide, at RG 267.46, states:[42]
The primary purpose of the reporting requirement in s1052E is to require AFCA to give information to a regulator so that it may consider whether regulatory action—beyond the resolution of any underlying complaints—is necessary.
CONTENTIONS
[42] Exhibit 1, page 135.
The Applicants
The Applicants submitted that the Tribunal has jurisdiction to hear and decide their application. They contended that the overarching obligation of the Tribunal when determining whether it has jurisdiction is to comply with the words in the governing legislation. The Tribunal should not be distracted by assertions about what ASIC’s supervisory role is said to be; that may be the very question which the Tribunal has to review. The Applicants also argued that the Tribunal should not be distracted by assertions about what orders it can make; that question can be determined after the review. It was further submitted that the Tribunal should simply determine whether the legislation provides for review of a decision of the kind which ASIC has made and whether the Applicants have standing to make their application.
The Applicants contended that AFCA had failed to comply with its mandatory requirements under the Corporations Act, specifically the operational requirement under subsection 1051(4)(b) that ‘complaints against members of the scheme are resolved (including by making determinations relating to such complaints) in a way that is fair, efficient, timely and independent’.
The Applicants noted that section 1317B of the Corporations Act establishes a right of review of a decision of ASIC unless it is excluded under section 1317C and that decisions made under section 1052C regarding the making of a direction to AFCA are not so excluded. Accordingly, the Applicants submitted, ASIC’s decision not to give their requested direction to AFCA is reviewable under section 1317B of the Corporations Act.
ASIC
ASIC contended that the Tribunal does not have jurisdiction under the AAT Act and the Applicants do not have standing to bring the application. Alternatively, ASIC submitted, even if the Tribunal does have jurisdiction and the Applicants do have standing, the Tribunal should nonetheless dismiss the application without proceeding to a substantive hearing as the Tribunal has no power to grant the relief sought under section 1052C of the Corporations Act.
ASIC expanded further on its contention that the Tribunal does not have jurisdiction in this particular matter, as follows:
(a)the application, in substance, seeks to have the Tribunal review a decision of AFCA. The Tribunal has no jurisdiction to review AFCA decisions;
(b)there is no ‘decision’ by ASIC made under the Corporations Act which would enliven the Tribunal’s review jurisdiction;
(c)if there was a ‘decision’ made under the Corporations Act, the prerequisites for the Tribunal to be able to conduct a review have not been met; and
(d)any decision by ASIC not to commence regulatory action in respect of the matters raised by the Applicants is not reviewable by the Tribunal.
CONSIDERATION
Application to the Tribunal for review of decision under the Corporations Act
As set out above in these reasons, the Applicants’ application for review by the Tribunal sought an order that ASIC ‘be required to give the direction we recommend to AFCA under section 1052C(1) of the Corporations Act 2001’ and to also answer various points raised in their application regarding ASIC’s conduct.[43] The direction recommended by the Applicants was contained in their solicitors’ letter to ASIC dated 12 January 2022, but also in subsequent correspondence directly from the Applicants to ASIC, which included the following requests to direct AFCA to:[44]
(a)reconsider its decision to ‘exclude the systemic complaint’ lodged by the Applicants against CBA and Bankwest;
(b)‘direct CBA to resolve our cases’;
(c)‘direct CBA to compensate us for our outstanding loses [sic]’; and
(d)‘address significant systemic issues by CBA already established’.
[43] Exhibit 1, page 8.
[44] Exhibit 1, pages 186-198.
Under section 1317B of the Corporations Act, an application can be made to the Tribunal for review ‘of a decision made under this Act’ by, among others, ASIC. Certain specified sections of the Corporations Act are excluded from review by the Tribunal pursuant to section 1317C of the Corporations Act. Section 1052C of the Corporations Act, which provides the ability for ASIC to issue a direction to AFCA, is not one of those specified sections expressly excluded from review by the Tribunal. Accordingly, as accepted by ASIC, an exercise of power by ASIC under section 1052C of the Corporations Act would, prima facie, be open to review by the Tribunal under section 1317B of the Corporations Act.
The Applicants contended that this should be the end of the Tribunal’s deliberation about its jurisdiction and result in their application proceeding pursuant to the Tribunal’s normal processes. However, that is not the end of the Tribunal’s consideration regarding jurisdiction in relation to this application and whether the Applicants have standing to make the application.[45]
[45] See, for example, Sullivan and Australian Securities and Investments Commission [2002] AATA 1331.
Can the Tribunal review an AFCA decision?
Pursuant to section 25 of the AAT Act, the Tribunal can only review a decision if an enactment provides for applications to be made to the Tribunal for a review of decisions made in the exercise of powers conferred by that enactment. In this regard, the Tribunal does not have a general power to review decisions.
For the avoidance of doubt, and noting that this application relates to a decision of ASIC, the Tribunal is satisfied that there is no enactment that provides for applications to be made to the Tribunal for review of a decision by AFCA. That is, the making of applications to the Tribunal for review of a decision made under the Corporations Act provided for under section 1317B of the Corporations Act does not extend to applications for review of decisions made by AFCA. To this end, the Tribunal’s decisions in Tebbie and Decision Maker [2021] AATA 1459 (Tebbie) and Sanderson and Decision Maker [2021] AATA 284 confirm that the Tribunal has no jurisdiction to review a decision made by AFCA.
In Tebbie, the Tribunal made the following observations and findings in respect of AFCA and the Tribunal’s jurisdiction, at [10]-[11]:
Under Chapter 7, ASIC has an oversight role in relation to AFCA. ASIC may issue general directions or, by legislative instrument, issue to AFCA regulatory requirements relating to compliance with the mandatory requirements for the AFCA scheme under section 1051; or any of the general considerations for the AFCA scheme under section 1051A (sections 1052A and 1052C). ASIC has no role in individual complaints handling and does not intervene in the decision-making processes of AFCA.
A decision of AFCA is not a decision of the Minister within the meaning of paragraph 1317B(1)(a) of the Corporations Act nor is it a decision of ASIC within the meaning of paragraph 1317B(1)(b). There is no enactment that enables a party aggrieved by a decision of AFCA to apply to this Tribunal for review of the decision. The Tribunal does not have jurisdiction to review the decision.
Accordingly, the Tribunal is satisfied that there is no legislative basis for the Tribunal to review a decision of AFCA.
Is the application an attempt to have the Tribunal review AFCA’s decision?
On balance, the Tribunal is satisfied that the application made to the Tribunal is not an attempt by the Applicants to have the Tribunal review AFCA’s decision not to conduct a systemic issues review relating to CBA and Bankwest and not to report any systemic issue in respect of those matters to a regulator, as would be required under the Corporations Act.
As previously detailed in these reasons, on 16 December 2020, AFCA informed the Applicants that it would not commence their requested ‘systemic issues investigation’ into the conduct of CBA and Bankwest in relation to the treatment of existing commercial borrowers of Bankwest at the time of its sale to CBA in or around 2008.[46] The Applicants took issue with this decision of AFCA and, in January 2021, raised their complaint to both AFCA and ASIC, including requesting that ASIC ‘issue a direction to AFCA’.[47] In March 2021, ASIC informed the Applicants that it had an oversight role in relation to AFCA, but no role in ‘individual complaints handling and will not intervene in AFCA’s decision-making processes’.[48]
[46] Exhibit 1, pages 105-106.
[47] Exhibit 1, pages 82-97.
[48] Exhibit 1, pages 116-117.
In this regard, the Tribunal finds that there is nothing in the plain words of section 1052C of the Corporations Act, or in its subject matter, context or purpose that would permit ASIC to employ that provision to affect decisions made by AFCA under its Rules, including to review such decisions. The Tribunal considers that section 1052C of the Corporations Act is aimed at ensuring that ASIC is satisfied that AFCA is performing its statutory role as an independent external dispute resolution service in relation to certain financial disputes. That is, ASIC has the legislative power, if it considers that AFCA has not done all things reasonably practicable to ensure compliance with, relevantly, its mandatory or regulatory requirements, to first give AFCA written notice of its intention to give AFCA a specified direction requiring AFCA to take ‘specific measures’ under section 1052C of the Corporations Act and, second, if AFCA does not do so and ASIC still considers it appropriate, give the direction to AFCA. If AFCA fails to comply with the direction, subsection 1052C(7) of the Corporations Act provides for ASIC to apply to the Court for an order that AFCA comply with the direction.
Accordingly, under the Corporations Act, ASIC is charged with oversight of the AFCA scheme, but has no role in handling, determining or intervening in individual complaints made to AFCA or its decision-making processes. In the words of the Explanatory Memorandum to the Bill that led to the AFCA Act and established the AFCA scheme, ASIC has an ‘enhanced oversight and monitoring’ role in relation to the regulation of AFCA, but AFCA will ‘remain independent and responsible for its own internal processes and management of disputes’.[49] Additionally, the Explanatory Memorandum continued, ASIC will have ‘no role in complaints handling and will not intervene in the decision-making processes of the AFCA scheme’.[50] Furthermore, subsection 1052E(4) of the Corporations Act requires AFCA to report systemic issues it has identified to ASIC or another Commonwealth regulator.
[49] Exhibit 1, pages 25-26 and 36.
[50] Ibid., page 36.
ASIC’s power under the Corporations Act is therefore restricted to ensuring compliance with the overall conditions and requirements of the AFCA scheme, specifically, compliance with the mandatory requirements for the AFCA scheme, with conditions of authorisation of the AFCA scheme imposed by the Minister, and regulatory requirements issued by ASIC as legislative instruments under section 1052A of the Corporations Act.
ASIC contended that none of the directions sought by the Applicants fall within that scope and the Tribunal has no jurisdiction to review decisions of AFCA. ASIC submitted that the substance of what the Applicants seek the Tribunal to do is to review AFCA’s decision under its Rules not to conduct a systemic issues review (relating to the Applicants’ complaints regarding CBA and Bankwest), and not to report any systemic issue in respect of those matters to a regulator. In addition, ASIC also contended that the Applicants seek to have the Tribunal, in substance, make a decision for AFCA that CBA should be compensating the Applicants for their alleged losses. To this end, ASIC argued, the Applicants are in substance attempting to have the Tribunal review and become involved in AFCA’s decision-making process under the guise of seeking for the Tribunal to utilise ASIC’s general directions power in relation to AFCA pursuant to section 1052C of the Corporations Act.
While the Tribunal accepts that there is some force to these submissions from ASIC, including because of the various requests over a period time from the Applicants for ASIC to use its legislative power to make certain directions to AFCA, the Tribunal gives the Applicants the benefit of the doubt that, by their application to the Tribunal, the Applicants are not attempting to have the Tribunal review AFCA’s decision. In this regard, the Tribunal accepts that the Applicants seek a review by the Tribunal of ASIC’s decision not to issue a direction to AFCA pursuant to section 1052C of the Corporations Act in relation to the alleged failure by AFCA to comply with one of its mandatory requirements, being the operational requirement in subsection 1051(4)(b) that ‘complaints against members of the scheme are resolved (including by making determinations relating to such complaints) in a way that is fair, efficient, timely and independent’. While the Applicants have sought to use their own complaints against CBA, Bankwest and AFCA to request a direction be made by ASIC to AFCA regarding the latter’s ‘decision…to exclude the systemic complaint lodged’ by them,[51] the Tribunal finds that the Applicants’ application to the Tribunal is not an attempt to have the Tribunal review AFCA’s decision, but rather seeks review of ASIC’s decision to refuse to issue a direction to AFCA.
[51] Exhibit 1, page 186.
The ability of the Applicants to make an application to the Tribunal for review of ASIC’s decision not to issue a direction under section 1052C of the Corporations Act and the Tribunal’s jurisdiction to consider that application is discussed further below in these reasons.
Did ASIC make a decision?
ASIC contended that the Applicants’ reliance on ASIC’s later letter of 17 March 2022 to make its application to the Tribunal was misconceived because they had initially requested that ASIC make a direction to AFCA in respect of the matters they raised about a systemic review in their letter of 12 January 2021. ASIC submitted that it had informed the Applicants that it could not do so in its earlier letter of 10 March 2021. As a result, ASIC contended, the subsequent 17 March 2022 letter referred to the position that had already been stated by ASIC. That is, that ASIC would not give the requested direction to AFCA. Accordingly, ASIC submitted that there is no reviewable decision but, if there is such a decision, it was made by ASIC on 10 March 2021, and not later by way of its letter on 17 March 2022.
Therefore, ASIC submitted to the Tribunal, having already communicated its position to the Applicants on 10 March 2021, if ASIC had made a decision under the Corporations Act it was made at that time and ASIC was functus officio from that time. The subsequent letter of 17 March 2022, ASIC contended, had no further effect as the position had already been communicated by ASIC. Accordingly, if there was a reviewable decision made on 10 March 2021, then the Applicants would need to apply to the Tribunal for an extension of time as their application was made more than 28 days after 10 March 2021.
The Tribunal does not accept ASIC’s submission on this issue. The Applicants’ letter to ASIC dated 12 January 2021 requested that ASIC ‘take action’ against AFCA for various alleged breaches and ‘issue a direction to AFCA’. It also referred, in an attachment, to ASIC’s power under section 1052C of the Corporations Act.[52] ASIC’s response to the Applicants dated 10 March 2021 referred to its oversight role in relation to AFCA, the legislative framework, its position that ASIC has ‘no role in individual complaints handling and will not intervene in AFCA’s decision-making process’, and that AFCA must decide whether an issue is systemic and therefore reportable to regulators.[53]
[52] Exhibit 1, pages 82-84.
[53] Exhibit 1, pages 116-117.
However, ASIC’s correspondence to the Applicants in March 2021 did not expressly deal with, or specifically make a determination regarding, the Applicants’ request for ASIC to issue a direction pursuant to section 1052C of the Corporations Act. There was no specific reference to ASIC’s power to make a direction to AFCA or ASIC’s refusal to do so. This can be contrasted with ASIC’s subsequent letter to the Applicants dated 17 March 2022, in which it confirmed that ‘we will not be making a direction under section 1052C(1) of the Corporations Act 2001’.[54] While the effect of ASIC’s March 2021 letter to the Applicants was plainly to not issue the requested direction to AFCA, or ‘take action against AFCA’, such a ‘decision’ was not, on the face of this correspondence, conveyed to the Applicants. Accordingly, the Tribunal does not accept that the Applicants should have sought a review by the Tribunal of any ASIC decision from 2021 and because they failed to do so within 28 days they require an extension of time to make such an application to the Tribunal. Moreover, ASIC’s correspondence from 10 March 2021 did not contain any information regarding any review rights available to the Applicants in the event that this communication had amounted to a decision of ASIC.
[54] Exhibit 1, pages 9-10.
For these reasons, the Tribunal is satisfied that ASIC did not make a decision in its letter to the Applicants dated 10 March 2021 regarding their request to give a direction to AFCA. However, the Tribunal notes ASIC’s contentions regarding both its role in relation to AFCA under the Corporations Act, which was set out in its March 2021 letter, and on the Tribunal’s lack of jurisdiction regarding any decision ASIC makes to not issue a direction to AFCA under section 1052C of the Corporations Act. These matters are addressed further below in these reasons.
As previously set out in this decision, the limits of the Tribunal’s jurisdiction are prescribed by section 25 of the AAT Act and require an ‘enactment’ to provide for applications to be made to the Tribunal for review of a decision made pursuant to that or another enactment. That is, there needs to be a ‘decision’ that is made in the exercise of powers conferred by an enactment before the Tribunal has jurisdiction to conduct a review. An ‘enactment’ is defined in subsection 3(1) of the AAT Act to include an Act or an instrument (including rules, regulations or by-laws) made under an Act.[55]
[55] See, for example, Nickson and Australian Securities and Investments Commission [2005] AATA 859 at [13] (Nickson).
Section 1317B of the Corporations Act provides that applications can be made to the Tribunal for ‘review of a decision made under this Act’. The phrase ‘under’ an enactment means ‘in pursuance of’ or ‘under the authority of’ an enactment.[56] For a decision to be made under an enactment seems to require ‘a link of substance between what is done and the powers that are given under the enactment’.[57] That is, a power in an enactment needs to be identified and then there must be a link of substance between what is done and the power given under the enactment.[58]
[56] Australian National University v Burns (1982) 43 ALR 25 (page 31); and Birdseye and ASIC [2003] AATA 138 at [33]-[43].
[57] Nickson at [26].
[58] Ibid., at [44].

Section 1317A of the Corporations Act provides that the meaning of ‘decision’ for the purposes of a review under the Corporations Act is the same as the meaning of decision in the AAT Act, which definition is set out above in these reasons. It relevantly includes refusing to give a direction.
The meaning of a ‘decision’ was considered by the High Court of Australia in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321, in the context of the Administrative Decisions (Judicial Review) Act 1977, which expressed the following principles:[59]
the reference in the definition in s. 3(1) to “a decision of an administrative character made...under an enactment” indicates that a reviewable decision is a decision which a statute requires or authorizes rather than merely a step taken in the course of reasoning on the way to the making of the ultimate decision.
…
a reviewable “decision” is one for which provision is made by or under a statute. That will generally, but not always, entail a decision which is final or operative and determinative, at least in a practical sense, of the issue of fact falling for consideration. A conclusion reached as a step along the way in a course of reasoning leading to an ultimate decision would not ordinarily amount to a reviewable decision, unless the statute provided for the making of a finding or ruling on that point so that the decision, though an intermediate decision, might accurately be described as a decision under an enactment.
Another essential quality of a reviewable decision is that it be a substantive determination.
[59] (1990) 170 CLR 321 at 336-337. See also, for example, Birdseye and ASIC [2003] AATA 138 at [27]-[32].
In Director-General of Social Services v Hales (1983) 47 ALR 281 at 305-306, Justice Lockhart made the following comments regarding the meaning of a ‘decision’:
One cannot look to the definition in s 3(3) [of the AAT Act] to determine definitively the meaning of the word "decision". It must take its colour and content from the enactment which is the source of the decision itself. No narrow or pedantic approach is called for in determining whether a decision falls within the scope of review of the Administrative Appeals Tribunal. The multiplicity of statutes which continue to grow and to confer jurisdiction on the Administrative Appeals Tribunal, and the manifold and diverse circumstances which attract the power of the decision maker, all call for a liberal approach to the definition of the word "decision"...It is necessary to examine the Act which confers jurisdiction on the Administrative Appeals Tribunal and the administrative framework in which it operates to determine whether there is a "decision" susceptible to review under the Administrative Appeals Tribunal Act. A pronouncement which alters rights or imposes liabilities is readily classified as a "decision", but the word has a wider scope. It may include a declaration or statement which has a real practical effect although not altering rights or imposing liabilities: Duncan v Defence Force Retirement and Death Benefits Authority and Commonwealth of Australia [1980] FCA 58; (1980) 30 ALR 165 at 169-70.
In Kim v Minister for Immigration (2008) 167 FCR 578 at [21], the Federal Court of Australia commented that:
The power of the Tribunal to review a "decision" extends not only to the review of a decision which is in fact made lawfully, but also to the review of a decision which is only purported to be made but which is not authorised by law: see Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd [1979] FCA 21; (1979) 2 ALD 1; Yilmaz v Minister for Immigration and Multicultural Affairs [2000] FCA 906; (2000) 100 FCR 495. The expression "decision" is to be given its ordinary meaning, namely, "the action of deciding", which covers a situation where the decision is merely purported to be made but is in fact made without authorisation by law. This proposition is supported by the fact that s 119 of the Act is concerned with the way in which the power under s 116 is to be exercised, and not with the existence of the power itself. This distinction between power and manner of exercise was regarded as important by Deane J in Brian Lawlor 2 ALD at 30-31, and is also referred to in cases mentioned below.
In this regard, conduct which is outside the scope of a power can be a ‘decision’, as can refusing to give a direction or refusing to make a determination under the definition of decision in subsection 3(3) of the AAT Act.
In this case, ASIC contended that it ‘simply did not turn its mind to making a decision at all’ under the power in section 1052C of the Corporations Act, and therefore made no decision under that power.[60] To this end, ASIC referred to its correspondence of 10 March 2021 that replied to the Applicants’ correspondence requesting ASIC make a direction to AFCA, in which ASIC stated that it had no role in individual complaints handling, that it would not interfere in AFCA’s decision-making process, and that whether a systemic issues investigation should be commenced (and systemic issues reported to regulators) was a matter for AFCA. ASIC further submitted that, in subsequent correspondence in 2022, it did not alter the position that it had already taken in March 2021. Accordingly, ASIC contended, its response to the Applicants in March 2021 (and the subsequent reiteration of that response) did not involve ASIC, in any substantive way, turning its mind to the exercise of the power under section 1052C of the Corporations Act.
[60] Paragraph 71 pf the Respondent’s Outline of Submissions dated 19 July 2022.
However, the Tribunal does not accept these contentions and finds that a specific decision was made by ASIC, in its correspondence on 17 March 2022, not to make a direction to AFCA under subsection 1052C(1) of the Corporations Act. ASIC expressly addressed the Applicants’ request for such a direction to be made to AFCA and it specifically declined to do so. As set out above in these reasons, under the heading ‘AFCA’s systemic issues investigation and ASIC’s Power to Issue a Direction’, ASIC informed the Applicants that:[61]
We have considered the issues raised in relation to AFCA and ASIC confirms that we will not be making a direction under section 1052C(1) of the Corporations Act 2001.
[61] Exhibit 1, page 10.
The Tribunal is satisfied, pursuant to subsection 3(3) of the AAT Act, that ASIC’s refusal to give a direction to AFCA, expressly conveyed to the Applicants in 2022, constitutes a ‘decision’ and demonstrates that ASIC did, in fact, turn its mind to this issue.
Even if there is a decision, does the Tribunal have jurisdiction?
Where there has been a ‘decision’ made under the Corporations Act, then an error by a decision maker does not deprive the Tribunal of jurisdiction to review that decision.[62] However, there is a distinction between an error that can be cured by the Tribunal on review by re-exercising all the powers of the decision-maker and a situation in which the prerequisites for the exercise of the power of the original decision-maker have not been met that affect the authority of the Tribunal. That is, there is no power of the Tribunal to review a decision if the person seeking review had no right to make a request because the prerequisites were not met.
[62] DWQ16 v Minister for Immigration and Border Protection [2018] FCA 1916 at [40]; Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd (1979) 24 ALR 307; Yilmaz v Minister for Immigration and Multicultural Affairs (2000) 100 FCR 495; Zubair v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 139 FCR 344.
In Kowalski and Repatriation Commission [2014] AATA 141 at [36] and [39], Deputy President Forgie described this as follows (footnotes omitted):
Care must be taken in applying the principle in Brian Lawlor, though. A conclusion that the Tribunal has power to review a decision that has been invalidly made on internal review does not necessarily lead to the conclusion that it can review the operative decision that is in fact under review. The operative decision must be identified and examined in order to determine whether there are any prerequisites before the Tribunal can, as permitted by s 43 of the AAT Act, exercise the powers of the person who made the decision. If its power to make a decision exercising the powers and discretions conferred by the relevant enactment on the person who made the decision, as permitted by s 43 of the AAT Act, were dependent upon there having been a valid application for whatever benefit or entitlement was in issue, then the Tribunal would arguably not be able to overcome that deficiency; it would not be able to grant the benefit or entitlement.
…
A defect in the sense that the VRB did not have power to review the decision at all is not a defect of the sort that can be cured by the Tribunal or the processes it follows. That follows from the fact that the right to apply to the Tribunal under s 175(1) arises when a decision of the Commission has been reviewed by the VRB “upon a request made under section 135” and affirmed, varied or set aside that decision. A request can only be made in the circumstances provided for in s 135. If those circumstances do not exist, the person seeking review has no right to make a request. As the VRB’s power to review is dependent upon that request’s being made, it has no power to review the decision if there is no right to make the request. The existence or non-existence of that right to make a request under s 135 is pivotal to the subsequent rights that lie at the heart of the heart of the system of review that is provided for review of decisions made under Parts II and IV of the VE Act.
In SZGME v Minister for Immigration and Citizenship [2008] FCAFC 91 at [30] and [36], Black CJ and Allsop J (as his Honour then was) stated that:
The Tribunal has no authority other than under the Migration Act to grant or to refuse a visa. It accedes to the powers and discretions of the delegate, which include ss 47 and 65 of the Migration Act. ... The ratio decidendi of Li [Minister for Immigration and Multicultural Affairs v Li] [2000] FCA 1456; 103 FCR 486 at [81]- [82] is that a valid application is not merely a requirement affecting the delegate’s power, it also affects the authority of the Tribunal. ...
...
The essential difference between Yilmaz [2000] FCA 906; 100 FCR 495; Zubair 139 FCR 34; Ahmed [2005] FCAFC 58; 143 FCR 314 and Uddin [2005] FCAFC 218; 149 FCR 1, on the one hand, and Li ..., on the other, is that as a matter of statutory construction, the defects in the primary decision in the former cases did not affect the power exercised by the relevant review tribunal. This was so in Yilmaz ... because the defect had been cured; it was so in Zubair ...; Ahmed ... and Uddin ...because, as a matter of construction, the defect in the authority of the delegate did not affect the authority of the tribunal on review. In Li ..., on the other hand, the Full Court was of the view that the persisting lack of validity of the application directly qualified the power of the Tribunal, through ss 47 and 415. In Brian Lawlor ... there was no power, at the level of the decision-maker or of the AAT. In Li the same applied. The Tribunal could only set the decision aside and make no grant or refusal itself. It could not, by affirming the decision of the delegate, refuse a visa.
In Sillars and Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] AATA 994 (Sillars) at [30] to [31], the Tribunal explained the distinction between cases in which there were errors in the original decision which did not preclude the Tribunal’s power to review and cases in which the Tribunal did not have the capacity to conduct a review, as follows:[63]
The Respondent Minister’s contention is thus correct: there is a critical difference between Yilmaz, Zubair and Ahmed on the one hand, and Li and the instant facts on the other. In the former category of cases, defects in the primary decisions sought to be reviewed did not affect or preclude the Tribunal’s power to review. This is primarily because (1) there was scope for subsequent curing of the defect(s) (as in Yilmaz and Zubair) or (2) the status or impacts of the defect(s) was not of a preconditional nature to the Tribunal’s review function and thus did not threaten or fatally impugn the Tribunal’s capacity to conduct the review (Ahmed).
In Li and the instant facts, there are clearly discernible requirements that were not met before the matter reached the Tribunal. Those requirements are not capable of any subsequent curative solution because they directly precondition the Tribunal’s capacity to conduct its review function. For present purposes, the requirement to make representations in accordance with the invitation directly preconditions the Tribunal’s power to revoke the mandatory cancellation decision pursuant to s501CA(4) of the Act.
[63] See also paragraphs [24] to [29].
Although the Tribunal is satisfied that a decision was made by ASIC not to give the Applicants’ requested direction to AFCA, it is not satisfied that the legislative requirements that precondition the giving of any such direction were met before the matter reached the Tribunal. The Tribunal therefore has no jurisdiction to review the Applicant’s application.
In respect of section 1052C of the Corporations Act, ASIC may give AFCA a direction where:
(a)ASIC has first given AFCA a ‘written notice’ that it intends to give AFCA a direction pursuant to that provision. The written notice to AFCA must set out the ‘specific measures’ that the proposed direction will require AFCA to take to comply with the requirements or condition under subsection 1052C(1) of the Corporations Act and the reasons for ASIC’s intention to give the direction;
(b)after AFCA receives the written notice from ASIC setting out the ‘specific measures’ required to be taken, ASIC may give AFCA a direction, with an accompanying statement setting out the reasons for such a direction, if:
(i)AFCA ‘does not take those specific measures’; and
(ii)ASIC still considers that it is appropriate to give the direction to AFCA.
Accordingly, any possible ability for the Tribunal to review a decision of ASIC not to give a direction under subsection 1052C(1) of the Corporations Act would therefore have to be premised on the satisfaction of the legislative preconditions to the giving of a direction by ASIC. The Applicants did not request that ASIC undertake the steps that would satisfy these legislative preconditions, but rather sought the final part of this process be implemented by ASIC, being the making of a direction to AFCA. As summarised in Sillars above, the Tribunal finds that there is no scope for it to cure the lack of preconditions to the decision not to give a direction. The status or impact of these was of a preconditional nature to any review function held by the Tribunal such that it impugned the Tribunal’s capacity to conduct the requested review.[64]
[64] See also Break O’Day Council v Resource Management and Planning Appeal Tribunal [2004] TASSC 122 at [19]-[20].
The Tribunal does not accept the Applicants’ contention that the refusal to issue a direction is reviewable because section 1052C of the Corporations Act requires notice that ASIC intends to issue a direction to AFCA, but does not require notice that ASIC does not intend to issue a notice. The Tribunal finds that ASIC’s refusal to give AFCA a direction merely highlights the role solely provided to ASIC under the Corporations Act in relation to AFCA and the proper functioning of the AFCA scheme, including that there was no legislative provision made for any external entity or individual to apply to have ASIC give AFCA a direction or for review of a related decision. The decision to issue or not to issue a direction to AFCA is one for ASIC as the relevant regulator, and is not reviewable by the Tribunal, which is further demonstrated by ASIC’s ability to seek relief in the Court if AFCA fails to comply with any direction. This is plainly not a matter for the Tribunal.
The Applicants further argued that the Tribunal in its review may determine that a direction should be issued and it could then issue the required notice to AFCA. As set out above, no written notice had been given by ASIC to AFCA of an intention to give AFCA a specified direction under subsection 1052C(1) of the Corporations Act setting out the ‘specific measures’ such a direction would require AFCA to complete in relation to the requirements or condition under that provision. As a result, and as contemplated by the legislation, AFCA has neither been able to ‘take those specific measures’ to comply with its obligations nor has it plainly not taken those specific measures, in circumstances where it has not been provided with the aforementioned written notice. Additionally, and as a result of these matters, ASIC has not then considered whether ‘it is appropriate to give the direction’ as a result of a failure by AFCA to ‘take those specific measures’. The preconditions for a decision as to whether to exercise the power to give a direction under subsection 1052C of the Corporations Act have therefore not been met.
As those preconditions have not been met, the preconditions for the Tribunal to potentially have jurisdiction to review such a decision have not been met. The Tribunal is not satisfied that these preconditions are capable of rectification by the Tribunal standing in ASIC’s shoes because, under section 1052C of the Corporations Act, a direction cannot be issued prior to the written notification of an intention being issued to AFCA, so the Tribunal cannot stand in ASIC’s shoes and exercise the power to issue a direction without that written notification having previously been provided and AFCA being provided with an opportunity to take ‘specific measures’ required by ASIC. For the Tribunal to undertake these preconditional steps would go beyond the scope of the Tribunal’s power by putting the Tribunal in the role of regulator for an indeterminate period of time in relation to oversight of this matter: for example, by potentially having to identify the specific measures to be undertaken by AFCA, monitoring compliance with those measures the subject of written notice, determining whether it is satisfied they have or have not been met and then, if not, deciding whether to proceed to give AFCA a direction under section 1052C.
For the above reasons, the Tribunal finds that it does not have jurisdiction to review the application.
Do the Applicants have standing to make the application?
Further to the above finding, the Tribunal is not satisfied that the Applicants have standing to make the application to the Tribunal for review of a decision of ASIC. If an applicant does not have standing to seek a review by the Tribunal then the Tribunal has no jurisdiction to conduct the review.[65]
[65] See The Estate of the late Sarah Isabella Stewart [2014] AATA 161 at [6] and [16]-[17].
Subsection 27(1) of the AAT Act provides that:
Where this Act or any other enactment (other than the Australian Security Intelligence Organisation Act 1979) provides that an application may be made to the Tribunal for a review of a decision, the application may be made by or on behalf of any person or persons (including the Commonwealth or an authority of the Commonwealth or Norfolk Island or an authority of Norfolk Island) whose interests are affected by the decision.
The Tribunal is satisfied that the Applicants have no standing to make the application because they are not persons ‘whose interests are affected by the decision’ of ASIC. In this regard, the following summary of the applicable principles regarding when a person’s interests are affected by a decision are instructive:[66]
[66] See also some of the principles summarised by the Tribunal in respect of whether a person’s interests are affected under section 27 of the AAT Act in Secretary, Department of the Prime Minister and Cabinet and Treasurer of the Commonwealth and Superannuants Association of NSW Incorporated [2014] AATA 485 at [55] and in Moorabbin Airport Corporation Pty Ltd and Minister for Infrastructure and Regional Development and Ors [2014] AATA 101 at [96]-[117].
(a)the meaning of whether a person’s interests are affected is not encased in any technical rules. Much will depend upon the nature of the particular decision and the extent to which the interest of the applicant rises above that of an ordinary member of the public;[67]
[67] Right to Life Association Inc v Secretary, Department of Human Services and Health (Right to Life) (1995) 56 FCR 50 at 65.
(b)in each case, the content of the terms ‘affected’ and ‘interest’ must be seen in light of the subject, scope and purpose of the particular statute in issue.[68] In this regard, the relevant interests must be determined by reference to the terms of the particular decision that has been made and the enactment under which that decision was made;[69]
(c)where there is more than one decision that can be made under an enactment, interests that are relevant in relation to one decision may not be relevant in relation to another.[70] In that regard, what may amount to relevant interests must be determined afresh in relation to each applicant regarding each decision under each enactment;[71]
(d)the test of whether there is a person whose interests are affected may have an ambulatory effect, dependent upon the terms of any legislation which may adopt the review procedure in the AAT Act;[72]
(e)what serves to identify a person as one affected by a reviewable decision will vary having regard to the nature of the reviewable decision itself;[73]
(f)a person whose interests are affected must have an interest other than that which attaches to members of the general public and other than that of a person holding a belief that a particular type of conduct should be prevented or a particular law observed;[74]
(g)a person must show a genuine affection of an interest which attaches to them;[75]
(h)proprietary and financial interests may be sufficient and, in some cases, a lesser interest may suffice;[76]
(i)any ‘ripple of affection’ by a decision is not sufficient to support an interest, particularly where the affect is not immediate or direct or is only tenuous.[77] There is a point, which must be fixed as a matter of judgment in each case, beyond which the interests of those affected are too indirectly affected to be recognised.[78] In this regard, an applicant’s interests must not be remote, indirect or fanciful;[79]
(j)a person’s interests are not assessed by reference to the effect of a decision on other persons, but by reference to the effect on them;[80] and
(k)whether a person has a right to be heard in the decision-making process is relevant to whether their interests are affected, but is not necessarily determinative.[81]
[68] Alphapharm Pty Ltd v SmithKline Beecham (Aust) Pty Ltd (1994) 49 FCR 250 (Alphapharm) at 272 and Allan v Transurban City Link Ltd (2001) 75 ALJR 1551 at [15].
[69] NVCV and Secretary, Department of Infrastructure, Transport, Regional Development and Communications [2020] AATA 2662 at [31] citing Alphapharm at 260.
[70] NVCV and Secretary, Department of Infrastructure, Transport, Regional Development and Communications [2020] AATA 2662 at [31] citing Alphapharm at 273.
[71] NVCV and Secretary, Department of Infrastructure, Transport, Regional Development and Communications [2020] AATA 2662 at [31] citing Alphapharm at 272.
[72] Brisbane Airport Corporation Ltd v Wright [2002] FCA 359 at [26].
[73] Allan v Transurban City Link Ltd (2001) 75 ALJR 1551 at [17].
[74] Alphapharm at 258, citing US Tobacco Co v Minister for Consumer Affairs (1988) 20 FCR 520 at 526-530, and Re Control Investment Pty Ltd and Australian Broadcasting Tribunal (No 1) (1980) 50 FLR 1 at 79-80.
[75] Alphapharm at 258 and Re Control Investment Pty Ltd and Australian Broadcasting Tribunal (No 1) (1980) 50 FLR 1 at 79-80.
[76] Alphapharm at 259 and the cases cited therein and at 256 per Gummow J.
[77] Alphapharm at 259 citing Re McHattan and Collector of Customs (NSW) (1977) 1 ALD 67 at 70.
[78] Australian Foreman Stevedores’ Association v Crone (1988) 20 FCR 377 at 382 cited in Alphapharm at 259.
[79] Right to Life Association Inc v Secretary, Department of Human Services and Health (Right to Life) (1995) 56 FCR 50 at 65.
[80] NVCV and Secretary, Department of Infrastructure, Transport, Regional Development and Communications [2020] AATA 2662 at [31] citing Alphapharm at 261-262.
[81] NVCV and Secretary, Department of Infrastructure, Transport, Regional Development and Communications [2020] AATA 2662 at [31] and the cases cited therein.

The present proceeding has many of the factors that have caused a court or the Tribunal to decide that a person or entity was not affected by a decision and therefore did not have standing. The power of ASIC to give a general direction to AFCA in section 1052C of the Corporations Act is aimed at ensuring that the broad overall conditions and regulatory requirements of the AFCA scheme are met, not at individual or systemic complaints that may be affected by the scheme. That is, the relevant legislative provisions are aimed at the interests of the general community or collective interests, but not at individual rights. Importantly, none of the mandatory requirements in section 1051 of the Corporations Act relate to individual complaints or systemic issues to be dealt with by AFCA. Most relevantly, subsection 1051(4)(b) provides that one of the ‘operational requirements’ is that ‘complaints against members of the scheme are resolved (including by making determinations relating to such complaints) in a way that is fair, efficient, timely and independent’. The Tribunal is satisfied that this requirement relates to the proper functioning and operation of AFCA’s complaints mechanism and not to individual complaints. To this end, the legislation provided ASIC with an oversight and monitoring role of AFCA; it was not intended to have the power to interfere with decisions of AFCA regarding individual matters. A plain reading of the legislation and associated material such as the relevant Explanatory Memorandum indicates that there was no intention for ASIC to become involved in a review of AFCA’s decisions in particular matters or to direct AFCA as to how to make decisions about individual complaints or systemic issues, or how to specifically make decisions under its Rules. Instead, the powers given to ASIC in respect of AFCA under the Corporations Act were aimed at the broad operation of the dispute resolution scheme and AFCA’s compliance with its regulatory requirements.
There is nothing in the plain words of the power, nor in its context or purpose, that would permit it to be exercised to influence AFCA’s decision-making or to affect decisions about individual or systemic complaints about a particular financial firm (in this case, CBA and/or BankWest).
Additionally, section 1052C of the Corporations Act does not, on its terms, permit an application to be made by a financial firm or complainant to ASIC to request a direction to be made. In this regard, section 1052C, and the other specific powers that ASIC has in respect of AFCA, do not require ASIC to consult with financial firms, complainants or the general public. ASIC is only required to give written notice and reasons to AFCA in respect of an intention to give AFCA a direction under section 1052C of the Corporations Act. There is no requirement on ASIC to give notice and reasons to individual complainants, financial firms who are members of AFCA, or to the general public. As a result, this demonstrates that the power to give general directions provided to ASIC is aimed at the AFCA scheme as a whole and the collective interests of those for whom the scheme operates, rather than the interests of individual complainants or financial firms. In this regard, the Applicants stand too far away from the scope of the matters to which the power for ASIC to give AFCA a direction in section 1052C can apply. The so-called ‘ripple of affection’ is accordingly too remote to amount to an affected interest that would weigh in favour of the Applicants having standing to make an application to the Tribunal.
Furthermore, there is nothing in the plain words of the power under section 1052C of the Corporations Act that permits ASIC to make a direction to AFCA about how it makes decisions under its Rules; about how it deals with specific systemic issues and compensation in respect of them or identification and investigation of those issues; about how it deals with specific complaints and compensation of them; or to act as a de facto review by ASIC of AFCA’s specific decision-making under its Rules. The written reasons that ASIC is required to give are limited to AFCA, not to any third party. If there is a failure to comply with a direction, it is ASIC which has the power to apply to the Court to seek compliance by AFCA. The general public, or complainants to AFCA, or financial firms who are members of the AFCA scheme do not have any right to apply to the Court for an order that AFCA comply with a direction. There is also no provision in the legislation for a financial firm which is a member of the AFCA scheme, or for a complainant under the AFCA scheme, or for the general public, to apply to ASIC to request it to issue a direction to AFCA.
The plain words and the context of ASIC’s general directions power point to a finding that it was aimed at ensuring compliance with the overall requirements of the AFCA scheme, rather than with how AFCA acts and makes decisions under its Rules in specific cases or in respect of systemic issues with a particular financial firm or in relation to individual complainants. The description of the directions power in the Explanatory Memorandum as ‘intended to be used as a last resort’ and ‘to ensure that AFCA complies with legislative and regulatory requirements’ is consistent with the interpretation of the power as being one solely to ensure the AFCA scheme’s compliance with the requirements placed upon it under the Corporations Act. The legislation does not suggest that is intended to be a mechanism that can be used by ASIC to direct how AFCA makes decisions in particular cases or in respect of particular financial firms, or under its Rules, or as some kind of de facto review mechanism by ASIC of AFCA’s particular decision-making processes.
In this regard, ASIC’s Regulatory Guide provides guidance about ASIC’s role and powers in respect of AFCA and the AFCA scheme.[82] In particular, as set out above in this decision, the Regulatory Guide makes it clear that ASIC does not have any role in the decision-making processes of AFCA, as follows:
The Explanatory Memorandum confirms that while ASIC has an enhanced oversight role over AFCA, the scheme remains independent and responsible for its own internal processes and the management of complaints. ASIC has no role in individual complaints handling and will not intervene in the decision-making processes of AFCA.
[82] Guidelines which are developed to govern the application of a wide statutory power are relevant to consideration of the exercise of the power in question, although they should not be uncritically applied: Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409 at 420-421; Minister for Immigration, Local Government and Ethnic Affairs v Gray (1994) 50 FCR 189; Re Lofthouse v ASIC [2004] AATA 327 at [66].
There are reporting requirements placed on AFCA in respect of any systemic issues it identifies. Under subsection 1052E(4) of the Corporations Act, if AFCA considers that there is a systemic issue arising from the consideration of complaints under the AFCA scheme, AFCA is required to give particulars of the issue to one or more of the Australian Prudential Regulatory Authority, ASIC or the Commissioner of Taxation. The Operational Guidelines to the Rules state that the ‘primary purpose of this reporting requirement is to enable the recipient body to consider whether regulatory action is necessary’.[83] That purpose is also confirmed by the Regulatory Guide, as follows:[84]
The primary purpose of the reporting requirement in s1052E is to require AFCA to give information to a regulator so that it may consider whether regulatory action—beyond the resolution of any underlying complaints—is necessary.
[83] Exhibit 1, page 340.
[84] Exhibit 1, page 135.
That is, the purpose of section 1052E of the Corporations Act is not to enable ASIC to give a direction to AFCA about how it conducts a systemic review or compensates individuals or entities. The purpose is to allow for notification to regulators of a possible issue so that they can determine whether regulatory action is required beyond AFCA undertaking its own function to resolve complaints through a dispute resolution process.
In summary, the Tribunal is satisfied that the Applicants were not persons affected by ASIC’s decision to refuse to give a direction to AFCA in section 1052C of the Corporations Act. Accordingly, the Tribunal finds that the Applicants do not have standing to make the application to the Tribunal and the Tribunal therefore has no jurisdiction in respect of the application.
Does the Tribunal have power to grant the relief sought?
As a result of the Tribunal’s above findings, the Tribunal does not address ASIC’s contention that the Tribunal should dismiss the application pursuant to section 42B of the AAT Act because the Tribunal cannot grant the relief sought by the Applicants. ASIC argued that the relief sought by the Applicants is beyond the scope of the power in section 1052C of the Corporations Act and is therefore beyond the Tribunal’s power. The Applicants contended that the Tribunal could deal with the issue of relief at a substantive hearing, noting that the Applicants did not in their written or oral submissions to the Tribunal set out the specific relief sought from the Tribunal, despite their earlier correspondence to various entities describing the form a direction could take if it was given in the terms they requested. Based on the Tribunal’s findings that it does not have jurisdiction in relation to the application made by the Applicants, the Tribunal does not further address this matter.
Can the Tribunal review ASIC’s position not to commence regulatory action?
Finally, and for completeness, ASIC’s position is that it would not commence regulatory action in respect of the matters raised by the Applicants. The Tribunal has no jurisdiction to review ASIC’s position that it would not commence regulatory action against CBA or BankWest or any other related entity or individual. ASIC has general powers of investigation under section 13 of the ASIC Act. Section 244 of the ASIC Act permits applications to be made to the Tribunal for review of a decision by ASIC. The particular decisions that can be reviewed are specified in subsection 244(2) of the ASIC Act. Those decisions do not include a decision by ASIC about whether to investigate a matter. Consequently, and for the avoidance of doubt, the Tribunal is satisfied that it has no jurisdiction to review any such decision by ASIC.[85]
[85] See, for example, Nickson and ASIC [2005] AATA 859 at [58]; Bittman and ASIC [2006] AATA 732 at [7]-[8]; Tokich and ASIC [2007] AATA 1192 at [22].
CONCLUSION & DECISION
Although the Tribunal could, prima facie, review a decision under section 1052C of the Corporations Act pursuant to section 1317B of the Corporations Act, in this particular case and for the reasons set out above, the Tribunal decides that it has no jurisdiction to review the decision and the Applicants do not have standing to make an application to the Tribunal.
Accordingly:
(a)pursuant to subsection 42A(4) of the AAT Act, the Tribunal dismisses the application without proceeding to review the decision because it is satisfied that the decision is not reviewable by the Tribunal; and
(b)the Applicants do not have standing to make an application to the Tribunal because they are not persons whose interests are affected by the decision made by ASIC as required under subsection 27(1) of the AAT Act.

I certify that the preceding 106 (one hundred and six) paragraphs are a true copy of the reasons for the decision herein of Member W Frost.

..........................[sgd]..............................................
Associate
Dated: 22 February 2023

Date(s) of hearing:

18 November 2022

Date final submissions received:

4 October 2022

Counsel for Applicants:
Mr Philip Walker SC

Solicitors for Applicant:

Mr John Harris, O’Connor Harris & Co Solicitors

Counsel for Respondent:

Dr Phillip Bender

Solicitors for Respondent:

Ms Alice Rees, Australian Securities & Investments Commission

Date(s) of hearing:	18 November 2022
Date final submissions received:	4 October 2022
Counsel for Applicants:	Mr Philip Walker SC
Solicitors for Applicant:	Mr John Harris, O’Connor Harris & Co Solicitors
Counsel for Respondent:	Dr Phillip Bender
Solicitors for Respondent:	Ms Alice Rees, Australian Securities & Investments Commission