Hutchison and Australian Securities and Investments Commission
[2017] AATA 1419
•7 September 2017
Hutchison and Australian Securities and Investments Commission [2017] AATA 1419 (7 September 2017)
Division:TAXATION & COMMERCIAL DIVISION
File Number(s): 2017/3652
Re:Robert Hutchison
APPLICANT
AndAustralian Securities and Investments Commission
RESPONDENT
DECISION
Tribunal:Deputy President B W Rayment
Date:7 September 2017
Place:Sydney
The stay order sought by that Applicant pursuant to section 41(2) of the Administrative Appeals Tribunal Act 1975 (Cth) is granted.
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Deputy President B W Rayment
Catchwords
PRACTICE AND PROCEDURE – application for stay of decision – relevant considerations – prospects of success – no repetition of misconduct – stay granted
Legislation
Administrative Appeals Tribunal Act 1975, s 41(2)
Corporations Act 2001, ss 920A, 920B
REASONS FOR DECISION
Deputy President B W Rayment
7 September 2017
This is an application for a stay of a permanent banning order made by the respondent under ss 920A and 920B of the Corporations Act 2001 pending the hearing of the applicant’s application to this Tribunal for the review of the delegate’s decision. The review is to be heard in the Perth Registry.
Some oral and documentary evidence was led before me on the applicant’s behalf. No credit or other findings of disputed facts ought to be made in an interlocutory application such as this. The power to grant a stay is set out in s 41(2) of the Administrative Appeals Tribunal Act1975 (the Act). The application was made upon notice to the respondent, whose counsel cross-examined the applicant. The power in s 41(2) of the Act to grant a stay is enlivened if the Tribunal considers it desirable to do so after taking into account the interests of any persons who may be affected by the review, and the power is to make such order as the Tribunal considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review.
The principal issue arising before me is the desirability in the circumstances of ordering a stay. If no stay is granted, the effectiveness of the hearing and determination of the application may be seriously diminished. Indeed if no stay is granted and yet the review results in a favourable outcome from the applicant’s point of view, the applicant may, as his solicitor submits, be required to sell his existing business at a steep discount as a result of action threatened by his lender. Moreover, the interests of others, including both his clients and the respondent as regulator, are unlikely in my opinion to be adversely affected by the making of a stay order in the circumstances, as spelt out in more detail below. The applicant’s wife, who also works in the applicant’s business, would be adversely affected by the failure to grant a stay.
The applicant is a financial adviser who carries out his occupation in Perth, Western Australia. Between 14 May 2007 and 30 November 2012 he was an authorized representative of RI Advice Group Pty Ltd (RI Advice), which I was informed is a wholly owned subsidiary of ANZ Bank. The misconduct found against the applicant which resulted in the banning order took place in that period and it is not alleged that any repetition of that conduct, or other misconduct on his part has occurred in the intervening period of almost five years. Since the basis of the banning order itself related to a concern about matters of dishonesty, and a concern about their repetition, the passage of that period of time without the delegate’s concern being shown to be justified is a matter to be taken into account in the applicant’s favour on this matter and perhaps also at the final hearing, if the evidence remains the same.
The applicant gave evidence both before the delegate and in a compulsory examination before an ASIC officer which amounted to admissions of the primary facts in a number of matters alleged against him, but not of the dishonesty found against him by the respondent. He said before the Tribunal that he did not adhere to a number of those admissions, stating that he was disadvantaged in several respects when the admissions were made, including being without access to relevant documents and without legal representation. His evidence before the delegate included material as to the absence of intent on his part for the double-charging which had occurred and assertions about the inadequacy of the procedures followed by RI Advice in dealing with the complaints made against him, including investigations carried out by a former employee, who was alleged by him to have a motive to blacken his name. To some extent those allegations were discussed by the delegate in his decision.
The applicant’s evidence and cross-examination on the evidence apparently volunteered by him before the ASIC officers, including the delegate, will obviously be important at the final hearing. The same is true for any evidence he or ASIC may call from the licensee for which he is now, and previously was, an authorised representative, and present or former clients of his, and/or any of those with whom he has worked or who can give evidence about his character. The applicant’s honesty and the circumstances which led to such of the matters as this Tribunal decides merit criticism or adverse findings are among the issues to be determined by the Tribunal at the final hearing. I have heard evidence about some of those matters. It appeared that his legal representatives had struggled to present a detailed case on his behalf for the stay, because of time constraints and other matters.
The banning order has already been publicly announced and has been in place since the reviewable decision of 2 June 2017, so now for some three months. His doors have been able to be kept open by the use of other staff.
It is clear to me that the central findings of the Tribunal as to the applicant’s character and as to the likelihood that he will commit further breaches of a financial services law will be principal issues on the final hearing and it cannot be said that the applicant will have an insubstantial case on those issues. The final submissions of the applicant as to the primary facts earlier admitted by the applicant suggest that in important respects, those primary facts themselves will be genuinely in issue to the extent set forth in those submissions.
DECISION
It seems to me, that the matters set out in the previous paragraph, coupled with the lapse of time since the misconduct found against him by the delegate occurred, without evidence that the matters of concern mentioned by the delegate have in fact occurred, and in the light of the serious consequences which may ensue if the ban is not stayed, combine to make this a case in which I am of the opinion that it is desirable to order a stay.
The applicant has proposed the application of certain conditions on the making of a stay order. The respondent has not suggested other conditions. I have re-framed the conditions proposed by the applicant and if either party wishes to argue for some amendment to the conditions as set out below, then further submissions may be made to the Tribunal within seven days of this decision.
The stay order which I will make is revocable so that if further matters come to notice in the period of time between now and the final hearing, they can be brought before the Tribunal for a further order to be made.
In those circumstances, the application for a stay of the reviewable decision is granted, subject to the following conditions:
(a)The applicant is to notify existing and any new clients forthwith, in writing, that following the making by ASIC of a permanent banning order against him (the Decision), the applicant sought review of that decision by the Administrative Appeals Tribunal, and that the Tribunal has made an order staying the operation of the Decision (the Stay) pending the final hearing of the review.
(b)The applicant is to ensure that while the Stay is in force, any payments made by clients for financial services are to be made directly to InFocus Securities Australia Pty Ltd (InFocus Securities) and are not to be made by deduction from the client’s account.
(c)The applicant is to request InFocus Securities to conduct a monthly reconciliation of fees paid by the applicant’s clients and report such reconciliation to ASIC, including any perceived breach of condition (b).
I certify that the preceding 12 (twelve) paragraphs are a true copy of the reasons for the decision herein of Deputy President B W Rayment
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Associate
Dated: 7 September 2017
Date(s) of hearing: 14 & 15 August 2017 Date final submissions received: 23 August 2017 Solicitors for the Applicant: Mr J Xenidis, LFS Lawyers Counsel for the Respondent: Ms W F Gillan Solicitors for the Respondent: Australian Securities and Investments Commission
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