Hutchison and Australian Securities and Investments Commission

This matter concerned an application by the Applicant for review of a decision by the Australian Securities and Investments Commission (ASIC) to permanently ban the Applicant from providing any financial services. The Applicant sought to have this banning order set aside. The review was conducted by the Administrative Appeals Tribunal (AAT), which has the power to affirm, vary, or set aside the original decision and conduct its own de novo assessment.

The primary legal issue before the Tribunal was whether the Applicant had engaged in conduct that constituted a contravention of a financial services law, specifically section 1041G of the Corporations Act 2001 (Cth). This section prohibits dishonest conduct in the course of carrying on a financial services business, but crucially, the dishonest conduct must be "in relation to a financial product or financial service." ASIC’s case was that the Applicant's receipt of fees directly, contrary to internal procedures of RI Advice, constituted dishonest conduct.

The Tribunal considered whether the Applicant's conduct, specifically the direct receipt of fees which contravened RI Advice's procedures regarding cash payments and the payee of cheques, was dishonest. While the Applicant conceded he was bound by these procedures, the Tribunal focused on whether this breach was "in relation to a financial product or financial service" as required by section 1041G. The Tribunal found that the dishonest conduct, as alleged by ASIC, was not in relation to a financial product or a financial service, meaning the first element of section 1041G was not satisfied.

Consequently, the Tribunal set aside ASIC's decision to permanently ban the Applicant from providing financial services.