Imaging Applications Pty Ltd v Australian Securities and Investments Commission

[1999] FCA 890

FEDERAL COURT OF AUSTRALIA

Imaging Applications Pty Ltd v ASIC [1999] FCA 890

JUDICIAL REVIEW – application for review of decision of Australian Securities and Investments Commission not to take over proceedings instituted by the applicants in the Supreme Court of Victoria pursuant to s 55A of Insurance Contract Act 1984 (Cth) – no power to make decision.

IMAGING APPLICATIONS PTY LTD & ANOR v AUSTRALIAN SECURITIES & INVESTMENTS COMMISSION
V 232 of 1999

GOLDBERG J
23 JUNE 1999
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 232 of 1999

BETWEEN:

IMAGING APPLICATIONS PTY LTD
(ACN 006 376 441)
First Applicant

MICHAEL IAN PETCH
Second Applicant

AND:

AUSTRALIAN SECURITIES & INVESTMENTS COMMISSION
Respondent

JUDGE:

GOLDBERG J

DATE OF ORDER:

23 JUNE 1999

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1.The time within which the respondent may file a notice of objection to competency be extended up to and including 21 June 1999.

2.The application for an order of review filed on 12 May 1999 be dismissed.

3.The respondent pay the applicants' costs in relation to the application incurred up to and including 18 June 1999, and that otherwise there be no order as to costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 232 of 1999

BETWEEN:

IMAGING APPLICATIONS PTY LTD
(ACN 006 376 441)
First Applicant

MICHAEL IAN PETCH
Second Applicant

AND:

AUSTRALIAN SECURITIES & INVESTMENTS COMMISSION
Respondent

JUDGE:	GOLDBERG J
DATE:	23 JUNE 1999
PLACE:	MELBOURNE

EX TEMPORE REASONS FOR JUDGMENT

HIS HONOUR:

1. On 12 May 1999, the applicants filed an application for an order of review in respect of a decision of the respondent (“the Commission”) not to take over proceedings which had been instituted by the applicants in the Supreme Court of Victoria under the power granted by s 55A of the Insurance Contracts Act1984 (Cth).

2. The applicants had made an application to the respondent to exercise its power under s 55A of the Insurance Contracts Act and to take over the proceedings. Section 55A provides:

   (1)If:

   (a)an insured has entered into a contract of insurance with an insurer; and

   (b)ASIC is satisfied that the insured has suffered damage, or is likely to suffer damage, because the terms of the contract, or the conduct of the insurer, breaches the requirements of this Act;

   ASIC may, by application, if ASIC is of the opinion that it is in the public interest to do so:

   (c)bring an action against the insurer on behalf of the insured under or in respect of that contract; or

   (d)take over and continue, on behalf of the insured, an action brought against the insurer by the insured under or in respect of that contract.

   (2)      If:

   (a)a number of insureds have entered into contracts of insurance with an insurer; and

   (b)ASIC is satisfied that those insureds have suffered damage, or are likely to suffer damage, because the terms of the contracts, or the conduct of the insurer, breaches the requirements of this Act;

   ASIC may, by application, if ASIC is of the opinion that it is in the public interest to do so, bring a single action against the insurer on behalf of all of those insureds under or in respect of the contracts so entered into.

   (3)ASIC may only bring or take over an action under subsection (1), or bring an action under subsection (2), if ASIC has obtained the written consent of the insured or of each of the insureds on whose behalf the action is being brought or is being continued.”

3. By letter dated 14 April 1999, the Commission, over the signature of Mr Jim Grayson, notified the applicants that the Commission had determined that it was not appropriate for the Commission to seek to become involved in the Supreme Court proceedings pursuant to s 55A of the Insurance Contracts Act, nor to seek to be heard as an amicus curiae at the hearing of an appeal against the decision of Master Evans made on 6 November 1998 in that proceeding.

4. In their application the applicants set out in some considerable detail the grounds upon which they relied, which in general terms were errors of law which were specified as a denial of natural justice, improper exercise of power, bad faith, and that the decision was contrary to law. In the application, the applicants claimed an order pursuant to subs 16(1) of the Administrative Decisions (Judicial Review) Act1977 (Cth) quashing the decision of the Commission and consequential relief directed to the same end.

5. On 10 June 1999, the Commission, again through Mr Grayson, wrote a letter to the solicitor for the applicants, referring to the application before the Court and stated:

   “It has now come to my attention that I did not have the necessary delegation from ASIC to make a decision in respect of section 55A of the act at or at any relevant time before 14 April 1999.  As a result ASIC has not made a decision in relation to your application. 

   I have referred your application to Philip George Khoury who has been delegated with the necessary power by ASIC to decide your application.  Naturally, all of the material that you have provided to me in support of your application has been referred to Mr Khoury.  He has requested that you provide me with any additional information which you request that he consider in support of your application by 18 June.”

   The applicants and their solicitors did not reply to that letter, other than to say that the application continues.

6. On 21 June 1999, the Commission filed a notice of objection to competency pursuant to O 54 r 4 of the Federal Court Rules, objecting to the jurisdiction of the Court to try the application on the grounds that the respondent had not made a decision that is reviewable by the Court.  It is accepted by the Commission that the notice of objection to competency was filed out of time, as it should have been filed within fourteen days after service of the application upon the Commission.  Nevertheless, the Commission submitted that I should exercise the power to extend the time for the filing of the notice pursuant O 3 r 3 of the Federal Court Rules.

7. In considering whether I should grant that application to extend time and deal with the notice of objection to competency today, it is appropriate that I consider the substance of the matter, rather than its form.  The substance of the matter is this: a purported decision was made which the Commission now accepts was made without jurisdiction and without power.  The Commission has acknowledged that fact and has, in effect, set aside the decision and accepted it as a nullity.  The Commission is prepared to start from the beginning and have the matter considered afresh.

8. If I were not to deal with the objection to competency but allow the matter to proceed to trial, on the material before me it would be inevitable that the application would be dismissed because there would be no decision for the purposes of the Administrative Decisions (Judicial Review) Act.  Mr Petch, who appeared for the applicants, submitted that I should nevertheless deal with the matter and, although I have to find that there was no decision, I could look at the substance of what had happened and give guidance or directions to the Commission as to how it should go about its task afresh.  However, it is not the practice of this Court to give advisory opinions or to deal with matters which are hypothetical.

9. Having regard to the evidence, the application is bound to fail and it seems to me it would be inappropriate to make any further comment, having regard to the fact that the decision was not effective and is to be revisited. In those circumstances it is sensible and, in my view quite appropriate to extend the time for the filing of the notice of objection to competency pursuant to O 3 r 3 of the Rules until and including 21 June 1999 so that I can deal with the objection to competency now. Having regard to the matters to which I have referred, the application must be dismissed. However, it is clear that it is being dismissed on the basis that the Commission is accepting that it now has to enter upon a consideration of the application made to it by the applicants pursuant to s 55A of the Insurance Contracts Act and to deal with that application on its merits.

10. It was clear from what Counsel for the Commission submitted to me that the Commission intends to extend the time for another fourteen days within which the applicants can make submissions or further submissions in support of their application.  In those circumstances the effect of the upholding of the notice of objection to competency is that the applicants have effectively succeeded in what they set out to do by filing their application on 12 May 1999.  The decision which was the subject of that application no longer exists and in those circumstances the applicants are not inhibited by that purported decision.  They can make any further submissions which they wish to make and seek to be persuasive in relation to the Commission to the extent to which they wish to do so.  Accordingly I order that the application filed on 12 May 1999 be dismissed.

11. The applicants have submitted that they should be entitled to their costs of the application.  I am satisfied that the application was filed not only properly but as a matter of necessity, having regard to the information then available to the applicants, because they had a time limit within which to challenge what was propounded to them in the letter of 14 April 1999 as a decision for the purposes of the Administrative Decisions (Judicial Review) Act.  However, once they were put on notice that the decision had been made beyond power by a person not properly delegated with the power, the matter changed.  It seems to me that on a proper consideration of what had been said by the Commission, a hearing today might well have been averted and an order by consent made in accordance with O 35 r 10 of the Federal Court Rules.

12. In these circumstances the proper order to make is that the Commission should pay the applicants’ costs not only up to the time of the communication of the irregularity in the decision‑making process which was 10 June 1999, but up to a reasonable time thereafter, to enable the applicants to have considered their position.  In all the circumstances, I propose to order that the Commission pay the applicants' costs of the application incurred up to and including Friday, 18 June 1999.  It seems to me that upon proper consideration of the matter thereafter, the hearing today could have been averted, and in all those circumstances I propose to make no order as to the costs of any of the parties after 18 June 1999.  To that extent each side should bear their own costs incurred on and after 18 June 1999.

13. The formal order of the Court will be that:

    ·The time within the respondent may file a notice of objection to competency be extended up to and including 21 June 1999.

    ·The application for an order of review filed on 12 May 1999 be dismissed.

    ·The respondent pay the applicants' costs in relation to the application incurred up to and including 18 June 1999, and that otherwise there be no order as to costs.

14. The applicants filed a notice of motion on 21 June 1999 for, inter alia, orders that the title of the proceeding not contain the name of the parties and that the documents on the court file remain confidential.  I do not propose to make any order changing the name and title of the proceeding.  Pursuant to O 46 r 10 of the Federal Court Rules the documents on the Court file such as the affidavits and the exhibits, are not available for inspection by any party unless a Court or a judge otherwise orders.  To that extent the applicants are protected.

I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg J.

Associate:

Dated:            23 June 1999

Counsel for the Applicants:	Mr M I Petch
Solicitor for the Applicants:	Michael Petch Solicitors
Counsel for the Respondent:	Mr R M Downing QC
Solicitor for the Respondent	Australian Securities and Investments Commission
Date of Hearing:	23 June 1999
Date of Judgment:	23 June 1999