Investment Planners (Australia) Pty Ltd and Australian Securities and Investment Commission
[2003] AATA 1112
•6 November 2003
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2003] AATA 1112
ADMINISTRATIVE APPEALS TRIBUNAL )
) No W2003/202
GENERAL ADMINISTRATIVE DIVISION ) Re INVESTMENT PLANNERS (AUSTRALIA) PTY LTD Applicant
And
AUSTRALIAN SECURITIES AND INVESTMENT COMMISSION
Respondent
DECISION
Tribunal Mr M Allen, Member Date6 November 2003
PlacePerth
Decision The Tribunal has no jurisdiction to review the decisions made on 15 May 2003 by the delegate of the respondent as set out in the letter of that date to the applicant. ........(sgd M Allen)...............
Member
CATCHWORDS
CORPORATION & SECURITIES – discharge of security lodged by holder of dealers licence – whether Tribunal has jurisdiction to review decisions made concerning the conduct of a hearing regarding compensation claims – whether a decision within meaning of the Administrative Appeals Tribunal Act 1975 – whether decision made pursuant to a regulation is reviewable.
Administrative Appeals Tribunal Act 1975 ss 3, 25, 37
Corporations Act 2001 ss 9,786, 1317A, 1317B, 1317C, 1401, 1430, 1431, 1432, 1445
Australian Securities & Investments Commission Act 2001 ss 11, 51, 59, 244
Safety, Rehabilitation and Compensation Act 1988 s62
Corporations Regulations 2001 regulations 7.3.04, 7.3.06
Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd (1979) 24 ALR 307
Re Birdseye and ASIC (2003) AATA 138
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321
Geographical Indications Committee v O’Connor 64 ALD 325
Federal Commissioner of Taxation v Beddoe 44 ALD 561
Johns v Connor (1992) 107 ALR 465
Hong Kong Bank v ASIC (1992) 40 FCR 402
Toll v ASIC (1993) 29 ALD 412
Re Morton and ASIC (1997) 23 ACSR 452
Re Donald and ASIC (2001) 38 ACSR 661
Comcare v Williams 43 ALD 253
Re Young and Telstra 32 ALD 307
REASONS FOR DECISION
6 November 2003 Mr M Allen, Member 1.The applicant, Investment Planners (Australia) Pty Ltd, has applied for the review of decisions which the applicant said had been made on 15 May 2003 by a delegate of the respondent, the Australian Securities and Investment Commission (“ASIC”). In the application lodged with the Tribunal the decision to be reviewed was described as follows: “Please see attached: annexure A, annexure B, annexure C”. I will refer below to what the terms of the decision under review may have been, but for the moment it is sufficient to note that the applicant is concerned with decisions apparently made by the delegate on 15 May 2003 about the way in which a hearing convened to determine how ASIC should apply a security deposit of $20,000.00 was to proceed.
2.ASIC questioned the jurisdiction of the Tribunal to hear and determine the application and a hearing was held to determine the issue of jurisdiction. At that hearing the applicant was represented by its solicitor, Mr O’Connor, and ASIC was represented by Mr Benter, one of its officers. At the time of that hearing no documents had been lodged by ASIC pursuant to Section 37 of the Administrative Appeals Tribunal Act 1975 (the AAT Act) and no oral evidence was given on behalf of either party.
3.Both parties made oral submissions at the hearing and subsequently filed written submissions in relation to the question of jurisdiction. During the course of my consideration of the issues I invited further submissions on several points and written submissions were subsequently received from both parties.
Background
4.From the documents before me and from what I was told at the hearing the following background information appears not to be in dispute between the parties.
5.When it was granted a dealers licence in 1997 the applicant deposited the sum of $20,000.00 with ASIC in satisfaction of a condition imposed by ASIC pursuant to s786(2)(d) of the Corporations Law (“the Law”) of Western Australia. The applicant ceased to operate its business as a dealer in June 2002 and at the applicant’s request ASIC revoked the dealers licence with effect from 9 July 2002. The applicant also applied to ASIC for discharge and return of the security amount and, in accordance with reg 7.3.06 of the then Corporations Regulations (the terms of which are set out below), published an advertisement inviting claims against the security to be submitted to ASIC within 3 months.
6.ASIC received claims from a number of people who wished to be compensated from the security deposit and, in accordance with a requirement of the applicable regulation, ASIC invited the applicant to indicate whether it wished to be heard at a hearing in relation to the claims that had been submitted and the applicant advised ASIC that it did so wish to be heard. In March 2003 ASIC issued a notice to the applicant convening a hearing to enable submissions to be made by the applicant as to whether ASIC ought to make payments of compensation from the security deposit.
7.The hearing commenced on 10 April 2003 and in the course of the hearing and in a subsequent letter dated 9 May 2003 (a copy of which I do not have) the applicant’s solicitors apparently asked the delegate to adopt certain procedures in relation to the conduct of the hearing when the hearing was re-convened. By letter dated 15 May 2003 (annexure A to the applicant’s application) in response to the 9 May letter the delegate informed the applicant’s solicitors, in summary, that
(a)Mrs McGarey and Mrs Dodd, who had given evidence at the hearing on 10 April 2003, had agreed to attend the re-convened hearing on 22 May 2003 and to respond to questions asked by the applicant. Accordingly, the delegate did not intend to summon, pursuant to paragraph 58(1)(b) of the Australian Securities and Investments Commission Act 2001 (“the ASIC Act,”), either Mrs McGarey or Mrs Dodd to attend the hearing when it re-convened on 22 May 2003.
(b)The delegate would permit the applicant to ask Mrs McGarey and Mrs Dodd questions about their compensation claim, but she would not permit cross-examination about statements given by Mrs McGarey and Mrs Dodd that were contained in what the delegate referred to as “the banning brief”.. [I understand this to be a reference to another hearing convened by ASIC to consider whether a person associated with the applicant should be “banned.” from being involved in the securities industry. ]
(c)In relation to cross-examination generally, the delegate mentioned that hearings conducted by delegates in the exercise of administrative functions are inquisitorial, rather than adversarial in nature. The delegate invited the applicant to present oral or written submissions setting out its version of the events and conversations concerning Mrs McGarey and Mrs Dodd and to make submissions about the versions of events given by Mrs McGarey and Mrs Dodd. It would be open to the delegate to ask further questions of Mrs McGarey, Mrs Dodd or the applicant.
(d)The delegate would not summons Mrs McGarey and Mrs Dodd to produce all documents in their possession relating to their respective claims.
(e)In relation to another claimant, Mrs Stirling, the delegate did not propose summoning her to attend the re-convened hearing and expressed the same comments concerning cross-examination. The delegate noted that the applicant had been provided with a copy of Mrs Stirling’s statement in relation to her compensation claim and the supporting documents. The applicant was asked to submit further information about the basis of the request for the production of documents.
(f)The delegate referred to the compensation claims received by ASIC from a number of named persons after the 3-month period specified in the notice published by the applicant under reg 7.3.06, noting that the regulation prevents ASIC from discharging, returning or releasing the security until 3 months after that publication. The delegate noted that the claims were made following the publication of a reg 7.3.06 notice, not a notice published by ASIC under reg 7.3.04 (the terms of which are also set out below). The delegate then stated as follows:
“Subregulation 7.3.04(3)(c) provides that a security deposit must not be applied to compensate a person unless the claim for compensation is lodged in writing by, or on behalf of, that person no later than a later date ASIC allows in a particular case.
As the claim for compensation from the Claimants were received by me, as delegate for ASIC, before ASIC’s power in discharging the security deposit was exercised, I am prepared to consider all the claims for compensation received from the Claimants.
Accordingly, I confirm that ASIC is considering the claims for compensation from all the Claimants and you should be preparing your client’s case on the basis of compensation claims from ... [a number of named claimants].”
(g)The delegate did not intend to require two named ASIC officers to attend the hearing on 22 May 2003 to submit to cross-examination by the applicant.
8.In relation to the applicant’s request that the re-convened hearing date of 22 May 2003 not proceed so that the applicant could appeal the “the procedural decisions” the delegate had made, the delegate expressed the view that the preferable approach was for the hearing to proceed and for all points of contention, both as to process and substance, to be reviewed on appeal - because in that way the significance of procedural decisions could be fully appreciated in the context of the final decision. However, the delegate advised that if the applicant commenced proceedings in either this Tribunal or the Federal Court, then the delegate would stay the current hearing pending the hearing of any stay application made by the applicant.
9.By letter dated 16 May 2003 (annexure B to the applicant’s application) the applicant’s solicitors responded to matters addressed in the letter of 15 May 2003 and advised that the applicant intended to appeal against the “procedural decisions” to this Tribunal. By letter dated 21 May 2003 (annexure C to the applicant’s application) the delegate advised the applicant’s solicitors that she was not prepared to revise her procedural decisions – which did not deprive the applicant of the opportunity to place before ASIC information or an explanation of events which may influence the delegate’s decision. Upon receipt of papers regarding an appeal the delegate would stay the hearing.
10.In annexure D to its application the applicant set out the reasons for the application. After referring to the procedural directions as outlined above, the applicant stated that the directions given would not afford the applicant natural justice or procedural fairness in the hearing of the compensation claims. Specifically, the applicant identified the failure to require witnesses to attend the hearing and to be cross-examined by the applicant as denying the applicant the right to be heard and the delegate was thereby refusing to consider all the relevant considerations. The delegate was also said to have erred in law and fact by accepting claims from several claimants that had been lodged outside what was said to be a three-month limitation for lodging claims.
Consideration
11.Prior to 2001 the Corporations Law and Corporations Regulations of Western Australia regulated the granting of dealer’s licences and related matters, including the handling of security deposits by holders of such licences. From July 2001 the Corporations Act 2001 (“the Act”) and the regulations made under it (“the Regulations”) replaced the Corporations Law and its regulations – but essentially reproduced their provisions.
12.The relevant provision of the Act was s 786(9) (which is found within Part 7.3) and which provides that “Where a security is lodged with ASIC pursuant to a condition to which a licence is subject in accordance with (2)(d), the security may be applied by ASIC in such circumstances, for such purposes and in such manner as is prescribed”.
13.The applicable provisions of the Regulations dealing with security deposits are found in regulations 7.3.04 and 7.3.06 and, as far as is relevant, are as follows:
“Regulation 7.3.04
“(1)For subsection 786(9) of the Act, a security lodged with ASIC in relation to a licence may be applied by ASIC in accordance with this regulation to compensate a person who has suffered pecuniary loss due to the failure of the licensee, or an agent or employee of the licensee, to carry on business under the licence adequately and properly.”
(2)…
(3)A security must not be applied to compensate a person unless the claim for compensation is lodged in writing by, or on behalf of, that person no later than:
a)if ASIC has, by notice published in accordance with sub-regulation (4), advertised for claims for compensation to be paid out of the security and specified a date not less than 3 months after publication of the notice – that date; or
b)if no notice is published and paragraph (c) does not apply – 6 months after the person becomes aware that he or she has suffered the pecuniary loss; or
c)a later date ASIC allows in a particular case.”
(4) A notice mentioned in paragraph (3)(a) must be published:
(a) in a daily newspaper of general circulation in this jurisdiction; and
(b)if ASIC so requires – in a newspaper circulating generally in a State or Territory where the holder of the licence, or the agent or employee, carries on business under the licence.
(5)ASIC must give the licensee an opportunity of being heard before deciding whether a person is to be compensated under sub-regulation (1).
...”
“Regulation 7.3.06
“(1)ASIC may:
(a)discharge in whole or in part a security maintained by it under a condition of a licence; or
(b)return the security in whole or in part; or
(c)release, in whole or in part, any surety who provided the security;
if:
(d)a person ceases to hold the licence; or
(e)the potential liability of the licence holder is reduced; or
(f)it is reasonable in the circumstances for the amount of the security to be reduced; or
(g)it is reasonable in the circumstances for the security not to be maintained;
and a written application is made by the former licence holder, the licence holder, or any surety who provided the security.
(2)ASIC must not exercise a power under subregulation (1) until 3 months after the date on which a notice in accordance with Form 702 is published:
(a)in a daily newspaper of general circulation in this jurisdiction; and
(b)if ASIC so requires – in a newspaper circulating generally in a State or Territory where the holder of the licence carried on business under the licence;
asking for particulars in writing of any claim in respect of the security to be lodged before the end of the 3 month period.
(3)A notice must be published by, and at the expense of, the person making the application.
…”.
14.However, the Act and the Regulations were themselves amended in 2001 by a further package of legislation that introduced a new “Financial Services Regulation” (“FSR”) regime with effect, relevantly, from 11 March 2002. From that date neither the Act nor the Regulations contained any provisions equivalent to s 786 or the associated regulations – but Part 10.2 of the Act contains various transitional provisions regarding that new regime.
15.Section 1430(1) of the Act states that:
“For the purposes of this Subdivision, a person is a regulated principal if, immediately before the FSR commencement, the person is a person described in column 2 of one of the items in the following table. The regulated activities of that person are as specified in column 4 of that item.”
Item 1 in the table in s 1430 is as follows:
ItemThese persons areThese are the regulated This is the
regulated principals principal’s regulated relevant old
activities legislation (if
any)
1 A holder of a dealers The activities that the Parts 7.3, 7.4
licence within the licence (as in force (other than
meaning of the old immediately before the Division 2), 7.5,
Corporations Act. FSR commencement) 7.6 and 7.7 of authorised the person the old
to carry on. Corporations Act, and any
associated
provisions.
16.Section 1432(1) of the Act provides that:
“Subject to subsection (2), during the transition period for a regulated principal, the relevant old legislation (if any) continues to apply, despite its repeal:
(a)to, and in relation to, the regulated principal and their regulated activities; and
(b)to any other person to whom it is expressed to apply, but only in relation to matters related to the regulated principal and their regulated activities.”
17.The applicant’s dealers licence was not revoked until July 2002 and it was, consequently, a “regulated principal” immediately before the “FSR commencement” (11 March 2002). By virtue of s 1432(1) the relevant old legislation, which includes Part 7.3 (and, hence, s 786) and any associated provisions, continued to apply despite its repeal during the transition period. By virtue of s 1410(1) the “associated provisions” include the relevant regulations and the “transition period” has the meaning given by s 1431(1) in relation to a regulated principal.
18.Section 1431(1) serves two purposes. First, it relevantly defines a transition period as being the period that starts on the FSR commencement and ends when the first of the following events occurs:
(a)the period of 2 years starting on the FSR commencement;
(b)…
(c)…
(d)the regulated principal ceases (for whatever reason) to have the status that made them a regulated principal.
For the purposes of paragraph (d), “having a status” includes holding a licence, registration, approval or similar thing, or carrying on a particular activity.”
Secondly, s 1431(1) provides that certain provisions of the new legislation will not apply during the transition period.
19.The applicant has contended that it ceased to hold a dealers licence from early July 2002 and, therefore, to be a regulated principal, prior to any step being taken under s 786 or the Regulations to deal with its security deposit. The transition period in relation to it therefore ended prior to those steps being taken and, hence, s 786 and the relevant regulations no longer applied to authorise such steps.
20.ASIC did not directly address this point, but did contend that the general transitional provisions to be found in ss 1401 and 1445 of the Act would also support an ongoing power of ASIC to deal with the security deposit in accordance with those provisions.
21.On the face of it the applicant’s contention, if correct, would suggest that the steps taken by the applicant (to advertise in accordance with reg 7.3.06 and to apply for discharge of the security under s 786) and ASIC (to proceed to deal with compensation claims) were without a statutory basis – indeed, the particular circumstances of the applicant might not be covered by the old legislation under the transitional provisions or the new legislation.
22.I do not consider that I need attempt to determine that issue or ASIC’s contention regarding the general transitional provisions at this stage of determining the Tribunal’s jurisdiction to review. As the applicant has contended, even if its contention is correct, the fact that a decision-maker has purported to act without legal authority will not deprive this Tribunal of its jurisdiction to review a decision that has been made in fact regardless of whether or not it is a legally effective decision: Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd (1979) 24 ALR 307.
23.This Tribunal can only review those decisions in relation to which it has been given jurisdiction by statute. Section 25(1) of the AAT Act provides 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; or
(b)for the review of decisions made in the exercise of powers conferred, or that may be conferred, by another enactment having effect under that enactment.”
24.Subsection 25(4) complements ss25(1) by providing that the Tribunal has power to review any decision in respect of which application is made to it under any enactment.
25.The words “enactment” and “decision” are defined in subsections 3(1) and 3(3) respectively of the AAT Act as follows:
“3(1) In this Act, unless the contrary intention appears:
…..
enactment means, …:
(a) an Act;
(b) … ; or
(c)an instrument (including rules, regulations or by-laws) made under an Act …;”
3(3) A reference in this Act to a decision includes a reference to:
(a)making, suspending, revoking 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.”
26.Part 9..4A of the Act deals with review by this Tribunal of decisions made under the Act. Relevantly:
(a)s 1317A provides that “decision” has the same meaning as in the AAT Act;
(b)s 1317B(1) provides that “Subject to this Part, applications may be made to the Tribunal for review of a decision made under this Act by ... ASIC”.
(c)s 1317C excludes certain types of decisions from the application of s1317B, but none of the exclusions is relevant in the present case.
27. Section 5B of the Act provides for ASIC to administer the Act. ASIC’s powers and functions are governed by the provisions of the ASIC Act. The jurisdiction of the Tribunal to review decisions made by ASIC under the ASIC Act is limited to the provisions set out in s 244. Subsection 244(1) provides that in that section “decision” has the same meaning as in the AAT Act. Subsection 244(2) provides that applications may be made to the Tribunal for review of certain specified decisions that ASIC is empowered to make under Division 8 of Part 3 of that Act, none of which is relevant in the present proceedings.
28.Some further provisions of the ASIC Act should be noted:
(a)Subsection 11(4) gives ASIC the power “to do whatever is necessary for or in connection with, or reasonably incidental to, the performance of its functions.”
(b)Subsection 51(1) provides that ASIC may “hold hearings for the purposes of the performance or exercise of any of its functions and powers under the corporations legislation” (other than certain specified functions or power that are not relevant in these proceedings).
(c)Sections 52-62 deal with how hearings are to be held, including such matters as whether they can be held in public, who may appear, the power to summon witnesses etc. Section 59 provides that a hearing must be conducted with as little formality and technicality, and with as much expedition as the legislation and a proper consideration of the matters permit; that ASIC is not bound by the rules of evidence; and that ASIC must observe the rules of natural justice.
Further relevant provisions of the legislation will be referred to later in these reasons for decision.
29. I turn now to consider the jurisdiction of the Tribunal to review the various decisions referred to at [7] above. For convenience I will refer to the decisions set out in paras 7(a), (b), (c), (d), (e) and (g) as “the procedural decisions” and the decision set out in para 7(f) as “the claim decision”.
30. The oral and original written submissions made by Mr Benter can be summarised as follows:
(a)Regardless of whether the decisions in question were made under the ASIC Act or the Act, the decisions are not “decisions” for the purposes of the AAT Act because they are procedural only – and are not final or operative to the extent necessary: Re Birdseye and ASIC (2003) AATA 138, Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321.
(b)Even if the decisions are decisions for the purposes of the AAT Act (which is not conceded), the Tribunal has no jurisdiction to review them because:
(i)The procedural decisions were made pursuant to subs 11(4) and/or s51 of the ASIC Act - and s244 of the ASIC Act does not make provision for review of such decisions.
(ii)The “claim decision” – was made under the Regulations and there is no provision in the Regulations permitting Tribunal review; nor is there any provision in the Act which provides for Tribunal review of decisions made under the Regulations but which have effect under the Act. In his final written submissions Mr Benter amended this position in the way I will refer to below.
31. The oral and written submissions made by Mr O’Connor on behalf of the applicant can be summarised as follows:
(a)The applicant has a statutory right to be heard by virtue of reg 7.3.04(5); the hearing that is to be accorded to the applicant is one that conforms to the requirements of the ASIC Act, including the requirement contained in s59(2)(c) of that Act that the applicant be accorded natural justice.
(b)The applicant will be deprived of that right to be heard if the hearing proceeds in the way contemplated by ASIC. The decisions about what evidence will be received (the procedural decisions) and which claims will be considered (the claim decision) would directly affect the outcome of the hearing – and will be final and determinative in that they will have removed the applicant’s right to a fair hearing. They are, therefore, decisions for the purposes of the AAT Act.
(c)Any act done by an ASIC delegate exercising the hearing powers in the ASIC Act for the purpose of exercising some power under the Act (such as the hearing of claims against security deposits) is done by virtue of ASIC exercising incidental power conferred upon ASIC through the Act. The decisions are made under the Act, not the ASIC Act.
(d)From s25(1)(b) of the AAT Act it is clear that where a delegate exercises power under the ASIC Act having effect under another enactment, namely the Act, then there is a right of review by this Tribunal.
(e)An interpretation of s244 of the ASIC Act that limits Tribunal review to ASIC decisions under Division 8 of Part 3 of the ASIC Act implies a legislative intention for ASIC to have “unfettered and unreviewable powers in a disturbingly wide range of circumstances.” Section 244 should be read as not restricting appeal rights. The section merely provides for an appeal where no existing right exists – and the Division 8 of Part 3 powers are independent of any power or provision of the Act.
(f)ASIC has no right to consider the claims made by people out of time and the applicant should not be put to the inconvenience of having to address those claims. ASIC has not purported to exercise the power contained in sub-regulation 7.3.04(3)(c) to extend the time for receipt of claims.
32. For this Tribunal to have jurisdiction to review a decision the following issues must be addressed:
(a)The decision must be able to be characterised as a decision within the meaning of s3(3) of the AAT Act. If it can not be then that is the end of the matter.
(b)If it can be so characterised, then the enactment under which the decision was made in the exercise of powers conferred by that enactment must be identified. There is no dispute that, whatever powers have been exercised by the delegate, they must have been powers conferred by either the Act or the ASIC Act.
(c)That enactment, or a second enactment under which the powers conferred by the first enactment have effect, must provide that applications can be made to the Tribunal for review of the decision.
33. ASIC acknowledges, correctly in my opinion, that a distinction must be drawn between what I have described as the “procedural decisions” and the “claim decision”. I will consider the former first.
The Procedural decisions
34. In Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 the High Court dealt with the meaning of the word “decision” for the purposes of the Administrative Decisions (Judicial Review) Act 1977 (the ADJR Act), which is in the same terms as the definition of “decision” in sub-section 3(3) of the AAT Act. Mason, CJ considered the competing policy considerations that must be taken into account when considering the word, noting that “to interpret ‘decision’ in a way that would involve a departure from the quality of finality would lead to a fragmentation of the process of administrative decision making and set at risk the efficiency of the administrative process” (pp. 336-337). His Honour went on to say that:
“... 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 may accurately be described as a decision under an enactment.
Another essential quality of a reviewable decision is that it be a substantive determination. If ‘decision’ were to embrace procedural determinations, there would be little scope for review of conduct, a concept which appears to be essentially procedural in character. To take an example, the refusal by a decision maker of an application for an adjournment in the course of an administrative hearing would not constitute a reviewable decision, being a procedural matter not resolving a substantive issue and lacking the quality of finality. Then it is the “conduct” of the hearing in refusing an adjournment that is the subject of review. To treat the refusal of an adjournment in this way is more consistent with the concept of “conduct” than with the notion of a “decision under an enactment”. (pp. 337-338)
35. In Geographical Indications Committee v O’Connor 64 ALD 325 the Full Federal Court considered whether directions given by this Tribunal about the procedure to be followed at a hearing (concerning the role to be played at the hearing by a particular party) constituted a “decision” for the purposes of the ADJR Act – and concluded that they did not (at [20]). The Full Court endorsed (at [28]) comments made by Spender J in Federal Commissioner of Taxation v Beddoe 44 ALD 561 at 568:
“It is in my opinion wholly undesirable that the process contemplated by the AAT Act should be fragmented by applications seeking to challenge intermediate directions or determinations made along the way to reaching an ultimate determination of the issue before the tribunal, in the same way that this court should be reluctant to fragment the criminal process by entertaining applications under the AD(JR) Act in relation to committal proceedings and, in particular, intermediate rulings or determinations made in the course of committal proceedings rather than the ultimate decision to commit.”
36. In my opinion the procedural decisions made by ASIC’s delegate are essentially procedural in substance. They deal with how the hearing is to be conducted and they are not decisions required to be made under any statutory provision. They do not resolve a substantive issue and they lack the quality of finality. In my opinion, these procedural rulings can not be characterised as being a decision for the purposes of the AAT Act – or, for that matter, the ASIC Act or the Act, which define “decision” as having the same meaning as in the AAT Act. That being the case, in my opinion this Tribunal has no jurisdiction to review such decisions under s25 of the AAT Act.
37. However, in case I am wrong in that view, I should consider whether the procedural decisions, if they are decisions for the purposes of s25, are decisions made in the exercise of powers under either the ASIC Act or the Act and whether the applicable statute makes provision for this Tribunal to review them.
38. The applicant concedes that the hearing to be afforded it is one pursuant to s51 of the ASIC Act. The procedural decisions made by the delegate have been made in the context of the conduct of that hearing. Section 786 of the Act confers on ASIC the function of, and powers to, make decisions about the affairs of holders of dealers licenses, including how a security is to be applied. The Regulations prescribe a procedure to be followed and confer certain limited powers for that purpose, including a requirement for a license holder to be heard when ASIC is considering compensation claims. It is for the purpose of the performance of those functions and powers (and other of ASIC’s functions and powers) that s51(1) of the ASIC Act empowers ASIC to hold hearings.
39. Although Part III of Division 6 of the ASIC Act sets out certain requirements in relation to the conduct of hearings (see [27] above) and confers certain specific powers on ASIC regarding the conduct of hearings – such as to give directions preventing or restricting the publication of evidence (s55(1)), or directions about who can be present at a private hearing (s56(1)), or to summon witnesses (s58(1)) - it does not specifically empower ASIC or its delegates to make rulings or give directions regarding the conduct of hearings generally.
40. As Lockhart J observed in Johns v Connor 107 ALR 465 at 473:
“It is a well established principle of interpretation of statutes that a power conferred by a legislature carries with it the power necessary for its performance or execution. The express power impliedly authorises everything which can fairly be regarded as incidental or consequential to the power itself: (references deleted).”
41. In my opinion the power of the delegate to make the procedural decisions of the type concerned in this case derives incidentally from the express power to hold hearings in s51(1) or from the general incidental power contained in s11(4) of the ASIC Act.
42. This Tribunal and the Federal Court has held on numerous occasions that the only decisions made by ASIC under the ASIC Act that can be reviewed by this Tribunal are those specified in s244 of the ASIC Act: see generally Hong Kong Bank of Australia Ltd & Anor v Australian Securities Commission (1992) 40 FCR 402; Toll v Australian Securities Commission (1993) 29 ALD 412; Re Morton and Australian Securities Commission (1997) 23 ACSR 454; Re Donald and Australian Securities and Investments Commission (2001) 38 ACSR 661; Birdseye v Australian Securities & Investments Commission (2003) AATA 138.
43. Whether the power to make the procedural decisions is derived incidentally from the express power in s 51 or from s11(4) of the ASIC Act, they are not decisions in respect of which s244 makes provision for appeals to this Tribunal. It follows, in my opinion, that even if the procedural decisions made by the delegate are decisions for the purposes of s25 of the AAT Act, no right of review by this Tribunal exists in respect of those decisions and the Tribunal has no jurisdiction to consider the application made by the applicant so far as it relates to the procedural decisions.
The Claim decision
44. In relation to the decision that I have described above as the “claim decision”, I must first decide whether it is a “decision” for the purposes of s25 of the AAT Act.
45. A comparison of regs 7.3.04 and 7.3.06 suggests that they deal with two related, but distinct, situations. The latter deals with the situation where a licence holder (or former holder or surety) applies to ASIC for discharge of a security in whole or in part. The former deals with how ASIC handles claims for compensation, which can arise in two ways – the first where ASIC receives claims for compensation as a result of an application for discharge (and publication of a notice) under reg 7.3.06 and the second where ASIC has received claims for compensation in the absence of any application for discharge of the security.
46. In the present case the first step taken was the application made for discharge of the security and the publication on about 29 July 2002 by the applicant of a notice under reg 7.3.06 – which invited claims to be submitted within three months. ASIC did not publish a notice of the kind mentioned in reg 7.3.04(3)(a). Accordingly, the claims received by ASIC between September 2002 and January 2003 were in response to the reg 7.3.06 notice.
47. Reg 7.3.06 provides that ASIC must not exercise its power under reg 7.3.06(1) until three months after the publication of the reg 7.3.06(2) notice, which invites claims to be submitted within the three-month period. The regulation does not deal with the situation where claims are submitted within or beyond that time. It is reg 7.3.04 that governs how ASIC is to deal with claims against security deposits by persons who claim within certain times.
48. It seems to me that reg 7.3.04(3) is by no means clear about what is the date referred to – and later than which ASIC can allow claims in particular cases. Because the notice published in this case was pursuant to reg 7.3.06 rather than 7.3.04, the three-month period referred to in reg 7.3.04(3)(a) does not arise – and so the power of ASIC to allow claims made by a “later date” can not relate to a three-month period. Accordingly, the time for making claims for the purposes of reg 7.3.04 is the six-month period referred to in reg 7.3.04(3)(b) or a period greater than six months if ASIC so allows under reg 7.3.04(3)(c).
49. Although the delegate’s letter of 15 May 2003 referred to ASIC’s ability to allow claims to be lodged by a later date, it did not mention what was the date that the claims could be later than. It is apparent that some of the claims ASIC received between September 2002 and January 2003 must have been lodged after the three-month period referred to in the reg 7.3.06 notice published at the end of July 2002. However, there is no evidence before me that any of the claims were lodged beyond the six-month period referred to in reg 7.3.04(3)(b) and I am not prepared to infer that any of them were. That being so, I am not prepared to conclude that the delegate in fact exercised the power available under reg 7.3.04(3)(c) to allow a later time. I have noted at para 31(f) above that a submission made on behalf of the applicant was that the delegate had not purported to exercise that power. It follows, in my opinion, that the delegate by proceeding to consider the claims received made no decision within the meaning of s 25 of the AAT Act.
50. From the point of view of the applicant that action by the delegate had no elements of finality and determination of rights. This is not a case comparable to an “extension of time” that can be found in provisions such as s62(3)(b) of the Safety, Rehabilitation and Compensation Act 1988 (“the SRC Act”) – which provides that a request for reconsideration of a compensation determination must be made within 28 days “... or within such further period (if any) as the determining authority ... allows”. A decision by an authority to not allow a further period is a decision for the purposes of the SRC Act (which also defines decision to have the same meaning as in the AAT Act) and is reviewable by this Tribunal: Comcare v John Lewis Willems 43 ALD 253 at 260 (per Full Federal Court); Re Young and Telstra Corp 32 ALD 307 at 311 (per President O’Connor J).
51. I conclude, therefore, that the delegate made no decision within the meaning of s25 of the AAT Act and the Tribunal has no jurisdiction. The position may, however, be different if my view is incorrect and the delegate did exercise the power available under reg 7.3.04(3)(c). In that case the claim decision would have been a decision that reg 7.3.04(3)(c) specifically authorised and determined the issue that the regulation gave ASIC to decide. In that sense it could be said to be an operative and determinative decision – and a decision for the purposes of s25 of the AAT Act.
52. If that were to be the case then the next question that would need to be addressed is whether any “enactment” makes provision for review of that decision by this Tribunal.
53. The Regulations are, themselves, an enactment by virtue of the definition in s3(1)(c) of the AAT Act. They do not, however, make any specific provision for appeals to this Tribunal – but that is not the end of the matter. Section 1317B of the Act refers to “decisions made under this Act”. Section 9 of the Act, so far as is relevant, provides that “this Act includes the regulations”.
54. It follows, in my opinion, that the decisions made under the Act for the purposes of s1317B include decisions made under the Regulations. ASIC in its written submission acknowledged this to be the case. Accordingly, the claim decision will be reviewable by this Tribunal unless s1317C excludes it -–and it is common ground that it does not. The Tribunal would, therefore, have jurisdiction to review the claim decision if that were to be regarded as a decision for the purposes of s 25 of the AAT Act. However, for the reasons set out above I consider that the claim decision is not such a decision.
55. My decision is that the Tribunal has no jurisdiction to review any of the decisions made on 15 May 2003 by the delegate of ASIC as set out in the letter of that date to the applicant.
I certify that the 55 preceding paragraphs are a true copy of the reasons for the decision herein of Mr M Allen, Member
Signed: ....................(sgd J Rainey)...........................
AssociateDate/s of Hearing 24 June 2003
Date of Decision 6 November 2003
Counsel for the Applicant Mr M O’Connor
Solicitor for the Applicant O’Connor Partners
Counsel for the Respondent Mr M Benter
Solicitor for the Respondent ASIC
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