Mark Duffy and Australian Securities and Investments Commission

[2012] AATA 556

[2012] AATA 556 

Division	GENERAL ADMINISTRATIVE DIVISION
File Number(s)	2012/2021
Re	Mark Duffy
APPLICANT
And	Australian Securities and Investments Commission
RESPONDENT

DECISION

Tribunal	Senior Member John Handley
Date	24 August 2012
Place	Melbourne

The decision made by the respondent on 16 March 2012, is not reviewable by the Tribunal. Pursuant to s. 42A(4) of the Administrative Appeals Tribunal Act 1975, the application is dismissed without proceeding to review.

...........[sgd]....................................

Senior Member John Handley

CORPORATIONS – application to ASIC for whistleblower protection – applicant made disclosures against a corporation alleging contravention of the Corporations Act2001 – ASIC investigated and decided the applicant did not qualify for protection – decision not made pursuant to the Corporations Act2001 – decision made under the Australian Securities and Investments Commission Act 2001 – decision made not reviewable by the Tribunal – application dismissed pursuant to s. 42A(4) of the Administrative Appeals Tribunal Act 1975.

LEGISLATION

Administrative Appeals Tribunal Act1975 sections 25(1), 42A(4)

Australian Securities and Investments Commission Act 2001 sections 11(1) and (4), 13(1), 244

Corporations Act 2001 sections 1317AA, 1317B

REASONS FOR DECISION

Senior Member John Handley

24 August 2012

BACKGROUND

1. Mr Mark Duffy, the applicant, lodged an application for review with this Tribunal seeking review of a decision by the Australian Securities and Investments Commission (ASIC), the respondent, alleged to have been made on 7 May 2012.

2. The respondent contends that the Tribunal should dismiss the application for review because the respondent made a decision relevant to this review on 16 March 2012; the applicant did not lodge his application for review until 17 May 2012 (more than 28 days after the respondent’s decision was made); and time should not be extended to permit him to continue with the review. Additionally, and substantially, the respondent contends that it has not made any decision which is capable of review and the application should be dismissed pursuant to s. 42A(4) of the Administrative Appeals Tribunal Act 1975 (the AAT Act).

3. Accordingly, the respondent contends that it is unnecessary to consider an extension of time to permit the proceedings to continue, because to do so would be futile.

4. The Tribunal convened a jurisdictional hearing on 3 July 2012.  At that date, both parties had lodged submissions and a number of documents in support of their respective applications.  Subsequent to the jurisdictional hearing, both parties lodged additional written submissions.  This decision has had regard to the oral submissions made on 3 July 2012, the documents, and the written submissions. 

5. The circumstances giving rise to this application may be briefly summarised as follows.

6. Commencing on 25 January 2010, the applicant wrote a number of letters and had discussions with the respondent where he made allegations of certain conduct, by officers of the ANZ Bank (the corporation), which contravened the Corporations Act 2001 (the Corporations Act). His subsequent correspondence and discussions with the respondent also concerned the conduct of the corporation which the applicant alleged was continuing to offend the Corporations Act.

7. The applicant alleged that he had been victimised by the corporation and sought whistleblower protection pursuant to Part 9.4AAA of the Corporations Act.

8. The respondent investigated the applicant’s allegations, including referral of the allegations to its Misconduct and Breach Reporting unit.  On at least 2 occasions, before 16 March 2012, the respondent notified the applicant of its investigations and its decision not to take action on the allegations made.

9. On 16 March 2012 an officer of the respondent wrote a letter to the applicant. The respondent contends that this letter contains the decision relevant to this review but asserts that this decision is not within the jurisdiction of the Tribunal to review.  Both parties have referred to that letter in their submissions and relevant parts of it are reproduced as follows:

   On 27 October 2011, we again wrote to you to advise that we had carefully considered the issues you had raised.  Following this consideration, we had determined not to take further action as the available evidence did not indicate a breach of a law we administer.

   In relation to your claim to have been victimised as a whistleblower, as we have previously advised you, we don't consider the conduct of which you complain constitutes a breach of the whistleblower protection provisions under Part 9.4AAA of the Act.  The Act protects certain whistleblower activities, and protects whistleblowers from victimisation.  However, to be protected as a whistleblower under the Act, amongst other things, the disclosure in question must itself qualify for protection and the alleged victimisation must be because the person made the protected disclosure.  In ASIC’s view neither of these conditions have been satisfied.

   ASIC’s position as set in our letters of 13 May 2010 and 27 October 2011, has been arrived at after thorough consideration of the issues and consultation by relevant senior ASIC staff.  I consider that ASIC has fully dealt with these issues, and explained our position to you.  Accordingly, we do not propose responding further to you in relation to this matter.

10. Apparently not satisfied with the contents of the above letter, the applicant wrote 5 letters to the respondent, between 23 March 2012 and 18 April 2012.  On 27 April 2012 the applicant met with officers of the respondent and discussed the issues of concern to him. On 30 April 2012, the applicant prepared Minutes of that meeting and sent them to the respondent seeking confirmation.

11. The author of the letter of 16 March 2012 sent an e-mail to the applicant on 7 May 2012 notifying him as follows:

    we do not confirm your summary as an accurate minute of our discussion and we do not endorse it. 

12. Relevantly the author then advised:

    Further, ASIC does not propose engaging in further dialogue with you concerning the matter; we are confident we have done all we can to explain ASIC’s view of the concerns you have raised.

13. The extracted part of the letter, reproduced immediately above, constitutes the decision the applicant seeks to review. The applicant asserts that this decision is within the jurisdiction of the Tribunal to review.

    THE LEGISLATION 

14. Under s. 25(1) of the AAT Act, an enactment may provide that applications may be made to the Tribunal for review of decisions made under that enactment. In effect, this means that the Tribunal can review decisions only where its jurisdiction to do so is found within an enabling Commonwealth Act.

15. Sections 11(1) and (4), 13(1) and 244 of the Australian Securities and Investments Commission Act 2001 (the ASIC Act) are relevant to this decision and are reproduced as follows:

    s.11

    (1) ASIC has such functions and powers as are conferred on it by or under the corporations legislation (other than the excluded provisions)

    (4) ASIC has power to do whatever is necessary for or in connection with, or reasonably incidental to, the performance of its functions.

    s.13

    (1) ASIC may make such investigation as it thinks expedient for the due administration of the corporations legislation (other than the excluded provisions) where it has reason to suspect that there may have been committed:

    (a) a contravention of the corporations legislation (other than the excluded provisions); or

    …

    s.244

    (1)  In this section:

    “decision” has the same meaning as in the Administrative Appeals Tribunal Act 1975.

    (2) Applications may be made to the Administrative Appeals Tribunal this for a review of a decision by ASIC:

    (a) to make an order under section 72 or 73; or

    (b) to make an order under subsection 75(1) varying an order in force under Division 8 of Part 3; or

    (c) to refuse to vary or revoke an order in force under Division 8 of Part 3.

16. Sections 72, 73 and 75(1) of the ASIC Act have no relevance to the circumstances of the application made by the applicant or to the decision he is seeking to review.

17. Section 1317AA(1) of the Corporations Act (which is within Part 9.4AAA) records 5 qualifying elements in order to obtain protection as a whistleblower, relevantly being:

    1.   The person disclosing information (the discloser) is an officer or an employee of a company; and

    2. the disclosure is made to ASIC; and

    3. the discloser informs the person to whom the disclosure is made of the discloser’s identity before making the disclosure; and

    4. the discloser has reasonable grounds to suspect that the information indicates that a company or an officer or employee of a company has, or may have, contravened the Corporations legislation; and

    5. the disclosure is made in good faith.

18. Section 1317B(1) of the Corporations Act provides that applications may be made to the Tribunal for review of decisions made by ASIC under the Corporations Act.

    DISCUSSION

19. The written submissions of the applicant, filed subsequent to the jurisdictional hearing, indicate that he had made a clear disclosure to the respondent that the company had serious and systemic governance failures that were creating breaches of Corporations Legislation and that these failures created further breaches of law (at paragraph 48). The written submissions further indicate that the applicant had drawn the respondent’s attention to the powers conferred on it by Part 9.4 AAA of the Corporations Act and that he had made disclosures with reasonable grounds to suspect that there may be multiple breaches of Corporations Legislation (at paragraph 49). In his submissions, the applicant further submitted that the respondent confirmed in the meeting on 27 April 2012 that the applicant qualified for protection (at paragraph 49).

20. At paragraph 50 of his submissions, the applicant recorded that the contents of the letter of the respondent of 7 May 2012 constituted a decision made by it not to take action and use its powers and functions conferred on it by Part 9.4AAA of the Act.

21. The applicant, as may be discerned from his submissions and the documents that he has lodged, is clearly aggrieved that ASIC has not given him protection as a whistleblower.  Additionally, he asserts that ASIC, having decided orally that he qualified for protection, should have made that decision as it was empowered to do so under s. 1317AA(1) of the Corporations Act. This contention is not necessarily at odds with the applicant’s submission, at paragraph 49, that he qualified for protection.  However, there is nothing from the materials lodged by the respondent, which would satisfy the Tribunal, that any decision was made or advice was communicated to the applicant, at the meeting on 27 April 2012, that he did qualify for protection. As a fact, the Tribunal does not make that finding.

22. ASIC had regard to the provisions of s. 1317AA of the Corporations Act to the extent that it received a disclosure from the applicant. Nothing indicates that the disclosure was made other than in good faith.

23. Consistent with its powers under s. 11(4) of the ASIC Act, the respondent then decided to exercise its discretion to make such investigation as it thinks expedient for the due administration of the corporations legislation. To have undertaken that investigation it must have been satisfied that there was a reason to suspect that there may have been committed…a contravention of the corporations legislation (s. 13(1)(a) of the ASIC Act). The correspondence received by the applicant from the respondent indicates that its officers did investigate his complaints.

24. However, the respondent apparently became satisfied that whistleblower protection was not available to the applicant because it decided that the disclosure must itself qualify for protection and any alleged victimisation must be because the person made a protected disclosure.  The respondent’s letter to the applicant of 16 March 2012 makes that recording and adds that neither of those conditions, having completed its investigations, had been satisfied.

25. In reaching that conclusion, the respondent completed the investigations it undertook under its discretionary powers and subsequently decided that it would not take any further action.  The Tribunal is satisfied that the respondent was entitled to make that decision.  The Tribunal is also satisfied that it was not a decision that is capable of review by this Tribunal.

    JURISDICTION

26. The Tribunal is empowered to review decisions made by ASIC under s. 244 of the ASIC Act. Those decisions are confined to ss. 72, 73 or 75(1) of the ASIC Act. ASIC did not make a decision pursuant to s. 1317AA of the Corporations Act. Consequently, s.1317B of the Corporations Acts does not apply.

27. It is the applicant – the discloser – who must (initially) have reasonable grounds to suspect that the information he provided indicates contravention of the Corporations Act (s. 1317AA (1)(d)). In the Tribunal’s view, satisfying the criteria within s. 1317AA(1) does no more than set the foundation for an investigation. ASIC exercised its discretion pursuant to s. 11(4) and s. 13(1) of the ASIC Act to investigate the disclosure by the applicant. It had apparently been satisfied that the disclosed information was worthy of investigation because to have done so, the respondent must also have had reason to suspect there may have been a contravention of the Corporations Act. ASIC ultimately became satisfied that the victimisation alleged did not qualify for whistleblower protection.

28. The decision made by ASIC, to decline protection, being a decision which arose out of the performance of its statutory responsibility, was not made pursuant to s.1317AA of the Corporations Act. It was made pursuant to s. 11(4) of the ASIC Act which, by its broad ambit, includes the making of decisions. Therefore, the respondent’s decision is not reviewable by the Tribunal. Only the three decisions found within s. 244 of the ASIC Act are reviewable by this Tribunal.

    EXTENSION OF TIME

29. The letter of 7 May 2012confirmed the respondent’s decision that was made and found within the letter of 16 March 2012. In the Tribunal’s view, little turns on this finding because even if the contents of the letter of 7 May 2012 constituted a decision, neither would be reviewable.  The extension of time application does not need to be considered.

    DECISION

    For the reasons expressed above, I am satisfied that the decision made by the respondent, conveyed to the applicant by its letter of 16 March 2012, is not reviewable by the Tribunal. Pursuant to s. 42A(4) of the AAT Act, the application is dismissed without proceeding to review.

I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for the decision herein of Senior Member John Handley.

.........[sgd]………......................

Associate

Dated 24 August 2012

Date of hearing	3 July 2012
Date last submissions lodged	17 July 2012
Applicant	Mr Mark Duffy
Representative for the Applicant	Self-represented
Solicitor for the Respondent	Mr Mat Povey, Australian Securities and Investments Commission