McIvor and Australian Securities and Investments Commission

[2017] AATA 201

McIvor and Australian Securities and Investments Commission [2017] AATA 201 (17 February 2017)

Division:TAXATION & COMMERCIAL DIVISION

File Number(s):      2015/6326

Re:Mark McIvor

APPLICANT

AndAustralian Securities and Investments Commission

RESPONDENT

AndEquititrust Limited (in Liquidation)

THIRD PARTY

DECISION

Tribunal:Deputy President Bernard J McCabe

Date:17 February 2017

Place:Sydney

Application for access by third party to documents is refused.

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Deputy President Bernard J McCabe

CATCHWORDS

PRACTICE AND PROCEDURE – third party access – request to access documents provided to the Tribunal where applicant had withdrawn application for review before the matter had proceeded to final hearing – where third party also sought access directly from respondent through a freedom of information request – third party access refused

LEGISLATION

Administrative Appeals Tribunal Act 1975 (Cth) ss 35, 37 & 41

Australian Securities and Investments Commission Act 2001 (Cth) s 127(1)
Corporations Act 2001 (Cth) ss 920A(1) & 920B(2)

Freedom of Information Act 1982 (Cth)

REASONS FOR DECISION

Deputy President Bernard J McCabe

17 February 2017

1. Equititrust Ltd was a financial services firm on the Gold Coast that failed spectacularly in February 2012. Mr Mark McIvor is a former director of Equititrust. The Australian Securities and Investments Commission (ASIC) subsequently banned Mr McIvor from providing financial services under Part 7.6 Division 8 of Part 7.6 of the Corporations Act 2001 (Cth). Mr McIvor commenced proceedings in the Tribunal with a view to challenging the decision, but withdrew the application before the matter proceeded to a final hearing.

2. Independent of those proceedings, the liquidator of Equititrust has been picking over the entrails of the collapsed firm. The liquidator suspects there may be important information contained in the many volumes of documents that were prepared and filed in the course of the truncated Tribunal proceedings. The liquidator has approached ASIC for copies of some of the documents. While ASIC has provided a number of those documents, the liquidator has now approached the Tribunal and asked for an order permitting third party access to the documents on the Tribunal’s file.

3. Mr McIvor opposes the application. So does ASIC, albeit for different reasons.

4. I do not propose permitting the liquidator to access the documents on the Tribunal’s file. I explain my reasons below.

   THE DOCUMENTS IN QUESTION

5. The decision-maker[1] in proceedings before the Tribunal is generally required to provide copies of relevant documents[2] on its file together with a statement of reasons under s 37 of the Administrative Appeals Tribunal Act 1975 (Cth) (the ‘Act’). Those documents are usually due within 28 days of the decision-maker being notified of the application for review. The applicant and respondent often file additional material before the hearing. In cases where there are interlocutory proceedings, both parties might provide statements and other material in support of their positions. In a larger or more complex case, there might be hundreds of documents and thousands of pages on the Tribunal’s file.

   [1] Technically the obligation to comply with s 37 of the Act lies on the decision-maker. That entity will usually be the respondent in proceedings before the Tribunal, but not inevitably.

   [2] The requirement in s 37 of the Act does not apply in every case. Proceedings commenced in the Migration and Refugee Division of the Tribunal do not trigger an obligation to produce the so-called “T” documents, and modified rules apply in some other proceedings.

6. That is certainly the case here. ASIC filed over 80 volumes of material. Both parties provided additional material in support of an application for a stay of the underlying decision pursuant to s 41 of the Act.

7. Some of the material provided by ASIC was collected using its information gathering and compulsory examination powers. Some of the material includes personal information. ASIC says a good deal of the material is confidential and should not lightly be released.

8. The liquidator believes the material may disclose matters that are relevant to the winding-up of Equititrust. He has previously asked ASIC for the transcripts of ASIC’s examinations of a number of Equititrust’s former officers. Some of those transcripts have been handed over.

9. The liquidator can seek information in a number of ways. The most obvious of these mechanisms is a request under the Freedom of Information Act 1982 (the FOI Act). The liquidators lodged an FOI request with ASIC on 9 November 2016 seeking access to the statement of reasons that accompanied the banning order. (I was told ASIC was still dealing with that request.) The liquidator might have recourse to the information gathering powers available in Federal Court proceedings, such as non-party discovery or subpoena. For now, though, the liquidator says it would be convenient and useful to access the collection of documents prepared in connection with these proceedings. To that end, he has made a third-party access request to the Tribunal.

10. The liquidator’s request for third-party access came in after Mr McIvor had withdrawn his application for review. The withdrawal was lodged following an interlocutory hearing regarding a stay application, but before the substantive hearing. The interlocutory hearing occurred in December 2015.

    SHOULD THE LIQUIDATOR BE GIVEN ACCESS TO THE DOCUMENTS IN THIS CASE?

11. The matter has now come before me to consider whether the liquidator, who was not involved in the earlier proceedings, should have access to the material on the Tribunal’s file.

12. I begin by noting the Tribunal’s commitment to open justice. Subsection 35(1) provides that hearings should take place in public. There are exceptions to the general rule, of course: some categories of cases are required to be heard in private. The Tribunal also has the power to order a private hearing under s 35(2) and make non-disclosure and non-publication orders under ss 35(3) and (4). But the power to make confidentiality orders under ss 35(2), (3) and (4) in the ordinary run of cases is informed by s 35(5), which says:

    In considering whether to give directions under subsection (2), (3) or (4), the Tribunal is to take as the basis of its consideration the principle that it is desirable:

    (a)that hearings of proceedings before the Tribunal should be held in public; and

    (b)that evidence given before the Tribunal and the contents of documents received in evidence by the Tribunal should be made available to the public and to all the parties; and

    (c)that the contents of documents lodged with the Tribunal should be made available to all the parties.

    However (and without being required to seek the views of the parties), the Tribunal is to pay due regard to any reasons in favour of giving such a direction, including, for the purposes of subsection (3) or (4), the confidential nature (if applicable) of the information.

13. The focus on the hearing is deliberate. Many things occur during the pre-hearing processes which must remain confidential, even in the absence of confidentiality orders. Indeed, even a presiding member is not privy to some of the things that go on during the course of the pre-hearing processes: for example, a member would not ordinarily have regard to what was said by either party in the course of a conciliation conference. Conferences are conducted by the Tribunal’s experienced conference registrars. Those events are intended to provide the parties with an opportunity for a frank exchange. The cloak of relative secrecy that shrouds conferences helps to promote settlement. Even where matters fail to settle, conferencing can help crystallise the issues in dispute. That promotes efficient dispute resolution.

14. It follows different considerations intrude when the information in question has not been produced in connection with a hearing and the publication of a set of reasons. That is important in a case like this where the application for review was withdrawn before the final hearing occurred. The Tribunal did not have the opportunity to admit documents into evidence and it did not take oral evidence from any witnesses. Section 35(5) does not offer clear-cut guidance on how the Tribunal should proceed.

    The relevant considerations

15. The liquidator is not a busybody. He has an obvious interest in accessing the material for use in connection with the winding-up proceedings. Indeed, I would go so far as to say there is a public interest in providing the liquidator with access to documents given the quasi-public nature of his role. If there is evidence which sheds light on the collapse of Equititrust, then the Tribunal should consider making that material available. The fact the original decision in relation to Mr McIvor concerns his role at Equititrust rather underlines the claim of Equititrust’s liquidators.

16. Mr McIvor’s counsel referred to Mr McIvor’s interest in preserving his own privacy. Much of the material presumably relates to Mr McIvor’s private business affairs, although those affairs are inextricably intertwined with the affairs of Equititrust. He is unsurprisingly circumspect about sharing information with the liquidators. Some of that information would have come out at a final hearing.  Some of the evidence might have been discussed in detail in the reasons which accompanied a decision. But not all of the material filed in the course of proceedings inevitably makes its way into evidence. Some of it may turn out to be irrelevant to the ultimate dispute. While Mr McIvor should have expected his privacy would be compromised during the course of the proceedings if he prosecuted them to their conclusion, he did not necessarily abandon all of his rights – such as they are – particularly in circumstances where he elected to withdraw the proceedings at an early stage.

17. Mr Brady, counsel for ASIC, said there were at least two problems with the request for access. Firstly, he said the request was so broad as to constitute a fishing expedition. Secondly, he pointed out s 127(1) Australian Securities and Investments Commission Act 2001 (Cth) (the ‘ASIC Act’) obliged ASIC:

    …to protect from unauthorised use or disclosure information:

    (a)    given to it in confidence in or in connection with the performance of its functions or the exercise of its powers under the corporations legislation (other than the excluded provisions); or

    (b)    that is protected information.

18. Mr Brady said it would be necessary for ASIC to go through the material to redact confidential information that should not be released. That would be unduly burdensome, he argued. He added the Tribunal was effectively subject to the same obligation of confidentiality when it stepped into ASIC’s shoes.

19. I asked Mr Brady whether ASIC would have to take on the burden of going through the documents if it was to process a request under the FOI Act. He pointed out:

    ·The current request was alarmingly non-specific: the third party wants essentially all of the material without clearly demonstrating relevance. A request under the FOI Act would presumably be more precise, which would narrow the scope of the inquiry ASIC would need to conduct.

    ·The FOI process was established and understood. ASIC could comfortably operate within the framework of the FOI Act which includes specific time-frames, clear processes and well-understood claims for exemption. There was also a user-friendly review and appeal process. It would be improper and inelegant for the liquidator to access the same information through another route which did not include the procedural protections that operate in FOI cases.

20. I can see the liquidator’s point. He imagines there is useful information that would be available to him if the Tribunal would only say the word. He assumes most of the information belonged to or is about Equititrust, the remains of which he is administering. I accept he has an interest in the information so he can complete his work. I accept Mr McIvor has an interest in keeping the information confidential, given some of it was obtained from him under compulsion. I also acknowledge ASIC has an interest in not being unduly burdened with the task of processing the material.

21. The Tribunal is not just concerned with the interests of individuals, of course. It is also responsible for promoting good government. In this context, promoting good government means encouraging parties to access relevant information through established processes that are adapted to the complicated task of protecting privacy and other interests.

    CONCLUSION

22. In all the circumstances, I am satisfied the liquidator should be denied access to the material. He can make further applications under the FOI Act, and using the information gathering powers available in Federal Court proceedings. Under the FOI process, ASIC has the opportunity to consider which documents should be released and make claims for exemptions and provide reasons in a format where all of those claims can properly be contested. It would be inefficient and inelegant to conduct a separate review of the documents outside of the FOI process.

I certify that the preceding 22 (twenty-two) paragraphs are a true copy of the reasons for the decision herein of Deputy President Bernard J McCabe

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Associate

Dated: 17 February 2017

Date(s) of hearing:	1 February 2017
Counsel for the Applicant:	Mr A O’Brien
Solicitors for the Applicant:	James Conomos Lawyers
Counsel for the Respondent:	Mr M Brady QC
Solicitors for the Respondent:	Australian Securities and Investments Commission
Counsel for the Third Party:	Mr PR Gaffney
Solicitors for the Third Party:	Squire Patton Boggs