Penna and Australian Securities and Investments Commission
[2018] AATA 1274
•3 May 2018
Penna and Australian Securities and Investments Commission [2018] AATA 1274 (3 May 2018)
Division:GENERAL DIVISION
File Number: 2017/5531
Re:Giulia Penna
APPLICANT
AndAustralian Securities and Investments Commission
RESPONDENT
DECISION
Tribunal:Deputy President B W Rayment
Date:3 May 2018
Place:Sydney
Time will be extended up to and including 18 May 2018 for the filing of an application by the applicant to review the two orders made against her by ASIC on 16 June 2015.
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Deputy President B W Rayment
CATCHWORDS
PRACTICE AND PROCEDURE – extension of time application – whether it is reasonable in all the circumstances to grant the extension – explanation for delay – whether substantive matter has merit – extension of time application granted.
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth) s 29(7)
Corporations Act 2001 (Cth) ss 902A, 920B
National Consumer Credit Protection Act 2009 (Cth) ss 80, 81
CASES
SZUOV v Minister for Immigration and Border Protection [2017] FCA 1420
REASONS FOR DECISION
Deputy President B W Rayment
3 May 2018
On 16 June 2015, the Australian Securities and Investments Commission (ASIC) made an order that the applicant be permanently banned from providing financial services under s. 920A and s. 920B of the Corporations Act 2001 (Cth), and a further order that the applicant be permanently prohibited from engaging in credit activities under sections 80 and 81 of the National Consumer Credit Protection Act 2009 (Cth).
There was a delay in service of those orders and they were not served until 4 April 2016.
The applicant had 28 days from 4 April 2016 to seek a review of the decision of ASIC, and an application for review might have been made to this Tribunal as of right on or before 3 May 2016. She failed to do so. On 12 September 2017, the applicant filed an application for extension of the time to seek a review of one of the decisions of 16 June 2015, namely that relating to the engaging in credit activities. I understand that the applicant has made it clear that she seeks also to file out of time, an application which extends to the banning order in respect to the provision of financial services.
I will discuss in turn, the explanation offered by the applicant for the delay, the prospects of success of the proposed review, and other submissions made by the applicant in support of the application.
Reasons for delay
As to delay, the applicant states in her affidavit of 27 March 2018 that she was unwell, in the relevant period, and that she was unfit to do anything with her home life or working life and “due to my medical condition I have been unable to provide a proper thought process”. She also says that her injuries and associated conditions are chronic, degenerative and ongoing. She says that her earlier legal advisers did not follow her instructions that both orders made by ASIC were to be the subject of her application. The applicant also says that she was (wrongly) advised by two lawyers in succession that she could proceed with her application even though it was out of time. Her medical evidence is not precise, but her evidence that she was not thinking properly at the relevant time is some evidence explaining the delay, and she may have relied upon advice that putting on an application for review was not urgent. On the other hand, the decisions, when served in 2016, made clear that there was 28 days in which to appeal, and her explanation for the delay is far from compelling.
Prospects of success
As to the prospects of success with respect to the engaging in credit services, the banning order was made without notice to the applicant on the ground that she had been convicted of fraud, and of serious fraud within the meaning of the National Consumer Credit Protection Act, and s. 80 of that Act permitted ASIC to make an order against the applicant without hearing her in those circumstances. As to the provision of financial services, s. 920A of the Corporations Act made the same provision and again, the order was made without notice to the applicant.
ASIC had a discretion as to whether or not to make a banning order and as to whether to make it a permanent order or for a specified period. Each of those discretions is capable of being re-exercised in this Tribunal on review. Very little appears in the applicant’s affidavit on that matter. She does point out that although she was convicted of serious fraud, the local court imposed a good behaviour bond for an 18 month period, which may reflect the court’s view of the seriousness of the wrongdoing. In the witness box, Ms Penna described the events which led to her being charged, which apparently related to her having provided documents to a dealer who sold her a number of mobile phones for resale as her “only mistake”. She said that her record in the industry is otherwise unblemished over 30 years. Her oral evidence suggested that she pleaded guilty to the charges of being an accessory because, although she did not know it, six mobile phones which she sold had been stolen by a store manager employed by Virgin Australia. She also made reference to 100 points of identification having been used by the store manager to enable the phones to be stolen by him, but suggested she did not know that he had procured multiple phones in that way.
The evidence which was led on behalf of the applicant suggests to me that there is a possibility that after a hearing on the merits, which would involve a close examination of the circumstances which led to her conviction, and her previous conduct, if she is not wholly successful, some alteration may be made by this Tribunal to the sanction imposed. That is enough to show that granting an extension of time may be appropriate. As was said in SZUOV v Minister for Immigration and Border Protection [2017] FCA 1420 at [5], [8], the substantive application should have such prospects of success as to not render the grant of an extension of time an exercise in futility.
Ms Graycar for the respondent submits that the delay is insufficiently explained, and that the prospects of success have not been sufficiently demonstrated to justify an extension of time. She points out that no suggestion has been made on behalf of the applicant that the conviction was wrongly made, and that is a matter on which I particularly invited submissions when this matter was last before me. Submissions to that effect have been more recently made on behalf of the applicant, and I have preferred to deal with this matter without troubling ASIC to respond to those recent submissions, which also raise issues of fact that have not previously been proved on this application in proper form. The reason why I am taking that course is that I am able to dispose of the matter without regard to the most recent submission of the applicant.
Ordinarily, on an application such as this (particularly if the explanation for delay is not compelling), the most important question is that of the prospects of success, and as I have said, it does not appear to me that granting an extension of time would be an exercise in futility.
Another matter which I believe should be taken into account is that although ASIC was entitled to proceed as it did, without hearing the applicant, the fact that it did so meant that the applicant had no opportunity to place before the decision maker factual and discretionary reasons why no sanction or a lesser sanction than permanent banning or prohibition may have been an appropriate exercise of discretion. I recognise that the effect of denying the present application would be that the applicant would again be denied the same opportunity.
ASIC has published policy documents which indicate in respect of both the banning order and the prohibition order that long or permanent banning orders may be appropriate in the case of conviction for dishonesty. Those policy documents are in the nature of guidance, but they serve to promote consistency in decision making. Their significance in this proceeding will be one of the matters on which both parties should be heard in due course.
Time is extended up to and including 18 May 2018 for the filing of an application by the applicant to review the two orders made against her by ASIC on 16 June 2015.
I certify that the preceding 13 (thirteen) paragraphs are a true copy of the reasons for the decision herein of Deputy President B W Rayment
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Associate
Dated: 3 May 2018
Date of hearing: 28 March 2018 Solicitors for the Applicant: Mr N Raj, Case Legal Pty Ltd Counsel for the Respondent: Ms R Graycar Solicitors for the Respondent: Mr N Goodstone, Australian Securities and Investments Commission
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