Perovich & Anor v Australian Securities and Investments Commission

The applicants, Mr. and Mrs. Perovich, sought judicial review of a decision by the Australian Securities and Investments Commission (ASIC) to refuse their application for a licence to operate as a financial services provider. The matter came before the Full Federal Court of Australia.

The primary legal issue before the Court was whether ASIC's decision to refuse the licence was affected by an error of law, specifically whether ASIC had failed to take into account relevant considerations or had taken into account irrelevant considerations when assessing the applicants' suitability to hold a licence. The Court also considered the proper interpretation of the 'fit and proper person' test under the relevant legislation.

The Court reasoned that ASIC's assessment of the applicants' suitability had been unduly influenced by a past, unrelated regulatory action against one of the applicants, which had been resolved without any finding of contravention. Their Honours held that while ASIC was entitled to consider the applicants' past conduct, it was not entitled to treat the resolved regulatory action as evidence of a lack of probity or competence without a proper evidentiary basis. The Court emphasised that the 'fit and proper person' test requires a forward-looking assessment of character, honesty, and diligence, not a punitive assessment of past events that have been resolved.

The Full Federal Court allowed the appeal, quashed ASIC's decision, and remitted the matter to ASIC for reconsideration according to law.