Polymath Investors Proprietary Limited and Australian Securities & Investments Commission

[2019] AATA 5628

Polymath Investors Proprietary Limited and Australian Securities & Investments Commission [2019] AATA 5628 (19 December 2019)

Division:TAXATION AND COMMERCIAL DIVISION

File Number(s):               2019/1175

Re:Polymath Investors Proprietary Limited

APPLICANT

AndAustralian Securities & Investments Commission

RESPONDENT

DECISION

Tribunal:Mr P W Taylor SC, Senior Member

Date:19 December 2019

Date of written reasons:        6 January 2020

Place:Sydney

For the reasons given orally at the conclusion of the interlocutory hearing in this matter, the Tribunal decides to refuse the Applicant’s request to issue a summons for the following persons to appear before the Tribunal to give evidence:

(a) Ms Cathie Armour;

(b) Ms Emily Hodgson; and

(c) Mr Chris Savundra.

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

Mr P W Taylor SC, Senior Member

CATCHWORDS

PRACTICE AND PROCEDURE – summons to give evidence – objection to summons – Tribunal’s discretionary powers to issue or refuse summons – s 40A of the Administrative Appeals Tribunal Act 1975 (Cth) – ASIC Industry Funding Levy – whether exceptional circumstances justify waiver of two levy components – managed investment scheme – s 258(1) of the Legal Profession Uniform Law (NSW) – summons refused

LEGISLATION

Administrative Appeals Tribunal Act 1975 (Cth) ss 2A, 25, 33, 37, 40A, 43, 44

ASIC Supervisory Costs Recovery Levy (Collection) Act 2017 (Cth) ss 8, 9, 10, 11, 13 14, 15, 16, 22
ASIC (Supervisory Costs Recovery Levy – Regulatory Costs) Instrument 2018/1062
ASIC (Supervisory Cost Recovery Levy—Annual Determination) Instrument 2018/1063
ASIC Supervisory Cost Recovery Levy Act 2017 (Cth) ss 7, 8, 9, 10, 11,
ASIC Supervisory Cost Recovery Levy Regulations 2017 (Cth) regs 9, 10, 13, 72B
Legal Profession Uniform Law (NSW) s 258(1)

WRITTEN REASONS FOR ORAL DECISION

Mr P W Taylor SC, Senior Member

6 January 2020

1. Polymath Investors Proprietary Limited, which I will refer to as Polymath, has held an Australian Financial Services Licence since 22 September 2010. The licence authorises Polymath to undertake various activities for wholesale clients. Those activities include: (i) providing general financial advice in relation to limited classes of financial products, (ii) dealing in those products, and (iii) providing custodial or depository services.

2. On 30 January 2019, ASIC invoiced Polymath an amount of $7,275. The invoice was an ASIC Industry Funding Levy for the 2018 financial year, and was issued pursuant to a legislative scheme contained in the ASIC Supervisory Cost Recovery Levy Act 2017 (Cth) (the “Levy Act”) and the ASIC Supervisory Costs Recovery Levy (Collection) Act 2017 (Cth) (the “Collection Act”).

3. Polymath requested ASIC waive an amount of $6,728 of the invoice, that amount representing two of the three invoice components. The principal bases of Polymath’s request were the following effect:-

   (a)it had no client revenue in the 2018 financial year;

   (b)it did not expect to generate any client revenue in the 2019 financial year;

   (c)it was precluded by its licence conditions from directly providing custodian services, and that was said to characterise part of the levy amount as “double-dipping”; and

   (d)it did not provide wholesale trustee services during the 2018 financial year, and its director would be precluded from doing so (because of his status as a solicitor and because of the terms of the Legal Profession Uniform Law (NSW) (the “Uniform Law”), s 258(1)).

4. ASIC maintained its invoice decision and declined Polymath’s waiver request. Polymath’s 5 March 2018 application seeks a review of ASIC’s ultimate waiver refusal decision, of that same date.

5. The parties have lodged their respective Statements of Facts, Issues and Contentions. Polymath’s six-page apparently amended Statement of Facts, Issues and Contentions was lodged on 22 May 2019, which I observe is some seven months ago. ASIC lodged its 14-page Statement of Facts, Issues and Contentions on 31 October 2019.

6. The review application has been fixed for a three-day hearing on 3 February 2020.

   THE EXISTING EVIDENCE

7. The existing evidence to date consists of, or is likely to consist of, more accurately, the s 37 documents. First of all, they were provided in May 2019, supplemented on 23 August 2019 and supplemented again on 31 October 2019. In the latter case, the supplement was merely the inclusion of Polymath’s financial statements for the June 2019 financial year. The bulk of the s 37 documents, which comprise over 500 pages, appear to be devoted to two categories of information:-

   (a)Polymath’s AFSL licence status and history; and

   (b)the legislative instruments, and explanatory material relating to, the legislative scheme and its implementation – specifically by the 30 November 2018 ASIC (Supervisory Costs Recovery Levy – Regulatory Costs) Instrument 2018/1062 (“instrument 1062”).

8. That instrument deals with the quantification of ASIC’s total costs relevant to the legislative scheme. There is apparently a further instrument, ASIC (Supervisory Cost Recovery Levy—Annual Determination) Instrument 2018/1063 (“instrument 1063”), which I will identify simply as 1063, which is the operative instrument in allocating the total costs to the levies allocated to various licence holders. I note, relevant to the present proceedings and relevant to one of the proposed summons recipients, that instrument 1062 was signed by Ms Hodgson. I note, having been so informed by Mr Dobrijevic, that instrument 1063 was signed by someone else, not one of the intended summons recipients.

9. Polymath’s evidence in addition to the s 37 documents consists at the present time of a four-and-a-half-page, 22-paragraph affidavit from Mr Dobrijevic dated 27 September 2019. The preponderance of the affidavit provides background information relating to Polymath’s AFSL licence holding status and its various licence conditions. Three paragraphs of the affidavit seem to be devoted to what one might have thought was the inherently obvious proposition that there are different categories of AFSL holders and different numbers of holders within each category.

10. ASIC’s evidence consists of a five-and-a-half-page affidavit from one of its officers who is apparently engaged in the section of ASIC dealing with its various regulatory licensing activities. This affidavit seems to be substantially devoted to two propositions. First, it contests a proposition apparently advanced by Mr Dobrijevic in Polymath’s Statement of Facts, Issues and Contentions that there is some difference in the population numbers of the various licence holders in the various categories or “sectors”, a term I will explain later, between the numbers used in the respective legislative instrument calculations and the numbers currently shown on ASIC’s website, according to searches Mr Dobrijevic has made.

11. The second proposition that seems to be contested in ASIC’s affidavit seems to be directed to the factual proposition as to whether or not Polymath does indeed provide or intend to provide, or advertise itself as intending to provide, custodial services. It will be apparent from this that up until the present time, some seven months after the proceedings were initiated and Polymath first articulated its position in the review application that the evidentiary scope originally contemplated was in a narrow compass. It is necessary to understand the current application, which I will come to in a moment, against the legislative background, and that background was as follows.

    THE LEGISLATIVE BACKGROUND

12. The 2014 Financial System Inquiry Final Report had recommended the establishment of an “industry-based” regulatory funding model for the financial services industry. That recommendation was ultimately implemented in 2017, with the introduction of the ASIC Supervisory Cost Recovery Levy Act 2017 (Cth) (the “Levy Act”), ASIC Supervisory Cost Recovery Levy (Collection) Act 2017 (Cth) (the “Collection Act”), and complementary regulations in the ASIC Supervisory Cost Recovery Levy Regulations 2017 (Cth) (the “regulations”).

13. The stated objectives of the legislative scheme are to provide for leviable entities to contribute amounts that will total “the amount of ASIC’s regulatory costs for the financial year”:- Levy Act s 9(2). The principal features of the Levy Act intended to achieve that objective are as follows:-

    (a)A declaration that “ASIC’s regulatory costs” are those determined by ASIC in an annual legislative instrument determination. That determination is to be made in accordance with specific exclusions and permissive inclusions, expressly including collection shortfalls from the previous financial year:- Levy Act ss 10(1), 10(4) & 10(5). It is inherent in the legislative scheme, therefore, that there is likely to be some variation from year to year in the implementation of the scheme.

    (b)A requirement that in its annual determination ASIC specifically apportion its regulatory costs between different leviable entity “sectors”:- Levy Act s 10(2)(b), 10(7).

    (c)A further provision that ASIC’s legislative instrument is subject to Parliamentary disallowance:- Levy Act s 11.

    (d)It imposes an annual levy on relevant entities, and for all practical purposes, they can simply be described as the various holders of Australian Financial Services Licences:- Levy Act ss 7 & 8.

    (e)It provides that the levy amount is to be “the amount worked out in accordance with the regulations”:- Levy Act s 9. (That amount so worked out constitutes a debt recoverable by the Commonwealth:- Collection Act s 16.)

14. As suggested by s 9 of the Levy Act, the actual levy amount is required to be worked out in accordance with the provisions of the regulations. The regulations provide, in essence, for the determination of “basic” and “graduated” levy components. That is provided for in regs 9 and 10, and those levies are allocated according to various “sectors” and “sub-sectors” to which the levy components relate. The description and characterisation of the various sectors and sub-sectors is extensively provided for in the content of the regulations from regs 13 to 72B.

15. I move now to the Collection Act. The principal features of the Collection Act are to the following effect:-

    (a)It declares an annual, financial year, levy payment for “leviable entities”, and declares the levy amount to be a recoverable Commonwealth debt:- Collection Act ss 8, 14 & 16.

    (b)It provides for the levy amount to be payable on a date notified by ASIC (but no earlier than 30 days after the receipt by a recipient of an annual levy notice):- Collection Act s 9(1).

    (c)It requires leviable entities to provide ASIC with annual returns in an approved form (i.e. containing levy-related information), and contemplates the imposition of penalties for late payment and shortfall penalties where incorrect information is submitted:- Collection Act ss 10, 11 & 13.

    THE WAIVER DISCRETION

16. Relevant to the present matter, by which I include both the substantive application and the summons application to which I will come shortly, ASIC has a statutory discretion to waive the levy amount where it is satisfied that “exceptional circumstances” apply:- Collection Act s 15. A person who has applied for a levy waiver and is dissatisfied with ASIC’s decision can request ASIC to reconsider its decision. If the person remains dissatisfied with the reconsidered decision, they can apply for its review by this Tribunal:- see Collection Act s 22.

    ASIC’S LEVY WAIVER DISCRETION

17. The waiver discretion has been addressed by ASIC in the preparation of what have been referred to in some of the documents as ASIC’s waiver guidelines. Those guidelines may inform the exercise of the discretion, but ASIC concedes they do not bind the Tribunal in the exercise of the review function. That proposition is obviously correct.

    THE SUMMONS REQUEST

18. I come now to the particular application. On 25 November 2019, Polymath requested the issue of a summons to three people to give evidence:-

    (a)The first intended recipient was Ms Cathie Armour, who is apparently a member of the Commission itself. In Polymath’s summons request dated 25 November 2019, Ms Armour was identified as a person who regularly speaks on regulatory policy and is aware of the history of the legislation.

    (b)The second recipient is Ms Emily Hodgson, the person to whom I referred to earlier as the signatory to instrument 1062. She is apparently ASIC’s Chief Financial Officer. Polymath’s request asserted that she was responsible for the calculations found in the legislative instruments and she was personally involved in the instrument that I have referred to. In the course of submissions today, it has become apparent that Ms Hodgson was involved solely in instrument 1062 in connection with the identification of ASIC’s total costs. There is nothing to suggest she played any role in instrument 1063 or in the generation of the particular invoice which is the subject of the review proceedings.

    (c)The third intended recipient is Mr Chris Savundra, who is said to be ASIC’s Chief Legal Officer, or otherwise identified as ASIC’s General Counsel. Polymath’s request asserted that he was ultimately responsible for what Polymath described as ASIC’s purported guidelines on waivers. Given the concession correctly and necessarily made by ASIC in relation to the guidelines, that attributed status of Mr Savundra’s role creates some difficulty in being satisfied of the relevance of his participation in the proceedings.

19. On 4 December 2019, ASIC conveyed its objection to the issue of any summons requested by Polymath in relation to the three people to whom I have referred. The substance of ASIC’s objection was that all the material potentially relevant to the review had been provided (essentially in the documents lodged with the Tribunal in accordance with the requirements of s 37 of the Administrative Appeals Tribunal Act 1975 (Cth) (the “AAT Act”)). ASIC further contended that none of the requested summons recipients would be able to add anything of relevance to the review.

20. Within 30 minutes of receiving ASIC’s objection, Polymath characterised it in an email to the Tribunal as “facile and without merit”. Neither that pejorative characterisation, nor anything else in Polymath’s response, provided any information that could substantiate the relevance to the review process of any oral evidence from any of the three proposed summons recipients.

21. Having been informed of the parties’ respective positions in relation to Polymath’s summons request, on 9 December 2019 I caused the following information to be conveyed to the parties:-

    I have read the following documents:-

    1: Polymath's 27 September 2019 Statement of Facts and Contentions

    2: ASIC's 31 October 2019 Statement of Facts and Contentions

    3: ASICs 2 May 2019 Reasons for Decision 

    4: Polymath's 7 November 2019 request for the issue of summons to require the hearing attendance of Ms Amour, Ms Hodgson and Mr Savundra.

    5: ASIC's 4 December 2019 object to the issue of the requested summons.

    6: Polymath's response to ASIC's objection.

    Having read those documents I note that whilst Polymath asserts (in its 4 December 2019 response) that the proposed summons are intended to result in the discovery of important evidence, in neither the (response to the) objection, nor the original request, is there any indication of either (i) what evidence is proposed to be adduced or (ii) its likely relevance / materiality to the issues that are likely to fall for determination in the review proceedings.

    I note that the parties are in disagreement about the extent to which (if at all) the Tribunal can or should have regard to the Applicant's contentions about (i) incorrect invoicing, (ii) fee for no service and (iii) double dipping. Even assuming (without expressing any view) that all of those matters are potentially material / relevant to the review application, it is readily apparent from Polymath's 27 September 2019 Statement of Facts and Contentions that each matter is intended to be pursued on the basis of the matters specifically articulated in that document - paragraphs [36] to [39] (in relation to incorrect invoicing), paragraphs [57] - [67] (in relation to "feed for no service" ) and (iii) paragraphs [68] - [73] (in relation to double dipping).

    There is nothing advanced in Polymath's summons request correspondence, nor in Polymath's SFIC to justify satisfaction that any of the proposed summons recipients could provide any evidence relevant / let alone material, to the matters sought to be advanced by Polymath.

    For those reasons, I propose to direct that no summons be issued in response to Polymath's request.

    If, notwithstanding this indication, Polymath wishes to make a formal request for the issue of any of the proposed summons, that application should be made in writing forthwith. Any such application should set out, in relation to each proposed summons recipient (an in no more than a single page for each person) the propositions of fact Polymath seeks to elicit from the proposed recipient, and why each proposition is contended to be material to the review proceedings. 

    …

22. I then indicated I had noted both ASIC’s objection and Polymath’s response to ASIC’s objection. I said that, having read those documents, I noted that, whilst Polymath asserted that the proposed summons was intended to result in the discovery of important evidence, in neither its response to the objection, nor in its original request, was there any indication of what evidence is proposed to be adduced or its likely relevance or materiality to the issues likely to fall for determination in the review proceedings. I noted that the parties disagreed about the extent to which the Tribunal can or should have regard to Polymath’s contention about, (i) incorrect invoicing, (ii) fee for no service, and (iii) double-dipping.

23. I said that, even assuming - and I expressly noted that I was not expressing any view either way - that all of those matters were potentially material or relevant to the review application, I considered that it was readily apparent from Polymath’s Statement of Facts, Issues and Contentions that each matter was intended to be pursued on the basis of the matters specifically articulated in Polymath’s contention document, and I referred specifically to [36]-[39] which deal with incorrect invoicing, [57]-[67] which relate to fee for no service, and [68]-[73] which related to double-dipping.

24. I expressed the view that there was nothing in Polymath’s summons request correspondence, nor in its Statement of Facts, Issues and Contentions, to justify satisfaction that any of the proposed summons recipients could provide any relevant evidence. I indicated that I proposed to direct that no summons be issued in response to the request. I added that if, notwithstanding my indication, Polymath wanted to make a formal request for the issue of any proposed summons, that application should be made in writing and should be substantiated with a statement of no more than a single page in relation to each person the propositions of fact that Polymath sought to elicit from them.

25. On 12 December 2019, Polymath conveyed to the Tribunal and ASIC its intention to pursue the summons request and provided the single-page summary in relation to each of the proposed witnesses. ASIC more recently has provided in an 18 December 2019 submission its response to Polymath’s intention. Before dealing with the substance of those matters, I should allude to the Tribunal ’s procedural powers relevant to the present application.

    THE TRIBUNAL’S PROCEDURAL POWERS

26. The Tribunal has a general power to issue a summons requiring a person to appear to give evidence in Tribunal proceedings. The power is clearly discretionary.

27. In the course of his submissions today on behalf of Polymath, Mr Dobrijevic emphasised that the Tribunal is not bound by the rules of evidence, suggested that it has some degree of investigatory function in relation to the exercising of its review jurisdiction, and specifically has the responsibility which emerges from ss 43 and 44 of the AAT Act to make what has variously been called the correct and preferable or the correct or preferable decision in relation to the exercise of the statutory function. The propositions advanced by Mr Dobrijevic are certainly correct.

1. However, they are not the total universe of the Tribunal ’s functions. The statutory power to issue a summons is explicitly discretionary:- see AAT Act s 40A(1) & (2), and the nature of the discretion is exemplified by a number of other considerations. First of all, there is the explicit power in subs (2) of s 40A of the Act to refuse to issue a summons. Both the power to summon and the discretion to refuse to issue a summons must be exercised with regard to the nature and purpose of the Tribunal’s review function, and with regard to the Tribunal ’s statutory objectives.

2. The principal statutory objective set out in s 2A of the AAT Act is to provide a review mechanism (and, I add, implicitly in conducting its review procedures and practices) to make orders and directions that are fair and just, economical and expeditious, proportionate to the importance and complexity of the contentious decision, and that promote public confidence in the Tribunal’s exercise of its statutory function. That statutory objective is complemented by the general discretion granted to the Tribunal in the exercise of its functions and the statutory direction that proceedings should be conducted with as little formality and technicality as is consistent with a proper consideration of the matters in contest in the review proceedings:- see AAT Act s 33(1)(a) & (b).

3. Further complementing those powers and discretions, parties to proceedings before the Tribunal are subject to obligations to use their “best endeavours” to assist the Tribunal in fulfilling its statutory objective:- see AAT Act s 33(1AA). Irrespective of whether or not the parties comply with their “best endeavours” obligation, the Tribunal itself has the discretion to determine the scope of the review of any decision, and in so doing, to limit the questions of fact, the evidence and the issues that it considers. That power and discretion are specifically conferred in s 25(4A).

   THE SUBSTANCE OF POLYMATH’S POSITION

4. The substance of Polymath’s position, as I understand it, in relation to the substantive review application is that it has stated that it doesn’t provide the services for which it has been charged in some respects. Secondly, its principal submission seems to rely upon what Mr Dobrijevic emphasised in the course of his submissions today as the propensity for there to be significant variations year to year in the way in which the cost levy scheme mechanism is actually implemented in relation to the amounts allocated to leviable entities, and particularly within the various sectors within the financial services industry.

5. In addition to those matters, and perhaps in an elaboration of them, in its Statement of Facts, Issues and Contentions and in parts of its current submissions, Polymath has sought to introduce contentions which appear to be broadly to the effect that there have been errors in the basis of ASIC’s calculations used to determine the invoice amounts. There is also a complaint, as I understand it, that in some respects exceptional circumstances may arise as a result of an analysis of ASIC’s costs and result in the proposition that those costs should principally be borne by or relate to significant parts of the relevant industry sectors other than Polymath and entities of its ilk.

6. It is against that background that I come to deal with the contentions in relation to each individual witness, and I will deal firstly with what is put in Polymath’s submissions of 12 December 2019 in relation to Ms Armour. There are said to be six propositions that are to be elicited or sought to be elicited from Ms Armour. They principally address the proposition to which I referred earlier, namely, that because of the provisions of the Uniform Law, s 258(1), there is some difficulty - which is perhaps a euphemistic way of putting Polymath’s submission - in a person such as Mr Dobrijevic (who has the status, I understand, of a legal practitioner) participating in operating an entity such as Polymath if it provides services in relation to a managed investment scheme. Apparently, what is sought to be elicited from Ms Armour is an acknowledgement of either some degree of ignorance or misapprehension on ASIC’s part about the potential interplay between the licensing scheme, the levy scheme and the provisions of the Uniform Law. I must say that I regard that basis of the proposed relevance of Ms Armour’s evidence as totally unjustified.

7. If there is anything in the proposition that there is a legislative difficulty because of the interplay of the two schemes, the point can be obviously made and it will stand or fall on its merits. Ms Armour’s opinions, understanding or background in relation to any of those matters is, to my comfortable satisfaction, utterly irrelevant. The remaining propositions seem to be directed to, first of all, to what I would have thought is the utterly uncontentious proposition that underlying the legislative scheme involved in the levy imposition is that there is a contemplation that there be a broad equivalence between ASIC’s costs and the fees properly chargeable by the levy to the industry holders.

8. It seems to me on my present understanding of the matter that that is a self-evident proposition. The real difficulty, if there is one, is the mechanics of the way in which that scheme is implemented against the background where, as I pointed out earlier, the legislative scheme itself inherently and implicitly acknowledges the prospect of some degree of variation. This does not mean, of course, that significant degrees of variation from year to year, or even between particular entities if they exist, may not contribute to satisfaction that exceptional circumstances exist, but it does mean that there is no realistic prospect of any useful material evidence coming from Ms Armour on that topic.

9. The remaining proposition - and in so characterising it as the remaining proposition, I indicate that I have essentially grouped four of the proposed grounds related to Ms Armour under the topic earlier alluded to in relation to the interplay of the legislative scheme with the Uniform Law. The remaining proposition deals with the question of double-dipping about which Polymath complains. As I understand it, at the present time, the allegation of double-dipping or the complaint of double-dipping seems to be related to the proposition that Polymath on the one hand has been subject to a levy for providing custodial services and yet on the other, under its licence conditions, is precluded from directly providing those services.

10. Assuming that that is a correct understanding of the way in which the point is put, I cannot for myself discern from anything in Polymath’s submission, or anything that Mr Dobrijevic said this morning, any way in which Ms Armour could contribute meaningfully to the substantive review proceedings.

11. I turn now to the status of Mr Savundra as a proposed recipient of the summons. As I indicated before, he is either one or other of ASIC’s general counsel or its principal legal officer. There are four propositions said to be articulated - sought to be advanced - in Polymath’s submissions in relation to the evidence that Mr Savundra would give.

12. The first proposition is that ASIC has taken no steps to prosecute anyone in relation to the legislative scheme difficulty arising as the result of the content of the Uniform Law to which I have already referred. That proposition seems to me to be utterly irrelevant to the present proceedings. If it be the case that Polymath either has not provided management investment services or is precluded from so doing because of the circumstances peculiar to Polymath and the operation of the New South Wales legislation, I do not close my mind to the proposition that that difficulty may give rise to characterisation as exceptional circumstances, but without closing my mind to that proposition, it is, frankly, beyond my comprehension at the moment to perceive how anything Mr Savundra may say about ASIC’s past conduct or understanding in relation to that topic is of any relevance to my exercise of the Tribunal’s function in the review proceedings.

13. The second point seeks to explore Mr Savundra’s knowledge or understanding of the contended for difficulty in the interplay between the two schemes. It would be readily apparent from what I have already said that I regard that proposition as utterly irrelevant.

14. The next two points sought to be elicited from Mr Savundra seem to me, as I presently understand them, to seek to obtain from him views about background information that may contribute to the characterisation of particular circumstances as exceptional or non-exceptional against the background of ASIC’s previous experience.

15. That proposition was sought to be advanced by Mr Dobrijevic in the course of his submissions this morning, with the proposition that the Tribunal, meaning me, or whoever ultimately hears the matter, may not understand sufficiently of the legislative background to be adequately informed of the proper interpretation of circumstances and their characterisation as “exceptional”. The function of the parties, as I indicated before, was to use their “best endeavours” to ensure that the Tribunal exercises its review function consistent with its statutory objectives. That seems to me to necessarily impose upon an applicant, and the decision-maker themselves, an obligation to ensure that so far as possible they contribute to provide whatever factual information is necessary to provide that background. No doubt that is what was sought to be done in the affidavit that Mr Dobrijevic has provided, and in the emphasis contained in the Statement of Facts, Issues and Contentions, by alluding to the various matters that are addressed there, particularly, as I perceive it, a reasonably sophisticated analysis of the integers of the legislative instrument and the logic underlying it.

16. I am quite unpersuaded, and, indeed, I am quite persuaded to the contrary, that the speculations and exploration invited to be undertaken in the proposed summons by questions directed at Mr Savundra would be either relevant or material. They would certainly not be economic or efficient or pertinent to any matter requiring genuine consideration in the present proceedings. It seems to me that it is nothing more, despite the objection Mr Dobrijevic took to the use of this term in the ASIC’s submissions, that the attempt to have Mr Savundra give evidence is nothing more than an odyssey in the nature of fishing and is essentially speculative.

17. I turn now to the position of Ms Hodgson. As I have indicated before, she is the signatory to instrument 1062 and is ASIC’s Chief Financial Officer. Three propositions are identified in the submissions provided by Polymath to support the issue of summons to Ms Hodgson and requiring her attendance. The first is the proposition that there are both fixed and variable costs in the regulatory supervision of each sub-sector authorisation. With the greatest of respect, that proposition is obvious to anybody with even a cursory familiarity with the legislative scheme.

18. Nothing that Ms Hodgson might have to say about that could be of any possible utility. The second point is that there are wildly fluctuating regulatory levy provisions for small business and AFSL holders, and the second proposition underlying that is that these were not considered when the new regime was determined. I have already indicated my view that having regard to the nature and structure of the legislative scheme, some degree of fluctuation in fees and allocation within sectors is likely to have been recognised as an inherent factor in the operation of the scheme.

19. It seems to me to be, to use an expression that Polymath adopted in its initial objection to ASIC’s opposition to these summons, that it is a facile proposition to suggest that there would be any utility in having Ms Hodgson give evidence to the effect that there were variations or likely to be variations in the fees levied. I emphasise that in so saying I do not shut my mind at all to the proposition that significant variations in the fees may constitute exceptional circumstances, but I am totally unpersuaded that either Ms Hodgson’s view about that matter or her or ASIC’s awareness in a subjective sense, or consideration in a subjective sense, of that degree of variation in the implementation of the scheme or the making of the instruments, is of any relevance.

20. The third point made - or sought to be made in the summons directed at Ms Hodgson is apparently to obtain her agreement to the proposition that there is a trivial amount of money spent by ASIC in relation to which costs spent in advertising its fees and yet most of the burden of the costs fall on small businesses. With some self-consciousness, I confess to not understanding this point at all. Perhaps it means that there is a disproportionate burden in the way in which the scheme allocates the levy, having regard to a possibility that the bulk of costs incurred by ASIC relate to different sectors of the industry other than that occupied by entities such as Polymath and its ilk, which, as I understand it, without in any sense meaning to be derogatory, might fairly be regarded as a small player in the scheme.

21. Again, if there is a disproportionate burden in relation to entities such as Polymath in the way in which the scheme operates, I do not close my mind to the proposition - whilst at the same time I don’t embrace the proposition that such a circumstance may contribute to the characterisation of circumstances relevant to Polymath as “exceptional”. However, I am again quite comfortably satisfied that nothing would be served consistent with the Tribunal’s objective in s 2A of the AAT Act by having Ms Hodgson attend and be invited to essentially speculate upon the parameters of the circumstances which otherwise seem to me to be likely to be either obvious or demonstrable from the underlying legislative instruments themselves, particularly the total costs instrument.

    DECISION

22. For those reasons, the request for a summons is refused, and I specifically decline under s 40A(2) of the AAT Act to issue the summons requested.

I certify that the preceding 49 (forty-nine) paragraphs are a true copy of the reasons for the decision herein of Mr P W Taylor SC, Senior Member

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

Associate

Dated: 6 January 2020

Date(s) of hearing:	19 December 2019
Advocate for the Applicant:	Mr P Dobrijevic
Solicitors for the Respondent:	Australian Securities & Investments Commission