Ramesh Adiga and Australian Securities and Investments Commission

[2013] AATA 952

[2013] AATA  952

Division	GENERAL ADMINISTRATIVE DIVISION
File Number	2013/3527
Re	Ramesh Adiga
APPLICANT
And	Australian Securities and Investments Commission
RESPONDENT

DECISION

Tribunal	Mr P W Taylor SC, Senior Member
Date	12 December 2013
Date of written reasons	10 January 2014
Place	Sydney

For the reasons given orally at the conclusion of the hearing of this matter on 12 December 2013 the decision under review is affirmed

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

Mr P W Taylor SC, Senior Member

CATCHWORDS

Statutory criteria for registration – alternative interpretations proposed by applicant and registration authority – authority preferring its proposed construction and determining that criteria not satisfied – no factual dispute – authority’s determination that criteria were not satisfied constituted a decision and was amenable to review

LEGISLATION

Superannuation Industry (Supervision) Act 1993 (Cth)

CASES

Walker v Secretary, Department of Social Security (No 2) (1997) 75 FCR 493

Deputy Commissioner of Patents v The Board of Control of Michigan Technology University (1979) 2 ALD 711
Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27

Certain Lloyds Underwriters Subscribing to Contract No IH00AAQS v Cross (2012) 293 ALR 412

REASONS FOR DECISION

Senior Member Taylor

10 January 2014

1. At the conclusion of this hearing of the above matter the terms of the decision intended to be made and the reasons therefore were stated orally. After the hearing the Respondent, pursuant to subsection 43(2A) of the Administrative Appeals Tribunal Act 1975, requested that the Tribunal provide written reasons for the decision.

2.   The oral reasons for decision have been transcribed from the sound recording of the reasons that were delivered orally.  Where the orally delivered reasons may reflect the inelegance of an extempore decision, they have been edited to better facilitate their comprehension, but without altering the substance of the orally delivered reasons. 

3.   Mr Adiga is a person who holds various accounting qualifications, and some registrations under Australian law connected with his accounting qualifications.  The nature and extent of those qualifications and, indeed, Mr Adiga's competence, are not matters for me to address or comment upon in the present application. 

4. Mr Adiga is an Indian resident. Between 31 May 2013 and 13 June 2013, the dates being somewhat unclear from the material, he applied for registration as an approved self-managed superannuation fund auditor. Registration is provided for in Part 16 of the Superannuation Industry (Supervision) Act 1993, a provision which came into effect following the commencement of relevant amendments in January 2013. It is common ground that ASIC is "the Regulator", which is the relevant statutory description, for the purpose of determining the registration application which Mr Adiga has made.

5. On 28 June 2013, ASIC acknowledged Mr Adiga's application but, referring to his Indian residency, said it did not accept his application. ASIC said it would return his application fee. In a 5 July 2013 email Mr Adiga requested ASIC review its refusal to accept his application. ASIC refused to do so. ASIC's position, which it communicated by email on 18 July 2013, was that foreign residents were not eligible for approval and that, in so interpreting section 128A and in refusing his application, it had made no relevant decision. ASIC's consequential contention is that there is nothing Mr Adiga could validly request it to review and thus nothing that could trigger the review jurisdiction conferred on the Tribunal by section 348(8) of the Superannuation Industry (Supervision) Act 1993.

6. Mr Adiga lodged a review application with the tribunal on 19 July 2013. ASIC contends that it has not made a relevant decision and that the tribunal's review jurisdiction has not, therefore, been validly or effectively invoked. The parties' competing contentions turn on the proper interpretation of sections 128A(1), section 128B and section 344 of the Superannuation Industry (Supervision) Act 1993. The principally relevant provisions are sections 128A and 128B. Those provisions, so far as they are relevant, are in the following terms:

Section 128A

(1) A natural person who is an Australian resident may apply to the Regulator for registration as an approved SMSF auditor.

(2) The application must be in the approved form.

Section 128B

(1) The Regulator must grant an application under section 128A and register the applicant as an approved SMSF auditor if:

(a) the applicant …

7.   And I will simply paraphrase subparagraphs (i), (ii) and (iii) by saying – “the applicant has the required qualifications and practical experience”.

8.   Alternatively, the regulator must grant the application if it is satisfied that the applicant is otherwise capable of performing the duties required and unlikely to contravene the relevant provisions of the Act.  There is, as I indicated earlier, no consideration in the present proceedings of Mr Adiga's competence or qualifications, simply the fact of his resident; and in that sense subparagraph (1)(b) is not a relevant consideration. 

9.   Subsection (2) of section 128B confers upon the Regulator a discretion in these terms:

If the applicant does not meet one or more of the requirements of paragraph (1)(a), the Regulator may grant the application if the applicant meets the requirements of paragraph (1)(b).

1. Significantly, nothing in section 128B refers specifically to the residence requirement that, on one view, is stated in categorical terms in section 128A(1). 

2. The provisions for reconsideration of an ASIC decision and for review by the Tribunal are contained in section 344 of the Superannuation Industry (Supervision) Act and depend upon whether or not ASIC has made a "reviewable decision". In Mr Adiga's circumstances the point to be determined is whether or not ASIC has made a decision "under section 128B refusing an application made under section 128A" - that expression being extracted from the definition in section 10(1) of the Superannuation Industry (Supervision) Act.

3. Mr Adiga contends that subsection 128A(1) is wholly permissive and does not limit eligible applicants to those who are Australian residents.  Indeed, in the course of oral submissions this morning, Mr Vickers who appeared on Mr Adiga's behalf went so far as to contend that section 128A(1) had no work to do, and was a wholly unnecessary provision.  Mr Vickers maintained that submission, notwithstanding drawing attention to the provisions of section 128E(2)(d).  That provision contains a discretion which permits the Regulator, ASIC, to cancel a person's SMSF auditor registration in the event that the person "has ceased to be an Australian resident".  Mr Vickers conceded, and I regard the concession as necessary having regard to the provisions of the legislation, that section 128E(2)(d) carried the connotation that the cessation of Australian residence was a sufficient permissive basis upon which an SMSF auditor's registration could be cancelled. 

4. In contrast to Mr Adiga's contention, ASIC contends that section 128A prescribes the basic registration eligibility criterion and precludes registration of foreign residents, irrespective of their potential to satisfy any other eligibility criteria.  The essence of ASIC's contention was put originally in written submissions in these terms:

   The Tribunal does not have jurisdiction in this matter because the decision that Mr Adiga was not entitled to apply for registration was not a decision "under section 128B refusing an application made under section 128A". It follows that this was not a reviewable decision within section 10 of the Superannuation Industry (Supervision) Act that ASIC has no power to review it under section 344(4) and that this Tribunal does not have power to review the decision under section 344(8).

5. The question whether Mr Adiga is ineligible for registration because of his Indian residency, and the question whether ASIC's purported refusal to accept his application on the ground that he was not an eligible person are closely related.  ASIC's position, which would deny the possibility of either reconsideration in accordance with a general statutory provision, or review by this Tribunal, and force alternative determination of the underlying question of statutory interpretation, points to a resolution process that is potentially inconvenient and likely to be more costly than the ordinary processes of review by this Tribunal.  It is not an attractive proposition for this Tribunal to either adopt or encourage. 

6. ASIC suggests that its position is justified and, indeed, substantiated by observations in particular of Burchett J in a matter that was reported as Walker v Secretary, Department of Social Security (No 2) which was reported in (1997) 75 FCR 493. It was a review or attempt to review a decision of the Social Security Appeals Tribunal. The particular passage upon which emphasis was placed in submissions appears at page 497 of the judgment. The question that arose was whether or not the Social Security Appeals Tribunal had actually embarked upon exercising jurisdiction, or whether it had simply refused a relevant application on the basis that it had no power to accede to the application that had been made.

7. Justice Burchett, in coming to the view that neither the Social Security Appeals Tribunal, nor the review proceedings in the Administrative Appeals Tribunal were within jurisdiction, referred to a section of the Social Security Act 1991 and also the comments that had been made in the Social Security Appeals Tribunal decision. His Honour then said this after referring to the relevant statutory provisions:

   This provision gives no right to apply to the Administrative Appeals Tribunal for a review of a decision simply declining jurisdiction.  I say "not surprisingly", because such a decision involves a question which is quite plainly appropriate to be decided upon judicial review, by proceedings in the nature of mandamus. 

8. His Honour continued:

   Therefore, if the Administrative Appeals Tribunal rightly interpreted the decision of the Social Security Appeals Tribunal as a refusal of jurisdiction, the Administrative Appeals Tribunal had itself no jurisdiction to deal with the matter.  It would follow that the Federal Court had no jurisdiction to entertain an application by way of appeal from the Administrative Appeals Tribunal, so far as it related to any question of law involved in the review sought by the appellant of the decision to maintain the implementation in this instance of section 1233 procedures.

9. Two things are apparent from that extract.  The first is that at the essence of His Honour's view was the proposition that it was necessary to construe or interpret the purported reviewable decision in order to determine whether or not it really amounted to an exercise of jurisdiction or a refusal to exercise jurisdiction.  The second thing that emerges from it is that His Honour's reasoning process is really gaining its emphasis from his assertion that such a decision - that is, a decision declining jurisdiction - involves a question which is quite plainly appropriate to be decided upon judicial review. 

10. There are nuances in those two propositions which can lend themselves to support either the argument that ASIC has advanced in the present proceedings or the contrary view, the view which I prefer.  The nuance is this: that the question of jurisdiction is commonly understood by lawyers but, in its particular application, "jurisdiction" is an elastic and difficult to define concept.  There is an inevitable interplay between notions of power and jurisdiction.  Some powers such as, for example, the power to give directions are clearly powers that are exercised within jurisdiction.  Other powers are of a different kind and are closely related to the concept of jurisdiction itself. 

11. The problem of differentiating in a meaningful way between concepts of power within jurisdiction and power that goes to the nature or the existence of jurisdiction is exemplified in cases such as the present kind where there is arguably a threshold consideration of eligibility involved.  For myself, I would have thought that where threshold considerations are involved there is much to be said in favour of the reasoning process adopted by Smithers J in Deputy Commissioner of Patents v The Board of Control of Michigan Technology University, a decision which is now of some antiquity but none the worse for that, and reported in (1979) 2 ALD 711. There the essential argument was whether or not a statutory power to extend time was available where it was conditioned upon the existence of a preceding state of affairs, namely a relevant application for a patent, or in proceedings under the relevant Act, and also an additional threshold condition as to whether or not a particular event had or had not occurred within a limited time period.

12. In considering whether or not, where there was a debate or difficulty, threshold conditions had been satisfied so as to enliven the jurisdiction for review, His Honour Justice Smithers said this in relation to the application of the relevant statutory provision:

    It was in the course of deciding what to do with the application, in the course of performing his function under the Act, that the decision-maker necessarily consulted and construed the relevant provision.  Having done that and made his decision that the provisions did not apply to an application concerning a lapsed application and that the application for restoration under the relevant legislation must therefore necessarily fail, and having informed the defendant thereof he officially disposed of the applications.  In effect he rejected them.  It is impossible to regard the Commissioner's intimation that the relevant section did not empower him to grant the relief sought as an exercise independent altogether of the performance of his functions in relation to the applications, or to say that he made the decision merely "in gross" so to speak.  When what actually was done is examined it is clear that the applications were dealt with and disposed of by reference to what was regarded as the proper construction of section 160(2).

13. That reasoning process, it seems to me, is precisely applicable when one has regard to the correspondence that took place between Mr Adiga and ASIC in the present matter.  ASIC's response of 28 June 2013 referred to the relevant legislation, recited ASIC's disagreement with the interpretation advanced by Mr Adiga, namely that the residence criterion in section 128A(1) was purely permissive and not restrictive and ASIC then recorded its disagreement.  ASIC went on to say:

    The intent and spirit of this section is that only Australian residents can apply to become SMSF auditors. 

14. Later, ASIC said:

    ASIC does not accept your application for registration.

15. And went on to indicate that the relevant fee would be refunded. 

16. The language of not accepting an application does not, in fact, reflect in my view the reality of what occurred.  The application had been made, it had been received, and it had been evaluated.  ASIC decided that Mr Adiga was not an eligible applicant and on that basis it could not accede to the application for registration.  Some linguists might prefer to use the expression "that ASIC did not accept the invitation" but in practical reality, and in legal analysis, ASIC decided that Mr Adiga had not made a complying application in the sense that he did not satisfy a fundamental eligibility criterion of Australian residence.

17. ASIC then, in response to Mr Adiga's request for reconsideration, set out its response in an email of 18 July 2013.  It recorded Mr Adiga's request for a review and then said:

    ASIC's view is that it was unable to accept your application under section 128A of the Superannuation Industry (Supervision) Act as you are not an Australian resident. This view does not fall within the definition of a reviewable decision under section 10 of the Superannuation Industry (Supervision) Act, therefore the option of an internal review is not available to you.

18. Again, different views might be held as to the precise characterization of what ASIC was doing in its email response of 18 July 2013.  In what seems to me to be the undeniable, practical reality ASIC had received the request for review, had considered that request for review and had decided to adhere to its original decision, namely that Mr Adiga was not an eligible applicant and that it had no power to accede to his application having regard to non-compliance with the resident's criterion. 

19. In my view, the question of whether or not ASIC has made a decision or not has to be addressed by reference to the practical reality of what has occurred. In legal analysis, ASIC has decided that it has no power to grant the application and it has adhered to that view about the limits of its powers, both in response to the original application and in response to a request for review. ASIC, as a matter of fact, has rejected Mr Adiga's application and, in my view, that rejection, even though it be expressed on the basis of an asserted reason of lack of power, is in fact a decision and a reviewable decision for the purposes of section 344 of the Superannuation Industry (Supervision) Act and, in particular, the definition of "reviewable decision" in section 10.

20. In the course of oral submissions this morning, ASIC resisted that conclusion by pointing to the similarity in use of the expression "reviewable decision" and, in particular, the words "under section 128A" in both the definition of "reviewable decision" and in the provision of section 128B - which is the provision that effectively requires ASIC to determine an application.  It is, of course, true but only at a level of generality, that there is some presumption in favour of construing statutory provisions consistently wherever the same expression is used in a relevant piece of legislation.  But in statutory interpretation, as in other walks of life, meaning depends upon intention and context.  There is, in fact, no categorical prohibition on giving words where they appear in different sections of the same legislation a different meaning.  The question of whether or not that is appropriate depends upon the context. 

21. In the present matter it is my view that the context that is relevant to the present application is that in the definition of "reviewable decision" the expression "under section 128A" is primarily directed towards evaluating that expression from the perspective of the permission and apparent entitlement conferred upon the applicant for registration and the person seeking review.  From the perspective of that person, no doubt they must, in order ultimately to succeed, satisfy the relevant statutory criteria, but the question of their entitlement is evaluated against the background of their claimed entitlement.  And it seems to me that, in that context, applying the concept of an application “under section 128A” the relevant meaning is that of a person who makes an application claiming an entitlement under section 128A, or purporting to have complied with the requirements of section 128A. 

22. From the perspective of the decision-maker on the other hand, or the Regulator, the expression "under section 128A", particularly where it is used in conferring upon ASIC the decision-making power and function in section 128B, must necessarily be directed towards the question of ASIC's satisfaction that the relevant statutory criteria have been complied with.  It is a matter for ASIC to decide, in the exercise of its powers under section 128B, not just whether or not an applicant claims an entitlement under section 128A but whether or not they have in fact satisfied ASIC of the reality of their compliance with that provision.

1. For those reasons related to the different context and purpose for which the expression is used in addressing on the one hand an applicant's position and, on the other hand, the statutory functions and powers of ASIC, I adhere to the view I previously expressed; namely, that this Tribunal does have jurisdiction to review the decision that ASIC has made, a decision which it regards as merely a refusal to accept Mr Adiga's application but which in my view must be properly characterized as a decision to reject his application. 

2. That then takes me, with what I understand to be the acknowledgement of the parties that it is appropriate for me, to address the substantive question of whether or not Mr Adiga is in fact an eligible person or, more accurately, whether he is not disqualified from being an eligible person solely because of his Indian residence.  I stress that in what I am about to say I make no comments upon Mr Adiga's capacity to satisfy any eligibility criterion other than Australian residence. 

3. Mr Vickers, on behalf of Mr Adiga, put the proposition essentially as a matter of a literal meaning of section 128A(1) and emphasised the permissive nature of the expression that "a natural person who is an Australian resident may apply to the Regulator".  Mr Vickers emphasised that the word "may" was a permissive discretion, not an exclusive definition.  He sought to add to that submission by reference to provisions in the Corporations Act relating to the permissive qualifications of directors and general auditors. 

4. Statutory interpretation is sometimes a task that is adequately undertaken by literal interpretation, but that is a rare circumstance confined to the clearest of cases.  The general principles of statutory interpretation, as ASIC's submissions emphasised, depend upon giving primary attention to the words of the statute in the context in which they are used.  ASIC's submissions principally referred to a short comment in a decision of the High Court in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue. That decision is reported at (2009) 239 CLR 27 and the particular passage that was relied upon is at paragraph 47. That passage was referred to subsequently in the joint judgment of French CJ and Hayne J in December 2012 in a case reported as Certain Lloyds Underwriters Subscribing to Contract No IH00AAQS v Cross, a decision which was reported in 293 ALR 412. After referring to the passage in Alcan to which I have referred, their Honours continued at paragraph 24:

   The context and purpose of a provision are important to its proper construction because, as the plurality judgment said in Project Blue Sky Inc v Australian Broadcasting Authority [[1998] HCA 28; (1998) 194 CLR 355 at 381], "[t]he primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute."  That is, statutory construction requires deciding what is the legal meaning of the relevant provision: "by reference to the language of the instrument viewed as a whole" and "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed".

   Determination of the purpose of a statute or of particular provisions in a statute may be based upon an express statement of purpose in the statute itself, inference from its text and structure and, where appropriate, reference to extrinsic materials.  The purpose of a statute resides in its text and structure. Determination of a statutory purpose neither permits nor requires some search for what those who promoted or passed the legislation may have had in mind when it was enacted.  It is important in this respect, as in others, to recognise that to speak of legislative "intention" is to use a metaphor.  Use of that metaphor must not mislead.

5. The sentence that I want to emphasise is this:

   The duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have.  And as the plurality went on to say in Project Blue Sky: "Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision.  But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning."

6. Taking that general background which emphasises, in my view, the need to not slavishly adhere to a priori versions of literal meaning and applying it to the relevant statutory provisions in the present case leads me comfortably to the view that section 128A(1) in its apparently permissive description of an Australian resident as a person who may apply to the Regulator for registration is, in truth, a prescriptive eligibility criterion. 

7. If the applicant's basic submission in the present case was correct then, as

   
   

   Mr Vickers frankly conceded, section 128A(1) has simply no work to do in this legislation.  It might as well not be there.  That would be a surprising interpretation of the legislation for two reasons.  One, that it requires very strong contextual justification to conclude that an apparently deliberately inserted statutory provision has no substantive operation; and, secondly, it would stand in unacceptable contrast to the discretionary permission contained in section 128E(2), the provision to which I have earlier referred and which contains a permission to cancel a person's registration for the sole ground that they have ceased to be an Australian resident. 

8. When section 128E(2)(d) is seen against the apparent meaning of section 128A(1) it seems to me that there is no justification at all for acceding to the applicant's submission that "Australian residence" is merely referred to as a purely permissive and non-restrictive consideration.  In my view, section 128A(1) is a deliberately inserted provision which makes Australian residence a precondition to eligibility for registration.  That interpretation of section 128A is, in my view, not only consistent with the general tenor of section 128B which refers to the existence of qualifications, experience and competency, concepts which in my view are directed towards individuals, it is also consistent with the provisions of section 128E which clearly presuppose Australian residence being an ongoing prerequisite requirement for continued registration. 

9. In those circumstances the position that I would come to, and which I will give the parties an opportunity to comment upon in a moment before I make a formal decision, is this: (i)  insofar as today's proceedings have been instigated by ASIC's contention that the Tribunal lacks jurisdiction and should be treated as an application by ASIC to dismiss the proceedings on the basis of want of jurisdiction, that application should be rejected; (ii) insofar as today's proceedings are concerned with the merits review of Mr Adiga's application for registration, that review application should be dismissed on the basis that Mr Adiga is not an Australian resident and therefore not eligible for registration under sections 128A and 128B.

10. The decision under review is affirmed. 

I certify that the preceding 41 (forty-one) paragraphs are a true copy of the reasons for the decision herein of Mr P W Taylor SC, Senior Member

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Associate

Dated 10 January 2014

Date of hearing	12 December 2013
Advocate for the Applicant	Mr Peter Vickers
Counsel for the Respondent	Ms Juliet Lucy
Solicitors for the Respondent	In house