Re Dollas-Ford and Australian Securities and Investments Commission
[2006] AATA 704
•15 August 2006
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2006] AATA 704
ADMINISTRATIVE APPEALS TRIBUNAL )
) No W2005/333
GENERAL ADMINISTRATIVE DIVISION ) Re PAULA DOLLAS-FORD Applicant
And
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
Respondent
DECISION
Tribunal Mr S Penglis, Senior Member Date15 August 2006
PlacePerth
Decision 1. The matter be re-listed for further hearing in accordance with these reasons for decision.
2. No later than 14 days prior to the date fixed for the further hearing, both the applicant and respondent file with the Tribunal, and serve on each other, a Minute of agreed orders, alternatively an outline of their respective submissions with respect to the terms of the banning order to be made by the Tribunal.
........[Sdg. Mr S Penglis].................
Senior Member
CATCHWORDS
Corporations Law – banning order – factors relevant to determining whether to make a banning order and, if so, whether permanent or for a shorter period – meaning of ‘good fame and character’ – applicant’s conduct requires the making of a banning order – applicant still of ‘good fame and character’ – permanent ban not warranted in exercise of Tribunal’s discretion – matter adjourned to further hearing as to terms of banning order to be made by Tribunal.
Legislation
Corporations Act 2001 – ss 920A, 920B, 920C and 1041G
Cases
Rich v Australian Securities and Investments Commission (2004) 220 CLR 129
Australian Securities and Investments Commission v Kipp (1996) 20 ACSR 697
Re HIH Insurance Ltd (in provisional liquidation): Australian Securities and Investments Commission v Adler (2002) 42 ACSR 80
Donald v Australian Securities and Investments Commission (2000) 18 ACLC 794
Ex parte Tziniolis; Re Medical Practitioners Act (1966) 67 SR (NSW) 448
Melbourne v The Queen (1999) HCA 32
McBride v Walton (unreported, NSW Court of Appeal, delivered 15 July 1994: BC 94902907)
Briginshaw v Briginshaw & Anor (1938) 60 CLR 336
REASONS FOR DECISION
16 August 2006 Mr S Penglis, Senior Member 1. On 12 September 2005, pursuant to sections 920A and 920B of the Corporations Act 2001 (the Act), a delegate of the respondent permanently banned the applicant from providing any form of financial services.
2. The applicant seeks a review of that decision.
3. It is submitted on behalf of the applicant that her conduct was a “once off aberration” not justifying the making of a banning order, or if the conduct warrants the making of a banning order, it does not warrant the applicant being permanently banned.
4. It was submitted on behalf of the respondent that the applicant’s conduct shows her to be a person who is no longer of “good fame and character” and that, accordingly, the Act mandates she be permanently banned. Alternatively, as an exercise of discretion, the public interest requires a permanent ban of the applicant.
Background
5. The applicant commenced in the financial services industry in 1979 when she joined Prudential Assurance Co as a life insurance and superannuation agent. She has continued to work in the financial service industry ever since.
6. The following were agreed facts in this matter:
“…
7.The Applicant had previously operated a financial services business, which she sold to her son, Aaron Dollas (“Mr Dollas”), in late 2003.
8.On 13 May 2005, Matrix Super Fund advised Mr Dollas that Mr Erwin and Mrs Danuta Schneiker (“Mr and Mrs Schneiker”) were requesting their superannuation funds be transferred to MLC through the National Australia Bank Super Fund (T 15, folios 092 and 093 – note only the request to transfer forms were produced at the hearing).
9.On 13 May 2005 Mr Dollas attempted to contact Mr and Mrs Schneiker to clarify the position because he had discussed a similar transfer with them in February 2005 and they had decided to retain their investment with Matrix Super Fund, at that time.
10.Mr Dollas phoned Mr Schneiker but he was unable to speak to him or Mrs Schneiker.
11.Mr Dollas left for overseas on the same day but before he left, he asked the Applicant to try to contact Mr and Mrs Schneiker to ensure it was their intention to transfer their superannuation.
12.On 16 May 2005 the Applicant telephoned Mr and Mrs Schneiker and spoke with their daughter, who advised her that Mr and Mrs Schneiker were overseas until the end of May 2005 and could not be contacted in the interim.
13.The Applicant stated that she became concerned about preserving the present position of their superannuation investment in Matrix Super Fund until she had an opportunity to clarify with Mr and Mrs Schneiker, their instructions and ascertain whether they were fully informed of: the potential costs of switching their investment; that the switch would not involve a significantly different investment strategy; and that they could switch to another Matrix product at no cost.
14.The Applicant subsequently drafted and sent a letter dated 17 May 2005 (T 15, folio 085), purportedly from Mr and Mrs Schneiker, to Matrix Personal Super, requesting the transfer to MLC to be put on hold until June 2005.
15.The Applicant signed the letter as Mr and Mrs Schneiker.
16.The Applicant stated that her reason for doing so was that she was aware of a couple of similar situations in the past where a client had signed a form to rollover into another fund, and then, after contacting the client, she found that it was not their intention. The applicant stated that she wished to avoid a similar situation arising.
17.On 8 June 2005, Mr Dollas, on his return from overseas, became aware, through a telephone call from Mr Schneiker, of the delay in transferring Mr and Mrs Schneiker to MLC.
18.On 8 June 2005 Mr Dollas forwarded a letter of apology to Mr and Mrs Schneiker (T15, folio 086).
19.On 15 June 2005 Matrix queried the Applicant about her conduct.
20.On 15 June 2005 the Applicant resigned as an authorised representative of Matrix.
21.Matrix Personal Superannuation Fund refunded the total contribution or entry fees of $3,371.49 (GST inclusive) back to Mr Schneiker’s account. The contribution or entry fees were the total fees (other than the adviser review fee and the annual member fee) paid by Mr Schneiker from the date he joined the Matrix Superannuation Plan to the date he left the Matrix Superannuation Plan.
22.Matrix Personal Superannuation Fund refunded the total contribution or entry fees of $3,237.54 (GST inclusive) back to Mrs Schneiker’s account. The contribution or entry fees were the total fees (other than the adviser review fee and the annual member fee) paid by Mrs Schneiker from the date she joined the Matrix Superannuation Plan to the date she left the Matrix Superannuation Plan.
23.Matrix received an adviser review fee of $388.38 (GST inclusive) and an annual member fee of $123.62 (GST inclusive) on Mr Schneiker’s account from the date of inception of the account to the date it was closed. Other than the contribution or entry fees refunded by Matrix Personal Superannuation Fund, these were the only fees (and excluding taxes) applicable to Mr Schneiker’s account from inception to the date his account was closed. The term adviser review fee is commonly known as the trail commission. The trail commission earned by Matrix for the additional period Mr Schneiker’s funds were under administration from the time it was requested they be transferred to another fund to the time they were actually transferred was approximately $32.37 (12 May 2005 being the date of the request and 9 June 2005 being the date the funds were actually transferred).
24.Matrix received an adviser review fee of $375.99 (GST inclusive) and an annual member fee of $123.62 (GST inclusive) on Mrs Schneiker’s account from the date of inception of the account to the date it was closed. Other than the contribution or entry fees refunded by Matrix Personal Superannuation Fund, these were the only fees (and excluding taxes) applicable to Mrs Schneiker’s account from inception to the date her account was closed. The term adviser review fee is commonly known as trail commission. The trail commission earned by Matrix for the additional period Mrs Schneiker’s funds were under administration from the time it was requested they be transferred to another fund to the time they were actually transferred was approximately $31.33 (12 May 2005 being the date of the request and 9 June 2005 being the date the funds were actually transferred).
25.The consequences for the Schneikers’ funds staying under administration with Matrix, for the period of delay caused by the conduct of the Applicant, was that Mr Schneiker gained $1,576.76 and Mrs Schneiker gained $1,264.11.
…”
The act
7. Section 920A of the Act provides that the respondent may make a banning order against a person by giving written notice to the person if, relevantly,
“the person has not complied with their obligations under s912A…or (it) has reason to believe that the person will not comply with their obligations under s912A…or (it) has reason to believe that the person will not comply with a financial services law”.
8. Section 920B of the Act relevantly provides as follows:
“…
(1)A banning order is a written order that prohibits a person from providing any financial services or specified financial services in specified circumstances or capacities.
(2)The order may prohibit the person against whom it is made from providing a financial service;
(a) permanently; or
(b)for a specified period, unless ASIC has reason to believe the person is not of good fame or character.
(3)A banning order may include a provision allowing the person against whom it was made, subject to any specified conditions
(a) to do specified acts; or
(b) to do specified acts in specified circumstances,
that the order would otherwise prohibit them from doing.
”
9. Section 920C of the Act provides that a person against whom a banning order is made cannot be granted an Australian financial services licence contrary to the banning order.
10. Section 1041G of the Act provides that “a person must not, in the course of carrying on a financial services business in this jurisdiction, engage in dishonest conduct in relation to a financial product or financial service”. It further provides that, in the section, “dishonest” is defined to mean;
“(a) dishonest according to the standards of ordinary people; and
(b)known by the person to be dishonest according to the standards of ordinary people.”
Should a banning order be made against the applicant?
11. Before the respondent’s delegate it was submitted on behalf of the applicant by her Counsel, Mr Mendalow, that the applicant had not engaged in any “dishonest” conduct within the meaning of section 1041G of the Act (or any other provision of the Act or other financial services law) and there was no reasonable basis for the respondent to apprehend that she may do so in the future. It was therefore submitted that the power to order a banning order under the Act was not enlivened on the facts.
12. Before the Tribunal, Mr Mendalow conceded (rightly in my view) that the facts disclosed “dishonest” conduct on the part of the applicant within the meaning of section 1041G of the Act. It was therefore common cause before the Tribunal that the respondent’s delegate (and now the Tribunal) had jurisdiction to make a banning order. The applicant contended, however, that in all the circumstances of the matter, a banning order was not warranted.
13. The proper basis for the exercise of a discretion to impose a banning order was considered by the High Court of Australia in Rich v Australian Securities and Investments Commission (2004) 220 CLR 129. The High Court rejected the proposition stated in Australian Securities and Investments Commission v Kippe (1996) 20 ACSR 697 that the purpose of banning orders is solely to protect the public rather than to punish.
14. Both Mr Mendalow on behalf of the applicant and Ms Vernon, Counsel for the respondent, referred to the decision of McHugh J in Rich where his Honour referred to, with approval, fifteen propositions formulated by Santow J in Re HIH Insurance Ltd (in provisional liquidation); Australian Securities and Investments Commission v Adler (2002) 42 ACSR 80. Those fifteen proposition were as follows [49]:
“1.Disqualification orders are designed to protect the public from the harmful use of the corporate structure or from use that is contrary to proper commercial standards.
2.The banning order is designed to protect the public by seeking to safeguard the public interest in the transparency and accountability of companies and in the suitability of directors to hold office.
3.Protection of the public also envisages protection of individuals who deal with companies, including consumers, creditors, shareholders and investors.
4.The banning order is protective against present and future misuse of the corporate structure.
5. The order has a motive of personal deterrence, though it is not punitive.
6. General deterrence is an object of the legislation.
7.In assessing the fitness of an individual to manage a company, it is necessary that the individual have an understanding of the proper role of the company director and the duty of due diligence that is owed to the company.
8.Longer periods of disqualification are reserved for cases where contraventions have been of a serious nature such as those involving dishonesty.
9.In assessing an appropriate length of prohibition, consideration is given to the degree of seriousness of the contraventions, the propensity of the defendant to engage in similar conduct in the future and the likely harm that may be caused to the public.
10.It is necessary to balance the personal hardship to the defendant against the public interest and the need for protection of the public from any repeat of the defendant’s conduct.
11.A mitigating factor in considering a period of disqualification is the likelihood of the defendant reforming.
12.The eight criteria to govern the exercise of the court’s powers of disqualification set out in Commissioner for Corporate Affairs (WA) v Ekamper (114) have been influential. It was held that in making such an order it is necessary to assess:
(a) the character of the defendant;
(b) the nature of the breaches;
(c)the structure of the company or companies and the nature of its or their business;
(d)the interests of shareholders, creditors and employees;
(e)the risks to others from the continuation of the defendant as a director;
(f)the honesty and competence of the defendant;
(g)hardship to the defendant and to his or her personal and commercial interests; and
(h)the defendant’s appreciation that future breaches could result in future proceedings.
13.Factors that have led to the imposition of the longest periods of disqualification (that is, disqualifications of twenty-five years or more) include:
(a) large financial losses;
(b)high propensity that the defendant may engage in similar activities or conduct;
(c)activities undertaken in fields in which there was potential to do great financial damage such as in management and financial consultancy;
(d)the defendant’s lack of contrition or remorse;
(e)disregard for the law and compliance with corporate regulations;
(f)dishonesty and intent to defraud; and
(g)previous convictions and contraventions for similar activities.
14.In cases in which the period of disqualification ranged from seven years to twelve years, the factors that led to the conclusion that these cases were serious though not the “worse cases”, included:
(a) serious incompetence and irresponsibility;
(b) substantial loss;
(c)the fact that the defendant had engaged in deliberate courses of conduct to enrich himself or herself at others’ expense, but with lesser degrees of dishonesty;
(d)continued, knowing and wilful contraventions of the law and disregard for legal obligations; and
(e)lack of contrition or acceptance of responsibility, although that must be weighed against the prospect that the defendant may reform.
15.The factors leading to the shortest disqualifications (that is, disqualifications for up to three years) were:
(a)although the defendant had personally gained from the conduct, he or she had endeavoured to repay or partially repay the amounts misappropriated;
(b)the defendant had no immediate or discernible future intention to hold a position as a manager of a company; and
(c)the defendant had expressed remorse and contrition, acted on advice of professionals and had not contested the proceedings against him or her.”
15. The Tribunal’s attention was also directed to paragraphs [52] and [53] of the judgment of McHugh J in Rich:
“52Both Santow J’s list of propositions and the comments of the Victorian Court of Appeal indicate that the factors taken into account in the criminal jurisdiction – retribution, deterrence, reformation, contrition and protection of the public – are also central to determining whether an order of disqualification should be made under the Corporations Act and, if so, the appropriate period of disqualification. Those factors also support the conclusion that the jurisdiction exercised under this part of the Corporations Act cannot properly be characterised as purely protective.
53A good example of the approach of judges in this particular area of the law is found in the judgment of Bryson J in Re One.Tel Ltd (In liq); Australian Securities and Investments Commission v Rich (2003) 44 ACSR 682. His Honour’s reasons show that the jurisdiction cannot be characterised as purely protective. They reflect an approach that can be found in many other cases concerning the disqualification from office of company officers. Among the matters Bryson J thought were relevant were the second defendant’s age and stage of career at which disqualification would fall, the office held, the extent of the second defendant’s responsibilities in terms of the value of assets, the complexity of the activities and the number of people within the range of adverse effects of the second defendant’s breaches of duty (Rich (2003) 44 ACSR 682 at 692). His Honour warned that the guidance to be obtained from other decisions with respect to the reasons for ordering disqualification and the period of disqualification is limited. Each decision is closely related to its own facts, which tend to be highly complex. Further, the circumstances of each defendant are special to that person (Rich (2003) 44 ACSR 682 at 691, per Bryson J, citing Adler (2002) 42 ACSR 80 at 97-99, per Santow J). Bryson J also said that there is “not much to be gained from considering or attempting to classify periods of disqualification which have been imposed in other cases” (Rich (2003) 44 ACSR 682 at 692). That is because breaches of the Corporations Act, the circumstances of the breaches and the outcomes of the breaches, including the number of persons and the value of the interests affected, may take many forms. In addition, the personal circumstances of persons in breach vary greatly (Rich (2003) 44 ACSR 682 at 692, per Bryson J).”
16. It was common cause before the Tribunal that there was no requirement under the Act that, in order to impose a banning order, the activity complained of must involve a repeated or continuous contravention of financial service laws; Donald v Australian Securities and Investments Commission (2000) 18 ACLC 794.
17. In regard to the propositions formulated by Santow J in Adler and approved by McHugh J in Rich, I have no hesitation in concluding that the facts of this matter require the making of a banning order. In this regard I make the following findings on the evidence:
(a)The applicant’s conduct was palpably dishonest. The applicant created a false document for the purpose of communicating to a third party matters which she had not discussed with the clients and which were therefore false. She then forged the clients’ signatures on the document so prepared.
(b)The applicant acted in this way because she believed it to preserve the position of the clients pending discussion with them. She did not act to obtain any benefit for herself or her son.
(c)The creation of a false document and the forging of signatures constitutes dishonest conduct of a serious nature.
(d)There is no evidence of any loss having been suffered by the clients.
(e)The applicant has shown contrition and remorse and has accepted the wrongfulness of her conduct.
(f)The applicant is otherwise of good reputation and character.
(g)The making of a banning order would create personal hardship on the part of the applicant. She would be prevented from doing that which she has done for over a quarter of a century. No evidence was adduced to the contrary.
(h)It was an agreed fact that the applicant has assisted the respondent in its enquiries and resisted a suggestion purportedly made on behalf of the clients to make the matter go away by the payment of a sum of money to charity.
18. With respect to my finding that the applicant has shown contrition and remorse and has accepted the wrongfulness of the conduct, I note that counsel for the respondent accepted that the applicant had shown contrition, but submitted that the applicant had not shown true remorse or accepted the wrongfulness of her conduct. To support her submission, counsel for the respondent referred the Tribunal to various portions of the transcript of proceedings before the respondent’s delegate where the applicant answered various questions put to her by the delegate. In particular, the Tribunal was referred to pages 22, 23 and 25 of the transcript. At page 25, in answer to the question “What is your view as to the propriety of your actions in signing the Schneikers’ name on the request letter?”, the respondent answered:
“I realise that I’ve done the wrong thing. I’m sorry about that. I’m deeply embarrassed and I would never do it again. I haven’t done it before, because I’ve always been able to contact the clients. I know it was wrong, but the only thing I was doing was just to delay till they got back. It wasn’t to stop it altogether. That wasn’t the intention. The letter said to hold till the beginning of June”.
19. It was submitted on behalf of the respondent that the applicant’s statements that she realised that she had done the wrong thing were diminished by her endeavour to explain and justify her wrongful conduct. In addition, counsel for the respondent referred to an earlier question and answer on page 25 of the transcript. In answer to the question “Did you give any consideration to what Mr and Mrs Schneiker’s reaction would be when they discovered that you had created the document and signed their names without their consent?”, the applicant said as follows:
“Well, I thought we would contact them before – the idea was to contact them as soon as they came back, but unfortunately they contacted MLC to see if the money had been transferred over. Then they found out about the letter. We thought that we would have a chance to speak to them before – as soon as they came back – but it didn’t work out that way”.
20. Again, counsel for respondent submitted that the applicant’s answer was evidence of an absence of remorse or full acceptance by the applicant as to the wrongfulness of her conduct.
21. Counsel for the respondent did not seek to cross-examine the applicant. Accordingly, I must determine this matter solely by reference to the documents (including the transcript of the proceedings before the delegate). In so doing, I give the words used by the applicant in her answers their natural and ordinary meaning. In doing that, I am unable to conclude that the applicant’s answers relied upon by counsel for the respondent, or indeed the fact that the applicant’s witness statement contains an apology for her actions, but no express acceptance of the wrongfulness of the same, warrant a finding other than that the applicant realises that what she did was wrong and is deeply embarrassed.
22. As for the applicant’s good reputation and character, the Tribunal received into evidence numerous character references and heard from 4 witnesses. That evidence overwhelmingly established that, apart from the conduct the subject of this matter, the applicant is of good reputation and character. Indeed, counsel for the respondent did not suggest otherwise.
23. Having regard to my findings of fact and considering the overriding requirement for protection of the public and to have regard to all unified elements of retribution, deterrence, reformation and mitigation, I conclude that notwithstanding the applicant’s previous good character, the personal hardship she will suffer, the contrition and acceptance shown on her part, the absence of any loss on the part of the clients, the fact that the applicant was not motivated out of any notion of gain to herself or her son (and no such gain was obtained) and her willingness to assist the respondent, the legislative objective of personal and general deterrence and the protection of the public nevertheless require that this serious act of dishonesty, albeit an isolated incident, result in the making of a banning order.
Is the applicant of good fame and character?
24. Having concluded that a banning order is warranted, section 920B(2) provides that the order may prohibit the person against whom it is made from providing a financial service permanently or “for a specified period, unless ASIC has reason to believe the person is not of good fame or character”.
25. It was submitted by Ms Vernon on behalf of the respondent that the evidence ought cause the Tribunal to conclude that the applicant is “not of good fame or character” and that, accordingly, it is not open to the Tribunal to make a banning order for a specified period; it must be permanent.
26. Although no authority was relied upon by Counsel for either party, the proper approach to the resolution of this issue is well settled. In Ex parte Tziniolis; Re Medical Practitioners Act (1966) 67 SR (NSW) 448, a decision of the Court of Appeals in New South Wales, Holmes JA held as follows (p 475):
“It was submitted by Mr Yeldham that the term “good character” as used in s 17 referred to an applicant’s reputation and not to his disposition. We were referred to discussions of the term “character” as used in various contexts in Leader v. Yell (1864) 16 C.B.N. 584; Thornton v. Federated Ironworkers’ Association (1955) A.R (NSW) 1122; Plato Films v. Speidel (1961) AC 1090; Stirland v. Director of Public Prosecutions (1944) AC 315. I do not think that these cases are relevant to the problem we have to decide. It is not “good character” in some particular sense developed in the criminal law or the law of defamation but “good character” of a person seeking to practise medicine as a registered medical practitioner with which we are concerned. Cf. In re Davis (1947) 75 CLR 409 at 426. Reputation is obviously relevant to the solution of the problem but cannot be the exclusive test. “Good” is used also in the sense of “moral strength”. I do not propose to substitute for the terms in the section some other words. Had the board dissected fact from mere assertion, its combined view of whether the applicant was of good character or not should have been sufficient. I am satisfied that we are able correctly to apply this standard to the established facts from our experience of people and of the behaviour required of an applicant for registration as a medical practitioner. On the other hand too much emphasis should not be placed upon the circumstances that the issue is one as to registration and not as to practice. Unregistered practitioners in reality are relegated to the umbra of the medical profession. A man’s conduct in respects known only to his intimates can evidence his character. Medical practitioners occupy positions of trust. An inability to withstand the importunings of the evilly disposed would disqualify, as would the propensity to exploit the gullible. These and other defects in moral fibre may not be part of a man’s reputation, but evidence of these traits must be weighed in estimating character. Even these characteristics cannot be looked at in isolation. The judgment as to character must be arrived at by giving due weight to all features. Finally, the judgment must be made of the man at the time when the court is asked to consider the application
The Act provides for the circumstances in which the name of a registered medical practitioner may be removed from the register and the expression “infamous conduct in a professional respect” has been used to define such conduct. “Good character” is not a summation of acts alone, but relates rather to the quality of a person. The quality is to be judged by acts and motives, that is to say, behaviour and the mental and emotional situations accompanying that behaviour. However, character cannot always be estimated by one act or one class of act. As much about a person as is known will form the evidence from which the inference of good character or not of good character is drawn.”
27. The remarks of Holmes JA in Tziniolis have been referred to and applied in various subsequent decisions, including the High Court of Australia: see, for example, Melbourne v. The Queen (1999) HCA 32 at [66].
28. In this regard reference should also be made to the unreported decision of the New South Wales Court of Appeal in McBride v Walton (unreported, delivered 15 July 1994, BC 9402907) where Kirby P (as his Honour then was) said as follows:
“5. Where it is complained that the medical practitioner is “not of good character” and it is established that, in a particular act or connected series of actions, the practitioner’s behaviour falls below the standards usually required and expected relevant to the practice of medicine, a question will be posed as to whether that behaviour was abhorrent, exceptional and such as is not likely to interfere in the function of the practitioner as such (as was held in Ziems) or whether it betokens some more serious flaw of “character” attracting an order affecting the practitioner’s practice (as in In re Davis (1947) 75 CLR 409, 417 ( a barrister who, on admission, failed to disclose a conviction for breaking, entering and stealing either to the court or to his referees)) and Ex parte Tziniolis; Re the Medical Practitioners Act (1967) 84 WN (NSW) (Pt2) 275 (CA) (an applicant for registration who committed perjury and intimidation of a discreditable kind)). In considering an alleged lack of good character it will be relevant for the Tribunal to seek to catalogue the pertinent wrong proved, either as an isolated incident or episode or as an indication of some deeper underlying quality which shows a “character” demonstrating defects relevant to medical practice. Thus, the Tribunal will ask itself whether the errors which it has found are simply errors of judgment in a particular case or demonstrate fault of “character”. It will often be relevant in this connection to consider the motivation of the practitioner. See Ex parte Tziniolos (above), 301. Where that motivation is greed or some corrupt purpose, such a finding will typically carry more weight than a conclusion that some other motivation, normally irrelevant to professional practice, affected the particular conduct impugned;
6. Once the impugned conduct is properly found and classified, it is then necessary for it to be seen in the wider context of the medical practitioner’s “character”, including evidence of “good character” as demonstrated by his or her service in the profession and the community. Relevant here will be any evidence provided as to the practitioner’s good fame and character in the eyes of patients, fellow practitioners and other citizens. Such evidence may help to show the underlying qualities of character of the practitioner in question. They may assist in the evaluation of the overall character of the practitioner. They may lead the Tribunal to the view that the particular conduct impugned and proved is to be regarded as exceptional and such as will not require the ultimate conclusion that the practitioner is “not of good character” or, if that conclusion is found, that some order short of removal from practice is appropriate to the case;”
29. I also note that, having regard to the serious consequences which flow from the result of an affirmative finding that the applicant is “not of good fame and character”, the decision of the High Court of Australia in Briginshaw v Briginshaw & Anor (1938) 60 CLR 336, requires a very high level of satisfaction before such a finding ought be made.
30. Having regard to the relevant authorities, without in any way diminishing the seriousness of the applicant’s conduct, I am not prepared to conclude that the applicant is not of good fame or character. I say that for the following reasons:
(a)as previously stated, the evidence before the Tribunal establishes that, excluding the conduct the subject of this application, the applicant is clearly of good fame and character;
(b)the applicant has operated in the financial services industry for over a quarter of a century without blemish;
(c)the applicant’s motivation was not one of “greed or some corrupt purpose” (to use the words of Kirby P (as his Honour then was) in McBride);
(d)the evidence does not establish other than this was an isolated incident (to use the expression used by one of the witnesses called by the applicant to give character evidence on behalf of the applicant, “a mind-snap”);
(e)the conduct, the subject of the application, was a serious error of judgment, but not demonstrative of any fault of character.
31. I therefore consider it is within my discretion to order the banning order to be for a specified period.
Should as a matter of discretion the Banning Order be permanent or for a specific period?
32. The factors relevant to the determination of the period of disqualification under the criteria set down in Adler and approved in Rich may be summarised as follows:
(a)seriousness of the conduct;
(b)incompetence or irresponsibility;
(c)large or substantial financial losses;
(d)high propensity that the person may engage in similar activities or conduct;
(e)activities undertaken in fields in which there was potential to do great financial harm;
(f)lack of contrition or remorse or acceptance of responsibility;
(g)disregard for the law and compliance with corporate regulations, and whether it is knowing and wilful;
(h)dishonesty and intent to defraud;
(i)previous convictions or contraventions for similar activities;
(j)whether the person has made restitution where applicable.
33. Having given the matter careful consideration, I have concluded that the application of the factors which have been identified as relevant in determining the length of a period of disqualification does not require, nor justify, the imposition of a permanent ban. Dealing with each of the factors set out above -
(a)as I have already found, the conduct was very serious;
(b)as I have already found, the conduct involved irresponsibility on the part of the applicant;
(c)it was agreed between the parties that there was no evidence of any losses (let alone large or substantial financial losses);
(d)as I have already found, there is no real (let alone high) propensity that the applicant may engage in similar activities or conduct;
(e)the activities were undertaken in fields in which there is potential to do great financial harm;
(f)as I have found, the applicant has shown contrition and remorse and accepted responsibility for her wrongful conduct;
(g)as I have found, the applicant’s conduct constitutes a disregard for the law and disregard for the compliance with corporate regulations; it was done knowingly and wilfully;
(h)as I have found, the applicant’s conduct was dishonest with an intent to mislead (but not an intent to defraud in the fiscal sense in which that word is usually used);
(i)it was common cause before the Tribunal that the applicant has no prior convictions or had engaged in any contraventions of a similar nature;
(j)the question of restitution does not arise.
34. However, whilst the balance favours the applicant as to whether or not a permanent ban is required, my preliminary view is that the seriousness of the applicant’s conduct requires the imposition of a significant period of disqualification.
Conclusion
35. It therefore follows that whilst I uphold the decision of the respondent’s delegate that a banning order should be made against the applicant, I do not affirm the delegate’s decision to impose a permanent ban.
36. At the hearing of this matter I indicated to Counsel that, should I reach such a conclusion, I would publish my reasons and invite the parties to submit to me a minute of proposed orders, failing which I would re-list the matter to hear the parties submissions with respect to the length of the “specified period” and any other conditions that might be imposed. Accordingly, that is what should now occur.
I certify that the 36 preceding paragraphs are a true copy of the reasons for the decision herein of Mr S Penglis, Senior Member
Signed: .........[Sgd. Ms R Riberi].................................
AssociateDate/s of Hearing 31 July 2006
Date of Decision 15 August 2006
Counsel for the Applicant Mr P Mendalow
Solicitor for the Applicant Mr D Isaacs
Counsel for the Respondent Ms K A Vernon
Solicitor for the Respondent Mr W Bellew
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