Re VBJ and Australian Prudential Regulation Authority - [2005] AATA 642

CATCHWORDS – PRACTICE AND PROCEDURE – stay order – stay of operation and/or implementation of decision disqualifying person from being a trustee, investment manager or custodian of a superannuation entity – whether requirements of request for reconsideration complied with – matters to be taken into account in considering stay – whether appropriate to take account of personal commercial interests or interests affecting a person’s reputation in considering stay – whether stay can affect statutory obligation to publish – whether publication necessary to protect the interests of the public – implementation of decision stayed.

PRACTICE AND PROCEDURE – confidentiality order – whether hearing and material before Tribunal should be confidential to secure effectiveness of internal review – confidentiality granted.

Administrative Appeals Tribunal Act 1975 ss. 35, 27, 29 and 41
Financial Sector Legislation Amendment Act (No.1) 2000, s. 3, Schedule 3, item 14
Migration Act 1958 ss, 476, 477, 482, 500, 501 and 501G
Social Security Act 1991 s. 1222A
Superannuation Industry (Supervision) Act 1993 ss. 3 10, 52, 120, 120A, 121, 344 and 345

Goldie v Minister for Immigration and Multicultural Affairs (2001) 111 FCR 378; 33 AAR 446
Hall v Minister for Immigration and Multicultural Affairs (2000) 97 FCR 387
Long v Minister for Immigration and Multicultural and Indigenous Affairs (2002) 122 FCR 159
Project Blue Sky Inc and Others v Australian Broadcasting Authority (1998) 194 CLR 355
Re Bishop and Secretary, Department of Social Security (1989) 18 ALD 661
Re Commonwealth of Australia and Quirke (1986) 9 ALD 92
Re Crossan and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 216
Re Edwards and Civil Aviation Safety Authority (2003) 74 ALD 572
Re Kanina Banner Pty Ltd v Minister for Health and Ageing (2002) 66 ALD 663
Re Kurukkal and Minister for Immigration and Multicultural and Indigenous Affairs (2004) 38 AAR 482
Re Pochi and Minister for Immigration and Ethnic Affairs (1979) 26 ALR 247
Re Repatriation Commission and Delkou (1985) 8 ALD 454
Re Webber and Secretary, Department of Social Security (1989) 18 ALD 422
Smith v Land & House Property Corporation (1884) 28 Ch D 7

DECISION AND REASONS FOR DECISION [2005] AATA 642

ADMINISTRATIVE APPEALS TRIBUNAL     )
  )          V2005/519
GENERAL ADMINISTRATIVE DIVISION     )

Re “VBJ”

Applicant

AndAUSTRALIAN PRUDENTIAL REGULATION AUTHORITY
Respondent

DECISION

Tribunal:                   Deputy President S A Forgie
Date:  20 June 2005
Place:  Melbourne

Decision:The Tribunal:
1.orders that the implementation of the respondent’s reviewable decision dated 9 June 2005 be stayed until the respondent has determined VBJ’s request for review to the extent that it may not:
(1)publish in the Commonwealth Government Gazette particulars of the notice given to VBJ under s. 120(6) of the Superannuation Industry (Supervision) Act 1993; and
(2)make any public disclosure regarding its decision; and

2.directs that, in the Tribunal:
(1)the applicant be described by the letters “VBJ” for the purpose of the application;
(2)publication of the name of the applicant and of any material tending to identify him, either of the entities described in the reasons for decision as SFund and Superannuation Pty Ltd (“SPL”) or any entities in which he has an interest, be restricted to members and staff of the Tribunal, the parties and their representatives and professional advisers and staff of Auscript; and
(3)all hearing shall be held in private.
S A FORGIE
Deputy President

REASONS FOR DECISION

There was a standard employer sponsored superannuation fund, which I will call the SFund. I will call the trustee Superannuation Pty Ltd (“SPL”) and the standard employer sponsors, the Sponsors. For a little over three years, VBJ held an executive position with one of the Sponsors. For the last two years of that period, he was also a director of SPL. On 9 June 2005, and after he had resigned his positions with the Sponsors and SPL, a delegate of the Australian Prudential Regulation Authority (“APRA”) disqualified VBJ from being a trustee, investment manager or custodian of a superannuation entity. In doing so, he relied on APRA’s powers under ss. 120A(2) and (3) of the Superannuation Industry (Supervision) Act 1993 (“SIS Act”). The delegate gave VBJ written notice of the disqualification. VBJ has asked APRA to review its decision.

Even though the Tribunal does not have jurisdiction to review APRA’s decision until it has been reviewed and confirmed or varied, the effect of VBJ’s application is that he has requested the Tribunal to stay the operation or implementation of the decision pending the completion of that review under s. 41(2) of the Administrative Appeals Tribunal Act 1975 (“AAT Act”). The Tribunal has power to do that under s. 344(10) of the SIS Act. VBJ submits that the effect of such an order would be that APRA’s obligation to publish notice of the decision in the Commonwealth Government Gazette (“Gazette”) in accordance with s. 120A(7) of the SIS Act would be stayed. APRA considers that it must cause particulars of that notice to be published regardless of any stay order as it is a statutory obligation. I have decided that the operation of the decision should not be stayed but that its implementation should be stayed to the extent that APRA may not publish any details of the decision. As requested by VBJ, I have also made an order prohibiting publication of particulars of his disqualification and made a confidentiality order in respect of the proceedings in the Tribunal.[1]

[1] see [70] below

BACKGROUND

For the purposes of this proceeding only, I will give a very broad sketch of the facts as they appear to be. The SFund has several broad categories of members. One of them comprises those members whose retirement, death, disablement or resignation benefits are calculated as a multiple of salary (“MoS Division members”). Another comprises those whose benefits are the accumulation of the contributions they and their employers have made together with interest on those contributions (“Accumulation Division members”). Some years ago, the SFund was advised to create a further division. It comprised those members who had resigned with at least ten years of service and who had left their benefit in the fund until they were at least 55 years of age. After they reached 55, they were entitled to a pension determined by whether they were initially MoS Division or Accumulation Division members (“deferred benefit members”). The rate at which interest accrued to their funds was based on a three year compound average but with a specified minimum rate determined by reference to tax cash rates and ten year bond yields. Members were advised of this. This was the crediting rate policy and it was later reviewed. APRA has found that the deferred benefit members were not told of the review. In June, SPL advised members that the crediting rate policy had been reviewed to allow it to determine the rate each year rather than using a formula. Consistent with the revised policy, interim crediting rates had been set for the various categories of members. All were positive, rather than negative rates. In August of that same year, SPL advised members of the SFund that the net earning rate for the financial year just completed was a negative figure.

Also in August, SPL told SFund’s members of the interest crediting rate decision, it also advised that the Sponsors were considering whether to offer deferred benefit members aged over 50 years an enhancement to their account balances if they chose to take their benefit as a lump sum. This was based on a lump sum’s being a cheaper option to the SFund than a pension once the members turned 55 years. The Sponsors ultimately made an offer and SPL passed it on to SFund’s members without comment.

BROAD OUTLINE OF THE SIS ACT

The SIS Act provides for the “… supervision of certain entities engaged in the superannuation industry …”.[2] It does not apply to all entities engaged in the superannuation industry as the legislation depends on the Commonwealth’s powers with respect to corporations or pensions. Those funds that are supervised may be eligible to be taxed at concessional rates.[3] With these matters in mind, s. 3(1) provides that:
“The object of this Act is to make provision for the prudent management of certain superannuation funds, approved deposit funds and pooled superannuation trusts and for their supervision by APRA, ASIC^[[4]] and the Commissioner of Taxation.”

Together, those certain superannuation funds, approved deposit funds and pooled superannuation trusts are known as superannuation entities.[5]

[2] SIS Act, long title

[3] SIS Act, ss. 3(2) and (3)

[4] Australian Securities and Investment Commission

[5] SIS Act, s. 10(1)

The SIS Act provides for such matters as the approval of trustees,[6] the prescription of operating standards for superannuation entities,[7] and trustees’ lodgement of annual returns.[8] It provides for APRA’s supervision of those superannuation entities to which the legislation applies by providing that it may give a written notice to the trustee of a superannuation entity stating, in effect, whether that entity has, or has not, complied with its obligations under the SIS Act.[9] The entity’s obligations are set out[10] as well as those of its trustees, custodians and investment managers[11] and its actuaries and auditors.[12] The SIS Act goes on to, among other matters, regulate and prohibit certain sorts of conduct[13] and to give APRA power to monitor and investigate entities.[14]

[6] SIS Act, Part 2

[7] SIS Act, Part 3

[8] SIS Act, Part 4

[9] SIS Act, Part 5

[10] SIS Act, Parts 6-14

[11] SIS Act, Part 15

[12] SIS Act, Part 16

[13] e.g. SIS Act, Parts 19 and 20

[14] SIS Act, Part 25

Covenants that must be included in a superannuation entity’s governing rules

One way in which the SIS Act prescribes the obligations of a superannuation entity is to provide that:
“If the governing rules of a superannuation entity do not contain covenants to the effect of the covenants set out in subsection (2), those governing rules are taken to contain covenants to that effect.”[15]

Of relevance in this case, are:

“… the following covenants by the trustee:
(a)…
(b)to exercise, in relation to all matters affecting the entity, the same degree of care, skill and diligence as an ordinary prudent person would exercise in dealing with property of another for whom the person felt morally bound to provide;
(c)to ensure that the trustee’s duties and powers are performed and exercised in the best interests of the beneficiaries;
…”[16]

[15] SIS Act, s. 52(1)

[16] SIS Act, s, 52(2)

Disqualified person

A person must not intentionally be, or act as, a trustee[17] or as a responsible officer[18] of a superannuation entity if the person is, and knows, that he or she is a disqualified person. A responsible person in relation to a body corporate is a director, secretary or executive officer of the body.[19]
[17] SIS Act, s. 121(1)
[18] SIS Act, s. 121(2)
[19] SIS Act, s. 10(1)

A person becomes a disqualified person by operation of s. 120(1) in certain circumstances. In addition, APRA may disqualify an individual if it is satisfied that the individual has contravened the SIS Act, whether before or after s. 120A(1) commenced on 18 January 2001[20] and “… if the nature or seriousness of the contravention or contraventions, provides grounds for disqualifying the
[20] Inserted by the Financial Sector Legislation Amendment Act (No.1) 2000, s. 3, Schedule 3, item 14

individual.”[21] It may also disqualify an individual in two other circumstances set out in ss. 120A(2) and (3):

“(2) The Regulator^[[22]] may disqualify an individual who is, or was (including before the commencement of this section), a responsible officer of a trustee, investment manager or custodian (the body corporate) if satisfied that:
(a)the body corporate has contravened this Act or the Financial Sector (Collection of Data) Act 2001 on one or more occasions (whether before or after the commencement of this section); and
(b)at the time of one or more of the contraventions, the individual was a responsible officer of the body corporate; and
(c)in respect of the contravention or contraventions that occurred while the individual was a responsible officer of the body corporate—the nature or seriousness of it or them, or the number of them, provides grounds for the disqualification of the individual.

(3) The Regulator may disqualify an individual if satisfied that the individual is otherwise not a fit and proper person to be a trustee, investment manager or custodian, or a responsible officer of a body corporate that is a trustee, investment manager or custodian.”

[21] SIS Act, s. 120A(1)

[22] For the purposes of this case, the Regulator is APRA: SIS Act, s. 10(1)

A disqualification takes effect on the day on which it is made.[23] APRA’s decision to disqualify a person is a reviewable decision.[24] APRA may revoke a disqualification either on the application by the person it has disqualified or on its own initiative.[25] A revocation takes place on the day on which it is made.[26]

Notice of a disqualification, revocation of a disqualification or a refusal to revoke a disqualification

[23] SIS Act, s. 120A(4)

[24] SIS Act, s. 10(1)

[25] SIS Act, s. 120A(5)

[26] SIS Act, s. 120A(5)

Section 120A(6) provides that it:
“… must give the individual written notice of a disqualification, revocation of a disqualification or a refusal to revoke a disqualification.”

Section 120(7) provides that:

“The Regulator must cause particulars of a notice given under subsection 120A(6) or 344(6) (result of internal review)^[[27]] to be published in the Gazette as soon as practicable.”

[27] see [12] below

Further implications of a disqualification

Section 121(3) provides that, if a trustee of a superannuation entity is or becomes a disqualified person, the trustee must immediately tell the Regulator in writing.

APRA’s reconsideration of its decision

A person affected by a reviewable decision[28] may request APRA to reconsider the decision.[29] A “reviewable decision” includes a decision made under ss. 120A(1), (2) and (3) to disqualify and individual and a decision under s. 120(5) refusing to revoke the disqualification of an individual.[30] The request:
“… must be made by written notice given to the Regulator within the period of 21 days after the day on which the person first receives notice of the decision, or within such further period as the Regulator allows.”[31]

Section 344(3) provides that:

“The request must set out the reasons for making the request.”

[28] Regard must be had to s. 345(12) in determining whether a person is affected by a reviewable decision.

[29] SIS Act, s. 344(1)

[30] SIS Act, s. 10(1)

[31] SIS Act, s. 344(2)

Statements to accompany notification of decisions

On receiving the request, APRA must reconsider the decision and confirm, revoke or vary it as it thinks fit.[32] If it has not made a decision on the application 60 days after it received the request to reconsider the decision, APRA is taken to have confirmed its decision. That is the effect of s. 344(5). Section 344(6) provides that:
“If the Regulator confirms, revokes or varies a decision before the end of the period referred to in subsection (5), the Regulator must give written notice to the person telling the person:
(a)the result of the reconsideration of the decision; and
(b)the reasons for confirming, varying or revoking the decision, as the case may be.”
[32] SIS Act, s. 344(4)

In relation to a reviewable decision, s. 345(1) provides that:
“(1) If a written notice is given to a person affected by a reviewable decision telling the person that the reviewable decision has been made, that notice is to include a statement to the effect that:
(a)the person may, if dissatisfied with the decision, seek a reconsideration of the decision by the Regulator in accordance with subsection 344(1); and
(b)the person may, subject to the Administrative Appeals Tribunal Act 1975, if dissatisfied with a decision with a decision made by the Regulator upon that reconsideration confirming or varying the first-mentioned decision, make application to the Administrative Appeals Tribunal for review of the decision so confirmed or varied.”

Section 345(2) imposes a similar requirement when APRA confirms or varies a reviewable decision. A failure to comply with s. 345(1) does not affect the validity of the decision.[33]

[33] SIS Act, s. 345(3)

AAT’s review of APRA’s decision

An application may be made under s. 344(8) to the Tribunal for review of decisions that APRA has confirmed or varied.[34] As s. 344(9) goes on to provide that the 28 day time limit for lodging the application[35] is taken to begin on the day on which a decision is taken to be confirmed under s. 344(5), s. 344(8) must be read as referring to a decision that APRA is taken to have confirmed under s. 344(5) as well as to a decision that it has confirmed under s. 344(4).
[34] SIS Act, s. 344(8)
[35] Determined under s. 29 of the Administrative Appeals Tribunal Act 1975

Section 344(11) relates to the hearing in the Tribunal:
“The hearing of a proceeding relating to a reviewable decision is to take place in private and the Administrative Appeals Tribunal may, by order:
(a)give directions as to the persons who may be present; and
(b)give directions of a kind referred to in paragraph 35(2)(b) or (c) of the Administrative Appeals Tribunal Act 1975.”

Operation of s. 41 of the Administrative Appeals Tribunal Act 1975

In general terms, s. 41(1) of the Administrative Appeals Tribunal Act 1975 (“AAT Act”) provides that:
“Subject to this section, the making of an application to the Tribunal for a review of a decision does not affect the operation of the decision or prevent the taking of action to implement the decision.”

Section 41(2) then goes on to provide that:

“The Tribunal or a presidential member may, on request being made, as prescribed, by a party to a proceeding before the Tribunal (in this section referred to as the relevant proceeding), if the Tribunal or presidential member is of the opinion that it is desirable to do so after taking into account the interests of any persons who may be affected by the review, make such order or orders staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relates or a part of that decision as the Tribunal or presidential member considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review.”

In the context of the SIS Act, the decision referred to in s. 41 of the AAT Act is the decision confirmed or varied by APRA under s. 344(4) or taken to have been confirmed under that section by virtue of s. 344(5). It is not the reviewable decision that APRA made initially to disqualify an individual or to refuse to revoke the individual’s disqualification. Section 344(10) of the SIS Act, however, gives the Tribunal power to make an order under s. 41 of the AAT Act staying or affecting the operation or implementation of APRA’s reviewable decision but only if a request has been made to review it. To be precise, s. 344(10) provides:
“If a request is made under subsection (1) in respect of a reviewable decision, section 41 of the Administrative Appeals Tribunal Act 1975 applies as if the making of the request were the making of an application to the Administrative Appeals Tribunal for a review of that decision.”

APRA’s DECISION

APRA concluded that SPL had contravened the covenants in ss. 52(2)(b) and (c) in respect of both issues and in s. 52(2)(g) in respect of the

crediting rate issue. The covenants to this case were set out above.[36] In the briefest summary, APRA reached its conclusions on the following grounds:

[36] at [6] above

s. 52(2)(b): care, skill and diligence
SPL did not give the deferred benefit members all of the information they had and that the members needed to make a properly informed decision. It had legal advice that it should make a recommendation in relation to it rather than merely act as the conduit between the Sponsors and members. APRA concluded that SPL did not act on the legal advice in the sense of investigating whether or not it had to make a recommendation.
In failing, in APRA’s findings, to give adequate and complete information about the changes to its crediting rate policy and the nature of the minimum crediting rate in June, APRA concluded that SPL had failed to exercise the same degree of care, skill and diligence as an ordinary prudent person would exercise in dealing with the property of another for whom that person felt morally bound to provide.
s. 52(2)(c): best interests
SPL did not communicate to the SFund’s members all of the information available to it and required by the members to assess the Sponsors’ offer. A trustee acting in the members’ best interests would have done so.
VBJ was a responsible officer at the time and, as a director, either was aware, or should have been aware, of what was happening in relation to the offer.
APRA concluded that publishing an interim crediting rate in June would have created an impression among members that the crediting rate for the financial year would be a similar amount. SPL had not told its members as soon as practicable that it was reviewing the crediting rate.
s. 52(2)(g): formulating and giving effect to a strategy consistent with SPL’s investment strategy
APRA concluded that SPL did not formulate a crediting rate reserve consistent with its investment strategy.

APRA considered that the nature and seriousness of the breaches were such that VBJ should be disqualified under s. 120A(2) of the SIS Act. It further concluded, through its delegate, that he was not a fit and proper person and should be disqualified under s. 120A3).

NOTICE OF THE DECISION

In a notice, also dated 9 June 2005 and addressed to VBJ, the delegate told VBJ that he was:
“A. … a former responsible officer of … (the body corporate); and
B.… a responsible officer of the body corporate at the time of one or more of the contraventions; and
C.the nature or seriousness of the contraventions and the number of contraventions, that occurred while you were a responsible officer of the body provide grounds for disqualifying you; and
…”

that he disqualified VBJ under s. 120A(2). The delegate then told VBJ that he was satisfied that he was “… otherwise not a fit and proper person to be a trustee, investment manager or custodian, or a responsible officer of a body corporate that is a trustee, investment manager or custodian …” and that he disqualified him under s. 120A(3) of the SIS Act.

Four notes appeared at the end of the notice. The first advised VBJ that the decision to make the disqualification order was a reviewable decision within the meaning of s. 10(1). It went on to advise VBJ of his right to request APRA to reconsider its decision. If he chose to request that of APRA, the note told VBJ that he had to do so in writing within 21 days of the day on which he first received notice of the decision, or within any extended period approved by APRA. His request had to set out his reasons for making his request. If he was dissatisfied with APRA’s decision on review, he could apply to the Tribunal “… for review of the reconsidered decision.”[37]
[37] Affidavit of VBJ’s solicitor, Exhibit JK-16, Attachment B to the delegate’s letter dated 9 June 2005

REQUEST FOR REVIEW OF APRA’S DECISION

In a letter dated 14 June 2005, VBJ’s solicitors wrote to APRA requesting reconsideration of the disqualification decision.[38] After noting that the letter was a request for the purposes of s. 344, they wrote:
“… In accordance with section 344(3), we set out below several reasons for making the request. We propose to supplement this material in the near future and ask that a decision on the request not be made until this has been done.”
[38] Affidavit of VBJ’s solicitor, Exhibit JK-18

The reasons that were given extended over three and a half closely typed pages. I will give only a very broad summary of them. VBJ challenges the way in which APRA made its decision and suggests that it reached its decision after deciding that SPL had breached its statutory duties without considering whether it should exercise its discretion whether to disqualify VBJ. The delegate has misconstrued the scope of ss. 52(b) and 9(c), he argues and his errors infect the decision under s. 120A(3). VBJ also contends that the delegate made his decision without giving him an opportunity to comment on some of the material that he took into account. On the evidence that the delegate had, the delegate should not have concluded that any member would have expected the credit rate would be 2%. The crediting rate was properly set. VBJ has also suggested that the delegate’s decision was affected by apprehended bias.

APPLICATION FOR A STAY AND A CONFIDENTIALITY ORDER

VBJ applied for an order staying the operation of APRA’s decision pending its reconsideration and any reconsideration by the Tribunal. He also asked for an order preventing APRA from publishing in the Gazette details of the notice relating to VBJ’s disqualification or otherwise making any public disclosure about the disqualification.

VBJ also asked for an order under s. 35(2) of the AAT Act that the hearing of the proceeding take place in private and that publication of the material before the Tribunal be kept confidential.

CONSIDERATION

The request to APRA for reconsideration of the reviewable decision

VBJ requested APRA to review its reviewable decision five days after he received notice of it and so well within the 21 day period allowed by s. 344(2). On behalf of APRA, Mr Crennan SC noted that VBJ had not yet indicated the grounds upon which his request was made as required by s. 344(3). VBJ’s request made it clear that, while he gave “several reasons” for making the request, he wanted “… to supplement this material in the near future …”. In relation to his statement that the delegate had taken account of material he had not provided to VBJ, VBJ said that he reserved “… the right to raise other matters of this description.”

The first question is whether both ss. 344(2) and (3) must be complied with in order for a request to have been made. At one time, that question would have raised the distinction between mandatory and directory provisions but that is no longer a valid distinction to draw. That follows from the majority judgement of the High Court in Project Blue Sky Inc and Others v Australian Broadcasting Authority.[39] As Brennan CJ explained in his dissenting judgment:
“…The description of provisions as either mandatory or directory provides no test by which the consequences of non-compliance can be determined; rather, the consequences must be determined before a provision can be described as either mandatory or directory.”[40]
[39] (1998) 194 CLR 355
[40] (1998) 194 CLR 355 at 374

His Honour’s approach is consistent with that adopted by the majority, who added:
“... A better test for determining the issue of validity is to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid. … In determining the question of purpose, regard must be had to ‘the language of the relevant provision and the scope and object of the whole statute’ ….”[41]
[41] (1998) 194 CLR 355 at 374 at 390-1

These principles were considered by Finkelstein J in Hall v Minister for Immigration and Multicultural Affairs[42] in the context of s. 500(6C) of the Migration Act1958 (“Migration Act”). That section provides that, if a decision under s. 501 relates to a person in the migration zone, an application for review of a decision must be accompanied by, or by a copy of, the document notifying the person of the decision and one of the sets of documents given to him or her under s. 501G(2). Finkelstein J concluded that a failure to comply with s. 500(6C) would not result in invalidity of the application. He added that “no purpose would be served by invalidating an application for a failure to provide documents which the Tribunal can obtain in any event”.[43] His Honour observed that failure to comply with s. 500(6C) would still mean that the application would be dealt with expeditiously as intended by Parliament. The Tribunal could require the Minister to produce the documents once the application has been lodged. Cancellation of a visa would result in the deportation of the non-citizen and so cause great hardship to him or her and to his or her family. It was difficult to imagine, he said, that Parliament intended that a non-citizen should lose his or her right to review merely because documents that remained in the possession of the Minister had not been lodged.
[42] (2000) 97 FCR 387
[43] (2000) 97 FCR 387 at 391

A different result was reached by Gray J in Goldie v Minister for Immigration and Multicultural Affairs.[44] His Honour analysed the scheme of the Migration Act and, in particular, the role of s. 500(6J). That section provides that an applicant wanting the Tribunal to have regard to any documents other than those provided by the Minister, must give the Minister a copy of those documents at least two business days before the Tribunal holds a hearing.
[44] (2001) 111 FCR 378; 33 AAR 446 (Gray, RD Nicholson and Stone JJ)

Gray J concluded that s. 500(6J) required strict compliance:
“It is plain that the scheme is designed to disadvantage an applicant for review. Subsections (6H) and (6J) are not counterbalanced by any express obligation on the Minister to disclose the entire case against the applicant prior to the hearing. The purpose of subss (6H) and (6J) can only be to advantage the Minister at the hearing. Being forewarned as to the entirety of the case of the applicant for review, the Minister is better able to respond to the case. …”[45]
[45] (2001) 111 FCR 378; 33 AAR 446 at 390; 457-8

At first glance, there is a conflict between the conclusion reached by Finkelstein J in Hall v Minister for Immigration and Multicultural Affairs and that reached by Gray J in Goldie v Minister for Immigration and Multicultural Affairs. The apparent conflict arises from the fact that both considered provisions of s. 500 relating to applications where the applicant is in the migration zone and yet reached different conclusions regarding whether strict compliance was required. It is important to note, though, that neither of their Honours applied their conclusion to the whole of the section. Finkelstein J was concerned with that relating to the application and Gray J with that relating to the Minister’s being forewarned of the documentary evidence to be given at the hearing. They reached different conclusions but from a common basis of reasoning. That was that Parliament intended that the Minister be forewarned of the evidence that was to be given on behalf of an applicant for review. Strict compliance with s. 500(6C) requiring that the applicant lodge with an application documents that he has already been given by the Minister’s delegate did not advance the Minister’s knowledge of the applicant’s case. Strict compliance with s. 500(6J) relating to documentary evidence did.

The principles followed by Finkelstein and Gray JJ in Hall and Goldie respectively are equally applicable in considering whether s. 344(3) of the SIS Act must be strictly complied with. Under the SIS Act, APRA has power to monitor and investigate superannuation entities. In investigating SPL and VBJ, it chose to give VBJ a letter asking him to show why it should not disqualify him. Its letter gave a very detailed account of its investigations and of its preliminary conclusions. It asked VBJ for submissions and he responded. At that stage, APRA holds the information it has obtained by using its statutory powers. Once it has made a reviewable decision and VBJ has requested that it review that decision, it has 60 days in which to make a decision if it is not to find itself in the position of being deemed to have confirmed it. It needs to know why an applicant is dissatisfied with its decision if it is to be properly equipped to undertake the review. Without that knowledge, it is left only with the information it has previously gathered and its previous analysis of that information. It seems to me that the structure of the provisions means that the requirement in s. 344(3) must be complied with; an applicant must set out the reasons for making the request.

Has VBJ complied with s. 344(3)? I have summarised his request. With regard to the first 12 reasons that he gave for making his request, VBJ said that he proposed “… to supplement this material in the near future”. I read his letter not as suggesting that he intended to give further reasons but only that he intended to supplement the material. With regard to his last reason, he is suggesting that other reasons may be given at a later time. If given, those other reasons will relate to other instances in which VBJ claims that APRA had regard to material with which he was not provided and made findings upon which he was not given an opportunity to comment.

The fact that other information or other reasons may be given at a future time does not detract from the fact that VBJ’s request set out his reasons for making his request at the time he made it. If he chooses to give further reasons at a later time, there may be a question whether he can do so. The answer may depend upon whether he does so within the 21 day time limit or outside it. If outside it, it may depend on whether APRA has allowed him a further period under s. 344(2) in which to make a request. The answer may also depend on whether the requirement that a request must set out reasons means that a person may only give reasons in the context of making a request or whether they may be advanced separately. I do not need to answer the question in this case.

Section 41(2): the matters to which the Tribunal must have regard in exercising its power

Twenty years ago, Deputy President Hall gathered together the cases that had considered powers of the sort given in s. 41(2) and analysed the principles applicable to the exercise of that power. He did so in Re Repatriation Commission and Delkou[46] and his analysis remains current:
“(8) The power conferred by s41(2) of the Act is a power to make an order ‘staying or otherwise affecting the operation or implementation of the decision or a part of the decision’ sought to be reviewed. It is a power that enables the Tribunal to preserve the status quo pending the hearing and determination of the application for review where the ‘effectiveness’ of the review may be jeopardized if the decision, in the meantime, is carried into operation. Thus the power may be exercised when it is appropriate to do so to ensure that the application for review, if successful, is not rendered nugatory: cf Polini v Gray (1879) 12 Ch D 438 at 446 per Colton LJ; cf J C Scott Constructions v Mermaid Waters Tavern Pty Ltd [1983] 2 Qd R 243.
(9) The Tribunal commonly grants a stay in respect of deportation orders. Otherwise the effectiveness of the review would almost certainly be jeopardized because the applicant would be unable to attend the hearing and to enjoy the benefits of his application for review, if successful: cf Kioa v West (1984) 6 ALN N21. On occasions, the Tribunal has stayed the operation of decisions cancelling social welfare benefits where, deprived of that support, the applicant faces serious hardship. Notwithstanding the possibility that, if the application for review is unsuccessful, benefits may be paid in the meantime to which the applicant was not entitled and which may be irrecoverable, the Tribunal has recognized that, in a very practical sense, the review may be rendered nugatory unless the applicant is provided with the means of sustenance pending the hearing: cf Re Dart and Director-General of Social Services (1982) 4 ALD 553.
(10) However, the Tribunal has also recognized that the power conferred by s41(2) needs to be construed broadly and that it must be capable of adaptation to the wide variety of situations that arise in its diverse administrative review jurisdictions. Thus in Re Dekanic and Tax Agents' Board of New South Wales (1982) 6 ALD 240 at 241, the President said: ‘In applying s41, the principles which are adopted in other places for other purposes have no direct relevance. Moreover, the jurisdiction of the Tribunal is wide and diverse and it is not practicable to lay down a principle or a set of specific principles applicable to every type of case in respect of which there may be an application for a stay.’
A stay order may therefore be appropriate to ensure that the hearing takes place at a suitable time after there has been adequate preparation for the hearing by both parties: see RC and Director-General of Social Services (1981) 3 ALD 334 at 341; cf Re Dart at 556.”[47]
[46] (1985) 8 ALD 454
[47] (1985) 8 ALD 454 at 457-458

The following year, the Honourable JBK Williams, Senior Member, also considered the power. Having regard to previous decisions in the Tribunal, he set out the matters to which it was proper to have regard in deciding whether or not to grant a stay sought by the applicant for review in that case, the Commonwealth. Those matters were summarised in the headnote to the case:
“(a) the likely prospect of recovery by the Commonwealth of compensation paid to the respondent pursuant to the determination in favour of the respondent in the event that the determination was not upheld on review;
(b)the prospect of success of the Commonwealth's application for review of the determination;
(c)the hardship to the respondent that might result if a stay order were made.”[48]
[48] Re Commonwealth of Australia and Quirke (1986) 9 ALD 92 at 92

The principles were stated in the context of an application to review a decision regarding compensation paid to a Commonwealth employee. At times, they have been applied directly in the context of other decisions related to the payment of benefits to individuals.[49] At others, they have been adapted to suit the circumstances of decisions far divorced from such payments.[50] In each case, the principles are fashioned to securing the effectiveness of the hearing and determination of the application for review. For the reasons I gave in Re Kurukkal and Minister for Immigration and Multicultural and Indigenous Affairs,[51] I do not consider that the principles should be fashioned on the narrower basis of securing the processes of the hearing and the processes of the determination as decided in Re Crossan and Minister for Immigration and Multicultural and Indigenous Affairs[52] in the context of an application for review of a decision to cancel a visa under s. 501 of the Migration Act.
[49] e.g. Re Bishop and Secretary, Department of Social Security (1989) 18 ALD 661 (Senior Member Purcell)
[50] e.g. Re Edwards and Civil Aviation Safety Authority (2003) 74 ALD 572 (Senior Member Beddoe).
[51] (2004) 38 AAR 482
[52] [2002] AATA 216 at 27

What are those principles in the context of a decision disqualifying a person from being a trustee, investment manager or custodian of a superannuation entity made in the wider context of the SIS Act? They must always be directed to a consideration of:
what is desirable;
for the purpose of securing the effectiveness of the hearing and the determination of the application for review; and
after taking into account the interests of any persons who may be affected by the review.

I will begin with what is meant by “desirable”? Mr Crennan submitted that an order under s. 41(2) would only be desirable if VBJ can show that the decision has caused him a detriment of a kind different from that which necessarily follows from any disqualification decision. An applicant’s personal commercial interests or interests affecting his reputation should not support a stay order. Those interests are not consistent with the purpose of the SIS Act, which raises the protection of the public above the interests of the individual. If I were to adopt this approach, it seems to me that I would not be paying due regard what s. 41(2) requires of me. In so far as “desirable” is concerned, its meanings are, in so far as they are relevant in a matter such as this “… pleasing; worth having …”.[53] Just as a finding that a tenant is a desirable tenant does not guarantee that the tenant will always pay the rent on time,[54] a power to make a decision if it is desirable to do so does not guarantee that a certain decision will be made in any particular case.
[53] Chambers 21st Century Dictionary, revised edition 1999 and see also 2002, Shorter Oxford English Dictionary, 5th edition
[54] Smith v Land & House Property Corporation (1884) 28 Ch D 7 at 15-16 per Bowen LJ (CA)

What is worth having, and so desirable, is assessed after I take into account the interests of any persons who may be affected by the review of the decision. Those persons will include the parties to the application but will go beyond them to include those whose interests were taken into account in making the decision or whose interests were taken into account by Parliament in giving APRA the power to make the decision as part of its regulatory role.[55]
[55] Those persons may not be able to apply for review of the decision under s. 27(1) of the AAT Act as they may not be “persons … whose interests are affected by the decision” (emphasis added). That does not mean that they are not “persons who may be affected by the review” (emphasis added).

There is nothing in either s. 41(2) of the AAT Act or in the SIS Act that states that a particular applicant’s circumstances must be assessed on one side and the consequences of the decision compared with the consequences of the same type of decision to all other persons who have been the subject of it. Those other persons are not persons whose interests are affected by the review. They may have an interest in the outcome of the review so that they may compare the outcome with the outcome in those circumstances. That, however, is not an interest that may be affected by the particular review to which s. 41(2) refers.

Looking at the matter another way, I do not consider that taking account of a person’s personal commercial interests or interests affecting his reputation necessarily leads to the conclusion that a stay order would be appropriate in almost every case in which a disqualification order has been made under s. 120A. That is only one of the factors that must be taken into account. Even then, the extent to which each person’s personal commercial interests or interests affecting his reputation are affected will vary from case to case as will such matters as the nature of the behaviour that led to APRA’s deciding to make its decision and the likelihood of the public’s being affected if a stay order were made.

I agree that the scheme of the SIS Act makes it clear that, in regulating certain superannuation entities, Parliament intends to protect the public. This, though, does not mean that to grant a stay when a person relies on damage to his personal commercial interests or interests affecting his reputation would subvert Parliament’s intention in enacting the disqualification provisions in the SIS Act. It is Parliament that decided that s. 41(2) of the AAT Act would apply. It intended that the effect of aspects of its scheme of regulation and supervision could be stayed in certain circumstances. A stay order, if made in accordance with s. 41(2), would not subvert the scheme of the SIS Act but be consistent with it.

It will also be relevant to consider whether the decision under consideration is APRA’s reviewable decision or its decision after reviewing its reviewable decision. That will only be one factor but it may be relevant in assessing whether or not there is further material to be considered.

In summary, I consider that, in reaching a decision under s. 41(2) of the AAT Act, the matters I must take into account include:
the prospects of success of VBJ’s application for review of APRA’s decision;
the consequences for APRA in carrying out its functions under the SIS Act and for those whose interests are affected by the review of the decision if the stay were, or were not, granted;
the consequences for VBJ if the stay were, or were not, granted;
any conditions, such as undertakings, that could ameliorate any consequences of either granting or refusing a stay; and
whether review is sought of APRA’s reviewable decision or of its decision after its own review.

Section 41(2): the order that the Tribunal may make in exercising its power

The Tribunal may make an order:
affecting the operation or implementation of the decision; and
if it is appropriate to secure the effectiveness of the hearing and determination of the application for review.

I will begin with the “operation or implementation” of the decision. The ordinary meanings of “operation” include:
“… an action or series of actions which have a particular effect …”;[56] and
“… Exertion of power; the process of operating or the mode of operation; an effect brought about in accordance with a definite plan; action; activity. …
Operation of law. This term expresses the manner in which rights, and sometimes liabilities, devolve upon a person by the mere application to the particular transaction of the established rules of law, without the act or co-operation of the party himself.”[57]

Those of “implement”, on which “implementation” is based, are:

“… to carry out, fulfil or perform …”[58] and
“… put (a decision or plan) into effect …”.[59]

[56] Chambers 21st Century Dictionary, revised edition 1999 and see also 2002, Shorter Oxford English Dictionary, 5th edition

[57] Black’s Law Dictionary, 6^th edition, 5^th reprint, 1991

[58] Chambers 21st Century Dictionary, revised edition 1999

[59] 2002, Shorter Oxford English Dictionary, 5th edition

In the context of a disqualification decision, its operation is prescribed by s. 120A(4). It takes effect on the day it is made. That is the day on which it comes into operation and it does so by operation of that section without any step being taken beyond the making of the decision. Its implementation is something different. It includes all those steps that are required to give effect to the decision i.e. preparing the notice in accordance with s. 345 to give to the person disqualified, giving that notice to the person as required by s. 120A(6) and causing particulars of the notice to be published in the Gazette as required by s. 120A(7). I do not accept Mr Santamaria’s submission that s. 120A(7) gives APRA a choice whether it publishes particulars of a notice after its reviewable decision or after it has carried out its internal review. To my mind, it obliges APRA to publish whenever it has given notice under ss. 120A(6) or 344(6). That is the natural meaning of the words and is consistent with the purpose of the SIS Act to protect the public.

Some thought was given at the hearing to whether a decision under s. 41(2) of the AAT Act could affect APRA’s statutory duty to cause particulars of the notice given under s. 120A(6). It is true that s. 120A(7) imposes a statutory obligation upon APRA to do so but I do not consider that its statutory duty overrides any order made by the Tribunal so that it must publish the particulars in any event. I have reached this conclusion on three bases.

First, every stay order that the Tribunal makes affecting the operation or implementation of a decision alters the way in which an enactment would otherwise operate in relation to that decision. A decision to recover overpayment of a social security benefit, for example, comes into operation immediately. The fact that the amount becomes a debt owed to the Commonwealth[60] imposes an obligation on the officers of the relevant Department or Centrelink to recover it as soon as possible. Some decisions are implemented on a continuing basis and others once only. Re Webber and Secretary, Department of Social Security[61] provides and example. An order under s. 41(2) of the AAT Act had been sought in respect of a decision affirming that Mr Webber’s invalid pension should be paid at the married, rather than the single, rate under the Social Security Act 1991 (“SS Act”). The Tribunal analysed that decision as:
“… not one which once given is irrevocable either as to entitlement or as to the rate of payment. In this it differs from a decision that a lump sum of arrears is payable. That lump sum is computed once on the basis of events which have happened in the past and is paid once. Consequently, as in the case of Delkou, it can be said that once it has been paid, there is nothing left. All that can be done has been done. The case of continuing payments is different. It is a matter of practicality that they are not calculated, one each pension-day and that the amount of each instalment is calculated by dividing an annual amount by 26. The reality is that a different amount could be paid on each pension-day if the circumstances of the pensioner changed with that frequency as it is reviewable at any time.”[62]

A power to order a stay would have little, if any, use if it could not be used to affect what would otherwise be statutory obligations.

[60] Social Security Act, s. 1222A

[61] (1989) 18 ALD 422

[62] (1989) 18 ALD 422a at 423

The second basis is a different view of the first. The courts have recognised that a statutory power to order a stay may affect statutory obligations and may do so even when they have taken effect in law. In Long v Minister for Immigration and Multicultural and Indigenous Affairs,[63] RD Nicholson J recognised that a statutory power may stay a decision that has taken effect in law. At that time, ss. 482(2) and (3) of the Migration Act provided that “… orders staying, or otherwise affecting the operation or implementation of the judicially-reviewable decision, or part of that decision”[64] could be made if an application for review had been made under ss. 476 or 477 of the Migration Act in relation to such a decision and the orders that could be made were those “that the Court or Judge considers appropriate for the purpose of securing the effectiveness of the hearing and the determination of the appeal”.[65] His Honour said of the decision by the Minister for Immigration and Multicultural and Indigenous Affairs to cancel Mr Long’s permanent residency visa:
“… absent statutory authority of the type which appeared in the former s 482 of the Act, the Court has no power to stay an administrative decision which has taken effect in law so as to affect legal rights so that there is no continuing aspect of the decision remaining to be stayed. If, however, the decision has continuing effects the Court has power, subject to any statutory provision, to stay those effects or some of them subject to it being otherwise appropriate for a stay order to be made. In this respect I note that s 15(1) of the Administrative Decisions (Judicial Review) Act distinguishes between the suspension of the operation of the decision and a stay of all or any proceedings under the decision.
I do not consider that a different result can be reached by placing reliance on s 23 of the Federal Court of Australia Act as the accepted source of the Court’s power to stay. This is because, absent such a provision such as the former s 482(2), the decision to the extent it has taken effect is beyond stay.”[66]
[63] (2002) 122 FCR 159
[64] Migration Act, s. 482(3)
[65] Migration Act, s. 482(2)
[66] (2002) 122 FCR 159 at 166

The third basis arises from the nature of APRA’s obligation under s. 120A(7). It is an obligation to publish particulars of the notice “as soon as practicable”. Publication is an aspect of the implementation of the decision. What amounts to publication as soon as practicable must be assessed in light of any order made by the Tribunal using its power under s. 344(10) of the SIS Act and s. 41(2) of the AAT Act to affect the implementation of the decision. The Tribunal’s decision would not be overriding APRA’s statutory obligation; rather, APRA’s statutory obligation is determined by reference to s. 120A(7) as affected by any order made under s. 41(2) of the AAT Act.

Had APRA already published a notice before the Tribunal made an order, the Tribunal could not make an order affecting that publication. There would have been nothing left of the implementation to stay. Had APRA lodged the notice for publication but it had not yet been published, there may be something left to stay but that would depend on the circumstances as they are found to exist if that case ever arises.

Should an order be made under s. 41(2) in this case?

In seeking an order, VBJ relied on the effect that notice of his disqualification would have on his personal commercial interests or interests affecting his reputation. He illustrated the effect on his interests by reference to his need and ability to attract clients and, consequently, his future employment. VBJ referred also to the effect that the notice would have on his current work with a client that was unrelated to superannuation entities. He is a member of various boards and groups that are not concerned with superannuation. At the moment, he is a director of the trustee of his own personal superannuation fund. That is a position which he cannot hold. At the time of the hearing, VBJ was seeking legal advice as to his position and that of his fund. It may be that, in the short term, his personal superannuation fund remains intact according to s. 17A(4) of the SIS Act, to which Mr Crennan drew my attention. Although VBJ can no longer be a trustee of his personal superannuation fund as required by s. 17A(1)(d)(i), it will not cease to be self managed superannuation fund until six months have passed.[67]
[67] SIS Act, s. 17A(4)(b)

VBJ stressed that his career “… is not that of an employee who accepts work from others. In this sense, it is vastly different from the life of a public servant.”[68] It may be or it may not be vastly different in some senses but, there is one respect in which there is no difference between VBJ and public servants or between VBJ and anyone else for that matter. It is a common view that:
“… he that filches from me my good name
Robs me of that which not enriches him,
And makes me poor indeed.”[69]
[68] VBJ’s affidavit at [18]
[69] Othello, William Shakespeare, Act 3 Scene 3, l. 155

“Filches”[70] is not an apt word when a statutory body has made a decision using the legislative power it has been given and when it implements its decision according to its statutory obligations. Putting that to one side, the sentiment remains appropriate. The effect that publication will have on VBJ’s good name is a relevant consideration. His present employer is aware of the proceedings but others are not. I accept that publication will have some impact even though it is difficult to quantify what that impact will be. He has estimated that, in financial terms, he has lost in the region of $100,000 each year in the salary he could have expected had he not revealed APRA’s investigation to his employer.
[70] “To steal something small or trivial …”; Chambers 21st Century Dictionary, revised edition 1999

Publication of the particulars in the notice of APRA’s decision place members of the public generally and those engaged in the superannuation industry in particular on notice of a person’s disqualification. They can take that into account in considering their business dealings and in arranging their affairs if it has relevance to them. Publication also assists in monitoring that disqualified persons do not act as trustees of superannuation entities or as responsible officers.

The decision itself is made to protect the public and those engaged in the superannuation industry from behaviour that Parliament has specified are inappropriate. On the information that I have, I consider that the interests of the public outweigh VBJ’s interests in so far as the operation of the decision is concerned. VBJ has implicitly recognised this when he undertook not to accept a position as a trustee, investment manager or custodian of a superannuation entity or a responsible officer of a trustee, investment manager or custodian of a superannuation entity. I do not consider it desirable to make an order affecting the operation of the disqualification of VBJ.

The implementation of the decision is another matter. It has been made and VBJ is disqualified from holding those positions with a superannuation entity. He has undertaken that he will not hold them and, if he should break his undertaking he would face various ramifications. Among them would be the very real likelihood that he would be prosecuted for committing offences under the SIS Act. The public is well protected in these circumstances. Deferral of the publication of the particulars of the notice of VBJ’s disqualification will not affect them adversely at this stage. It will not affect APRA’s interests adversely either at this stage.

From VBJ’s point of view, publication will affect both his reputation and his commercial interests. They will be affected at a time when he has requested review of that decision and given detailed reasons in support of his request. Many of them are framed in terms more suited to an application for judicial review than a merits review that APRA will undertake but, even so, they raise issues that require consideration.

Taking all these matters into account, I have decided that I should make an order affecting the implementation of APRA’s reviewable decision. It is appropriate to do so in order to secure the effectiveness of the hearing before APRA. The effect of s. 344(10) is that s. 41(2) of the AAT Act applies to APRA’s review in the same way that it would apply to the Tribunal’s review of a decision had an application been made to it. The effectiveness of the hearing is not limited to protecting the subject matter of the review or to protect the efficacy of VBJ’s rights. If VBJ’s name is revealed at this stage, I am satisfied that there is a very real possibility that the effectiveness of APRA’s review of its reviewable decision would be significantly diminished. APRA could conduct its review effectively as far as its own procedures and processes were concerned but the effectiveness of that hearing and APRA’s determination of his request would be diminished for VBJ. Even if APRA were to revoke its decision and VBJ were completely vindicated, his reputation would have been called into question and doubts raised about him. Such questions and doubts linger in the minds of many once they have been raised in the first place.

Should an order be made under s. 35(2) of the AAT Act?

The Tribunal has only a very limited jurisdiction in relation to VBJ’s request for a stay order. The hearing of his request is a hearing of a proceeding relating to a reviewable decision. Section 334(11)(b) gives the Tribunal power to give directions or a kind referred to in ss. 35(2)(b) or (c). Section 35(2) of the AAT Act provides that:
“Where the Tribunal is satisfied that it is desirable to do so by reason of the confidential nature of any evidence or matter or for any other reason, the Tribunal may, by order:
(a)direct that a hearing or part of a hearing shall take place in private and give directions as to the persons who may be present; and
(aa)give directions prohibiting or restricting the publication of the names and addresses of witnesses appearing before the Tribunal; and
(c)give directions prohibiting or restricting the publication of evidence given before the Tribunal, whether in public or in private, or of matters contained in documents lodged with the Tribunal or received in evidence by the Tribunal; and
(d)give directions prohibiting or restricting the disclosure to some or all of the parties to a proceeding of evidence given before the Tribunal, or of the contents of a document lodged with the Tribunal or received in evidence by the Tribunal, in relation to the proceeding.”[71]
[71] As s. 344(11) refers only to ss. 35(2)(b) and (c), there is a question whether the Tribunal would have power to give directions under the remaining provisions of s. 35(2). This is not a question I need answer in this case.

In considering whether a hearing of a proceeding should be held in private or whether publication, or disclosure to some or all of the parties, of evidence given in, or received by, the Tribunal or of matter in documents lodged in the Tribunal[72] should be prohibited or restricted, the Tribunal must take as the basis of its consideration the principle that it is desirable that the hearing be held in public. That means not only that it is desirable that the proceedings be held in public but also that it is desirable that evidence given in, or received by, the Tribunal and that matter in documents lodged with the Tribunal should be made available both to the public and to the parties. Although this principle is at the foundation of its consideration, the Tribunal is required to give due regard to any reasons given to it as to why the hearing should be held in private or why publication or disclosure of the evidence or of matter in a document lodged with the Tribunal should be prohibited or restricted.[73]
[72] AAT Act, s. 35(3)
[73] AAT Act, s. 35(3)

Why it is desirable to hold hearings in public and why that desirability should be the basis of the Tribunal’s consideration under s. 35(2) was explained in Re Pochi and Minister for Immigration and Ethnic Affairs.[74] Brennan J said that public hearings are:
“calculated to ensure that public confidence in proceedings to administer justice is both warranted and maintained. It is a principle of particular importance to a Tribunal which is engaged in reviewing the exercise of administrative power, for administration has hitherto been a cloistered process (McPherson v McPherson [1936] AC 177 at 200) and its exposure to public scrutiny is calculated to enhance greater public confidence in it.”[75]
[74] (1979) 26 ALR 247 at 270
[75] (1979) 26 ALR 247 at 270

This is given statutory imprimatur in s. 35(1) of the AAT Act. Brennan J continued in Re Pochi:
“… the powers conferred upon this Tribunal by s 35(2) are not intended to lie dormant – they are there to be exercised, albeit sparingly. The purpose of their exercise is to secure to the Tribunal the availability of as much relevant information as possible, without violating the confidentiality which a party, a witness or the public is properly entitled to preserve (though a proper entitlement to confidentiality is not lightly established). A Court may be constrained to violate that confidentiality in order to facilitate the flow of relevant information to it, and if the exclusion of the public or even of a party is essential to preserve the proper confidentiality of the information needed to determine the application, that is a price which has to be paid, however reluctantly.
An order excluding the public may be justified more readily than an order excluding a party, but strict criteria govern the making of such an order. There must be a real possibility of doing injustice to, or inflicting a serious disadvantage upon, a party, a witness or a person giving information if the proceedings were in public; or it must clearly appear that the publication of the proceedings would be contrary to the public interest; or it must appear that the information to be given in the proceedings is of a kind described in s 36 (though in the last case, it is relevant that the Attorney-General has not given a certificate under that section). Where it is contended that publication of the proceedings would be contrary to the public interest, it is difficult to envisage a case justifying exclusion of the public which a court would not deal with by refusing to admit the evidence: this class of case is a narrow one. Where the publicity which traditionally marks curial proceedings may inhibit the production of evidence or lead to its rejection, the power conferred upon the Tribunal by s 35(2) authorizes it to remove these impediments to the receipt of information. Yet the power is conferred in order to do justice in exceptional cases – that is to say, where the ‘principle that it is desirable that hearings of proceedings before the Tribunal should be held in public’ cannot be applied. Some of these exceptional cases are statutorily defined: see the Insurance Act 1973 s 63(14).”[76]
[76] (1979) 26 ALR 247 at 272-3

In Re Kanina Banner Pty Ltd v Minister for Health and Ageing,[77] I said of the Tribunal’s power under s. 35(2):
“24. Unlike the situation in the courts and bearing in mind that the class of case justifying the exclusion of the public is a narrow one, it is clear that s. 35(3) does not suggest that there are any particular categories of matter that may be regarded as exceptions to the principle that the proceedings be held in public. The reasons that may be put forward to be weighed in the scales need only be reasons that relate to limiting the public nature of the proceedings in some way. It is inevitable, of course, that over the years it has become possible to develop categories of the reasons that have been accepted as tilting the balance against the public nature of the proceedings to a greater or lesser extent. There are, for example, cases in which an order has been made restricting access to certain information on the basis that its disclosure would lead to the Tribunal’s no longer being given access to a certain type of information that an administrative body requires for its on-going decision-making and that information was necessary to secure effective administration. That was a relevant factor in Re Everfresh Seafoods Pty Ltd and Australian Fisheries Management Authority (1999) 58 ALD 581 at 590 and Re Nolan and Minister for Immigration and Ethnic Affairs (1986) 9 ALD 407 at 414. Re Nolan also took into account that disclosure would be contrary to the public interest in the effective administration of the prison system (9 ALD at 414).
25. In other cases, the Tribunal has made orders excluding access to material not only by the public but also by the applicant. Such a step is a grave one and not one taken lightly. That is all the more so because it effectively overrides a basic principle that a person is entitled at common law and under the AAT Act (s. 36(4)) to be “… made aware of all relevant matters” that are to be taken into account in determining the issues affecting him or her. It was a step taken in Re Pochi when Brennan J concluded that a party could only be excluded when:
‘… an applicant’s interest in a fair hearing to him can be over-ridden only by another and superior interest, and then only when reconciliation of the two interests is impossible. But the criterion may be satisfied when a public interest in confidentiality clearly appears. In R v Home Secretary; Ex parte Hosenball [1977] 1 WLR 766 Lord Denning MR acknowledged that the public interest in confidentiality can be paramount. He said at 782: “When the public interest requires that information be kept confidential, it may outweigh even the public interest in the administration of justice.”
In the present case, the public interest in protecting the confidentiality of the sources of information obtained to combat crime conflicted with the interests of the applicant in meeting the case made against him. The public interest prevailed, as it did in Hosenball’s case …’ (page 273)”[78]
[77] (2002) 66 ALD 663
[78] (2002) 66 ALD 663 at 669-70

It is premature to speak of a hearing for APRA is yet to review its reviewable decision. It seems to me that the revelation of the material that has been submitted to the Tribunal in support of the applications under ss. 41(2) and 35(2) would undermine the effectiveness of APRA’s review of its decision. They should not be revealed at this stage.

Orders and directions

For the reasons I have given, I continue the orders that I made at the hearing on 16 June 2005 and made in written form on the following day. That is, until the respondent has determined VBJ’s request for review of its reviewable decision dated 9 June 2005, I:
1.order that the implementation of the respondent’s reviewable decision dated 9 June 2005 be stayed until the respondent has determined VBJ’s request for review to the extent that it may not:
(1)publish in the Commonwealth Government Gazette particulars of the notice given to VBJ under s. 120(6) of the Superannuation Industry (Supervision) Act 1993; and
(2)make any public disclosure regarding its decision; and
2.direct that, in the Tribunal:
(1)the applicant be described by the letters “VBJ” for the purpose of the application;
(2)publication of the name of the applicant and of any material tending to identify him, either of the entities described in the reasons for decision as SFund and Superannuation Pty Ltd (“SPL”) or any entities in which he has an interest, be restricted to members and staff of the Tribunal, the parties and their representatives and professional advisers and staff of Auscript; and
(3)all hearing shall be held in private.
I certify that the seventy preceding paragraphs are a true copy of the reasons for the decision herein of
Deputy President S A Forgie,

Signed: ...............................................................

Nathaniel Wills Associate

Date of Stay Hearing               16 June 2005
Date of Decision  20 June 2005
Counsel for the Applicant        Mr J G Santamaria QC with Mr D M Maclean SC
Solicitor for the Applicant       Corrs Chambers Westgarth
Counsel for the Respondent     Mr M J Crennan SC with Mr S P Donaghue
Solicitor for the Respondent     Australian Prudential Regulation Authority

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Citations

Re VBJ and Australian Prudential Regulation Authority [2005] AATA 642

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