Richard Hill and Members of the Companies Auditors and Liquidators Disciplinary Board Australian Securities & Investments Commission JOINED PARTY
[2015] AATA 447
•25 June 2015
[2015] AATA 447
Division GENERAL ADMINISTRATIVE DIVISION File Numbers
2014/6346
Re
Richard Hill
APPLICANT
And
Members of the Companies Auditors and Liquidators Disciplinary Board
RESPONDENT
And
Australian Securities & Investments Commission
JOINED PARTY
DECISION
Tribunal The Hon. Brian Tamberlin QC, Deputy President
Date 25 June 2015 Place Sydney The Tribunal affirms the decision of the respondent to publish a copy of its reasons on its website and to disseminate to appropriate media operations and professional bodies and post on its website a media release in the form attached to its reasons of 9 December 2014 and marked “Schedule A”. Such publication is not to occur until the expiry of the stay granted by this Tribunal on 22 December 2014 and continued until further order on 22 May 2015 unless the Tribunal, the Federal Court of Australia or the Federal Circuit Court of Australia otherwise orders.
The application with respect to the decision on costs is dismissed by consent for lack of jurisdiction.
................................[sgd]........................................
The Hon. Brian Tamberlin QC, Deputy President
CATCHWORDS
CORPORATIONS LAW – auditor’s registration – whether original decision maker’s decision should be publicised – whether there is a difference between the findings of original decision maker and the Tribunal on review – decision under review affirmed
PRACTICE AND PROCEDURE – jurisdiction – whether applicant should pay costs for proceedings before respondent – decision dismissed by consent for lack of jurisdiction
LEGISLATION
Corporations Act 2001 (Cth) ss 1292(1)(d), 1296(1B)
Administrative Appeals Tribunal Act 1975 (Cth) ss 43AA, 43(1), 43(6)
CASES
Re NHPT and Members of the Companies Auditors and Liquidators Disciplinary Board and Anor [2015] AATA 245
Davies v Australian Securities Commission (1995) 59 FCR 221
Gould v Companies Auditors and Liquidators Disciplinary Board [2009] FCA 475
REASONS FOR DECISION
The Hon. Brian Tamberlin QC, Deputy President
25 June 2015
These reasons concern an applications for review of the respondent’s decision of 9 December 2014 requiring the applicant to pay the Australian Securities & Investments Commission’s (ASIC) costs in the proceedings before the respondent (the “costs issue”) regarding the suspension of the applicants registration as an auditor and ordering that a copy of the respondent’s reasons be published on their website and a media release regarding the decision be disseminated (the “publicity issue”).
On 24 April 2015 I published my reasons affirming the decision of the respondent in relation to the suspension for a period of 12 months in Re NHPT and Members of the Companies Auditors and Liquidators Disciplinary Board and Anor [2015] AATA 245. At the request of the parties, I stood over for further argument the application for review of the respondent’s decision in relation to publicity and costs.
On the review hearing for publicity and costs, the applicant and ASIC made further written and oral submissions and provided draft orders in relation to these issues. The respondent took a passive role and sought only to assist the Tribunal, if required.
In relation to the costs issue, the applicant and ASIC now agree that the application should be dismissed for want of jurisdiction.
The remaining question relates to publicity of the respondent’s decision and its reasoning.
PUBLICATION
The respondent’s decision on publicity was that under s 1296(1B) of the Corporations Act 2001 (Cth) (the Act) it would cause to be published on 23 December 2014, being 14 days from the date of its decision, a copy of its’ decision and reasons on its’ website and to disseminate to appropriate media operations and professional bodies and post on its website a media release, in the form attached to its reasons for decision.
The applicant contends the short question which arises in relation to publicity is whether the decision and reasons of the respondent should be published, in addition to the decision and reasons of this Tribunal which were published on 24 April 2015.
The applicant’s submission with respect to this question is that there is a significant difference in the findings made by the respondent in relation to the suspension decision and those made by the Tribunal in its reasons on review affirming the decision. On review the Tribunal has made findings that the applicant failed to comply with the conditions on his registration as an auditor and failed to carry out or perform adequately and properly his duties as an auditor and therefore should have his registration suspended for a period of 12 months.
The respondent had made findings that the applicant had committed such breaches and in addition that he was not a fit and proper person to remain registered as an auditor.
The applicant contends that it is inappropriate and unreasonable that the decision and reasons of the respondent should be made public in circumstances where this Tribunal on review made no specific finding that the applicant was not a fit and proper person within the meaning of section 1292(1)(d) of the Act. He submits that that the only appropriate and reasonable publication under section 1296(1B) of that Act should be of the Tribunal’s decision and reasons and that there should not be any publication which discloses the finding of the respondent as to his not being a fit and proper person, which, it is said, was not adopted by this Tribunal. As the Tribunal has all the powers and discretions conferred on the respondent for the purposes of the review then the reasons and the decision of this Tribunal displace the reasoning of the respondent because the Tribunal stands in the shoes of the original decision-maker: see ss 43(1) and 43(6) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act).
It is further submitted that the only operative decision and reasons which are “definitive”, and which it is reasonable and appropriate to publish, are those relating only to the findings of this Tribunal as to breaches of duty with no specific finding as to whether the applicant is a fit and proper person. The authority of the Tribunal as the review body may be undermined if its reasons are not accorded primacy over those of the primary decision-maker.
In my view the Tribunal’s decision to affirm the respondent’s decision to suspend for a specified period of 12 months means that the decision of the Board continues to have effect and is reinforced. Indeed it confirms the correctness of that decision.
It is submitted by the applicant that a finding that a person is not “fit and proper” carries a particular adverse meaning which could have a significant impact on the applicant in circumstances where the reasoning and findings of the respondent have been displaced or replaced by the reasons of the Tribunal which did not make such a finding.
The applicant further submits that because there will be an alteration under s 43AA of the AAT Act of the text of the Tribunal’s decision and reasons of 24 April 2015 as to the date on which the decision will come into effect then there will been a “variation” so that s 43(6) is enlivened and the decision of the Tribunal is deemed to be that of the Board. Thus the decision and reasons which should be made public are only those of the Tribunal.
I do not accept this submission because there is a distinction between the “correction” of an obvious textual error and the making of a “variation” to a decision.
Nor do I accept that the correction to text means that the reasoning of the respondent ceases to have any relevance so that it should not be published.
In the circumstances I consider it is reasonable and appropriate that the text of the reasoning and decision of the respondent on suspension and publication should be disclosed to the public and that the public have access so that the process of review is seen to be transparent. The findings against the applicant by the Tribunal on the suspension application are sufficiently serious and important to warrant the suspension of the applicant for a period of 12 months on the findings of the Tribunal which affirmed the decision of the respondent. It is important for the protection of the public that there should be transparency in relation to the history and public record of the proceedings concerning the applicant’s conduct. To suppress the reasoning of the respondent would be to present an incomplete picture as to the findings which have in fact been made in the course of the litigation and to misrepresent the history of the matter. Where a member of the public will have access to both the reasons for decision of the Tribunal and the respondent there is an opportunity for the applicant to point to the later findings and reasoning of the Tribunal and refer to any difference in the findings. There is no real danger of a properly informed member of the public being “misled” where there is public access to the whole record.
I note in passing that in the case of Davies v Australian Securities Commission (1995) 59 FCR 221, Hill J expressed the view that a failure to carry out or perform adequately and properly the duties of an auditor will “ordinarily” mean that he is not a fit and proper person. I also note that Lindgren J in Gould v Companies Auditors and Liquidators Disciplinary Board [2009] FCA 475 at [102] took a different view and he considered that failure to perform adequately or properly the duties of a liquidator will, without more, demonstrate that the person is not a fit and proper person to be registered as such. To the extent these observations are in conflict, I prefer the analysis in Gould because it is a more recent decision and gives full effect to the use of the word “otherwise” in s 1292 of the Act. The term “ordinarily” used by Hill J is uncertain in its operation.
The effect of affirming the decision of the respondent in relation to the suspension in this matter with the correction as to date of operation means that the respondent’s decision continues to be the operative decision. Where there is an affirmation of the respondent’s decision the Tribunal’s decision does not become the respondent’s because the respondent’s decision continues to have force and effect. There is no room for a variation or substitution in the case of an affirmation. I do not accept the submission of the applicant that the decision and reasoning of the respondent should not be published.
DECISION
The application in relation to costs is dismissed by consent.
The Tribunal affirms the decision of the respondent to publish a copy of its reasons on its website and to disseminate to appropriate media operations and professional bodies and post on its website a media release in the form attached to its reasons of 9 December 2014 and marked “Schedule A”. Such publication is not to occur prior to the expiry of the stay granted on 22 December 2014 and continued until further order on 22 May 2015 unless the Tribunal, the Federal Court of Australia or the Federal Circuit Court of Australia otherwise orders.
CONSEQUENTIAL ORDERS
As a consequence of the above decision, there are several related matters with respect to confidentiality and the stay in this matter which it is also appropriate to address in these reasons. I make the following orders in this regard:
(a)On and from 23 July 2015, orders 1(b) and 1(c) of the stay granted on 22 December 2014 is revoked, unless an appeal is lodged, in which case the orders are to continue until the appeal is determined, unless the Tribunal, the Federal Court of Australia or the Federal Circuit Court of Australia otherwise orders.
(b)On and from 23 July 2015, the order made by the Tribunal pursuant to s 35(2) of the AAT Act on 14 January 2015 is revoked and the pseudonym ‘NHPT’ is to be replaced with the applicant’s name, unless an appeal is lodged, in which case the order is to continue until the appeal is determined, unless the Tribunal otherwise orders.
(c)The parties are directed to notify the Tribunal of any appeal lodged in relation to these proceedings by 23 July 2015.
I certify that the preceding 22 (twenty-two) paragraphs are a true copy of the reasons for the decision herein of The Hon. Brian Tamberlin QC, Deputy President ............................[sgd]............................................
Associate
Dated 25 June 2015
Date of hearing 15 June 2015 Date final submissions received 18 June 2015 Counsel for the Applicant Mr T Castle Solicitors for the Applicant Sophie Grace Legal Pty Ltd Solicitors for the Respondent Australian Government Solicitor Counsel for the Joined Party Mr A Conolly Solicitors for the Joined Party In house
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