ROBERT REGINALD STITT and AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2009] AATA 601

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2007/4414

GENERAL ADMINISTRATIVE DIVISION		)
Re		ROBERT REGINALD STITT

Applicant

And AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Respondent

DECISION

Tribunal The Hon B J M Tamberlin QC, Deputy President
Mr S E Frost, Member

Date14 August 2009 

PlaceSydney

Decision The decision under review is set aside.

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The Hon B J M Tamberlin QC

Deputy President

168.In addition, you failed to perform appropriate duties in relation to your position as a director of HIH Investment Holdings Ltd.

169.I have concluded that you fell below the standard of what is to be expected of a director of a general insurer. In particular, you failed in a number of instances to consider matters for your decision with the degree of due care and diligence required of a director in your position. As noted at paragraph 5 above, competence in the performance of your business duties is one of the criteria for fitness and propriety under the Insurance Act. As you were a director of HIH, my assessment as to whether you fulfilled your duties as a director with the requisite degree of due care and diligence is fundamentally relevant to your competence, and thereby to my assessment of your fitness and propriety under the Insurance Act. Accordingly, I consider that you fail to meet the criteria for fitness and propriety of competence in the performance of your duties as a director. These matters demonstrate that you have failed to meet standards of fitness and propriety under subsection 25A(1) of the Act on the basis of your failures to abide by the duties to consider matters for the decision of the board with due care and diligence.

9.      The conclusions of the later delegate, Ms Tongue, confirming the decision of Mr Kennedy, were as follows:

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39.Based on the material above, I find that your conduct demonstrates a failure to adequately consider three significant transactions, namely the re-purchase of CareAmerica, the acquisition of FAI, and a joint venture arrangement with Allianz, prior to HIH entering into these transactions.  I also find that, as a member of the HIH audit committee, you authorised the inclusions of misleading material in the financial reports for the year ended 30 June 2000; that you failed to take steps to understand and consider the provisioning of outstanding claims liabilities; and that you failed to discharge your duties as a director of HIH Investment Holdings.

40I consider that your conduct demonstrates that you failed to fulfil your duties as a director with the requisite degree of due care and diligence, and that this conclusion is fundamentally relevant to your competence and thereto the assessment of your fitness and propriety pursuant to section 25A of the Insurance Act.

41On the basis of my concerns as to your competence, I find that you are not a fit and proper person to be or act in a section 24 position. Accordingly, I confirm…