Sasso and Australian Securities & Investments Commission
[2024] AATA 2617
•23 July 2024
Sasso and Australian Securities & Investments Commission [2024] AATA 2617 (23 July 2024)
Division:TAXATION AND COMMERCIAL DIVISION
File Number(s):2024/2906
Re:Pedro Eduardo Sasso
APPLICANT
Australian Security and Investments CommissionAnd
RESPONDENT
DECISION
Tribunal:Senior Member D Benk
Date:23 July 2024
Place:Sydney
The applications for stay and confidentiality orders pursuant to ss 41 and 35 of the Administrative Appeals Tribunal Act 1975 (Cth) are refused.
.............................[SGD] .............................
Senior Member D Benk
Catchwords
PRACTICE AND PROCEDURE – application for stay of decision and confidentiality orders – applicant banned from providing any financial services for five years – whether discretion of the Tribunal is enlivened to grant a stay – whether a stay is desirable for the purpose of securing the effectiveness of the hearing – applicant no longer providing financial services – whether consequences for applicant and third parties substantiated – public interest considerations – presumption of openness and transparency of proceedings – whether grounds for confidentiality orders made out – reputational damage and financial hardship not sufficient – applications for stay and confidentiality orders refused
Legislation
Administrative Appeals Tribunal Act 1975 (Cth) ss 35, 41
Australian Securities and Investments Commission Act 2001 (Cth) s 1
Corporations Act 2001 (Cth) ss 12CB, 920A, 920B, 1041H(1), 911A(1)Cases
Dart and Director-General of Social Services (1982) 4 ALD 553
Birdseye v Tax Practitioners Board [2020] FCA 1235
Poidevin and Australian Securities and Investments Commission [2018] AATA 124
McLean v Australian Securities and Investments Commission [2016] AATA 22
Rawson Finances Pty Ltd v Commissioner of Taxation (2013) 133 ALD 39
Australian Securities and Investments Commission v Adler (2002) 42 ACSR 80
Australian Securities and Investments Commission v Forge [2007] NSWSC 1489
Scott and Australian Securities and Investments Commission [2009] AATA 798
Trading Life Services Pty Ltd and Australian Securities and Investments Commission [2022] AATA 4746
Australian Securities & Investments Commission v Administrative Appeals Tribunal [2009] FCAFC 185
Daly and Australian Securities and Investments Commission [2020] AATA 1516
Australian Securities and Investments Commission v McCormack [2017] FCA 672
Devasahayam and Comcare [2010] AATA 784
Flood & Secretary, Department of Social Security (1994) 33 ALD 182
Re Lawrance and CRS Australia (2004) 85 ALD 238
Re Pochi and Minister for Immigration and Ethnic Affairs [1979] AATA 64
Re Pochi and Minister for Immigration and Ethnic Affairs (1979) 2 ALD 33
REASONS FOR DECISION
Senior Member Benk
23 July 2024
INTRODUCTION
On 2 May 2024, the Australian Security Investments Commission (the respondent) issued a five-year banning order[1] on Mr Pedro Sasso (the applicant) preventing him from performing any function involved in carrying on of a financial services business and from controlling, either alone or with others, an entity that carries on such a business.
[1] An order made under sections 920A and 920B of the Corporations Act 2001 (Cth).
The applicant seeks review of that decision by the Administrative Appeals Tribunal (the Tribunal). Stay, confidentiality and non-publication orders were sought and the subject of this interlocutory hearing.
I have had regard to the written and oral submissions and exhibits, which consisted of over 11,000 folios. I was also referred to several Tribunal decisions by both parties. It is axiomatic that each case turns on its own factual circumstances.
BACKGROUND
It is undisputed the applicant was the sole director and company secretary of Europe FX who was a Corporate Authorised Representative (CAR) under Union Standard International Group Pty Ltd (USG) Australian Financial Services license between 24 May 2018 to 31 January 2020. As the corporate authorised representative, Europe FX offered contracts for difference (CFD) including margin foreign exchange contracts to clients on behalf of USG using a trading MetaTrader4 trading platform. USG ultimately terminated its CAR agreement (effective on 31 January 2020) with Europe FX maintaining it had breached its obligations, noting that there had been 67 complaints made about its conduct.
The respondent commenced an investigation. At all times the applicant maintained he was not a party to any alleged misconduct of Europe FX or USG; or alternatively if there was to be a finding of misconduct, it was appropriately directed elsewhere. For the purposes of the investigation, the respondent, whilst acknowledging the conduct and involvement of various third parties, concentrated on the applicant’s management of Europe FX in his role as a director and corporate authorised representative for the period 30 April 2019 to 31 January 2020.
Following investigation which involved the review of 15 investor affidavits, the respondent determined the applicant had breached obligations under the Corporations Act 2001 (Cth) (the Corporations Act) by engaging in unconscionable conduct[2]; misleading statements to encourage deposits and discourage withdrawals;[3] engaged in the provision of personal advice, trading strategies and recommendations when not licensed to do so[4] amongst other matters. Further the respondent determined the applicant was not adequately trained or competent to provide financial services or carry on such business as his conduct demonstrated little oversight or knowledge of day to day operations; he was inactive in mitigating or addressing “significant” problems as they arose; he abrogated his responsibilities for supervision and oversight to persons offshore without a monitoring system in place; failed to investigate issues with regards to complaints as they arose and despite termination of the CAR continued to enter into contracts with third parties without consideration of the financial impact on EuropeFX.
[2] Section 12CB of the Corporations Act.
[3] Section 1041hH1) of the Corporations Act.
[4] Section 911A (1) of the Corporations Act.
The respondent acknowledged there may be an overlap in compliance obligations, however determined the blanket delegation of compliance tasks to third parties without safeguards was sufficient to warrant the above findings, especially as the applicant was the sole director. The respondent accepts that delegation of tasks is entirely within the orbit and discretion of a director, however the requirements of that office do not allow for an abandonment of the duties of a director in both financial and non-financial obligations with regards to care and diligence.
The respondent did not make any findings of dishonesty in dealings, but rather maintains the applicant was ignorant and incompetent in the management of his obligations resulting in significant client losses.
It was on these findings[5] that a five-year banning order was imposed by the respondent.
[5] T docs folios p 377 to 395.
RELIEF SOUGHT
For the purposes of these proceedings, the applicant seeks the following relief:
(a) pursuant to s 41(2) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act), an order staying the operation and implementation of the Banning Order; and
(b) pursuant to s 35(2) of the AAT Act, an order that pending the final determination of the
Review Application or any further order of the Tribunal, that:(i) the applicant be described by a pseudonym for the purpose of protecting his identity; and
(ii) the hearing shall take place in private and that only the parties and their representatives and witnesses, the Tribunal and its staff may be present; and
(iii) the publication or disclosure of evidence or the contents of documents lodged with or received in evidence by the Tribunal is restricted to the parties and their representatives and witnesses, the Tribunal and its staff and the staff of Auscript.
STAY APPLICATION
The Tribunal’s stay power
The Tribunal’s stay power is found in s 41(2) of the AAT Act. It is available “for the purpose of securing the effectiveness of the hearing and determination of the application for review.” The power may only be exercised “if the Tribunal 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.”
Section 41(1) of the AAT Act makes clear that a reviewable decision ordinarily comes into effect and operates according to its terms even though an interested person has commenced review proceedings in the Tribunal. The stay power is discretionary and exceptional, in the sense the Tribunal must be satisfied it is appropriate to make an exception to the usual state of affairs contemplated under s 41(1).
At the interlocutory hearing, both parties provided submissions on the stay which followed the framework of Downes J in the authority of Scott and Australian Securities and Investments Commission [2009] AATA 798 at [4] (Scott) relevantly presenting arguments relating to;
·Prospects of success in the proceeding.
·The consequences to the Applicant if a stay is not granted.
·The public interest.
·The consequences to the Respondent, in carrying out its functions, if the stay is or is not granted.
·Whether the application for review will be rendered nugatory if the stay is not granted.
·Any other relevant matters.
These factors are not prescriptive and the weight, if any, to be given to any particular factor will depend on the facts and circumstances of the case, including the nature and content of the reviewable decision.
The prospects of success
When assessing the prospects of success, it is not the role of the Tribunal to conduct a preliminary hearing on the review application on the evidence before it.[6][7] Indeed, in this case, it would be near impossible given the legal issues raised and the volume of documents. Importantly, the applicant does not have to establish that his case will succeed upon a review of the merits of the decision. At most, all he has to establish is that grounds exist to enable the Tribunal to form a view that it would be ‘desirable’ in order to preserve the effectiveness of the review, to grant the stay.[8]
[6] Re Dart and Director-General of Social Services (1982) 4 ALD 553 at 555.
[8] Logan J in Birdseye v Tax Practitioners Board [2020] FCA 1235 (Birdseye).
Generally speaking, if the applicant were able to point to a strong case at this stage, that would count heavily in favour of a positive exercise of the discretion. If the applicant appeared to have a poor case, that would count against the exercise of the discretion. If it has an arguable case, this consideration would not count for or against the exercise of the discretion.
The applicant argues he has strong prospects of success in relation to the substantive review. He maintains he will not be found responsible for the misfeasance that has taken place as he did not control the overall supply and provision of financial services. It was emphasised that the respondent’s concerns were misplaced and misdirected as he has not had any involvement with the entity since at least 2020.
The respondent submits the applicant fails to appreciate the case against him. At all times, even during the initial investigation, he bypassed the allegations made against him as director and demonstrated little insight as to the serious issues at hand. The respondent emphasises the issue is not the activities of third parties, but rather that of the applicant in his personal capacity as director for the entity.
It is difficult to evaluate the merits of the substantive review application, (in the absence of a full hearing), especially where the applicant forecasts additional expert evidence. It is not clear on the material currently available that the applicant has a strong case overall, (particularly in regards to his obligations as a director) but at the same time there is some argument to be had given the contractual arrangements. In these circumstances, I find this consideration is at best neutral in favour of a stay.
The consequences for the applicant
The applicant submits the refusal of a stay would negatively impact him as he would not be able to rebuild his business and reputation, even if successful at final review.
The applicant addressed the consequences for himself and others of the refusal of a stay at some length in his affidavit’s. He submits he and his family would suffer significant financial hardship, and he would also incur reputational damage. Further, his company, Shuriken Consulting Hornsby Pty Ltd (Shuriken) (a company in which he provides accounting and advisory services) will likely suffer adverse financial consequences and prejudice if the Banning Order is not stayed and or made public. Three staff members and at least five hundred regular accounting clients could be affected by the banning order.
He also harbours fears CPA Australia would terminate his membership and the Tax Practitioners Board (TPB) would terminate his registration as a tax agent, which could result in the need for him to relinquish his 50% interest in Shuriken. With the loss of his primary source of income, the applicant forecasts default on liabilities, which will impact on his ability to care for his elderly mother given the flexibility that self-employment offers. He submits he would find it difficult to find alternative employment at the age of 59.
Besides these assertions, there was no probative evidence before me to support these claims despite the banning order being in place for a period of over seven weeks at the time of this interlocutory hearing.
In relation to the financial impacts on the applicant’s current occupation as a general accountant and tax practitioner, the respondent submitted the claims to be exaggerated and speculative and even if disciplinary action was taken by the CPA or TPB, internal and external review rights are available. Forecasted and hypothetical ramifications with other regulatory bodies cannot be grounds for a stay, and even if predictions crystallised, no reason was advanced as to why the business of Shuriken could not continue by the engagement of another practitioner who is a chartered accountant or registered tax agent.
I am prepared to acknowledge there will be some detrimental financial consequences to the applicant and his family although the extent of such impact is uncertain. However, I am also mindful that prejudice or hardship to an applicant is “hardly ever a sufficient basis for securing a stay.”[9]
[9]McLean and Australian Securities and Investments Commission [2016] AATA 22 at [21]-[22].
The respondent further submitted the applicant failed to explain why the publication of the Banning Order in relation to a financial services business would result in significant financial harm to his current enterprise, which provides different services, and why that harm would likely eventuate. The argument was persuasive as the Tribunal “must proceed by reference to ‘rationally probative evidence”, rather than on ‘mere suspicion or speculation’”.[10] In all the circumstances, the evidence given by the applicant was deficient as to the financial and reputational harm to him and others (presumably as the impact is unknown and cannot be quantified with any accuracy). I find this weighs against the grant of the stay.
[10] Rawson Finances Pty Ltd v Commissioner of Taxation (2013) 133 ALD 39 at [62] per Jessup J.
The public interest
The applicant accepts the public interest of protecting the consumers of financial services is an important factor, however, argued the public interest is not compromised as he is not engaged in providing financial services and reinforces he was never involved in the provision of financial products or services contrary to the corporations legislation, maintaining this ground has limited significance in the assessment of this stay application.
The respondent submitted the public interest was the most important consideration. I was referred to the objectives found in Chapter 7 of the Corporations Act set out in s 760A which promotes:
(a)confident and informed decision making by consumers of financial products and services while facilitating efficiency, flexibility and innovation in the provision of those products and services; and
(i)fairness, honesty and professionalism by those who provide financial services; and
(ii)fair, orderly and transparent markets for financial products…
I was also referred to subsection 1(2) of the Australian Securities and Investments Commission Act 2001 (Cth) (the ASIC Act) which provides further context to the respondent’s functions. Relevantly, the respondent must strive to, amongst other things, “maintain, facilitate and improve the performance of the financial system and the entities within that system in the interests of commercial certainty…” and “take whatever action it can take, and is necessary, in order to enforce and give effect to the laws of the Commonwealth that confer functions and powers on it.” [11]
[11] See Australian Securities and Investments Commission v McCormack [2017] FCA 672 at [60]-[67].
I acknowledged banning orders under the Corporations Act are made by the respondent to protect the public interest, especially members of the public who deal with financial services providers. It follows the need to protect consumers is paramount when assessing public interest impacts[12]. Banning orders have also been recognised as having a deterrent purpose not only against the recipient of the order but also as a general deterrent to others participating in the industry. That is, the object of general deterrence is served by signalling to others, the serious consequences which will ensue if they breach their duties.[13] Despite the applicant’s representations, I find no cogent grounds advanced as to why his circumstances should avoid regulatory action and related publicity. Not only would this frustrate the intention and statutory obligations of the Corporations Act and the ASIC Act but would also be inequitable when compared to other applicants in similar circumstances who have also been banned. That is, there was nothing advanced to differentiate this case from others to justify the stay under this ground. The respondent in this and other situations is not prevented from making a banning order in respect of a person who is not presently providing or intending to provide financial services as banning orders serve a general deterrence for others. This factor strongly favours the refusal of the Stay despite the applicant no longer being engaged in such activities.
The consequences to the Respondent, in carrying out its functions, if the stay is or is not granted.
[12] Australian Securities and Investments Commission v Adler (2002) 42 ACSR 80 at [80].
[13] Australian Securities and Investments Commission v Forge [2007] NSWSC 1489 at [103].
The applicant submits the grant of a stay would not have any adverse effect or consequences for the respondent in carrying out its regulatory functions. However, I note this stay application seeks orders preventing the entry of the decision in any register maintained by ASIC; publication of any decision in the Gazette and disclosure of the decision in any media release issued by ASIC.
The orders sought are significant and if granted would in my view restrain and impede ASIC from carrying outs its operations unimpeded which is contrary to the public interest. I am of the view that any stay, even conditional, should be very careful not to trespass and infringe on the obligations and territory the respondent is charged with under the Corporations Act; that is, to protect and educate the public which has the end result of promoting confidence and informed participation of investors and consumers at all levels. It is in the public interest that decisions made by the respondent be implemented without delay and those charged with regulation are being seen to be fulfilling their role.[14] I conclude the need to ensure that the respondent is able to discharge its public obligations efficiently and without interference weighs strongly against the issue of a stay.
[14] Scott and Australian Securities and Investments Commission [2009] AATA 798 at [10].
Whether the application for review will be rendered nugatory if the stay is not granted.
The applicant submits there is a prospect the review could be rendered nugatory if a stay is not granted because even if he is successful on final review, the damage to his reputation and goodwill is unlikely to be restored at this late stage of his career. It is a difficult task to reach a position as to whether reputational damage would be irrecoverable and, therefore, whether the review proceedings could be rendered nugatory.
In Trading Life Services Pty Ltd and Australian Securities and Investments Commission [2022] AATA 4746, Deputy President McCabe concluded in that case - which presented similar difficulties about evaluating the reputational damage caused to a person following a banning order - that the orders were properly sought for the purpose of securing the effectiveness of the hearing of the application for review. Accordingly, the Tribunal concluded the discretion was enlivened. The Tribunal nevertheless refused to exercise the discretion on the basis that the public interest consideration outweighed the other considerations.
I have reached a similar conclusion in this case although the facts and circumstances are different. I accept that the applicant is seeking the Stay Order for the requisite purpose in s 41(2) of the AAT Act, albeit he is most concerned with the practical aspects of the Banning Order, namely, the publicity and its implications on his reputation and other business interests. The stay in my view will not render the hearing nugatory. Further the matter can be timetabled for hearing quickly thereby mitigating any foreseen/unforeseen consequences. This factor weighs slightly in favour of a stay.
Other matters that are relevant
The length of time that will pass before a hearing is held is a relevant consideration. The applicant expects to produce additional evidence but was not clear on the extent or nature. The respondent indicated it is able to commit to a timetable for final review and ‘was willing to cooperate with the applicant to ensure the matter can be prepared for hearing’ without delay. Given this, this has limited weight in the circumstances.
Conclusion on the stay application
I have balanced all of the competing factors in Scott. Whilst I have found a ground to enliven s 41(2) of the AAT Act, I am not satisfied that a stay should be granted primarily because I place paramount importance on the public interest considerations, particularly the general deterrence purpose. I cannot find that the applicant’s reputational and financial interests alone outweigh the global public interest factors which are intended to ensure the general public have sufficient information to make informed decisions and the Regulator is not unduly burdened in ensuring it meets its statutory objectives on a case by case basis. Consequently, for the reasons above, I find a stay is not desirable for the purposes of securing the effectiveness of any final review hearing and so refuse the application.
SHOULD CONFIDENTIALITY ORDERS BE GRANTED?
Subsection 35(3) of the AAT Act gives the Tribunal power to make directions prohibiting or restricting the publication or other disclosure of information tending to reveal the identity of a party or witness in a proceeding. To this end, the Tribunal may allocate a pseudonym to a party or witness and use this instead of their name.
Further, subsection 35(5) of the AAT Act makes plain that in considering whether to grant a confidentiality order under subsection 35(3) the Tribunal is to take as the basis of its consideration that ‘it is desirable’ that hearings of proceedings before the Tribunal be held in public and that evidence given before the Tribunal and the contents of documents received in evidence should be made available to the public.
It is clear from the terms of section 35 of the AAT Act that the Tribunal must generally conduct a proceeding on the basis of openness, in the interests of maintaining public confidence in the fairness and integrity of that proceeding, and that the Tribunal should only depart from this approach if it is satisfied that there are proper and cogent reasons for doing so. Such relief has been explored exhaustively in a number of authorities; relevantly:
In Re Pochi and Minister for Immigration and Ethnic Affairs [1979] AATA 64; (1979) 2 ALD 33 (Pochi), President Brennan said (at pp. 55-56):
Yet 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 conduct its proceedings in public; but the Tribunal’s powers are intended 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 appear 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 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 by 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 those 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.
In Australian Securities and Investments Commission v Administrative Appeal Tribunal (2009) 181 FCR 130 at [75], the Full Federal Court of Australia, in the joint judgment of Downes and Jagot JJ, said the following with respect to an application under section 35 of the AAT Act:
Suppression orders are rarely made in courts, even though publicity undoubtedly disadvantages the parties. Criminal proceedings are a good example. In the AAT itself facts which parties would not wish to be published and which may disadvantage them are frequently published. Social security applications are a good example. The reason these matters are not kept secret is the overriding importance of justice being administered openly and in public. It is not readily apparent why persons in businesses should be treated differently even when, for example, employees may be disadvantaged.
When measured against the existence of the norm of a public hearing and the scheme established by the Corporations Act with respect to banning orders, it is apparent that the AAT would need some cogent reason by reference to the particular case to depart from the ordinary requirement of a public hearing. It is difficult to accept that harm (even serious harm) to the recipient’s reputation resulting from public awareness of the banning order will be a sufficiently cogent reason to justify the grant of a stay in most cases. This is because the risk of harm of this type is inherent in the nature of a banning order. (underlining is emphasis added)
At [54] of ASIC v AAT, Downes and Jagot JJ observed as follows in relation to the issue of openness and transparency:
Moreover, information is the key to effective trading in any market. It takes the place of regulation in ensuring fairness. A market which is not fully informed is not operating properly. Is not an investor who is about to deposit funds with a person providing financial services entitled to know that a banning order has been made against the person? If the order has been stayed on substantial grounds the person is also entitled to know that. The informed investor may continue with the proposal. If the investor does not, then that is just an example of the operation of the market place. The critical matter is that the market is fully informed. If the banning order is not disclosed, but subsequently upheld, is not the investor entitled to complain that all the circumstances should have been made public? (underlining is emphasis added)
The Full Court further held at [79] that the allocation of a pseudonym as a method of identification is not ‘freestanding’ and is an ‘exception to the norm’, established by section 35 of the AAT Act, that the hearing of a proceeding, including the evidence given before the Tribunal and the contents of documents received in evidence, shall be public. The Court further noted that ‘this power also is one to be exercised sparingly’.
In Re Lawrance and CRS Australia (2004) 85 ALD 238, it was held that ‘possible embarrassment’ was not a sufficient reason for the making of an order to suppress the publication of the applicant’s name. The Tribunal also came to the same conclusion in Devasahayam and Comcare [2010] AATA 784, where the applicant applied for a confidentiality order to prevent publication of her name because she was concerned that publication might affect her prospects of finding a new job. The Tribunal found that the applicant’s reasons were more concerned with ‘avoiding possible personal embarrassment’ than with ‘preventing injustice or other serious disadvantage to her’.
In Daly and Australian Securities and Investments Commission [2020] AATA 1516 at [17], Deputy President McCabe stated that:
The Tribunal will look carefully at requests to suppress news of a reviewable decision even where the Tribunal is otherwise prepared to issue a stay under s 41(2). The reasons for that caution are obvious enough. The Tribunal’s review mechanism is intended to operate in a transparent way. But the Tribunal is also conscious that others who continue to deal with an applicant will be understandably angry if they later discover they were kept in the dark about a reviewable decision that might have influenced their choices as consumers of the applicant’s services.
While the Tribunal will consider the reputational damage and economic loss that an applicant might experience if the reviewable decision is published while the review proceeds, it might not give those concerns much weight. Requests for suppression orders – for that is what they are, in substance – will be scrutinised very carefully where the reviewable decision in question relates to a person’s right to participate in a regulated occupation. Participation in a regulated occupation brings many benefits, including (in many cases) economic advantages that accrue to licence holders. Those economic advantages flow from the establishment of barriers to entry that incidentally reduce competition between the favoured few. The licence necessarily carries with it a requirement that the licensee conform to the rules and participate in regulatory processes according to law. Most of those regulatory regimes – including the one established in Chapter 7 of the Corporations Act 2001 (the Corporations Act) – place a premium on transparency. It follows that a risk of bad publicity accompanying adverse regulatory action will often be regarded as an incident of a licensee’s participation in a regulated occupation.
It is against this line of authority that I assess the relief sought.
Unforeseen reputational damage and consequential financial fallout is not a cogent reason to displace the usual position that the hearing of a proceeding in the Tribunal must be in public and there is full transparency in relation to the alleged misconduct: see ASIC v AAT at [75] and so this argument is not compelling in these circumstances.
Further non-disclosure or non-publication of information relating to identity would impede the free flow of information in circumstances where I have concluded there is no information that is inherently confidential. This is especially so in this case, where the respondent, as regulator, has concerns about contraventions under the Corporations Act and where publicity serves to deter misconduct and educate the public. After all, a banning order is required to be publicised. This is the case even though the applicant maintains he is no longer involved in the provision of financial services, because there is an obvious public interest in the respondent being seen and unrestrained in discharging its regulatory role.
On balance, the Tribunal is not satisfied the relief sought in paragraph 10 above should be granted as I find the submissions and contentions of the applicant do not displace the factors set out in subsection 35(5) of the AAT Act because:
i.Such orders would hinder ‘open justice’ which is the paramount consideration in assessing whether such orders are to be made and which is my view is a crucial and central feature of our legal system. The reason for the principle of open justice is that, if the proceedings are fully exposed to public and professional scrutiny and criticism, and interested observers are able to follow and comprehend the evidence, the submissions and the reasons for judgment, then public administration of justice will be enhanced and confidence in the integrity and independence of the Tribunal will be maintained. Not only does the conduct of proceedings publicly and in open view assist in removing doubts and misapprehensions about the operation of the system, it also limits the opportunity for abuse and injustice by those involved in the process, by making them publicly accountable;
ii.Departure from the principle of open justice is only justified where observance of the principle would in fact frustrate the administration of justice (Pochi). To that end, an order restricting the public availability of information can and should only be made if it is really necessary to secure the proper administration of justice. Such an order must be clear in its terms and do no more than is necessary to achieve the due administration of justice. The submissions before me did not allude to justice overall being frustrated in these circumstances if confidentiality orders were not granted;
iii.It is a trite statement that one of the consequences of the principle of open justice is that embarrassing, damaging and inconvenient facts may occasionally come to light. There is much authority supporting the proposition such matters have rarely been regarded as a reason of itself for the suppression of evidence or the use of a pseudonym. Equally, it is common for sensitive issues to be litigated and for information that is extremely personal or confidential to be disclosed. This is sometimes an unavoidable by-product, and a necessary consequence, of the application of the principle of open justice. These circumstances are no different;
iv.Furthermore, there must be some material before the Tribunal upon which it can reasonably reach the conclusion that it is actually necessary to make an order of that type. Whilst there have been submissions made, none were compelling to bypass or circumvent the foundation of open justice;
v.Finally, and possibly repetitive, it is relevant to again mention that there is nothing inherently confidential about the respondent’s reviewable decision. It is the decision of a public regulator and in the ordinary course of events is published openly. The applicant has not referred to any other reason why this should not take place (with the exception of those above) which I have already determined to be not persuasive nor proper grounds to grant the relief sought.
DECISION
The applications for stay and confidentiality orders pursuant to ss 41 and 35 of the Administrative Appeals Tribunal Act 1975 (Cth) are refused.
I certify that the preceding fifty (50) paragraphs are a true copy of the reasons for the decision herein of Senior Member D Benk.
.........................[SGD]...........................
Associate
Dated: 23 July 2024
Dates of hearing: 25 June 2024 Counsel for the Applicant: Mr F. Tao Counsel for the Respondent: Mr L. Livingston SC
Mr D. Birch
[7] Poidevin and Australian Securities and Investments Commission [2018] AATA 124 at [39] – [40].
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