Sleiman and Companies Auditors and Liquidators Disciplinary Board and Anor
[2007] AATA 1892
•26 October 2007
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 1892
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2006/1260
GENERAL ADMINISTRATIVE DIVISION ) Re JOSEPH SLEIMAN Applicant
And
COMPANIES AUDITORS AND LIQUIDATORS DISCIPLINARY BOARD
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
Respondents
DECISION
Tribunal Senior Member P W Taylor SC Date26 October 2007
PlaceSydney
Decision The decision under review is affirmed.
...................[sgd].........................
P W Taylor SC
Senior Member
CATCHWORDS
COMPANIES LAW – cancellation of registration as a liquidator – allegations of unsatisfactory conduct – Tribunal previously answered three questions for separate determination – whether the Tribunal should limit the scope of review – consideration of the Tribunal’s power to limit the scope of review – applicant’s illness impediment to effective participation in full hearing of all contested issues – risk to applicant of proceeding with full review – loss of opportunity for professional vindication – public interest does not require full review of disciplinary board’s findings – determination that the scope of the review be confined – applicant suffering psychotic illness which makes him unfit to remain registered as a liquidator – decision under review affirmed
Administrative Appeals Tribunal Act 1975 – sections 2A, 25, 28, 33, 37, 38, 43
Administrative Appeals Tribunal Amendment Act 2005
Corporations Act 2001 – sections 1282, 1292, 1317B
Re Sleiman and Australian Securities Investments Commission [2007] AATA 1383
Bridges v Law Society of New South Wales [1983] 2 NSWLR 361
Re Demer; Ex Parte Law Society (NSW) [1967] 1 NSWR 167
O’Toole v Charles David Pty Ltd (1991) 171 CLR 232
Freeman v Secretary, Department of Social Security (1988) 19 FCR 342
Shi v Migration Agents Registration Authority (2007) 158 FCR 525; (2007) 95 ALD 260; [2007] FCAFC 59
Re Wharton and Australian Securities and Investments Commission (2002) 69 ALD 419
Bramwell v Repatriation Commission (1998) 51 ALD 56
Secretary, Department of Employment Education Training and Youth Affairs v Mackay (1998) 58 ALD 130
REASONS FOR DECISION
26 October 2007 Senior Member P W Taylor SC 1.The Companies Auditors and Liquidators Disciplinary Board (referred to as “the CALD Board” or “the Board”) cancelled Mr Sleiman’s registration as a liquidator on 12 September 2006. Mr Sleiman immediately applied to the Administrative Appeals Tribunal (“the Tribunal”) for review of the CALD Board’s decision. The Australian Securities and Investments Commission (“ASIC”) (the applicant in the proceedings before the CALD Board) became a party to the review proceedings on 17 November 2006.
2.The CALD Board cancellation resulted from adverse findings concerning Mr Sleiman’s conduct as voluntary administrator of four companies between June 2002 and March 2004. At an early stage of the review proceedings, ASIC lodged a Statement of Facts and Contentions raising allegations of unsatisfactory conduct by Mr Sleiman involving a further 12 corporations. ASIC also alleged that Mr Sleiman had paranoid schizophrenia.
3.On 16 February 2007, the Tribunal directed the separate determination of several questions. These questions arose from ASIC’s contention that Mr Sleiman was suffering from a psychotic illness. The Tribunal’s direction was that the following questions be determined separately, and in advance of any other matters relied upon in ASIC’s Statement of Facts and Contentions:
1.1 Whether Mr Sleiman is suffering from an illness which renders him:
(a) incapable of managing his affairs, or
(b) alternatively, not a fit and proper person to remain registered as a liquidator;
1.2 Whether, and if so to what extent, Mr Sleiman is suffering from an illness which materially impedes his ability to participate effectively in the conduct of the proceedings;
1.3Whether, and if so to what extent, Mr Sleiman is suffering from an illness which may be exacerbated or prolonged by the conduct of the review proceedings - assuming they include all of the matters relied upon in ASIC’s Statement of Facts and Contentions and are conducted by way of a continuous hearing involving all those matters; and
1.4Whether the Tribunal should exercise the power conferred by subsection 25(4A) of the Administrative Appeals Tribunal Act 1975 (“AAT Act”) to determine the scope of the review by limiting the issues it considers in determining the application for review. (The proposed issues were (i) Mr Sleiman’s illness, (ii) the allegedly more serious adverse findings made by the CALD Board, and (iii) the allegedly more serious additional allegations set out in ASIC’s Statement of Facts and Contentions).
4.On 29 May 2007, I delivered reasons for decision answering the first three questions for separate determination: see Re Sleiman and Australian Securities Investments Commission [2007] AATA 1383. The answers were as follows:
1.1Mr Sleiman is suffering from a psychotic illness, paranoid schizophrenia, As a result of that illness
(i) Mr Sleiman is not incapable of managing his affairs
(ii)Mr Sleiman is not a fit and proper person to remain registered as a liquidator.
1.2Mr Sleiman is suffering from a psychotic illness, paranoid schizophrenia, that is likely to impede materially his ability to participate effectively in the conduct of the review proceedings.
1.3 Mr Sleiman is suffering from a psychotic disease, paranoid schizophrenia, that is likely to be exacerbated or prolonged by the conduct of the review proceedings. This is especially likely if the review proceedings include all of the matters relied on in ASIC’s Amended Statement of Facts and Contentions and are conducted by way of a continuous hearing involving all those matters.
5.After the 29 May 2007 findings ASIC contended the Tribunal should affirm the CALD Board’s decision on the basis of those findings, and need not consider either the CALD Board’s adverse conduct findings or ASIC’s additional conduct allegations against Mr Sleiman. On 18 July 2007, in a directions hearing at which Mr Sleiman was legally represented, the Tribunal gave directions fixing 30 and 31 August 2007 for a hearing to address the outstanding question for separate determination. That question was whether the Tribunal should order that the review be limited in the manner contended for by ASIC. The Tribunal indicated that if such an order was made, the hearing listed on 30 and 31 August 2007 would then immediately deal with the review application on that limited basis.
6.Mr Sleiman’s disputes the correctness of the CALD Board’s cancellation, and, at least, the more serious adverse findings that were made against him. He also disputes the schizophrenia diagnosis. He wants the review proceedings to deal with the substantive merits of the findings that have been made against him. Mr Sleiman’s strong preference as to the way in which the review proceedings should be conducted is perfectly understandable. But his subjective preferences need to be considered in the light of the findings made in the 29 May 2007 Reasons for Decision. Those findings suggest the ultimate lack of utility in any review of the substantive allegations. They also suggest a risk that, because of the difficulties associated with Mr Sleiman’s ongoing illness, the review proceedings could not be conducted in a way that completely achieved the Tribunal’s mandatory objective of providing a review mechanism that is “fair, just, economical, informal and quick”: see section 2A of the AAT Act.
7.In the end result, I decided that it was appropriate to determine the scope of the review proceedings in the manner contended for by ASIC. Accordingly, at the hearing on 30 August 2007 I made the following determination:
Pursuant to subsection 25(4A) of the Administrative Appeals Tribunal Act 1975 that in these proceedings for the review of the decision of the Companies Auditors and Liquidators Disciplinary Board on 12 September 2006 the questions of fact and issues to be considered are limited to those matters identified in the question for separate determination, that question being whether:
Mr Sleiman either:
was at the date of the decision of the Companies Auditors and Liquidators Disciplinary Board in September 2006, or
is presently
suffering from a psychotic illness, namely schizophrenia of a paranoid type
AND
that illness renders him unfit to remain registered as a liquidator.
8.The determination obviously deprives Mr Sleiman of the opportunity to challenge the substantive findings that have been made against him by the CALD Board. In making its determination, the Tribunal has noted the CALD Board’s findings, but neither received any evidence, nor entertained any submissions, that would permit it to make an independent assessment of the sufficiency of the CALD Board’s findings and reasoning. The same applies to the additional matters raised in ASIC’s Statement of Facts and Contentions. The Tribunal has assumed that Mr Sleiman has reasonably arguable grounds for contesting the findings and allegations that have been made against him. Given that assumption, the determination involves the risk that it deprives Mr Sleiman of a chance of some degree of professional vindication – conceivably even complete vindication – in relation to those findings and allegations. The gravity of that possible consequence makes it appropriate to consider in detail both the Tribunal’s power to determine the scope of its review, and the factors that justify its exercise in the present circumstances.
The Tribunal’s power to determine the scope of the review
9.The Tribunal’s mandatory objective, as stated in section 2A of the AAT Act, is to provide a “mechanism of review that is fair, just, economical, informal and quick”. That statement, in its use of the expression “mechanism of review”, goes beyond merely procedural directions. Section 2A is one of a number of amendments made by the Administrative Appeals Tribunal Amendment Act 2005. Those amendments both complemented and supplemented the Tribunal’s existing procedural powers. Even before the 2005 amendments the Tribunal had an ample discretion to determine the procedure to be followed in the exercise of its review functions. Subsection 33(1)(b) of the AAT Act required the Tribunal to conduct its proceedings “with as little formality and technicality, and with as much expedition, as … proper consideration of the matters before the Tribunal permit”. In assessing the requirements for “proper consideration” in particular cases the Tribunal could:
(a)have regard to a decision maker’s statement of reasons: see subsections 28(1) and 37(1)(a) of the AAT Act;
(b)require a decision maker to provide an additional statement of reasons and material findings: see section 38 of the AAT Act;
(c)give directions about the “procedure to be followed” in connection with the hearing of review proceedings: see subsection 33(2) of the AAT Act;
(d)require a decision maker to provide a statement of grounds on which review of a decision is resisted: see subsection 33(2A)(b) of the AAT Act; and
(e)require any party to provide a statement of the matters or contentions to be relied on at the review hearing: see subsection 33(2A)(c) of the AAT Act.
10.The Tribunal’s procedural powers under subsection 33(2A) of the AAT Act permit it to give directions requiring the parties to focus attention on matters that are determinative of, or really material to, the decision to be made in the proceedings. The very existence of those specific powers, together with the Tribunal’s obligation to conduct the review proceedings with as much expedition as proper consideration permits, indicates that the Tribunal should endeavour to restrict its consideration to matters that are genuinely controversial, and should require the parties to co-operate in that endeavour. At least in the case of the decision maker, that obligation to co-operate is itself mandated by subsection 33(1AA) of the AAT Act.
11.The specific provisions of both section 2A and subsection 25(4A) of the AAT Act provide additional powers that complement the amplitude of the Tribunal’s directions powers and the purpose their exercise is intended to achieve. By conferring on the Tribunal a specific power to limit “the questions of fact, the evidence and the issues that it considers”, subsection 25(4A) of the AAT Act at least makes explicit what is already implied by subsection 33(2A). The subsection 33(2A) power to require parties to specify the matters in controversy in the proceedings necessarily implies that the Tribunal can deal with the review proceedings primarily on the basis of those matters. Subsection 25(4A) provides an explicit, formal power to proceed on that basis. And it goes further than the pre-existing powers in subsection 33(2A) of the AAT Act, because it does not depend on the active co-operation of the parties in formulating specific issues. Neither is the exercise of the subsection 25(4A) power limited to situations where the parties have themselves first identified the matters and issues they intend to contest.
12.The Tribunal's mandatory objective under section 2A of the AAT Act, and its power under subsection 25(4A), permit the Tribunal to confine the issues and evidence it considers. Those powers could not be used to justify orders precluding effective review of decisions falling within the Tribunal’s proper review jurisdiction. But the amplitude of the language is certainly apt to permit the Tribunal to limit the scope of its review function to a consideration of matters that are truly material to the determination of the review proceedings. There are several reasons why that amplitude of the language of subsection 25(4A) should be given full effect.
13.First of all, the objective stated in section 2A of the AAT Act is obviously declaratory of a public interest in the efficiency, economy and fairness of the exercise of the Tribunal's review function. Consistent with that public interest, and in common with similar provisions in many legislative provisions relating to curial practice and procedure, it is inherently desirable that the Tribunal confine its consideration to matters that contain the “real” issues. This emphasis on “real” issues alludes both to their materiality and to genuine contest about their proper resolution, irrespective of whether or not they involve matters of fact, law or discretionary assessment.
14.Secondly, and in addition to the general public interest in the efficiency of the Tribunal’s proceedings, parties to those proceedings have a direct and immediate interest in ensuring that their participation is required only in relation to issues of genuine contest. The most obvious aspect of the parties’ respective interests in that regard is that of minimising the costs (both direct and indirect) they incur in participating in Tribunal proceedings. Particularly where a party is self-represented there may be additional, less readily quantified, costs associated with the disruption of ordinary activities.
15.Finally, there is the inherent desirability of minimising the subjective burdens imposed upon parties required to participate in the intensity of contested forensic adjudication. This may be of particular significance in some cases, such as the present, where real health issues arise for consideration. Issues of that kind may arise for several reasons including:
(a)the personal circumstances of one or other of the parties and the physical burdens that participation in the proceedings may impose;
(b)the potential for a particular health-related condition to materially impede either a party’s ability to participate in the hearing or the effectiveness of their participation; and
(c)the likelihood that the health issue may itself be a determinative factor in the review of the decision.
16. Properly understood, subsection 25(4A) of the AAT Act does permit the Tribunal to determine the scope of its review function. The language of the subsection permits limits relating to facts, evidence and issues. The appropriate scope of any restriction will depend on the circumstances of the particular case.
The difficulty of Mr Sleiman’s effective participation in a full hearing of all contested issues
17.A consideration of particular relevance in making an order under subsection 25(4A) of the AAT Act is the desirability of the Tribunal being satisfied that the review process will operate fairly and justly in the interests of all parties. In the 29 May 2007 Reasons for Decision the Tribunal’s second and third findings were that:
1.2Mr Sleiman is suffering from a psychotic illness, paranoid schizophrenia, that is likely to impede materially his ability to participate effectively in the conduct of the review proceedings.
1.3Mr Sleiman is suffering from a psychotic disease, paranoid schizophrenia, that is likely to be exacerbated or prolonged by the conduct of the review proceedings. This is especially likely if the review proceedings include all of the matters relied on in ASIC’s Amended Statement of Facts and Contentions and are conducted by way of a continuous hearing involving all those matters.
18.Those findings, and the psychiatric evidence on which they were based, highlight the foreseeable health risk the conduct of the review proceedings poses to Mr Sleiman, in the light of his paranoid schizophrenia. Features of the diagnosed illness include bizarre and persecutory delusions, as well as the use of neologisms. Another feature is disjointed thought processes. In the course of the proceedings before the Tribunal the apparent extent of Mr Sleiman's ability to focus on specific issues, to identify matters of relevance and to distinguish between relevant and irrelevant considerations has fluctuated. This fluctuation was particularly evident in the course of his submissions during the hearing which was the subject of the Tribunal's Reasons for Decision published on 29 May 2007. I commented on these matters in paragraphs 66 to 71 of those Reasons.
19.These instances of variable intellectual discrimination by Mr Sleiman do not wholly deprive him of the ability to understand the nature of the proceedings or to participate in them in a meaningful way. In the course of the proceedings both Counsel for ASIC, and the Tribunal itself, have, from time to time, assisted Mr Sleiman with explanations and promptings either to ensure he properly understood matters he was required to address or to direct his attention to particular points. With that measure of assistance Mr Sleiman appeared to be able to follow the course of the proceedings and to contribute reasonably appropriately.
20.However, a feature of Mr Sleiman's diagnosed illness is his lack of insight. This lack of insight was remarked upon by Drs Virgona and Kossoff in the course of their evidence in the hearing preceding the 29 May 2007 Reasons. It continued to be evident in the course of the hearing on 30 August 2007 when Mr Sleiman alluded occasionally to matters the two psychiatrists had previously characterised as either bizarre or persecutory delusions, but which he still apparently regarded as matters of objective fact. It was also evident in the written submissions Mr Sleiman provided after the 30 August 2007 hearing. In those submissions Mr Sleiman criticised Dr Kossoff’s evidence on the basis that she had wrongly characterised as delusions (i) matters that were “recognised instances which occur in the marketplace” and (ii) “physical damage” that Mr Sleiman claimed was “visible”. In his 10 September 2007 submissions Mr Sleiman criticised Dr Virgona’s report on the basis that he had made adverse conclusions about Mr Sleiman’s fitness “as opposed to providing a clinical assessment” of Mr Sleiman’s mental health. The criticisms were entirely misplaced. There was no objective evidence that Mr Sleiman had suffered any relevant physical injury or damage. The criticism of Dr Virgona’s evidence, in particular, misreads the evidence. Dr Virgona did provide a clinical assessment of Mr Sleiman’s mental health. His conclusions about Mr Sleiman’s fitness were based on that clinical assessment and his prognosis was that Mr Sleiman’s psychotic illness would continue to manifest similar symptoms, unless Mr Sleiman was provided with appropriate and effective treatment.
21.Mr Sleiman’s ongoing symptoms, and evident lack of insight into his illness, jeopardise the effectiveness of his communication to the Tribunal. He does not seem to perceive, with the level of understanding that is required to deal with them persuasively, the real reasons for the diagnosis that Drs Kossoff and Virgona have made. His response and submissions stray between matters of relevance and irrelevance, and it is inherently difficult for the Tribunal consistently and accurately to perceive the real merit of the points being made. A similar difficulty arises when Mr Sleiman relies on matters that he perceives to be objective and persuasive factual explanations without any apparent appreciation that the Tribunal is likely to regard those very same facts as merely illustrative of his own lack of insight into the delusions that are a feature of his illness. A fair and just review proceeding necessarily requires a comfortable satisfaction that the parties are able to communicate effectively and consistently in a way that presents to the Tribunal an accurate view of the merits of their respective positions. Mr Sleiman's self-representation is characterised by regular manifestations of symptoms which characterise his illness, especially lack of insight into the bizarre nature of his claims about “magnetic forces”, “encroachments to his residence” and “genocide within his immediate and extended family”. This necessarily leads to a lack of satisfaction that Mr Sleiman genuinely and fully understands, and is able to evaluate meaningfully, all of the objective facts that would require evaluation in properly addressing the adverse findings made by the CALD Board and the additional allegations presented by ASIC. That lack of satisfaction materially reduces confidence in the fairness and justness of the review process and would be a matter of real concern if the review proceedings involved detailed consideration of the many company administrations involved in the CALD Board findings and ASIC’s additional allegations.
The immateriality of full hearing of all contested issues
22.The CALD Board’s 12 September 2006 order was made under subsection 1292(2) of the Corporations Act 2001. The subsection provides five alternative grounds for cancelling or suspending a liquidator’s registration. The subsection is in the following terms:
(2)The Board may, if it is satisfied on an application by ASIC for a person who is registered as a liquidator to be dealt with under this section that, before, at or after the commencement of this section:
(a) the person has:
(i) contravened section 1288; or
(ii) ceased to be resident in Australia; or
(d) that the person has failed, whether in or outside this jurisdiction, to carry out or perform adequately and properly:
(i) the duties of a liquidator; or
(ii) any duties or functions required by an Australian law to be carried out or performed by a registered liquidator;
or is otherwise not a fit and proper person to remain registered as a liquidator;
by order, cancel, or suspend for a specified period, the registration of the person as a liquidator.
23.Subsection 1292(2)(d) of the Corporations Act 2001 uses the present tense in the disjunctive expression “or is otherwise not a fit and proper person to remain registered as a liquidator”. In ASIC’s submission both the use of the present tense, and the infinitive “to remain” indicate that the Tribunal’s review is not limited to the situation that was before the CALD Board. The subsection permits the Tribunal to determine the review on the basis of its own findings about Mr Sleiman’s psychotic illness.
24.Having regard to the criteria set out in subsection 1292(2) of the Corporations Act 2001, Mr Sleiman's psychotic illness, and the Tribunal's consequential findings in the 29 May 2007 Reasons for Decision, are likely to be determinative considerations in the review proceedings. The affirmative finding that Mr Sleiman's psychotic illness rendered him unfit to remain registered as a liquidator tends to dictate the appropriate decision to be made in the review proceedings. This is so irrespective of any findings that the Tribunal might otherwise make in relation to either the CALD Board findings or the additional complaints ASIC makes against Mr Sleiman.
Loss of opportunity for professional vindication
25.An important consideration in making an order that has the effect of limiting the issues to be considered in the review proceedings is their effect in depriving a party of the chance of favourable factual findings on material matters. In the review proceedings Mr Sleiman seeks to avail himself of the opportunity for professional vindication in relation to all of the irregular conduct findings that have been made against him. The loss of that opportunity, as a consequence of the exercise of the power conferred by subsection 25(4A) of the AAT Act, is potentially a matter of real significance. Mr Sleiman said the course proposed by ASIC caused him both disappointment and offence. His reaction was understandable. He regards the findings of the CALD Board as at least harsh, and in some instances, wrong. He claims to have acted honestly, and that there are no instances of deliberate misconduct or incompetence.
26.However, Mr Sleiman’s understandable concern about the impact of the proposed order under subsection 25(4A) of the AAT Act, and his desire for professional vindication, are not determinative considerations. Whilst an applicant for review may hope for vindication, the respondent will contend for the contrary. In the absence of any detailed consideration of the underlying merits of the competing contentions, the Tribunal cannot venture upon anything other than a most impressionistic evaluation of the respective parties’ position. Often, as in the present case, that impressionistic evaluation will justify no more than a conclusion that each of the parties’ respective positions appear reasonably arguable. Indeed, in the case of a review decision which has been a product of due notice to the applicant for review, an apparently contested hearing and is the subject of detailed formal reasons, the Tribunal should ordinarily proceed on the basis that the decision under review has a fairly arguable basis.
27.Where there is an apparently arguable basis for the decision under review, an applicant’s prospect of vindication in the review proceedings cannot be adequately assessed in advance. Unless they can be so assessed, the applicant’s subjective desire to take full advantage of the opportunity for vindication cannot itself be a determinative consideration against making an order limiting the scope of the review under subsection 25(4A) of the AAT Act.
The desirability of making concluded findings on substantive issues
28.There is an element of public interest in the proper investigation and determination of irregular conduct allegations involving a registered liquidator. Considered formal findings, made after proper investigation and a contested hearing, will ordinarily merit a high degree of confidence about their accuracy and reliability. They may provide important information in relation to any later application the liquidator may make where their honesty, competence and reputation are relevant considerations – as they would be, for example, on an application for reregistration. If such an application may be made at any time, and therefore long after the disputed events, it is obviously desirable to be able to resort to a relatively contemporaneous finding made when all material evidence and witnesses were still available: Bridges v Law Society of New South Wales [1983] 2 NSWLR 361 at 362 and 368.
29.But the suggested desirability of proceeding to make formal findings on any material misconduct allegation is subject to satisfaction that the task involves both practical utility and can be carried out with confidence in its accuracy and fairness. In some instances the public interest may be sufficiently served merely by the existence of a formal record of the misconduct allegations and the evidence relied on to support them: see Re Demer; Ex parte Law Society (NSW) [1967] 1 NSWR 167 at 168.
30.In the present case, the matters that were considered in the 12 September 2006 decision of the CALD Board are now a matter of record. The Board’s published reasons reveal the nature of the evidence adduced, the respects in which it was disputed and the Board’s evaluation of that evidence. To that extent, the public interest is sufficiently served by the formal record of the CALD Board’s proceedings, including the published reasons of the Board.
31.Different considerations, relevant to the public interest, fall to be considered in relation not only to Mr Sleiman’s challenge to the CALD Board’s findings, but also in relation to the additional matters ASIC seeks to rely on in its amended Statement of Facts and Contentions. The ultimate significance the CALD Board’s findings may have to any future application Mr Sleiman may make will depend on the circumstances prevailing when such an application is made. If he has recovered from his illness at that time, he may be able to provide explanatory insights that will satisfy a future decision maker that the conduct irregularities found by the Board were aberrations and influenced by his illness. But there is little prospect of the Tribunal carrying out a useful consideration of that possibility in the present circumstances, where Mr Sleiman exhibits little insight into his illness and its effects.
32.The additional matters ASIC seeks to raise in its amended Statement of Facts and Contentions would fall for investigation for the first time in the course of proceedings before the Tribunal. Mr Sleiman would be required to answer them, probably without the benefit of legal representation and while still suffering from his psychotic illness. A review process carried out in those circumstances is one gravid with the prospect of misunderstanding and some consequential risk of injustice to Mr Sleiman - no matter what well-intentioned assistance was offered to him either by the Tribunal or by ASIC. The public interest would not be well served by such a proceeding, and the findings that might result from a hearing conducted in such circumstances would have an uncertain utility.
Risk of prejudice in relation to future applications for registration
33.A decision confirming the decision under review solely on the basis of Mr Sleiman's psychotic illness should not operate to his significant future disadvantage. On the basis of the findings the Tribunal has already made, Mr Sleiman is, by virtue of his illness, not a fit and proper person to remain as a registered liquidator. That unfitness will endure for as long as his illness remains relevantly symptomatic.
34.On the other hand, if Mr Sleiman recovers to the point where his illness is not itself a disqualification, he may then make an application for reregistration as a liquidator. In dealing with such an application ASIC will have to comply with the relevant provisions of the Corporations Act 2001. These entitle Mr Sleiman to notice of any proposed refusal of his application, an opportunity to make submissions and an opportunity to give evidence in support of the application: subsection 1282(10) of the Corporations Act 2001. He is entitled to reasons for any refusal of his application for reregistration: subsection 1282(11). Any refusal of his application is reviewable by the Tribunal: subsection 1317B(1)(b).
35.There is no provision of the Corporations Act 2001 that would make the mere fact of the prior cancellation of Mr Sleiman's registration a disentitling consideration in any reregistration application he might make. In any such application a relevant consideration would be the effect, if any, of his psychotic illness on either or both of (i) the events that were the subject of the findings made by the CALD Board and (ii) the effectiveness of his participation in the CALD Board hearings.
36.In relation to any reregistration application Mr Sleiman might make after recovering from his present illness, no inference adverse to him could or should be drawn from his participation in the review proceedings in this Tribunal. A determination of the review proceedings solely on the basis of Mr Sleiman’s current medical fitness does not involve any affirmation of the merits of the individual factual findings in the decision under review. Furthermore, the drawing of any future conclusion about the applicant's fitness, where that conclusion takes into account any past findings involved in the decision under review, may be unsound unless it pays proper regard to the nature and extent of the applicant’s current illness. That is especially the case where the psychiatric evidence indicates that it is longstanding and is likely to have been present during most, if not all, of the period to which the CALD Board’s adverse findings, and ASIC’s additional allegations, relate.
The 29 May 2007 findings not formally conclusive
37.There is authority for the view that where questions have been the subject of separate determination in court proceedings, that determination is binding on the parties in relation to the resolution of the rest of the proceedings: see for example, O’Toole v Charles David Pty Ltd (1991) 171 CLR 232 at 245, 260 and 295. This view seems to be based partly on the content of specific curial rules that expressly permit “separate” determination. Those rules often contemplate the parties’ agreement about the precise effect that the “separate” determination will have in relation to the finalisation of the proceedings.
38.No provision of the AAT Act expressly deals with the procedure for, or the consequence of, the separate determination of matters relevant to the review proceedings. Conversely, the Tribunal’s review powers in section 43 of the AAT Act invest the Tribunal with all of the primary decision maker’s material powers and discretions. It would generally be open to the primary decision maker to review, before making their ultimate formal decision, any preliminary factual findings and assessments. Whether or not it would be either necessary or appropriate to do so would depend on whether new information had become available or whether the decision maker was otherwise satisfied that their preliminary views were wrong. The Tribunal should be regarded as having a similar flexibility in relation to its preliminary determinations. The Tribunal’s mandatory objective stated in section 2A of the AAT Act would ordinarily mean that the Tribunal should, in fact, require good reasons before permitting any re-argument or reconsideration of its preliminary determinations, especially where they were the result of a formal and considered hearing process. But the caution that would properly apply to the exercise of any discretion to permit reconsideration of preliminary determinations does not require conclusions either that the Tribunal lacks the power to reconsider such determinations or that it should only be permitted in special circumstances. The proper enquiry is simply as to whether, in the particular circumstances, including any materially changed circumstances, it is appropriate to reconsider a previously expressed finding.
39.The 29 May 2007 Reasons for Decision proceeded on the assumption that Mr Sleiman’s current fitness was the relevant matter for determination. There are some instances where the relevant statutory criteria require both the primary decision maker, and the Tribunal, to have regard only to events that exist, or are known, at a particular point in time – usually when the reviewable decision was first made. In these kinds of cases, the Tribunal may be precluded from taking into account subsequent events: see Freemanv Secretary, Department of Social Security (1988) 19 FCR 342 at 344-5 (cancellation of a social security benefit); Shi v Migration Agents Registration Authority (2007) 158 FCR 525; (2007) 95 ALD 260; [2007] FCAFC 59 (cancellation of a migration agent’s registration). The present case does not involve statutory criteria of that kind. Subsection 1292(2) of the Corporations Act 2001 is directed at a liquidator’s ongoing fitness. It permits the Tribunal to consider, and provides no justification for refusing to consider, any events that question an applicant’s ongoing fitness. This is so irrespective of whether or not the events occurred before or after, or were even raised in, any decision of the CALD Board: see Re Wharton and Australian Securities and Investments Commission (2002) 69 ALD 419 at [39]; Bramwell v Repatriation Commission (1998) 51 ALD 56 at 64 – 67; Secretary, Department of Employment Education Training and Youth Affairs v Mackay (1998) 58 ALD 130 at 133.
No evidence of material change since 29 May 2007
40.The Tribunal’s 29 May 2007 findings were based on the psychiatric assessments made by Drs Virgona and Kossoff. Both psychiatrists reviewed statements Mr Sleiman had put before the CALD Board, transcripts of his evidence to the Board, his written statement to the Tribunal in support of the review application, and transcripts of submissions he had made to the Tribunal prior to the April hearing. Dr Virgona had also been provided with selected medical records and examined Mr Sleiman for the purpose of providing his evidence to the Tribunal.
41.Both Drs Virgona and Kossoff said there was reason to anticipate Mr Sleiman’s condition could improve with appropriate treatment. At the directions hearing on 18 July 2007 Mr Sleiman’s then legal representative informed the Tribunal that he had arranged to commence treatment. But no treatment evidence was given at the hearing on 30 August 2007. On the contrary, Mr Sleiman still appeared to dispute the reality of his illness and, particularly in his subsequent written submissions, he challenged the accuracy of its diagnosis. I do not accept that the challenge was justified or that there is any objective basis for rejecting the opinions of Drs Kossoff and Virgona. Drs Kossoff and Virgona’s evidence was carefully expressed, well reasoned and based on appropriate expertise. It was proper to accept that evidence for the purpose of the 29 May 2007 Reasons for Decision and nothing proffered at the 30 August 2007 hearing leads to a different view of their previous evidence. Their evidence was that Mr Sleiman’s psychotic illness was longstanding and likely to persist. Despite the time that has passed since 29 May 2007 there is no material to justify a conclusion that Mr Sleiman’s psychotic illness has resolved. Whilst it remains unresolved, Mr Sleiman is unfit to remain registered as a liquidator – for the reasons more fully set out in the Tribunal’s 29 May 2007 Reasons.
Conclusion
42.The Tribunal has power to limit the scope of its review. Mr Sleiman is suffering from paranoid schizophrenia. That illness makes him unfit to remain registered as a liquidator, in any event. It is likely to be exacerbated by his participation in fully contested review proceedings. It would also compromise his ability to participate effectively in those proceedings. Limiting the scope of the Tribunal’s review to a consideration of Mr Sleiman’s illness and its effect on his continuing entitlement to registration would address an appropriate ultimate issue in the proceedings. It would also comply with the Tribunal’s mandatory objective. The nature and effect of Mr Sleiman’s psychotic illness justify the conclusion that the public interest does not require a full review of the CALD Board’s findings. If Mr Sleiman’s illness resolves he may re-apply for registration as a liquidator. No adverse inference could be drawn, in connection with proper consideration of that application, from the Tribunal’s decision in these review proceedings. Proper consideration of such an application would have to pay due regard to the opinions of Drs Kossoff and Virgona that Mr Sleiman’s current psychotic illness is longstanding, and may have predated the events giving rise to the substantive complaints made against him.
43.In the light of the matters summarised in the preceding paragraph, it is appropriate to determine the scope of the review by confining it in the manner set out earlier in these reasons. In the review so confined it is proper to conclude that Mr Sleiman is suffering from a psychotic illness and is unfit to remain registered as a liquidator. That conclusion makes it necessary to affirm the decision under review.
I certify that the 43 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member P W Taylor SC
Signed: ..................[sgd]..............................................................
AssociateDate of Hearing 30 August 2007
Date of Decision 26 October 2007
Solicitor for the Applicant Self-represented
Counsel for ASIC Mr G. McNally
Solicitor for ASIC Ms S. Le Breton
Solicitor for CALDB Submitting appearance
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