The Applicant and The Regulator

[2019] AATA 4683

The Applicant and The Regulator [2019] AATA 4683 (4 November 2019)

Division:TAXATION AND COMMERCIAL DIVISION

File Number(s):      

Re:The Applicant

APPLICANT

AndThe Regulator

RESPONDENT

DECISION

Tribunal:Deputy President Bernard J McCabe
Senior Member D O'Donovan

Date:4 November 2019

Place:Melbourne

The Tribunal is not entitled to have regard to documents that describe events precipitated by the applicant’s convictions which he is now permitted to actively deny. The Tribunal cannot have regard to the documents if, following a redaction process, non-disclosable matters may still be inferred from those documents.

These reasons have been published with the names of the parties and any other identifying materials redacted pursuant to an order of the Tribunal made in the substantive proceedings dated 4 November 2019.

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Deputy President Bernard J McCabe

CATCHWORDS

PRACTICE AND PROCEDURE – disclosure of spent convictions – whether the disclosure of facts underlying spent convictions may be referred to – evidence of failing to disclose convictions when not spent which are now spent – where disclosure would lead to disclosure of spent convictions – whether the regulator can rely on grounds not previously raised – documents to be removed or redacted as set out in Schedule One

LEGISLATION

Administrative Appeals Tribunal Act 1975 s 37

Crimes Act 1914 ss 85ZV and 85ZW

CASES

Frugtniet v Australian Securities and Investments Commission [2019] HCA 16

REASONS FOR DECISION

Deputy President Bernard J McCabe
Senior Member D O'Donovan

4 November 2019

1. The applicant in these proceedings objects to the respondent including certain documents in the T-Documents produced pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (the AAT Act). The applicant says the documents should not be disclosed and should not form any part of the Tribunal’s record – and should not thereafter be considered by the Tribunal – because they refer to spent convictions that should not be disclosed by reason of sections 85ZV and 85ZW of the Crimes Act 1914 (the Crimes Act).

2. The respondent accepts it is obliged not to refer to “the fact of the spent convictions themselves nor any of the conduct underpinning them” even though those matters would, in the absence of the prohibition, likely be relevant to the Tribunal’s deliberations on the substantive application. The substantive application requires that we review the regulator’s decision to reject the applicant’s registration in a regulated occupation on fitness and character grounds. The respondent says the documents should still be included in the section 37 T-Documents and be considered by the Tribunal because they are not tendered for the purpose of disclosing the non-disclosable matters. The respondent proposes to rely on the documents to establish the applicant “failed to make full, frank and honest disclosure…in circumstances where he was obliged to do so”.

3. When the challenge is expressed at that level of generality, the solution appears obvious: redact the non-disclosable matters from the documents so they can be used. But the problem is more complicated than that.

4. We decided it was appropriate to deal with the issue at an early point in the proceedings because our ruling would affect the way in which each party prepared its case. We considered referring the matter to another Tribunal member to decide but concluded the best and most expeditious course was to decide the matter ourselves without reading the documents in question. We are satisfied it is possible to provide proper guidance to the parties on that basis.

5. To that end, we directed the respondent to place the documents in question (numbered T4, T9, T19, T21, T26 and T27) into a sealed envelope and provide written submissions. The applicant also provided submissions although he subsequently identified a number of other documents in the bundle of section 37 T-Documents which he claims raise similar issues. Our specific conclusions in relation to the documents in the sealed envelope will be included in a separate part of these reasons that will be redacted when the reasons are published to protect the identity of the applicant. The reasoning, however, applies to all of the documents that may be disclosed in the proceedings, and both parties should keep those reasons in mind.

6. The respondent’s submissions explain a number of the sealed documents record the reasons of other decision-makers dealing with the affairs of the applicant. As we understand it, the decisions in question were precipitated by the applicant’s failure to disclose his (now spent) convictions to responsible authorities at a time when he was required to do so. There is also a transcript of a hearing and some written submissions to the decision-maker that conducted the hearing which discuss the spent convictions.

7. The respondent in these proceedings accepts the applicant is not required to disclose the spent convictions now, but it argues the fact he failed to disclose them in the past when he was still under an obligation to do so is something the Tribunal should know about. Put another way, the regulator says the Tribunal is entitled to know the applicant has a track record of failing to disclose facts that reflect adversely on his fitness. The Tribunal is entitled to know about that even if the Tribunal is not entitled to know what those facts might be.

8. The applicant’s position in relation to the documents is straight-forward. The documents mention or allude to matters that should not be disclosed, so those documents should be excluded in their entirety. As we understand his argument, he does not accept it is possible or permissible to discuss matters that were precipitated by the non-disclosable matters even with judicious redactions because doing so would amount to a disclosure of the spent convictions contrary to the provisions in Part VIIC of the Crimes Act.

9. To appreciate the applicant’s argument, it is necessary to set out the words of section 85ZW in full. The section provides:

   85ZW Effect of right of non-disclosure

   Subject to Division 6, but despite any other Commonwealth law, or any State law or Territory law, where, under section 85ZV, it is lawful for a person not to disclose, in particular circumstances, or for a particular purpose, the fact that he or she was charged with, or convicted of an offence:

   (a)it is lawful for the person to claim in those circumstances, or for that purpose, on oath or otherwise, that he or she was not charged with, or convicted of, the offence; and

   (b)anyone else who knows, or could reasonably be expected to know, that section 85ZV applies to the person in relation to the offence shall not:

   (i)     without the person’s consent, disclose the fact that the person was charged with, or convicted of, the offence to any other person, or to a Commonwealth authority or State authority, where it is lawful for the first-mentioned person not to disclose it to that other person or that authority; or

   (ii)    in those circumstances for the purpose, take account of the fact that the person was charged with, or convicted of, the offence.

10. The respondent says the provisions do not prevent it from communicating the documents in question to the Tribunal. In making that submission, the respondent is walking a fine line, and it is inviting the Tribunal to join it on the journey. We do not think that course can be maintained in light of the recent decision of the High Court in Frugtniet v Australian Securities and Investments Commission [2019] HCA 16. In that case, Bell, Gageler, Gordon and Edelman JJ observed in a joint judgment (at [37]):

    37.      Division 3 of Pt VIIC has the relevant effect that, subject to Div 6 of Pt VIIC and despite any other Commonwealth law, a person whose conviction is spent is not required to disclose the fact that the person has been charged with or convicted of the offence to any Commonwealth authority, and a Commonwealth authority which knows or could reasonably be expected to know that the person is not required to make that disclosure is prohibited from taking account of the fact that the person was charged with or convicted of the offence. A Commonwealth authority, for the purpose of Pt VIIC, includes "a body (whether incorporated or not), or a tribunal, established or appointed for a public purpose by or under a Commonwealth law", and on that basis includes both ASIC and the AAT. [Emphasis added]

11. That reasoning has profound implications given the breadth of the relevant provisions in the Crimes Act. The provisions do not simply exempt the applicant from an obligation to disclose matters that would otherwise be disclosable pursuant to a state or federal law. The scope is much broader than that. Section 85ZW(a) authorises an individual to actively deny that he or she has ever been charged or convicted in relation to the offence in question. It follows an individual is not just permitted to redact references to their past. They are entitled to rewrite history and replace it with a fiction that they are entitled to actively promote, and which others may not dispute. That right is intended to “…give people a chance to live down a minor conviction”.[1]

    [1] Australia, House of Representatives, Parliamentary Debates (Hansard), 11 May 1989 at 2545.

12. If an applicant is permitted to rewrite history so that it excludes details of his past, there is a difficulty in encouraging the Tribunal to have regard to events directly precipitated by facts the applicant is now entitled to deny. In proceedings before this Tribunal the applicant is entitled to deny under oath that he was ever convicted of the offences. In those circumstances, the respondent cannot be entitled to lead evidence or cross examine the applicant in ways that call into question or deny the fiction he is entitled to maintain. The legislature has made it clear that fiction must be accepted for the purposes of subsequent decision making.

13. Paragraph (b), which prohibits disclosure of the conviction by the regulator, needs to be read in that context when considering the extent of the constraint imposed.

14. Obligations imposed by other Commonwealth laws yield to the requirements of section 85ZW. Consequently, compliance with obligations imposed by section 37 of the AAT Act must be done consistently with the restrictions imposed by section 85ZW.

15. The inclusion of documents which refer to the convictions which are now spent in the T-Documents will involve a breach of the requirements of section 85ZW. The respondent denies that including the documents involves any ‘disclosure’ to the Tribunal because the information is already publicly available (as a consequence of references in the various documents which they wish to include in the T-Documents) and so does not involve the ‘action of making new or secret information known’. This proposition cannot be accepted. The fact of the applicant’s convictions is a matter of public record. In that sense the information is not new to the world. But it is new to each additional person or body who does not know it. The act of telling someone about the conviction must amount to a disclosure otherwise the scheme will be entirely ineffective in preventing the dissemination of information about spent convictions. In our view, revealing information about the spent convictions to the Tribunal by including T-Documents which refer to them does amount to disclosure contrary to section 85ZW.

16. Further, as soon as the regulator brings to the Tribunal’s attention a sequence of events which can only be intelligibly understood by accepting that convictions which are now spent were entered against the applicant is just as much a disclosure, and is as hostile to the applicant’s right to deny the existence of those convictions, as the revealing of the details of the convictions themselves.

17. It is no answer for the regulator to say it is relying on the subsequent events as if they stand alone when they incidentally reveal that which the applicant is entitled to deny. It seems to us that if the applicant is entitled to deny the underlying facts at their source, he cannot have matters occurring downstream held against him if they tend to reveal what he is entitled to deny. We do not think a disclosure is made permissible within the terms of the Crimes Act by redacting references to the details of the convictions: disclosing there are facts which the applicant is entitled to deny is a problem.

18. It is possible the respondent could review the documents in question and identify facts or passages which could be disclosed if they make sense on their own terms without prompting enquiries that tended to reveal that which the applicant is entitled to conceal. But T-Documents that disclose that the applicant has a history of failing to disclose things which he was then required to disclose but which he is now entitled to deny ever occurred, it seems to us, in most circumstances involves a form of disclosure of spent convictions – and that is impermissible.

19. We would add it would be difficult to evaluate and sensibly use documents in which a decision-maker was critical of an applicant for failing to disclose something if we are not permitted to know what was not disclosed. The significance of the non-disclosure is difficult to assess if we do not know the gravity of the underlying conduct.

20. Informed as we are by the High Court’s reasoning in Frugtniet, we are satisfied the relevant provisions of the Crimes Act should be interpreted broadly to give effect to the rehabilitative objective. We are not entitled to have regard to documents that describe events precipitated by the applicant’s convictions which he is now permitted to actively deny. We cannot have regard to the documents if, following a redaction process, non-disclosable matters may still be inferred from those documents. The applicant is permitted to conceal the underlying events and the disclosure of the subsequent matters would tend to disclose that which is meant to be buried without a trace. If the Parliament had intended those subsequent matters should nonetheless be disclosable in proceedings like these, it would have provided for an exception to the rule (as it has done for some other types of decision).

21. Our directions in relation to the particular documents are in schedule one. The schedule should be redacted from the reasons which are published publicly.

    OTHER ORDERS

22. The applicant also seeks an order that the respondent file a redacted statement of reasons in relation to the matter to allow him to determine the scope of the review of a decision by limiting the questions of fact, the evidence and the issues to be considered. Such an order is not appropriate. We are satisfied the issues will be adequately defined if, as the current directions contemplate, the respondent files its statement of facts, issues and contentions first having regard to these reasons.

23. The applicant has also submitted he “will strenuously object to any changing of provisions upon which the matter[s] was determined by the primary delegate and the first Tribunal”. To the extent that the applicant is suggesting there is a temporal restriction on what may be taken into account for the purpose of reviewing the statutory decision, the Tribunal is satisfied that is a question can be addressed at the hearing of the matter. If the Tribunal finds there is a restriction then it will disregard any material which is not relevant to the statutory question posed on review.

24. If the regulator does file material which significantly expands the basis on which it seeks to have its decision affirmed, the Tribunal will ensure that the applicant has a proper opportunity to respond to such material. At this point, in the absence of full argument on this point, it is not appropriate to constrain the evidence which the regulator may file.

    SCHEDULE ONE

    [paragraphs 25 to 38 of the decision have been redacted from the public version of the reasons pursuant to an order of the Tribunal made in the substantive proceedings dated 4 November 2019.]

I certify that the preceding 38 (thirty -eight) paragraphs are a true copy of the reasons for the decision herein of Deputy President Bernard J McCabe, Senior Member D O'Donovan

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Associate

Dated: 4 November 2019

Date(s) of hearing:	On the papers
Date final submissions received:	25 October 2019
Applicant:	In person
Respondent:	In person