TNST and Australian Securities and Investments Commission
[2009] AATA 602
•14 August 2009
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2009] AATA 602
ADMINISTRATIVE APPEALS TRIBUNAL )
) No: 2009/2293
GENERAL ADMINISTRATIVE DIVISION ) Re TNST Applicant
And
Australian Securities and Investments Commission
Respondent
DECISION
Tribunal Mr G. L. McDonald, Deputy President Date14 August 2009
PlaceMelbourne
Decision The Tribunal makes the following orders:
1. The hearing shall be open to the public, however until further order of the Tribunal:
(a) the applicant continue to be described by the letters “TNST” for the purpose of the application; and
(b) publication of the name of the applicant and of any material tending to identify him be restricted to members and staff of the Tribunal, the parties and their representatives and professional advisers and experts, and staff of Auscript; and
(c) publication of the evidence given before the Tribunal and of matters contained in documents lodged with the Tribunal be restricted to members and staff of the Tribunal, the parties and their representatives and professional advisers and experts, and staff of Auscript; and
2. A stay be placed on the implementation of the decision under review and the gazettal notice of that decision.
…….[sgd G L McDonald]....
Deputy President
CATCHWORDS – PRACTICE AND PROCEDURE – applicant’s application for both a stay and confidentiality order – whether the hearing should be open to the public – whether the applicant would suffer damage if the confidentiality order was not granted – whether the applicant has a prospect of succeeding in the substantive application – stay granted – confidentiality order granted with conditions
Administrative Appeals Tribunal Act 1975 ss 35 and 41
Corporations Act 2001
Superannuation Industry (Supervision) Act 1993
Australian Securities Investments Commission v PTLZ [2008] FCAFC 164
DKZN and Companies Auditors and Liquidators Board and Anor [2009] AATA 406
PTLZ and Anor and Australian Securities and Investments Commission [2008] AATA 106
PVYM and Australian Securities and Investments Commission [2008] AATA 788
Re Quinlivan and Australian Securities and Investments Commission [2008] AATA 1094
VBW and Australian Prudential Regulation Authority and Anor (2005) AATA 1294
YFFM and Australian Securities and Investments Commission [2009] AATA 409
REASONS FOR DECISION
14 August 2009 Mr G. L. McDonald, Deputy President 1. The applicant is a person who provides financial services. On 22 May 2009 he was banned from providing any financial services for a period of three years. He has applied to this Tribunal to have the decision banning him reviewed. An expedited date for hearing his case has been set.
2. In the meantime, the applicant has applied to have the hearing of his case heard in private and that the contents of witness statements and other documents involved in his case to be suppressed in accordance with s 35(2) of the Administrative Appeals Tribunal Act 1975 (“the AAT Act”). He has also applied to have the operation of the decision to ban him stayed in accordance with s 41(2) of the AAT Act. The grant of the applications would, among other things, result in the respondent not publishing the fact of the banning order against him in the government gazette.
3. The respondent opposes both the suppression and the stay applications.
4. The applicant is aged 39 years and is married with two children and is the sole provider of material support to his family. He has been engaged in the financial services industry for 20 years. Since the banning order was made the applicant has been on paid leave from his employer and has said, and the Tribunal has accepted, that he will not resume working until after his application before the Tribunal is determined.
5. The Tribunal had before it an affidavit sworn by the applicant and an affidavit sworn by the applicant’s immediate supervisor in his workplace[1] who also gave oral evidence. The evidence from the applicant’s immediate superior is that:
(a)the only formal communication of the applicant’s ban has been made to him and the person who assumed the applicant’s position pending the outcome of this application;
(b)the applicant has a very good professional and personal reputation with his employer and deals with his clients in an exemplary manner;[2] and
(c)even if ultimately his application resulted in the decision under review being set aside and the orders presently sought were not made:
(i) his reputation would be adversely affected if publicity about the ban was circulated which would be likely following the gazettal of the ban;
(ii) he would be likely to lose some of his clients;
(iii) word would spread in the profession and that would make it difficult for him to obtain employment elsewhere; and
(iv) his employment with his current employer could not be guaranteed.
[1] Exhibit A1.
[2] Exhibit A1, paragraph 5.
6. On behalf of the applicant it is maintained that the above circumstances warrant the making of the orders. The applicant submits the making of the orders is supported by previously decided Tribunal cases.[3] The applicable AAT Act provisions should be distinguished from the more difficult grounds on which suppression orders can be sought in the Federal Court where a stricter test applies.
7.The respondent made the following submissions:
(a)s 35(3) of the AAT Act starts from the proposition that it is desirable that hearings should be in public, that the documentation should be publicly available and that the gazettal of the respondent’s decision should not be stayed. With respect to the latter point it is submitted that what is raised is something which could be raised in nearly every similar case, and that if granted the orders would result in the will of Parliament as expressed in the Corporations Act 2001, namely that upon being made a banning order should be gazetted, being thwarted. The respondent contrasted the situation in the instant case to that under the Superannuation Industry (Supervision) Act 1993, where Parliament expressly forbade the publication of information naming or identifying members of superannuation funds or the name of the fund when application for administrative review of trustees decisions occurred;
(b)that if, as the employer asserts, the applicant’s personal and professional reputation is so very high, publication should not stand in the way of his continuing employment unless that employment is terminated purely on the ground of prejudice; and
(c)the respondent took issue with any order which may suppress it from issuing a press release claiming that there was no authority in the AAT Act or the relevant corporations law which prohibited ASIC from issuing a press release as found by the Tribunal in Re Quinlivan and Australian Securities and Investments Commission.[4] Nevertheless, despite reserving on this point, the respondent undertook not to issue such a press release until this case is finally determined.
[3] The applicant referred to the following cases in support of that submission: VBW and Australian Prudential Regulation Authority and Anor (2005) AATA 1294; DKZN and Companies Auditors and Liquidators Board and Anor [2009] AATA 406; PVYM and Australian Securities and Investments Commission [2008] AATA 788.
[4] [2008] AATA 1094.
8. The respondent maintained that the approach to the consideration of s 35(2) of the AAT Act had changed with the decision in Australian Securities Investments Commission v PTLZ[5] and made reference to the joint judgment of North and Downes JJ. In that decision their Honours emphasised:
(a)the words used in s 35 required the Tribunal to take as the basis of its consideration that hearings be held in pubic and this is emphasised in s 35(3); and
(b)that different considerations apply when considering s 35(2) and s 41(2). Section 35(2) confers the power when “the Tribunal is satisfied that it is desirable to do so by reason of the confidential nature of any evidence or matter or for any other reason, the Tribunal may … direct that a hearing … shall take place in private and give directions as to the persons who may be present …” Whereas s 41(2) confers power on the Tribunal where it “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, [to] make such order or orders staying or otherwise affecting the operation or implementation of the decision … as the Tribunal considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review.” Their honours held the “statutory requirement under s 35(3) is both wider and deeper than under s 41(2).”[6]
[5] [2008] FCAFC 164.
[6] [2008] FCAFC 164 at [42] per North and Downes JJ.
9. Against that background the Tribunal has considered the applicability of s 35 and s 41(2), dealing first with s 35.
The Confidentiality Issue: s 35
10. The basis of the consideration relates to the legislative requirement that the hearing be held, and the evidence be given, in public. However, Parliament has both nominated the confidential nature of the evidence or matters and at the same time provided the Tribunal with a broad discretion to grant a confidentiality order “... for any other reason …” Too narrow a focus would result if the former words were interpreted to constrain or otherwise limit the breadth of the discretion which attaches to the words “… for any other reason …” There are at least two occasions in respect of which publication needs to be considered. The first is up to and including the hearing process. The second is where the hearing process has been completed and a determination is given. There may be substantive reasons as to why an applicant’s name or the names of some or all of the witnesses or others not directly involved in the proceedings should permanently remain confidential. There are other cases where whether the applicant be successful or not in the ultimate outcome publication in the public interest should be permitted.
11. There has perhaps been a tendency in the Tribunal to grant orders permanently restricting the publication of the names of an applicant or witnesses where the substantive application relating to the imposition of a banning order has been ultimately successful. This may need to given more consideration including in the instant case, at the conclusion of the substantive hearing.
12. In this case, as with most cases before this Tribunal, there is a de novo hearing. Evidence not before the original decision maker may, and almost certainly will, be called. Issues different from those involved before the original decision maker may, and are likely, to arise. If publication of names and addresses and of the evidence given, in newspapers, television or on the internet, was to occur prior to a decision, but nothing was published concerning the decision, and the applicant was to succeed, permanent damage to a person may occur. The Tribunal is not saying that journalists are not responsible in the publication of information but such publication is not only open to accredited journalists and others may not exercise such care.
13. Clearly, if an applicant is unsuccessful then the end of the administrative processes has been reached and publication of the details should follow. If that is the case, then what is occurring is a delay in the right to publish, not a permanent ban on publication. It is put on behalf of the applicant that damage to his reputation and the consequences which flow from it should leave the Tribunal satisfied that it is desirable to implement a confidentiality order. While that may be something which is often submitted in cases of this type, that does not lessen the impact which would be had on applicants who ultimately succeed in having the review of decisions banning them overturned. The Tribunal is satisfied that to grant such an order subject to some conditions is desirable. There is no reason why the hearing should not be open to the public but confidentiality orders be placed on the publication to any person, other than those authorised by the Tribunal, of the contents of the documentary evidence and of the names or identification of the applicant or other witnesses until the Tribunal is ready to give its determination and reasons on the substantive application.
14. The Tribunal will consider at the end of the hearing any further submissions the parties may wish to make as to whether, and if so why, it would be desirable to continue the confidentiality order beyond that date should the applicant succeed in his substantive application.
The Operation and Implementation of the Decision: s 41(2)
15. The considerations which must be considered when considering s 41(2) are well known and are put by the respondent as follows:
(a)the consequences for ASIC in carrying out its function and for those whose interests may be affected by the review;
(b)the consequences for the applicant; and
(c)any conditions which could be imposed.
16. It is undesirable for the Tribunal in considering this application to undertake an analysis of the facts. To do so would place the Tribunal in a position where it would, or at least may, be anticipating the outcome of the hearing when the evidence has not been considered. As Ms Mortimer put it, the Tribunal should endeavour to reach an impressionistic view without pre-judging the outcome. Undertaking such an approach leaves the Tribunal satisfied that there is a prospect of the applicant succeeding.
17. Clearly ASIC and the applicant will be differently affected in the case of a stay being granted. ASIC’s duty to inform the public of the outcome of its consideration will be, at least, delayed. There is a public interest in the information being made available. On the other hand, the applicant’s reputation stands to be adversely affected, he may lose his employment and find himself, even if he is ultimately successful, unable to attract another employer whether that arises from prejudice by some or all potential employers, or for some other reason.
18. In the circumstances where the applicant is on leave and does not propose to re-engage in his professional activity pending the ultimate outcome of this application the Tribunal is satisfied that his interests under s 41(2) outweigh the public interest in learning of the action taken to date by the respondent. The Tribunal therefore directs that a stay be placed on the implementation of the decision and the gazettal of notice of the decision. In view of the cooperative and helpful offer made by the respondent not to publish a press release pending the outcome of the decision this aspect needs not be addressed in the instant case. However, the Tribunal notes the approach taken in Re Quinlivan, where it was determined that there was no authority for the Tribunal to prohibit the making of a press release differs from that taken in PTLZ and Anor and Australian Securities and Investments Commission[7] where it was determined that the Tribunal could make such an order. A final resolution of this issue can await another day and may have to be made in another place.
[7] [2008] AATA 106 at [129] per Deputy President Forgie.
A Similar Case: YFFM And ASIC
19. There is one more issue that the Tribunal should address for completeness. During the applicant’s submissions in favour of orders pursuant to ss 35 and 41, Mr Lewis pointed to the decision in YFFM and Australian Securities and Investments Commission.[8] The applicant submitted YFFM was highly relevant in the current proceedings as it, on appearance, involved a person who is alleged to have given the applicant in this matter insider information. However, YFFM is subject to orders under ss 35 and 41, publication of the applicant’s name in that matter has been restricted by Senior Member Penglis. Mr Lewis submitted it was important to know the name of the applicant in YFFM because the facts were remarkably similar to the present case and the applicant in YFFM had no difficulty with the argument that there were prospects of success. Mr Lewis argued that YFFM would be highly persuasive in the current matter should both matters involve the same evidence and person(s). On that basis, Mr Lewis sought to make an application, before a differently constituted Tribunal, to vary the suppression orders in place in YFFM. This Tribunal was unable to accept that submission and informed Mr Lewis that the only appropriate way to vary the orders would be to make an application to the member who made those orders, Senior Member Penglis. At a subsequent telephone directions hearing the Tribunal was informed that the application to Senior Member Penglis had been refused. Mr Lewis sought to make further submissions on the matter and alluded to the Tribunal making its own inquiries in regard to the identity of the applicant in YFFM. In the Tribunal’s opinion it is not appropriate for the Tribunal to make such investigations about another matter before another member in another registry over which confidentiality orders have been made. Aside from any other consideration, even if this Tribunal was to identify the parties to the other case it would not release that information to the parties in this appeal before this Tribunal. In any event, the orders have been granted in the applicant’s favour on the evidence before this Tribunal. Therefore, the Tribunal does not need to have regard to the arguments put forward in YFFM.
[8] [2009] AATA 409.
Order
20. The Tribunal therefore makes the following orders:
(a)the hearing shall be open to the public, however until further order of the Tribunal:
(i) the applicant continue to be described by the letters “TNST” for the purpose of the application; and
(ii) publication of the name of the applicant and of any material tending to identify him be restricted to members and staff of the Tribunal, the parties and their representatives and professional advisers and experts, and staff of Auscript; and
(iii) publication of the evidence given before the Tribunal and of matters contained in documents lodged with the Tribunal be restricted to members and staff of the Tribunal, the parties and their representatives and professional advisers and experts, and staff of Auscript; and
(b)a stay be placed on the implementation of the decision under review and the gazettal notice of that decision.
I certify that the 20 preceding paragraphs are a true copy of the reasons for the decision herein of
Mr G. L. McDonald, Deputy President
Signed: ............[sgd G Horzitski].....................
Associate Grace HorzitskiDates of Hearing 14 and 29 July 2009
Date of Decision 14 August 2009
Counsel for the Applicant Mr A. Lewis
Solicitor for the Applicant Mr J. Dowsley, James Dowsley & Associates
Counsel for the Respondent Ms D. Mortimer SC and Mr D. GilbertsonSolicitor for the Respondent Ms J. Birch, Australian Securities & Investments Commission
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