Tokich and Australian Securities and Investments Commission
[2007] AATA 1192
•30 March 2007
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 1192
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 20070092
GENERAL ADMINISTRATIVE DIVISION ) Re ROBERT TOKICH Applicant
And
AUSTRALIAN SECURITIES & INVESTMENTS COMMISSION
Respondent
DECISION
Tribunal The Hon R N J Purvis AM QC, Deputy President Date30 March 2007
PlaceSydney
Decision The Application for Extension of Time is refused. ....................[sgd]........................
The Hon R N J Purvis AM QC
Deputy President
CATCHWORDS
JURISDICTION – powers under section 11(4) or 13 of Australian Securities and Investment Commission Act 2001 – decision not to commence investigation – decision made does not fall within section 244 Australian Securities and Investment Commission Act 2001- non relevance of section 536 Corporations Act 2001 – decision not competent for review by Administrative Appeals Tribunal – Application for Extension of Time refused.
Administrative Appeals Tribunal Act 1975; sections 3(3) and 25
Australian Securities and Investments Commission Act 2001; sections 11(4), 13, 244
Corporations Act 2001; section 536
Nickson and Australian Securities and Investments Commission [2005] AATA 859
Bittman and Australian Securities and Investments Commission [2006] AATA 732
REASONS FOR DECISION
30 March 2007 The Hon R N J Purvis AM QC, Deputy President application
1. This is an application made by Mr Robert Tokich seeking an extension of time for him to lodge an application for the review of a decision made by a delegate of the Australian Securities and Investments Commission (the Respondent). The decision sought to be reviewed by Mr Tokich is stated by him as one of 13 September 2006. A decision made by the Respondent on 28 November 2003 is the decision that is more apposite.
2. The Application for Extension of Time is opposed by the Respondent on the grounds that:
(i) The letter of 13 September 2006 does not contain a decision within the meaning of section 25 of the Administrative Appeals Tribunal Act 1975 capable of being reviewed by the Tribunal.
(ii) Whilst a decision was made by the Respondent as set forth in its letter of 28 November 2003, this decision was to the effect that the Respondent had decided not to commence an investigation into a number of complaints then raised by Mr Tokich. Such a decision was made by the Respondent in the exercise of powers granted to it under sections 11(4) and/or section 13 of the Australian Securities and Investments Commission Act 2001. It was not a decision the like of that detailed in section 244 of that Act and competent for review by the Administrative Appeals Tribunal.
3. The application proceeded to a Hearing as if it related to each of the letters of 13 September 2006 and 28 November 2003. The only issue raised by the Respondent was that of competence of the Tribunal. No issue referable to explanation for the delay or the merits or otherwise of Mr Tokich’s complaints was raised.
4.In its letter of 28 November 2003 the Respondent stated:
I refer to your correspondence dated 1 October 2003, 9, 16 and 28 November 2003 in relation to concerns over the conduct of the above named companies [CGU Workers Compensation (NSW) Ltd] and Steven Nicols as appointed liquidator of Sheraton Constructions (N.S.W.) Pty Ltd.
After careful consideration ASIC has decided not to commence an investigation into the issues you have raised at this time.
As discussed with you on a number of occasions it may be appropriate for you to seek and rely on your own legal advice in relation to the matter …
5. In the letter from the Respondent to Mr Tokich of 13 September 2006 the following appears :
In reference to your phone conversation with me on the 1 September 2006, my statements were that ASIC was not prepared to investigate the matter any further and we would not reopen the file and could not assist you further. At no time during our conversation was a reference made to the NSW Minister for Small Business.
We have made available the minutes of the meeting of March 2003 as we have received them. There is no other information we can provide to you. In respect of ASIC’s database, this is merely a record of documents lodged with it. Irrespective of this, the private rights of a party are not affected by what appears on the ASIC database. We note you made an application in the Supreme Court of NSW in 2002 in relation to the proxies, which dismissed your claim.
We have dealt with your matter in an impartial and objective manner and told you what we have. To this end, we cannot assist you further. We also note you have previously raised your concerns into ASIC’s handling of your allegations with the Commonwealth Ombudsman and they have also informed you of their determination following their inquiries.
After careful consideration we have decided that we will not take any further action into the issues you have raised. Please note that further telephone contact or correspondence relating to the same or similar issues, will not be responded to.
relevant facts
6. Mr Tokich was a director and the secretary of Sheraton Constructions (NSW) Pty Ltd, which company was, on 29 July 2002, presented with a petiton for its winding up. The petitioning creditor was CGU Workers Compensation (NSW) Ltd. A winding up order was made by the Supreme Court of New South Wales on 3 October 2002, a Mr S. Nicols being appointed liquidator.
7. Mr Nicols purported to hold a meeting of the company’s creditors on 11 March 2003. Mr Tokich was in attendance. Sometime after the meeting Mr Tokich complained to the Respondent that documentation referable to proxies allegedly lodged on behalf of the Commonwealth Bank of Australia and CGU Workers Compensation (NSW) Ltd were false, and false to the knowledge of Mr Nicols, the liquidator. The Minutes referable to the meeting were also said by Mr Tokich to be false. Mr Tokich further complained to the Respondent that CGU Workers Compensation (NSW) Ltd had falsely created a debt owing to it by Sheraton Constructions (NSW) Pty Ltd in order to have the latter company placed in liquidation.
8. The complaints of Mr Tokich were the subject of face to face discussions between him and officers of the Respondent as well as correspondence. The Respondent made its own enquiries. Mr Tokich wrote seeking to have the Respondent comment upon his complaints. It was then on 28 November 2003 that the Respondent wrote its above mentioned letter.
9. In 2006 Mr Tokich wrote to the Respondent by letter and by facsimile. The Respondent replied by its above letter of 13 September 2006.
legislative provisions relevant to this application
10. The Australian Securities and Investments Commission Act 2001 provides by sections 11(4), 13 and 244 that:
11 Corporations legislation functions and powers and other functions and powers conferred by the States and Territories
(4)ASIC has power to do whatever is necessary for or in connection with, or reasonably incidental to, the performance of its functions.
13 General powers of investigation
(1)ASIC may make such investigation as it thinks expedient for the due administration of the corporations legislation (other than the excluded provisions) where it has reason to suspect that there may have been committed:
(a)a contravention of the corporations legislation (other than the excluded provisions); or
(b)a contravention of a law of the Commonwealth, or of a State or Territory in this jurisdiction, being a contravention that:
(i) concerns the management or affairs of a body corporate or managed investment scheme; or
(ii) involves fraud or dishonesty and relates to a body corporate or managed investment scheme or to financial products.
(2)Where ASIC has reason to suspect that unacceptable circumstances within the meaning of Subdivision B of Division 2 of Part 6.12 of the Corporations Act have, or may have, occurred, ASIC may make such investigation as it thinks expedient:
(a)for the purposes of determining whether or not to make an application under section 657C of that Act; or
(b)otherwise for the due administration of the corporations legislation (other than the excluded provisions).
(6) If ASIC has reason to suspect that a contravention of a provision of Division 2 of Part 2 may have been committed, ASIC may make such investigation as it thinks appropriate.
Section 244 Review by Administrative Appeals Tribunal of certain decisions
(1)In this section:
decision has the same meaning as in the Administrative Appeals Tribunal Act 1975 .
(2)Applications may be made to the Administrative Appeals Tribunal for review of a decision by ASIC:
(a)to make an order under section 72 or 73; or
(b)to make an order under subsection 75(1) varying an order in force under Division 8 of Part 3; or
(c)to refuse to vary or revoke an order in force under Division 8 of Part 3.
11.The Corporations Act 2001 provides by section 536 that:
Section 536 Supervision of Liquidators
(1) Where:
(a)it appears to the Court or to the ASIC that a liquidator has not faithfully performed or is not faithfully performing his or her duties or has not observed or is not observing:
(i) a requirement of the Court; or
(ii) a requirement of this Act, of the regulations or of the rules; or
(b)a complaint is made to the Court or to ACIS by any person with respect to the conduct of a liquidator in connection with the performance of his or her duties;
the Court or ASIC, as the case may be, may inquire into the matter and, where the Court or ASIC so inquires, the Court may take such action as it thinks fit.
(2) ASIC may report to the court any matter that in its opinion is a misfeasance, neglect or omission on the part of the liquidator and the Court may order the liquidator to make good any loss that the estate of the company has sustained thereby and may make such other order or orders as it thinks fit.
12.The Administrative Appeals Tribunal Act 1975 provides by section 3(3) and 25 that:
Section 3 Interpretation
(3)Unless the contrary intention appears, a reference in this Act to a decision includes a reference to:
(a) making, suspending, revoking or refusing to make an order or determination;
(b)giving, suspending, revoking or refusing to give a certificate, direction, approval, consent or permission;
(c) issuing, suspending, revoking or refusing to issue a licence, authority or other instrument;
(d)imposing a condition or restriction;
(e)making a declaration, demand or requirement;
(f) retaining, or refusing to deliver up, an article; or
(g)doing or refusing to do any other act or thing.
Section 25 Tribunal may review certain decisions
Enactment may provide for applications for review of decisions
(1)An enactment may provide that applications may be made to the Tribunal:
(a)for review of decisions made in the exercise of powers conferred by that enactment; or
(b)for the review of decisions made in the exercise of powers conferred, or that may be conferred, by another enactment having effect under that enactment.
Australian Securities and Investment Commission Act sections 11(4) and 13
13. It is submitted on behalf of the Respondent that where it is the recipient of a complaint a decision is made by it when it either determines to exercise its power under section 11(4) of the Act to do whatever it considers is necessary for or in connection with, or reasonably incidental to, the performance of its functions or under section 13 of the Act to make such investigation “as it thinks expedient” for the due administration of the legislation.
14. The Respondent decided in 2003 not to commence an investigation into the complaints made by Mr Tokich. This was a decision that it was empowered to make pursuant to the Australian Securities and Investment Commission Act 2001.
15. The position taken by the Respondent as stated in its letter of 28 November 2003 was a decision made by it within the meaning of section 3 of the Administrative Appeals Tribunal Act 1975.
16. The statement by the Respondent in its letter of 13 September 2006, namely “After careful consideration we have decided that we will not take any further action into the issues you have raised …” may also be a decision within the meaning of section 3 of the Administrative Appeals Tribunal Act.
17. However, neither the decision in the letter of 28 November 2003 or the decision, if it be one, in the letter of 13 September 2006 is a decision the like of that referred to in section 244 of the Australian Securities and Investment Commission Act 2001. An order under section 72 of that Act applies where in ASIC’s opinion information about the affairs of a body corporate “needs to be found out for the purposes of the exercise of any of ASIC’s powers under [Part 3 Division 8] but cannot be found out because a person has failed to comply with a requirement made under this Part.” An order under section 73 of the Act applies where in ASIC’s opinion information about financial products “needs to be found out for the purposes of the exercise of any of ASIC’s powers under [Part 3 Division 8] but cannot be found out because a person has failed to comply with a requirement made under this Part.” Neither section 72 or 73 is relevant in the present circumstances.
18. Section 75(1) of the Australian Securities and Investment Commission Act 2001 refers to the power to vary or revoke an order already made and section 244(2)(c) to refusal to vary or revoke such an order. Neither subsection is relevant in this application.
Corporations Act 2001 Section 536
19. It is strictly not necessary for me to further discuss the application made by Mr Tokich for consideration of the decisions of the Respondent of 2003 or of 2006. However, the possible application of section 536 of the Corporations Act 2001 was discussed at the hearing and in submissions.
20. It is clear from the express working of section 11(4) of the Act that the provision is one enabling the Respondent to do such things as it considers necessary in order to perform its functions. Section 13(1) of the Act contains a power that is discretionary. It may exercise the power or not exercise the power depending upon what “it thinks expedient”.
21. Section 11(4) is to a like effect. The subsection gives the Respondent a power which it is to exercise as it considers is relevantly necessary.
22. The Respondent made its decision of 2003 and 2006 exercising the power given to it by section 11(4) of the Australian Securities and Investments Commission Act 2001 and/or section 13(1). As stated above, decisions made under either section are outside the scope of section 244 of the Act and are not reviewable by the Tribunal: see re Nickson and Australian Securities and Investments Commission [2005] AATA 859 at paras 32, 39 and 58; Bittman and Australian Securities and Investments Commission [2006] AATA 732 at para 67.
23. In the present instance, the Respondent in making a decision not to commence an investigation was determining merely that an investigation was not warranted. As has been already detailed above this was a decision made pursuant to a power conferred upon it under the Australian Securities and Investments Commission Act 2001.
24. It was submitted on behalf of the Respondent that the decision/decisions of the Respondent not to commence an investigation into the Applicant’s complaints was not a decision under the Corporations Act 2001. Section 536 of that Act deals with the power to supervise liquidators and refer matters to the court. In relation to the complaint against the liquidator in the present matter the Respondent in deciding not to commence an investigation, was determining that regulatory intervention was not required in the matter. It is then maintained that a decision of this nature was made pursuant to s11(4) of the Australian Securities Investments Commission Act 2001 and does not involve any determination or positive decision being made not to conduct a section 536 enquiry.
25. The Applicant contends that section 536 is the section under which the Respondent derives its power to investigate and that his complaints “come under the scope of section 244” of the Australian Securities Investments Commission Act 2001. The jurisdiction conferred upon the Tribunal by section 244 is not, however, such as to embrace section 536 of the Corporations Act 2001.
26. A situation somewhat similar to the present arose in Nickson (supra) where the Tribunal was asked to reach a decision as to the applicability of the provisions of the Corporations Act 2001 where it had been decided by the Respondent that the actions of a liquidator did not require regulatory intervention. It was decided, as in the present application, that the decision had been made under section 11(4) of the Australian Securities and Investments Commission Act 2001 and was thus not reviewable by the Tribunal. With respect, the reasoning in Nickson is persuasive. Section 536 gives the Respondent the discretionary power to enquire, and then if it so decides, report to the Court and apply for an appropriate order. The section does not confer power on the Respondent to make a decision other than whether an enquiry into the matter is to be made. The Court may then take such action as it thinks fit. It is for the Court to take such action.
27. At paragraph 55 in Nickson it was stated:
I am not satisfied that ASIC made a decision under section 536 not to investigate the matters Mr Nickson raised. Certainly, it could have made such a decision for its discretion was enlivened when Mr Nickson made his complaint about the conduct of Mr McLellan a liquidator in connection with the performance of his duties as administrator of the EPAC group ie the event specified in section 536(1)(b) has occurred. ASIC decided that, on the information available to it Mr McLellan’s conduct did not require regulatory intervention at that time. It referred specifically to the CALD Board that was consistent with its reference to regulatory intervention. It made no reference to any enquiry of the sort that it could conduct under section 536. In omitting to mention such an enquiry, I have concluded that ASIC has not decided not to enquire under section 536 into the matters raised by Mr Nickson. Instead, it has decided not to turn its mind to its powers under section 536 at all. That is a decision that it could make exercising its powers under section 11(4) of the ASIC Act but that is not a decision that is reviewable by the Tribunal because of the operation of section 244(2) of that legislation. As it has not made a decision at all under section 536 of the Act, the Tribunal cannot rely on section 1317B(1) of the Act on which to base its jurisdiction to review ASIC’s action.
28. As in Nickson, so in this application, the Tribunal is not satisfied that a decision was made under section 536 not to enquire into the matter. On the basis of the information before it a decision was made by the Respondent that the alleged conduct did not require regulatory intervention. The respondent decided in 2003 “not to commence an investigation into the issues … raised at this time” and in 2006 “not take any further action into the issues … raised”.
29. No reference was made to any enquiry that it may be able to make under section 536. It was not a decision not to enquire under section 536 into the matters raised by the Applicant. The decision made by ASIC was under section 11(4) and or section 13 of the Australian Securities and Investments Commission Act.
Determination
30. I am of the opinion and so determine that there is no jurisdiction conferred upon the Tribunal to hear and determine any application made to review the 2003 and/or 2006 decisions of the Respondent. Accordingly the Application for Extension of Time is refused.
I certify that the 30 preceding paragraphs are a true copy of the reasons for the decision herein of The Hon R N J Purvis AM QC, Deputy President
Signed: ......[Emily Gadsby]........
AssociateDate/s of Hearing 20 February 2007
Date of Decision 30 March 2007
Representative for the Applicant Self-represented
Solicitor for the Respondent Mr J Mazurkiewicz
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