FEDERAL COURT OF AUSTRALIA
Walker v Members Equity Bank Ltd [2021] FCA 1554
ORDERS
VID 278 of 2021 BETWEEN: CAROLINE WALKER
Applicant
AND: MEMBERS EQUITY BANK LTD ABN 56 070 887 679
Accused
ORDER MADE BY:
MORTIMER J
DATE OF ORDER:
15 DECEMBER 2021
THE COURT ORDERS THAT:
1.The question reserved in…
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Details
- Case
- [2021] FCA 1554
- Decision Date
CaseChat Overview and Summary
In the matter of Walker v Members Equity Bank Ltd, the applicant, Caroline Walker, an officer of the Australian Securities and Investments Commission (ASIC), filed 62 charges against ME Bank on 25 May 2021. The charges were later reduced to eight 'rolled up' charges, four of which pertain to alleged contraventions of sections 64 and 65 of the National Credit Code (Cth), and the other four to alleged contraventions of sections 12DB(1)(g) and 12GB(1) of the Australian Securities and Investments Commission Act 2001 (ASIC Act). The court was tasked with deciding whether section 12GB(6) of the ASIC Act imposes a restrictive time limit on the bringing of a prosecution for conduct to which section 12GB(1) refers. The applicant contended that a prosecution may be brought at any time, by reason of the operation of section 15B(1A) of the Crimes Act 1914 (Cth). ME Bank, on the other hand, argued that section 12GB(6) does impose a restrictive time limit, and that any contravention of section 12DB(1)(g) alleged to have occurred before 25 May 2018 would be out of time and statute-barred.
The court considered the legislative history and the purpose behind the imposition of a three-year time limit for instituting prosecution under section 12GB(6) of the ASIC Act. The court found that section 12GB(6) does impose a restrictive time limit on the bringing of a prosecution for conduct to which section 12GB(1) refers. The court held that the three-year period is a relatively short time in which to prosecute a complicated set of allegations about the delivery of financial services by an accused such as ME Bank. However, the court emphasised that the imposition of criminal responsibility is a most serious matter and that the issue of time needed for complex prosecutions is a matter for Parliament. The court concluded that the separate question should be answered in favour of ME Bank's construction.
The court answered the reserved question in favour of ME Bank, stating that the offences the subject of Charges 63, 64, 65 and some of the offences the subject of Charge 66 are statute-barred. The court held that section 12GB(6) of the ASIC Act requires a prosecution to be commenced within three years after the commission of the offence, and no later. This decision has significant implications for the prosecution of financial services-related offences under the ASIC Act and highlights the importance of adhering to statutory time limits for instituting prosecution.
The court considered the legislative history and the purpose behind the imposition of a three-year time limit for instituting prosecution under section 12GB(6) of the ASIC Act. The court found that section 12GB(6) does impose a restrictive time limit on the bringing of a prosecution for conduct to which section 12GB(1) refers. The court held that the three-year period is a relatively short time in which to prosecute a complicated set of allegations about the delivery of financial services by an accused such as ME Bank. However, the court emphasised that the imposition of criminal responsibility is a most serious matter and that the issue of time needed for complex prosecutions is a matter for Parliament. The court concluded that the separate question should be answered in favour of ME Bank's construction.
The court answered the reserved question in favour of ME Bank, stating that the offences the subject of Charges 63, 64, 65 and some of the offences the subject of Charge 66 are statute-barred. The court held that section 12GB(6) of the ASIC Act requires a prosecution to be commenced within three years after the commission of the offence, and no later. This decision has significant implications for the prosecution of financial services-related offences under the ASIC Act and highlights the importance of adhering to statutory time limits for instituting prosecution.
Orders
Orders of the court
1. The question reserved in Order 3 of the Court’s orders of 15 September 2021 be answered as follows:
Yes, the offences the subject of Charges 63, 64, 65 and some of the offences the subject of Charge 66 are statute-barred. Section 12GB(6) of the Australian Securities and Investments Commission Act 2001 (Cth) requires a prosecution to be commenced within three years after the commission of the offence, and no later.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
When the parties proposed a separate question process, the Court queried if it was available in a summary prosecution. The parties submitted it was, and the Court accepted that submission. The separate question was therefore stated in accordance with Division 30.1 of the Federal Court Rules 2011 (Cth).BACKGROUND These proceedings were commenced against ME Bank on 25 May 2021 by an officer of ASIC, Caroline Walker (the applicant), with the filing of 62 charges. The Commonwealth Director of Public Prosecutions is the legal representative for the applicant. It is unnecessary to set out in any detail the course the proceedings then took, other than to note there was substantial negotiation between the parties, which resulted in the filing of a further information dated 11 October 2021 on 20 October 2021. That information alleges eight ‘rolled up’ charges, comprising:(a)four charges alleging contraventions of s 64 and s 65 of the National Credit Code (Cth); and(b)four charges alleging contraventions of s 12DB(1)(g) and s 12GB(1) of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act). The parties adduced a short agreed statement of facts (ASOF) pursuant to s 191 of the Evidence Act 1995 (Cth), the signed document being marked as an exhibit on the separate question. That statement is Annexure A to these reasons. The separate question concerns only the ASIC Act charges. Each of the ASIC Act charges involves alleged false and misleading representations by ME Bank in relation to a number of customers: see [13]-[17] of the ASOF. At the time of ME Bank’s alleged conduct, s 12GB(6) of the ASIC Act provided:A prosecution for an offence against subsection (1) may be commenced within 3 years after the commission of the offence. The present form of s 12GB(6) refers additionally to subs (1AA) of s 12GB, which was inserted on 1 January 2021, but is agreed to be of no relevance to the separate question, or to this proceeding. The separate question presents a constructional choice about the meaning of s 12GB(6): does it impose a “hard” or restrictive time limit on the bringing of a prosecution for conduct to which s 12GB(1) refers? The applicant contended a prosecution may be brought at any time, by reason of the operation of s 15B(1A) of the Crimes Act 1914 (Cth). If, as ME Bank contends, s 12GB(6) does impose a restrictive time limit, then any contravention of s 12DB(1)(g) alleged to have occurred before 25 May 2018 (being three years before the filing date for charges) would be out of time and statute barred. Three of the four ASIC Act charges involve dates entirely before 25 May 2018 – namely, between 24 April 2017 and 30 June 2017 (charge 63); between 1 July 2017 and 7 May 2018 (charge 64); and between 2 September 2016 and 30 June 2017 (charge 65). The fourth ASIC Act charge (charge 66) involves some alleged conduct which is prior to 25 May 2018 and some alleged conduct which is after this date (and up until 3 September 2018).
Evidence
Evidence Before The Court
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Decision
Reasons for decision
However, the emphasis in the Full Court on assessing what work a time limit provision has to do is, with respect, instructive in the context of s 12GB(6). Ultimately, the applicant strained to find work for s 12GB(6) to do, on her contended construction. It is, as I have explained, work which produces some irrationalities, and requires considerable reading into the text of s 12GB(6) itself. I consider that both at first instance and on appeal, the approach taken in Sadie Ville and Deloitte is not inconsistent with the approach I have taken, and does not require me to accept the applicant’s construction.CONCLUSION While it can be accepted that a period of three years is a relatively short time in which to prosecute a complicated set of allegations about the delivery of financial services by an accused such as ME Bank, on the other hand the imposition of criminal responsibility is a most serious matter. The issue of time needed for complex prosecutions is a matter for Parliament. Just as it addressed this issue with the introduction of s 79(6) into the TPA, and carried this through to s 12GB(6), it is able to do so again, if three years is seen as an inadequate period in which to bring a prosecution. The separate question should be answered in favour of ME Bank’s construction.
Ratio Decidendi
Legal Principle Established
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