Wright v Australian Prudential Regulation Authority

Case [2024] FCA 183

FEDERAL COURT OF AUSTRALIA

Wright v Australian Prudential Regulation Authority [2024] FCA 183   

File number(s): QUD 470 of 2023
Judgment of: SARAH C DERRINGTON J
Date of judgment: 5 March 2024
Catchwords:  SUPERANNUATION – application under s 126J(1)(a) of the Superannuation Industry (Supervision) Act 1993 (Cth) to vary or revoke disqualification of trustee or responsible officer under s 120A(1) – whether disqualification should be revoked – application granted
Legislation:

Financial Sector Legislation Amendment (Review of Prudential Decisions) Act 2008 (Cth) s 70(2)

Superannuation Industry (Supervision) Act 1993 (Cth) ss 10, 120A, 126G, 126J, 126K

Cases cited: Macalister, in the matter of an application by Macalister [2021] FCA 1455
Division: General Division
Registry: Queensland
National Practice Area: Commercial and Corporations
Sub-area: Regulator and Consumer Protection
Number of paragraphs: 20
Date of hearing: Determined on the papers
Date of last submissions 2 February 2024
Counsel for the Applicant The Applicant appeared in person
Counsel for the Respondent Mr A McKinnon
Solicitor for the Respondent Australian Prudential Regulation Authority

ORDERS

QUD 470 of 2023
BETWEEN:

JAMES HEBDEN WRIGHT

Applicant
AND:

AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Respondent

ORDER MADE BY:

SARAH C DERRINGTON J

DATE OF ORDER:

5 MARCH 2024

THE COURT ORDERS THAT:

1.Pursuant to s 126J(1)(a) of the Superannuation Industry (Supervision) Act 1993 (Cth), the disqualification of Mr James Hebden Wright made on 16 January 2004 pursuant to s 120A(1) of the SIS Act be revoked.

2.The Australian Prudential Regulation Authority remove Mr James Hebden Wright’s disqualification listing from the APRA Disqualification Register.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT

SARAH C DERRINGTON J

INTRODUCTION

  1. By an originating application filed on 30 October 2023, the applicant, Mr James Hebden Wright, seeks orders pursuant to s 126J of the Superannuation Industry (Supervision) Act 1993 (Cth) (SIS Act): that his disqualification as a trustee or responsible officer made on 16 January 2004 be varied or revoked, pursuant to s 120A(1) of the SIS Act, as then enacted; and that the Australian Prudential Regulation Authority (APRA) remove his disqualification listing from the APRA Disqualification Register.

  2. APRA is not required to be joined as a party to an application made pursuant to s 126J of the SIS Act. Nevertheless, as Mr Wright did join APRA, and because he is self-represented, APRA has filed submissions to assist the Court. The Court is grateful for APRA’s courtesy and assistance. APRA is neutral as to whether the orders sought by the applicant should be made.

  3. In support of his application, Mr Wright relied on his affidavits dated 25 October 2023 (First Wright Affidavit), 4 December 2023 (Second Wright Affidavit), and 8 December 2023 (Third Wright Affidavit) and written submissions filed on 31 January 2024. APRA relied on two affidavits of John Edmund Poulsen dated 30 November 2023 (First Poulsen Affidavit) and 22 December 2023 (Second Poulsen Affidavit), and written submissions filed on 2…

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AGLC
Wright v Australian Prudential Regulation Authority [2024] FCA 183
Case
[2024] FCA 183
Decision Date

CaseChat Overview and Summary

In the case of Wright v Australian Prudential Regulation Authority, the applicant, Mr Wright, sought the revocation of his disqualification as a trustee or responsible officer of a superannuation fund under section 120A(1) of the Superannuation Industry (Supervision) Act 1993 (Cth). The application was determined on written submissions alone, and the court granted the application, revoking Mr Wright’s disqualification. The primary issue before the court was whether Mr Wright’s disqualification should be revoked under section 126J(1)(a) of the SIS Act. This section allows a disqualified person to apply for the variation or revocation of an order if they were disqualified under section 126H. The court had to consider Mr Wright’s evidence that he was unaware of his disqualification and had not been properly notified by APRA. The court found that Mr Wright had not been properly notified of the disqualification and did not receive any communication from APRA regarding his disqualification, which was in effect since 2004.

The court carefully examined the legislative framework, including the Financial Sector Legislation Amendment (Review of Prudential Decisions) Act 2008 (Cth) and section 126J of the SIS Act, which provides the court with the power to revoke or vary a disqualification. The court noted that Mr Wright’s disqualification was in force when the relevant provisions of the Review of Prudential Decisions Act were enacted and continued in force under section 70(2) of that Act. The court found that Mr Wright's lack of awareness and proper notification aligned with the statutory requirements and the principles of natural justice, leading to the conclusion that the disqualification should be revoked. The court’s decision was grounded in the statutory provisions and the need to ensure fair processes in the enforcement of disqualifications.

The court ordered that Mr Wright’s disqualification, imposed on 16 January 2004, be revoked under section 126J(1)(a) of the SIS Act. Additionally, the Australian Prudential Regulation Authority was directed to remove Mr Wright’s disqualification listing from the APRA Disqualification Register. The court's orders ensure that Mr Wright's disqualification is officially revoked and that his name is removed from the register, providing him with the opportunity to resume his role in superannuation fund management, subject to compliance with any conditions set by the court.

Orders

Orders of the court

1. Pursuant to s 126J(1)(a) of the Superannuation Industry (Supervision) Act 1993 (Cth), the disqualification of Mr James Hebden Wright made on 16 January 2004 pursuant to s 120A(1) of the SIS Act be revoked.

2. The Australian Prudential Regulation Authority remove Mr James Hebden Wright’s disqualification listing from the APRA Disqualification Register.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

On 8 January 2024, I made Orders that the proceeding be determined on the papers. For the reasons that follow, it is appropriate to make the orders sought by Mr Wright.BACKGROUND The circumstances of Mr Wright’s disqualification are described in the First and Third Wright Affidavits, and the Second Poulsen Affidavit. At the time of his disqualification, Mr Wright was a trustee or responsible officer of “The Wright Directors and Executives Superannuation Fund” (WDES). The accountant who was administering WDES at the time used his business address – a post office box in Kuranda, Queensland 4881 – for correspondence. The evidence discloses that APRA had attempted to contact Mr Wright in 2003 about the non-lodgement of annual returns for WDES. None of APRA’s communications appear to have been brought to Mr Wright’s attention by his accountant, if they were received. Mr Wright deposed that he left North Queensland in 1996 and subsequently relocated to Brisbane. His accountant similarly left North Queensland and relocated to Tasmania in 1998, whereupon Mr Wright lost contact with him. APRA was apparently not notified of any change of contact details for WDES. Mr Wright did not become aware of his disqualification until on or about 11 July 2023 when he spoke with an officer of the Australian Taxation Office (ATO) about his application for SMSF registration. In order to view copies of the relevant disqualification notices, he was required to lodge a Freedom of Information request with APRA. I accept Mr Wright’s evidence that he never received any phone calls or mail from APRA in the period immediately prior to his disqualification, or in the ensuing period of over 20 years. APRA does not contest that evidence. In the period between 2003 and 2022, Mr Wright was a director of a corporate trustee entity Eurostyle Eyewear Pty Ltd ACN 107 117 395 as trustee for The Wright #3 Family Trust. Considering that both are registered entities, it is somewhat surprising that APRA was unable to obtain accurate contact details for Mr Wright through basic corporate searches, but nothing turns on this. To the extent that Mr Wright’s First Affidavit contained opinion evidence as to his view of shortcomings in the regulatory regime administered by APRA, that evidence is inadmissible, and I have had no regard to it.SHOULD THE DISQUALIFICATION BE REVOKED? The Financial Sector Legislation Amendment (Review of Prudential Decisions) Act 2008 (Cth) introduced, among other provisions, ss 126G to 126K of the SIS Act. Section 126K(1) of the SIS Act relevantly provides that a person commits an offence if the person is a disqualified person, and, knowing that he or she is a disqualified person, “is or acts as a trustee, investment manager or custodian of a superannuation entity”. Mr Wright’s disqualification was in effect at the time of the commencement of the relevant provisions of the Review of Prudential Decisions Act, which were assented to on 26 May 2008. The disqualification was taken to continue in force by virtue of s 70(2) of that Act. That section provides: (2) For the purposes of the Superannuation Industry (Supervision) Act 1993, a disqualification by APRA that is in force under section 120A of that Act immediately before this item commences continues in force after this item commences.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

The Financial Sector Legislation Amendment (Review of Prudential Decisions) Act 2008 (Cth) introduced, among other provisions, ss 126G to 126K of the SIS Act. Section 126K(1) of the SIS Act relevantly provides that a person commits an offence if the person is a disqualified person, and, knowing that he or she is a disqualified person, “is or acts as a trustee, investment manager or custodian of a superannuation entity”. Mr Wright’s disqualification was in effect at the time of the commencement of the relevant provisions of the Review of Prudential Decisions Act, which were assented to on 26 May 2008. The disqualification was taken to continue in force by virtue of s 70(2) of that Act. That section provides: (2) For the purposes of the Superannuation Industry (Supervision) Act 1993, a disqualification by APRA that is in force under section 120A of that Act immediately before this item commences continues in force after this item commences. Section 126J of the current SIS Act is in these terms: 126J Court power to revoke or vary a disqualification etc. (1) A disqualified person, or the Regulator, may apply to the Federal Court of Australia for: (a) if an individual is a disqualified person only because he or she was disqualified under section 126H – a variation or a revocation of the order made under that section; or (b) otherwise––an order that the person is not a disqualified person. (2) If the Court revokes an order under paragraph (1)(a) or makes an order under paragraph (1)(b), then, despite section 120, the person is not a disqualified person. (3) At least 21 days before commencing the proceedings, written notice of the application must be lodged: (a)if the disqualified person makes the application––by the person with the Regulator; or (b) if the Regulator makes the application––by the Regulator with the disqualified person. (4) An order under paragraph (1)(b) may be expressed to be subject to exceptions and conditions determined by the Court. (Emphasis in original.) “Regulator” is defined in s 10 of the SIS Act as follows: (a) if the provision in which it occurs is, or is being applied for the purposes of, a provision that is administered by APRA (other than a provision that is administered by both APRA and ASIC)—APRA; or (b) if the provision in which it occurs is, or is being applied for the purposes of, a provision that is administered by ASIC (other than a provision that is administered by both APRA and ASIC)—ASIC; or (c)if the provision in which it occurs is, or is being applied for the purposes of, a provision that is administered by both APRA and ASIC—either APRA or ASIC, but, if the context requires the reference to be particularly to one of those bodies, then Regulator means that body; or(d)if the provision in which it occurs is, or is being applied for the purposes of, a provision that is administered by the Commissioner of Taxation—the Commissioner of Taxation. Note: In relation to paragraph (c), the context may require Regulator to mean the same body as has been referred to elsewhere. For example, in subsection 344(1), the Regulator who may be requested to reconsider a decision is required by the context to be a reference to the body who made the reviewable decision.(Emphasis in original.)

Ratio Decidendi

Legal Principle Established

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