FEDERAL COURT OF AUSTRALIA

Panganiban v Australian Securities and Investments Commission [2016] FCA 510

ORDERS

THE COURT ORDERS THAT:

1.    The interlocutory application is dismissed.

2.    The originating application, as amended, is dismissed.

3.    The applicant is to pay the respondent’s costs as taxed or agreed.

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

REASONS FOR JUDGMENT

BROMWICH J:

Introduction

1    These proceedings seek judicial review of aspects of an inquiry being conducted by a delegate of the Australian Securities and Investments Commission (ASIC) to determine whether the applicant should be the subject of a banning order pursuant to s 920A of the Corporations Act 2001 (Cth).

2    On 21 April 2016, the matter came before me for the hearing of an interim interlocutory application. The applicant sought an injunction to restrain ASIC, and thus the delegate, from making any banning order until such time as his substantive challenge to the delegate’s conduct of the inquiry could be heard and determined by this Court.

3    ASIC submitted that the interlocutory application for an injunction should be dismissed. Pursuant to a notice of objection to competency, ASIC sought a ruling that these proceedings were incompetent. As a consequence, or in the alternative, ASIC sought summary dismissal of the originating application. In the alternative, ASIC sought to have this Court exercise the discretion to refuse relief upon the basis that the proper forum for the dispute was by way of merits review to the Administrative Appeals Tribunal (AAT).

4    For the reasons that follow, I am of the view that ASIC has made good its objection to competency and that the application (by the time of the hearing, a second further amended originating application) should be dismissed with costs, subject to allowing time for ASIC to seek, and the applicant to oppose, a special costs order.

5    If I am wrong in the conclusions I have reached as to competency, I indicate that had the application been competent, I would have exercised my discretion to refuse relief because the dispute in this case was, at all stages, an appropriate case for merits review by the AAT in the event that the delegate made a banning order.

6    In the light of the above, it was not necessary to consider the alternative application for summary dismissal, although the reasons below indicate that this had better than reasonable prospects of success.

Background

7    Between 19 March 2010 and 12 September 2014, the applicant was an authorised representative of AMP Financial Planning Pty Ltd, the holder of an Australian Financial Services Licence (AFS Licence). He was employed as a financial planner at Benidion Financial Services Pty Ltd, and authorised to provide financial product advice, deal with a financial product and apply for, acquire, or dispose of a financial product for another person.

8    On 29 September 2014, the applicant was appointed as an authorised representative of Lionsgate Financial Group Pty Ltd (Lionsgate). Lionsgate is also the holder of an AFS Licence.

9    The applicant is now working as a financial planner for Lionsgate. It is his sole means of earning a living, and supporting his family. There is no dispute that the applicant was at all relevant times providing financial services, and wishes to continue to do so.

10    The particular financial service provided to clients by the applicant, and the source of ASIC’s concerns, was financial product advice in relation to insurance: see in particular ss 766A(1)(a) and 766B of the Corporations Act.

11    If the delegate did proceed to make a banning order, that would probably mean that the applicant would be unable to work in the financial services industry to the extent of any such order and for the duration of the restriction imposed. The final decision on whether or not to make a banning order inevitably turns on factual findings and related value judgments, whether made by the delegate, or made following any merits review by a member of the AAT if a banning order was made.

12    The making of a banning order is undoubtedly a serious action, with serious consequences for a person made subject to such an order. That is reflected in the statutory regime for ASIC administrative hearings, and for banning order processes in particular.

Legislative framework

13    Chapter 7 of the Corporations Act deals with financial services and markets. Section 760A defines the main object of that chapter. Section 760A(b) includes as a part of the main object the promotion of fairness, honesty and professionalism by those who provide financial services.

14    Section 920A(1) of the Corporations Act provides relevantly as follows:

ASIC may make a banning order against a person, by giving written notice to the person, if:

…

(d)    ASIC has reason to believe that the person is not of good fame or character; or

…

(e)    the person has not complied with a financial services law; or

(f)    ASIC has reason to believe that the person is likely to contravene a financial services law;

…

15    Banning orders under s 920A of the Corporations Act are one of the mechanisms used by ASIC to address concerns about shortcomings of such persons as financial advisors in respect of fairness, honesty and professionalism. Such a sanction, appropriately applied, has the necessary effect of deterring others from failing to adhere to those standards. That in turn facilitates ASIC’s statutory obligation, in performing its functions and exercising its powers, set out in s 1(2) of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act). In particular, ASIC is required, in performing its functions and exercising its powers, to “promote the confident and informed participation of investors and consumers in the financial system”: see s 1(2)(b) of the ASIC Act.

16    Key provisions of the Corporations Act relevant to this matter, in addition to s 920A(1), are as follows:

(a)    s 766A, together with other provisions referred to in that section gives a wide definition of “financial services” – in this case the relevant parts of the definition are in ss 766A(1)(a) and 766B, namely “financial product advice”;

(b)    s 920A(1A) sets out the matters ASIC must (subject to Part VIIC of the Crimes Act 1914 (Cth)) have regard to in considering whether or not there is reason to believe a person is not of good fame and character for the purposes of s 920A(1)(d);

(c)    s 920A(1B) provides that a person contravenes a financial services law (widely defined in s 761A) if the person fails to comply with a duty under that law irrespective of whether the provision creating the duty is a criminal or civil penalty provision;

(d)    s 920A(2) provides (subject to exclusions that are not relevant to this case) that ASIC may only make a banning order after giving the person an opportunity to appear or be represented at a private hearing and to make submissions – hence the 16 November 2015 notice of hearing referred to below;

(e)    s 920B provides that a banning order is a written order that prohibits a person from providing any financial services (as that term is defined in s 766A and other provisions referred to in that section – see above), or alternatively particular financial services as specified, either permanently, or for a specified period, and may allow for particular conduct to take place; and

(f)    s 920C provides that a person against whom a banning order is made cannot be granted an AFS Licence contrary to the order, and that conduct in breach of a banning order is a criminal offence carrying a maximum penalty of a fine of 25 penalty units ($4,500 at the present penalty unit rate of $180, subject to indexation every three years, next taking place on 1 July 2018) and/or imprisonment for 6 months: see Corporations Act, s 1311 and item 268B of Schedule 3.

17    Division 6 of Pt 3 of the ASIC Act provides for ASIC hearings, such as those required by s 920A(2) of the Corporations Act. In particular:

(a)    s 57 (read with s 920A(2)(a) of the Corporations Act) provides for the involvement of a person entitled to appear (or be represented) at a hearing (as reflected in the 16 November 2015 notice of hearing issued to the applicant);

(b)    s 58 gives a power to summon witnesses to give evidence and produce documents; and

(c)    s 59 provides that a hearing must be conducted as informally and expeditiously as the requirements of the legislation and the context of the matters before ASIC permit, not being bound by the rules of evidence, but being required to observe the rules of natural justice.

18    The applicant contended that there was an additional common law obligation to afford procedural fairness, although it was not explained what the additional content of that common law right, if any, might be. It was not disputed that parliament may expand or narrow the scope of the content of procedural fairness.

Notice of hearing before ASIC

19    On 16 November 2015, the delegate sent the applicant a notice of hearing under s 920A of the Corporations Act. The notice advised the applicant that ASIC was concerned as to particular paragraphs of s 920A, namely that:

(a)    he had not complied with a financial services law: s 920A(1)(e);

(b)    it had reason to believe he would not comply with a financial services law: s 920A(1)(f); and

(c)    he was not a person of good fame and character: s 920A(1)(d).

20    The 16 November 2015 notice of hearing also had two attachments:

(a)    Attachment A, which set out ASIC’s areas of concern, focussing in particular on the applicant advising 50 clients in the period from 4 February 2011 to 31 July 2014 to cancel their AMP Flexible Lifetime Superannuation insurance policies and replace them with AMP Flexible Superannuation insurance policies. Attachment A also included related concerns as to whether this change was in the best interests of those clients in all the circumstances, including the effect on commission payments; and

(b)    Attachment B, which was a list of documents upon which the concerns set out in Attachment A were based (copies of which were made available to the applicant, and tendered, subject to relevance, in the proceedings before me).

21    Attachment A set out ASIC’s particular concerns in some detail as to whether or not the applicant:

(a)    had failed to give priority to his clients’ interests contrary to s 961J;

(b)    had failed to act in the best interests of his clients in relation to his advice contrary to s 961B;

(c)    did not have a reasonable basis for his advice contrary to s 945A (until repeal on 30 June 2013);

(d)    was likely to contravene a financial services law by reason of each of the above concerns and additional concerns listed in paragraph 16 of Attachment A; and/or

(e)    was not of good fame and character by reason of the above concerns and additional concerns listed.

Hearing before ASIC

22    The 16 November 2015 notice of hearing contemplated a hearing taking place on 17 December 2015. In the event, and at the request of the applicant, the hearing ultimately did not take place until 1 March 2016 (the ASIC hearing).

23    The applicant attended the ASIC hearing before the delegate and gave evidence. He was represented by a solicitor and by senior counsel, the latter adducing evidence from him.

24    The applicant’s evidence at the ASIC hearing entailed, inter alia, him being taken through a statement signed by him and a range of other documents by his counsel. This included, in particular, being taken through parts of two volumes of statements of advice (SOA) provided by the applicant to each of his clients throughout the relevant period, copies of which were provided to the delegate.

25    The SOAs before the delegate related to 49 of the 50 clients. There was no suggestion that anything turned on the absence of the 50th SOA.

26    At the ASIC hearing the applicant sought to provide an explanation for what he had done in respect of the clients the subject of the notice of hearing, sometimes specifically, and sometimes at a more general level.

Initial request for access to the client files

27    After attending the ASIC hearing the applicant changed solicitors. His new solicitors, who also act for him in these proceedings, sought to have ASIC give access to the 50 clients’ files if ASIC had them. In the alternative, to the extent that ASIC did not have any of the client files, the applicant’s solicitors sought to have ASIC require production to it and thereafter to the applicant. The delegate declined to do either, but did allow a further opportunity to provide additional submissions until 4.00 pm on 26 April 2016.

28    At the conclusion of the hearing before me on 21 April 2016, I sought and was given an undertaking that the delegate would not (if otherwise minded to do so) make any banning order until this judgment was handed down.

29    The applicant’s position was and is that without access to the clients’ files he cannot properly address the allegations that are before the delegate or make meaningful further submissions.

Proceedings in this Court

30    On 7 April 2016 the matter first came before me as duty judge for a short service application, which I granted.

31    On 13 April 2016 the matter came before Jagot J as duty judge. ASIC flagged an intention to file a notice of objection to competency on the basis that there was no “decision” for the purposes of s 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act) and no “conduct” for the purposes of s 6 of the ADJR Act. Counsel appearing for the applicant said he would amend the originating application to found a claim in s 39B of the Judiciary Act 1903 (Cth).

32    In fact, s 1337A(2)(b) of the Corporations Act provides that Div 1 of Pt 9.6A operates to the exclusion of s 39B of the Judiciary Act. Section 1337B(1) of the Corporations Act confers plenary jurisdiction on this Court with respect to civil matters arising under the Corporations legislation. ASIC advised Jagot J that it would consider any amended originating application and might file a notice of objection to competency, or might file an interlocutory application for summary disposal even if it accepted the proceedings were competent. Neither party was, at that time, ready to have the applicant’s interlocutory application resolved.

33    As directed by Jagot J, I received written submissions from both parties and also a notice of objection to competency filed by ASIC. As foreshadowed by ASIC, the notice of objection to competency asserted that the Court’s jurisdiction was not invoked. ASIC’s argument is that the delegate had not made a “decision” that was reviewable under s 5 of the ADJR Act. Further, ASIC argued that the matters sought to be reviewed in the part of the application that referred to s 6 were not “conduct” for the purpose of making a decision to which the ADJR Act applied and were therefore not reviewable.

34    The application ultimately proceeded by way of a second further amended originating application for judicial review. The argument before me was confined to:

(a)    whether the application was competent;

(b)    if the application was competent, whether relief should be nonetheless refused in the exercise of discretion under s 10(2)(b)(ii) of the ADJR Act upon the basis that an application should not be granted under, relevantly, ss 5 or 6 of that Act, for the reason that “adequate provision is made by any law other than this Act under which the applicant is entitled to seek a review by the court, by another court, or by another tribunal, authority or person, of that decision, conduct or failure”, namely the right of merits review by the AAT as provided for by s 1317B(1)(b) of the Corporations Act; and

(c)    if the application was competent, and the discretion not to entertain it was not exercised in ASIC’s favour, whether it should be summarily dismissed under s 31A of Federal Court of Australia Act 1976 (Cth).

35    It was only if ASIC failed on all the above arguments that I would need to consider whether the application for the injunction should be granted.

Whether the proceedings were competent

36    It was common ground that as the delegate has not yet made any decision as to the banning order, there was no such decision to which s 5 of the ADJR could be directed. However, the applicant did press as a “decision” for the purpose of s 5 of the ADJR Act what was alleged to be a decision to decline to give him access to the client files sought, which was styled as being a decision under s 127(2) of the ASIC Act.

37    Relevantly, ss 127(1) and (2) of the ASIC Act provide as follows:

127    Confidentiality

(1)    ASIC must take all reasonable measures to protect from unauthorised use or disclosure information:

(a)    given to it in confidence in or in connection with the performance of its functions or the exercise of its powers under the corporations legislation (other than the excluded provisions); or

(b)    that is protected information.

Note:    Information given to ASIC under Part 7.5A of the Corporations Act may be taken, for the purpose of this section, to be given in confidence in connection with the performance of ASIC’s functions under that Act: see subsections 903A(5) and (6), and 906A(3) and (4), of the Corporations Act.

(1A)    Disclosing summaries of information or statistics derived from information is authorised use and disclosure of the information provided that information relating to any particular person cannot be found out from those summaries or statistics.

(2)    For the purposes of subsection (1), the disclosure of information as required or permitted by a law of the Commonwealth or a prescribed law of a State or internal Territory is taken to be authorised use and disclosure of the information.

…

38    The applicant submitted that, because the information was required or permitted for the purposes of s 920A of the Corporations Act and/or s 58 of the ASIC Act, the confidentiality provisions of s 127 of the ASIC Act did not apply.

39    The impugned decision was asserted to be contained in a letter from ASIC to the applicant’s solicitor dated 23 March 2016, in which reference was made to emails of 22 March 2016 and 23 March 2016. Those emails sought access to the transcript of the ASIC hearing on 1 March 2016 (which was provided) and to “all of ASIC’s files” in relation to the matters being considered in the applicant’s hearing under s 920A, including 49 client files of the applicant’s former employer, Benidion Financial Services Pty Ltd.

40    ASIC’s 23 March 2016 letter responded to those requests in the following terms (extract only):

Request for additional documents

I note your client has been provided with all of the documents that are relevant to the matters at issue in your client’s hearing before the ASIC delegate. Therefore, procedural fairness to your client does not require the provision of any additional documents. In light of this your request for additional documents is declined.

ASIC is subject to confidentiality obligations in the ASIC Act and must take reasonable measures to prevent unauthorised use and disclosure of information it receives in confidence, in connection with its statutory functions. This means that we are unable to provide you with access to the documents you request.

If it assists, ASIC’s Regulatory Guide 103 Confidentiality and Release of Information discusses in what circumstances ASIC can release information. (Original emphasis)

41    In my view reliance on this letter as a decision under an enactment, being s 127(2) of the ASIC Act, fails at the first hurdle. Access to the documents was declined in accordance with the first paragraph of the portion of the 23 March 2016 ASIC letter reproduced above. It is not suggested that was itself a decision under an enactment. There was no refusal of access by way of a decision under s 127(2), even if noting an inability to give access could be considered to be a decision under an enactment, which I do not consider it can.

42    The reference in the 23 March 2016 ASIC letter to confidentiality obligations was an additional reason why access could not be given. While that conclusion may be contestable, it was not the primary basis for refusing access. The letter is express that access had already been provided to all documents which ASIC considered were relevant to the process underway. It was up to the applicant to provide a reason or basis for providing more documents.

43    A further asserted decision initially advanced of a refusal to exercise the discretion under s 58 of the ASIC Act to issue a summons to produce the client files to AMP was not pressed. No other asserted “decision” under s 5 of the ADJR Act was pressed by the applicant.

44    The primary basis for the applicant asserting jurisdiction by reason of a competent application under the ADJR Act was based on s 6 of that Act, relating to “conduct”. The applicant submitted that the “conduct” falling within s 6 was, as variously expressed, the regime by which, or the procedure by which, the applicant was not given access to the client files. ASIC argued that an evaluative assessment of what is, and is not, relevant for the purposes of an administrative decision is not “conduct” for the purposes of s 6 of the ADJR Act. The resolution of this dispute turns on the ambit of the concept of “conduct” under s 6 of the ADJR Act.

45    In Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321, the High Court considered, inter alia, the meaning of “decision” and “conduct” in ss 5 and 6 of the ADJR Act respectively in the context of an inquiry conducted by the Tribunal concerning television licences.

46    Adverse conclusions were reached by the Tribunal in Bond after a lengthy inquiry. Challenges were made in respect of a number of decisions, findings or rulings made by the Tribunal, some of which were described as “decisions” and others were described as “conduct”. That is an immediate point of contrast to this case in which no final decision has been made.

47    The leading judgment in Bond was that of Mason CJ, with whom Brennan J agreed and with whom Deane J sufficiently agreed for present purposes. As to “decision”, Mason CJ said at 337 that:

… [A] reviewable “decision” is one for which provision is made by or under a statute. That will generally, but not always, entail a decision which is final or operative and determinative, at least in a practical sense, of the issue of fact falling for consideration. A conclusion reached as a step along the way in a course of reasoning leading to an ultimate decision would not ordinarily amount to a reviewable decision, unless the statute provided for the making of a finding or ruling on that point so that the decision, though an intermediate decision, might accurately be described as a decision under an enactment.

Another essential quality of a reviewable decision is that it be a substantive determination. With the exception of s. 3(2)(g), the instances of decision mentioned in s 3(2) are all substantive in character. Moreover, the provisions in sub-ss. (1), (2), (3) and (5) of s. 3 point to a substantive determination. In this context the reference in s. 3(2)(g) to “doing or refusing to do any other act or thing” (emphasis added) should be read as referring to the exercise or refusal to exercise a substantive power. …

48    Mason CJ at a later point in the judgment in Bond at 341-342 considered the meaning of “conduct” for the purposes of s 6 of the ADJR Act to be as follows:

The distinction between reviewable decisions and conduct engaged in for the purpose of making such a decision is somewhat elusive. However, once it is accepted that “decision” connotes a determination for which provision is made by or under a statute, one that generally is substantive, final and operative, the place of “conduct” in the statutory scheme of things becomes reasonably clear. In its setting in s. 6 the word “conduct” points to action taken, rather than a decision made, for the purpose of making a reviewable decision. In other words, the concept of conduct looks to the way in which the proceedings have been conducted, the conduct of the proceedings, rather than decisions made along the way with a view to the making of a final determination. Thus, conduct is essentially procedural and not substantive in character. Accordingly, s. 3(5) refers to two examples of conduct which are clearly of that class, namely, “the taking of evidence or the holding of an inquiry or investigation”. It would be strange indeed if “conduct” were to extend generally to unreviewable decisions which are in themselves no more than steps in the deliberative or reasoning process.

Accordingly, there is a clear distinction between a “decision” and “conduct” engaged in for the purpose of making a decision. A challenge to conduct is an attack upon the proceedings engaged in before the making of the decision. It is not a challenge to decisions made as part of the decision-making process except in the sense that if the decisions are procedural in character they will precede the conduct which is under challenge. In relation to conduct, the complaint is that the process of decision-making was flawed; in relation to a decision, the complaint is that the actual decision was erroneous. To give an example, the continuation of proceedings in such a way as to involve a denial of natural justice would amount to “conduct”. That is not to deny that the final determination of the proceedings would constitute a decision reviewable for denial of natural justice.

49    Because I have already decided that there is no “decision” to which s 5 can apply, I need only refer to and consider the issue of “conduct” for the purposes of s 6 of the ADJR Act.

50    There was a live dispute between the parties as to how the above paragraphs from Bond should be interpreted and applied to this case. The applicant asserted that the conduct of ASIC in refusing either to give access to such of the client files as it already had, or to issue a summons to obtain the client files that it did not have and following that give access to the applicant, was “conduct” of the kind to which s 6 of the ADJR Act referred.

51    ASIC argued that the effect of the above passages in Bond was to reduce the application of “conduct” to procedural matters, rather than any decision which underpins such procedural matters, and accordingly had a very limited ambit. Moreover, even if the behaviour concerned could fall within the definition of “conduct”, it had to be conduct which involved a denial of natural justice, or denial of procedural fairness as it is more commonly referred to now.

52    The applicant’s response to ASIC’s argument largely turned on an assertion that denying access to or failing to obtain and then give access to the client files was “conduct” that constituted a denial of procedural fairness.

53    ASIC relied upon a decision of the Full Court in McLachlan v Australian Securities and Investments Commission [1999] FCA 244; (1999) 85 FCR 286 which dealt with the obligation of ASIC to provide access to documents in its possession in the context of the making of a banning order under the equivalent provision to s 920A. Kenny J, in writing the decision of the Full Court, said at 299 [48]:

… If it is for the ASIC to identify the matters and the material on which it relies as giving it the “reason to believe” referred to in s 829 of the Corporations Law, then the only matters and material which the rules of natural justice require to be disclosed to the appellants are those matters and material upon which the ASIC relies as being relevant, credible and significant to the ultimate decision. The interests of fairness do not require other material in the ASIC’s possession and touching the subject-matter of the hearing to be disclosed, because it is not relied upon as adverse to the appellants’ interests.

54    ASIC contended that this was precisely the situation presently being faced, save that no actual decision as to a banning order had been made. In this case, ASIC investigators had decided what material was relevant to be placed before the delegate. That material did not include any of the 50 client files.

55    The applicant sought to distinguish McLachlan upon the ground of a letter from ASIC reproduced in the judgment of Kenny J at 290-291 [18], the last sentence of which was: “So far as I am aware, there is no material in the custody or possession of the ASC which negatives the conduct alleged in the Notice of Hearing”. The applicant contended that this was an important difference because in that case there had been a representation that the additional material sought in that case was not exculpatory. In my view, reinforced by McLachlan at 298 [46]-[47], that is not a proper basis for distinguishing the clear and plain effect of the passage at 299 [48] reproduced above. Moreover, the question of what is, or is not, “relevant, credible and significant” is factual and therefore a part of the merit assessment process which this Court does not carry out in the limited ambit of judicial review.

56    Importantly, the only qualification to the view expressed in McLachlan at 299 [48] was contained in [49] where Kenny J said that absent any allegation of bad faith it could be inferred that the material before the delegate in that case was all the material which ASIC regarded as being relevant, credible and significant to the ultimate decision about whether or not to make a banning order. In that circumstance, her Honour could discern no impermissible prejudice flowing from the fact of being denied access to material in ASIC’s possession touching the subject matter of the hearing which was not relied upon by ASIC (see also McLachlan at 299 [50] in relation to a related complaint about confining or quarantining any information that was taken into account, which again was dismissed in the absence of any allegation of bad faith). Counsel for the applicant expressly disavowed any allegation of bad faith.

57    It is not for this Court to second-guess in an abstract or hypothetical way the assessment of relevance in its ordinary sense, especially in circumstances such as these, as that unavoidably involves delving into the merits of the applicant’s arguments as to why no banning order should be made. Proceedings in this Court in the absence of a precise articulation of error of a kind that can be part of a judicial review process are fraught with difficulty. Without that discipline, it is all too easy to stray into impermissible merits review, or at least to blur the dividing line between that and judicial review. In this case there was a significant degree of speculation as to the value of the client files in allaying the concerns that were to be considered by the delegate.

58    The limited scope of “conduct” for the purpose of s 6 has been confirmed by a number of other decisions of this Court, albeit by single judges, including Dhillon v Minister for Immigration, Local Government and Ethnic Affairs (1994) 48 FCR 107 per French J, Tasmanian Conservation Trust Inc v Minister for Resources (1995) 55 FCR 516 at 550 per Sackville J and NSW Aboriginal Land Council v Aboriginal and Torres Strait Islander Commission (1995) 59 FCR 369 at 380-381 per Hill J. In Tasmanian Conservation Trust, Hill J sagely pointed out that if “conduct” was given too literal a meaning, it would capture every step leading up to the making of a decision, which would be inconsistent with the majority view in Bond. Rather, his Honour concluded that following Bond, review of conduct “must be concerned with the procedure adopted by the decision-maker as the decision-making process leading up to the making of the relevant decision, the making of the decision in the course of the process not being, conformably with Bond, relevant conduct”.

59    In my view the matters relied upon by the applicant as constituting “conduct” for the purposes of s 6 of the ADJR Act do not meet that description. In substance, the applicant was really seeking to deal with a non-final decision going to the question of whether or not particular material was relevant or not, which most clearly would not be a “decision” for the purposes of s 5 of the ADJR Act. The applicant was therefore forced to try to dress this up as being procedural in the sense in which “conduct” for the purpose of s 6 has been interpreted. In my view, that characterisation attempt failed.

60    It follows that the applicant’s case does not involve any “conduct” for the purposes of s 6 of the ADJR Act. Given that there is no “decision” under s 5 of the ADJR Act, and no other provision of the ADJR Act is relied upon by the applicant, there is no valid invoking of the ADJR Act at all.

61    The applicant alternatively sought to render the originating application competent by relying upon s 1337B(1) of the Corporations Act. It was argued by counsel for the applicant that the mere reference to that provision, coupled with the common law rights of procedural fairness identified by the High Court in Annetts v McCann (1990) 170 CLR 596 and Ainsworth v Criminal Justice Commission (1992) 175 CLR 564, was enough.

62    The applicant suggested that s 1337B(1) enabled any form of denial of procedural fairness to be advanced without limitation and without pleading or relying upon any particular provision of the Corporations legislation. In my view, that argument is unsustainable. While s 1337B(1) bestows plenary jurisdiction in respect of civil matters arising under the Corporations legislation, that does not absolve an applicant from identifying the particular parts of the Corporations legislation being relied upon and identifying the particular cause of action thereby arising. The applicant was unable to take that necessary step.

63    As no other basis for the invoking of the jurisdiction of this Court was identified, in my view there has been no enlivening of the jurisdiction of this Court at all. It follows that the entire application brought in this Court is incompetent and must be dismissed.

The discretion under section 10(2)(b)(ii) of the ADJR Act

64    Section 10(1) of the ADJR Act provides that the judicial review rights in ss 5, 6 and 7 of that Act in respect of a “decision”, “conduct” or failure to make a decision respectively are in addition to any other rights to seek review. Section 10(2)(b)(ii) provides that notwithstanding s 10(1), this Court (or the Federal Circuit Court) may, in its discretion, refuse to grant an application under any of those provisions.

65    The sole reason provided in s 10(2)(b)(ii) for exercising the otherwise unfettered discretion to refuse to grant an application is that “adequate provision” is made by any other law under which an applicant is entitled to seek a review of the impugned decision, conduct or failure: see Cremona v Administrative Appeals Tribunal [2015] FCAFC 72; (2015) 230 FCR 1 at 6-7 [22] and 12 [45]-[48].

66    Even if I am wrong about the application not being competent and there was some basis to invoke the jurisdiction of this Court, I would not, in the exercise of my discretion under s 10(2)(b)(ii) of the ADJR Act, permit this application to continue in this Court. The reason is not only that “adequate provision” is made for review by the AAT, but that in the particular facts and circumstances of this case an AAT merits review is plainly superior to judicial review, at least at this stage.

67    The applicant raises issues that cannot be addressed adequately, if at all, by this Court. In particular, the applicant effectively seeks adjudication on relevance in the ordinary sense, which appears to fall well beyond the judicial review concept of being a mandatory consideration: see Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 39-40. As the above reasoning demonstrates, the applicant is forced to attempt to characterise the exclusion of consideration of the client files as a denial procedural fairness, when in truth he disagrees with the view of the ASIC investigators and delegate that they are not relevant in the ordinary sense.

68    Put another way, the applicant challenges the decision of the ASIC investigators to confine the ambit of the material to be placed before the decision-maker so as to exclude consideration of the client files. Importantly, he makes that challenge without, so far as I can ascertain, having ever made any reasonable attempt to explain to the ASIC investigators or the delegate outside of these proceedings how and why the client files are capable of making a difference. Indeed it seems the issue only arose after the ASIC hearing on 1 March 2016, and then principally by way of assertion and demand rather than explanation, submission or argument.

69    Determination of the issue of what should be considered (as opposed to what must be considered) by the decision-maker requires engagement with the detail of the facts and evidence, and the factual conclusions to be reached as to how the applicant dealt with his clients and the financial products they had and acquired. It necessarily entails findings of an administrative character that are usually beyond the remit of this Court. This sort of process is ill-suited to, if not entirely outside of, the limited confines of judicial review in this Court in which fairness of the process rather than fairness of the outcome is the main concern: see Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 35-6. Quin made it clear that a court conducting judicial review has no jurisdiction simply to correct administrative error or injustice, which ordinarily includes decisions as to relevance in the ordinary sense.

70    This Court has no role in determining whether the delegate or the ASIC investigators were right or wrong in excluding from consideration the client files, unless the applicant can demonstrate that consideration of such material was mandatory, which is highly unlikely and in any event not attempted, or a denial of procedural fairness, which has thus far failed.

71    While considerations of procedural fairness may require particular material to be considered, the applicant has not taken the rudimentary steps to ground that basis for judicial review. Communication of the relevance of the additional material to ASIC does not appear to have risen above assertion.

72    If a banning order is made, the question of what should have been taken into account (as opposed to what the law says must be taken into account) is a matter that is ideally suited for review by the AAT. Such a review may result in a different decision because different information is found to be relevant (in the non-mandatory sense) and is therefore taken into account.

73    At various points during the hearing before me, counsel for the applicant identified factual matters which could have been challenged by reference to material that might be on the client files. For example, counsel raised questions that might be answered by reference to the client files as to:

(a)    whether there had been any hiatus between the cancelling of a pre-existing insurance policy and the commencement of an additional policy;

(b)    whether or not there had been any detriment to the client in the change in policy; and

(c)    other matters of that kind which the applicant contended meant that he had not acted improperly in changing the financial products of the 50 clients.

74    There was nothing before me to suggest that even the above very general reasons for obtaining and taking into account the contents of the client files had been raised with ASIC. In my view they are the very matters that should have first been raised by the applicant with the ASIC investigators or with the delegate rather than in the course of a judicial review process. Indeed, in large measure that is the only way they can be considered, or at least considered fully.

75    If the argument for including consideration of them is made out, then they will be taken into account. If the argument is not successful, that may or may not be amenable to judicial review, but the question will be considered after that process has first reached an administrative outcome.

76    Following this hearing, if the delegate (and ASIC more generally) decide not to revisit the question of whether or not the client files should be taken into account, and if the delegate makes a banning order, then the best vehicle for the correctness or otherwise of that factual assessment as to ordinary relevance to be reviewed is by way of merits review by the AAT.

77    If a merits review application is needed, and brought, the AAT member steps into the shoes of the delegate but is, of course, not an employee of ASIC. That member would be able to bring a fresh and independent mind to bear on whether or not the correct and preferable judgment call had been made as to relevance leading to the correct and preferable decision on whether or not to make a banning order. Moreover, the applicant would, if he needed to, have a proper opportunity to advance a case on the relevance of the client files in a forum that is legally and practically best equipped to deal with them in the course of making a merits review decision.

78    I received into evidence, subject to relevance, copies of the documents listed in Attachment B to the notice of hearing issued by the delegate, being the totality of the material to which the delegate had been referred and to which the delegate intended to have regard. But for the fact that a few of those documents were referred to in the course of argument and some reference has been made to them in this judgment, I would have revisited my decision to admit them, and rejected the tender. As it is, most of them do not pass the test of relevance in these proceedings, but may be needed to understand in some contextual way the documents that do have that limited relevance.

Summary judgment

79    In the light of the findings I have made above as to the competency of the application and as to discretion, there is no need to consider summary judgment. The application fails without needing to take that step.

Conclusion

80    Both the interlocutory application, and the originating application, as amended, must be dismissed with costs.

Associate:

Dated:    13 May 2016