FEDERAL COURT OF AUSTRALIA

Wang v Australian Securities and Investments Commission [2019] FCA 1178

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be dismissed with costs.

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

REASONS FOR JUDGMENT

BROMWICH J:

1    On 21 May 2018, the Administrative Appeals Tribunal affirmed a 3 February 2017 decision made by a delegate of the respondent, the Australian Securities and Investments Commission (ASIC). The delegate had permanently banned the appellant, Mr Yingjie Wang, from providing financial services, under s 920A of the Corporations Act 2001 (Cth). By an amended notice of appeal under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth), Mr Wang asserts that two questions of law arise from the Tribunal’s decision:

(1)    whether the Tribunal erred in finding that he was not a person of good fame or character: s 920A(1)(d); and

(2)    whether, by reason of that error of law, the Tribunal’s exercise of the discretion under s 920A(1) to affirm the banning order was unreasonable, which Mr Wang’s submissions make clear is a reference to legal unreasonableness.

2    Mr Wang relies upon 10 grounds of appeal, with detailed particulars. Those grounds, in summary, attack not just the ultimate Tribunal finding that he was not a person of good fame or character, but also intermediate findings of dishonesty and as to the non-repayment of money (including asserting a denial of procedural fairness), findings made of other misleading conduct, and the exercise of discretion in affirming the permanent banning order.

3    ASIC defends the Tribunal’s decision, noting the high hurdle Mr Wang faces in drawing legal error from factual findings, especially when the finding involved a low threshold state of mind of “reason to believe” being applied to an evaluative assessment of the facts established by the evidence.

4    ASIC also relies upon a notice of contention, which is evidently intended to challenge the finding of the Tribunal that misleading or deceptive conduct by Mr Wang was not in relation to a financial product or service as referred to in s 1041H(1) of the Corporations Act for the purposes of s 920A(1)(e) (and thus contrary to the delegate’s finding). Mr Wang sought to challenge the notice of contention on the basis that dealing with it would amount to an advisory opinion because, if the decision was quashed and remitted, reconsideration of the point would be open to the Tribunal. As addressed in greater detail below, ASIC subsequently clarified its position, accepting that it may be unnecessary for the Court to determine the notice of contention, but seeking to have recorded that ASIC did not accept the approach of the Tribunal with respect to s 1041H(1).

The banning order power and context

5    Chapter 7 of the Corporations Act deals with financial services and markets. The main object of that chapter is set out in s 760A as follows:

Object of Chapter

The main object of this Chapter is to promote:

(a)    confident and informed decision making by consumers of financial products and services while facilitating efficiency, flexibility and innovation in the provision of those products and services; and

(b)    fairness, honesty and professionalism by those who provide financial services; and

(c)    fair, orderly and transparent markets for financial products; and

(d)    the reduction of systemic risk and the provision of fair and effective services by clearing and settlement facilities.

6    An important part of the framework of Chapter 7 in advancing the s 760A main object is the licensing of providers of financial services under Part 7.6, including:

(1)    by generally requiring such persons to hold an Australian Financial Services Licence (AFSL), including regulating their grant, variation, suspension and cancellation;

(2)    by providing for the banning of, or disqualification from, providing financial services: see Division 8;

(3)    by setting professional and ethical standards, including by training requirements;

(4)    by providing for compliance standards; and

(5)    by having a standards body and register of providers.

7    This proceeding is concerned with the exercise of ASIC’s protective banning power to advance the main object of Chapter 7. Section 920A(1) of the Corporations Act, as at the time of the Tribunal’s decision (since amended, but not in any way that would have been material to this case), relevantly provided:

(1)    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 (other than section 921E (relevant providers to comply with the Code of Ethics)); or …

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

…

8    The delegate found that each of the paragraphs (d), (e) and (f) of s 920A(1) was satisfied in relation to Mr Wang and made a mandatory permanent banning order. The Tribunal affirmed the decision under s 920A(1)(d) only, finding that it was satisfied that Mr Wang was not a person of good fame or character by reference to findings of dishonesty in relation to certain fund transfers, supported by related findings of a failure to refund money and other conduct found to be misleading.

9    Making a banning order that was permanent was mandatory by reason of s 920B(2). Section 920B provides as follows:

What is a banning order?

(1)    A banning order is a written order that prohibits a person from providing any financial services or specified financial services in specified circumstances or capacities.

(2)    The order may prohibit the person against whom it is made from providing a financial service:

(a)    permanently; or

(b)    for a specified period, unless ASIC has reason to believe that the person is not of good fame or character.

(3)    A banning order may include a provision allowing the person against whom it was made, subject to any specified conditions:

(a)    to do specified acts; or

(b)    to do specified acts in specified circumstances;

that the order would otherwise prohibit them from doing.

10    The effect of s 920B(2) is that if ASIC (and thus the Tribunal) has “reason to believe” that the person against whom the order is made “is not of good fame or character”, a permanent banning order is mandatory. It is only by overturning the finding by the Tribunal under s 920A(1)(d) that it had “reason to believe” that Mr Wang was not of good fame or character that he can ever be able to provide financial services again within Australia.

Mr Wang’s background

11    The following uncontroversial background facts are drawn from the Tribunal’s reasons, leading up to the events that gave rise to the banning order.

12    Mr Wang was born in 1977 in China. He went to university in China between 1996 and 2000. After initially studying shipping engineering, he changed to studying economics and law, graduating with degrees in both. While studying, he worked as manager for a subcontractor involved in a government dam project, and then worked for a firm of lawyers practising criminal law. Between 2001 and 2002 he was employed part-time as an accountant for a government power company and also in a construction company owned by his uncle.

13    Mr Wang came to Australia in 2002 with a basic command of English. In 2003 he completed a number of English language courses and studied accounting. He was awarded a post graduate diploma in professional accounting in 2006. He then studied law between 2004 and 2006, after which he graduated, worked as a paralegal, and was admitted as a solicitor. In 2009, he set up his own law firm, Wang & Associates, initially practicing mainly in criminal law, but later diversifying into financial services, personal injury, professional negligence, property, corporate governance and risk. Between 2009 and 2013 he completed a number of subjects towards a Master of Laws degree.

14    The Tribunal concluded that Mr Wang’s achievements meant that he was very clever. The Tribunal took into account his qualifications as requiring a high level of English. The Tribunal also formed the impression that he had a good command of English, but far from perfect and with some difficulties, noting that although he gave evidence by an interpreter on the first day of the hearing, he gave evidence in English on the second and third days of giving evidence, with the interpreter sitting beside him, from whom he required little assistance.

15    In 2013, Mr Wang decided to pursue something less stressful than his legal practice, due to illness. He chose foreign exchange trading. He realised that he had little experience in setting up or building such a business. Although he had family financial support, he felt that he needed a business partner who had more experience.

16    The key events detailed below took place between late September 2013 and early 2015.

17    In January 2016, Mr Wang completed the transfer of his interest in Wang & Associates to his partner and no longer practices as a lawyer.

18    The Tribunal found that Mr Wang’s evidence established that he was well aware:

(1)    that as a director of a company he had obligations under the Corporations Act and the Income Tax Assessment Act 1997 (Cth); and

(2)    of the obligations of a responsible manager of an Australian Financial Services Licence holder, having had formal training in 2012 in a course conducted by the Australian Financial Markets Association.

19    During the time that the events in question took place between late September 2013 and early 2015, Mr Wang:

(1)    was the director of a number of companies and employed over 200 people;

(2)    was the sole principal of a law firm employing 25 lawyers and support staff;

(3)    was a director of seventeen financial service licensees holding an AFSL between April 2012 and October 2016;

(4)    provided legal advice and legal assistance to companies wanting to acquire an AFSL;

(5)    was a director of those companies for short periods of time, who used his office as a contact address, to ensure that at least one director of the company was ordinarily resident in Australia to satisfy the requirements of the Corporations Act; and

(6)    had a general practice to only agree to be appointed director of those companies, generally unpaid, where:

(a)    the company was not trading; and

(b)    the company had no bank account; or,

(c)    if the company had a bank account, Mr Wang was a signatory of the bank account so that he could monitor the company’s financial transactions.

20    The reason for being a signatory of a bank account of a company for which he was a director was to ensure that the companies were not trading, or that there were no transactions in the company’s financial records that he considered to be unusual, so that he would be able to seek an explanation for the transaction from the Board of Directors, and resign if that was not forthcoming, circumstances that, according to Mr Wang, never arose.

Tribunal findings as to certain corporate entities

21    Understanding the significance of the key events, and in particular the deposit, withdrawal and transfer of certain funds, depends upon the unchallenged findings made by the Tribunal about Mr Wang’s involvement with a number of companies.

22    In about September 2013, Mr Wang met Mr Guofei Chen, who had approached Mr Wang’s firm seeking assistance in preparing and lodging applications for AFSLs. Mr Wang and Mr Chen decided to buy and sell Australian companies that held AFSLs through a company wholly owned by Mr Chen, Forpro Group Pty Ltd. The shareholding of Forpro was changed so that they each held 50%. Mr Wang became a director of Forpro on 3 October 2013, and its sole director from 21 January 2014 until 17 November 2015. On 30 October 2013, Mr Wang increased his shareholding to 51%, and Mr Chen’s shareholding correspondingly changed to 49%.

23    In November 2014, Mr Chen’s shares in Forpro were later acquired by Australian SIV Funds Management Pty Ltd, the shares in which are owned by Mr Wang’s mother. Mr Wang said that he arranged to put the Australian SIV Funds Management Pty Ltd shares in his mother’s name. She lives in China. The Tribunal was satisfied that Mr Wang controlled, and was the beneficial owner of, Australian SIV Funds Management.

24    On 11 October 2013, a company called Cfmoto Australia Pty Ltd changed its name to Easy Capital Pty Ltd, and all of its shares were acquired by Forpro. Mr Wang was therefore ultimately part owner of Easy Capital with Mr Chen, through their shareholding in Forpro. Mr Wang was sole director of Easy Capital from 11 November 2013 to 6 January 2014, and 12 February 2014 until 31 March 2014.

25    On 11 December 2013, Easy Capital Pty Ltd acquired a company called AIFA Global Pty Ltd, which was renamed Easy Capital Global Pty Ltd. Mr Wang was a director of Easy Capital Group Pty Ltd from 8 May 2014 to 22 July 2015, and then again from 30 September 2015 until 26 October 2015. On 8 May 2014, Easy Capital Pty Ltd transferred all of the shares in Easy Capital Global Pty Ltd to Australian SIV Funds Management. As noted above, the Tribunal was satisfied that Mr Wang controlled, and was the beneficial owner of, Australian SIV Funds Management.

26    The slight difference between the names of Easy Capital and Easy Capital Global assumes particular importance, because a reference to one could be, and was, easily mistaken as a reference to the other. That was an important part of the means by which a scam was perpetrated on certain overseas investors, because misleading references to both as though they were the same company led to funds being sent to the wrong company. The Tribunal was not satisfied that Mr Wang had been shown to have been a knowing party to that scam, being part of ASIC’s case before the Tribunal. The banning order ultimately arose out of Mr Wang’s conduct in response to the scam, rather than his proven participation in that scam.

27    The Tribunal also made findings about Mr Wang’s involvement with two other companies, each bearing the name Vivid Quark Technology Pty Ltd, one in the Seychelles and one in Australia. Vivid Quark Technology Pty Ltd was a company incorporated in Australia on 25 February 2014 by Mr Wang. Mr Wang was its sole director. Its principal place of business was at the premises of Wang & Associates. The sole shareholder of Vivid Quark Technology was Australian SIV Funds Management, the company owned by Mr Wang’s mother, but controlled and beneficially owned by Mr Wang. The Tribunal noted that, in relation to another company, Mr Wang was asked “and that’s the company you own through Australian SIV Fund Management, don’t you” to which he replied “Yes”. Thus the Tribunal was satisfied that Mr Wang also controlled and was the beneficial owner of Vivid Quark Technology.

28    The Tribunal found that the other company with substantially the same name, Vivid Quark Technology (Pty) Ltd, is an entity domiciled in the Seychelles (Vivid Quark Seychelles), and that the ultimate owner of Vivid Quark Seychelles is Mr Wang’s cousin’s husband. The Tribunal was satisfied that there was a very close relationship between Mr Wang and that company, apparently noting:

(1)    that he was asked whether he used it as a vehicle to acquire share capital in Easy Capital Global; and

(2)    that his answer was equivocal, saying “maybe to a certain extent but I’m not sure”.

29    The Tribunal did not conclude from the above answer that Mr Wang actually used Vivid Quark Seychelles to acquire share capital in Easy Capital Global, but the equivocal nature of the answer showed that this was not out of the question, leading to the conclusion that there was a close relationship between the two Vivid Quark companies and Mr Wang.

30    The Tribunal also found that:

(1)    Mr Wang also used Vivid Quark Seychelles as a vehicle for his family to make investments in Australian companies;

(2)    On 28 January 2015, Vivid Quark Seychelles deposited $249,094.07 into a Bank of China account held by Mr Wang’s mother, to which Mr Wang is signatory; and

(3)    Vivid Quark Seychelles also had dealings with Vivid Quark Technology, noting as an example that on 5 November 2014 Vivid Quark Seychelles transferred US$99,983 to Vivid Quark Technology.

31    The Tribunal was therefore satisfied that Mr Wang had very close family connections with both Vivid Quark Technology and Vivid Quark Seychelles.

Overview of the key events and Tribunal findings

32    As noted above, in about September 2013, Mr Wang met Mr Chen. Mr Chen had approached Mr Wang’s firm seeking assistance in preparing and lodging applications for AFSLs. In late 2013, Mr Wang was introduced by Mr Chen to Mr “Jerry” Chia Wee Keat and Mr “Alvin” Heng Swee Boon, as potential clients of Wang & Associates. Mr Wang was told that Alvin and Jerry had a large sales team in Malaysia and that Jerry was responsible for training and employing many foreign exchange brokers. Mr Wang visited Jerry in Malaysia and was impressed by what he saw. They went on holidays together in August 2014, and developed a good relationship.

33    Mr Wang and Jerry later decided to commence a foreign exchange business together. Mr Wang was interested in developing such a business, as an alternative to continuing his legal practice. They agreed to set the business up through Easy Capital Global, controlled by Mr Wang, which at that time held an AFSL. As part of the establishment of that business, Mr Wang and Jerry reached agreement that Jerry would contribute an amount of cash for establishment costs, with the sum of US$100,000-$150,000 being discussed, while Mr Wang would contribute the corporate vehicle Easy Capital Global and its AFSL. Nothing was in writing, other than discussions via a messaging application WeChat, and there was no final agreement as to whether Jerry’s funds would be a capital contribution or a loan.

34    Before turning to the detail of how this plan was implemented, and what went wrong, it is convenient to give an overview summary so as to better appreciate the detail of the evidence that follows. What mattered from the above discussions between Mr Wang and Jerry was that Mr Wang understood Jerry would be contributing substantial funds towards the proposed foreign exchange business from overseas. As will be seen, the scam that ensued involved funds from two third parties in Singapore who only dealt with Jerry, or his associates, at the time that the funds were provided. The funds from one overseas third party went into an Australian dollar bank account of Easy Capital Global, while the funds from the other overseas third party went into a US dollar bank account of Easy Capital Global, all in late October 2014. The Tribunal accepted that those funds appeared to Mr Wang to have come from Jerry, because no other source of money going to Easy Capital Global was in contemplation at the time.

35    All of the funds from one overseas third party in the Australian dollar Easy Capital Global account, and most of the funds from the other overseas third party in the US dollar Easy Capital Global account, were transferred from those accounts to an overseas bank account of Vivid Quark Seychelles in late November 2014, before, on the Tribunal’s findings (and contrary to ASIC’s primary case), Mr Wang had any reason to think the money had come from anyone other than Jerry.

36    In late August 2014, ASIC wrote to Easy Capital regarding the company representing to the public that it had an AFSL when it did not, and that the AFSL quoted on its website, www.easyfxtrading.co, was in fact licenced to Easy Capital Global. Wang & Associates wrote to ASIC on 19 September 2014, noting that Easy Capital was not currently operating, that there was “no agreement of any nature” between Easy Capital and Easy Capital Global, and that Easy Capital had not permitted Easy Capital Global to trade under the name “Easy Capital” or under its Australian Company Number. Mr Wang denied in his s 19 examination that he authorised the letter, but noted “we do send a letter on behalf of Easy Capital some time to ASIC and tell them OK this is not our website.” On 19 September 2014, Easy Capital also withdrew its application for an AFSL.

37    In December 2014, Mr Wang decided to end the relationship with Jerry upon the stated basis that he was not as good a salesman as he had expected, a proposition that the Tribunal did not accept. The Tribunal instead found that Mr Wang had, by September 2014, become aware of concerns that Easy Capital was appearing to pass itself off as Easy Capital Global. The third party whose funds went into the Australian dollar Easy Capital Global account then emailed two months later in late January 2015, to complain that he had not been receiving interest payments on his investment, and sought the repayment of his money. With Mr Wang’s authority, the remaining sum of $21,442.91 was then transferred from the Australian dollar Easy Capital Global bank account to the overseas bank account of Vivid Quark Seychelles, while the third party was told that investigations were continuing as to what had happened with his money.

38    Once the Tribunal:

(1)    was not satisfied that the evidence met the quality of evidence required to establish, on the balance of probabilities, that Mr Wang was involved in the scam (see s 140(2) of the Evidence Act 1995 (Cth); and Briginshaw v Briginshaw (1938) 60 CLR 336); and

(2)    accepted the evidence of Mr Wang that he believed the transfers into the Easy Capital Global bank accounts were from Jerry,

the critical findings turned on Mr Wang’s conduct once he was on notice that Jerry was not, or at least may not have been, the source of the funds deposited with Easy Capital Global after being contacted by the overseas third party. This included in particular the transfer of the remaining funds from the Australian dollar Easy Capital Global bank account to the overseas bank account of Vivid Quark Seychelles with Mr Wang’s authority after that contact took place. This appeal is about the Tribunal’s approach to this issue and the findings it made. The core complaint by Mr Wang turns on the Tribunal’s conclusion that the $21,442.91 payment was made to ensure that the investor could not recover the balance of moneys originally deposited, or to make it appear to the third party that he could not recover them. With this in mind, I turn to the detail of what transpired.

39    On 27 October 2014, Dr Cuntai Guan, a Singapore resident, transferred US$100,000 (A$111,112.69) into an Australian dollar account held by Easy Capital Global in Australia. The Tribunal described the circumstances of that transfer, and made related finding as follows (at [32]-[36]):

Dr Guan is a Professor in the School of Computer Science and Engineering in Singapore. Dr Guan’s evidence is he had a conversation with a friend in early October 2014 who said he had invested with Easy Capital Global and had been receiving interest for some months. The friend pointed out that he did not know the salesman Mr Chu very well and that the interest rate might be unsustainable. (The reference by the friend to Easy Capital Global cannot be correct as it was not trading at the time. Easy Capital however was trading).

Dr Guan thereafter met Mr Chu, who said words to the effect “Easy Capital Global is registered and regulated by ASIC in Australia. Easy Capital Global is monitored by ASIC and if anything happens you can seek help from ASIC”. He showed company information for Easy Capital Global evidencing that it was registered by ASIC in Australia.

Dr Guan’s affidavit indicates that Mr Chu, in the course of the conversation, also referred to Easy Capital as well as Easy Capital Global. Mr Chu provided Dr Guan with a business card which referred to Easy Capital. That business card also contains a web address of www.easyfxtrading.com and gives the address of the company as Level 22, 31 Market Street, Sydney, which is the address of Mr Wang’s firm. Mr Chu also had a laptop computer with him and said words to the following effect: “Easy Capital Global has an online portal you can access at www.easyfxtrading.com. I can open your investment accounts for you straight away. After your money has been received by Easy Capital Global, your accounts will be activated”.

Mr Chu then showed him how to access the website and how to access online accounts which would be activated upon his investment. He decided to invest USD $100,000 with Easy Capital Global in two USD $50,000 instalments. Mr Chu then sent him details of the Easy Capital Global bank account and he took a screenshot of that. On 27 October 2014 he transferred USD $100,000 to the Australian bank account provided by Mr Chu. Easy Capital Global Pty Ltd, National Australia Bank Account. He received confirmation that the transaction was completed on 30 October 2014. Converted from US dollars to Australian dollars the sum of money was $111,112.69.

I am satisfied that Chu, who was the salesman for Jerry and Alvin, was pretending to represent Easy Capital Global and that he used the names of the two companies Easy Capital and Easy Capital Global in such a way as to confuse his audience. Mr Wang says, and I accept, that he had never met Mr Chu and that he was never employed by Easy Capital Global and had no authority to act on its behalf.

40    Thus, the Tribunal found that Dr Guan had been a victim of a scam at the hands of Jerry and Alvin, together with the salesman, Mr Chu, which resulted in him transferring funds to Easy Capital Global under the pretence of that taking place with a different entity, Easy Capital.

41    At about the same time, a relative of Dr Guan, Ms Hong, made a deposit of US$50,000 into another account, being a US dollar account held by Easy Capital Global in Australia. It seems that she was also a victim of the scam perpetuated by Jerry, Alvin and Mr Chu.

42    As a matter of arithmetic, it may be seen that:

(1)    the two sums of US$50,000 from Dr Guan deposited into the Australian dollar account held by Easy Capital Global; and

(2)    the $US$50,000 from Ms Hong deposited into the US dollar account held by Easy Capital Global,

added up to the higher amount of US$150,000 that had been discussed between Mr Wang and Jerry.

43    The Tribunal found that:

(1)    Mr Wang believed that the funds deposited into the Easy Capital Global accounts by Dr Guan and Ms Hong represented Jerry’s contribution to the establishment of the business with him; and

(2)    Easy Capital Global was not trading or conducting any financial services business at the time the funds were received.

44    On 14 November 2014, US$49,900 was transferred out of the US dollar account held by Easy Capital Global, being the funds apparently deposited by Ms Hong. The Tribunal made no finding that this transfer amounted to any improper conduct on the part of Easy Capital Global, noting only that the incorrect description of the purpose of the transfer demonstrated incompetence within Mr Wang’s organisation, the description not being made by him, nor directed by him.

45    On 18 and 19 November 2014, a total of $91,796.19 was transferred from the Australian dollar account held by Easy Capital Global to Vivid Quark Seychelles (as a matter of arithmetic, this left, as a capital sum, $19,316.50 of the $111,112.69 deposited as two tranches of US$50,000 by Dr Guan). The Tribunal made no finding that these transfers amounted to any improper conduct on the part of Easy Capital Global, or Mr Wang. The Tribunal found that the lack of supporting records for the expenditure demonstrated incompetence and irresponsibility on the part of Mr Wang.

46    On 12 December 2014, an investor, Mr Hoong, sent an email to the email address of Mr Wang’s paralegal, Ms Puimen Tang, with the subject line “Easy Capital Global Pty Ltd e-wallet Withdrawal Request delay”. Mr Hoong noted that he had been unable to make withdrawals from his account and, on enquiry from Ms Tang as to how he had obtained her email address, noted that he was provided it by the Financial Ombudsman Service. Ms Tang replied, stating that “[w]e are only the legal representative for the above. We will contact the client to advise of your situation”, and forwarding her response to Mr Wang. The Tribunal found that Mr Hoong had “probably invested in Easy Capital and not Easy Capital Global”, but that to a prudent company director, this would have sounded an alarm. Mr Wang’s evidence was that he did not read the email, indicating to the Tribunal a lack of competence for failing to deal with it.

47    On 26 January 2015, Dr Guan sent an email to the email address of Ms Tang, addressed to Mr Wang. In that email, Dr Guan described himself as an “Easy Capital Customer’”, noted that he had made an investment of US$100,000, but had not received any interest payments, and sought the return of his US$100,000. This was well after Mr Wang knew in September 2014 of concerns that Easy Capital had been passing itself off as Easy Capital Global, well after the late November 2014 transfers, and well after Mr Wang had decided to end the relationship with Jerry. The verbatim text of Dr Guan’s email is important in that context:

Dear Mr Jay Wang

I am an Easy Capital customer. I invested US$100K in your company last Oct/Nov. Since the opening of the accounts in your company, I never received any investment interests from your company. I got your contact from ASIC, Australia.

Therefore, I request your company to return my deposit of USD$100K, and I reserve the right to demand for the interests your company owes me so far.

Your response is appreciated.

Best regards,

Dr Guan

P.S. My account information is as follows: [bank account details]

48    The Tribunal found that this email demonstrated that Dr Guan thought that he had invested his money with Easy Capital, rather than Easy Capital Global, and that a confusion had arisen in the mind of investors, and certainly in Dr Guan’s mind, as to which of the two companies their money had gone to. This email was forwarded to Mr Wang on the same day. The Tribunal was satisfied that Mr Wang received the email on the basis that, although Ms Tang would deal with many emails herself, she would know that it was important, given it dealt with USD $100,000 and raised a matter of great concern. The Tribunal further noted that this email was within the context of ASIC’s previous concerns that it appeared Easy Capital had been making representations that it had an AFSL.

49    Dr Guan sent a further email on 28 January 2015 reminding Mr Wang of his prior email. Between 29 January and 15 April 2015, email communications took place between Dr Guan and either Mr Wang or Ms Tang. Where Ms Tang was not the only recipient, she was often otherwise copied into email correspondence, as was another employee of Wang & Associates, Ms Stella Song. The Tribunal found that Mr Wang’s emails to Dr Guan were in some instances misleading, but not dishonest.

50    In order to fully appreciate what was before the Tribunal, and thereby understand the context and the flavour of Mr Wang’s communications, it is necessary to reproduce the text of this long series of emails in full and in chronological order as follows (verbatim):

(1)    Email from Ms Tang to Dr Guan, sent on 29 January 2015 (following a reminder email from Dr Guan addressed to Mr Wang, but sent to Ms Tang’s email address earlier that day):

This company has never had any trading last year, how did you trade with us?

We are planning to start to provide financial service this year of 2015. However, we haven’t started yet.

Kind regards

Puimen Tang

(2)    Email from Dr Guan to Ms Tang, sent on 29 January 2015 (forwarded to Mr Wang that same day):

Dear Mr Tang

Thanks very much for your reply. I found the following information from FOS [Financial Ombudsman Service] website:

Easy Capital Global Pty Ltd

Member number: 29879

ACN/ABN: 15154582242

Formerly known as Aifa Global Pty Ltd

Hide contact details

Member details

Date joined: 10/12/2013

Complaint contact

Mr Jay Wang

Managing Director

Easy Capital Global Pty Ltd

[Address, phone and email details]

It helped me to launch this complaint to Mr Jay Wang.

Could you confirm that this company (Easy Capital Global Pty Ltd, website http://www.easyfxtrading.com) has never started any trading last year?

Your prompt response is very much appreciated.

Best regards,

Dr Guan

(3)    Email from Mr Wang to Dr Guan, sent on 29 January 2015 (which the Tribunal considered to be “somewhat misleading”):

Dear mr guan

I don’t know where you got that website, but that has never been ours.

I will get my assistant ms puimen tang to assist you. If you need any more.

Regards

Jay

(4)    Email from Dr Guan to Mr Wang, sent on 29 January 2015 (which provided the Tribunal with a reasonable inference that Dr Guan did not think there was a link between the two companies, as to which Mr Wang should have enlightened him):

Dear Mr Wang

Thanks very much for your reply. Ms Puimen has responded to my email too. Thanks to her.

It looks your company got exactly the same name as another company, whose website I sent to you.

A group of investors are launching a complaint to ASIC for this company due to its cease of paying interest (it was suspected that this company violated laws).

For your information, please find the signature below of the MD of this company with whom we singed contract.

– – – – – – – – – – – –

For and on behalf of Easy Capital Global PTY LTD:

Signature:     [signature]

Name:        Simon Robert (Managing Director)

– – – – – – – – – – – –

If you find this person or company has got misconduct in your company’s name, you may like to report to ASIC or even police.

Regards,

Dr Guan

(5)    On 2 February 2015, the auditor of Easy Capital Global sent an email wanting to know where the deposits of $111,112.69 (the US$100,000 from Dr Guan) and USD $49,990.00 (from Ms Hong) had come from and to whom the withdrawals had been paid. Jenny Li, the accountant, responded and copied in Mr Wang. The Tribunal’s discussion of that response (at [92]-[93]) is reproduced in the succeeding substantive paragraph (at [51(1)]).

(6)    On 8 February 2015, Dr Guan also sent a letter to Mr Simon Robert to the address of Mr Wang’s legal office. The Tribunal’s discussion of that letter (at [94]-[95]) is reproduced in the succeeding substantive paragraph (at [51(2)]).

(7)    Email from Dr Guan to Mr Wang, sent on 10 February 2015:

Dear Mr Wang

Could you confirm if the following bank account belongs to your company:

Bank Name: National Australia Bank

Bank Swift Code: [code]

Bank Account Holder: Easy Capital Global Pty Ltd

Beneficiary USD Account No: [number]

Bank Address: [address]

Look forward to your response asap.

Thanks

Best regards,

Dr Guan

(8)    Email from Mr Wang to Dr Guan, sent on 10 February 2015:

Dear mr guan

Let me check with my accountant.

Regards

Jay

(9)    Email from Mr Wang to Dr Guan (after Mr Wang checked with his accountant, and a reminder email from Dr Guan), sent on 11 February 2015 (emphasis added):

Dear Mr Guan

Thanks for your email.

It is our account and we do received that payment from you. However, at that time, a person called jerry Chie told us he wanted to send money to us to setup a joint business with him including buying mt4 having a website etc.

I’m investigating the matter now.

Could you tell me

1 do you know mr jerry Chie?

2 what’s your relationship with him?

3 do you believe that mr Chie in any way deceived you?

Regards

Jay

(10)    Email from Dr Guan to Mr Wang, sent on 11 February 2015 (noting that Mr Wang knew Mr Heng Swee Boon as Alvin):

Dear Mr Wang

Thanks very much for your confirmation.

I do not know any Jerry Chie. The persons approaching me to enter into investment with Easy Capital Global were Mr Leo Chu and Mr Heng Swee Boon.

In this case, could you advise how I can get back my money transferred to your company’s account?

Best regards,

Dr Guan

(11)    Email from Mr Wang to Dr Guan, sent on 11 February 2015:

Dear Mr Guan

We are currently investigating the matter. We will notify you within two weeks.

Thanks for your understanding.

with regards

Jay

(12)    Email from Dr Guan to Mr Wang, sent on 12 February 2015:

Dear Mr Wang

My friend below also transferred US$50k to the same account as I did:

Qing Hong:

Username: [username]

MT4 ID: [number]

In addition, 3 other friends transferred money to the following account:

Recipient’s Name: Easy Capital Pty Ltd

Recipient’s Address:    [which appears to have been the suite number and level number of Wang & Associates, although noting a possible error in the street number of 21 Market Street, rather than 31 Market Street]

Recipient’s Bank: National Australia Bank Limited

SWIFT Code: [code]

Recipient’s Account Number: [number]

Username: [username] (US$50k)

MT4 No: [number]

Username: [username] (US$50k)

MT4 No: [number]

Username: [username] (US$50k)

MT4 No: [number]

Could you kindly help confirm if your company also received their payment?

Thank you very much.

Best regards,

Dr Guan

(13)    Email from Mr Wang to Dr Guan, sent on 12 February 2015 (emphasis added):

Dear Mr guan

This becomes very serious now. Please give us 14 days to investigate the matter and we shall promptly update you in the mean time.

Regards

Jay

Five days after the above email, on 17 February 2015, the remaining sum of $21,442.91 was transferred out of the Australian dollar account held by Easy Capital Global to Vivid Quark Seychelles. The emails prior to and following that transfer need to be read in that critical context, as the Tribunal must be taken to have done. The email correspondence relevantly resumed eight days after that transfer had taken place.

(14)    Email from Mr Wang to Dr Guan (following a reminder from Dr Guan on 25 February 2015), sent on 25 February 2015:

Thanks mr guan.

I have investigated the matter. I found the reason and issue. I also get mr jerry Chie and mr Alvan Heng agree to solve the issue.

Due to the Chinese New Year, it may take longer.

I will write to you next Wednesday as I’m taking my holiday this week.

Regards

Jay

(15)    Email from Dr Guan to Mr Wang, sent on 25 February 2015:

Dear Mr Wang

Thanks very much for your update. Really appreciate.

May I confirm that we are able to get the initial capital back? Could you advise when?

Sorry to disturb you during the Chinese New Year.

Best regards,

Dr Guan

(16)    Email from Dr Guan to Mr Wang, sent on 5 March 2015:

Dear Mr Wang

I wish you a great Chinese New Year holiday.

I’d like to follow up with you on this matter.

Could you please advise how this matter is solved? How are we able to get back our initial capital?

Many thanks for your help.

Best regards,

Dr Guan

(17)    Email from Ms Tang to Dr Guan (copied to Mr Wang and following a reminder from Dr Guan on 6 March 2015), sent on 6 March 2015 (emphasis added):

Dear Dr Guan Cuntai

After our client’s investigation we found out the following:-

1.    Mr Chia Wee Keat approached our client in early 2014 offering certain amounts of money to develop the Malaysia market for our client. Our client did receive the money including your $100k.

2.    However, Mr Chia Wee Keat has already taken the money for himself.

3.    Our client has never been aware of your transfer at all.

As such, we suggest you take relevant action in Malaysia which would be the most appropriate jurisdiction and we enclose Mr Chia Wee Keat’s identification and contact details for your information.

Kind regards

Puimen Tang

(18)    Email from Dr Guan to Ms Tang (copied to Mr Wang), with attachments, sent on 6 March 2015:

Dear Mr Wang

This is not appropriate. Since I signed agreement with Easy Capital Global Pty Ltd (please see agreement) and my money has been transferred to your company’s account, you hold responsibility to return the money to me. It is your fault to allow someone else (without my consent and permission) to take my money from the account.

If you refuse to solve the problem with me amicably, the action I will take will be reporting you to Australian police and making public all the illegal activities that Easy Capital Global Pty Ltd (NZ Global Financial Trading Pty Ltd) has been doing to media in China and the entire world.

Please help us to help yourself.

Regards,

Dr Guan

(19)    Email from Mr Wang to Dr Guan, sent on 6 March 2015:

Mr guan

It was also your fault to trust someone who cannot represent easy capital global.

How can you sure that you sign the agreement with easy capital global? The person deceived you but our client is innocent party, mr jerry Chie deceived u by falsely representing he can represent easy capital global. But that’s his fault and de emotive conduct.

We will report this to police as well.

We sympathise your loss but we are victim of this Mr jerry Chie deceptive conduct. When you report to police, please let us know. We will provide all necessary to assist. This is what we can help at the moment.

Regards

Jay

(20)    Email from Dr Guan to Mr Wang, sent on 6 March 2015:

Dear Mr Wang

The fact is that we signed the contract with your company, unless you confirm that Robert Simon (who is the signatory of the agreement) has been falsely representing your company.

You told me you have got Mr Jerry Chia Wee Keat and Mr Alvin Heng Swee Boon to agree to solve the issue. Could you advise on the following?

•    Could you tell me what you have agreed, and how you agreed to solve the issue?

•    Did Chia Wee Keat take our money from you before or after you three reached this agreement?

•    Did you meet them in Australia for this solution?

•    Did Heng Swee Boon take our money too?

Sorry to ask so many questions. They are very helpful for us to sort the things out so we can report the right parties to police.

Wish to receive your response soon.

Best regards,

Dr Guan

(21)    Email from Mr Wang to Dr Guan, sent on 7 March 2015:

Dear Mr guan

I confirm that we and our client has never been aware of mr Robert simon. We have no knowledge of such person at all.

Regards

Jay

(22)    Email from Dr Guan to Mr Wang, sent on 7 March 2015:

Dear Mr Wang

Thanks a lot for your confirmation.

Just to clarify, by your client, do you mean Easy Capital Global Pty Ltd, or Easy Capital Pty Ltd, or both?

Could you kindly answer the questions I raised below?

•    Could you tell me what you have agreed with Chia Wee Kiat, and how you agreed to solve the issue?

•    Did Chia Wee Keat take our money from you before or after you three reached this agreement?

•    Did you meet Chia Wee Keat and Alvin Heng in Australia when you discussed for this solution?

•    Did Heng Swee Boon take our money too?

Your help is very much appreciated.

Best regards,

Cuntai

(23)    Email from Mr Wang to Dr Guan, sent on 7 March 2015:

Easy capital global pty ltd only

(24)    Email from Dr Guan to Mr Wang, sent on 7 March 2015:

Dear Mr Wang

You told me Chia Wee Keat has taken our money away. Can you provide evidence on when and how he did so?

Best regards,

Dr Guan

(25)    Email from Mr Wang to Dr Guan, sent on 7 March 2015:

Yes we can.

I will write to you Monday next week.

(26)    Email from Dr Guan to Mr Wang, sent on 7 March 2015:

Dear Mr Wang

Thanks. Do you also represent NZ Global Financial Trading Pty Ltd?

Best regards,

Dr Guan

(27)    Email from Mr Wang to Dr Guan, sent on 7 March 2015:

Yes.

This is the company will start trading soon.

Mr Guan

Did you ever see mr Robert Simon?

Regards

Jay

(28)    Email from Dr Guan to Mr Wang, sent on 7 March 2015, with attachments:

Dear Mr Wang

This is strange. Robert Simon talked to a lot of media in China to promote Easy Capital. Importantly, he used the same AFSL as your company (AFSL:418008). It looks he should have represented your company.

Please find information published at some of the news websites for your information.

It is clearer and clearer to me what has happened to our investment money. May I know if Mr Wang is willing to help us to recover the money belonging to me and the people I mentioned to you (total amount $300,000) and how you suggest we should do?

Best regards,

Cuntai

(29)    Email from Dr Guan to Mr Wang (in response to Mr Wang’s email at (25) above), sent on 10 March 2015:

Dear Mr Wang

May I know if you could send me the evidence that indicates Mr Chia Wee Keat took away our money from your company account and the date he did?

Thanks a lot.

Best regards

Dr Guan

(A similarly worded email was also sent from Dr Guan to Mr Wang later that day.)

(30)    Email from Mr Wang to Dr Guan, sent on 12 March 2015:

Mr guan

Please give us some time to allow us to fully investigate the matter and I’m thinking to report to police. And then you may contact police.

Jay

(31)    Email from Dr Guan to Mr Wang, sent on 12 March 2015:

Dear Mr Wang

Thanks for your reply. We are looking forward to hearing from you soon.

At the same time, we will report to police.

Any information which can prove that our money has been taken away by an authorised person from your company’s account would be helpful to us as well as to you.

Best regards,

Dr Guan

(32)    Email from Mr Wang to Dr Guan, sent on 12 March 2015:

Dear mr guan

Our client will assist you as much as it can. Please let me know whether you are going to take action in Malaysia as well, our client may join you as a plaintiff. Our client may not take legal proceedings in Australia as they believe that mr jerry Chie is not an Australian citizen.

Regards

Jay

(33)    Email from Dr Guan to Mr Wang, sent on 12 March 2015:

Dear Mr Wang

Here is the thing, we do not have any evidence to prove Mr Chia Wee Keat took OUR money. We rely on you to provide the evidence to prove that he illegally stole the money from the bank account which belongs to Easy Capital Global Pty Ltd. We have been waiting for the information from yiu which you promised to send to me last Monday. I’m wondering if you could send it to me any time soon, so that we can report it to police?

Best regards,

Cuntai

(34)    Email from Mr Wang to Dr Guan, sent on 12 March 2015:

Mr guan

How can you prove to me that mr Chie’s deposit is actually yours?

(35)    Email from Mr Wang to Dr Guan, sent on 12 March 2015:

Mr guan

We would like to take this very serious. Please send me all information that you have to prove the money is yours and any information that induced you to deposit into our clients account. All information and documents you ever have any information in relation to mr Robert simon you mentioned.

Regards

Jay

(36)    Email from Mr Wang to Dr Guan, sent on 12 March 2015:

Mr guan

Just also let us know whether you intended to start proceedings in Malaysia and our client would like to join the proceedings as well. We can start from there.

Jay

(37)    Email from Dr Guan to Mr Wang, with attachments, sent on 12 March 2015 (emphasis in original):

Dear Mr Wang

1. You confirmed that the following account belongs to your company (referring to your email dated Wednesday, 11 February 2015 10:12 am):

Bank Name: National Australia Bank

Bank Swift Code: [code]

Bank Account Holder: Easy Capital Global Pty Ltd

Beneficiary USD Account No: [number, bolded]

Bank Address: [address]

2. In that same email, you confirmed you received my payment in your above account.

3. I did an investigation, out of the US$300,000, which I mentioned in the email to you dated Thursday, 12 February 2015 6:49 am, US$150,000 was transferred to your account (including my US$100,000 and Qin Hong’s US$50,000). The other US$150,000 was transferred to another account which may not have something to do with you.

4. I have bank proof that the above mentioned US$150,000 was received by your account above. Please see attachment.

Therefore, I request you to return the US$150,000 to me and Ms Qin Hong. If I do not receive the money in 2 weeks’ time, I will report your company to police and take legal actions.

Best regards,

Dr Guan

(38)    Email from Ms Tang to Dr Guan and Mr Wang, sent on 20 March 2015:

Dear Mr Guan Cuntai

For the US$150,000 you mentioned was transferred to our client’s bank account (including my US$100,000 and Qin Hong’s US$50,000).

Please provide a transfer receipt accordingly please of this deposit.

Kind regards

Puimen Tang

(39)    Email from Ms Tang to Dr Guan and Mr Wang, sent on 20 March 2015:

Dear Mr Guan Cuntai

I refer to my previous email and advise that you have only provided a transfer receipt for $50K, can you provide us with the other $100K?

Kind regards

Puimen Tang

(40)    Email from Dr Guan to Ms Tang and Mr Wang, sent on 20 March 2015:

Dear Puimen

Please find the two receipts of the US$100K and US$50K in the attachment. Please note, for the US$100k, the receipt indicates in AUD (AU$111,112.69).

Best regards,

Cuntai

(41)    Email from Dr Guan to Mr Wang and Ms Tang, sent on 27 March 2015:

Dear Mr Wang

I have sent the receipts requested by Puimen. Please also refer to the emails below I sent you which showed that I have given you enough time to investigate. Can you please let me know when you will return back the US$100,000 and US$50,000 to me and Ms Qin Hong respectively?

Best regards.

Cuntai

(42)    Email from Mr Wang to Dr Guan, sent on 27 March 2015 (emphasis added):

Mr guan

It is very serious, easy capital global is also a victim of mr Chie. We need more time to find out where the funds went. Easy capital global is currently trying to find from mr Chie what he did. I hope that you understand the situation. You were deceived by mr Chie to deposit the money and mr Chie used your money to claim it was his to come into a negotiation with easy capital global.

We have given you his passport and other personal details. I suggest you to report it to police in Malaysia, and we start from assisting police. Only Malaysian police can find him. After locating him, we will be able to solve the issue.

Regards

Jay

(43)    Email from Dr Guan to Mr Wang, sent on 27 March 2015:

Dear Mr Wang

I take your answer as refusing to return our money which was transferred to your account, albeit you have seen all the proof and evidence. We have nothing to do with Mr Chia. Your company has all the responsible to return the money to us. It’s your responsibility to sue Mr Chia. Your company has violated laws as illegally possessing capitals not belonging to your company.

You forced us to take the legal action against your company, and you are responsible for any consequences caused to your company.

Best regards,

Dr Guan

(44)    On 27 March 2015, Ms Tang sent an email to Mr Wang, noting “Jay they signed a agreement with robert georges who is no affiliation with easy capital. He is not a director of this company.”

(45)    On 28 March 2015, Mr Wang replied to Ms Tang:

Hi puimen

Can you prepare all documents related into one file as I previously instructed.

We only possibly have one issue is that the money went to our account from these guys and jerry Chie claimed that was his money. I need to find out where the money went. More Likely jerry took the money.

Then these guys have to prove the jerry or mr Robert Georges entered agreement on our behalf. Otherwise, we don’t know what’s the relationship between jerry and these guys, it’s their internal dispute. They may bring us in to give evidence but they cannot say we are liable.

(46)    That same day, 28 March 2015, Mr Wang also sent an email to “Mikki Wang”, asking “Please help to find out where the 150k went.” Mikki’s response, with attachments, on 30 March 2015 included:

Hello Jay

QIN HONG deposited USD$49990.00 on 27/10/2014 into EACAPUSD01. This money was transferred to VIVID QUARK HK on 18/11/2014 as you requested.

…

Dr Guan deposited AUD $111,1112.69 into Easy Capital Global cheque account #844902493 on 30/10/2014. $91,761.19 was transferred to VIVID QUARK HK on 19/11/2014 (as server/network/website one-year service), and rest of $21,442.91 transferred to VIVID QUARK HK on 17/02/2015 when we closed this account.

…

(47)    Email from Mr Wang to Dr Guan, sent on 28 March 2015:

Dear mr guan

We will take our responsibility. If you believe that you want to take legal action, you are welcome.

As I said to you easy capital global is a victim, the best ways to take action is to take is in Malaysia. We can provide whatever assist you need. But if you want to blame us. Sorry we cannot help.

Regards

Jay wang

(48)    Email from Mr Wang to Dr Guan, as a further response to his email above at [50(43)], sent on 28 March 2015:

Mr Guan

Further to my last email.

You have entered into an agreement with Robert (xxx) who we have no idea about it. The person come to see us is a person called jerry Chie. If you blame us you have to prove that jerry or mr Robert entered agreement with you on our behalf. Otherwise, we don’t know what’s the relationship between jerry and you. it’s your internal dispute. They may bring us in to give evidence but they cannot say we are liable.

We have fully provide the information to you. You need to take your own action.

Regards

Jay

(49)    Email from Dr Guan to Mr Wang, sent on 14 April 2015:

Mr Wang

There are two issues here. The first part of investors (including names like Pu Su, Wu Jie and Dong Ran) who sent their fund to a fake company (Easy Capital Pty Ltd). I will leave Pu Su and so on to find ways to recover their money.

The second part (including me and Qin Hong) is completely different. Our money was mistakingly sent to your company. You do not have any evidence to show that someone called Jerry Chia took our money with our consent. Therefore, you have all the obligations to return our money (in total US$150,000). If you do not return our money, you actually violated laws by committing fraudulence and illegally possessing other people’s capital.

Here is the deal: if you return our US$150,000, I promise you I will not go after you anymore.

I do not think it is worthwhile for you to keep this small amount of money but taking the risk of tarnishing the reputation of your company when everyone in the world (especially in China, where your big business is) gets to know this situation.

I wish you take this into consideration.

Regards

Dr Guan

(50)    Email from Mr Wang to Dr Guan, sent on 14 April 2015:

Mr Guan

You totally misunderstand me. I encourage you to sort out this issue via legal proceedings. I also encourage you to call all the people together to get the person should be responsible and bring them into jail.

Regards

Jay

(51)    Email from Dr Guan to Mr Wang, sent on 14 April 2015:

Mr Wang

Can you give us evidence that Chia took our money? Any evidence? If not, it is only logic to say that the money is still with you.

Best regards,

Dr Guan

(52)    Email from Mr Wang to Dr Guan, sent on 15 April 2015:

Guan

Due to your intimidation, I decide to resort this via legal system. From now on, except you sort assistance via court, I will not help you.

Please get Malaysia police involved and start court proceedings to resolve this.

Good bye and good luck

Jay

(53)    Email from Dr Guan to Mr Wang, sent on 15 April 2015:

Mr Wang

It is the Australian police who will help us.

Regards,

Dr Guan

(54)    Email from Mr Wang to Dr Guan, sent on 15 April 2015:

Good luck.

51    As noted above, during the chain of emails reproduced above:

(1)    On 2 February 20015, the auditor of Easy Capital Global sent an email inquiring about the source of the deposits that had in fact been made by Dr Guan and Ms Hong. As to the response to that email, the Tribunal said the following (at [92]-[93]):

On 2 February, the auditor of Easy Capital Global sent an email wanting to know where the deposits of USD [sic – this is the amount in Australian dollars, as correctly recorded in the Tribunal reasons at [35]] $111,112.69 (Dr Guan) and USD $49,990.00 (Ms Hong) had come from and to whom the withdrawals had been paid. Jenny Li, the accountant, responded and copied in Mr Wang with the following information:

“The deposit of $111,112.69 was by Jerry Chie, a business partner, for technology services including data centre, server, network, website, MT4 software license, technology department and maintenance in order to set up a FX business. A withdrawal of $91,761.19 was made to Vivid Quark Technology for technology services on 19 November 2014.

The deposit of USD 49,990 made by Jerry Chie as a business partner, however it was returned on 18 November 2014.

…”.

The first paragraph supports the evidence Mr Wang has given.

The second paragraph of the email is not correct. The USD $49,990 was not returned to Jerry on 18 November 2014. It was transferred to Vivid Quark Seychelles. This could mislead the auditor and indicates either dishonesty or incompetence. In his examination by the respondent pursuant to s.19 of the Australian Securities and Investments Commission Act 2001 (Cth), Mr Wang had said that he suspected that this money was paid to Vivid Quark for an IT service. In the evidence before this Tribunal he said that Jerry had borrowed money from Vivid Quark Seychelles and therefore in paying the money (which he thought had been contributed by Jerry to Easy Capital Global) to Vivid Quark Seychelles, he was thus paying off part of the loan by Vivid Quark Seychelles to Jerry. Hence, this payment has been categorised by Mr Wang and/or his organisation as rent, repayment of a loan, and payment for IT services. I am not prepared to find that he was dishonest about this, but again it shows Mr Wang in conducting the operations of his business is highly unreliable. The movement of money to and from Easy Capital Global was essentially two deposits and two withdrawals. It was a very simple matter to find out where the money had gone.

(2)    On 8 February 2015, Dr Guan sent a letter to Mr Simon Robert, addressed to Mr Wang’s legal office, about which the Tribunal said (at [94]-[95]):

On 8 February 2015 Dr Guan sent a letter addressed to Mr Simon Robert of Easy Capital Global Pty Ltd. The address on the letter was 2202/Level 22, 31 Market Street, Sydney, NSW 2000 – the address of all of the companies already mentioned and the address of Mr Wang’s legal office. The letter stated:

“On behalf of a group of Easy Capital clients who invested in Easy Capital Pty Ltd, I am writing to you to request to withdraw our deposit from Easy Capital Pty Ltd.

Each of us clients invested fund ranging from US$50,000 to US$100,000 in Easy Capital, since November 2014, and Easy Capital Pty Ltd is obligated to pay monthly interests to us clients. However, since November 2014, Easy Capital Pty Ltd ceased to pay and interest to us clients (some new clients who invested since October 2014 did not receive any interest ever since transferring fund to Easy Capital Pty Ltd). For that reason, Easy Capital Pty Ltd has infringed the agreement between Easy Capital Pty Ltd and us clients. Furthermore, we understand from the easy capital website that Easy Capital Pty Ltd in currently under investigation.

We are extremely concerned about the money we invested. The fund we invested is our hard-earned money, some of which was the lifesavings of some of us. The loss of the investment fund would put some of us in great distress and hardship. Under the agreement between Easy Capital Pty Ltd and us clients, our initial capital is under protection. Therefore, we would like to withdraw our deposit from Easy Capital Pty Ltd immediately and reserve the right to demand for compensation for the loss of the interest that Easy Capital Pty Ltd owes us so far”.

The first comment that should be made about this letter is that there is no such person as Mr Simon Robert. However, while the letter is addressed to Easy Capital Global Pty Ltd, the contents of the letter again show the confusion that has arisen between the companies because the body of the letter refers only to Easy Capital. There is no evidence that Mr Wang received this letter, but I assume he did since it is addressed to his office and to Easy Capital Global, his proposed FX company of which he is the sole director.

52    As noted above, after the 12 February 2015 email from Mr Wang to Dr Guan, on 17 February 2015 the remaining sum of $21,442.91 (the remaining $19,316.50 from the $111,112.69 deposited as two tranches of US$50,000 by Dr Guan, plus presumably some interest) was transferred out of the Australian dollar account held by Easy Capital Global to Vivid Quark Seychelles. The Australian dollar account held by Easy Capital Global account was then closed.

53    As outlined in the section above dealing with corporate entities, the Tribunal found that there was a very close relationship between Mr Wang and Vivid Quark Seychelles, the company being ultimately owned by his cousin’s husband, which was used as a vehicle for his family to make investments in Australian companies and to transfer large sums of money to the bank accounts of companies the he controlled or had access to. The effect of the Tribunal’s findings was that the ostensible appearance of the $21,442.91 transfer was to take it out of Mr Wang’s access and control, without that being the practical reality at all.

54    The Tribunal found that this final transfer of $21,442.91 was a dishonest act, coming as it did after Mr Wang was on notice that the money ostensibly provided by Jerry may have come from Dr Guan (as was in fact found to be the case). That was the finding upon which the Tribunal based its conclusion that Mr Wang was not a person of good fame or character. That in turn resulted in a mandatory permanent banning order pursuant to s 920B(2) of the Corporations Act. It follows that this adverse finding is, necessarily, the primary focus of Mr Wang’s appeal.

The grounds of review

55    Mr Wang groups his grounds of review, and ASIC responds to them, in four tranches as follows:

(1)    grounds 1, 3 and 4 challenge the Tribunal’s conclusion at [139] and reasons at [108]-[109] and [138]-[139], that the final transfer of $21,442.91 was a dishonest act as:

(a)    an error of law: ground 1;

(b)    a finding that was legally unreasonable, irrational and/or illogical (and thus a jurisdictional error): ground 3; and/or

(c)    a finding for which there was no evidence or was contrary to the evidence: ground 4;

(2)    grounds 2(a), 5, 6 and 6A challenge the Tribunal’s conclusion that its finding that Mr Wang was not a person of good fame or character was supported by him failing to cause Easy Capital Global or its successor to repay some or all of the money that had been paid by Dr Guan and Ms Hong as:

(a)    a finding that was legally unreasonable, irrational and/or illogical (and thus a jurisdictional error): grounds 2(a) and 5, advancing different reasons for that characterisation;

(b)    a finding for which there was no evidence or was contrary to the evidence: ground 6;

(c)    a finding that was reached without affording Mr Wang procedural fairness (both a legal error and a jurisdictional error): ground 6A;

(3)    grounds 2(b), 7 and 8 challenge the Tribunal’s conclusion that its finding that Mr Wang was not a person of good fame or character was supported by other conduct found to be misleading as:

(a)    a finding that was legally unreasonable, irrational and/or illogical (and thus a jurisdictional error): grounds 2(b) and 7, advancing different reasons for that characterisation;

(b)    a finding for which there was no evidence or was contrary to the evidence: ground 8; and

(4)    ground 9 relies upon the success of one or more of the preceding grounds, and in particular upon the first tranche of grounds concerning the finding that the final transfer of $21,442.91 was a dishonest act and therefore that Mr Wang was not a person of good fame or character, to assert that the discretion pursuant to s 920A(1) to impose a permanent banning order had miscarried (by reason of the adverse good fame or character finding, compelling a permanent banning order in accordance with s 920B(2)(b)).

Legal principles

56    Mr Wang’s written submissions identify the legal principles he seeks to rely upon in aid of his grounds of appeal summarised above. ASIC largely does not dispute the principles identified, but adds to them, especially the immediate following paragraph dealing with onus and the requirement imposed on the Court to read the reasons of administrative decision-makers beneficially. The following reflects the submissions made and principles identified, with some elaboration. A further section dealing with the topic of dishonesty is also provided, given its prominence in the Tribunal’s reasons and the grounds of appeal.

Onus to establish jurisdictional error and beneficial reading of the Tribunal’s reasons

57    Mr Wang bears the onus of establishing error, especially where he relies upon not just legal error, but jurisdictional error: Plaintiff M64/2015 v Minister for Immigration and Border Protection [2015] HCA 50; 258 CLR 173 at [24]. In determining whether such an error is present, the Tribunal’s reasons are to be read fairly and beneficially, without an eye keenly attuned to the perception of error: Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 186 CLR 259 at 272. An error will not be a jurisdictional error unless it could have made a difference to the result: Hossain v Minister for Immigration and Border Protection [2018] HCA 34; 359 ALR 1 at [24]-[27]; Minister for Immigration and Border Protection v SZMTA [2019] HCA 3; 363 ALR 599 at [45], but cf [90].

Illogical or irrational findings

58    A determination may be infected by jurisdictional error if it was irrational, illogical and not based on findings or inferences of fact supported by logical grounds: Gill v Minister for Immigration and Border Protection [2017] FCAFC 51; 250 FCR 309 at [59]. That high threshold is not easily met. As Crennan and Bell JJ stated in their plurality judgment in Minister for Immigration and Citizenship v SZMDS [2010] HCA 16; 240 CLR 611 (at [135]):

A decision might be said to be illogical or irrational if only one conclusion is open on the evidence, and the decision maker does not come to that conclusion, or if the decision to which the decision maker came was simply not open on the evidence or if there is no logical connection between the evidence and the inferences or conclusions drawn.

Legal unreasonableness

59    The power exercised by the Tribunal in making the decision in the shoes of the ASIC delegate was required to be exercised in a way that was not legally unreasonable: Minister for Immigration and Citizenship v Li [2013] HCA 18; 249 CLR 332 at [63]; Minister for Immigration and Border Protection v Singh [2014] FCAFC 1; 231 FCR 437 at [43]; Minister for Immigration v Stretton [2016] FCAFC 11; 237 FCR 1 at [4]. To do otherwise is beyond power: Minister for Immigration and Border Protection v SZVFW [2018] HCA 30; 357 ALR 408 at [78].

60    The test for legal unreasonableness is statute and context-specific and therefore does not lend itself to precise formulation. It is not limited to a conclusion that could not be reached by any reasonable decision maker, known as Wednesbury unreasonableness, following Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 at p 230: Li at [68], reproduced below. The hurdle can be “virtually insuperable” where the relevant statutory criterion involves a broad and subjective evaluation, as it does in this case: Plaintiff M64 at [56]. The test for legal unreasonableness is stringent: Li at [109], [113]. Unreasonableness is distinct from mere disagreement with a decision-maker’s reasoning: Li at [30].

61    Key aspects of the reasoning in each of Li, Singh, Stretton and SZVFW, addressed in that order below, help in identifying what will and will not meet the description of legal unreasonableness.

62    In Li, Hayne, Kiefel and Bell JJ discussed how legal unreasonableness went beyond the traditional understanding of the limits to Wednesbury unreasonableness as follows (footnotes omitted):

(1)    at [68]:

However, as has been noted, Wednesbury is not the starting point for the standard of reasonableness, nor should it be considered the end point. The legal standard of unreasonableness should not be considered as limited to what is in effect an irrational, if not bizarre, decision – which is to say one that is so unreasonable that no reasonable person could have arrived at it – nor should Lord Greene MR be taken to have limited unreasonableness in this way in his judgment in Wednesbury. This aspect of his Lordship’s judgment may more sensibly be taken to recognise that an inference of unreasonableness may in some cases be objectively drawn even where a particular error in reasoning cannot be identified.

(55)    at [72]:

The more specific errors in decision-making, to which the courts often refer, may also be seen as encompassed by unreasonableness. This may be consistent with the observations of Lord Greene MR, that some decisions may be considered unreasonable in more than one sense and that “all these things run into one another” … Whether a decision-maker be regarded, by reference to the scope and purpose of the statute, as having committed a particular error in reasoning, given disproportionate weight to some factor or reasoned illogically or irrationally, the final conclusion will in each case be that the decision-maker has been unreasonable in a legal sense.

and

(56)    at [76], that legal unreasonableness “is a conclusion which may be applied to a decision which lacks an evident and intelligible justification”.

63    In Singh, the Full Court (at [44]) described the two broad contexts in which the concept of legal unreasonableness may apply having regard to the judgments in Li:

(1)    a conclusion may be legally unreasonable if reached on the basis of an identified underlying error; and

(2)    legal unreasonableness can also be found by a consideration of the outcome of the decision, without the need to identify any underlying error in the decision-making process.

The latter outcome-focused approach may lead to the characterisation of decisions that are arbitrary, capricious or lacking in common sense as being legally unreasonable, even if no overt error in the decision making process can be identified.

64    In Stretton, Allsop CJ (with whom Wigney J agreed) said (at [11]):

The task is not definitional, but one of characterisation: the decision is to be evaluated, and a conclusion reached as to whether it has the character of being unreasonable, in sufficiently lacking rational foundation, or an evident or intelligible justification , or in being plainly unjust, arbitrary, capricious, or lacking common sense having regard to the terms, scope and purpose of the statutory source of the power, such that it cannot be said to be within the range of possible lawful outcomes as an exercise of that power. The descriptions of the lack of quality used above are not exhaustive or definitional, they are explanations or explications of legal unreasonableness, of going beyond the source of power.

65    In SZVFW, Kiefel CJ said (at [10], footnotes omitted):

In the joint judgment in Minister for Immigration and Citizenship v Li it was explained that a decision made in the exercise of a statutory power is unreasonable in a legal sense when it lacks an evident and intelligible justification. That may be so where a decision is one which no reasonable person could have arrived at, although an inference of unreasonableness is not to be drawn only where a decision appears to be irrational.

“No evidence”

66    The “no evidence” aspect of grounds 4, 6 and 8 will fail if there was any evidence to support a particular factual finding or inference: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 356; Kostas v HIA Insurance Services Pty Ltd [2010] HCA 32; 241 CLR 390 at [16], [91]. A “no evidence” ground is one of capacity at law, not weight as a matter of administrative fact-finding. As ASIC point out, the “no evidence” ground differs from the “legal unreasonableness” ground, relying upon:

(1)    the warning by Flick J in Australasian Meat Industry Employees’ Union v Fair Work Australia [2012] FCAFC 85; 203 FCR 389 at [92] that “[c]onsiderable caution needs to be exercised before concluding that an absence of evidence to support a particular factual finding necessarily constitutes jurisdictional error”; and

(2)    the observation by Tracey J in Shop, Distributive and Allied Employees Association v National Retail Association (No 2) [2012] FCA 480; 205 FCR 227 at [31], quoting the 2009 4th Edition of Judicial Review of Administrative Action by Aronson et al at 259 that the ground “cuts out when even a skerrick of evidence appears”: see also Australian Retailers Association v Reserve Bank of Australia [2005] FCA 1707; 148 FCR 446 at 587 [575].

67    As Mason CJ pointed out in Bond at 356:

Thus, at common law, according to the Australian authorities, want of logic is not synonymous with error of law. So long as there is some basis for an inference – in other words, the particular inference is reasonably open – even if that inference appears to have been drawn as a result of illogical reasoning, there is no place for judicial review because no error of law has taken place.

68    Mr Wang correctly points out that the “no evidence” ground is not restricted to circumstances where there is, quite literally, no evidence at all. That is because a finding may constitute an error of law if there was no probative evidence to support it, so as to be no evidence in law at all: see Bruce v Cole (1998) 45 NSWLR 163 at 188-189 per Spigelman CJ (Mason P, Sheller and Powell JJA agreeing). It follows that the no evidence ground of review will not always be defeated by identifying a mere “skerrick” of evidence if it can be shown by the party asserting the “no evidence” ground not to have been also legally probative in making the finding in question. However that inquiry is one of capacity, not weight.

Good fame or character

69    Mr Wang submits that two later decisions of the Tribunal inform how the present Tribunal should have approached the analysis of the question of whether he was of good fame or character:

(1)    In Williams and Australian Securities and Investments Commission [2018] AATA 2312, Deputy President McCabe considered the approach to a consideration of s 920A(1)(d) of the Corporations Act. He concluded (at [44]) that “fame” was a matter going to a person’s public reputation, whilst “character” required an analysis of a person’s moral qualities and nature. Mr Wang therefore submits that, in assessing character, a conclusion that there has been “bad behaviour” is insufficient: Williams at [46]. Mr Wang submits that it is necessary that the behaviour points logically to defects in character as opposed to a lapse in judgment, a “blip” or an “aberration”. Deputy President McCabe said at [46]:

… The statutory language focuses on whether there is reason to believe the applicant is not of good fame or character. That is not the same thing as asking whether the applicant is of good character, or – even less accurately – whether he is a paragon of virtue since the public does not expect perfection in financial advisers. ASIC (and the Tribunal, when standing in ASIC’s shoes) must identify reasons that tend logically to the conclusion that the applicant is not of the good fame or character expected of a person licensed to provide financial services. It is not enough that I be satisfied the applicant engaged in bad behaviour. That bad behaviour must point logically to relevant defects in character. Even very bad behaviour might not go that far in the circumstances of a particular case. While actions speak louder than words when it comes to assessments of character, those actions might still suggest a serious lapse of judgment rather than a character defect.

(2)    In Hutchison and Australian Securities and Investments Commission [2018] AATA 3520, (presently under appeal with judgment reserved) Deputy President Boyle, in a case dealing with s 1041G (dishonest conduct) and s 1041H (misleading or deceptive conduct) with respect to a banning order concluded (at [74]) that applying the approach set out in Williams, even a conclusion that there had been behaviour which was at times dishonest, did not result in a conclusion that there was reason to believe that a person was not of good fame or character. Something more was required.

70    In response, ASIC submits that the issue of “good fame [or] character” falls to be assessed in the context of a particular statutory regime. In this case, the issue arises in the context of a scheme for the licensing of persons involved in the provision of financial services, which is designed to maintain public confidence in the financial services industry. Conduct which is dishonest or misleading and deceptive – particularly where it involves potential investors – is capable, depending on the circumstances, of showing that a person is not of relevantly “good fame [or] character”.

71    The words good fame or character have their ordinary meaning. As was pointed out by Lee J as a member of the Full Court in Irving v Minister for Immigration, Local Government and Ethnic Affairs (1996) 68 FCR 422 at 431-2, in the context of the good character requirements in the Migration Act 1958 (Cth):

Unless the terms of the Act and regulations require some other meaning be applied, the words “good character” should be taken to be used in their ordinary sense, namely, a reference to the enduring moral qualities of a person, and not to the good standing, fame or repute of that person in the community. The former is an objective assessment apt to be proved as a fact, whilst the latter is a review of subjective public opinion: see Clearihan v Registrar of Motor Vehicle Dealers (ACT) (1994) 117 FLR 455 at 459-460 per Miles CJ; Plato Films Ltd v Speidel [1961] AC 1090 at 1128-1129 per Lord Radcliffe, Lord Denning at 1138. A person who has been convicted of a serious crime and thereafter held in contempt in the community, nonetheless may show that he or she has reformed and is of good character... Conversely, a person of good repute may be shown by objective assessment to be a person of bad character: see Re Davis (1947) 75 CLR 409 per Latham CJ; Clearihan at 461 per Miles CJ. Conversely, a person of good repute may be shown by objective assessment to be a person of bad character.

72    A significant area in which the topic of good fame or character has arisen concerns legal and medical disciplinary proceedings. Those proceedings have a similar protective purpose to banning orders and therefore provide some further basis for understanding the principled approach that is necessary. In Re Davis (1947) 75 CLR 409, the High Court was dealing with the situation of a barrister who was struck off the roll when prior offences that he had not disclosed came to light. Section 9 of the Legal Practitioners Act 1898-1936 (NSW) provided that no candidate “however qualified in other respects, shall be admitted as a barrister unless the Board is satisfied that he is a person of good fame and character.” The key passages of some relevance to this appeal are as follows:

(1)    Latham CJ said (at 414):

The argument for the appellant emphasized the provision of s.9, which has already been quoted, which requires the Board to be satisfied that the candidate is a person of good fame and character. Decision upon the question of the good fame and character of a candidate is expressly by this section entrusted to the Board. It is not given to the Court.

(2)    Latham CJ said (at 416-7):

It was submitted that the appellant, by his good behaviour since 1934, had redeemed himself, and that it was not unreasonable for him to take the view in 1944 and 1946 that he was then a person of good fame and character. It may be that he had by that time become a person of good fame, i.e., of good reputation among those who then knew him. But intrinsic character is a different matter. A man may be guilty of grave wrongdoing and may subsequently become a man of good character. If the appellant had frankly disclosed to the Board and to the two solicitors the fact of his conviction, that disclosure would have greatly assisted him in an endeavour to show that he had retrieved his character. But his failure to make such disclosure in itself, apart from the conviction, excludes any possibility of holding that he was in 1946, or had become in 1947, a man of good character.

(3)    Dixon J said at 420 (emphasis added):

The Bar is no ordinary profession or occupation. The duties and privileges of advocacy are such that, for their proper exercise and effective performance, counsel must command the personal confidence, not only of lay and professional clients, but of other members of the Bar and of judges. It would almost seem to go without saying that conviction of a crime of dishonesty of so grave a kind as housebreaking and stealing is incompatible with the existence in a candidate for admission to the Bar of the reputation and the more enduring moral qualities denoted by the expression, “good fame and character,” which describe the test of his ethical fitness for the profession.

73    The topic of good fame and character, as a conjunctive phrase, was considered by the New South Wales Court of Appeal, in Prothonotary of the Supreme Court of NSW v Alcorn [2007] NSWCA 288, a professional disciplinary case involving a solicitor. Hoeben J, with whom Beazley and McColl JJA agreed, said the following (at [57]-[60]):

A person of good fame and character

The absence of “good fame and character” is a matter that falls to be determined at the time of the hearing not at some prior time (Ex parte Tziniolis; Re The Medical Practitioners Act (1966) 67 SR (NSW) 448 per Holmes JA at 475.

In determining whether a person is of good fame and character, the Court is to consider “matters affecting the moral standards and attitudes and qualities (of an applicant for registration) and not merely consider what is his general reputation” – see Ex parte Tziniolis; Re Medical Practitioners Act (1966) 67 SR (NSW) 448 at 451 and Incorporated Law Institute of NSW v Meagher (1909) 9 CLR 655 per Higgins J at 692.

However the notion of good character is not at large. It must relate to the qualities relevant to practice as a professional. Kirby P described the concept as follows:

“The “good character” which is required, the absence of which may give rise to complaint leading to sanctions, must be a “good character” relevant to the purpose for which the complaint is entertained, viz for the making of an order affecting the practice of the medical practitioner concerned as such … The relevant function of the Tribunal is to protect the public from medical practitioners whose continued practice may cause harm to the public”. (McBride v Walton (NSWCA unreported, 15 July 1994 at [15]).

Dixon J described the concept of “good fame and character” as follows:

“It would almost seem to go to without saying that conviction of a crime of dishonesty of so grave a kind as housebreaking and stealing is incompatible with the existence in a candidate for admission to the Bar of the reputation and more enduring moral qualities denoted by the expression “good fame and character”, which describes the test of his ethical fitness for the profession.” (In Re: Davis at 420)

74    It follows that the mere absence of a conviction for dishonesty, or even the absence of a finding of dishonesty by the Tribunal, does not necessarily mean that the conduct in question cannot otherwise be a basis for being satisfied as to a lack of ethical fitness to be providing financial services, and conversely that the presence of a finding of dishonesty may, depending on the circumstances, properly lead to the conclusion that good fame or character is nonetheless present. In some cases there may be no simple equation between the presence or absence of a finding of dishonesty and a person being of good fame or character. It is an evaluative judgment to be applied to the statutory test without gloss or redefinition. The evaluation in this case was conducted by a senior member of a pre-eminent Tribunal, conducted in a quasi-judicial manner. The Tribunal had the benefit of observing Mr Wang give evidence, and evaluating his conduct in that context. This is an area in which this Court must be especially careful not to stray into impermissible merits review.

Dishonesty

75    A live question in this appeal is whether it can be dishonest to make an otherwise lawful, or at least otherwise not unlawful, transfer of funds, if the motive or purpose in doing it is found to be itself dishonest. Can there be dishonesty in doing something that you are otherwise entitled to do merely because of the state of mind in which you do it?

76    It is helpful at this point to turn to one of the leading High Court authorities on dishonesty, Peters v The Queen [1998] HCA 7; 192 CLR 493. Peters was a conspiracy to defraud case, and accordingly it canvasses issues that go well beyond what is necessary for the present circumstances. The consideration of that case is further complicated by the fact that the High Court divided between Toohey and Gaudron JJ on the one hand, and McHugh J (with whom Gummow J agreed) on the other. Kirby J reasoned along a third pathway, then abandoned it at the end of his Honour’s judgment by way of compromise to, apparently reluctantly, support Toohey and Gaudron JJ. A second complication is that the Parliament decided to enact a test of dishonesty that was contrary to the reasoning of the majority decision in Peters. However, as will be seen, the difference turns on the stepping stones required to be taken for the test of dishonesty to be met, rather than the underlying substance of the test itself.

77    The applicable statutory test for dishonesty arose from R v Ghosh [1982] QB 1053, being in substance the test that was legislated at a federal level. While the statutory test does not apply in terms to this case, the legislative test is convenient because of its brevity. That test was in s 1041G, as follows:

(1)    A person must not, in the course of carrying on a financial services business in this jurisdiction, engage in dishonest conduct in relation to a financial product or financial service.

Note 1:    Failure to comply with this subsection is an offence (see subsection 1311(1)).

Note 2:    Failure to comply with this subsection may also lead to civil liability under section 1041I.

(2)    In this section:

dishonest means:

  (a)    dishonest according to the standards of ordinary people; and

(b)    known by the person to be dishonest according to the standards of ordinary people.

Following the hearing of this matter, s 1041G was amended from 13 March 2019 by removing sub-s (2). This appeal is not concerned with any statutory test, but with the test at common law, to the extent that it helps to inform the analysis of the Tribunal decision.

78    The trial judge in Peters had given directions in line with Ghosh. The High Court, by majority, considered that the Ghosh test was incorrect, while McHugh J (joined by Gummow J) considered that there was no need to prove dishonesty as an element of a conspiracy to defraud at common law or under the statutory provision under consideration. In their plurality judgment, Toohey and Gaudron JJ said (at [15]-[18], footnotes omitted, emphasis added):

Dishonesty

There is a degree of incongruity in the notion that dishonesty is to be determined by reference to the current standards of ordinary, honest persons and the requirement that it be determined by asking whether the act in question was dishonest by those standards and, if so, whether the accused must have known that that was so. That incongruity comes about because ordinary, honest persons determine whether a person’s act is dishonest by reference to that person’s knowledge or belief as to some fact relevant to the act in question or the intention with which the act was done. They do not ask whether he or she must be taken to have realised that the act was dishonest by the standards of ordinary, honest persons. Thus, for example, the ordinary person considers it dishonest to assert as true something that is known to be false. And the ordinary person does so simply because the person making the statement knows it to be false, not because he or she must be taken to have realised that it was dishonest by the current standards of ordinary, honest persons.

There are also practical difficulties involved in the Ghosh test. Those difficulties arise because, in most cases where honesty is in issue, the real question is whether an act was done with knowledge or belief of some specific thing or with some specific intent, not whether it is properly characterised as dishonest. To take a simple example: there is ordinarily no question whether the making of a false statement with intent to deprive another of his property is dishonest. Rather, the question is usually whether the statement was made with knowledge of its falsity and with intent to deprive. Of course, there may be unusual cases in which there is a question whether an act done with knowledge of some matter or with some particular intention is dishonest. Thus, for example, there may be a real question whether it is dishonest, in the ordinary sense, for a person to make a false statement with intent to obtain stolen property from a thief and return it to its true owner.

The practical difficulties with the Ghosh test arise both in the ordinary case where the question is whether an act was done with knowledge or belief of some specific matter or with some specific intent and in the unusual case where the question is whether an act done with some particular knowledge, belief or intent is to be characterised as dishonest. In the ordinary case, the Ghosh test distracts from the true factual issue to be determined; in the unusual case, it conflates what really are two separate questions, namely, whether they are satisfied beyond reasonable doubt that the accused had the knowledge, belief or intention which the prosecution alleges and, if so, whether, on that account, the act is to be characterised as dishonest. In either case, the test is likely to confuse rather than assist in deciding whether an act was or was not done dishonestly.

In a case in which it is necessary for a jury to decide whether an act is dishonest, the proper course is for the trial judge to identify the knowledge, belief or intent which is said to render that act dishonest and to instruct the jury to decide whether the accused had that knowledge, belief or intent and, if so, to determine whether, on that account, the act was dishonest. Necessarily, the test to be applied in deciding whether the act done is properly characterised as dishonest will differ depending on whether the question is whether it was dishonest according to ordinary notions or dishonest in some special sense. If the question is whether the act was dishonest according to ordinary notions, it is sufficient that the jury be instructed that that is to be decided by the standards of ordinary, decent people. However, if “dishonest” is used in some special sense in legislation creating an offence, it will ordinarily be necessary for the jury to be told what is or, perhaps, more usually, what is not meant by that word. Certainly, it will be necessary for the jury to be instructed as to that special meaning if there is an issue whether the act in question is properly characterised as dishonest.

79    State of mind may therefore render an act dishonest, irrespective of whether the act is itself inherently lawful or unlawful. Thus an entirely lawful act may be dishonest if the intention or purpose or motivation in doing it can properly be characterised as dishonest; and an unlawful act may be found not to be dishonest. Toohey and Gaudron JJ in the last sentence of the second passage reproduced from Peters at [16], emphasised above, gave an example of the later: it may not be dishonest in the ordinary sense for a person to make a false statement with intent to obtain stolen property from a thief and return it to its true owner. The act of making a false statement may be unlawful, but the accompanying intent is not dishonest and therefore the act is not dishonest. Of course, an inherently unlawful act may greatly assist in concluding that it was also dishonest, and that it was known to be dishonest by the standards of ordinary, honest persons.

Mr Wang’s overall approach to his appeal

80    At the hearing of the appeal, Mr Wang relied upon the following characterisation of the facts to demonstrate asserted flaws in the Tribunal’s reasoning process (omitting cross-references):

The payment of $21,442.91 was a one off transaction and the payment of $21,442.91 was to the same company in relation to which the uncriticised prior payments were made in November 2014.

The payment concerned a relatively modest amount of money.

Neither Mr Wang nor Easy Capital Global had or were demonstrated to have had any financial need or be in any financial distress.

There was no evidence or finding of prior dishonest conduct by Mr Wang or Easy Capital Global.

Mr Wang engaged with Dr Guan after Dr Guan first emerged on 26 January 2015 and urged Dr Guan to report his complaint to the authorities so they could be investigated and to commence proceedings to pursue his claim.

Easy Capital Global held and continued to hold an AFSL licence, being something of material value, until it was cancelled on 1 October 2015.

Easy Capital Global continued in business, even if it later changed its name to NZGFT [NZ Global Financial Trading Pty Ltd] on 12 January 2015 (an understandable name change in the circumstances surrounding the prior confusion between Easy Capital Global and Easy Capital), that is, prior to Dr Guan first emerging on 26 January 2015.

In August 2015, Mr Wang (at a time when he was not a director or a shareholder of Easy Capital Global) offered to pay the sum of USD$100,000.00 into a trust account maintained by ASIC or another third party to meet Dr Guan’s claims pending their resolution, such that if they were established Dr Guan could be compensated[.] ASIC refused to engage with Mr Wang because he was not a current director.

Any cause of action by Dr Guan against Easy Capital Global was not identified and none was apparent (in circumstances where the money received by Easy Capital Global was in payment of the consideration by Jerry for his agreement to conduct an FX trading business with Mr Wang). As the Deputy President acknowledged [at [109]], “One can argue about the merits of Dr Guan’s claim against Easy Capital Global”.

There was no admission of or uncontested contemporaneous evidence of dishonesty. The finding of dishonesty was based on inference. On the no evidence issue, the hunt is for probative evidence to support the finding of dishonesty, that is, even if there is a “skerrick” of evidence.

There was no complete rejection of all of the evidence or creditworthiness of Mr Wang and no relevant contrary version of events propounded by any other witness called.

Mr Wang cooperated with the ASIC s.19 examination held on 15 and 21 March 2016 after receipt of notice requiring appearance at an examination dated 3 March 2016.

81    Each of the above points to reasons why the Tribunal could, on the merits, have reached a different conclusion, but they do not of themselves form a sufficient basis for establishing error. It is therefore necessary to consider carefully the submissions which endeavour to take the debate beyond mere merits review.

82    The specific parts of the Tribunal’s reasons under challenge are as follows (emphasis added):

(1)    at [108]-[109]:

I do not accept Mr Wang’s explanation for transferring $21,442.91 from Easy Capital Global to Vivid Quark Seychelles. The transfer was a dishonest act. He had lost trust in Jerry before he knew of Dr Guan’s existence. He had lost more trust since he had learned of Dr Guan’s concerns. It is highly improbable that he would be gratuitously paying Jerry’s debts. Furthermore, assuming the debts existed, they were the debts of what Mr Wang regarded as Jerry’s company, Easy Capital and not Easy Capital Global. The transfer was made by Mr Wang to a company ostensibly controlled by an extended family member.

I can only conclude the payment was made to ensure that Dr Guan could not recover the balance of moneys originally deposited – or to make it appear to Dr Guan that he could not recover them. Mr Wang has at times said that he was not sure that Dr Guan invested the money at all, or had any entitlement to claim the money even if it was his. One can argue about the merits of Dr Guan’s claim against Easy Capital Global, but the simple fact of the matter is Mr Wang knew Dr Guan had a claim on the money but regardless proceeded to pay the money out of the Easy Capital Global account to a family company. He then closed the account.

(2)    at [138]-[139]:

I am satisfied that his payment to Vivid Quark Seychelles of the balance of Dr Guan’s money at a time when he knew that Dr Guan was claiming the money was a dishonest act. It cannot be regarded otherwise when one considers the high educational level and qualifications of Mr Wang and the fact that he was, or had been, the principal of a firm of solicitors. He had to know that he should not have paid that money to a company controlled by his family and out of the local jurisdiction. Furthermore he has made no effort to repay any money from Easy Capital Global or its successor, even though the first two payments made by it was to acquire software and hardware for use in the FX business. Easy Capital Global has benefited at the expense of Ms Hong and Dr Guan, not Jerry. That indicates poor character.

In assessing good fame and character for the purpose of s.920A(1)(d), it is irrelevant whether the questionable behaviour or actions of the individual involved took place in the course of operating a financial services business or in contravention of or in relation to any provision of the [Corporations Act]. As it happens Mr Wang’s actions may directly contravene provisions of the [Corporations Act]. However I do not intend exploring whether each possible contravention of a provision of the [Corporations Act] by Mr Wang gives rise to a finding that he is not of good fame and character because I am satisfied that Mr Wang is not a person of good fame and character by reference to his act of dishonesty in regards to the transfer of Dr Guan’s remaining funds from Easy Capital Global to Vivid Quark Seychelles. This finding is further supported by his failure to cause Easy Capital Global or its successor to repay some or all of the money of Dr Guan and Ms Hong in addition to his other conduct which I have described as misleading.

83    Mr Wang’s submissions focus on the following part of [109] of the Tribunal’s reasons, reproduced in bold in the second passage at [82(1)] above: “I can only conclude the payment was made to ensure that Dr Guan could not recover the balance of moneys originally deposited – or to make it appear to Dr Guan that he could not recover them.”

Grounds 1, 3 and 4: the finding that the transfer of $21,442.91 was a dishonest act

84    Mr Wang contends that because Easy Capital Global had at least US$2 million in available funds at the time of the transfer of the $21,442.91, that would not and could not, to Mr Wang’s knowledge, have the effect of putting the money beyond Dr Guan’s reach. Further, he submits, the evidence did not support the conclusion that the purpose of the transfer was to do so. Rather, he submits, this evidence was only capable of supporting the contrary conclusion that Mr Wang knew that the transfer of the money would not have that effect. The argument as developed at the appeal hearing placed heavy reliance on the Tribunal failing to appreciate that Dr Guan’s capacity to recover any money was not impeded by the $21,442.91 having been transferred overseas. It focused on Dr Guan’s strict legal rights and his capacity to enforce them. It relied upon reading the Tribunal’s reasons at [109] to the effect of ensuring that Dr Guan could not recover the $21,442.91, or to make it appear to Dr Guan that he could not recover that sum, in the strictest legal sense. With that approach, Mr Wang submits that neither the fact that the money had been transferred, nor the fact of the account having been closed, could make it appear to Dr Guan that the money was unrecoverable.

85    Mr Wang also submits that the Tribunal failed to appreciate that the evidence was that the decision to close the Australian dollar Easy Capital Global bank account was made before any contact was made by Dr Guan, such that there was not, and could not be, any evidence that the account was closed to give the impression to Dr Guan that the money had disappeared. Mr Wang also submits that the Tribunal also erred in treating the evidence referred to in the preceding paragraph as only a submission. I do not propose to dwell on that suggestion. It entails scouring the Tribunal’s reasons for perceived error. A reference to a submission about evidence does entail treating such evidence as only a submission. There is no substance to this complaint.

86    In relation to Mr Wang’s arguments about the legal position as to recovery of the money, ASIC characterises this as both missing the mark, and in truth constituting a dispute on the merits. The substance of ASIC’s contrary argument is as follows:

(1)    The Tribunal’s finding was not whether there was a legal impediment to a successful law suit, but whether it was being conveyed to Dr Guan, a foreign national, that the money had gone from the bank account.

(2)    The communications with Dr Guan were, as the Tribunal found, directed to deflecting him from pursuing recovery in Australia.

(3)    The Tribunal did not find that Mr Wang did not know where the $21,442.91 had gone, given the finding that he had authorised it to be transferred to Vivid Quark Seychelles (Mr Wang points out that there was no direct evidence of such authorisation, but nothing turns on this because there was sufficient evidence to infer this).

(4)    There was nothing illogical about the Tribunal finding that Mr Wang had caused the $21,442.91 transfer to be made to make it appear to Dr Guan that it was irrecoverable and declining to find that Mr Wang knew precisely what Vivid Quark Seychelles had done with the money thereafter – a person who transfers money to an associate may still act dishonestly even if there is no knowledge about what happens to that money after that.

(5)    The Tribunal was not under any obligation to accept Mr Wang’s evidence that Easy Capital Global had funds available to it to meet a claim by Dr Guan – Mr Wang’s paralegal, Ms Tang, told Dr Guan that Chia Wee Keat (that is, Jerry) had already taken the money for himself, and invited him to commence proceedings in Malaysia.

(6)    Mr Wang did not give evidence before the Tribunal, and did not submit, that he was willing to apply available funds towards repaying Dr Guan, but rather that funds were available to meet a successful claim brought by Dr Guan.

(7)    Dr Guan faced substantial burdens litigating in Australia, and there was no evidence that he knew that Easy Capital Global had substantial funds available to it – to the contrary, the evidence indicated that Dr Guan was under the misapprehension that Easy Capital Global was not connected to Mr Wang.

(8)    Mr Wang allowed Dr Guan to labour under the misapprehension that his money had been invested with Easy Capital, not Easy Capital Global.

(9)    The evidence did not go so far as to establish that Mr Wang knew that the transfer of the $21,442.91 would not have the effect of putting that money out of Dr Guan’s reach.

(10)    The mere fact that there was evidence that a decision to close the bank account had been made before Dr Guan’s first contact does not impugn the Tribunal’s reasoning – it was not obliged to, and evidently did not, accept that evidence. The account was only in fact closed after Dr Guan’s contact.

(11)    While there was no direct evidence that Mr Wang had that motive to close the account, there was ample circumstantial evidence to support that conclusion, including correspondence indicating Dr Guan’s increasing agitation, the correlation between the transfer of the $21,442.91 and the closing of the account, and the email to Dr Guan telling him that the money had been taken by someone else. The mere fact that the Tribunal could have reached a different conclusion does not mean that it was compelled to do so.

(12)    It was reasonable to think that Dr Guan would be deterred from pursuing reimbursement once he learnt that the funds had been transferred, the account had been closed, there was no longer a company by the same name, and the only person who seemed to have knowledge about the money – Mr Wang – was asserting that the money was taken by someone else.

(13)    In those circumstances, it was open to the Tribunal to find that Mr Wang was aware that Dr Guan would or might be deterred from pursuing him for reimbursement.

87    I accept ASIC’s submissions to this point, and reject those by Mr Wang. The challenged phrase from the Tribunal’s reasons at [109] – “I can only conclude the payment was made to ensure that Dr Guan could not recover the balance of moneys originally deposited – or to make it appear to Dr Guan that he could not recover them.” – is to be read beneficially, and not in a legalistic way. The sentence is to be read as a whole, and in the context of the rest of the Tribunal’s reasons. Read in that way, the issue before the Tribunal and thus its determination was not about the technicalities of legal recovery of the money paid, or its worth, but about dishonest dissuasion. It was looking at the practical effect of what was being conveyed to Dr Guan, a foreign national, in terms of what had happened to his money, and whether he would ever see it again. The Tribunal was entitled to look at the action of closing the bank account once the $21,442.91 had been transferred in a way that was other than benign, and was not obliged to treat evidence that a decision had been made some time earlier to close the account as detracting from the overall conclusion reached that this account closure, whenever it was originally decided, was implemented as part of deterring Dr Guan from seeking to recover his money.

88    Viewed in that way, the Tribunal was not forming a view as to the legal prospects of success in litigation, but rather on the objective that the Tribunal perceived Mr Wang was seeking to achieve, which was to do what he could to ensure that Dr Guan would not be getting his money back, even as to $21,442.91. The Tribunal was assessing whether or not Mr Wang was endeavouring to convey to Dr Guan, at the level of a layman, or even just a practical person, that seeking to obtain the money from him (or Easy Capital Global) would be futile because it was no longer there. The Tribunal in substance found that this was what was conveyed to Dr Guan. There was no error in that conclusion.

89    I turn now to the question of dishonesty. The parties characterise that finding, and therefore its validity, very differently.

90    Mr Wang submits:

(1)    in the context of there being no known or established legal impediment to dealing with the money in an account when there were available funds to satisfy any valid claim as to the $21,442.91 debt or liability owed to Dr Guan, the finding of dishonesty was not open to be made and was therefore legally unreasonable or irrational;

(2)    the Tribunal found that his communications with Dr Guan about the money and what had happened to it were not dishonest and that after a series of inquiries, he had been unable to ascertain what had happened to the money, such that he subjectively did not know what had happened to it at the time he was communicating with Dr Guan;

(3)    it was therefore illogical and irrational to conclude that he was dishonest in authorising the final transfer to make it appear that those funds were beyond reach, but to conclude that he was not dishonest in his communications with Dr Guan as to where the money went;

(4)    further, the Tribunal’s conclusion that the transfer was dishonest carried an implicit conclusion that Easy Capital Global was under a legal obligation not to deal with the balance of the money in the Australian dollar Easy Capital Global bank account and to immediately repay it once it became aware of Dr Guan’s claim – while this was not an explicit argument advanced by ASIC, ASIC’s case before the Tribunal that the funds were trust property on the basis that they were received when Easy Capital Global was conducting a financial services business was rejected, denying any basis for concluding that, upon becoming aware of Dr Guan’s claim, any transfer of the balance of funds in the account was dishonest;

(5)    without a trust relationship, or freezing order, there is nothing dishonest or inherently wrong in law with a person dealing with a sum of money merely because a claim has been made against it, especially when such a dealing would not, as a matter of law, impede future recovery;

(6)    the Tribunal’s conclusion that the transfer was a dishonest act was inconsistent with its acceptance of Mr Wang’s evidence that he held doubts about whether Dr Guan had deposited the funds or had a legitimate claim against Easy Capital Global even if he had done so;

(7)    the Tribunal accepted that an argument could be had about the merits of Dr Guan’s claim against Easy Capital Global, such that it was not open to conclude that the transfer was a dishonest act; and

(8)    for the same reason, the related finding that Mr Wang “had to know that he should not have” made the final transfer, did not have a proper foundation – the evidence did not support any conclusion that Mr Wang knew that he should not have transferred the $21,442.91, but rather, and to the contrary, established that Mr Wang had legitimate doubts about the bona fides and merits of Dr Guan’s claim.

91    ASIC submits:

(1)    that the Tribunal made no finding that Mr Wang held doubts about whether it was Dr Guan who deposited the money into the Australian dollar Easy Capital Global bank account;

(2)    the key passage at [109] of the Tribunal’s reasons was: “One can argue about the merits of Dr Guan’s claim against Easy Capital Global, but the simple fact of the matter is Mr Wang knew Dr Guan had a claim on the money but regardless proceeded to pay the money out of the Easy Capital Global account to a family company.” In context, this was a reference to the legal merits of Dr Guan’s claim in the sense of its prospects of success in litigation, not to Mr Wang’s state of mind as to the source of the money;

(3)    that passage does not entail any implicit conclusion by the Tribunal that Easy Capital Global was under a legal obligation not to deal with the balance of the account;

(4)    the issue was one of “good fame and character”, being a factual matter;

(5)    a lawful act may be dishonest, and an unlawful act may be honest (a proposition that must be accepted in light of the discussion about Peters above at [75] to [79]);

(6)    the Tribunal’s finding of dishonesty was based on the purpose of the transfer being made, namely to defeat, or give the appearance of defeating, Dr Guan’s claim for the last $21,442.91 of his money that had been put into the Easy Capital Global account;

(7)    it was not the point that there might have been a sound defence to such a claim, or that alternative means were available to satisfy such a claim if pursued and upheld;

(8)    while there was nothing inherently unlawful in Mr Wang causing the $21,442.91, being the residue of the money from Dr Guan that was deposited, to be transferred to the overseas bank account, that otherwise lawful act could be rendered dishonest by the state of mind in which it was done, which was a matter for the Tribunal to determine; and

(9)    in the absence of any explanation from Mr Wang as to why he had made the $21,442.91 transfer, and in the context of the email exchanges that took place before and after the transfer, three of which were found to be misleading, the Tribunal inferred that the purpose in making the transfer was either to ensure that Dr Guan could not recover the balance of the moneys originally deposited, or to make it appear to Dr Guan that he could not recover that money, which was dishonest.

92    Once again, I prefer ASIC’s submissions. The central issue in this appeal was whether it was open to the Tribunal to make the finding of dishonesty on the material that was before it, and especially in the absence of any explanation by Mr Wang for what he had done, which was otherwise difficult to fathom, and very difficult to comprehend in a benign way. For the reasons advanced by ASIC, which I accept, it is not to the point that the transfer of the $21,442.91 was lawful, or that Dr Guan may still have had a legal remedy available to him, whether efficacious or not. Rather, following the observations of Toohey and Gaudron JJ in the first passage reproduced from Peters above (at [78]), the underlying question to be answered in this appeal is whether it was open to the Tribunal to conclude that the state of mind with which Mr Wang’s act of causing the $21,442.91 to be transferred was dishonest, in the sense of his intention. The additional subjective test from Ghosh is whether the individual who did the act must be taken to have realised that the act was dishonest by the standards of ordinary, honest persons.

93    The substance of what the Tribunal found was that:

(1)    Mr Wang had transferred the $21,442.91 so that it was not available to be returned to Dr Guan;

(2)    by the email Mr Wang sent on 6 March 2015, he conveyed to Dr Guan that all of his money had gone out of the hands of Easy Capital Global, which had effect of making it appear to Dr Guan that he could not recover, in specie, the money that had been deposited from his bank account to Easy Capital Global’s bank account;

(3)    Mr Wang’s purpose in making the transfer to create that appearance was dishonest; and

(4)    further, at [138], that Mr Wang knew that he should not have made that transfer in the circumstances, which in substance is a finding that he knew it was dishonest.

94    Thus, the Tribunal asked the right question when regard is had not just to the Peters test of dishonesty, but also of the Ghosh test if that additional element had to be satisfied. That question was answered by reference to probative material that was before it. No error has been established by Mr Wang in the Tribunal’s finding of dishonesty.

95    For completeness, a number of collateral submissions by Mr Wang should be addressed. Mr Wang also challenges the Tribunal’s reliance, at [138], on his “high educational level and qualifications … and the fact that he was, or had been, the principal of a firm of solicitors” to support the conclusion that he “had to know that he should not have paid that money to a company controlled by his family and out of the local jurisdiction”. He submits that the evidence supported the Tribunal’s conclusion that the concerns he had as to the bona fides and merits of Dr Guan’s claim were legitimate, and that his legal training made it inherently implausible that he would engage in a dishonest act. He submits that his high educational level and the fact that he had practiced as a legal practitioner were only capable of supporting an inference that he would not consciously act in a dishonest manner. ASIC correctly submits that it was open to the Tribunal to have regard to Mr Wang’s education, qualifications and professional position to support an inference that he had turned his mind to the propriety of his actions. It is therefore wrong to suggest that this information could only be used in favour of Mr Wang. The Tribunal did not err as asserted by Mr Wang.

96    Mr Wang submits that the Tribunal’s conclusion at [108] that he may have lost trust in Jerry was irrelevant to the consideration of whether he had engaged in dishonest conduct by reason of the final transfer. He submits that this conclusion was only capable of going to the consideration of his evidence concerning the reasons for the transfer, a matter about which he could not recall and was speculating. In circumstances where the Tribunal concluded that he was not dishonest in his contemporaneous communications with Dr Guan about where the money had gone, Mr Wang submits that whether or not an explanation offered by him at a later time should be accepted was irrelevant to a consideration of whether he had engaged in a dishonest act in authorising the transfer. ASIC again correctly submits that this evidence legitimately went to the question of whether the $21,442.91 transfer was honest. Mr Wang advanced Jerry as a motive and thus legitimate explanation for the transfer, which the Tribunal rejected; such a rejection was a part of the matrix of facts by which a non-benign conclusion was able to be reached. The Tribunal did not consider it necessary to find that the communications with Dr Guan were dishonest. Importantly, however, that did not entail any converse finding that they were honest, being left without any attribution of a state of mind. There is no necessary exhaustive honest/dishonest dichotomy. It should be remembered that this was within the context of the Tribunal having found that specific communications to Dr Guan were found to be, in some instances, misleading.

97    In reliance upon the success of his forgoing submissions, Mr Wang asserts that the Tribunal could not in fact have discharged what he describes as the “Briginshaw standard” to its assessment of whether ASIC had proven that he had been dishonest, a high degree of satisfaction being required. He submits that making such a serious finding, the Tribunal had an obligation to provide proper, clear and cogent reasons for this adverse conclusion, which it did not do. He submits that the Tribunal’s conclusion that the transfer of the $21,442.91 was a dishonest act was not supported by the evidence, was contrary to the evidence, was irrational and illogical and was legally unreasonable. I do not accept any such characterisation of the Tribunal’s reasons and, to the contrary, instead find that they were sufficiently clear and cogent for the reasons given above. The suggestion that the necessary sound findings were not made must be rejected.

98    Each of these grounds of appeal must therefore fail.

Grounds 2(a), 5, 6 and 6A: the finding that Mr Wang was not a person of good fame or character was supported by him failing to cause Easy Capital Global or its successor to repay some or all of the money that had been paid by Dr Guan and Ms Hong

Grounds 2(b), 7 and 8: the finding that Mr Wang was not a person of good fame or character was supported by other conduct found to be misleading

99    It is convenient to deal with these two tranches of grounds of appeal together.

100    These two tranches of grounds take issue with the last part of [138] and the last sentence of [139] of the Tribunal’s reasons, with the contentious sentences in bold and the key “some or all” phrase complained about underlined:

… He had to know that he should not have paid that money to a company controlled by his family and out of the local jurisdiction. Furthermore he has made no effort to repay any money from Easy Capital Global or its successor, even though the first two payments made by it was to acquire software and hardware for use in the FX business. Easy Capital Global has benefited at the expense of Ms Hong and Dr Guan, not Jerry. That indicates poor character.

…

I am satisfied that Mr Wang is not a person of good fame and character by reference to his act of dishonesty in regards to the transfer of Dr Guan’s remaining funds from Easy Capital Global to Vivid Quark Seychelles. This finding is further supported by his failure to cause Easy Capital Global or its successor to repay some or all of the money of Dr Guan and Ms Hong in addition to his other conduct which I have described as misleading.

101    Reading the passages above fairly and in context, the Tribunal was saying that it was satisfied that Mr Wang was not a person of good fame and character by reason of his dishonesty in relation to the final $21,442.91 transfer. The Tribunal is then saying that the conclusion of Mr Wang not being a person of good fame and character is supported by his subsequent failure to cause any of the money to be repaid, and by his misleading conduct in relation to the emails sent to Dr Guan. The failure to repay, and the misleading behaviour, are not further findings of dishonesty, but rather additional factors lending support to the finding of not being of good fame and character, which does not of itself require a finding of dishonesty.

102    The Tribunal was assessing Mr Wang’s reaction to Dr Guan, in substance, putting him on notice of the scam. Mr Wang was faced with a choice. He could have reacted in a way that was, or was not, reflective of him being a person of good fame or character. His reaction could have been upstanding, or not; to his credit, or not; indicating his suitability to provide financial services within the framework of Chapter 7 and the objects set out in s 760A, or not, as the ordinary meaning of the words “good fame or character” connote. This concerns the moral qualities of a person and is not a mere assessment of strict adherence to proven legal obligations: see Irving, quoted at [71] above. Viewed in that way, many of the arguments advanced by Mr Wang fall away.

103    As to grounds 2(a), 5, 6 and 6A, Mr Wang submits that it was not part of ASIC’s case before the Tribunal that a failure by him to cause Easy Capital Global to repay “some or all” of the money to Dr Guan or Ms Hong either gave rise to, or supported, a conclusion that he was not a person of good fame or character, such that it was a denial of procedural fairness to do so without warning and an opportunity to be heard. ASIC relies upon Minister for Immigration and Citizenship v SZGUR [2011] HCA 1; 241 CLR 594 at [9] as to procedural fairness only requiring express notice on an issue that was not apparent on the material before an administrative decision-maker.

104    With the principle restated in SZGUR in mind, ASIC submits that the Tribunal was not under any obligation to expose its provisional views on a topic that was clearly raised in ASIC’s statement of facts, issues and contentions, in circumstances in which Dr Guan gave evidence that he had not been repaid, and the whole thrust of ASIC’s case was that Mr Wang had taken steps to deter or deflect Dr Guan from taking steps to recover his money. As such, the question of whether, as a matter of suitable character, Mr Wang should have caused the money to be repaid was obviously an issue that was open to the Tribunal to take account on the material before it. I accept each of ASIC’s submissions, especially having regard to [70]-[74] of ASIC’s statement of facts, issues and contentions. There is no legitimate complaint in the Tribunal having regard to the fact of non-repayment as going to Mr Wang’s character: this was clearly a live issue before the Tribunal; and his only reaction to it, both before the Tribunal and in this Court, was to limit his responsibility, as a matter going to his good fame or character, to legally enforceable obligations. Moreover, as ASIC points out, Mr Wang has not suggested what possible difference this might have made if he had been given notice of the possible observation prior to making it. There was no practical injustice: Re Minister for Immigration and Multicultural Affairs; Ex parte Lam [2003] HCA 6; 214 CLR 1 at [37]–[38] per Gleeson CJ.

105    Mr Wang further submits in relation to the “some or all” reference in the last sentence of [139] of the Tribunal’s reasons that it:

(1)    suggests that a failure to repay the whole amount supported a finding of dishonesty, whereas that finding was confined to the final $21,442.91 transfer, which took place after Dr Guan’s email contact, and there was no finding that the earlier transfers were dishonest – as ASIC correctly points out, there was nothing illogical in commenting upon what Mr Wang did not do upon becoming aware that Dr Guan was claiming to have transferred the money to the account controlled by Mr Wang, as going to character, not dishonesty;

(2)    proceeds upon the basis that Dr Guan and Ms Hong had an established right to be repaid and the applicant was under an obligation to cause Easy Capital Global to repay those monies at the time of the transfer – this is a repeat of the argument rejected above that an adverse finding depended upon a legal right to be repaid being established, and therefore cannot succeed at this stage either;

(3)    was inconsistent with the Tribunal accepting that Mr Wang had concerns about the bona fides of Dr Guan’s claims and that there was room for a legitimate debate as to the merits of those claims, so that this could not support a finding that he was not of good fame or character – this is a repeat of the argument rejected above that the Tribunal had made a positive finding that Mr Wang had proven concerns about the bona fides of Dr Guan’s claim, when there was no such finding;

(4)    is inconsistent with uncontested evidence, not referred to by the Tribunal, that Mr Wang repeatedly invited Dr Guan to take his complaints to the appropriate authorities – ASIC correctly points out that this does not establish legal unreasonableness (nor, it may be added, any other error), because it was open to the Tribunal to find that, as a matter going to good fame or character, rather than legal obligation, Mr Wang should have repatriated at least the $21,442.91 transferred after Dr Guan’s email contact without any court determination;

(5)    is inconsistent with evidence that Mr Wang offered to pay US$100,000 into an account pending the commencement of proceedings by Dr Guan within three months – as ASIC correctly points out:

(a)    this does not detract from the finding of dishonest conduct in relation to the $21,442.91 transfer;

(b)    the offer was not made to Dr Guan, but to ASIC in response to an ASIC investigation into whether or not to cancel the AFSL of NZ Global Financial Trading Pty Ltd (the new name for Easy Capital Global);

(c)    ASIC did not engage with the offer because Mr Wang was not a director of that company at that time; and

(d)    the offer would have been no comfort to Dr Guan, a resident of Singapore, conditional upon him commencing proceedings in Australia within three months.

106    Mr Wang finally takes issue with the reference to Easy Capital Global or its successor in the last passage of [139] reproduced in bold at [100] above, as there was no successor, only a name change to NZ Global Financial Trading, asserting this was an independent error unless it was only a reference to the same entity known by a different name. This point need go no further as the Tribunal was clearly referring to the same entity.

107    As none of Mr Wang’s arguments in relation to grounds 2(a), 5, 6 and 6A have found favour, each must be dismissed.

108    As to grounds 2(b), 7 and 8, Mr Wang correctly takes the reference in the last passage of [139] reproduced in bold above to “other conduct” described by the Tribunal as misleading, as being a reference to Mr Wang’s emails to Dr Guan. Mr Wang submits that the Tribunal did not explain why the misleading conduct supported a conclusion that he was not of good fame or character, and there was no basis for concluding that such conduct reflected on his standing in this way. ASIC submits that there was nothing unreasonable in the Tribunal having regard to misleading conduct as a factor in a conclusion of good fame or character, especially when it is known that the recipient of the communication has been misled, and that declining to find that the emails were dishonest did not stand in the way of them supporting the conclusion of an absence of good fame or character.

109    I agree with ASIC. Misleading conduct in this context reflected poorly on Mr Wang, and the Tribunal was entitled to take that into account in support of the conclusion reached as to good fame or character upon the basis of what was found to be dishonest, namely the transfer of the $21,442.91. The emails did not have to be found to be dishonest before they could be taken into account in support of the adverse finding as to good fame or character, and I expressly reject Mr Wang’s submission that a dishonesty finding was necessary as being plainly incorrect. Mr Wang’s arguments are sought to be advanced by submissions seeking to downplay the extent to which the emails were misleading, one being “somewhat misleading”, one being “inaccurate” and one being partly, but not entirely true. That degree of refinement does not usefully add anything to the substance of his case. He also appears to draw a distinction between emails that objectively have that character and any state of mind as to that being intended by Mr Wang, but that distinction is difficult to sustain in any practical or sensible way in all the circumstances. The findings of the Tribunal on those emails, summarised at [50]-[51] above, do not need to be repeated.

110    As none of Mr Wang’s arguments in relation to grounds 2(b), 7 and 8 have found favour, they too must be dismissed.

Ground 9: the discretion to impose a permanent banning order had miscarried by reason of the prior errors or any of them (especially the finding of a dishonest act)

111    As each prior ground has failed, especially the grounds concerning the finding of a dishonest act, this ground of appeal cannot succeed. Contrary to Mr Wang’s submissions, the Tribunal’s reasons went well beyond a mere finding of dishonest conduct, and there was no need for evidence of his fame or reputation before a conclusion could be reached, based upon his conduct in all the circumstances, that he was not a person of good fame or character: Irving at 431-2. The conclusion that Mr Wang was not a person of good fame or character was plainly open for the reasons given. Mr Wang has not established that the Tribunal’s discretion miscarried.

ASIC’s notice of contention

112    By a notice of contention, ASIC asserts that the Tribunal erred in failing to find that Mr Wang’s false and misleading conduct was not conduct in relation to a financial product or a financial service, as referred to in s 1041H(1) of the Corporations Act. Section 1041H(1) provides:

A person must not, in this jurisdiction, engage in conduct, in relation to a financial product or a financial service, that is misleading or deceptive or likely to mislead or deceive.

113    The relevant portions of the Tribunal’s reasons in concluding that s 1041H(1) did not apply were as follows (at [143]–[147]):

Section 766A provides that a person provides a “financial service” if they engage in any of the conduct set out in sub-sections 766A(a)-(f). [Mr Wang] submits that at the time that the Dr Guan and Ms Hong deposits were made into the Easy Capital Global accounts, the company was not at that point in time in the business of carrying on a financial service within the definitions in s.766A(a)-(f). It was preparing to do so but had not commenced trading and therefore not carrying on a financial service.

763B of the [Corporations Act] provides that

“a person [(the investor)] makes a financial investment if [(a)] the investor gives money … to another person and … [(ii)] the investor intends that the other person will use the contribution to generate a financial return ... and [(b)] the investor has no day-to-day control over the use of the contribution to generate the return[…]”

[ASIC] argues that at all relevant times Easy Capital Global held a financial services licence and that Dr Guan and Ms Hong provided “money to the company intending that the company would use the money to generate a financial return” for them and relies on section 763B. The section therefore seems to apply to the transactions of Dr Guan and Ms Hong. Therefore there was a “financial service” within the meaning of sub section 766A(1).

The conduct to be considered is the conduct involved in the email chain. At that time Mr Wang was involved in Dr Guan’s efforts to recoup his investment.

I think the better interpretation of the legislation is to apply the definition to which s.1041H refers, which is to look at the definition of “financial service”. Neither Mr Wang nor Easy Capital Global actions fell within that definition.

114    ASIC submits that the Tribunal appears to have held that s 763B did not assist because it was necessary to consider the definition of “financial service” in s 766A(1). ASIC submits that, by this approach, the Tribunal failed to consider whether Mr Wang’s misleading or deceptive conduct was “in relation to a financial product”, which is the alternative way in which s 1041H can be engaged. ASIC submits that had the Tribunal directed itself properly, it would have found that s 1041H was engaged because the relevant “financial product” was met by the way in which Dr Guan provided moneys to Easy Capital Global and thus made a financial investment (s 763A(1)(a)) with the intention that Easy Capital Global would use those moneys to generate a financial return for him (s 763B(a)(ii)). The conduct was in relation to that financial product because it related to Dr Guan’s attempts to recoup the money provided as part of the “financial investment” referred to in s 763B(a)(ii).

115    Mr Wang characterises what took place differently, pointing out that the deposit of money by Dr Guan was made by him as the victim of a scam implemented by persons other than him, and neither he or thereby Easy Capital Global knew that the money had come from Dr Guan. At that time, Easy Capital Global had not commenced foreign exchange trading, even though it was preparing to do so. There was no evidence that, at the time of the deposit, Mr Wang or Easy Capital Global had any knowledge of Dr Guan’s subjective intention in making the deposit. The arrangement was not with them, but rather was the product of the scam. Mr Wang submits that the effect of the construction advanced by ASIC is that a deposit made without any communicated subjective intention and without any engagement by the recipient or offer of services by the recipient to generate a return, would still impose on that recipient the obligations in s 1041H(1). Mr Wang submits that this is stretching the operation of that provision beyond its purpose and intent. Thus, the payment by Dr Guan was not a financial product and Mr Wang’s conduct in dealing with Dr Guan was not conduct “in relation to … a financial product”. ASIC characterises this argument as not being a defence of ASIC’s reasons, but rather an argument that the Tribunal could have accepted, and entails an argument as to consequences, not statutory interpretation.

116    The exercise that is required is one of statutory construction in the context of the factual findings made by the Tribunal. I do not find the possibility advanced by Mr Wang to be of assistance. However, I am not called upon to consider such a situation. I am concerned only with the question of whether the conduct of Mr Wang, in responding to Dr Guan’s emails about deposits made into the account of Easy Capital Global for which he had not received interest payments, was, on the basis of the findings made by the Tribunal, capable of supporting a finding that he engaged in conduct in relation to a financial product or a financial service, that was misleading or deceptive, or likely to mislead or deceive.

117    The Tribunal made findings that three of those emails were misleading, and made findings as to the circumstances in which those representations were made. The live question is whether, as a question of law based on those findings, this was capable of constituting misleading conduct in relation to a financial product or a financial service. The Tribunal did not apparently consider the application of the phrase “in relation to a financial product” in s 1041H(1), nor the meaning of “financial product” in s 763A(1)(a), when read with s 763B(a)(ii), and instead focused on the meaning of “financial service” in s 766A(1). In an appropriate case, that might have sufficed. But it did not do so in this case.

118    Section s 763A(1)(a) relevantly provides that, for the purposes of Chapter 7, a “financial product” is “a facility though which … a person … makes a financial investment (see section 763B)”. Sections 763B(a)(ii) and 763B(b) provide:

For the purposes of this Chapter, a person (the investor) makes a financial investment if:

(a)    the investor gives money or money’s worth (the contribution) to another person and any of the following apply:

…

(ii)    the investor intends that the other person will use the contribution to generate a financial return, or other benefit, for the investor (even if no return or benefit is in fact generated);

…; and

(b)    the investor has no day-to-day control over the use of the contribution to generate the return or benefit.

119    There is nothing to indicate that s 763B(a)(ii) requires any communication of any subjective intention by the “investor” to the recipient. Nor does the presence of the scam in this case appear to be material. It is clear from the Tribunal’s findings of fact that Dr Guan gave money and thus a contribution to Easy Capital Global, intending that Easy Capital Global would use that contribution to generate a financial return for him, in circumstances in which he had no day-to-day control over the use of the contribution to generate the return. The money Dr Guan deposited into the account of Easy Capital Global was therefore a financial product. It was therefore covered by s 1041H(1).

120    The Tribunal made findings that Mr Wang engaged in misleading conduct, but because of its incomplete and thereby erroneous interpretation of the application of s 1041H did not make any finding as to whether or not Mr Wang breached that provision. As a consequence the Tribunal did not consider, upon a proper basis, whether or not to affirm the decision of the delegate that s 920A(1)(e) was engaged by reason of Mr Wang not having complied with a financial services law, and if so, whether to make the banning order upon that additional basis.

121    Had the Tribunal’s decision been overturned, the above conclusion would have formed an operative part of a remittal. It follows that while ASIC’s notice of contention must be upheld, it will not result in any different outcome for Mr Wang.

Conclusion

122    The appeal must be dismissed with costs.

Associate:

Dated:    31 July 2019