The High Court of Australia in Frugtniet v Australian Securities and Investments Commission [2019] HCA 16 has held that spent convictions which the Australian Securities and Investments Commission (“ASIC“) was prohibited from taking into account in deciding to make a banning order against a person as not being fit and proper to engage in credit activities could not be taken into consideration by the Administrative Appeals Tribunal (“AAT“) in reviewing ASIC’s decision.
Background
ASIC had made a banning order against F under s 80(1)(f) of the National Consumer Credit Protection Act 2009 (Cth) (“Credit Protection Act“) which enables ASIC to make a banning order against a person if it has reason to believe that the person is not a fit and proper person to engage in credit activities. Section 80(2) of the Credit Protection Act relevantly provides that, for the purposes of para (1)(f), “ASIC must (subject to Part VIIC of the Crimes Act 1914) have regard to” a range of specified matters. A note at the end of s 80(2) provides that Pt VIIC of the Crimes Act 1914 (Cth) includes provisions that, in certain circumstances, relieve persons from the requirement to disclose spent convictions and require persons aware of such convictions to disregard them. Those provisions are found in Div 3 of Pt VIIC of the Crimes Act and are s 85ZV which deals with non-disclosure and s 85ZW which relevantly provides that a Commonwealth authority which knows or could reasonably be expected to know that the person is not required to disclose a spent conviction is prohibited from taking account of the fact that the person was charged with or convicted of the offence.
F’s history included “spent convictions” within the meaning of Pt VIIC of the Crimes Act and these had not been taken into account by ASIC in making the banning order. By s 327 of the Credit Protection Act, F was entitled to make an application to the AAT for review of ASIC’s decision. F made such an application to the AAT. The AAT affirmed ASIC’s decision and, in doing so, took into consideration the spent convictions.
F appealed on a question of law to the Federal Court of Australia which dismissed the appeal. A further appeal to the Full Court of the Federal Court was also dismissed. F appealed by special leave to the High Court.
Appeal issue
The issue in the appeal was whether s 85ZZH(c) of the Crimes Act entitled the AAT to take into consideration material which ASIC was prevented from taking into account by Div 3 of Pt VIIC of the Crimes Act.
Section 85ZZH(c), which is within Div 6 of Pt VIIC, provides that Div 3 of Pt VIIC does not apply in relation to the disclosure of information to or by, or the taking into account of information by a court or tribunal established under a Commonwealth law, a State law or a Territory law, for the purpose of making a decision, including a decision in relation to sentencing. In Div 3 of Pt VIIC, ss 85ZV and 85ZW, dealing with non-disclosure of spent convictions and the requirement that they not be taken into account, are expressed to be subject to Div 6.
ASIC argued that. by reason of s 85ZZH(c), Pt VIIC operated differentially when the decision-making body was the AAT as compared to when it was ASIC, and that the words in brackets in the introduction to s 80(2) of the Credit Protection Act which required ASIC, for the purposes of para (1)(f), to have regard to specified matters “(subject to Part VIIC of the Crimes Act 1914)” acknowledged that this was the effect of s 85ZZH(c), with the result that ASIC was prevented by Pt VIIC from taking into account spent convictions while the AAT in reviewing ASIC’s decision could take into account such convictions.
Decision
The High Court (Kiefel CJ, Bell, Gageler, Keane, Nettle, Gordon and Edelman JJ) unanimously rejected ASIC’s argument and found that the AAT could not take the spent convictions into account.
Bell, Gageler, Gordon and Edelman JJ
A joint judgment of Bell, Gageler, Gordon and Edelman JJ made the following points (at [48]-[53]):
- Section 80 of the Credit Protection Act was solely directed to ASIC’s power to make a banning order. The words in brackets in the introduction to s 80(2), together with the note to s 80(2), acknowledged that the decision-making power of ASIC was constrained by Pt VIIC of the Crimes Act. The words in brackets said nothing about the decision-making power of the AAT.
- Section 85ZZH(c) of the Crimes Act did not go beyond the non-application of Div 3 of Pt VIIC to a tribunal established by statute taking information into account for the purpose of making a decision. It did not alter the statutory jurisdiction of the tribunal and did not make a spent conviction relevant to be taken into account in the exercise of that jurisdiction. Thus, the jurisdiction of the AAT on a review of a decision made by ASIC under s 80 of the Credit Protection Act was not affected by s 85ZZH(c) of the Crimes Act.
- The reason for this was because, except where altered by some other statute which had not occurred, the jurisdiction which was conferred on the AAT by ss 25 and 43 of the Administrative Appeals Tribunal Act 1975 (Cth) (“AAT Act”) on an application made to it under an enactment for review of a decision, was to stand in the shoes of the decision-maker and decide for itself the decision which could and should be made in the exercise of the powers conferred on the primary decision-maker. Thus, the AAT exercised the same powers as the primary decision-maker, subject to the same constraints. The primary decision, and the statutory question it answered, marked the boundaries of the AAT’s review. The AAT had to address the same question which the primary decision-maker was required to address, and the question raised by statute for decision by the primary decision-maker determined the considerations that were or were not to be taken into account by the AAT in reviewing the decision.
- To accept ASIC’s argument would result in the distortion of the exercise of the powers conferred on the AAT by s 43(1) of the AAT Act because, if spent convictions were to be taken into account by the AAT:
- the AAT would not be able to sensibly remit the matter to ASIC for reconsideration in accordance with any directions or recommendations of the AAT as ASIC would then be required to ignore the spent convictions; and
- any decision by the AAT in substitution of, or varying ASIC’s decision would be deemed by s 43(6) to be a decision of ASIC, even if that substituted or varied decision took into consideration spent convictions which ASIC was prevented from taking into account.
- The AAT and the primary decision-maker existed within “an administrative continuum.” The AAT did not have jurisdiction to make a determination on the material before it taking into account a consideration which could not have been taken into account by the primary decision-maker and which could not be taken into account by the primary decision-maker were the AAT to remit the matter to the primary decision-maker for reconsideration.
Accordingly, Bell, Gageler, Gordon and Edelman JJ concluded that ASIC’s decision-making power under s 80 of the Credit Protection Act was constrained by Pt VIIC of the Crimes Act to prevent ASIC from taking spent convictions into account and that the AAT’s decision-making power was subject to the same constraint in the exercise of the jurisdiction conferred on it by s 327 of the Credit Protection Act and ss 25 and 43 of the AAT Act (at [54]).
Kiefel CJ, Keane and Nettle JJ
A joint judgment of Kiefel CJ, Keane and Nettle JJ made the following points (at [16]-[32]):
- Subject to any clearly expressed contrary legislative intent, the question which the AAT was required to decide in reviewing ASIC’s decision was whether, having regard to the same specified range of matters in s 80(2) of the Credit Protection Act which, by reason of s 85ZW of the Crimes Act excluded spent convictions, and thus excluding spent convictions, F was not a fit and proper person to engage in credit activities.
- Section 80(2) of the Credit Protection Act did not express a clear contrary legislative intent. The requirement in s 80(2) that the matters to which ASIC was to have regard was “(subject to Part VIIC of the Crimes Act 1914)” was, in terms, directed only to ASIC and said nothing about a review of ASIC’s decisions by the AAT. The AAT’s review of ASIC’s decisions was separately provided for in s 327 of the Credit Protection Act, and s 327 also said nothing about the matters to which the AAT was to have regard in the conduct of the review.
- ASIC’s argument needed to be assessed against the background of long-standing principles regarding the function of an administrative review tribunal engaged in merits review of administrative decisions. Against that background, it was improbable that Parliament would select a technique of obscure implication to fundamentally change the nature of administrative merits review of a decision made by ASIC under s 80 of the Credit Protection Act or to change the nature of merits review of any other administrative decision to which Pt VIIC of the Crimes Act applied. This was all the more so where, as in the case of s 80(2), there was nothing to suggest in any of the extrinsic materials a parliamentary intention that the AAT was to exercise a function other than the function exercised by ASIC. Therefore, it was more probable that Parliament did not intend to change the nature of administrative merits review of ASIC’s decisions in the way proposed by ASIC.
- Provisions of other Commonwealth legislation which had been relied upon by ASIC in support of its argument were, like s 80(2) of the Credit Protection Act, silent as to the AAT in the conduct of merits review of administrative decisions and implied nothing about the application of s 85ZZH(c) of the Crimes Act to the AAT in the exercise of that function.
- The Full Federal Court had considered that the reasoning of White J, in dissent, in Kocic v Commissioner of Police, NSW Police Force [2014] NSWCA 368; (2014) 88 NSWLR 159 (“Kocic”) in relation to a similar provision in New South Wales legislation supported the conclusion that s 85ZZH(c) entitled the AAT to take into consideration material which ASIC was prohibited from taking into account by Pt VIIC. However, the reasoning of the majority judges in Kocic was to be preferred, and that reasoning fortified the conclusion that s 80(2) of the Credit Protection Act did not make s 85ZZH(c) of the Crimes Act applicable to the AAT in the review of a decision of ASIC under s 80(1) of the Credit Protection Act. “[I]t is not to be supposed that Parliament intended to make such a profound change to the nature of merits review by a legislative side-wind. The better view is that s 80(2) does not have that effect.”
