Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: Shafron v Australian Securities and Investments Commission [2012] NSWCA 255
• Hearing dates: 15 August 2012
• Decision date: 15 August 2012
• Before: Barrett JA

Decision

Joint application for consent orders to be referred to designated bench of three judges with a view to being dealt with on the papers.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Catchwords: PROCEDURE - Court of Appeal - powers of single Judge of Appeal - civil penalty proceedings under Corporations Act 2001 (Cth) - questions of penalty and costs remitted by High Court to Court of Appeal -parties reach agreement thereon and seek consent orders - whether single Judge of Appeal should make such orders.
• Legislation Cited: Corporations Act 2001 (Cth), Part 4.9B, s 317J(1); Supreme Court Act 1970, s 46(1)
• Cases Cited: Australian Securities and Investments Commission v Elm Financial Services Pty Ltd [2005] NSWSC 1020; (2005) 55 ACSR 411; Australian Securities and Investments Commission v Ingleby [2012] VSC 339; Australian Securities and Investments Commission v Lindberg [2012] VSC 332
• Category: Interlocutory applications
• Parties: Peter James Shafron - Appellant; Australian Securities and Investments Commission - Respondent
• Representation: R P L Lancaster SC/N J Owens - Appellant; A J L Bannon SC - Respondent; Middletons - Appellant; Clayton Utz - Respondent
• File Number(s): 2012/195077

Judgment

1 As a result of orders made by the High Court of Australia on 3 May 2012, there is remitted to this Court so much of the appeal and cross-appeal in these civil penalty proceedings under Part 9.4B of the Corporations Act 2001 (Cth) against Mr Shafron as relates to the question of penalty and the question of costs.

2 The proceedings were brought by Australian Securities and Investments Commission which, under s 317J(1) of the Corporations Act, is the only competent applicant for a declaration of contravention and consequential orders.

3 Australian Securities and Investments Commission and Mr Shafron have reached an agreement on the matters remaining for determination by this Court as a result of the remitter by the High Court. They propose that orders be made requiring Mr Shafron to pay a pecuniary penalty in a particular sum and disqualifying him from managing a corporation for a particular period, as well as an order that he pay a specified proportion of ASIC's costs, recognising that he was only one of several persons involved in the proceedings.

4 ASIC and Mr Shafron have put their agreement into the form of orders that they invite this Court to make by consent. There is, however, a question whether a single Judge of Appeal can or should make the orders as requested.

5 Under s 46(1) of the Supreme Court Act 1970, a Judge of Appeal may exercise the powers of the Court of Appeal "to give any judgment by consent or make any order by consent". Implicit in this, I think, is an assumption that a single judge may act where the parties' agreement means that no real discretion is to be exercised and no real evaluation is to be made.

6 The present case, I think, is not of that kind, at least as it concerns the matters of pecuniary penalty and disqualification. The applicable principle was stated in the following terms in Australian Securities and Investments Commission v Elm Financial Services Pty Ltd [2005] NSWSC 1020; (2005) 55 ACSR 411 at [11]:

"It is clear that the court is in no way constrained by the parties' agreement and that, having made a declaration of contravention, it must exercise its discretion as to penalty."

7 There was reference there (at [9]) to the fact that the parties' agreement "does not absolve the courts of its duty to consider the appropriateness of the penalty in the light of the agreed facts and the surrounding circumstances".

8 That approach has been approved and acted upon subsequently including in two very recent cases, Australian Securities and Investments Commission v Lindberg [2012] VSC 332 (9 August 2012) and Australian Securities and Investments Commission v Ingleby [2012] VSC 339 (10 August 2012). In the more recent of those cases, the court in fact imposed penalties less severe than those jointly proposed by ASIC and the person against the declaration of contravention was made.

9 Given the nature of the court's function as thus explained, I do not consider that it is appropriate for me, as a single Judge of the Court of Appeal to which the question of penalty has been remitted for determination, to make the orders sought, even though they are sought by both parties and are in that sense orders by consent and even though this is not a case of agreed facts but, rather, facts found at the earlier stage of the matter.

10 The parties' joint application and the supporting submissions will therefore be referred to the bench of three judges that had been designated to hear the proceedings commencing on Monday next. There will be no need for the parties now before me to appear on that occasion or at all, unless notified that submissions beyond those already reduced to writing are required. Subject to any notification of that kind, the matter will be dealt with on the papers.

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Decision last updated: 16 August 2012