FEDERAL COURT OF AUSTRALIA Murdaca v Australian Securities and Investments Commission [2009] FCAFC 92 ADMINISTRATIVE LAW – in considering whether disqualification is justified pursuant to s 206F(1)(c) and s 206F(2) of the Corporations Act 2001 (Cth), the Australian Securities and Investments Commission is required to accord procedural fairness to an affected person both by s 206F(1)(b) of the Corporations Act 2001 (Cth) and under the common law – there was no denial of procedural fairness by the Administrative Appeals Tribunal in the present case – any alleged denial of procedural fairness by ASIC's delegate was cured by the full merits review conducted by the Administrative Appeals Tribunal CORPORATIONS – determination pursuant to s 206F of the Corporations Act 2001 (Cth) by a delegate of ASIC that the appellant should be disqualified from managing corporations for two years – disqualification overturned by the Administrative Appeals Tribunal – appeal to a single judge of the Federal Court on questions of law – decision of the Administrative Appeals Tribunal set aside by primary judge – appeal to the Full Court – appeal concerned the correct interpretation of s 206F and s 533 of the Corporations Act 2001 (Cth) – whether for the purposes of s 206F(1)(a)(ii) ASIC is required to investigate the correctness and validity of a liquidator's report lodged pursuant to s 533(1) – whether the show cause notice contemplated by s 206F(1)(b)(i) must specify all allegations and all material to be relied upon by ASIC in support of such allegations when ASIC comes to consider disqualification – whether ASIC is permitted to consider allegations and material when making its decision pursuant to s 206F in respect of disqualification which have not been included in the show cause notice – the facts and matters referred to in s 206F(1)(a)(i), (a)(ii), (b)(i) and (b)(ii) are merely preconditions which enliven ASIC's power to set about deciding whether disqualification is justified – in addition to the statutory requirement in s 206F(b)(ii) to afford an affected person an opportunity to be heard on the question of whether disqualification is justified, ASIC is required to accord procedural fairness under the common law to such a person – the show cause notice contemplated by s 206F(b)(i) does not operate to constrain the scope of material to which ASIC may have regard when considering disqualification – the giving of such a notice is merely a precondition to action by ASIC – no error in the primary judge's decision Administrative Appeals Tribunal Act 1975 (Cth), ss 43 and 44 Companies (NSW) Code, s 562A Corporations Act 2001 (Cth), ss 9, 206A, 206B, 206BA, 206C, 206D, 206E, 206EA, 206F, 206G, 206GA, 533, 536 and 597 Corporations Law, s 600 Trade Practices Act 1974 (Cth), s 86E Australian Securities and Investments Commission v Murdaca (2008) 105 ALD 461, 26 ACLC 1007 [2008] FCA 1399 varied Murdaca v Australian Securities and Investments Commission [2008] AATA 209 related Commissioner for ACT Revenue v Alphaone Pty Ltd (1994) 49 FCR 576 followed Dwyer v National Companies and Securities Commission (1988) 13 ACLR 716 followed Ho v Akai Pty Limited (in liq) (2006) 24 ACLC 1526 cited Jorgensen v Australian Securities and Investments Commission (1999) 30 ACSR 481 cited Kardas v Australian Securities Commission (1998) 29 ACSR 304 at 312–313, (1998) 53 ALD 303, (1998) 16 ACLC 1695 cited Laycock v Forbes (1997) 150 ALR 186, (1997) 25 ACSR 659, (1997) 15 ACLC 1814 cited NAAV v Minister for Immigration and Multicultural and Indigenous Affairs (2002) 123 FCR 298 cited Rich v Australian Securities and Investments Commission (2004) 220 CLR 129 cited Visnic v Australian Securities and Investments Commission (2007) 231 CLR 381 cited ANTONIO MURDACA v AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION VID 837 of 2008 NORTH, KENNY AND FOSTER JJ 10 AUGUST 2009 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY general division VID 837 of 2008 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: ANTONIO MURDACA Appellant AND: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Respondent JUDGES: NORTH, KENNY AND FOSTER JJ DATE OF ORDER: 10 AUGUST 2009 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The appeal be allowed in part. 2. Order 2 made by Gordon J on 16 September 2008 be varied by deleting the words "… differently constituted …" in the second line thereof and by deleting the commas before and after those words so that the order shall read: "THE COURT ORDERS THAT 2. The decision of the Administrative Appeals Tribunal ("AAT") dated 18 March 2008 be set aside and the matter be remitted to the AAT to be heard and determined according to law." 3. The appeal be otherwise dismissed. 4. The appellant pay the respondent's costs of and incidental to the appeal. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY general division VID 837 of 2008 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: ANTONIO MURDACA Appellant AND: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Respondent JUDGES: NORTH, KENNY AND FOSTER JJ DATE: 10 AUGUST 2009 PLACE: MELBOURNE REASONS FOR JUDGMENT THE COURT Introduction 1 This appeal involves the interpretation of s 206F and s 533 of the Corporations Act 2001 (Cth) (the Act). 2 On 29 September 2006, a delegate of the Australian Securities and Investments Commission (ASIC) disqualified the appellant from managing a corporation without the leave of the Court for a period of two years from the date of service of the Notice of Disqualification. The Notice of Disqualification was served upon the appellant on 4 October 2006. It is common ground between the parties to this appeal that that period of disqualification expired on 4 October 2008. We shall refer to that disqualification as the disqualification. 3 The appellant applied to the Administrative Appeals Tribunal (the AAT) pursuant to s 43 of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act) for review of the disqualification. On 18 March 2008, the AAT set aside the disqualification: Murdaca v Australian Securities and Investments Commission [2008] AATA 209 (the AAT decision). 4 ASIC, which is the respondent in the appeal before this Full Court, appealed to this Court pursuant to s 44 of the AAT Act. That appeal was heard by a single judge of this Court. 5 On 16 September 2008, the learned primary judge made orders allowing the appeal, setting aside the AAT decision and remitting the matter to the AAT "… differently constituted, to be heard and determined according to law". Her Honour also ordered the appellant to pay ASIC's costs of and incidental to the appeal before her (see Australian Securities and Investments Commission v Murdaca (2008) 105 ALD 461, 26 ACLC 1007,[2008] FCA 1399). 6 In the present appeal, the appellant seeks to overturn her Honour's orders thereby restoring the AAT's decision setting aside the disqualification. The Relevant Facts 7 At various times, the appellant had been a director of three corporations, namely: (a) Amalgamated Motor Industries Pty Limited (AMI); (b) Australian Automotive Motor Inspection Centre Pty Limited (AAMIC); and (c) Market Place Properties Pty Limited (MPP). 8 AMI was incorporated on 13 September 2000. The appellant was a director of AMI from 13 September 2000 until 2 January 2003, when he resigned his directorship of that corporation. AMI was placed under administration on 4 February 2003 and placed into liquidation by way of a creditor's voluntary winding up on 4 March 2003. It was deregistered on 6 March 2006. Mr Ross McDermott was appointed as liquidator after having been initially appointed as administrator. For a short time up to 2002, AMI operated a motor vehicle repair business on premises at Essendon (Vic). 9 MPP was incorporated on 10 November 2000. The appellant was a director of MPP from 10 November 2000 until 2 January 2003, when he resigned his directorship of that corporation. MPP was also placed under administration on 4 February 2003 with Mr McDermott being appointed as administrator. On 4 March 2003, MPP was placed into liquidation by way of a creditor's voluntary winding up and Mr McDermott was appointed as liquidator. 10 AAMIC was incorporated on 28 May 2003. The appellant was appointed a director of that corporation on 21 April 2004. On 12 November 2004, AAMIC was wound up by order of the Supreme Court of Victoria and Mr Colin Nicol was appointed as liquidator of that corporation. The appellant was a director of AAMIC as at the date it was wound up. AAMIC also operated various motor vehicle repair businesses under several different trading names. 11 The appellant had also been a director of several other corporations two of which are of present interest. Both of these corporations have also been wound up. These corporations are Delitat Pty Limited (Delitat) and Total Motor Vehicle Protection Pty Limited (TMVP). The appellant was a director of Delitat from 9 July 1998 until 15 February 2002. That corporation was wound up on 4 April 2003. Mr McDermott was appointed liquidator of that corporation after having initially acted as administrator. The appellant was a director of TMVP from 1 December 1997 until 15 February 2002. That corporation was wound up on 4 April 2003. As was the case with Delitat, Mr McDermott was appointed liquidator of that corporation after having initially acted as administrator. Both Delitat and TMVP also conducted motor vehicle repair businesses. 12 Mr McDermott lodged with ASIC in respect of each of AMI, MPP, Delitat and TMVP a report purportedly made pursuant to s 533 of the Act. Mr Nicol also lodged with ASIC a s 533 report in respect of AAMIC. The initial s 533 report in respect of AMI was dated 8 March 2005; the s 533 report in respect of AAMIC was dated 16 May 2005; the s 533 report in respect of MPP was dated 12 October 2004; the s 533 report in respect of Delitat was dated 4 April 2005; and the s 533 report in respect of TMVP was dated 4 April 2005. 13 On 23 July 2006, ASIC gave to the appellant a notice dated 10 July 2006 pursuant to s 206F(1)(b) of the Act (the show cause notice). 14 Omitting formal parts, the letter under cover of which the show cause notice was given was in the following terms: NOTICE TO DEMONSTRATE WHY DISQUALIFICATION SHOULD NOT OCCUR - SECTION 206F OF THE CORPORATIONS ACT 2001 I refer to the enclosed notice under section 206F of the Corporations Act 2001 dated 10 July 2006 and accompanying attachments. The attachments contain the concerns that the Australian Securities and Investments Commission ("ASIC") has regarding your conduct and a list of the documents upon which the concerns are based. If you would like [sic] take the opportunity to be heard in relation to why you should not be disqualified from managing corporations could you please advise me within 14 days from the date of service of this notice and arrangements for you to be heard will be made. I can be contacted at the above address or on (08) 8202 8469. A copy of the documents referred to in "Attachment "B" will be provided to you on request, subject to the strict condition that they are only to be used by you or your legal representatives for the purposes of the preparation for, and conduct of, the hearing and on condition that the documents not be copied or disclosed to a third party without ASIC's prior written consent. Please contact Ms Kate Dluzniak of ASIC's Melbourne office on (03) 9280 3410 if you would like a copy of the documents. 15 The show cause notice itself was in the following terms: Form 5249 Corporations Act 2001 Subparagraph 206F(1)(b)(i) Notice to demonstrate why disqualification should not occur IN THE MATTER of Antonio Murdaca Notice to demonstrate why disqualification should not occur under section 206F of the Corporations Act 2001 To: Antonio Murdaca 39 Etzel Street Airport West Vic 3042 The records of the Australian Securities and Investments Commission ("ASIC") show that you are or were an officer of three (3) corporations that have been wound up, being: 1. Australian Automotive Motor Inspection Centre Pty Ltd ACN 104 887 863 (in liquidation) 2. Amalgamated Motor Industries Pty Ltd ACN 094 472 741 (deregistered); 3. Market Place Properties Pty Ltd 095 039 795 (deregistered) where a liquidator has reported under subsection 533(1) of the Corporations Act 2001 ("the Act") that each of the corporations may be unable to pay its unsecured creditors more than 50 cents in the dollar. In these circumstances you are required to demonstrate, in accordance with subparagraph 206F(1)(b)(i) of the Act, why you should not be disqualified from managing corporations. Under subsection 206F(l) of the Act you may be disqualified from managing corporations for a period of up to 5 years. In making a decision under subsection 206F(1) of the Act ASIC is required to give you an opportunity to be heard in relation to why you should not be disqualified from managing corporations. AREAS OF CONCERN ASIC has identified a number of concerns about your conduct which are described in Attachment "A". The documents on which these concerns are based are listed in Attachment "B". OPPORTUNITY TO BE HEARD If you wish to demonstrate why you should not be disqualified from managing corporations you should notify ASIC within 14 days from the date of service of this notice that you require an opportunity of being heard. You may exercise your right to be heard by: 1. making a written submission; 2. appearing before a person ASIC has appointed to hear the matter ("the delegate") and making submissions orally and appearing before the delegate to present evidence. You may exercise your right by doing any or all of these options. Once you have notified ASIC of your wish to demonstrate why you should not be disqualified a delegate will write to you with further details of the hearing procedure. If you do not wish to demonstrate why you should not be disqualified, a decision will be made by a delegate on the information available. If you wish to have access to the documents listed in Attachment "B" you should contact ASIC as soon as possible. Access to documents which are identified as "confidential" maybe given subject to strict conditions of confidentiality. Dated this 10th day of July 2006. Signed Valdemar Malinaric Delegate of the Australian Securities and Investments Commission 16 There was attached to the show cause notice a document headed Attachment A which set out ASIC's concerns relating to AAMIC, AMI and MPP. In essence, ASIC's concerns in respect of those corporations focused upon the appellant's role as a director of each of those corporations, the fact that each of those corporations had failed apparently with a deficiency of assets over liabilities and alleged poor management of all of those corporations on the part of the appellant. In respect of each of the named corporations in Attachment A, reference was made to the s 533 reports made by the liquidators of those corporations. 17 In Attachment B to the show cause notice, ASIC listed the documents upon which its concerns were based. The s 533 reports in respect of the named corporations were listed in Attachment B and were all relied upon. In addition, reliance was placed upon a supplementary s 533 report in respect of AMI. That report is dated 29 November 2005. That report was not included in the Appeal Books furnished to us. However, it appears that it was in evidence before the AAT and thus in evidence before the primary judge. Secondary evidence of its contents established that it disclosed that AMI had approximately $39,000 in liabilities with no assets of any value. 18 Neither the show cause notice nor the attachments to it made reference to Delitat or to TMVP. 19 In August and September 2006, the appellant was given, and availed himself of, opportunities to inspect and consider the documents to be relied upon by ASIC's delegate (the delegate). On 15 September 2006, the delegate conducted a hearing. After the hearing, further opportunities were provided to the appellant to tender additional documents and to make further submissions to the delegate. On 29 September 2006, the delegate made his decision disqualifying the appellant. 20 Because the appellant availed himself of the opportunity for a full merits review before the AAT pursuant to s 43 of the AAT Act and given the nature of the appeal from the AAT heard by the primary judge, it is not necessary for us to consider in detail the reasons given by the delegate for the disqualification. 21 The s 533 reports for each of Delitat, TMVP and AMI are similar. In each of them, Mr McDermott stated that: (a) He believed that the corporation would be unable to pay its unsecured creditors more than 50 cents in the dollar; (b) He did not propose to make an application for an examination or order under s 597 of the Act; (c) The appellant should be regarded as being a deemed director of each of these corporations as at the date of liquidation. 22 In the case of Delitat and TMVP, Mr McDermott also reported that he did not believe that he had all the books and records of either corporation although he accepted that he had received a small quantity of books and records in respect of Delitat. He also stated in his reports in respect of those two corporations that he was aware of other corporations in which the appellant had been involved which had also failed and which had not paid their creditors more than 50 cents in the dollar. 23 In his s 533 report in respect of MPP, Mr McDermott said that: (a) He believed that MPP would not be able to pay its unsecured creditors more than 50 cents in the dollar; (b) He did not propose to make an application for an examination or an order under s 597 of the Act; (c) MPP had operated as the trustee of a Unit Trust which owned property rented to a related corporation upon which a motor vehicle repair business had been conducted; (d) The repair business and the real estate had both been sold at about the same time (2002); (e) There were no trade creditors of MPP but the sole director of MPP (Robert John Green) and MPP's accountants remained creditors of MPP; (f) At the time of his appointment as liquidator of MPP, Mr McDermott had believed that a former employee intended to make a claim against MPP and against the related former tenant; (g) MPP had maintained proper books and records; and (h) He was unaware of any offences having been committed by any of MPP's officers in respect of MPP. 24 The s 533 report prepared by Mr Nicol in respect of AAMIC was more detailed than those prepared by Mr McDermott in respect of the related corporations. In that report, Mr Nicol stated that: (a) The books and records of AAMIC furnished to him by the appellant were substantially incomplete; (b) The appellant was actively involved in the day-to-day operations of AAMIC; (c) The appellant had been a director of eight other corporations which had either been wound up or deregistered with the involvement of Mr McDermott; (d) He (Mr Nicol) was not satisfied that the real value of the receivables owed to AAMIC was as the appellant had asserted ($187,365.80); (e) The receivables owed to AAMIC had possibly been factored; (f) The amount of the deficiency of assets over liabilities was at least of the order of $848,000; (g) AAMIC had failed to keep adequate financial records; (h) Allegations of fraud had been made against AAMIC; and (i) The appellant had probably committed offences under the Act. The AAT Decision 25 It is apparent from the Reasons for Decision delivered by the AAT that it conducted a full merits review of the disqualification. As part of that exercise, there was a hearing which occupied three days before the AAT. 26 At [13] of its reasons, the AAT noted that, by the time the case had come on for hearing before it in January 2008, approximately 18 months of the two year ban had already elapsed. It also noted that an application for a stay of the ban pending the outcome of the hearing before the AAT had not been successful. The AAT then said: Given this and the decision the Tribunal has reached with respect to the applicant's involvement in AMI and MPP it has not been necessary for it to consider the applicant's involvement in AAMIC. 27 The AAT then proceeded to consider the circumstances of each of AMI and MPP in turn. 28 After setting out certain facts and matters concerning AMI's business and the sale of its business assets in 2002, the AAT reviewed some of the evidence given by Mr McDermott at the hearing conducted by the AAT for the purpose of considering whether or not the disqualification had been justified. At [24] of its reasons, the AAT said: Much of the cross examination of Mr McDermott was aimed at questioning his actions in conducting the liquidation. In respect of AMI this focussed particularly as to his decisions not to pursue the purchasers and/or sell the equipment which remained in situ after the purchasers abandoned the Essendon business. Presumably this was aimed at establishing that at the time of winding up there was in fact no debt owed by AMI. Whether or not there was no debt owed may be considered irrelevant for purposes of s 206F(1)(a)(ii) of the Act as it is the liquidator's report which excites the provision. Neither ASIC nor this Tribunal standing in ASIC's place are authorised, when conducting their respective reviews, to interfere with the liquidator's reporting function. However in the determination of whether disqualification is justified under s 206F(2) ASIC and the Tribunal may have regard to "any other matters considered appropriate". If it could be demonstrated that, in fact, AMI was able to pay its debts then this becomes, or may become, a relevant matter for consideration with respect to whether a disqualification is justified. It is on that basis that the Tribunal has considered this aspect of the evidence. 29 The AAT then examined certain decisions made by Mr McDermott in relation to the sale of some of the assets of AMI in order to come to a view as to whether or not, had different decisions been made, AMI would have been able to pay its debts as and when they fell due as at the date it was wound up. 30 The AAT next looked at the question of whether Mr McDermott's conclusion that the appellant should be deemed to be a director of AMI was a correct conclusion. After analysing the evidence before it, the AAT came to the conclusion that the evidence did not support Mr McDermott's view that the appellant should be classified as a deemed director of AMI. The AAT then said (at [31] of its reasons): That being the case not any of the three matters identified by Mr McDermott are sufficient to leave the Tribunal satisfied that the disqualification on those grounds are [sic] justified. 31 The three matters referred to were those which the AAT had identified as being the basis upon which Mr McDermott had concluded that the appellant should be deemed to have been a director of AMI. These were that: (a) The sole director of AMI (Mr Green) required considerable assistance from the appellant in his (Mr Green's) management of the company; (b) The appellant had some connection or relationship with the purchasers of AMI's business giving rise to a suggestion of impropriety on the part of the appellant in connection with the sale; and (c) The appellant involved himself in the affairs of AMI subsequent to Mr McDermott's appointment without obtaining Mr McDermott's consent. 32 It is not clear to us why the AAT asked itself the question whether or not the appellant ought to be deemed to be a director of AMI. The appellant had clearly been a director of AMI within seven years of 23 July 2006 and the other pre-conditions to disqualification had apparently been satisfied. The AAT seems to have examined the three matters which we have extracted at [31] above for the purpose of coming to a conclusion as to whether the disqualification was justified rather than for the purpose of determining whether the conditions laid down in s 206F(1)(a) had been satisfied in the present case. 33 At [32] of its reasons, the AAT said: Clearly however the applicant was involved with the operation of the businesses of AMI prior to their sale. This falls within the 7 year period provided for in s 206F(1)(a) of the Act. There is however no evidence before the Tribunal which suggests any impropriety in the conduct of the applicant in relation to the management, business or property of AMI during this period. Indeed the contrary is the case. The Tribunal accepts the applicant's evidence that he sold his interest [sic] AMI at the suggestion of the other directors, in particular Mr Occhiuzzi and Mr Malacria [Exhibit A1 para 13]. The applicant explained that he sold his interest because of litigation between another of the applicant's companies (AAMIC) and AAMI, the latter being substantially involved in the vehicle insurance business and the user of AMI's services. The other directors felt that the applicant's continued involvement in AMI may stand to jeopardise AMI keeping the business it received from AAMI. Further it was Mr Rizzo's evidence that while he questioned the strategies adopted by AMI [by which he explained he meant 'where all the work was coming from' transcript pg 81] he was satisfied that the day to day operations were being managed by Messrs Clark and Malacria in [sic] to a satisfactory leve1 [Transcript pg 81]. Mr Rizzo was also satisfied that AMI was not operating while insolvent [Transcript pg 82]. 34 The AAT then held that, in its view, there were no grounds arising from the appellant's association with AMI which justified the disqualification. 35 The AAT then examined the appellant's relationship with MPP. The AAT held (correctly) that, from the time MPP was placed under administration and then into liquidation, the appellant was not a director of that corporation and had not acted in that capacity since his resignation two months before. 36 At [40] of its reasons, the AAT then said: Given that the Tribunal is satisfied, as was Mr McDermott apparently despite his advice to the contrary to ASIC in the s 533 report, that there were no creditors of MPP then it cannot be the case that MPP was unable to pay its debts. It follows that the liquidator was incorrect in reporting to ASIC as a necessary condition had not been fulfilled for the operation of s 533(1)(c) of the Act. It also follows it was not open for the respondent or its delegate to find that the applicant was liable for disqualification under the provision of s 206F(1)(a)(ii) of the Act in respect of MPP. 37 The AAT then concluded that there was no conduct on the part of the appellant which justified the disqualification. It repeated its conclusion that it was unnecessary for it to consider the circumstances surrounding the appellant's involvement in AAMIC because it had concluded that the requirements of s 206F(1) had not been satisfied in respect of two or more corporations. Presumably, in making these remarks, the AAT was alluding to the circumstance that, in its view, those requirements had not been satisfied in the case of AMI or MPP. 38 In the course of giving its reasons, the AAT mentioned Delitat and TMVP but did not move on to consider the appellant's involvement with those companies at all. The reason for this is to be found at [5] of its reasons where the AAT said: There was also evidence of two other corporations in which the applicant was involved and in respect of which the liquidator submitted a s 533 report to ASIC. Those corporations are Delitat Pty Ltd and Total Motor Vehicle Protection Pty Ltd. The applicant's involvement in both of these corporations was not the subject of a notice under s 206F(1)(b) of the Act and therefore cannot arise for consideration for disqualification in this hearing. Their relevance was related to the justification for disqualification and the period of that disqualification, if that became necessary. In view of the decision reached by the Tribunal these aspects do not arise for consideration. The Reasons of the Primary Judge 39 As mentioned at [4] above, ASIC appealed from the AAT decision. The questions of law advanced by ASIC to the primary judge were: (a) On the proper construction of s 206F, was the AAT, in determining whether to exercise the power to disqualify the appellant from managing the corporations, bound to take into account the circumstances surrounding the appellant's conduct in relation to: (i) AAMIC; (ii) Delitat; and (iii) TMVP. (b) On the proper construction of s 206F and s 533 of the Act, did the AAT err in law in finding that MPP was not a corporation which fell within the terms of s 206F(1)(a)(ii) of the Act; and (c) On the proper construction of s 206F of the Act, was the AAT, in determining whether to exercise the power to disqualify the appellant from managing corporations, bound to take into account cumulatively the totality of the evidence concerning the appellant's conduct in relation to the management of corporations. 40 Grounds of appeal were provided by ASIC. Particulars of these grounds were also provided. In those grounds and particulars, the following contentions were advanced: (a) Consideration of the appellant's involvement with AAMIC, Delitat and TMVP was relevant to the application of ss 206F(1)(a), 206F(1)(c) and 206F(2); (b) The fact that the show cause notice issued by ASIC had not mentioned Delitat and TMVP was not a proper basis for the AAT to decline to consider the circumstances of the appellant's involvement with those two corporations; (c) The AAT misdirected itself when it embarked upon the exercise of forming its own opinion as to whether the liquidator should have lodged a report pursuant to s 533 of the Act in respect of MPP. In lieu of making up its own mind as to whether or not the making of such a report was justified, the AAT was obliged simply to proceed upon the basis that such a report had, in fact, been lodged by a liquidator pursuant to s 533; and (d) The AAT should have considered all of the circumstances of the appellant's involvement with all of the relevant companies and not looked at and dismissed those circumstances as they related to each corporation, one by one. 41 As noted at [5] above, her Honour allowed the appeal. Her Honour observed that ASIC's principal complaint before her was that the AAT had misconstrued and misapplied s 206F of the Act. Her Honour agreed with this contention. 42 After setting out certain background facts and the terms of the relevant legislation, her Honour expressed her views as to the correct interpretation of s 206F. At [12]–[17], her Honour said: 12 Returning to the substantive provision at issue, s 206F(1)(a)(ii) specifies two conditions to be satisfied "within 7 years immediately before ASIC gives a notice under paragraph (b)(i)" (emphasis added). The conditions are: (1) the person must have been an officer of 2 or more corporations; and (2) while the person was an officer, or within 12 months after the person ceased to be an officer of those corporations, each of the corporations was wound up and a liquidator lodged a report under s 533(1) of the Act about the corporation's inability to pay its debts. 13 Section 206F, in its current form, was introduced as part of the Corporate Law Economic Reform Program Bill 1998 (Cth) ("CLERP"). The predecessor to s 206F was s 600 of the Corporations Law ("the Law"). Although the language of the sections is not identical, a number of earlier decisions that considered s 600 of the Law continue to be of assistance. 14 As those earlier decisions make clear, the preconditions to the operation of the section are just that – preconditions. For example, ASIC is not denied jurisdiction if the matters contained in a s 533 report have been wholly or partly rectified: Jorgensen v Australian Securities and Investments Commission (1999) 30 ACSR 481 at 483 and Dwyer v National Companies and Securities Commission (1988) 13 ACLR 716 at 720. As Heerey J said in Jorgensen, once s 533 reports have been lodged regarding two or more relevant corporations in respect of which the person was an officer within the previous seven years, the jurisdiction to make the order is established: at 483. Whether the matters in the report have been wholly or partly rectified is a matter that goes to the merits of whether ASIC, or in this case the AAT standing in the shoes of ASIC, should exercise the jurisdiction to make a disqualification order, not the existence of that jurisdiction. 15 The fact that a precondition to the enlivening of the jurisdiction under s 206F(1)(a)(ii) is the mere issue of a s 533 report of a particular kind and that the merits of the report are considered by ASIC under s 206F(1)(c) and (2) when deciding whether it should make a disqualification order is not surprising. Under s 533 of the Act, a liquidator of a corporation must report to ASIC if it appears that a company may be unable to pay its unsecured creditors more than 50 cents in the dollar. A liquidator need not demonstrate or prove that the company is unable to pay its unsecured creditors 50 cents in the dollar. 16 Moreover, once the preconditions are met, ss 206F(1)(b) [sic] of the Act specifies what ASIC must then do. It requires ASIC to give the person a notice in the prescribed form requiring them to demonstrate why they should not be disqualified. In the present case, the notice was in the form set out in [3] above. Prior to reaching a decision, ASIC, in addition to giving the notice, must also make available to the person all the material available to ASIC on which the decision will be based and provide the person with an opportunity to respond to, make submissions and call evidence in relation to the material before ASIC: Laycock v Forbes (1997) 150 ALR 186 at 193-94. That does not necessarily mean an oral hearing: Jorgensen at 486. 17 In practical terms, s 206F has a logical structure and operation. Section 206F(1)(a) provides a filter – if a person has been an officer of two or more corporations within the last seven years where the liquidator of each company has filed a s 533 report, then ASIC is entitled to serve a notice on that person requiring them to demonstrate why they should not be disqualified. Put another way, the legislature has decided that the mere fact those prescribed events occurred within the seven years is sufficient to permit ASIC to require the person concerned to demonstrate why they should not be disqualified. The person served with the notice has a choice. They may take the opportunity (see [16]) to demonstrate why they should not be disqualified or they may choose to stand silent. Either way, ASIC proceeds to determine whether the disqualification is justified by reference to the matters set out in s 206F(2). Of the matters to be considered, one is mandatory (s 206F(2)(a)) and the others are discretionary (s 206F(2)(b)). (Original emphasis.) 43 Her Honour then addressed the AAT decision in light of the grounds advanced by ASIC in the appeal before her. 44 At [20] of her reasons, the primary judge held that the determination by the AAT that it was not necessary to consider the appellant's involvement with AAMIC was an error. Her Honour held that, contrary to the reasoning expressed by the AAT, in respect of AMI, the preconditions to the operation of s 206F had been satisfied. Her Honour's detailed reasoning in support of those conclusions is to be found at [22] of her reasons. In that paragraph, her Honour said: The preconditions of s 206F(1) having been satisfied, ASIC's jurisdiction (and the jurisdiction of the AAT standing in ASIC's shoes) under s 206F(2) was enlivened regardless of whether it later turned out that s 533 reports in respect of one or even all of the corporations in question had been lodged erroneously. What is relevant for purposes of s 206F(1), as noted earlier, is no more and no less than the mere fact that the reports had been lodged and contained statements to the effect that it appeared that the company in question might be unable to pay more than 50 cents in the dollar to its unsecured creditors. The AAT was thus not entitled to exclude Murdaca's involvement in AAMIC from consideration on the basis that, because the s 533 reports in respect of MPP and AMI were erroneous or should not have been lodged, there were less than the two corporations required by s 206F(1) and thus the jurisdiction under s 206F(2) was not enlivened. What impact or significance should attach to Murdaca's conduct in relation to AAMIC in the context of the making of a disqualification order is ultimately a matter for the AAT when the matter is remitted to it to be determined according to law. On remittal, the AAT may yet decide that Murdaca's involvement in AAMIC is not relevant to, or does not justify, disqualification; the point here is only that it cannot do so on the basis that it lacks jurisdiction. The contrary view expressed by the AAT in the decision under review reveals that the AAT failed to properly construe s 206F(1)(a)(i) and that error may have affected the result below. 45 Her Honour then considered the position of MPP. Her Honour held that, by embarking upon the exercise of second guessing the basis for the liquidator's s 533 report in respect of MPP, the AAT had applied an erroneous interpretation of s 206F. Her Honour held that, for the purpose of enlivening ASIC's power to disqualify pursuant to s 206F, the preconditions in s 206F(1)(a) needed to be satisfied. Insofar as reference is made in s 206F(1)(a)(ii) to a report under s 533(1) of the Act, all that was required was that such a report, in fact, be lodged. The correctness or worth of the report so lodged was not a matter which ASIC was obliged to investigate before taking the steps authorised in s 206F(1)(b) and (c). At [25] of her reasons, her Honour said: Whether it proceeded to make such an order [referring to the power to make a disqualification order] depended upon its proper consideration of the matters specified in ss 206F(1)(c) and 206F(2), and under those sections it would be entirely proper to consider whether the contents of the reports were correct, whether the matters referred to had been in some way rectified, or other such factors. 46 At [26] of her reasons, her Honour then said: In addition to making the procedural error of considering that it could go behind the lodgement of the reports into their contents for purposes of the jurisdictional analysis (as opposed to the merits analysis), the AAT's analysis of the contents of the s 533 report lodged by the liquidator of MPP was itself erroneous. That is, the AAT ignored the express words of s 533(1)(c). As noted earlier (see [15]), under s 533 of the Act, a liquidator of a corporation must report to ASIC if it appears that a company may be unable to pay its unsecured creditors more than 50 cents in the dollar. A liquidator need not conclusively, whether on the balance of the probabilities or otherwise, demonstrate or prove that the company is unable to pay its unsecured creditors 50 cents in the dollar. That it later turned out that MPP could in fact pay its unsecured creditors in full (or that it had no unsecured creditors) does not impugn the propriety of the liquidator's conclusion at the time that it appeared that the company might not be able to meet its debts. (Original emphasis.) 47 Her Honour then concluded that MPP was a corporation that satisfied the preconditions of s 206F(1)(a). 48 In respect of Delitat and TMVP, her Honour held that, if the AAT had intended to suggest that, because the show cause notice had not referred to Delitat and TMVP, it was not open to the AAT to have regard to the appellant's involvement in these two corporations for the purposes of the jurisdictional analysis, that was an error of law for the reasons which her Honour then explained (see [29] of her Honour's reasons). 49 Her Honour then held that the circumstances of the appellant's involvement with Delitat and TMVP were relevant to the AAT's consideration of whether the disqualification was justified. 50 Her Honour ultimately concluded that the AAT's refusal to consider the appellant's conduct in relation to AAMIC, Delitat and TMVP constituted an error of law (see [32] of the primary judge's reasons). 51 Her Honour then considered certain specific admissions made on behalf of the appellant. 52 At [34] of her reasons, the primary judge dealt with the appellant's contention that he had been denied procedural fairness by the delegate. The primary judge held that this contention was answered by the fact that the AAT had plainly complied with its obligations of procedural fairness vis-a-vis the appellant so that any difficulties that might have arisen from the way in which matters were dealt with by the delegate had been cured. 53 Her Honour then moved to deal with the appellant's second main contention which related to the content of the show cause notice. The submission before her Honour was that, in order for a notice to meet the requirements of s 206F(1)(b)(i), that notice must be in the prescribed form and must list all of the corporations relied upon by ASIC in support of any disqualification so that the recipient of the notice is accorded natural justice by being provided with all proper particulars at the earliest possible stage. Her Honour rejected that submission (see [39] of the primary judge's reasons). 54 At [40] and [41] of her reasons, the primary judge explained why she rejected that contention. Her Honour held that the preconditions set out in s 206F(1)(a) and s 206F(1)(b) were filters designed to identify which person or persons might be subject to a disqualification order. Her Honour then held that there would inevitably be facts and matters outside the four corners of the show cause notice which would support the discretion to make such an order and facts and matters which might tend against the making of such an order. Her Honour held that, before reaching a decision, the decision-maker would need to accord procedural fairness to the affected person. Her Honour held that, provided that proper notice and a fair opportunity to be heard are given, the fact that a relevant matter is not stated in the initial s 206F notice would not provide a basis for that matter to be excluded. The procedural fairness obligation to which her Honour was referring in this part of her reasons was an obligation which, in her Honour's view, existed separately from the requirement to issue a notice pursuant to s 206F(1)(b). Her Honour held that the show cause notice contemplated by s 206F(1)(b) was merely the initial way in which ASIC is required to put certain of the relevant matters before the person in respect of whom the disqualification order is being considered. 55 The final contention advanced by the appellant before the primary judge concerned the way in which ASIC was required to consider the s 533 reports. Her Honour dealt with the appellant's submissions in respect of this contention at [42]–[45] of her reasons. 56 Consistent with the views which her Honour had expressed earlier in her reasons, at [43] of her reasons, the primary judge said: Section 206F(1)(a) provides the filter – if a person has been an officer of two or more corporations within the last seven years where the liquidator of each company has filed a s 533 report - then ASIC is entitled to serve a notice on that person requiring them to demonstrate why they should not be disqualified. The person served with such notice has a choice. They may take the opportunity (see [16]) to demonstrate why they should not be disqualified or they may choose to stand silent. The contents of the s 533 reports will be before ASIC. Absent a challenge to the contents of a s 533 report (in whole or in part) or material in the possession of ASIC casting doubt on the veracity of a s 533 report, I can identify no reason why ASIC should be required to conduct some further or separate enquiry to verify the matters contained in a s 533 report prepared by a liquidator of a company. If there are matters contained in a s 533 report that a person subject to a possible disqualification order seeks to challenge, then the person will have notice of those matters and an opportunity to address them. (Original emphasis.) 57 Her Honour concluded that the contention advanced by the appellant in relation to the s 533 reports in the present case reflected a misunderstanding both of ASIC's submissions and of the distinction between the existence of a power or discretion, on the one hand, and the circumstances which might justify the lawful exercise of that power or discretion, on the other hand. 58 Her Honour then addressed whether relief should be granted to ASIC and, if so, the form of that relief. At [47] of her reasons, the primary judge explained why it was appropriate to remit the matter to the AAT in light of her conclusions that the AAT had made errors of law. Her Honour then held that it was appropriate to direct remitter to the AAT differently constituted. 59 At [49] of her reasons, the primary judge dealt with a submission made on behalf of the appellant to the effect that the Court should direct in some way the approach which should be adopted by the AAT at the rehearing. The primary judge rejected such an approach, principally because the AAT had the capacity to admit evidence going to conduct and events that occurred after the date upon which the decision under review was made. Her Honour concluded that it would be inappropriate to fetter the way in which the AAT might go about its task when the matter came before it on the remitter. The Grounds of Appeal 60 In the Full Court, the appellant raised the following grounds of appeal, namely that the primary judge erred: (a) In holding that ASIC was empowered to disqualify the appellant pursuant to s 206F of the Act if the appellant had been the subject of s 533 reports in respect of two or more corporations that had been wound up in circumstances where only one of the s 533 reports was ultimately found to have been correct (Ground 1); (b) In holding that the AAT was bound to consider the circumstances of AAMIC (Ground 2); (c) In holding that the AAT was bound to consider the circumstances of MPP when the AAT found as a matter of fact that all of the allegations concerning MPP that were the subject of the s 533 report in respect of MPP were not sustainable (Ground 3); (d) In holding that the show cause notice did not need to name all of the corporations that were being relied upon or might be relied upon by ASIC in considering disqualification of the appellant and in holding further that the giving of a notice naming all corporations to be relied upon was not a condition precedent to the exercise of ASIC's powers to disqualify the appellant but was a mere procedural requirement that could be cured by a merits review in the AAT (Ground 4); (e) In holding that the circumstances concerning Delitat and TMVP were relevant when there was insufficient evidence before the AAT to justify any findings of fact in respect of either of those corporations (Ground 5); (f) In holding that the AAT did not have the discretion to disregard Delitat and TMVP when considering the delegate's decision (Ground 6); (g) In holding that, in circumstances where, at the time her Honour delivered her judgment, the disqualification was due to expire two and a half weeks after that date, nonetheless the matter should be remitted to the AAT for a full hearing (Ground 7); (h) By denying the appellant natural justice in failing to remit the matter to the AAT to be constituted by Deputy President McDonald in circumstances where ASIC had expressly abandoned any opposition to that course of action and where no further submissions directed to the point were advanced either by the appellant or by ASIC because of that concession (Ground 8); (i) In holding that the AAT was bound to take into account the appellant's conduct in relation to Australian Automotive Centre Pty Limited (AAC), Delitat and TMVP (Grounds 9 and 10); and (j) In failing to provide adequate reasons as to the circumstances that the AAT was bound to take into account surrounding the appellant's conduct and further failed to provide directions on what conduct should have been taken into account (Ground 11). The Appellant's Submissions 61 The first submission advanced on behalf of the appellant was that the learned primary judge misconstrued s 206F of the Act. It was submitted that her Honour gave undue significance to the exercise of the power given to ASIC by s 206F(1)(c) and failed to accord appropriate weight to the prerequisites set out in s 206F(1)(a). Counsel for the appellant submitted that, at a stage anterior to the point in time when it begins to consider making the decision called for by s 206F(1)(c), ASIC was required to satisfy itself that: (a) The person potentially liable to disqualification had been an officer of two or more corporations within seven years immediately before ASIC gave the relevant show cause notice; and (b) While the person was an officer, or within 12 months after the person ceased to be an officer of those corporations (referring to the two or more corporations mentioned in sub-par (a) above), each of the corporations was wound up and a liquidator lodged a report under s 533(1) of the Act about each corporation's inability to pay its debts. 62 The submission was that, before ASIC becomes entitled pursuant to s 206F(1)(b) to give a show cause notice to a person it has under consideration as being liable to disqualification, it must be satisfied that each of the facts and matters summarised in [61] above actually exists. In particular, so it was submitted, ASIC must satisfy itself after due enquiry that the liquidator's report made and lodged under s 533(1) of the Act and contemplated by s 206F(1)(a)(ii) is "correct". According to the submissions made on behalf of the appellant, this means that ASIC must satisfy itself that the contents of the report are correct. It must also satisfy itself that the report otherwise complies with the requirements of s 533(1) of the Act. 63 It was further submitted on behalf of the appellant that ASIC must satisfy itself that the opinions expressed by the liquidator in the s 533 report contemplated by s 206F(1)(a)(ii) are opinions which were bona fide actually held by the liquidator at the time when the report was signed and had been formed reasonably having regard to a correct understanding of the law under which the liquidator was purporting to act. The proposition was that, unless the opinions satisfied these requirements, they would not be opinions of the kind called for by s 533(1) of the Act with the consequence that the s 533 report would not be a report made pursuant to s 533 of the Act at all. 64 In support of these contentions, Counsel for the appellant submitted that the exercise of the power afforded to ASIC by s 206F(1)(c) was unlimited and not constrained in any way. Therefore, in order to provide some limits on the exercise of that power, s 206F should be interpreted so as to require the type of investigation and inquiry described in [62] and [63] above at the earliest possible stage, namely, at the stage of considering the matters set out in s 206F(1)(a) described in [61] above so as to give full effect to the need for appropriate limitations to be placed upon the exercise of the power afforded to ASIC by s 206F. In support of these contentions, Counsel for the appellant relied upon NAAV v Minister for Immigration and Multicultural and Indigenous Affairs (2002) 123 FCR 298 at [291]–[297] (pp 377–379) (per Wilcox J) and at [452]–[460] (pp 418–421) (per French J as he then was). 65 It was further submitted that, consistent with the principles articulated by French J in NAAV 123 FCR 298 at [443]–[450] (pp 415–418), s 206F should be construed by paying due regard to the proposition that every statutory power must be exercised bona fide and for the purpose for which it was conferred. The latter purpose is to be distilled from the object and scope of the relevant provisions as discerned from the statute itself and from such other materials to which resort may legitimately be had. 66 It was submitted on behalf of the appellant that ASIC was not permitted simply to abrogate its powers in favour of the particular liquidator and slavishly to adopt his or her opinion. It was submitted that ASIC must form its own opinion as to the correctness of the opinions and conclusions expressed in the relevant s 533 report. It was also suggested by Counsel for the appellant that ASIC's position must be that the mere fact of the lodgement of a s 533 report is not only sufficient to establish the facts and matters set out in such a report but conclusive in respect of those facts and matters. 67 The appellant submitted that a person who is under consideration for disqualification must be able to challenge the validity or worth of a s 533 report. It was said that the right to be heard would be worthless if that person could not dispute the contents of the s 533 report. It was then submitted that the only means available to such a person for mounting such a challenge is to interact with ASIC by putting material and submissions to ASIC at a point in time anterior to the time when ASIC begins to undertake the exercise contemplated by s 206F(1)(c) and s 206F(2), ie at the point in time when ASIC is called upon to satisfy itself of the matters set out in s 206F(1)(a). 68 The second submission advanced on behalf of the appellant was that the show cause notice contemplated by s 206F(1)(b) must contain fair notice of all matters which ASIC has under consideration in respect of the potential disqualification as at the date of the notice with the consequence that ASIC is not permitted to have regard to matters not mentioned in that notice when it ultimately comes to consider the exercise of its power of disqualification. It was submitted on behalf of the appellant that, in the present case, because the show cause notice was confined to the appellant's conduct in connection with AMI, AAMIC and MPP, ASIC was not permitted to have regard to the appellant's conduct in respect of any of Delitat, TMVP or AAC. 69 Finally, it was submitted that the learned primary judge had failed to accord to the appellant procedural fairness in relation to the form of order which her Honour made. The proposition was that, because ASIC had conceded that it was not necessary for the primary judge expressly to provide in the order for remitter that the AAT should be "differently constituted", the appellant was entitled to assume that an order in those terms would not be made unless her Honour expressly drew the attention of the appellant to the possibility that an order in those terms might be made. In the present case, so it was submitted, her Honour did not draw the attention of Counsel for the appellant to that possibility and thus denied to the appellant procedural fairness in that respect. 70 At the end of the hearing before us, it was suggested by Counsel for the appellant that the findings made by the AAT in respect of AMI had been challenged before the learned primary judge by the appellant in the sense that the appellant had contended before her Honour that there was no valid s 533 report extant in respect of AMI. Subsequent to the hearing before us, supplementary written submissions and further materials dealing with this point were furnished to us. Our attention was drawn to the written submissions of the parties made to the learned primary judge as well as to portions of the transcript of the hearing before her Honour. ASIC's submissions 71 ASIC adopted the reasoning of the learned primary judge and submitted that, in the circumstances of the present case, the delegate, and subsequently the AAT, were empowered by s 206F(1)(a) and (b) of the Act to move on to consider the exercise of the power to disqualify more particularly embodied in s 206F(1)(c) and s 206F(2) of the Act. In essence, it was submitted on behalf of ASIC that her Honour had correctly construed s 206F of the Act by regarding the requirements laid down in s 206F(1)(a) and s 206F(1)(b) as preconditions or filters through which the particular case needed to pass but as not requiring the kind of investigation contemplated by the submissions made on behalf of the appellant. The Act did not require ASIC to accord to the appellant procedural fairness in relation to its decision to issue a show cause notice pursuant to s 206F(1)(b). It is the notice itself which initiates the process and procedure in respect of which ASIC is obliged to accord procedural fairness to the appellant. 72 In addition, ASIC took issue with the proposition that the show cause notice contemplated by s 206F(1)(b) operated to delimit the scope of the matters which could legitimately be taken into account by ASIC when it came to making its decision in respect of disqualification. It was submitted on behalf of ASIC that, whilst it must be accepted that the person who is under consideration for disqualification must be accorded procedural fairness, s 206F contemplated that more information and relevant considerations would come to the mind of ASIC after the service of the show cause notice contemplated by s 206F(1)(b) and that this body of material could legitimately be taken into account by the decision-maker in making his or her decision provided that the person affected by that decision is accorded procedural fairness. The content of that obligation to accord procedural fairness may well vary from case to case. 73 Finally, it was submitted on behalf of ASIC that the s 533 reports in respect of AMI had not been challenged by the appellant before the learned primary judge. Rather, the only challenge to those reports had been by ASIC itself. That challenge was really directed at the process undertaken by the AAT rather than at the correctness or worth of the AMI s 533 reports themselves. The proposition advanced by ASIC before the learned primary judge was that it was not appropriate for the AAT to deal with the matters which it had under consideration in a separate way, one by one, as it in fact did. This proposition is captured in the last of the grounds advanced by ASIC in support of the questions of law raised before her Honour. The Relevant Statutory Provisions 74 Part 2D.6 – Disqualification from Managing Corporations of the Act deals with disqualification of persons from managing corporations. That Part is to be found in Chapter 2 – Officers and Employees. 75 Section 206B provides for the automatic disqualification of a person from managing corporations in the event that that person is convicted of certain specified offences or if the person is an undischarged bankrupt or has entered into certain arrangements outside of bankruptcy but under the Bankruptcy Act 1966 (Cth) predicated upon that person's insolvency. Section 206BA provides for the extension of a period of automatic disqualification upon application by ASIC to a Court having jurisdiction under the Act. 76 Section 206C empowers ASIC to apply to the Court for an order disqualifying a person from managing corporations in circumstances where relief in the nature of a civil penalty provision has been granted against that person. Section 206D(1) is in the following terms: 206D Court power of disqualification—insolvency and non-payment of debts (1) On application by ASIC, the Court may disqualify a person from managing corporations for up to 20 years if: (a) within the last 7 years, the person has been an officer of 2 or more corporations when they have failed; and (b) the Court is satisfied that: (i) the manner in which the corporation was managed was wholly or partly responsible for the corporation failing; and (ii) the disqualification is justified. 77 Section 206D(2) provides for the circumstances in which a corporation will be held to have failed within the meaning of that term as found in s 206D(1). Section 206D(3) is in the following terms: (3) In determining whether the disqualification is justified, the Court may have regard to: (a) the person's conduct in relation to the management, business or property of any corporation; and (b) any other matters that the Court considers appropriate. 78 Section 206E empowers ASIC to apply to the Court for an order disqualifying a person from managing corporations if that person has been found guilty of repeated contraventions of the Act. Section 206EA provides for the disqualification of a person from managing corporations if a court order disqualifying that person from managing corporations is in force under s 86E of the Trade Practices Act 1974 (Cth). 79 Section 206F provides as follows: 206F ASIC's power of disqualification Power to disqualify (1) ASIC may disqualify a person from managing corporations for up to 5 years if: (a) within 7 years immediately before ASIC gives a notice under paragraph (b)(i): (i) the person has been an officer of 2 or more corporations; and (ii) while the person was an officer, or within 12 months after the person ceased to be an officer of those corporations, each of the corporations was wound up and a liquidator lodged a report under subsection 533(1) (including that subsection as applied by section 526-35 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006) about the corporation's inability to pay its debts; and (b) ASIC has given the person: (i) a notice in the prescribed form requiring them to demonstrate why they should not be disqualified; and (ii) an opportunity to be heard on the question; and (c) ASIC is satisfied that the disqualification is justified. (1A) To avoid doubt, the references in paragraph (1)(a) to corporations include references to Aboriginal and Torres Strait Islander corporations. Grounds for disqualification (2) In determining whether disqualification is justified, ASIC: (a) must have regard to whether any of the corporations mentioned in subsection (1) were related to one another; and (b) may have regard to: (i) the person's conduct in relation to the management, business or property of any corporation; and (ii) whether the disqualification would be in the public interest; and (iii) any other matters that ASIC considers appropriate. (2A) To avoid doubt, the references in subsection (2) to a corporation includes a reference to an Aboriginal and Torres Strait Islander corporation. Notice of disqualification (3) If ASIC disqualifies a person from managing corporations under this section, ASIC must serve a notice on the person advising them of the disqualification. The notice must be in the prescribed form. Start of disqualification (4) The disqualification takes effect from the time when a notice referred to in subsection (3) is served on the person. ASIC power to grant leave (5) ASIC may give a person who it has disqualified from managing corporations under this Part written permission to manage a particular corporation or corporations. The permission may be expressed to be subject to conditions and exceptions determined by ASIC. 80 The balance of Pt 2D.6 is not presently relevant. 81 Section 533 of the Act is in the following terms: 533 Reports by liquidator (1) If it appears to the liquidator of a company, in the course of a winding up of the company, that: (a) a past or present officer or employee, or a member or contributory, of the company may have been guilty of an offence under a law of the Commonwealth or a State or Territory in relation to the company; or (b) a person who has taken part in the formation, promotion, administration, management or winding up of the company: (i) may have misapplied or retained, or may have become liable or accountable for, any money or property of the company; or (ii) may have been guilty of any negligence, default, breach of duty or breach of trust in relation to the company; or (c) the company may be unable to pay its unsecured creditors more than 50 cents in the dollar; the liquidator must: (d) as soon as practicable, and in any event within 6 months, after it so appears to him or her, lodge a report with respect to the matter and state in the report whether he or she proposes to make an application for an examination or order under section 597; and (e) give ASIC such information, and give to it such access to and facilities for inspecting and taking copies of any documents, as ASIC requires. (2) The liquidator may also, if he or she thinks fit, lodge further reports specifying any other matter that, in his or her opinion, it is desirable to bring to the notice of ASIC. (3) If it appears to the Court, in the course of winding up a company: (a) that a past or present officer or employee, or a contributory or member, of the company has been guilty of an offence under a law referred to in paragraph (1)(a) in relation to the company; or (b) that a person who has taken part in the formation, promotion, administration, management or winding up of the company has engaged in conduct referred to in paragraph (1)(b) in relation to the company; and that the liquidator has not lodged with ASIC a report with respect to the matter, the Court may, on the application of a person interested in the winding up, direct the liquidator so to lodge such a report. 82 Section 536 provides that, in the circumstances specified therein, the Court or ASIC may inquire into complaints or allegations that a liquidator has not faithfully performed or is not faithfully performing his or her duties or has otherwise not complied with the Act or orders of the Court and that the Court may take such action as it thinks fit after such an inquiry has been completed. Under s 536, there is power in the Court to order a liquidator who is held to be guilty of misfeasance, neglect or omission to make good any loss occasioned by that conduct. 83 Officer of a corporation is defined in s 9 of the Act as meaning: officer of a corporation means: (a) a director or secretary of the corporation; or (b) a person: (i) who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the corporation; or (ii) who has the capacity to affect significantly the corporation's financial standing; or (iii) in accordance with whose instructions or wishes the directors of the corporation are accustomed to act (excluding advice given by the person in the proper performance of functions attaching to the person's professional capacity or their business relationship with the directors or the corporation); or (c) a receiver, or receiver and manager, of the property of the corporation; or (d) an administrator of the corporation; or (e) an administrator of a deed of company arrangement executed by the corporation; or (f) a liquidator of the corporation; or (g) a trustee or other person administering a compromise or arrangement made between the corporation and someone else. Note: Section 201B contains rules about who is a director of a corporation. 84 Some assistance as to the meaning of the phrase managing corporations is provided by s 206A(1) of the Act which is in the following terms: 206A Disqualified person not to manage corporations (1) A person who is disqualified from managing corporations under this Part commits an offence if: (a) they make, or participate in making, decisions that affect the whole, or a substantial part, of the business of the corporation; or (b) they exercise the capacity to affect significantly the corporation's financial standing; or (c) they communicate instructions or wishes (other than advice given by the person in the proper performance of functions attaching to the person's professional capacity or their business relationship with the directors or the corporation) to the directors of the corporation: (i) knowing that the directors are accustomed to act in accordance with the person's instructions or wishes; or (ii) intending that the directors will act in accordance with those instructions or wishes. Note: Under section 1274AA, ASIC is required to keep a record of persons disqualified from managing corporations. 85 A person who, strictly speaking, is not a director of a corporation may nonetheless be disqualified from managing a corporation if that person is involved in, or participates in, the management of a corporation in ways which are considered to constitute directing or controlling the affairs of that corporation either alone or in company with others. Such persons are sometimes referred to as deemed or shadow directors: (see Ho v Akai Pty Limited (in liq) (2006) 24 ACLC 1526). Consideration The Meaning of s 206F 86 ASIC's power to disqualify a person from managing a corporation is bestowed and regulated by s 206F of the Act. Disqualification by ASIC is one of several ways a person may be prevented from managing corporations. Part 2D.6 of the Act also provides for automatic disqualification (s 206B and s 206BA) and disqualification by the Court (ss 206C, 206D, 206E, 206EA, 206G and 206GA). The maximum period of disqualification for a court-ordered disqualification based upon the person's participation in the management of two or more failed corporations is 20 years (s 206D(1)) whereas the maximum period of disqualification that may be imposed by ASIC pursuant to s 206F is five years (s 206F(1)). Other periods apply in respect of automatic disqualification and court-ordered disqualification on other grounds. 87 The more serious breaches of duty which lead to the failure of a corporation are intended to be dealt with by the Court pursuant to s 206D. For a person to be susceptible to disqualification under s 206D, ASIC must prove that, within the seven years immediately prior to the date when ASIC's application is made, the person has been an officer of two or more corporations when they have failed (s 206D(1)(a)) and must satisfy the Court that the manner in which the corporation was managed was wholly or partly responsible for the corporation failing and that the disqualification is justified (s 206D(1)(b)). The concept of "failure of a corporation" is defined in s 206D(2). Regard must also be had to s 206D(2A). In determining whether disqualification is justified and, if so, the terms thereof, the Court has a wide discretion. Section 206D(3) specifically mentions the person's conduct in relation to the management, business or property of any corporation and then provides that regard may be had to any other matters that the Court considers appropriate. 88 Section 206D contemplates a Court hearing and a judicial determination as to whether disqualification should be ordered and, if so, for what term. ASIC would need to make its case in Court in the usual way. The trigger for the Court's jurisdiction is an application filed by ASIC. There is no need for the legislature to devise some non-curial trigger. 89 Disqualification effected by the administrative decision of ASIC (s 206F) is dealt with in a different way. 90 Ultimately, of course, disqualification can only be effected if ASIC is satisfied that disqualification is justified (see s 206F(1)(c) and s 206F(2)). The words of s 206F(1)(c) are the same as those used in s 206D(1)(b)(ii). But ASIC is not permitted to reach the requisite level of satisfaction unless and until the conditions laid down in s 206F(1)(a) and s 206F(1)(b) have been met. ASIC being satisfied that disqualification is justified is the last requirement that must be met before disqualification can be effected. 91 There are two groups of conditions which must be met before ASIC can move to consider whether disqualification is justified. These are found in s 206F(1)(a) and (b). 92 The second group of conditions laid down in s 206F(1) are those provided for in s 206F(1)(b) – the giving of a show cause notice and the giving of an opportunity to be heard "… on the question". The "question" referred to in s 206F(1)(b)(ii) is the question posed in s 206F(1)(b)(i) viz whether the person can demonstrate why he or she should not be disqualified. The show cause notice must be in the prescribed form. The prescribed form requires ASIC to set out its concerns and to list the documents upon which those concerns are based. ASIC must refer to all concerns which it has at the time when the notice is issued about the affected person's conduct relevant to disqualification and must also list all documents upon which those concerns are based. This is the effect of s 206F(1)(b)(i) when considered with the terms of the prescribed form itself. 93 Neither s 206F itself nor the prescribed form requires that all matters and all materials which will or might be taken into account by ASIC when it comes to consider the question of disqualification need to be specifically and exhaustively mentioned in the show cause notice contemplated by s 206F(1)(b)(i). There is a difference between concerns, on the one hand, and matters to be or likely to be taken into account, on the other hand. 94 The source of ASIC's obligation to accord procedural fairness to an affected person is to be found in s 206F(1)(b)(ii) and the common law. An opportunity to be heard on the question must be given to the affected person. That opportunity must be fair and adequate. The affected person must be fully informed of the allegations made against him or her and of the material that might be relied upon by ASIC to support those allegations (see Laycock v Forbes (1997) 150 ALR 186 at 192–194, (1997) 25 ACSR 659 at 665–668, (1997) 15 ACLC 1814 at 1820–1822). 95 The first group of conditions found in s 206F(1) are those found in s 206F(1)(a). That subsection refers to matters of fact, viz that within seven years immediately before ASIC gives the relevant show cause notice: (a) the person under consideration for disqualification has been an officer of two or more corporations; and (b) while that person was an officer, or, within 12 months after the person ceased to be an officer of those (two or more) corporations referred to in sub-par (a) above: (i) each of those corporations was wound up; and (ii) a liquidator lodged a s 533 report about each of those (two or more) corporations' inability to pay its debts. 96 The question of whether the person under consideration for disqualification was an officer of two or more corporations in the relevant period is a pure question of fact in the case of persons expressly appointed as officers and a question of mixed fact and law in the case of deemed directors. 97 The additional requirements that the particular corporations be wound up and be wound up during a specified period of time (as to which see s 206F(1)(a)(ii)) involve pure questions of fact. 98 It is thus quite clear that, up to the point in s 206F(1)(a) when mention is made of a liquidator's report under s 533(1) of the Act, what is required in order to satisfy the language of the subsection is the existence of facts. These matters are pure questions of fact or, in a case where reliance is placed upon the relevant principles of law in respect of deemed directors, a question of mixed fact and law. It is not ASIC's belief or suspicion or opinion about facts or a state of affairs which matters. Nor does s 206F(1)(a) require that ASIC be satisfied of something. What is required is that each of those facts be in existence before the show cause notice can be given and the third stage of the process commenced. 99 Yet, so the appellant submits, when one comes to consider the meaning of the words: … and a liquidator lodged a report under subsection 533(1) about the corporation's inability to pay its debts … those words do not merely require the existence of the fact (viz that a liquidator lodged a document purporting to be a report made under s 533(1) in respect of each such corporation which report in each case had something to say about the corporation's inability to pay its debts) but they go much further and require that ASIC conduct an investigation into the truth of the contents of each such report. 100 We do not think that s 206F requires that ASIC do anything of the kind. We are of the view that all that is required is that the liquidator lodge a report in respect of each of the corporations relied upon for the purposes of s 206F(1)(a) which appears to be regular on its face, which appears to comply with the terms of s 533 of the Act and which appears to be about each corporation's inability to pay its debts. The liquidator is obliged to act bona fide and must not express views in such a report which are not genuinely held. Section 533 does not require that the liquidator have reasonable grounds for the views, opinions and statements expressed by him in such a report. 101 Our reasons for these conclusions may be shortly stated as follows: (a) Subsection (1) of s 206F comprises, in ascending order of importance: (i) A trigger mechanism (the conditions, filters or gateway) embodied in subs (1)(a) (stage 1); (ii) A procedural fairness requirement (the giving of a show cause notice and an opportunity to be heard): subs (1)(b) (stage 2); and (iii) A merits decision captured in the requirement that ASIC be satisfied that disqualification is justified: subs (1)(c) read with s 206F(2) (stage 3). (b) ASIC's power to disqualify a person from the management of corporations must be exercised for the purposes for which it was granted. Those purposes are the protection of all those persons who deal with corporations from the consequences of the actions of those corporate officeholders who, either through incompetence or dishonesty or a combination of the two, bring about the failure of corporations and thus cause loss to others (Rich v Australian Securities and Investments Commission (2004) 220 CLR 129 at [47]–[50] (151–155) and the maintenance of professional management standards in the public interest (Visnic v Australian Securities and Investments Commission (2007) 231 CLR 381 at [11] (p 385) and [26] (p 388)). (c) Section 206F does not give reports prepared by liquidators pursuant to s 533 of the Act any particular status or weight. ASIC may approach the exercise of its power of disqualification under s 206F(1)(c) in any way it thinks fit, subject to complying with s 206F(1) and s 206F(2) and subject to respecting and applying the principles referred to in subpar (b) above. (d) Subsection (2) of s 206F informs the exercise of the power given to ASIC by subs (1)(c). Subparagraph (a) of subs (2) lays down a mandatory requirement to which regard must be had and subpar (b) sets out matters to which regard may be had. ASIC is not obliged to have regard to the s 533 report or reports which triggered the disqualification process when considering whether disqualification is justified. No doubt it may do so in an appropriate case but it is not obliged to do so. Rather, it is authorised and empowered to make a decision on the merits as to whether disqualification is justified. It would make no sense at all if it were also required to involve itself in a merits-based decision in relation to the correctness of the relevant s 533 report or reports at stage 1 of the process. In the event that reliance is placed upon the s 533 report or reports at stage 3 of the process, ASIC will be called upon to assess the worth of that report or those reports at that stage in order to decide whether disqualification is justified. (e) Section 206F is an alternative to Court action by ASIC. It is meant to be a quick and cheap alternative to Court action. However, it cannot be utilised just because ASIC feels that it would like to take action against a particular individual. Certain preconditions for action must be satisfied. But, in the end, the merits consideration by ASIC is intended to take place only once in the process—not at two stages. In a sense, the preconditions provided for in subpars (a) and (b) of s 206F(1) are jurisdictional requirements which must be satisfied before ASIC's power to disqualify under s 206F is enlivened. (f) To interpret s 206F as the appellant has contended would lead to endless challenges during the s 206F disqualification process directed to the validity of the relevant s 533 reports and would be likely to render s 206F unworkable. 102 This interpretation of s 206F is consistent with well-established authorities which have interpreted similar provisions in prior companies legislation—s 600 of the Corporations Law and s 562A of the Companies (NSW) Code (see Jorgensen v Australian Securities and Investments Commission (1999) 30 ACSR 481 at 483 where Heerey J held that a similar condition requiring the lodgement of a liquidator's report would be satisfied even if the matters in the report had been partially or wholly rectified by the time of the disqualification hearing; see also Dwyer v National Companies and Securities Commission (1988) 13 ACLR 716 at 720; Laycock 150 ALR 186 at 192–194, 25 ACSR 659, 15 ACLC 1814; and Kardas v Australian Securities Commission (1998) 29 ACSR 304 at 312–313, (1998) 53 ALD 303, (1998) 16 ACLC 1695). 103 It must also be remembered that s 533 itself does not contemplate that concrete facts be presented to the liquidator before he is obliged to report. Nor does it require that the liquidator form a concrete opinion in relation to the topics addressed by the section. 104 What is required is that it "… appears …" to the liquidator that certain things "… may …" have occurred or "… may …" be the fact. Once one or more of the matters referred to in subs (1)(a), (b) or (c) appear to be the case in the mind of the liquidator, he or she must lodge a report. The report must be "… with respect to the matter …". The report does not have to be "correct" in every respect, either at the time when it was lodged or subsequently when looked at with the benefit of hindsight. 105 In our judgment, the liquidator is not required to express any particular views or conclusions in a s 533 report. If opinions or views on the part of the liquidator are expressed in the report, the liquidator is not required to set out the basis for such opinions or views. Nor is the liquidator obliged to have reasonable grounds for holding such opinions or views before articulating them. The function of the report is to alert ASIC to potential problems with particular corporations and to do so promptly after the potential problems have been identified by the liquidator. All that the liquidator is required to do is comply with subpars (d) and (e) of s 533(1). 106 For the purposes of s 206F, the liquidator is obliged to lodge a s 533 report with ASIC and otherwise to comply with the terms of subpars (d) and (e) of s 533(1) as soon as it appears to the liquidator that the corporation may be unable to pay its unsecured creditors more than 50 cents in the dollar. This is a relatively low threshold requirement. The liquidator may lodge further reports with ASIC if he or she thinks fit. Those additional reports are to specify any other matters which the liquidator thinks it is desirable to bring to the notice of ASIC. The Court may direct the liquidator to lodge a s 533 report in the circumstances set out in s 533(3). 107 Liquidators are officers of the Court and, as such, are supervised by the Court. A liquidator may also be subjected to an inquiry pursuant to s 536 of the Act in the event that he or she is suspected of being guilty of misfeasance or negligence (s 536). 108 In 2004 and 2005, ASIC had in place Practice Note 50 (PN50) which had been issued in order to provide guidance to external administrators (including liquidators) on their reporting obligations to ASIC (including under s 533(1) of the Act). In Section C – Schedule B of PN50 at [PN 50.42] ASIC said: The sections do not specify precisely what information is to be included in the report other than to require the external administrator to give to ASIC such information, and such access to and facilities for inspecting and taking copies of any documents, as ASIC requires: see s422(1)(d), 438D(1)(d) and 533(1)(e). An additional requirement is placed on a liquidator who must advise whether he or she proposes to make an application for an examination or order under s597: see s533(1)(d). 109 The Practice Note also provided a form of a general kind for use in providing reports under ss 422, 438D and 533 of the Act (see [PN 50.87]). That form contemplated that detailed and specific information would be provided to ASIC by the liquidator. 110 PN50 has now been replaced by a Regulatory Guide (RG16) which gives very similar guidance to liquidators in respect of such reports. 111 Neither PN50 nor RG16 prescribes any particular form for a s 533 report nor does either of those documents prescribe what is to be included in such a report. The Act is also silent on these matters. 112 ASIC is required to keep a register of persons who have been disqualified from managing corporations (s 1274AA(1)). The register must contain a copy of every disqualification notice given by ASIC under s 206F(3) (s 1274AA(2)(b)). The register may be inspected and its contents provided to members of the public (s 1274A). 113 The only sections in the Act where reference is made to s 533 are ss 206D, 206F, 534 and 1274. Section 206D and s 206F are concerned with the disqualification of delinquent officers of corporations. Section 534 is concerned with the prosecution of such persons. 114 The sole uses to which a s 533 report can be put is to alert ASIC of potential delinquent or aberrant behaviour and to provide information to ASIC. Such reports have no particular evidentiary status and are not given any evidentiary status by the Act. 115 To be valid, of use and relevant for the purposes of s 206F, a s 533 report must: (a) be with respect to the fact or possibility that the particular corporation may be unable to pay its unsecured creditors more than 50 cents in the dollar (s 206F(1)(a)(ii) and s 533(1)(c)); (b) contain a statement by the liquidator whether he or she proposes to make an application for an examination or order under s 597; and (c) have been prepared and lodged because it appeared to the liquidator that the particular corporation may be unable to pay its unsecured creditors more than 50 cents in the dollar. The liquidator's appreciation of that possibility must have been genuinely and honestly formed but is not required to have been formed on reasonable grounds. 116 A report that, on a cursory inspection, meets the criteria referred to in [115] above will be a s 533 report for the purposes of the Act. 117 It is the fact of lodgement of such a report that matters for the purposes of s 206F(1)(a)(ii). The correctness of information, assertions and opinions contained in the report is (at best) only relevant to the third stage of the process ie the decision stage (s 206F(1)(c)). 118 In our judgment, there exists in the Act and at general law some capacity to control the behaviour of liquidators in relation to the preparation of s 533 reports. The supervisory role of the Court might be engaged if, for example, it could be demonstrated that a liquidator had prepared a s 533 report which was incorrect and actuated by malice. In circumstances such as that, an inquiry pursuant to s 536 of the Act might be undertaken. It may also be the case that the decision to prepare and lodge such a report might be susceptible to judicial review. It is not necessary to postulate all conceivable ways and means by which both directly and indirectly a rogue liquidator might be brought to heel and an invalid s 533 report removed from consideration for the purposes of s 206F. It is sufficient for present purposes to note that there is no reason to read into the Act a requirement that ASIC satisfy itself of the validity and worth of a s 533 report before it issues a show cause notice pursuant to s 206F(1)(b)(i). The terms of such a report are not conclusive of anything. 119 The lodgement of the report is merely a trigger for potential future action by ASIC. Its further disposition is effectively a matter for ASIC. 120 For these reasons we reject the appellant's submission that ASIC is obliged to satisfy itself of the validity and correctness of the relevant s 533 report before it is permitted to issue a show cause notice. The appellant's submissions in support of this contention are noted at [61]–[67] above. 121 We will now address the requirements of the notice contemplated by s 206F(1). 122 Section 206F(1)(b)(i) refers to "a" notice. That is to say, the subsection refers to one single notice—not to notices (plural). In our view, the subsection contemplates the giving of only one notice. 123 In addition, as already mentioned (at [92] and [93] above), the notice has to be in the prescribed form. The prescribed form is Form 5249 in Schedule 2 to the Corporations Regulations. That form makes clear that the recipient of the notice may avail himself or herself of the opportunity to be heard which is outlined in the form or may choose to remain silent. The form invites the recipient to demonstrate why he or she should not be disqualified from managing corporations. 124 Both the terms of s 206F and the language used in Form 5249 contemplate that a notice recipient may wish to put material and submissions before ASIC in support of his or her contention that he or she should not be disqualified and may also wish to attend a hearing before a delegate of ASIC. 125 That process, the possibility of further s 533 reports and the very real prospect that additional relevant material may come to ASIC's attention after the s 206F(1)(b) notice has been given all tend to negate the proposition that the show cause notice must contain everything upon which ASIC will or may rely when undertaking the third stage of the process. Such an approach is unduly restrictive and is not warranted by the terms of s 206F. 126 That is not to say that s 206F(1)(b) is a complete statement of the content of the duty to afford procedural fairness owed by ASIC to the person under consideration for disqualification. In our view, the general law would oblige ASIC to accord procedural fairness to such a person prior to making any decision to disqualify him or her (see Commissioner for ACT Revenue v Alphaone Pty Ltd (1994) 49 FCR 576 at 589–592). The proper discharge of that obligation would compel ASIC to ensure that, immediately before it set about deciding the question of disqualification, the person affected was well aware of the allegations made against him or her and was well aware of the material that ASIC intends to rely upon in coming to a view about those allegations. ASIC would also be obliged to ensure that that person had had a fair opportunity to be heard in respect of those matters. Very often, in any event, it will not be possible for ASIC to comply fully with that duty at the time when the show cause notice is issued. 127 For these reasons, we do not agree that ASIC must refer to and address in the show cause notice all matters upon which it might rely in support of disqualification and we do not agree that ASIC is confined to such matters as are contained in the show cause notice when it comes to consider disqualification. 128 The fact that, when deciding the question of disqualification, ASIC may have regard to the relevant person's conduct in relation to the management, business or property of any corporation, to the public interest and to any other matter that ASIC considers appropriate (see s 206F(2)(b)) supports the conclusions which we have reached. The Present Case and the Grounds of Appeal 129 It is apparent that we do not consider that the learned primary judge misconstrued s 206F or was in error in her interpretation of s 206F. In substance, we agree with her Honour's interpretation of the section and the reasons which she gave for the conclusions which she reached. 130 The undisputed facts were that, within the seven years which preceded the serving of the show cause notice, the appellant had been a director of two or more corporations (AMI, AAMIC and MPP) and that: (a) in the case of AAMIC, while he was a director; and (b) in the case of AMI and MPP within 12 months after the appellant ceased to be a director of those corporations, each of those corporations was wound up. 131 Further, in conformity with the interpretation that we have given to the second half of s 206F(1)(a)(ii), in respect of each of AMI, AAMIC and MPP, a liquidator lodged a report under s 533(1) about the corporation's inability to pay its debts. 132 The show cause notice was in the prescribed form and required the appellant to demonstrate why he should not be disqualified from managing corporations. 133 The AAT clearly afforded the appellant an opportunity to be heard on the question of whether he should be so disqualified. 134 It follows that the pre-conditions laid down in subs (1)(a)(i) and (ii) and (1)(b)(i) and (ii) were satisfied in the present case. 135 The AAT was entitled to determine the question of whether disqualification of the appellant from managing corporations was justified. It held that it was not. But, in doing so, the AAT committed errors of law. Although its jurisdiction was properly engaged, it was infected by errors of law. That is why the primary judge set aside the AAT decision. 136 We now turn to consider the grounds of appeal in the present case in light of our conclusions as to the correct interpretation of s 206F. Grounds 1, 2 and 3 (see [60(a)]–[60(c)] above) 137 Each of these grounds relies upon the appellant's principal submission to the effect that ASIC is obliged to satisfy itself that the contents of the relevant s 533 reports were correct before moving to issue the show cause notice. For the reasons explained at [86]–[120] above, we reject this submission. Therefore, Grounds 1, 2 and 3 all fail. 138 The appellant faces an additional difficulty in respect of some of these grounds. At [70] and [73] above, we have noted the submissions of the parties concerning the question of whether or not the appellant had challenged before the learned primary judge the validity or correctness of the s 533 reports in respect of AMI. We are satisfied that the appellant made no such challenge. Further, the AAT made no finding concerning the validity or correctness of the reports furnished to ASIC by Mr McDermott in respect of AMI. It will be recalled that the AAT also made no findings in respect of any of AAMIC, Delitat, TMVP or AAC. The reasoning of the AAT in support of its decision not to address the position of AAMIC is obscure. The AAT did make a finding in respect of MPP. That finding was that the s 533 report furnished by Mr McDermott in respect of MPP was erroneous because there were no creditors of MPP at the time that the report was made with the consequence that it could not have been the case that MPP was unable to pay its debts. The AAT appears to have then concluded that, because MPP was no longer available as a launching pad for disqualification action, there was no need to look at, and come to a view about, AMI, AAMIC, Delitat or TMVP. Accordingly, no findings were made in respect of any of those companies. 139 This leaves the appellant in the position where, even if we were to accept that the AAT correctly left MPP out of consideration for the purpose of deciding whether the pre-conditions laid down in s 206F(1)(a) had been satisfied, he would still need to satisfy us that the primary judge erred when she held that the AAT was also obliged to have regard to the position of AMI and AAMIC for that purpose. The AAT did not approach the matter in that way. The appellant has not satisfied us that her Honour made such an error. Ground 4 (see [60(d)] above) 140 The issue here is whether the appellant's conduct in respect of Delitat, TMVP and AAC was able to be taken into account by the AAT when determining whether the appellant should be disqualified notwithstanding that none of those companies was mentioned in the show cause notice. 141 At [92]–[94] and at [121]–[128] above we have explained why we have decided the question of principle raised by this issue against the appellant. In our judgment, as long as the AAT accorded procedural fairness to the appellant in respect of its allegations in respect of those corporations, it could have taken the appellant's conduct in respect of those corporations into account. It is expressly authorised to do so by the terms of s 206F(2)(b)(i). The AAT erred when it held that it was not permitted to consider Delitat and TMVP because neither of those corporations was mentioned in the show cause notice. The appellant has failed to make out Ground 4. Grounds 5, 6, 9 and 10 (see [60(e)], [60(f)] and [60(i)] above) 142 The primary judge did not decide that the AAT did not have a discretion to disregard Delitat and TMVP when reviewing the delegate's decision. Her Honour did not decide that the AAT was bound to have regard to the appellant's conduct in relation to those corporations when considering whether disqualification was justified. What her Honour actually decided was that it was open to the AAT to consider the appellant's conduct in relation to those two corporations. To the extent that the AAT decided that it was not open to it to consider those corporations it made an error of law (the reasons of the primary judge at [28] and [29]). 143 The primary judge made no findings about AAC. It seems to us, however, that it must be in the same position as Delitat and TMVP. 144 The question of the sufficiency of evidence before the AAT was not dealt with by her Honour. She was not called upon to deal with this point and, in any event, ought not to have done so had she been requested to deal with it. Grounds 5, 6, 9 and 10 all fail. Ground 7 (see [60(g)] above) 145 Her Honour made no error in rejecting the appellant's submission to the effect that, because the disqualification was about to expire at the time her Honour heard the appeal, there was no utility in granting any relief to ASIC. Disqualification from the management of corporations is an important matter which ASIC is obliged to record in a public register maintained by it. In the event that the appellant's disqualification was justified, it is in the public interest that it be appropriately recorded as contemplated by the Act. Not only did her Honour not commit appealable error in respect of this aspect but, in our view, made the correct decision. Ground 7 fails. Ground 8 (see [60(h)] above) 146 During the course of the hearing before us, ASIC indicated to us that it would be prepared to accept a variation of order 2 made by her Honour by the deletion of the words "… differently constituted …" where they appear in the second line of that order. Whilst the appellant's preferred position was that the matter should be remitted to the same Tribunal member as made the AAT decision, the appellant ultimately accepted as appropriate the concession made by ASIC. This state of affairs obviates the need for us to decide whether Ground 8 was made out. We will reflect ASIC's concession and the appellant's acceptance of it in the orders to be made by this Court. Ground 11 (see [60(j)] above) 147 This ground was not seriously pressed. The primary judge gave adequate reasons for the orders which she made. She was not obliged to give directions to the AAT "… on what conduct should be taken into account …" when the matter comes to be reheard on the remitter. The issues to be ventilated at that stage and the material to be relied upon by the parties in support of their respective positions will be a matter for the parties and the AAT. It would have been wholly inappropriate for the primary judge to do that which the appellant complains she did not do in Ground 11. Ground 11 also fails. Conclusion 148 In substance, the appeal has failed. It is true that the appellant has secured a variation of one of the orders made by her Honour, effectively by consent. Little time was taken in dealing with the appellant's ground of appeal which raised the issue in respect of which the appellant has had some success and a fair appreciation of the appeal and the conduct of the appeal lead us to conclude that ASIC has substantially succeeded in the appeal. For these reasons, we propose to order that the appellant pay ASIC's costs of and incidental to the appeal. We shall make orders accordingly. I certify that the preceding one hundred and forty-eight (148) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices North, Kenny and Foster. Associate: Dated: 10 August 2009 Counsel for the Appellant: Mr J G Levine Solicitor for the Appellant: Buxton & Associates Counsel for the Respondent: Mr MR Pearce SC and Mr R C Knowles Solicitor for the Respondent: Ms J Birch of Australian Securities and Investments Commission Date of Hearing: 3 March 2009 Date of Last Submission: 17 March 2009 Date of Judgment: 10 August 2009