FEDERAL COURT OF AUSTRALIA Donald v Australian Securities & Investment Commission [2000] FCA 1142 SECURITIES – creating a false or misleading appearance with respect to the price of securities – purchase by securities dealer at a higher price than available on the market – banning order by Australian Securities and Investment Commission – review by Administrative Appeals Tribunal – whether no evidence of contravention – whether mens rea a necessary element – whether proof of likely repetition needed – relevance of brokers' lack of authority from client Corporations Law ss 829(d), 998(1) North v Marra Developments Ltd (1981) 148 CLR 42 applied Fame Decorator Agencies Pty Ltd v Jeffries Industries Ltd (1998) 28 ACSR 58 at 62-63 applied Australian Securities Commission v Nomura International plc (1998) 29 ACSR 473 at 556 applied He Kaw Teh v The Queen (1985) 157 CLR 523 applied Alphacell Limited v Woodward [1972] AC 824 mentioned ANDREW WILLIAM DONALD v AUSTRALIAN SECURITIES AND INVESTMENT COMMISSION NO. V 44 of 2000 HEEREY J 10 OCTOBER 2000 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 44 of 2000 BETWEEN: ANDREW WILLIAM DONALD APPLICANT AND: AUSTRALIAN SECURITIES AND INVESTMENT COMMISSION RESPONDENT JUDGE: HEEREY J DATE OF ORDER: 10 OCTOBER 2000 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The appeal is allowed. 2. The decision of the Administrative Appeals Tribunal made on 21 January 2000 is set aside. 3. The application of the applicant for review of the decision of the delegate of the respondent made on 25 July 1999 is remitted to the Administrative Appeals Tribunal differently constituted for rehearing according to law. 4. The respondent pay the applicant's costs to be taxed, including reserved costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 44 of 2000 BETWEEN: ANDREW WILLIAM DONALD APPLICANT AND: AUSTRALIAN SECURITIES AND INVESTMENT COMMISSION RESPONDENT JUDGE: HEEREY J DATE: 10 OCTOBER 2000 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 Under s 829 of the Corporations Law (the Law) the respondent Australian Securities and Investment Commission (ASIC) by its delegate made an order banning the applicant from acting as a representative of a securities dealer or an adviser for a period of four years. On review the Administrative Appeals Tribunal upheld the banning order but varied the period to two years from 20 July 1999. 2 Section 829(d) of the Law confers power to make a banning order if a person contravenes a "securities law". By s 9 of the Law that term is defined to mean a provision of, inter alia, Ch 7 of the Law which includes s 998(1): "A person shall not create, or do anything that is intended or likely to create, a false or misleading appearance of active trading in any securities on a stock market or a false or misleading appearance with respect to the market for, or the price of, any securities." 3 The allegation against the applicant arises out of a transaction in which, acting as a representative of a securities dealer, he caused securities to be bought at a price higher than that available on the market. Evidence before the Tribunal 4 On 29 May 1998 the applicant was a representative of ABN-AMRO Equities Australia Ltd. One of ABN-AMRO's clients was National Australia Asset Management (NAAM). NAAM had a substantial holding in the listed company Burswood Limited. At 3.24 pm on 29 May (a Friday and the last trading day of the month) Mr John Thomson of NAAM telephoned the applicant. The conversation, recorded at the time, was as follows: "Thomson: It's that time of the month to get stitched up in Burswood again. Applicant: Right. Yeah. Thomson: Is there any around? Applicant: Let's have a look if there's any around. Thomson: Going through at eight. Applicant: Yeah, they're going through at eight at the moment. From a depth point of view, there's 58,000 at 89, 78 at 90, and not much up to 93 from there. Thomson: Hmm. Applicant: But there's sort of – what's that? A 100 – about 160,000 up to 93. Thomson: Oh well we can try and buy. A few hundred. Applicant: Okay, not a problem. I'll do my best there – try and get you some stock." "Going through at eight" was a reference to the stock trading at 88 cents. After discussing other stocks the conversation continued: "Applicant: All righty. I will do my best on Burswood." Thomson: All righty. Buy up to about a half. If you have to. If you can. Applicant: Okay. Thomson: (inaudible) ridiculous about it. Applicant: All right. No worries. Thomson: All right. Applicant: Okay. Thomson: Okay. Thanks mate. 5 The Tribunal found that the expression "getting stitched up in Burswood again" referred to an in-house understanding that NAAM had, over the months preceding 29 May 1998, paid a premium in order to maintain the balance of Burswood shares it had determined was appropriate for its portfolio and that Mr Thomson did not personally believe that the shares were worth buying. The reference to "about a half" meant about 500,000 shares. The applicant received no express instruction from Mr Thomson as to any upper limit to be paid. The Tribunal made a finding that the purchase was to be at market price and that the market price was at or around 88 cents or 89 cents. 6 At 3.33 pm on 29 May the applicant telephoned Mr Michael Casey, the ABN-AMRO operator in Sydney, so that the purchase order could be implemented through the Stock Exchange Automatic Trading System (SEATS). Relevantly for present purposes that conversation went as follows: "Applicant: Mate, it's the end of month and I want to give these Burswoods a bit of a nudge upwards, all right. I've given it to you because I want to make sure it's done today, right. The client (inaudible) – fuck we stuffed it up last time with the client. Casey: Did we? Applicant: Yeah so I've got up to half a million to buy, right. But we want to make sure we have the stock whole – we don't want to fire our shots too early. All right. Casey: So what's the code B – Applicant: BIR. Casey: BIR? Applicant: Yeah. Up to – up to half a million, you know, we don't – we don't have to buy half a million buy 200 if we don't need to but – Casey: Right. We just want to try and close them up at as high a price as possible but on the lowest amount possible. Applicant: Yeah. But you know, up to half a million if need be. Casey: No worries. Applicant: All right. Casey: Burswood. All right Andy. Applicant: Thanks, mate. Casey: I'll obviously look at this in the five past match out mate. Applicant: Yeah, beautiful. Casey: No worries. Applicant: Thanks mate. Casey: Bye, bye. Applicant: Bye." 7 The "five past match out" was the five minute period immediately following the close of trading at 4.00 pm. In that period the stock exchange conducts a single price auction. The resulting prices are the closing prices for the day unless no trades are executed. 8 At 3.35 pm on 29 May the applicant phoned Mr Thomson back. Relevantly the conversation was: "Thomson: Hello. Applicant: G'day, John. [Mention of other stocks.] We'll be leaving those Burswood until the match out. That's the only way really to do it these days. Thomson: Yeah. Applicant: So we'll do what we can in the match out process. Thomson: Oh, okay. Applicant: Okay. That's where the last sales counted anyway – that's what – what it's all about. Thomson: Yeah. I mean that's not particularly worrying me. Applicant: No. Well, my – my instructions have been to try and buy as little as you can at the best possible price. Thomson: Oh, no I am happy to buy them – happy to buy – when to – Applicant: Yeah. Thomson: So – Applicant: All right. Thomson: You know, they've come back a fair way in the last few days and those lines that went through the other day might give them – Applicant: Yeah. Thomson: – might have given them a kick in the bottom. Applicant: Well, we hope so, yeah. Thomson: Yeah. Righto mate. Applicant. Yeah. Thomson: (Inaudible) happy to pick it up. Applicant. Okay. Not a problem. Thomson: Okay. Applicant: Okay. Thomson: Bye. Applicant. Thanks." 9 At 4.03 Mr Casey telephoned the applicant: "Applicant: Andrew. Casey: Andy? Applicant: Yeah. Casey: I can close these things 95 bid. I just need to have a, you know, that will take on board 2 – about 250,000. Applicant: Sounds good to me mate. Casey: Okay, then. Applicant: Righteo. Casey: Bye. Applicant: Bye." 10 At 4.04.46 pm on 29 May ABN-AMRO placed a bid for 500,000 Burswood shares at 95 cents. By 4.15.01 pm on that day 183,913 shares had been purchased at 95 cents in fifteen transactions. The last trade before the ABN-AMRO bid was placed at 89 cents and the market range was in the 86-89 cents (bid) and 88-90 cents (ask). The balance of the bid was cancelled at 9.14 a.m. prior to opening of the market on the next trading day, 1 June 1998. The applicant's explanation 11 For the purposes of the hearing before the delegate the applicant provided a written statement which included the following: "2. At the time it was my intention to carry out Mr Thomson's order to purchase shares in Burswood Ltd on 29 May 1998 and to do this so that the shares would be purchased at a price higher than that at which they have previously been trading. 3. I did not at any time indicate to the SEATS operator Mr Michael Casey what was the level at which I wanted him to bid for the shares. Originally I did not anticipate that he would bid at 95 cents although I well understood that a bid was to be made during the match out period on that day. What I had intended was to have the shares bought at a somewhat higher price than they had been and certainly not to have the price pushed down. 4. As I indicated at my examination conducted pursuant to section 19 of the ASC Law, I considered that previous trading in Burswood shares had been unsatisfactory for some period prior to 29 May 1998. 5. Because I considered that the price of the shares was unreasonably low compared with their true value I intended to have the shares move to a more reasonable level. 6. Taking into account the fact that the trading was occurring in an open market as well as my view that it was legitimate for the client to endeavour to have the price of the shares moved to a reasonable level upwards in light of their true value, I did not and still do not, consider that to make a bid higher than the previous mark level was in any way improper." The Tribunal's decision 12 In discussing the evidence the Tribunal said: "12. For the purpose of fulfilling the order placed by Mr Thomson, the applicant's instructions were to buy up to 500,000 shares at market price. The applicant told the Tribunal that he thought at the time that the price of the Burswood shares was low. He concluded that Mr Thomson wanted the shares bought at a 'fairer value' than that which was reflected in the trading price. The Tribunal is satisfied that by 'fairer' the applicant clearly meant 'higher' as reflected in his instruction to Mr Casey to give them a 'nudge upwards'. The conclusion reached by the applicant was not, however, in accordance with any instruction given by Mr Thomson and curiously it was not a matter that the applicant sought to clarify with Mr Thomson during the second telephone conversation. There was an opportunity to do so in circumstances after Mr Thomson had expressly rejected the approach suggested by the applicant to purchase as little quantity as possible at the highest possible price. The Tribunal is satisfied that the applicant persisted in implementing the strategy for the purchase of Burswood shares at a price higher than those shares could have been obtained on the open market and that that strategy was contrary to the express instructions given by Mr Thomson." 13 After referring to passages from the judgments in North v Marra Developments Ltd (1981) 148 CLR 42 and Fame Decorator Agencies Pty Ltd v Jeffries Industries Ltd (1998) 28 ACSR 58 at 62-63 the Tribunal said: "14. In the view of the Tribunal the applicant's actions were likely to have created a false or misleading appearance with respect to the price of Burswood shares in that at 95c per share the price of the shares is set at a 'false price' as that term was described by Mason J in North's case. Accordingly, the Tribunal is satisfied that a breach of s.998(1) of the Corporations Law has occurred. For such a finding, it is not necessary that the Tribunal need be satisfied that anyone was, in fact, misled as a result of the applicant's actions. It is sufficient that there be a misleading 'appearance' and that is so in the instant case." 14 The Tribunal then said that in the light of its finding that there had been a breach of s 998(1) it was not necessary to consider whether or not there had been a breach of s 829(f)(i) or (g)(i) which relate to persons performing duties efficiently, honestly and fairly. The Tribunal then went on to record the evidence as to the applicant's career with BZW Australia Ltd and subsequently ABN-AMRO. The Tribunal noted evidence from eleven current and former supervisors, associates and clients who spoke highly of the applicant's personal qualities and expressed confidence in his dedication and integrity. The Tribunal was satisfied that those persons presented a "uniformly high opinion" as to the applicant's integrity and ability in the securities industry over a number of years. The Tribunal noted however that it was clear that both the employer and the Australian Stock Exchange took a serious view of the applicant's actions. The Tribunal then said: "18. It is submitted on behalf of the applicant that, if a ban were to be imposed, it would be tantamount to punishing him for a single lapse and that this is not in accordance with the purpose of the issuance of banning orders, namely the protection of the public. The respondent led some evidence to suggest that there had been an earlier similar occurrence with the purchase of shares in Burswood in which the applicant was involved. The Tribunal has not found it necessary to determine this issue. 19. The public need to be assured that those dealing in securities are not likely to manipulate the price of securities in the market in the sense discussed by Mason J in North's case. A distinction can be drawn between various types of conduct. A serious breach will take with it a correspondingly greater need for the public to be protected. Embarking on a course of conduct, contrary to a client's instructions, which results in the manipulation of the market which has or is likely to create a false or misleading appearance with respect to the price of securities is, in the Tribunal's view, serious conduct. In this case the seriousness is compounded in circumstances where the applicant should have corrected the strategy that he and Mr Casey determined after the applicant had, again, spoken to Mr Thomson and before Mr Casey commenced implementing the earlier agreed strategy. In those circumstances the public interest is appropriately protected by the imposition of a banning order. However, bearing in mind the sanctions imposed on the applicant by the employer, which have ultimately led to him losing his job, his age, his previous good record and the high regard which he is held by his colleagues, the Tribunal believes that that protection can be satisfied by the imposition of a banning order of two rather than four years." Issues on the appeal 15 On the appeal to this Court under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) the following issues were raised: (i) Whether there was no evidence on which the Tribunal could have reached the conclusion it did; (ii) Whether contravention of s 998(1) requires mens rea; none had been established, or at any rate the Tribunal did not deal with this issue; (iii) Whether a case had been made out for protection of the public by way of a banning order in view of the fact that there was no question of repetitive or continuous conduct; (iv) Whether the applicant's lack of authoirty was relevant to the length of the banning order. 16 All these arguments raise questions as to the proper construction of s 998(1) and the nature of the applicant's conduct in the light of the findings of the Tribunal. Section 998(1) 17 For the purpose of analysis it is helpful to break down s 998(1) into the components identified by Sackville J in Australian Securities Commission v Nomura International plc (1998) 29 ACSR 473 at 556: "A person shall not [i] create; [ii] do anything that is intended to create; or [iii] do anything that is likely to create a false or misleading appearance [iv] of active trading in any securities on a stock market; [v] with respect to the market for any securities; or [vi] with respect to the price of any securities." 18 In the present case it was common ground that components [iii] and [vi] were relevant. I turn now to the leading authorities on this section and its predecessors in the Securities Industries Acts and Codes. 19 In North v Marra Developments Ltd (1981) 148 CLR 42 a broker and the directors of a company agreed to a scheme whereby transactions on the Sydney Stock Exchange would "establish a market" for the company's shares at about $16.50 per share so as to facilitate a takeover proposal in which the company's shares were to be exchanged for those of the target company. Immediately prior to the takeover announcement the broker purchased shares on behalf of itself and the company's directors at $16.50 and $16.00. These prices were substantially higher than the last traded price. The broker sued the company for fees in respect of its advice. The company successfully resisted this claim on the basis that the agreement was illegal as being in contravention of s 70 of the Securities Industry Act 1970 (NSW). That provision was relevantly the same as s 998 except that it prohibited persons doing anything "calculated to create" a false or misleading appearance etc. The broker argued that there had been no misleading conduct because the market is not concerned with the identity or motivation of the purchasers, so long as the purchases are genuine, in the sense of satisfying a legitimate market activity of the purchaser. Mason J, with whom the other members of the Court agreed, said (at 59): "It seems to me that the object of the section is to protect the market for securities against activities which will result in artificial or managed manipulation. The section seeks to ensure that the market reflects the forces of genuine supply and demand. By 'genuine supply and demand' I exclude buyers and sellers whose transactions are undertaken for the sole or primary purpose of setting or maintaining the market price. It is in the interests of the community that the market for securities should be real and genuine, free from manipulation. The section is a legislative measure designed to ensure such a market and it should be interpreted accordingly. … When purchases have been made of shares in a company at or about a particular level for the purpose of setting and maintaining a market price for those shares there is a breach of the statutory prohibition. At the very least purchases have then been made which are calculated to create 'a false or misleading appearance with respect to the market for, or the price of' the shares. In reality the purchases are calculated to create a false market or false price. The false or misleading appearance is that the market, in the absence of any disclosure that a market support operation is on foot, appears to be real or genuine, there being no overt sign of market support or manipulation." 20 In Fame Decorator Agencies Pty Ltd v Jeffries Industries Ltd & Ors (1998) 28 ACSR 58 the appellant Fame was a holder of preference shares and was entitled to convert them into ordinary shares on a particular date. The applicable formula had the effect that the lower the average price of ordinary shares during the 20 days before the conversion date, the greater the number of ordinary shares to be allotted. Thus Fame had an objective which was the reverse of the alleged contraveners in North and in the present case; for Fame, the lower the market price the better. The shares were thinly traded. As at 28 April 1995, the day that triggered the conversion provisions, there were unfulfilled offers to buy on the SEATS system ranging from 35 cents on 31 March back to 13 cents on 9 March. On the 28th Fame accepted all the outstanding offers to buy at prices of 35, 30, 28, 26, 25 and 14 cents and some of the shares offered at 13 cents. The Court was concerned with the sales of 20,000 shares at 14 cents and 74,000 at 13 cents and whether they involved contraventions of, inter alia, s 998. A finding of fact of the trial judge was that Fame deliberately sold at least the 94,000 shares on 28 April at a price well below the previous sale prices in order to create an artificially low figure for the purpose of the conversion calculation. All of those transactions were within three minutes of the close of trading on 28 April. Gleeson CJ, with whom Powell JA agreed, held that there had been a contravention of s 998. After citing the passage from North already referred to Gleeson CJ said (at 62): "This approach accords with United States authority on similar legislation, where a price reflecting basic forces of supply and demand working in an open, efficient and well-informed market is contrasted with an artificial price resulting from manipulative conduct: see eg Cargill Inc v Hardin 452 F 2d 1154 (1971); Freeman v Laventhol & Horwath 915 F 2d 193 (1990). Section 998 aims to preserve the integrity of the share market. Markets, in reflecting the interaction of forces of supply and demand, may suffer from a variety of imperfections, including mismatches of information, without such imperfections destroying their integrity. However, the conduct of a seller of thinly traded shares, calculated to effect sales at the lowest, rather than the highest, obtainable price, and timed so as to deflect the possibility of some purchasers bidding up the price,had both the purpose and effect of creating, temporarily, an artificial market and price." 21 Applying those principles I have no doubt that it was open to the Tribunal to find that what the applicant did was likely to create a false or misleading appearance with respect to the price of Burswood shares. I accept, as senior counsel for the applicant submitted, that share trading calls for skill and judgment. Timing can be critical. For example, a buyer might have to pay a premium over the market price to acquire a substantial parcel of a thinly traded stock. But the problem with this argument is that it is not what the applicant says happened. In his own carefully considered statement, made in circumstances where he was subject to a Commission enquiry, he said that the price had been "unsatisfactory" and "unreasonably low" compared with their "true value" and that he intended to have the shares "moved to a more reasonable level". 22 This was plainly an artificial or managed manipulation of the price. In his own words, the applicant wanted to give the Burswood shares "a bit of a nudge upwards" so that the price appeared higher than it would if the market had operated in accordance with the normal expectations of participants, with buyers buying for the lowest price obtainable and sellers selling for the highest. Mens rea 23 A contravention of s 998 not only gives rise to a banning order under s 829(d), it is a criminal offence: s 1311 and sch 3. Whether contravention requires mens rea is a question of statutory construction. The leading authority on the principles to be applied is the decision of the High Court in He Kaw Teh v The Queen (1985) 157 CLR 523. Although mens rea means, literally, a guilty mind, it may take the form of different states of mind or indeed different states of mind in respect of different elements of the same offence (at 568 per Brennan J). Amongst other things the subject matter or character of the legislation must be looked at. As Dawson J said (at 595): "Conduct prohibited by legislation which is of a regulatory nature is sometimes said not to be criminal in any real sense, the prohibition being imposed in the public interest rather than as a condemnation of individual behaviour. On the other hand, if a prohibition is directed at a grave social evil, the absolute nature of the offence may more readily be seen, particularly if proof of intent would be difficult and would represent a real impediment to the successful prosecution of offenders." 24 In Nomura Sackville J was also concerned with the third limb of s 998(1) as identified above. His Honour found the contravener in fact knew that its conduct was likely to create a false and misleading appearance of active trading and as to the market for the price of securities. However his Honour went on to note his view that s 998(1) does not require proof of knowledge, at the time of the allegedly contravening conduct, that a false and misleading appearance was likely to be created by that conduct. After referring to He Kaw Teh his Honour said (at 571): "S 998(1) embodies alternatives. The subsection specifically proscribes the conduct intended to create a false or misleading appearance of active trading or with respect to the price of any security. The introduction of the expression 'likely to create' in s 998(1) of the Corporations Law was clearly designed to cover conduct other than conduct intended to create a misleading appearance. By the words 'likely to create', the drafter sought to prohibit conduct which, objectively assessed, was likely to create a false or misleading appearance and thus be likely to detract from the operation of the ordinary forces of supply and demand. The severity of the consequences attaching to a breach of s 998(1) are sufficiently recognised by construing 'likely' to mean more probable than not. This does not mean, of course, that the third limb of s 998(1) involves no mental element. Doubtless, it is necessary to show that the alleged contravener intended to carry out the conduct relied on as creating the likelihood of a misleading or deceptive appearance. But I do not think it is necessary to prove that the allege contravener was aware that the conduct would be likely to have a false or misleading appearance of the kind specified in s 998(1). However, as I have already indicated, it is not necessary to express a final view on this issue." 25 I respectfully agree with his Honour's obiter view. It is also supported by an examination of other provisions of Div 2 of Pt 7.11 where the statute specifically provides for carefully differentiated states of minds, and in some cases no state of mind at all. Section 995(2) prohibits misleading or deceptive conduct in relation to dealings in securities. No mental element is specified. The section corresponds to s 52 of the Trade Practices Act 1974 (Cth) where it has long been established that proof of intention to engage in misleading or deceptive conduct is not required to establish a contravention. By contrast, s 997 prohibits carrying out two or more transactions in securities which are likely to have the effect of increasing the price of those securities with a particular defined intent; namely an "intent to induce other persons to buy or subscribe for securities of the body corporate". A specific intention is also prescribed in s 998 itself. Subsections (5) and (6) are concerned with that part of s 998(1) which prohibits creating etc a false or misleading appearance of active trading in any securities. Subsection (5) stipulates certain forms of conduct which are deemed to create such an appearance, eg a transaction for the sale of securities which does not involve any change in beneficial ownership: s 998(5)(a). However if any of the deeming provisions are relied on s 998(6) provides a defence if it is proved that the purposes for which the person did the act did not include the purpose of creating a false or misleading appearance of active trading. Section 999 prohibits the making of a statement that is false in a material particular or materially misleading and is likely to induce other persons to subscribe for securities if the person making the statement "does not care whether the statement or information is true or false" or "knows or ought reasonably to have known" that statement or information is false in a material particular or materially misleading. Section 1001A(2) prohibits a "disclosing entity" contravening the provisions of the listing rules of a securities exchange by "intentionally, recklessly or negligently" failing to notify the securities exchange of certain information. 26 An example of different states of mind being required for different elements of the same offence is Alphacell Limited v Woodward [1972] AC 824 where a statute made it an offence if a person "causes or knowingly permits to enter a stream any poisonous, noxious or polluting matter". The House of Lords held there was no reason to read "knowingly" into the provision before "causes" and the concept of mens rea was inapplicable. 27 I conclude therefore that the Tribunal was not required to find the applicant knew or had in mind at the time of the contravening conduct that a false and misleading appearance were likely to be created by that conduct. In any event, his statement already referred to indicates that he clearly intended a price to be set which would be different from that resulting from the operation of genuine supply and demand. No repetitive conduct 28 Senior counsel for the applicant argued that the primary object of s 829 is the protection of the public. The Tribunal did not make any finding as to the propensity of the applicant to repeat the contravention. Nor had there been a repetitive or continuous non-compliance; it was but an isolated incident. Accordingly the Tribunal, in imposing the banning order, must have treated it as a matter for punishment. Further, the Tribunal failed to consider "the real quality" of the offence. It failed to consider whether it was merely "an indiscretion" resulting from a need to fulfil a client's perceived demand. It should only be in an "extreme case" that a banning order should be made. There must be a finding that the contravener would repeat the conduct unless a banning order was made. 29 The answer to these contentions is that s 829(d) gives express power to make a banning order if a person "contravenes a securities law". Obviously Parliament contemplated that a single contravention could be sufficient to trigger the power to make such an order. It is not permissible to read into the statute some further requirement such as the necessity for threatened continuance of the conduct. Lack of Authority 30 It is apparent from par 19 of the Tribunal's reasons that it treated as a factor adverse to the applicant its finding that he had acted "contrary to a client's instructions". Although for other reasons the Tribunal reduced the period of the banning order from four years to two it seems likely that the finding of lack of authority operated against any further reduction. But was this a relevant matter for the purposes of s 998 and the imposition of a banning order for a contravention? In my opinion not. Transactions on the stock exchange by dealers such as the applicant are legally binding, whether or not within the authority conferred by the client principal. For a potential buyer or seller of securities assessing the posted price for a sale, the possibility that it might have been made without the authority of a dealer principal is simply irrelevant. Sales might also have been made as a result of incompetent advice, or unsubstantiated rumour, or misunderstanding. All these may be considered, along with lack of authority, as examples of dealings by imperfectly informed participants in a market. But they do not, as Gleeson CJ points out in Fame, destroy the integrity of the market. 31 Conversely, if a dealer creates a false or misleading appearance with respect to the price of securities but does so with the express authority of the client that would not be a matter going to the mitigation of the period of a banning order. All it would show was that the client had also contravened s 998(1). Orders 32 The appeal will be allowed and the decision of the Tribunal made on 21 January 2000 be set aside. There will be an order that the application of the applicant for review of the decision of the delegate of the respondent made on 25 July 1999 be remitted to the Tribunal differently constituted for rehearing according to law. These well be an order that the respondent pay the applicant's costs, including reserved costs. I certify that the preceding thirty two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. Associate: Dated: 10 October 2000 Counsel for the Applicant: N Moshinsky QC and P Murley Solicitor for the Applicant: R Murley Counsel for the Respondent: M Steward and D Williams Solicitor for the Respondent: M Steward Date of Hearing: 10 August, 20 September 2000 Date of Judgment: 10 October 2000