FEDERAL COURT OF AUSTRALIA Oreb v Australian Securities and Investments Commission [2016] FCA 321 File number: NSD 1051 of 2015 Judge: MARKOVIC J Date of judgment: 1 April 2016 Catchwords: CORPORATIONS – application under s 6 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) for review of the Australian Securities and Investments Commission's decision to issue notices requiring officers to show cause why they should not be disqualified pursuant to s 206F of the Corporations Act 2001 (Cth) – whether statutory preconditions to the issuing of the "show cause" notices were satisfied – whether the statutory preconditions at s 206F(1)(a)(ii) require the winding up of a company be complete and a liquidator's report under s 533(1) be lodged while or within 12 months after the person receiving the notice ceased to be an officer in respect of two corporations or more PRACTICE AND PROCEDURE – non-publication order – whether non-publication order should be made in circumstances of potential commercial disadvantage to the applicants Legislation: Administrative Decisions (Judicial Review) Act 1977 (Cth) ss 6(1), 16 Companies (New South Wales) Code s 562A Corporations Act 1981 (Cth) s 562A Corporations Act 1989 (Cth) s 600 Corporations Act 2001 (Cth) ss 206C, 206D, 206E, 206F, 206F(1)(a)(ii), 533, 1337 Federal Court of Australia Act 1976 (Cth) ss 21, 22, 23, 37AE, 37AF, 37AG, 37AJ Cases cited: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 Arnold World Trading Pty Ltd v ACN 133 427 335 (2010) 80 ACSR 670 Australian Competition and Consumer Commission v Air New Zealand Ltd (No 3) [2012] FCA 1430 Australian Competition and Consumer Commission v Cascade Coal Pty Ltd (No 1) [2015] FCA 607 Australian Competition and Consumer Commission v Origin Energy Electricity Limited [2015] FCA 278 Australian Securities and Investments Commission v Maxwell (2006) 59 ACSR 373 Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 Culley v Australian Securities and Investments Commission (2010) 183 FCR 279 Director of Public Prosecutions for Nauru v Fowler (1984) 154 CLR 627 Hogan v Australian Crime Commission (2010) 240 CLR 651 Minister for Immigration and Citizenship v SZJGV (2009) 238 CLR 642 Murdaca v Australian Securities and Investments Commission (2009) 178 FCR 119 Nicholas v Commissioner of Corporate Affairs [1988] VR 289 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 Re London & Caledonian Marine Insurance Co (1879) 11 Ch D 140 Russian and English Bank v Bearing Brothers Co Ltd [1936] AC 405 Thiess v Collector of Customs (2014) 250 CLR 664 Visnic v Australian Securities and Investments Commission (2007) 231 CLR 381 Date of hearing: 1 December 2015 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: Catchwords Number of paragraphs: 95 Counsel for the Applicants: Ms R Seiden SC with Mr H El-Hage Solicitor for the Applicants: William James Counsel for the Respondent: Dr S P Donaghue QC with Mr S B Rosewarne Solicitor for the Respondent: Australian Securities and Investments Commission Table of Corrections 22 April 2016 In Order 5, the word "interlocutory" has been replaced with "originating" 22 April 2016 In the first sentence of paragraph 95, the word "interlocutory" has been replaced with "originating" Table of Amendments 29 November 2016 By Order 2 of the orders made by the Full Court (Rares, Davies and Gleeson JJ) on 25 November 2016 in Proceeding No NSD574/2016 Orders 1, 2 and 3 were set aside. The pseudonyms used to identify the applicants and their related companies have been replaced with their actual names where appearing in the judgment. ORDERS NSD 1051 of 2015 BETWEEN: MR PETER CHRISTOPHER OREB First Applicant MS INGRID SUSAN WEBBER Second Applicant AND: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Respondent JUDGE: MARKOVIC J DATE OF ORDER: 1 APRIL 2016 THE COURT ORDERS THAT: 1. Information tending to reveal the identity of the applicants including the companies with which they were and are associated not be disclosed by publication or otherwise. 2. The affidavits: (a) affirmed by Jonathan Edward O'Loughlin on 2 September 2015; (b) sworn by the second applicant on 23 September 2015; and (c) affirmed by Jennifer Parbery on 23 September 2015; not be disclosed or made available for inspection to any person other than the respondent or its legal representatives. 3. Orders 1 and 2 shall operate until 30 September 2016. 4. Orders 1 and 2 are made on the ground that non-disclosure of the applicants' identity, including the companies with which they were and are associated, and of the evidence is necessary to prevent prejudice to the proper administration of justice. 5. The amended originating application be otherwise dismissed. 6. The applicants pay the respondent's costs of the proceedings. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT MARKOVIC J: INTRODUCTION 1 These proceedings are concerned with the interpretation of s 206F of the Corporations Act 2001 (Cth) (the Act) which empowers the respondent (ASIC) to disqualify a person from managing a corporation for up to 5 years in certain circumstances. In order to exercise its power under s 206F, ASIC must give a notice in the prescribed form to the relevant person requiring that person to demonstrate why he or she should not be disqualified and giving the person an opportunity to be heard. The first and second applicants have been served with such notices. 2 There are preconditions to the giving of the notice. They are that within seven years immediately before ASIC gives the notice the person must have been an officer of two or more corporations and while the person was an officer, or within 12 months after the person ceased to be an officer of those corporations, each of those 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. 3 The first and second applicants were formerly directors of the following corporations which are now in liquidation: Consulting 087819538 Pty Ltd (Consulting); Contracting 089833134 Pty Ltd (Contracting); Australasia 125253149 Pty Ltd (Australasia); CXC Remuneration Services Pty Ltd (Remuneration) (collectively referred to as the Companies). 4 On 2 and 7 August 2015, ASIC served a Notice to demonstrate why disqualification should not occur dated 21 July 2015 on each of the first and second applicants (the Notices). The Notices, which require the applicants to show cause pursuant to s 206F(1)(b)(i) of the Act why they should not be disqualified from managing corporations for a period of up to five years, relate to the applicants' roles as officers of the Companies in circumstances where a liquidator has reported under s 533(1) of the Act that each of the Companies will be unable to pay its unsecured creditors more than 50¢ in the dollar. 5 Two issues arise for determination. They relate to interpretation of the preconditions to the giving of the notice set out in s 206F(1)(a)(ii). The first issue centres around the meaning of "was wound up" and the second issue relates to whether there is a temporal requirement to the lodgement by the liquidator of the report pursuant to s 533(1) of the Act. 6 By their amended originating application, the applicants apply for review of certain conduct and proposed conduct engaged in and proposed to be engaged in for the purposes of making a decision under s 206F of the Act to disqualify the applicants from managing companies. The applicants make their application pursuant to s 1337 of the Act and s 6(1) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the ADJR Act). 7 The conduct and proposed conduct the subject of the relief sought is the issuing of the Notices and the conducting of a hearing in respect of each applicant to give them an opportunity to demonstrate why they should not be disqualified from managing corporations. 8 The applicants seek relief under s 16 of the ADJR Act and/or ss 21 to 23 of the Federal Court of Australia Act 1976 (Cth) (the FCA Act) including: (1) a declaration that the statutory preconditions to the issuing of the Notices at s 206F(1)(a)(ii) of the Act have not been met; (2) an order setting aside the Notices and restraining ASIC from conducting the show cause hearings; and (3) an order restraining ASIC from disqualifying the applicants from managing corporations pursuant to s 206F of the Act on the basis of any of the matters set out in the Notices. 9 The applicants also seek an order pursuant to s 37AF of the FCA Act restricting the publication or disclosure of information which reveals the identity of the applicants in connection with these proceedings. Legislative Framework 10 Section 206F of the Act is in Pt 2D.6 of the Act which is titled "Disqualification from managing corporations". It sets out ASIC's power of disqualification and is relevantly in the following terms: (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. … (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. … 11 Section 533(1) of the Act, which is referred to in s 206F of the Act, provides: (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. Legislative History of s 206F 12 Section 206F was part of the Act as originally enacted. It was amended by the Corporations Amendment (Aboriginal and Torres Strait Islander Corporation) Act 2006 (Cth) to its current form set out at [10] above. 13 Section 206F was inserted into the Corporations Act 1989 (Cth) (Corporations Law), which was in force prior to the Act, by the Corporate Law Economic Reform Program Act 1999 (Cth) (the CLERP Act). It replaced s 600 of the Corporations Law which was repealed by the CLERP Act. Before its repeal s 600 was in the following terms: 600 Commission may order persons not to manage corporations (1) For the purposes of this section: (b) a relevant body is a section 600 body at a particular time if, and only if, within the period of 7 years ending at that time, a liquidator of the body has, under: (i) subsection 533(1); or (ii) a previous law corresponding to subsection 533(1); reported, or lodged a report with respect to, a matter relating to the ability of the body to pay its unsecured creditors; and (c) a person shall be taken to be a relevant person in relation to a relevant body that is or was a section 600 body if, and only if, the person was a director of the body at any time during the period of 12 months ending on the day of the beginning of the winding up of the body. (2) The Commission may give to a person who is a relevant person in relation to 2 or more relevant bodies that are, at the time of service, section 600 bodies a notice in writing requiring the person to show cause why the Commission should not serve on the person a notice under subsection (3). (3) Where the Commission: (a) has served on a person a notice under subsection (2); and (b) has given the person an opportunity of being heard in relation to the matter; the Commission shall, unless it is satisfied that it is not appropriate to do so, serve on the person a notice in writing prohibiting the person, for such period not exceeding 5 years as is specified in the notice, from managing a corporation. (4) Where: (a) the Commission has served a notice under subsection (2) on a person who is a relevant person in relation to 2 or more relevant bodies that were, at the time of service, section 600 bodies; and (b) those 2 bodies have at any time been related to each other, or any of those bodies has at any time been related to any other of those bodies, as the case may be; the Commission shall have regard to that fact in considering whether or not it is appropriate to serve on the person a notice under subsection (3). (5) A person who is subject to a section 600 notice (whether served before or after the commencement of this section) must not, without the leave of the Court, manage a corporation. (6) Section 91A defines what, for the purposes of this section, constitutes managing a corporation. 14 Section 600 was amended after the enactment of the Corporations Law to the form set out in the preceding paragraph. The section was originally included in the Corporations Law when it was enacted in the following terms: 600 Commission may order persons not to manage corporations (1) For the purposes of this section: (a) a reference to a company is a reference to: (i) a corporation; or (ii) a Part 5.7 body; and includes a reference to such a corporation or body that has been dissolved; (b) a company shall be taken to be a relevant company at a particular time if, and only if, within the period of 7 years ending at that time, a liquidator of the company has, under: (i) subsection 533(1); or (ii) a law corresponding to subsection 533(1); reported, or lodged a report with respect to, a matter relating to the ability of the company to pay its unsecured creditors; and (c) a person shall be taken to be a relevant person in relation to a company that is or was a relevant company if, and only if, the person was a director of the company at any time during the period of 12 months ending on the day of the beginning of the winding up of the company. (2) The Commission may give to a person who is a relevant person in relation to 2 or more companies that are, at the time of service, relevant companies a notice in writing requiring the person to show cause why the Commission should not serve on the person a notice under subsection (3). (3) Where the Commission: (a) has served on a person a notice under subsection (2); and (b) has given the person an opportunity of being heard in relation to the matter; the Commission shall, unless it is satisfied that it is not appropriate to do so, serve on the person a notice in writing prohibiting the person, for such period not exceeding 5 years as is specified in the notice, from managing a corporation. (4) Where: (a) the Commission has served a notice under subsection (2) on a person who is a relevant person in relation to 2 or more companies that were, at the time of service, relevant companies; and (b) those 2 companies have at any time been related to each other, or any of those companies has at any time been related to any other of those companies, as the case may be; the Commission shall have regard to that fact in considering whether or not it is appropriate to serve on the person a notice under subsection (3). (5) A person who is the subject of a section 600 notice (whether served before or after the commencement of this section) shall not, without the leave of the Court, be a director or promoter of, or be in any way (whether directly or indirectly) concerned in or take part in the management of, a corporation. 15 The forerunner to s 600 of the Corporations Law was s 562A of the Companies (New South Wales) Code which was in the following terms: 562A Commission may order persons not to manage corporations (1) For the purposes of this section: (a) a reference to a company is a reference to: (i) a corporation; or (ii) a body of the kind referred to in paragraph 469(1)(b); and includes a reference to such a corporation or body that has been dissolved; (b) a company shall be taken to be a relevant company at a particular time if, and only if, within the period of 7 years ending at that time, a liquidator of the company has, under: (i) subsection 418(1); (ii) a provision of a previous law of the Territory with which subsection 418(1) corresponds; (iii) a provision of a law of a participating State or participating Territory that corresponds with subsection 418(1); or (iv) a provision of a previous law of a participating State or participating Territory with which a provision of the kind referred to in subparagraph (iii) corresponds; reported, or lodged a report with respect to, a matter relating to the ability of the company to pay its unsecured creditors; and (c) a person shall be taken to be a relevant person in relation to a company that is or was a relevant company if, and only if, the person was a director of the company at any time during the period of 12 months ending on the date of the commencement of the winding up of the company. (2) The Commission may serve on a person who is a relevant person in relation to 2 or more companies that are, at the time of service, relevant companies a notice in writing requiring the person to show cause why the Commission should not serve on the person a notice under subsection (3). (3) Where the Commission: (a) has served on a person a notice under subsection (2); and (b) has given the person an opportunity of being heard in relation to the matter; the Commission shall, unless it is satisfied that it is not appropriate to do so, serve on the person a notice in writing prohibiting the person, for such period not exceeding 5 years as is specified in the notice, from being a director or promoter of, or from being in any way (whether directly or indirectly) concerned in or taking part in the management of, a corporation without the leave of the Court. (4) Where: (a) the Commission has served a notice under subsection (2) on a person who is a relevant person in relation to 2 or more companies that were, at the time of service, relevant companies; and (b) those 2 companies have at any time been related to each other, or any of those companies has at any time been related to any other of those companies, as the case may be; the Commission shall have regard to that fact in considering whether or not it is appropriate to serve on the person a notice under subsection (3). (5) A person shall not contravene a notice served under subsection (3) that is applicable to the person. Penalty: $5,000 or imprisonment for one year, or both. (6) A person shall not contravene a notice served under a provision of a law of a participating State or participating Territory that corresponds with subsection (3), being a notice that is applicable to the person. Penalty: $5,000 or imprisonment for one year, or both. recent decisions concerning s 206F 16 A Full Court of this Court considered the operation of s 206F in Murdaca v Australian Securities and Investment Commission (2009) 178 FCR 119 (Murdaca). 17 In that matter ASIC had issued a notice to Mr Murdaca pursuant to s 206F(1)(b) of the Act requiring him to demonstrate why he should not be disqualified from managing corporations. After conducting a hearing and receiving written submissions, ASIC disqualified Mr Murdaca from managing corporations for two years. Mr Murdaca applied to the Administrative Appeals Tribunal (AAT) for review of the disqualification. The AAT set aside the disqualification. The matter then came before the primary judge on appeal from the AAT by ASIC. The primary judge allowed the appeal and remitted the matter to the AAT differently constituted for rehearing. Mr Murdaca appealed seeking to overturn the primary judge's orders. 18 The matter involved three corporations of which the appellant, Mr Murdaca, had been a director. In relation to two of those corporations, Amalgamated Motor Industries Pty Ltd (AMI) and Market Place Properties Pty Ltd (MPP), the appellant resigned as a director approximately one month prior to the appointment of an administrator. Both corporations were subsequently placed into liquidation by way of a creditor's voluntary winding up on 4 March 2003. The third corporation, Australian Automotive Motor Inspection Centre Pty Ltd (AAMIC), was wound up by order of the Supreme Court of Victoria while the appellant was still a director. The liquidator of AMI and MPP lodged reports pursuant to s 533(1) of the Act dated 8 March 2005 and 12 October 2004 respectively and the liquidator of AAMIC lodged a report pursuant to s 533(1) of the Act dated 16 May 2005. 19 The grounds of appeal before the Full Court are set out at [60] of its decision. Central to the appeal was the issue of whether, before issuing a notice under s 206F(1)(b), ASIC had to satisfy itself that each of the prerequisites set out in s 206F(1)(a) actually existed and, in particular, whether it had to satisfy itself that the liquidator's report made and lodged under s 533(1) of the Act was "correct". Relevantly, the issues now before me were not before the Full Court. At [86] and following, the Full Court considered the meaning of s 206F including that: [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). … … [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 (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 (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). … [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 subparagraph (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…. (emphasis in original) 20 At [101] of its judgment the Full Court sets out its reasons for its conclusions on its interpretation of s 206F in light of the issues raised as follows: [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]) and the maintenance of professional management standards in the public interest (Visnic v Australian Securities and Investments Commission (2007) 231 CLR 381 at [11] and [26]). (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 (2) and subject to respecting and applying the principles referred to in subparagraph (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 subpara (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 subparas (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. 21 At [102] of its decision, the Full Court noted that its interpretation of s 206F of the Act was consistent with well-established authorities which have interpreted similar provisions in prior legislation, referring to s 600 of the Corporations Law and s 562A of the Companies (New South Wales) Code, and authorities which have considered those sections. 22 In Culley v Australian Securities and Investments Commission (2010) 183 FCR 279 (Culley) a Full Court of this Court considered whether s 206F required ASIC to exercise its power of disqualification within any shorter period than the seven years immediately before the giving of a notice under s 206F(1)(b). It found it did not. Once again the issues before me were not before the Full Court. However, at [31] to [33] of its judgment the Full Court said the following about the purpose of s 206F: 31. ... It is clear enough from its terms and its location in Pt 2D.6 of the Corporations Act that the legislature, in framing s 206F, has been concerned to strike a balance between two competing interests. 32. The section reflects on the one hand, the interest of the public in the existence of a facility for removing from the pool of managers those who are, or have been, officers of two or more corporations which have been wound up for inability to pay their debts. As a result, the public and the market are afforded a measure of protection from those who, as was said in Murdaca (supra), at 143: "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])." In the same passage, their Honours discerned in s 206F a concern with "the maintenance of professional management standards in the public interest: Visnic v Australian Securities and Investments Commission (2007) 231 CLR 381 at [11] and [26]." 33. On the other hand, the legislature has recognised the need for corporate officers not to be exposed to disqualification as a result of corporate failures separated by an inordinate length of time. In our view, the concern, which we have imputed to Parliament, to strike a balance between these competing interests has been accommodated by fixing in s 206F(1)(a) a "window" of seven years within which two or more corporate collapses must occur in order for an officer involved in them to be at risk of disqualification from managing any other corporation. FACTS 23 The first and second applicants are respectively the chief executive officer and a director of the Australian and New Zealand operations of a business which is a global association of companies supplying contingent workforce solutions. The applicants were formerly directors of each of the Companies and resigned as directors on 10 May 2012. Mr David Thomas remains as a director of each of the Companies. 24 Voluntary administrators were appointed to the Companies on 26 February 2013, approximately nine and a half months after the applicants resigned as directors. The Companies were put into liquidation on 11 April 2013. The liquidators of the Companies have provided a report to ASIC for each of the Companies pursuant to s 533(1) of the Act. 25 A summary of the dates the applicants were directors of the Companies, the dates of appointment of the voluntary administrators and liquidators to the Companies and the dates of the liquidators' reports pursuant to s 533(1) of the Act is as follows: Consulting Contracting Australasia Remuneration First applicant period as director 22.10.07 to 10.05.12 22.10.07 to 10.05.12 01.07.07 to 10.05.12 22.10.07 to 10.05.12 Second applicant period as director 30.04.03 to 10.05.12 01.05.03 to 10.05.12 01.07.07 to 10.05.12 01.05.03 to 10.05.12 Company placed into administration 26.02.13 26.02.13 26.02.13 26.02.13 Company placed into liquidation 11.04.13 11.04.13 11.04.13 11.04.13 Section 533(1) report lodged with ASIC 14.10.14 16.10.14 30.09.14 23.07.14 Further report lodged with ASIC pursuant to s 533(2) 11.02.15 13.02.15 24.03.15 N/A 26 The Notices were served, in the case of the first applicant, on 7 August 2015 and, in the case of the second applicant, on 2 August 2015. The Notices are, with the exception of the addressee in each case, relevantly in the same terms as follows: Form 5249 Corporations Act 2001 Subparagraph 206F(l)(b)(i) Notice to demonstrate why disqualification should not occur Notice to demonstrate why disqualification should not occur under section 206F of the Corporations Act 2001 The records of the Australian Securities and Investments Commission (ASIC) show that you are, or were an officer of 4 corporations that have been wound up, being: …. 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(l)(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" may be given subject to strict conditions of confidentiality. Dated this 21st day of July 2015. Signed ..................................................................... Graeme Darcy Plath As a delegate of the Australian Securities and Investments Commission Attachments Attachment "A" Areas of concern Attachment "B" List of documents upon which concerns are based consideration 27 The applicants contend that the power of disqualification in s 206F of the Act is only enlivened if the preconditions in s 206F(1)(a)(i) and (ii) are satisfied. While no issue arises in relation to the precondition in s 206F(1)(a)(i), they submit that the preconditions in s 206F(1)(a)(ii), properly interpreted, require that: (1) while the person was an officer, or within 12 months after the person ceased to be an officer, "each of the corporations was wound up" in the sense that the winding up of the company was complete; and (2) "while the person was an officer, or within 12 months after the person ceased to be an officer" a "liquidator lodged a report under s 533(1) … about the corporation's inability to pay its debts". 28 The applicants submit that these two preconditions are jurisdictional requirements which must be satisfied before ASIC's power in s 206F is enlivened, that based on the facts neither of the two preconditions is satisfied in relation to the applicants and that neither precondition is capable of being satisfied on the facts because the winding up of the Companies is not complete and the applicants ceased to be officers of the Companies more than 12 months ago and in each case the reports pursuant to s 533(1) of the Act were lodged more than 12 months after the applicants ceased to be officers of the Companies. 29 As identified above, the issue that arises for determination is the construction of s 206F(1)(a)(ii) of the Act and, in particular: (1) the meaning of the expression "was wound up"; and (2) whether the requirement that a "liquidator lodged a report under s 533(1)" is governed by the temporal requirement that it be lodged while the person was an officer or within 12 months after the person ceased to be an officer of the relevant corporation. Approach to Statutory Construction 30 The applicants submit that the task of statutory construction begins with a consideration of the text itself and that a court must construe the words used in a statute in accordance with their ordinary and natural meaning and the accepted rule that a court will have regard to the context in which words appear and their purpose. 31 So much is not in issue. As Hayne, Heydon, Crennan and Kiefel JJ said in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at [47]: This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy. (footnotes omitted). 32 In Thiess v Collector of Customs (2014) 250 CLR 664 (Thiess) at [22] the plurality of the High Court said the following, quoting from Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503 at [39]: Statutory construction involves attribution of meaning to statutory text. As recently reiterated: "This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the [statutory] text. So must the task of statutory construction end. The statutory text must be considered in its context. That context includes legislative history and extrinsic materials. Understanding context has utility if, and in so far as, it assists in fixing the meaning of the statutory text." 33 And at [23]: Objective discernment of statutory purpose is integral to contextual construction. The requirement of s 15AA of the Acts Interpretation Act 1901 (Cth) that "the interpretation that would best achieve the purpose or object of [an] Act (whether or not that purpose or object is expressly stated) is to be preferred to each other interpretation" is in that respect a particular statutory reflection of a general systemic principle. 34 In Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 the majority of the High Court observed at [78]: However, the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning. In Statutory Interpretation, Mr Francis Bennion points out: "The distinction between literal and legal meaning lies at the heart of the problem of statutory interpretation. An enactment consists of a verbal formula. Unless defectively worded, this has a grammatical meaning in itself. The unwary reader of this formula (particularly if not a lawyer) may mistakenly conclude that the grammatical meaning is all that is of concern. If that were right, there would be little need for books on statutory interpretation. Indeed, so far as concerns law embodied in statute, there would scarcely be a need for law books of any kind. Unhappily this state of being able to rely on grammatical meaning does not prevail in the realm of statute law; nor is it likely to. In some cases the grammatical meaning, when applied to the facts of the instant case, is ambiguous. Furthermore there needs to be brought to the grammatical meaning of an enactment due consideration of the relevant matters drawn from the context (using that term in its widest sense). Consideration of the enactment in its context may raise factors that pull in different ways. For example the desirability of applying the clear literal meaning may conflict with the fact that this does not remedy the mischief that Parliament intended to deal with. (footnotes omitted)" 35 In some circumstances a court may adopt a construction to avoid an unreasonable or anomalous consequence. In Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 Mason and Wilson JJ at 320 noted that "mere inconvenience of result" in itself is not a ground for departing from the natural and ordinary sense or meaning of the language read in its context. However, their Honours also observed that there are "cases in which inconvenience of result or improbability of result assists the court in concluding that an alternative construction which is reasonably open is to be preferred to the literal meaning because the alternative interpretation more closely conforms to the legislative intent discernible from other provisions in the statute". "Was wound up" 36 The applicants submit that the phrase "was wound up" is clear and unambiguous and that it refers to a state of affairs where the winding up process has been completed but before deregistration of the company. The applicants also submit that the statutory context and purpose supports the construction for which they contend. 37 Against this, ASIC submits that the phrase "was wound up" when used in s 206F(1)(a)(ii) means the date on which a company is placed into liquidation and the winding up process begins. 38 In support of their overarching submission, the applicants contend that: (1) firstly the winding up of a corporation is a multi-stage process which may be commenced by the court or voluntarily by special resolution. Once commenced, the winding up process involves the liquidation of the corporation. That is, realising its assets, dealing with proofs from creditors and distributing net proceeds; (2) in the usual course, a liquidator is appointed to undertake the winding up process until such time as that process is complete. The applicants rely on Russian and English Bank v Bearing Brothers Co Ltd [1936] AC 405 at 433 where Lord Russell of Killowen provided the following explanation about when a company is wound up: a company is wound up when its affairs are wound up; and its affairs are wound up by getting in such assets as can be got in, and paying therewith such debts as are ascertainable, and disposing of the surplus (if any) to those entitled thereto. The applicants also rely on Re London & Caledonian Marine Insurance Co (1879) 11 Ch D 140 (Re London) where James LJ (at 144) in explaining the meaning of the expression "fully wound up" said that this occurs: … when the liquidator has done all that he can to wind up the company, when he has disposed of the assets as far as he can realise them, got in the call as far as he can enforce them, and paid the debts as far as he is aware of them and has done all that he can in winding up the affairs, so that he has completed his business so far as he can, and is functus officio. Then it is his duty to call a meeting, to give in his account of the affairs of the company, and to make return to the Registrar under the Act. (3) consistently with the explanation in Re London, s 509 of the Act, which applies once the affairs of a corporation are "fully wound up", sets out the steps that must be taken when a corporation has been fully wound up, none of which have occurred in relation to the Companies; (4) the legislature has been careful to use specific language to capture different stages of the winding up process in the Act. The difference in language used in various sections of the Act indicates that the legislature has been selective in adopting specific text to refer to a particular part or stage of the winding up process. Had the legislature intended that s 206F(1)(a)(ii) was to capture the circumstance where the winding up process has not been completed, it was open for it to do so as it has done in other provisions. These contextual considerations reinforce the applicants' contentions as to the meaning of the expression "was wound up" in s 206F; (5) there are other contextual considerations which support the applicants' position. That is, the Act specifically empowers ASIC to apply to the court to seek an order for disqualification in the following circumstances: (a) pursuant to s 206C where a person has contravened a civil penalty provision; (b) pursuant to s 206D where the corporation "fails" and the manner in which the corporation was managed was at least partly responsible for its failure; and (c) pursuant to s 206E where a person has repeatedly contravened the Act; (6) in the case of each of the provisions set out in the preceding subparagraph, the court must be satisfied that disqualification of the relevant person is "justified". That will involve the consideration of evidence from ASIC and any person relied on by the relevant person. Such proceedings will usually involve intricate issues and commercial complexities and the court is conferred with broad powers to impose significantly longer disqualification periods than the five year limit under s 206F; (7) in contrast, s 206F empowers ASIC to disqualify a person in circumstances where it has not carried out any investigation into the conduct of the relevant person and ASIC is not required to conduct an investigation into the contents of the report lodged by the liquidator under s 533(1) of the Act. Equally, the liquidator is not required to express any views or to have reasonable grounds for any views or opinions expressed in his or her report. These aspects of s 206F indicate that the section is intended to apply in less complex cases where the mismanagement of the corporation or misconduct by the officer is apparent on its face so as to be quickly and readily identifiable without the need for a lengthy investigation by ASIC. The construction contended for by the applicants accords with that legislative intent; (8) there is nothing in the legislative history of s 206F or the secondary material which assists in the resolution of the construction of the expression "was wound up". The predecessor to s 206F, s 600 of the Corporations Law, was materially different; (9) in Murdaca the Full Court assumed that a corporation "was wound up" on the day the liquidator was appointed or the winding up order was made. The construction of the phrase "was wound up" was not in issue in Murdaca and so was not considered by the Full Court (or the primary judge). Those decisions cannot be relied on as authority that the expression "was wound up" has a different meaning from that contended for by the applicants; (10) it is not a bar to the applicants' construction that the expression "officer" is used in s 206F. A person may remain an "officer" of a corporation as defined in s 9 of the Act whilst a liquidator is appointed to the corporation. 39 In determining the meaning of the phrase "was wound up" in s 206F(1)(a)(ii) close regard ought be had to the text of the legislation. However, the statutory text must be considered in its context. The interpretation urged by the applicants achieves a result that the phrase "was wound up" is to be equated to the phrase "has been wound up" or "have been fully wound up". 40 The term "was wound up" is unique to s 206F of the Act while the phrases "has been wound up" or "have been fully wound up" are used elsewhere in the Act. For example, as noted by the applicants the phrase "fully wound up" is found in s 509 of the Act which sets out the steps a liquidator must take "as soon as the affairs of the company are fully wound up". That section requires a liquidator to make up an account showing how the winding up has been conducted and the property of the company has been disposed of, to convene a meeting of creditors or a general meeting of the company and to take certain steps subsequent to the meeting. After the liquidator has lodged a return following the holding of the meeting, ASIC must deregister the company. 41 The phrase "fully wound up" is also used in s 601AB of the Act which sets out the circumstances in which ASIC may deregister a company. Those circumstances include where the company is being wound up and ASIC has reason to believe that the "company's affairs have been fully wound up and a return that the liquidator should have lodged is at least 6 months late" or where the company's affairs "have been fully wound up" under Pt 5.4 of the Act and the company has no or insufficient property to cover the costs of obtaining a court order for the company's deregistration. 42 The term "has been wound up" is used in s 589(1) which is found in Pt 5.8 of the Act relating to offences. It sets out the companies to which ss 590 to 593 apply which include a company which "has been wound up". 43 In the case of s 206F, Parliament did not elect to use either of those phrases. Similarly, it did not elect to use the phrase "is wound up" which would accommodate the interpretation contended for by ASIC. 44 To the extent that the applicants submit that the phrase "was wound up" means fully wound up they urge a construction which would mean that ASIC could only invoke the procedure under section 206F when the winding up was complete or finished in the sense described in Re London and where the steps contemplated by s 509 of the Act had been undertaken by a liquidator. 45 ASIC relies on Arnold World Trading Pty Ltd v ACN 133 427 335 (2010) 80 ACSR 670 (Arnold) in which Barrett J considered whether he could make an order terminating a winding up where a liquidator had commenced the process set out in s 509 of the Act and thus where the company was fully wound up. He found that he could do so. At [19] of his judgment Barrett J observed that there are a number of sections of the Act that refer to temporal aspects of a winding up, only one of which assisted in considering the issue he had identified: s 601AB. After setting out s 601AB(2) Barrett J said at [20]: This section recognises that, even though "the company's affairs have been fully wound up" (these are the words in each of paragraph (b) and paragraph (c)), the company can still be one that "is being wound up". Words like these have been used in companies legislation for a long time. Provisions analogous with those in the present s 601AB(2) were introduced into New South Wales as part of the Companies Act 1936 (NSW). Section 323(5) of that Act permitted striking off of a company after the expiration of a particular period following action described in s 323(4): "If, in any case where a company is being wound up, the Registrar-General has reasonable cause to believe either that no liquidator is acting, or that the affairs of the company are fully wound up, and the returns required to be filed by the liquidator have not been so filed for a period of six consecutive months, the Registrar-General shall publish in the Gazette and send to the company or the liquidator, if any, a like notice as is provided in subsection three of this section." (emphasis in original) 46 Barrett J concluded that there was a distinction between completion of the process of winding up a company's "affairs" (being the process referred to in s 509(1)) and the status of the company as one that "is being wound up". He said that the status of "being wound up" may continue even though the company's affairs have been fully wound up. Barrett J also concluded that the observation of Master Sanderson in Keith v Verge [2009] WASC 338 at [20], that a company is not "being wound up" after a liquidator has made the final lodgement required by s 509(1) and before deregistration, could not be accepted. 47 If the analysis in Arnold is applied to the construction urged by the applicants on the phrase "was wound up" in s 206F(1)(a)(ii) the company would have to be at a stage beyond the process set out in s 509 of the Act and likely at the stage of deregistration before ASIC could take any steps pursuant to s 206F. That would lead to a situation where, if an officer resigns in the lead up to the inevitable winding up of a company, he or she could only ever be the subject of an administrative disqualification by ASIC if the winding up could be completed and the company was fully wound up, in the sense of being at the stage of deregistration, at the conclusion of the 12 month period from the date of that officer's resignation. Even if a company "was wound up" before reaching deregistration but upon a liquidator being at the stage of taking the steps contemplated by s 509 of the Act, an officer could only be the subject of an action under s 206F if a liquidator could reach that stage within 12 months of the officer's resignation. Practically, that would mean that s 206F would rarely, if ever, apply to an officer who resigns in the lead up to a winding up. 48 One of the contextual considerations which the applicants say support their construction is that, if it considers it appropriate, ASIC can have resort to ss 206C, 206D or 206E of the Act to take steps to disqualify a person from managing corporations where a person ceased to be an officer more than 12 months from the date that the company was wound up in the sense contended for by them. Each of those sections applies in different circumstances and requires ASIC to make an application to the court. Those sections are more complex and require different matters to be proved before a court will order a disqualification. They also give the court the ability to order higher disqualification periods: in the case of ss 206C and 206E, the court can order the period it considers appropriate and, in the case of s 206D, the court can order a disqualification period of up to 20 years. They are, as the applicants contend and, as was recognised by the Full Court in Murdaca in relation to s 206D, aimed at the more complex and serious cases. However, it does not follow that, while s 206F may be aimed at the less complex cases or, to put it another way, those involving less serious breaches of duty, it would be constrained in its application such that ASIC could only move under s 206F in circumstances where a winding up was, in effect, at an end and then, it could only take steps against those persons who remained as officers at that time or who had resigned in the 12 months prior to the winding up reaching that stage. Practically, this would likely be a much smaller pool and inconsistent with the purpose of the legislation. 49 In considering the text of the legislation regard can be had to the context of the text and the purpose of the legislation. The imposition of an interpretation that means ASIC would be prevented from taking steps under s 206F until the end of the winding up process would, in my view, be contrary to the purpose of the section: (1) in Nicholas v Commissioner for Corporate Affairs [1988] VR 289 at 299 Kaye J, in considering s 562A of the Companies (Victoria) Code, a predecessor to s 206F of the Act, noted that the object of that section was "clearly to protect the public's interest by preventing persons, who by past conduct are unfit, from directing, promoting or managing the affairs of a corporation"; (2) in Murdaca the Full Court said at [101(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] and the maintenance of professional management standards in the public interest (Visnic v Australian Securities and Investments Commission (2007) 231 CLR 381 at [11] and [26]); (3) in Culley, the Full Court recognised that the legislature had been concerned to strike a balance between two competing interests one of which was the "interest of the public in the existence of a facility for removing from the pool of managers those who are, or have been, officers of two or more corporations which have been wound up for inability to pay their debts" as a result of which the public and market are afforded a measure of protection from those who, as identified in Murdaca, bring about the failure of corporations either through incompetence or dishonesty or a combination of the two: at [32]. 50 There is nothing to suggest that the purpose of the section has changed. If the interpretation urged on "was wound up" by the applicants is adopted the objective of protecting those who deal with corporations from the consequences of the actions of corporate office holders who bring about the demise of a corporation through incompetence or dishonesty will not be achieved or will be significantly diminished. A consequence of the interpretation urged by the applicants is that the time at which action can be taken by ASIC under s 206F will be much later in the process and the pool of potential officers against whom action can be taken will be much smaller. 51 There was much discussion about s 206D and its impact on the construction of s 206F. By that section, on application by ASIC, the court can disqualify a person from managing corporations for up to 20 years if, within the last 7 years, the person has been an officer of two or more corporations where they have failed, the court is satisfied that the manner in which the corporation was managed was wholly or partly responsible for the corporation failing and the disqualification is justified. 52 Section 206D(2) sets out when a company fails. Relevantly, subsection (h) provides that a company fails where it is wound up and a liquidator lodges a report under s 533(1) about the corporation's inability to pay its debts. There is a note to subsection (h) which is in the following terms: To satisfy paragraph (h), a corporation must begin to be wound up while the person is an officer or within 12 months after the person ceases to be an officer. However, the report under subsection 533(1) may be lodged by the liquidator at a time that is more than 12 months after the person ceases to be an officer. Sections 513A to 513D contain rules about when a company begins to be wound up. 53 The note is, as the parties accept, part of the Act and provides an explanation of the subsection. It relevantly says that to satisfy s 206D(2)(h) a corporation must begin to be wound up while the person is an officer or within 12 months after the person ceases to be an officer. The note could be seen as anomalous in the context of s 206D. It is inconsistent with s 206D(1) which specifies that a court may disqualify a person from managing a corporation if the person has been an officer of two or more corporations when they have failed. In Australian Securities and Investments Commission v Maxwell (2006) 59 ACSR 373 at [117] Brereton J recognised the anomaly and observed that neither he nor counsel for ASIC was able to explain the rationale for the note. 54 The applicants contend that the note is necessary to explain the temporal elements in s 206D(2)(h) which are not present or required in s 206F. A contrary view may be taken. That is that the note was included in s 206D(2)(h) to ensure a consistent approach in the application of that subsection and s 206F(1)(a)(ii). Such a view promotes consistency between the two sections which contain similar language and criteria. In Visnic v Australian Securities and Investments Commission (2007) 231 CLR 381, which concerned a constitutional challenge to the validity of s 206F, the High Court recognised the similarity between s 206F and the other sections empowering a court to disqualify persons from managing corporations, including s 206D. At [7] of their judgment, the majority identified one difference between s 206F and ss 206C, 206D and 206E namely, that an additional matter for ASIC to consider in determining whether disqualification is justified is whether the disqualification would be in the public interest. At [33] Kirby J observed: The similarity between the language of the provisions empowering "the court" to disqualify a person from managing corporations and the language of s 206F by which ASIC is empowered to so determine is clear. In the case of "the court", the period of disqualification may be longer (up to 20 years in s 206D and not specifically limited in s 206C or s 206E)…. 55 In my view a proper rationale for the note is that it has been included for the purpose of promoting a consistent interpretation of the two subsections: s 206D(2)(h) and s 206F(1)(a)(ii). This view tends against the interpretation of "was wound up" urged by the applicants. 56 A further submission made by ASIC, described as speculative by senior counsel appearing for ASIC, is that the note was mistakenly positioned under s 206D(2)(h) and, on its construction, it would make sense if it was positioned under s 206F. ASIC refers generally to Pearce and Geddes, Statutory Interpretation in Australia, (8th ed, LexisNexis Butterworths, 2014) at pp 64 to 65 in relation to the approach of the courts in dealing with mistakes and drafting oversights. The mistakes referred to by the authors there are simple mistakes in the form of a printing or a drafting error. Where that occurs the general proposition is that the court will read the legislation in its correct form. 57 For example, in Director of Public Prosecutions for Nauru v Fowler (1984) 154 CLR 627, the High Court concluded that the word "either" appeared in the wrong place in the section of the legislation under consideration. The Court said at 630 that it was "apparent that a simple grammatical mistake was made in the drafting of the subsection, and that if the strict grammatical sense of the words is adhered to it would lead to an absurdity". In Minister for Immigration and Citizenship v SZJGV (2009) 238 CLR 642, French CJ and Bell J, in considering the construction of the now repealed s 91R(3) of the Migration Act 1958 (Cth), were prepared to substitute the word "whether" with "that" to correct "an obvious drafting error were whether to be construed according to its ordinary and natural meaning": at [12]. 58 It is difficult to see how the placement of the note could be seen to be a simple mistake in the form of a printing, grammatical or drafting error or to rise to the level of an "obvious drafting error". At issue is the placement of an entire note not just the placement or use of a single or a few words. I am not persuaded that the Court would conclude that the note was misplaced. 59 The predecessor to s 206F was s 600 of the Corporations Law. Section 600(1)(c) defined the term "relevant person" as a person who was a director of a relevant body at any time during the 12 months ending on the day of the beginning of the winding up of the body. The Explanatory Memorandum to the Corporate Law Economic Reform Bill (the Bill) which implemented the insertion of s 206F into the Corporations Law is silent on the policy intention behind the change in language from s 600 to s 206F. ASIC submits that the only relevant part of the Explanatory Memorandum is at [2.12] at p 9 which states: The reforms are being implemented through changes to the Corporations Law. In addition, a plain English rewrite is being undertaken of the relevant areas of the Corporations Law. This will make the law more user friendly and reduce compliance costs for corporations and market participants. 60 Section 15AC of the Acts Interpretation Act 1901 (Cth) deals with changes to style. It provides that where an Act has expressed an idea in a particular form of words and a later Act appears to have expressed the same idea in a different form of words for the purpose of using a clearer style, the ideas shall not be taken to be different just because a different form of words is used. 61 The applicants submit that ASIC's suggestion that s 206F discloses no intention to make a policy shift from the predecessor section, s 600 of the Corporations Law, is wrong. However, the applicants do not point to any material which supports a policy change and the effect of any such change. The applicants can only point to the text of s 206F and submit that there was a deliberate use of different words to those used in the predecessor section. The applicants rely on a statement of Gageler J in his dissenting judgment in Baini v The Queen 246 CLR 469 (Baini) at [43] that: …changes of drafting style aside, statutory language re-enacted in an altered form after it has acquired a settled judicial meaning be taken to have a different meaning. Were it otherwise, legislative policy choices would be blurred and orderly legislative reform would be impeded. (footnote omitted). The principle enunciated by Gageler J in Baini has been applied: see Maraya Holdings Pty Ltd v Chief Commissioner of State Revenue [2013] NSWCA 408 at [80]. However, its application in these circumstances would, in my view, lead to an unintended result. Section 206F is in an altered form but the only evident purpose of the new enactment, as set out in the Explanatory Memorandum to the Bill, is to introduce a plain English rewrite. 62 As submitted by ASIC, in the absence of any indication to the contrary, it is difficult to see that there was any policy shift in the repeal of s 600 and the introduction of s 206F. Nor is one recognised by the decision in Murdaca where the Full Court had regard to the authorities which dealt with the predecessors to s 206F including s 600 of the Corporations Law. The construction urged by the applicants suggests a significant policy shift. ASIC would need to wait until a company was fully wound up before it could take any action under s 206F and then it would be limited to taking action only against a limited class of those officers who continued to hold office at that point or who were officers in the 12 months prior to that point. This result would mean that ASIC could not take swift action to protect the public nor could it take action, at least under s 206F, against all potential officers of the corporation who may have been responsible for the failure of the corporation. 63 Before leaving this issue, it is relevant to note that I am not assisted in determining the particular issue by the decision in Murdaca. The meaning of "was wound up" was not before the Court. Both the Full Court and the primary judge proceeded on the basis that the precondition in s 206F(1)(a)(ii) was met in circumstances where Mr Murdaca was either an officer of the corporation as at the date of its winding up or had been an officer of the corporation within 12 months of the date of its winding up. In other words, the Full Court and the primary judge proceeded on the basis of a construction of the phrase "was wound up" that is consistent with the construction urged by ASIC without infact considering that issue. In Muldoon v Church of England Children's Home Burwood (2011) 80 NSWLR 286 at [39], Campbell JA observed that reasons for judgment are not authority for a matter that has been assumed rather than actually decided in the course of those reasons. 64 In my view, for the reasons set out above, the phrase "was wound up" as it appears in s 206F(1)(a)(ii) relevantly means the date on which the company is placed into liquidation and the winding up begins. the timing of the lodgement of the report under s 533(1) 65 The applicants submit that the 12 month temporal requirement included in s 206F(1)(a)(ii) applies equally to the timing of lodgement of the report under s 533(1) of the Act by a liquidator. That is, in order for the precondition in the second part of s 206F(1)(a)(ii) to be met a liquidator must have lodged his or her report under s 533(1) while a person was an officer or within 12 months of the person ceasing to be an officer of the relevant corporation. In the case of the applicants, the liquidators of the Companies did not lodge their reports under s 533(1) while either of the applicants was an officer or within 12 months of them ceasing to be officers. Accordingly, the applicants submit that this precondition has not been and cannot be met. 66 ASIC takes the contrary view and submits that the temporal requirement does not apply to the lodgement by the liquidator of a report under s 533(1) of the Act. That is, ASIC submits that the subsection should be read disjunctively. 67 The applicants submit that the note to s 206D(2)(h) supports the construction for which they contend. That note, which is set out at [52] above, states that in the case of s 206D(2)(h) the report under s 533(1) may be lodged at a time that is more than 12 months after the person ceased to be an officer. The applicants submit that such a note would not sit well with the clear language of s 206F and that the absence of a note to that effect to s 206F(1)(a)(ii) is consistent with the evident purpose of s 206F. Namely, that it is only clear cases, where there is an absence of complexity, that are to be dealt with pursuant to s 206F. A liquidator can lodge a report under s 533(1) of the Act quickly and without much due diligence. In those circumstances there is ample work for s 206F to do. In the applicants' submission, the more complex cases, where it would take longer than 12 months for a liquidator to lodge a report, would be dealt with under s 206D. 68 I do not agree with the construction propounded by the applicants. There are several reasons why I have come to this view. Firstly, the constraint which is placed on a liquidator by the applicants' construction is inconsistent with the policy of the section as found by prior judicial consideration of s 206F and its predecessors and with which I agree. My view in that regard is reinforced when one considers that a result of the applicants' construction is that if a liquidator is slow in preparing a report, for whatever reason, an officer may escape action under s 206F. It is not an answer to say that in those circumstances ASIC can have resort to s 206D. As I have already observed, the process under s 206D will, by its very nature, be more protracted. It does not achieve the intended purpose of providing a quick but fair method of maintaining standards of those holding roles as officers and in protecting the public who deal with corporations. 69 Secondly, the requirement in s 533(1) is for a liquidator to prepare his or her report as soon as practicable or within six months of the circumstances which give rise for the need to report becoming apparent to the liquidator. Section 533(1) does not impose time limits relative to the dates upon which persons may be or cease to be officers but recognises the investigative nature of a liquidation. To construe s 206F(1)(a)(ii) as imposing such a time limit would impose a constraint on s 533(1) that is not in the section itself and would be inconsistent with that section which regulates the requirement and preparation of such reports. 70 Thirdly, to the extent the applicants rely on the note to s 206D(2)(h), I refer to the parties' submissions and my consideration of them at [52] to [58] above which apply equally here. 71 For completeness, I once again observe that I am not assisted in considering this particular issue by the judgment in Murdaca. The question of the timing of the lodgement of the reports pursuant to s 533(1) was not before the Full Court. In Murdaca the s 533(1) reports had been lodged by the liquidator more than 12 months after Mr Murdaca had ceased to be an officer of two of the corporations. The Full Court (and the primary judge) proceeded on the assumption that the precondition in relation to the lodgement of the reports pursuant to s 533(1) of the Act had been met. a non-publication order? 72 The applicants seek an order under s 37AF of the FCA Act restricting the publication or disclosure of information which reveals their identity in connection with these proceedings. ASIC does not oppose the making of such an order. 73 The applicants submit that such an order which, on their submission, would extend to the names of the applicants, the corporations of which they were directors which ground the Notices and the evidence relied on by the parties, is necessary to prevent prejudice to the proper administration of justice: see s 37AG(1)(a) of the FCA Act. The applicants also contend that, pursuant to s 37AJ of the Act, such an order, if made, would stay in place until further order. 74 The Court's power to make suppression and non-publication orders is found in Div 2 of Pt VAA of the FCA Act. Section 37AE of the FCA Act provides: 37AE Safeguarding public interest in open justice In deciding whether to make a suppression order or non-publication order, the Court must take into account that a primary objective of the administration of justice is to safeguard the public interest in open justice. 75 Section 37AF, the section pursuant to which the applicants seek the order, relevantly provides: 37AF Power to make orders (1) The Court may, by making a suppression order or non-publication order on grounds permitted by this Part, prohibit or restrict the publication or other disclosure of: (a) information tending to reveal the identity of or otherwise concerning any party to or witness in a proceeding before the Court or any person who is related to or otherwise associated with any party to or witness in a proceeding before the Court; …. (2) The Court may make such orders as it thinks appropriate to give effect to an order under subsection (1). 76 Section 37AG of the FCA Act sets out the grounds for making an order, which relevantly include, for the purposes of the order the applicants seek, where "the order is necessary to prevent prejudice to the proper administration of justice": see s 37AG(1)(a). 77 In Hogan v Australian Crime Commission (2010) 240 CLR 651 the High Court considered the operation of s 50 of the FCA Act, the predecessor to Pt VAA. In doing so it considered the word "necessary" as it appeared in s 50 of the FCA Act at the time. At [30] the High Court observed that the word "necessary" as it appeared in s 50 is a "strong word". The Court went on to say at [30]: …. Hence the point made by Bowen CJ in Australian Broadcasting Commission v Parish, that the collocation of necessity to prevent prejudice to the administration of justice and necessity to prevent prejudice to the security of the Commonwealth "suggests Parliament was not dealing with trivialities". Further as indicated earlier in these reasons: … (b) "the administration of justice" spoken of in s 50 is that involved in the exercise by the Federal Court of the judicial power for Commonwealth; this is a more specific discipline than broader notions of a public interest. (footnotes omitted) 78 At [31] the Court held that: It is insufficient that the making or continuation of an order under s 50 appears to the Federal Court to be convenient, reasonable or sensible, or to serve some notion of the public interest, still less that, as the result of some "balancing exercise", the order appears to have one or more of those characteristics. (footnotes omitted) 79 The Court's power in s 37AF was considered by Perram J in Australian Competition and Consumer Commission v Air New Zealand Ltd (No 3) [2012] FCA 1430 (Air New Zealand (No 3)) at [18]-[21]: 18 Important for present purposes is the wording of s 37AG(1)(a). It will be noted that the wording is essentially identical to the equivalent part of s 50 of the Federal Court of Australia Act, except that the word 'proper' now appears in front of the word 'administration'. 19 I do not think that the word 'proper' alters the meaning of the phrase, so that s 37AG(1)(a) reproduces a test with the same content as that which had formerly obtained in relation to s 50. That matters because the meaning and operation of those words have been comprehensively explained by the High Court in Hogan v Australian Crime Commission (2010) 240 CLR 651 at 664 [30]-[33] per curiam. Relevant matters to note about the wording in s 37AG(1)(a) are that, first, before the order is made, it must be 'necessary' and that 'necessary' is, as was explained in Hogan, a high standard. It is different to 'convenient, reasonable or sensible': Hogan at [31]. 20 Secondly, the propinquity of the wording in sub-s (a) to the wording in sub-s (b), with its references to 'prejudice to the interests of the Commonwealth or a State or Territory in relation to national or international security', shows that, as the High Court noted in Hogan at [30], citing the judgment of Bowen CJ in Australian Broadcasting Commission v Parish (1980) 43 FLR 129; [1980] FCA 33 at 133 (FLR), orders of this kind are not concerned with trivialities; that is, they are not lightly to be made. 21 Thirdly, what is involved in assessing whether the order should be made is not a balancing exercise: Hogan at [31]-[32]. It is not a question, on the one hand, of seeking to serve, as best one can, the interests of open justice and, on the other hand, considering the prejudice which may occur if the information is released. The test to be applied is the posing of the question as to whether it is necessary to make the order to prevent prejudice to the proper administration of justice. No balancing exercise is required or permitted. 80 It is clear that the threshold to be met by an applicant seeking a suppression order is high. 81 In Air New Zealand (No 3) Perram J found that it was an accepted head under the former s 50, now s 37AF of the FCA Act, that commercial sensitivity is a basis for making an order: at [35]. Perram J referred to a number of cases in support of that proposition. On that basis, Perram J made an order. In Australian Competition and Consumer Commission v Origin Energy Electricity Limited [2015] FCA 278 (ACCC v Origin Energy) Katzmann J was also prepared to make an order under s 37AF of the FCA Act to prohibit the publication of information in a confidential annexure to a statement of agreed facts and admissions. At [148] Katzmann J found: The evidence discloses that the information is not in the public domain and is confidential to SalesForce and its parent company. It is commercially sensitive. If the information were disclosed, it could be used by competitors of SalesForce and damage SalesForce in the market in which it operates. It is not in the interests of the administration of justice that the proceedings "become a vehicle for advantaging or prejudicing trade rivals": Australian Competition and Consumer Commission v Cement Australia Pty Ltd (No 2) [2010] FCA 1082 at [23]. It is in the interests of the proper administration of justice that the value of confidential information not be destroyed or diminished. Otherwise, the parties and members of the public might lose confidence in the Court and the Court's processes "might open the way to abuse": Australian Broadcasting Commission v Parish (1980) 29 ALR 228; (1980) at 230; 43 FLR 129 at 134. Applicants' evidence in support of the non-publication order 82 The applicants' evidence in support of the order is set out in an affidavit of the second applicant, the chief executive officer of the Australian and New Zealand operations of the business of ASP16 (ASP16). The first applicant is a fellow director of the Australian and New Zealand operations of that company. The Australian and New Zealand operations of ASP16 are conducted through ASQ16 (ASQ16), the holding company of eight subsidiaries. 83 ASP16 is a global association of companies in the business of supplying contingent workforce solutions to some of the largest corporations around the world. It has been operating in the contractor management business for more than 20 years and operates in more than 68 countries worldwide. The second applicant says their clients entrust ASP16/ASQ16 to manage their contingent workforce, accounting for in excess of 75% of ASQ16's revenues annually, and that these businesses engage with ASP16/ASQ16 because of the strength of the brand and the fully compliant solutions provided to them. The second applicant is of the view that integrity and compliance is the cornerstone of their business and the reason why their clients engage with them to provide services. 84 ASP16 has agreements with clients that mandate regular review and audit by external parties to confirm that it compliantly manages and payrolls their contractors. ASP16 wins new work through a tender and proposal process, a part of which includes a due diligence process which includes a litigation search being undertaken on the various companies connected with ASP16 and the applicants personally. 85 The applicants say that it is important that they suppress their names because if their names were disclosed in connection with these proceedings, and therefore ASIC's actions in issuing the Notices were disclosed, it would be crippling to their business because it would jeopardise their ability to win work: (1) clients will not be associated with organisations that raise risks to their supply chain. The second applicant believes that even an allegation of non-compliance with statutory obligations would be used by clients as a reason not to renew contracts; (2) the majority of the applicants' contracts are sourced via a tender process which includes a due diligence process of the proposed supplier. Suppliers are removed from the tender process at this stage without the opportunity to explain any of the findings in a due diligence process. That could affect new business and the renewal of existing clients; (3) competitors have used regulatory audits or other statutory activity as a reason for existing clients not engaging with the object of that action. The second applicant is concerned that if the applicants' names are made public in connection with these proceedings, their competitors will use this to persuade their clients not to engage them. Should a non-publication order be made? 86 The applicants submit that an order should be made in the current proceedings because, on the applicants' construction, ASIC acted without jurisdiction in issuing the Notices and in seeking to conduct the show cause hearings and that, coupled with the likely detriment and/or commercial disadvantage to the applicants' business if their names were disclosed in connection with the litigation, demonstrates that the proper administration of justice would be prejudiced if a suppression order is not made in the terms sought. The applicants submit that conclusion is supported by the decision in ACCC v Origin Energy where the Court made an order under s 37AF in circumstances where there was evidence of possible commercial advantage if no suppression order was made. 87 In ACCC v Origin Energy and Air New Zealand (No 3) the Court was dealing with a category of information which, in each case, was said to be commercially sensitive. In that sense, if a competitor armed itself with that information, it would be damaging to the applicant for the order and could be used by those competitors to disadvantage them. It was in those circumstances that the Court found in each case that it was necessary to prevent prejudice to the proper administration of justice to make the order. 88 Here, it is not particular information, which is not otherwise accessible to competitors, that the applicants seek to suppress. Rather, it is the applicants' names and anything within the judgment which would allow a party reading it to draw a connection to the applicants. The commercial advantage which competitors would gain if the order were not made is that the mere association with the subject matter of the judgment and inferences that can be drawn from that could be used by those competitors to undermine the applicants in an industry which relies on the integrity and reputation of its suppliers and their compliance with regulation. 89 It is relevant to note that this order is sought in circumstances where: (1) the proceedings have been in the Court list on at least two occasions, naming the applicants; (2) no order of this nature was sought until the final hearing; (3) no confidentiality order was sought upon the reading of the applicants' evidence; and (4) the applicants seek suppression of the names of companies, now in liquidation, of which they were formerly officers. Their role as former officers of those companies is available by undertaking a search of the records maintained by ASIC although in doing so the information that the Notices have been served will not be available. 90 The task before me is to determine whether it is necessary to make the order sought to prevent prejudice to the proper administration of justice. In doing so I must take into account the objective set out in s 37AE of the FCA Act that a primary objective of the administration of justice is to safeguard the public interest in open justice. 91 In Australian Competition and Consumer Commission v Cascade Coal Pty Ltd (No 1) [2015] FCA 607 at [30] Foster J, after noting that the threshold which a suppression order must satisfy is high, observed that "[m]ere embarrassment, inconvenience, annoyance or unreasonable or groundless fears will not suffice". That is not this case. The evidence before me is that the applicants fear more than mere embarrassment or inconvenience. They fear that as a result of their association with these proceedings their commercial reputation will come under scrutiny, their competitors will gain a competitive advantage and their business will be affected. 92 The process that ASIC follows under s 206F is private. It is only when the process is complete, after the person on whom a notice is served has had an opportunity to be heard, and ASIC has made a determination that disqualification is justified pursuant to s 206F(2) and has served the requisite notice on the person the subject of such a determination pursuant to s 206F(3) that the process becomes public. That is because ASIC is required by s 1274AA of the Act to maintain a register of persons who have been disqualified pursuant to, among others, s 206F. But for these proceedings the fact of service of the Notices would not be a matter of public record. 93 It is not in the interests of the administration of justice that trade competitors should get an advantage, or conversely that the applicants should be disadvantaged, by the very fact of these proceedings. These proceedings will not finally determine the outcome of the process under s 206F of the Act. That is so despite the conclusion I have reached on the substantive application that is before this Court in relation to the interpretation of s 206F(1)(a)(ii). It is in the interests of the administration of justice and in my view it is necessary to prevent prejudice to the proper administration of justice that an order be made pursuant to s 37AF of the FCA Act restricting the publication of the names of the applicants, the companies of which they were formerly officers and the evidence relied on by the parties in the proceedings. 94 The applicants submit that such orders should be made until further order. Section 37AJ of the FCA Act regulates the period for which an order can be made. It requires that a suppression or non-publication order operates for the period decided by the Court and specified in the order and that in deciding the period the Court is to ensure that the order operates for no longer than is reasonably necessary to achieve the purpose for which it is made. Section 37AJ(3) provides that the period for which the order operates may be specified by reference to a fixed or ascertainable period or by reference to the occurrence of a specified future event. I do not think that an order made until further order would satisfy the requirements of s 37AJ. It would not, to adopt the description of Perram J in Air New Zealand (No 3) at [24], provide some form of sunset clause on the operation of the orders. In those circumstances I will make the orders until 30 September 2016 which is 6 months from the date of this judgement. That should allow the applicants sufficient time to take whatever steps they wish as a result of the judgment and/or for the process contemplated by s 206F to proceed. Conclusion 95 In light of the matters set out above I decline to make the orders sought in paragraphs 1, 1A and 2 of the applicants' amended originating application. The applicants did not press the orders sought in paragraphs 1 and 2 under the heading "Claim for interlocutory relief". I will make orders to give effect to the order sought in paragraph 3 under the heading "Claim for interlocutory relief". That being the result, I will also make an order that the applicants pay ASIC's costs of the proceedings. I certify that the preceding ninety-five (95) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Markovic. Associate: Dated: 1 April 2016