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Federal Court dismisses broker’s appeal

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Reporter 2 minute read

Former Victorian finance broker Meenakshi Devi Callychurn, the director of Unique Mortgage Services Pty Ltd (UMS), has had her appeal regarding her ban from credit activities dismissed.

In March 2015, Ms Callychurn was banned from engaging in credit activities for a period of five years and the credit licence of UMS was cancelled.

Ms Callychurn was originally banned from engaging in credit activties for five years after ASIC raised allegations that she had submitted two Annual Compliance Certificates for UMS with false or misleading responses; was not engaged in operating the business and attending to duties associated with the UMS credit licence; did not understand her responsibilities in relation to the UMS credit licence; and showed a lack of preparedness to engage with ASIC, amongst other allegations.

ASIC found that Ms Callychurn failed to actively engage in the operations of the business and failed to meet the standards expected of the roles of sole director, key person, and fit and proper person. This made her unfit to engage in credit activities.

As a result of ASIC's findings in relation to Ms Callychurn, ASIC also cancelled UMS' credit licence.

In February last year, the Administrative Appeal Tribunal (AAT) reduced her ban to four years but upheld the credit licence cancellation.

However, Ms Callychurn then advanced nine grounds of appeal on that decision, largely relating to questions of law.

In the ruling on the latest appeal, dated 27 January 2017, the Honourable Justice Beach said: “In broad terms, the grounds appear to assert that the Tribunal erred in its decision because it misconstrued or misapplied various provisions of the Act, and it failed to afford the applicants procedural fairness. 

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“For present purposes I am prepared to accept that each of the grounds raised can be characterised as a question of law.” 

However, in the review, the judge concluded that “no error of law, as attempted to be articulated by the applicants, has been made out. And in any event, even if such an error had been established I see no realistic possibility that the Tribunal’s determination and orders would have been any different. To set aside the Tribunal’s determination and orders and remit would be an exercise in futility even if an error of law had been established.

“The applicants’ appeal must be dismissed with costs.

The company has been in court previously, when former UMS director Rudy Noel Frugtniet was found to have provided misleading information and a lack of full disclosure on a credit licence application.

In 2014, Mr Frugtniet was permanently banned from engaging in credit activities owing to his 'dishonest conduct over a prolonged period; his failure to show any real awareness of the nature, extent and significance of that conduct; and a demonstrated disregard for compliance with regulatory requirements'.

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His appeal against his permanent ban was dismissed last August.

In Ms Callychurn’s court case there were also concerns raised by ASIC that she had allowed Mr Frugtniet to “continue to exercise control” over the company.

[Related: Broker’s ban reduced following appeal]

Federal Court dismisses broker’s appeal
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