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Young, Diana; Zimmermann, Nagja --- "Procedural fairness in administrative decision-making" [2016] PrecedentAULA 61; (2016) 136 Precedent 18


PROCEDURAL FAIRNESS IN ADMINISTRATIVE DECISION-MAKING

By Diana Young and Nadja Zimmermann

The administrative decision-making process is an important function of government that can have a significant effect on a person’s rights and livelihood. As such, the rules of procedural fairness have a vital role to play in ensuring that the decision-making process is carried out in a fair and proper manner.

The concept of procedural fairness is founded on the principle of natural justice and requires that certain standards and procedures be observed in administrative decision-making – the basic precept being the right to be heard by an unbiased decision-maker.

The obligation to accord procedural fairness arises where a statutory power is exercised by an administrative decision-maker which has the ability to affect a person’s rights, interests or legitimate expectations.[1] The principle applies at common law unless expressly excluded by statute and can also be based in statute. The content of the rule requires that a person be informed of the case against her or him and that she or he be given a right to respond in an appropriate way before a decision is made (known as the Hearing Rule), and that the decision be made without bias or apprehended bias on the part of the decision-maker (Bias Rule). It is concerned with the process of decision-making rather than the outcome of a decision; if there has been a breach of procedural fairness in reaching a decision, a court will generally declare a decision invalid.

While the core principles of procedural fairness are relatively well settled, there are areas of procedural fairness that continue to develop.

WHEN DO THE OBLIGATIONS, PRESCRIBED BY THE HEARING RULE, ARISE?

The obligation to accord a fair hearing does not automatically apply to all administrative decisions; rather, the obligation is enlivened where an existing right or interest is affected.[2]

It may also apply where a person has a legitimate expectation about how a power will be exercised.[3] While not a right in itself, a legitimate expectation can serve to inform the content of the rules of procedural fairness.[4] An obligation to accord procedural fairness pursuant to a legitimate expectation may arise where a person expects a decision-maker to act in a certain way based on prior conduct or express statements. For example, where a person has been receiving a benefit such as a licence for some years, that person will often expect to continue receiving that benefit.

Where a right, interest or legitimate expectation is affected by a decision, a presumption is raised that procedural fairness will be accorded. The principle of legality applies and, as such, the presumption may be displaced only by clear manifestation of statutory intention to the contrary.[5] For example, by unmistakable and unambiguous statutory language or where a duty to accord procedural fairness would be inconsistent with the proper operation of the relevant statute.[6] Legislative intention to exclude the principles of procedural fairness cannot be implied from the availability of merits review. That is, a statutory right of appeal or review does not necessarily deny or limit the principles of procedural fairness.[7]

The precise contents, and indeed the existence, of procedural fairness may be governed by express statutory provisions.[8] Pow Wow Training v Australian Skills Authority (Pow Wow)[9] provides some insight into the practical application of the principles of procedural fairness in a statutory context. The case confirms that the exclusion of the common law duty to accord procedural fairness must be clear.

Pow Wow Training was a supplier of vocational training services. It submitted an application to the Australian Skills Quality Authority (ASQA), the responsible body under the National Vocational Education and Training Regulator Act 2011 (Cth) (the Act), to renew its registration. In relation to its renewal, Pow Wow Training was audited. As a result of the audit, Pow Wow Training was informed that it was critically non-compliant. ASQA gave notice of its intention to suspend Pow Wow Training’s registration and, following considerable delay in providing Pow Wow Training with its audit report, ultimately refused to renew the company’s training registration.

An issue the Federal Court considered was whether the decision to refuse renewal of the registration denied Pow Wow Training procedural fairness pursuant to common law principles, because ASQA did not give Pow Wow Training sufficient notice or opportunity to respond to the adverse findings in the audit report.

The Act provided that procedural fairness be observed in relation to one aspect of decision-making. ASQA argued that an absence of such an express requirement in relation to another decision-making power under the Act implied that there was no duty to accord procedural fairness in relation to that power. The Court held that the existence of an express obligation to accord procedural fairness in relation to a particular power in the Act, does not imply the absence of such a duty in relation to another power under that Act where the obligation is not express.[10]

On the other hand, procedural fairness may not apply to routine administration and policy making decisions, or to decisions that initially give a benefit such as issuing a licence in the first instance. In Pow Wow, ASQA argued that the application for renewal was nothing more than a statutory privilege, and that the decision as to whether that privilege be granted was a discretionary one. It further argued that the audit report was nothing more than an editorial comment made for the benefit of ASQA in respect of the merits of the renewal application. On that basis ASQA submitted that the principles of procedural fairness did not apply. Ultimately, the Court found in favour of Pow Wow Training. It held that where a decision-maker intends to reject an application by some consideration personal to the applicant based on information obtained from another source which has not been dealt with by the applicant in its application, there may be a case for saying that procedural fairness requires that the applicant be given an opportunity to respond to the matter.[11] As such, procedural fairness required that Pow Wow Training be given an opportunity to respond to the audit report.

THE CONTENT OF THE RULES OF PROCEDURAL FAIRNESS

The Hearing Rule

The content of the Hearing Rule will depend on the particular circumstances of the case.[12] That is, the nature of the enquiries, the subject matter of the decision and the rules under which the decision-maker is proceeding. The Hearing Rule generally requires the disclosure of ‘credible, relevant and significant’[13] information that affects the rights and interests of the applicant. In other words, a decision-maker is required to inform a person of the case against her or him. An affected person must then be provided with an opportunity to respond in a way that is appropriate in the circumstances before the decision is made. For example, in Pow Wow the Federal Court held that the Hearing Rule required the audit report to be put to Pow Wow Training and that Pow Wow Training be given an opportunity to respond to the adverse findings before ASQA made a decision.[14]

The content of the Hearing Rule may also depend on whether adverse material is confidential. There are no set rules as to what a decision-maker needs to disclose in order to accord procedural fairness, because the rules are flexible, and require fairness in the particular circumstances of each case.[15] Because confidential information that is not ‘credible, relevant and significant’ does not need to be disclosed, it is generally only necessary to disclose the nature of the information rather than the actual documents on which the decision-maker relies.[16]

For example, in Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs,[17] the High Court held that information contained in a confidential letter was ‘credible, relevant and significant’ to the decision made. However, procedural fairness in that case required only the substance of the adverse allegations be put to the applicant, rather than the letter itself. This was consistent with the public interest in there being no impediment to the provision of information to authorities. The Court considered that it was important to protect the identity of the author so as not to discourage informers assisting the government.[18]

In rare cases, the consideration of confidential information may reduce or extinguish the content of the obligation to accord procedural fairness; for instance, where national security is concerned.[19]

The Bias Rule

Procedural fairness is not accorded where a decision is affected by bias or apprehended bias. While the rules of procedural fairness do not require a complete absence of a redisposition or an inclination for or against a particular argument or conclusion, a decision will be affected by bias where a decision-maker is so committed to a conclusion, that their position is incapable of being altered, irrespective of the evidence or arguments put to them.[20] Nor will procedural fairness be accorded where there is an apprehension of bias. That is, where a lay observer might reasonably think that a judge who has found a state of affairs to exist, or has come to a clear view about an issue, may not be inclined to depart from that view in a subsequent case.[21]

A risk of apprehended bias may arise where a decision-maker treats like decisions as like. In Minister for Immigration and Citizenship v SZQHH, the decision-maker considered ten visa applications made by Hazara Shia asylum seekers who all feared persecution in Afghanistan because of their ethnicity and religion.[22] The claims were rejected. The decision-maker used a template to record his assessment of the common claims repeating the materials relied on to make the decision, word for word. It was argued that the decision was void because it was affected by apprehended bias.

A majority of the court held that a fair minded observer would be aware that the decision-maker based his decision on materials such as country information which was similar to all claimants and that such an assessment, as undertaken by the decision-maker, would ensure consistency. On the other hand, the dissenting judge considered that independent consideration must be given to each particular case,[23] and that repetition of reasons may provide an indicator that independent consideration had not been afforded.[24] The extent to which a decision-maker can rely on previous decisions is unclear and a decision-maker should be wary of repetition in their reasons, instead ensuring that independent consideration is evident from the perspective of the lay observer.

POSSIBLE REMEDIES FOR A BREACH OF THE RULES OF PROCEDURAL FAIRNESS

A failure to accord procedural fairness is a jurisdictional error on the part of the decision-maker.[25] As such, a breach of procedural fairness in reaching a decision allows a court to issue a writ of certiorari or mandamus. That is, a court may declare a decision invalid, or prevent or compel an action.

The principles of procedural fairness are concerned with procedure rather than the merits of the exercise of power and the outcome of a decision. As such, the question as to the impact of any breach of those procedures is largely irrelevant. Ordinarily there is no discretion to refuse relief where there is a breach of procedural fairness, even where the breach does not appear to have affected the outcome.[26] Indeed, the rules of procedural fairness might be of added importance in that they ensure the opportunity to raise matters that might not already be obvious or which might create a risk of subconscious prejudice.[27] This means that a court cannot look at the merits of a case to evaluate the triviality of a breach. It is the possibility rather than the probability of what might have occurred that is relevant.[28]

On the other hand, relief will not be afforded if the breach could not have affected the outcome,[29] as granting relief in such a case would be futile.[30] For example, relief will be denied where a decision is achieved by merits on an independent ground unrelated to the matter in respect of which procedural fairness was denied,[31] or where a decision-maker would have been bound to come to the same conclusion on another legal basis whether the breach of procedural fairness had occurred or not.

CONCLUSION

In relation to administrative decision-making, the ultimate concern of the law is that practical justice be ensured.[32] In Re Minister for Immigration and Ethnic Affairs; Ex parte Lam,[33] Gleeson J considered this not to be an abstract concept, but rather an assessment of the circumstances in each case.[34] This means its articulation can be imprecise and open to debate.[35]

The rules that relate to the availability of a ground in relation to procedural fairness, the content of the ground if it is made out and the relief that is granted, are all flexible and adaptable to unique circumstances on a case-by-case basis. The cases referred to above provide useful guidance in relation to the application of the principles of procedural fairness where administrative decision-making is concerned.

Diana Young, Associate, Commercial and Project Litigation, Slater and Gordon Lawyers. PHONE: (03) 9602 6923 EMAIL: diana.young@slatergordon.com.au.

Nadja Zimmermann, Law Clerk, Commercial and Project Litigation, Slater and Gordon Lawyers.


[1] Kioa v West [1985] HCA 81; (1985) 159 CLR 550, 584.

[2] Ibid.

[3] Ibid.

[4] Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex Parte Lam (2003) 214 CLR 1, 12.

[5] Kioa, see above note 1, 585.

[6] See, for example, S10/2011 v Minister for Immigration [2012] HCA 31; (2012) 246 CLR 636, 668.

[7] Re Minister for Immigration and Multicultural Affairs; Ex Parte Miah (2001) 206 CLR 57, 98- 9.

[8] Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476, 489-90 (Gleeson CJ).

[9] [2012] FCA 1490.

[10] Ibid, [55]; citing McHugh J in Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57.

[11] Ibid, [38]; citing Kioa, [587].

[12] Kioa, see above note 1, 612.

[13] Ibid, 629.

[14] Pow Wow Training, see above note 9, [42].

[15] Applicant VEAL of 2002 v Minister for Immigration & Multicultural & Indigenous Affairs [2005] HCA 72; (2005) 225 CLR 88, 98-9.

[16] Commissioner for Australian Capital Territory Revenue v Alphone Pty Ltd [1994] FCA 1074; (1994) 49 FCR 576, 590-1.

[17] [2005] HCA 72; (2005) 225 CLR 88.

[18] Applicant VEAL, see note 15 above, 98.

[19] Leghaei v Director General of Security [2005] FCA 1576, [88]; Minister for Immigration and Citizenship v Maman [2012] FCAFC 13; (2012) 200 FCR 30, [33].

[20] Minister for Immigration and Multicultural Affairs v Jia Legeng (2001) 205 CLR 507.

[21] British American Tobacco Australia Services Ltd v Laurie [2011] HCA 2; (2011) 242 CLR 283, 331.

[22] (2012) FCR 223.

[23] Minister for Immigration and Citizenship v SZQHH (2012) FCR 223, [79].

[24] Ibid.

[25] Minister for Immigration and Multicultural Affairs v Bharadwaj [2002] HCA 11; (2002) 209 CLR 597, 614-5.

[26] Kioa, see above note 1, 603.

[27] Ibid, 629 (Brennan J).

[28] Re Refugee Review Tribunal: Ex Parte Aala [2000] HCA 57; (2000) 204 CLR 82, 153-4 citing Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141, 145-6.

[29] Ibid.

[30] Ibid.

[31] VBAP of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 965 [33].

[32] Re Minister for Immigration and Ethnic Affairs; Ex parte Lam (2003) 214 CLR 1, 13-4.

[33] Ibid.

[34] Ibid.

[35] SZRMQ v minister for Immigration and Border Protection [2013] FCAFC 142, [7].


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