FEDERAL COURT OF AUSTRALIA

Emmett v McCormack [2016] FCAFC 65

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be dismissed.

2.    The appellant pay the respondent’s costs, as taxed if not agreed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

BUCHANAN AND PERRY JJ:

1    The appellant owes a reasonably substantial debt to the Commonwealth (about $125,000). The respondent, as delegate of the Finance Minister, has declined to waive the debt which the appellant owes to the Commonwealth. That decision was challenged unsuccessfully in this Court, and now an appeal has been filed raising the issue for further attention.

2    In the present case, the debt owed to the Commonwealth was assessed under the Child Support (Registration and Collection) Act 1988 (Cth) (“CS(RC) Act”). The decision by the respondent which was challenged at first instance was made under the Financial Management and Accountability Act 1997 (Cth) (“FMA Act”) which, by s 34(1)(a) provides:

34    Finance Minister may waive debts etc.

(1)    The Finance Minister may, on behalf of the Commonwealth:

(a)    waive the Commonwealth’s right to payment of an amount owing to the Commonwealth;

3    It should, at this point, be mentioned that to the extent the debt is discharged by the appellant the amounts paid will be passed to his former wife. An inference is available, from the facts referred to hereunder, that the debt would have been considerably lower but for the fact that the appellant was dealt with by the Child Support division of the Department of Human Services (“DHS”) in a way that may be seen as partisan against his interests, and in favour of the interests of his former wife.

4    The possibility of partisan, perhaps defective, administration supports close attention to the appellant’s legal arguments. At the same time, it must be steadfastly borne in mind that an application for judicial review of an administrative decision of the kind which was before the primary judge does not provide an opportunity for a court to intrude into areas of discretionary decision-making entrusted to the executive government.

5    Before the legal issues are discussed in greater detail, some brief explanation of the facts is required.

6    The appellant and his former wife married on 4 November 1989, separated in July 1997 and subsequently divorced.

7    The rupture apparently was, and remains, acrimonious.

8    There were two children of the marriage who remained with their mother. In 1997, an assessment of child support payments was made, and the appellant made those payments until February 2000, when he left Australia to reside in the United Kingdom. As the law then stood, that put an end to an obligation to make child support payments in Australia, but the law changed on 1 July 2000.

9    On 11 September 2000, the appellant’s former wife obtained a further assessment against the appellant. That assessment was communicated by DHS to authorities in the United Kingdom and, on 8 February 2002, an order was made there for monthly payments by the appellant, commencing on 1 March 2002.

10    The appellant made payments as required by that order (and a second order made on 14 March 2008 in the same amount) until July 2012 when he returned to Australia, but the amounts ordered were less than the amount of the Australian assessment and, as a result, arrears accrued. It is those accrued arrears which explain the present debt.

11    Under legislative amendments commencing on 19 July 2007, a new s 30AA was inserted into the CS(RC) Act. Its effect was to allow formal registration of a second liability to make child support payments (in this case the UK order(s)) which would have the effect of extinguishing the primary liability (under Australian law) and thereby avoid “dual” liability. The consequence for the appellant, if this step had been taken, would have been to avoid any accrual of arrears under the Australian assessment from the time of registration of the UK order(s).

12    According to findings made by the primary judge, it appears likely that both of the UK orders were made at the initiative of DHS. The second was made after the commencement of s 30AA. DHS took no steps to inform the appellant that registration of the UK order(s) would limit his liability.

13    The primary judge found:

14    The applicant spoke with staff at Child Support, apparently by telephone, on 3 April 2008. He spoke again with staff at Child Support on 10 November 2008. On this occasion, he asked if there was any way in which the amount of the arrears he owed could be decreased. The following is recorded in the brief from Child Support to the respondent:

We discussed Mr Emmett’s income and requested he update the provisional incomes that we were using to calculate his child support assessment, with what he actually earned. Mr Emmett declined to provide incomes. We explained that while the UK courts may only enforce part of the monthly liability this did not negate the Australian assessed amounts.

15    It does not appear that, at the time of these conversations, Child Support informed the applicant of the availability of s 30AA of the CS(RC) Act to avoid dual liabilities.

14    The advice to the appellant by DHS was incomplete, and arguably very misleading. Not only was the appellant not told about the legislative change the previous year (which must be presumed to have given effect to a legislative intent to avoid dual liabilities), but it was apparently suggested to him that it was a regular consequence that the Australian assessment would continue in force undiminished.

15    The appellant returned to Australia in mid-2012. There were then various communications between him and DHS about the various assessments, but it was not until 20 November 2012 that he was told by DHS about the operation of s 30AA. By this time, the second of his children had turned 18 and the appellant’s liability under the Australian assessment had ceased in any event.

16    In due course, the position of DHS, as conveyed to the respondent, was that DHS had no obligation to inform the appellant of his right to register the UK order(s), or the consequence if he did so, and that his own failure to register simply had the legal consequence that arrears continued to accrue. It was also suggested to the respondent, and he accepted, that waiver of any part of the appellant’s debt would be to the financial disadvantage of the appellant’s former wife.

17    The last argument gave little weight to the idea that the liability now said to exist (to the former wife’s ultimate benefit) could readily have been extinguished. In that sense, it may be said to be a benefit probably not intended under the legislative scheme as a whole.

18    It is for that reason that it may be argued that the position taken by DHS may have been partisan. It has been accepted that it was unjustified.

19    Notwithstanding those considerations, the respondent refused to waive any part of the outstanding debt for reasons explained first in a letter to the appellant on 7 May 2014 and later in a more formal statement of reasons dated 26 June 2014.

20    The respondent’s decision reflected recommendations made to him by DHS. The decision effectively rejected representations made on behalf of the appellant by the Commonwealth Ombudsman and submissions made by Legal Aid New South Wales (which submissions were not put directly before the respondent).

21    A matter which was influential to the respondent’s decision was that a scheme exists for investigating defective Commonwealth administration (Scheme for Compensation for Detriment caused by Defective Administration (“the CDDA Scheme”)) and that it was open to the appellant to lodge a claim under that scheme (which is under the supervision of a different Minister).

22    That, and other, findings appear in the following extract from the respondent’s formal statement of reasons:

4.    In reaching my decision, I made the following findings of fact:

…

(iii)    Section 30AA of the Child Support (Registration and Collection) Act would have allowed Mr Emmett to extinguish his larger Australian Child Support liability by registering his smaller UK child support liability with DHS. DHS did not advise him of this option. DHS held various overseas addresses for Mr Emmett between 2000 and 2008 but these were deemed invalid when mail was returned. The Ombudsman was critical of DHS’s administration of this matter and both Mr Emmett and the Ombudsman consider DHS is responsible for Mr Emmett incurring the debt. However, DHS is not required by legislation or policy to notify customers of section 30AA.

…

(vii)    DHS did not support the request for waiver and noted the debt was payable to Ms Berry for the ongoing support of her children. The allegations of defective administration made against it by Mr Emmett had not been denied by DHS. DHS advised that the CDDA Scheme is the appropriate mechanism to investigate the claims and had invited either party to claim.

…

(xiii)    Mr Emmett was liable to pay this amount of child support under Australian law.

23    The reasons for decision were expressed as follows:

6.    Waiver of the debt of $123,401.68 (excluding late payment fees) would have been at the expense of Ms Berry.

7.    There was insufficient information for a finding of financial hardship on Mr Emmett’s part from enforcement of this debt.

8.    While a reduction in Mr Emmett’s payments to Ms Berry had been legally possible, I was not satisfied that his inability to avail himself of that was an inequitable outcome.

9.    Mr Emmett was liable to pay that amount of child support under Australian law.

10.    DHS’s investigation of the matter under the CDDA Scheme seemed the most appropriate forum for investigating Mr Emmett’s claims of its defective administration.

11.    There was insufficient information to conclude that Mr Emmett’s own actions had not contributed to DHS’s difficulties in locating him. I did not have sufficient information to accept that Mr Emmett bore no responsibility for this situation. In this regard, the specific, unrefuted (and in some cases documented) allegations made by Ms Berry strongly contradicted his claims. I was therefore not satisfied it would be appropriate to waive the late payment fees.

12.    I did not consider that a waiver of this debt was appropriate.

13.    I was not satisfied that there was any factor in Mr Emmett’s matter which warranted deviating from the general position of limiting waivers of debt to instances where the debt’s enforcement would cause inequity or financial hardship.

24    With respect, some of those reasons seem highly contestable and some irrelevant.

25    For example, the matters referred to in [11] do not seem to us to have any bearing on an evaluation of the conduct of DHS in November 2008 when, at least from that moment, it would have been possible and proper to bring to the appellant’s attention the legislative steps which had been taken to avoid the very kind of dual liability which the respondent (on the advice of DHS) has decided should be enforced in the present case.

26    Similarly, we find it hard to see that (legislatively unintended) result as “equitable”, whatever acrimony may remain between the appellant and his former wife. The propositions that the appellant was “liable” to make additional payments and that waiver would be “at the expense” of his former wife seem to us also to be lacking in objectivity. The plain intent of s 30AA was to avoid outcomes of the present kind. It is a curious matter that the Commonwealth can turn aside that apparent intent in order to receive the extra payments upon a discretionary basis in its own name (no matter to whom they may then be passed) when the active failure of disclosure in 2008 (and perhaps again in 2012) may be laid at the door of its own agencies.

27    Nevertheless, the Court does not deal with these matters as an administrative decision-maker. The grounds for intervention are limited. Moreover, normally the limits of the contest are defined by the position of the litigating parties.

28    The proceedings at first instance in this Court, seeking to challenge the decision of the respondent, were commenced under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (“AD(JR) Act”) which, by s 5, sets out the available grounds for judicial review of an administrative decision to which the AD(JR) Act might apply. It is of the utmost importance to see whether the criticisms we have made and the reservations we have expressed fall within the confines of the AD(JR) Act, as the matters were argued by the parties themselves.

29    At this point, it is necessary to observe that the case decided by the primary judge was expanded on the appeal, with leave. Attention must, therefore, first be given to the reasons of the primary judge and then to the additional matters ventilated in the appeal.

30    Before the primary judge, there were two main lines of argument relied upon by the appellant. The first was that the appellant was denied procedural fairness in various ways by DHS and that the respondent failed to consider the request for a waiver in the light of that unfairness. The second was that the respondent’s decision was (legally) unreasonable.

31    Those lines of argument attempted to engage the following provisions of the AD(JR) Act:

5    Applications for review of decisions

(1)    A person who is aggrieved by a decision to which this Act applies that is made after the commencement of this Act may apply to the Federal Court or the Federal Circuit Court for an order of review in respect of the decision on any one or more of the following grounds:

(a)    that a breach of the rules of natural justice occurred in connection with the making of the decision;

…

(e)    that the making of the decision was an improper exercise of the power conferred by the enactment in pursuance of which it was purported to be made;

…

(2)    The reference in paragraph (1)(e) to an improper exercise of a power shall be construed as including a reference to:

…

(g)    an exercise of a power that is so unreasonable that no reasonable person could have so exercised the power;

32    Neither of those lines of argument could succeed. As to the first, the focus of attention needed to be on the respondent’s conduct, not that of DHS. There was clearly no failure by the respondent to consider the background we have set out, including the failures of DHS. As to the second argument, however much room there may be to disagree with the respondent’s reasons, it is not possible to stigmatise the result as one to which no reasonable person could come.

33    It is unnecessary to add further to the analysis of those issues by the primary judge, whose explanation of his reasons for rejecting the arguments is lucid, logical and, with respect, plainly correct (see Emmett v McCormack [2015] FCA 826).

34    On the appeal, in response to lines of enquiry from the Bench, the appellant sought, and was granted leave, to argue two further matters. They were, in substance, that the respondent misconstrued s 34(1) of the FMA Act and misconstrued s 30AA of the CS(RC) Act.

35    Neither of those grounds has any substance. The respondent plainly understood the nature of the task on which he was embarked under s 34 of the FMA Act. He plainly took into account the failure by DHS to advise the appellant of the facility under s 30AA of the CS(RC) Act.

36    The thing that has troubled us about the present case lies elsewhere. It concerns the matters referred to in s 5(1)(e) of the AD(JR) Act (set out above), as informed by s 5(2)(a) and/or (f), as follows:

5    Applications for review of decisions

…

(2)    The reference in paragraph (1)(e) to an improper exercise of a power shall be construed as including a reference to:

(a)    taking an irrelevant consideration into account in the exercise of a power;

…

(f)    an exercise of a discretionary power in accordance with a rule or policy without regard to the merits of the particular case;

37    However, we are sitting on appeal, not at first instance. Moreover, the matters which have concerned us do not arise within the boundaries of the present litigation: they do not form part of the appellant’s case and the respondent has had no opportunity to deal with them.

38    There has certainly been no error demonstrated in the conclusions or orders of the primary judge.

39    Despite our misgivings, therefore, we see no alternative to dismissing the appeal. The appellant may have administrative courses which remain open to him under the CDDA Scheme, as the respondent appeared to intend.

40    There is no reason in principle to deny the respondent’s costs. We would therefore dismiss the appeal with costs.

Associate:

Dated:    10 May 2016

REASONS FOR JUDGMENT

FLICK J:

41    The facts giving rise to the present dispute go back some years. In issue is the liability of the Appellant, Mr Anthony Emmett, to pay a sum of about $125,000 to his former wife, Ms Berry.

42    It is unnecessary for present purposes to retrace the facts in any great detail.

43    The facts start with the separation of Mr Emmett from his former wife in July 1997. The couple subsequently divorced. They had two children who both resided with their mother after the separation. Both children are now over 18 years of age.

44    In 1997 Mr Emmett was ordered to pay child support. This he did until he left Australia and went to the United Kingdom in 2000. At the time, his departure from Australia had the consequence that he ceased having to pay child support. Amendments, however, were made to the Child Support (Assessment) Act 1989 (Cth) (the “Child Support (Assessment) Act”). Those amendments provided for a parent to make an application for a child support assessment where the other parent was residing in a reciprocating jurisdiction, such as the United Kingdom.

45    The Child Support Division of the Department of Human Services was responsible for the administration of the Child Support (Assessment) Act and the collection of child support liabilities under the Child Support (Registration and Collection) Act 1988 (Cth) (the “Child Support (Registration and Collection) Act”).

46    Ms Berry applied for an assessment of child support by a Magistrate in England in September 2000. The amount of that assessment was less than the amount previously payable in Australia under the Child Support (Assessment) Act. But the assessment made by the Magistrate did not extinguish or vary the assessments made pursuant to the Australian Act. A second, similar order was made in March 2008.

47    Some amounts were paid pursuant to the Magistrate’s assessment and collected by the Child Support Division. Some correspondence was forwarded by the Child Support Division but returned because it was apparently sent to the wrong address. On one view of the facts, it was said that Mr Emmett was difficult to locate.

48    In July 2007 the Child Support (Registration and Collection) Act was amended. Section 30AA was inserted which allowed for the registration of an assessment of liability which extinguished any former liability.

49    In March 2008, however, the Child Support Division forwarded to Mr Emmett a letter enclosing an account statement disclosing the accruing arrears. In April 2008 Mr Emmett telephoned the Division and asked whether he could decrease the arrears. He was subsequently told that although “the UK courts may only enforce part of the monthly liability this did not negate the Australian assessed amounts”. He was not told about s 30AA.

50    In November 2012 the Child Support Division received a request from Mr Emmett seeking the registration of the Magistrate’s second order. But the request came too late. Mr Emmett could not by then invoke s 30AA.

51    The manner in which the Child Support Division had dealt with Mr Emmett received attention. In 2013 it was the subject of an Ombudsman’s inquiry which was critical of the Agency. But such past administrative conduct provides only historical background.

52    Of present relevance is the fact that in December 2012 Legal Aid New South Wales wrote to the Department of Human Services on behalf of Mr Emmett. The letter detailed the past history and concluded with a request that “any outstanding arrears of child support and penalties … be remitted in their entirety”. Also sought was “a formal waiver on Mr Emmett’s behalf”. The Child Support Division expressed its view in March 2013. It opposed the “application for a debt waiver” and recommended the “Department refuse the waiver of Mr Emmett’s child support debt of $124,399.15”.

53    In May 2014 the Respondent declined to waive the debt.

54    Proceedings were then commenced in this Court seeking judicial review of that decision. The application invoked the Court’s jurisdiction pursuant to both the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the “Judicial Review Act”) and s 39B of the Judiciary Act 1903 (Cth).

55    A Judge of this Court dismissed the application in August 2015: Emmett v McCormack [2015] FCA 826.

56    The appeal from that decision is to be dismissed with costs.

THE RESPONDENT’S REASONS FOR DECISION

57    In a letter dated May 2014 informing Mr Emmett of his decision not to waive the debt, the Respondent addressed one of Mr Emmett’s concerns as follows:

Furthermore, I understand you consider that section 30AA of the Child Support (Registration and Collection) Act 1988 – rule to avoid dual liabilities is also a basis for a finding of inequity. You have also advised of serious mental health issues and financial hardship being caused by this debt.

I note your and the Ombudsman’s concerns that DHS did not advise you of a mechanism by which you could reduce your child support payments. While a reduction in your payments to Ms Berry was legally possible, I am not satisfied that your inability to avail yourself of this was an inequitable outcome.

I do not consider that a waiver of this debt is appropriate. You were liable to pay this amount of child support under Australian law. DHS’s investigation of the matter under the CDDA Scheme seems the most appropriate forum for investigating your claims of its defective administration.

There is insufficient information to establish that financial hardship would be caused by enforcement of this debt. I note you are employed.

The suggestion by the Ombudsman to waive the debt and make a commensurate act of grace payment to Ms Berry is predicated on an acceptance of your account of the facts. I do not have sufficient information to accept that you bear no responsibility for this situation. In this regard, the specific unrefuted (and in some cases documented) allegations made by Ms Berry strongly contradict your claims.

The letter concluded as follows:

I do not consider that a waiver of debt is appropriate in this instance. Therefore, I have declined, under section 34(1)(a) of the FMA Act, waiver of a debt of $125,283.33 owed by you. I have also declined to make an act of grace payment to Ms Berry of $125,283.33 under section 33(1) of the FMA Act. Information about the options available if you are dissatisfied with this decision is in the enclosed document.

58    A request was thereafter made pursuant to s 13 of the Judicial Review Act. That section, unlike reasons that may be provided voluntarily by a decision-maker in advance of any request, imposes a statutory requirement to provide a statement setting forth:

    findings on “material questions of fact”;

    a reference to “the evidence or other material on which those findings were based”; and

    “the reasons for the decision”.

The statement of reasons requested was provided in June 2014.

59    That statement of reasons outlined as follows the legislative scheme under consideration:

3.    In reaching my decision, I considered the following applied:

(i)    Section 34(1)(a) of the FMA Act provides that the Finance Minister may waive debts owing to the Commonwealth. This subsection provides that:

(1)    The Finance Minister may, on behalf of the Commonwealth:

(a)    Waive the Commonwealth’s right to payment of an amount owing to the Commonwealth.

(ii)    The principles in the FC 2009/09 were also taken into account in relation to this matter.

(iii)    Paragraph 19 of FC 2009/09 outlines the parameters of the waiver of debt power. Relevantly, it notes that the circumstances under which waiver of debt requests are approved can broadly be characterised as where the Minister or delegate considers that recovery of the debt would, in the particular circumstances, be inequitable or cause ongoing financial hardship. An inequity may arise where the debt has arisen as a result of the implementation of a Commonwealth law in a person’s particular circumstances, whether or not it arose from defective administration.

(iv)    Paragraphs 20 and 21 of FC 2009/09 outline circumstances where waiver of debt is generally unavailable.

Thereafter the statement set forth findings on “material questions of fact”, including the following:

FINDINGS ON MATERIAL QUESTIONS OF FACT

4.    In reaching my decision, I made the following findings of fact:

…

(iii)    Section 30AA of the Child Support (Registration and Collection) Act would have allowed Mr Emmett to extinguish his larger Australian Child Support liability by registering his smaller UK child support liability with DHS. DHS did not advise him of this option. DHS held various overseas addresses for Mr Emmett between 2000 and 2008 but these were deemed invalid when mail was returned. The Ombudsman was critical of DHS’s administration of this matter and both Mr Emmett and the Ombudsman consider DHS is responsible for Mr Emmett incurring the debt. However, DHS is not required by legislation or policy to notify customers of section 30AA.

…

(v)    Mr Emmett considered that section 30AA of the Child Support (Registration and Collection) Act 1988 – rule to avoid dual liabilities is also a basis for a finding of inequity. Mr Emmett also advised of serious mental health issues and financial hardship being caused by this debt.

(vi)    Mr Emmett and the Ombudsman were concerned that DHS did not advise Mr Emmett of a mechanism by which he could reduce his child support payments.

(vii)    DHS did not support the request for waiver and noted the debt was payable to Ms Berry for the ongoing support of her children. The allegations of defective administration made against it by Mr Emmett had not been denied by DHS. DHS advised that the CDDA Scheme is the appropriate mechanism to investigate the claims and had invited either party to claim.

…

60    The statement concluded with the following reasons for the decision:

REASONS FOR THE DECISION

…

6.    Waiver of the debt of $123,401.68 (excluding late payment fees) would have been at the expense of Ms Berry.

7.    There was insufficient information for a finding of financial hardship on Mr Emmett’s part from enforcement of this debt.

8.    While a reduction in Mr Emmett’s payments to Ms Berry had been legally possible, I was not satisfied that his inability to avail himself of that was an inequitable outcome.

9.    Mr Emmett was liable to pay that amount of child support under Australian law.

10.    DHS’s investigation of the matter under the CDDA Scheme seemed the most appropriate forum for investigating Mr Emmett’s claims of its defective administration.

11.    There was insufficient information to conclude that Mr Emmett’s own actions had not contributed to DHS’s difficulties in locating him. I did not have sufficient information to accept that Mr Emmett bore no responsibility for this situation. In this regard, the specific, unrefuted (and in some cases documented) allegations made by Ms Berry strongly contradicted his claims. I was therefore not satisfied it would be appropriate to waive the late payment fees.

12.    I did not consider that a waiver of this debt was appropriate.

13.    I was not satisfied that there was any factor in Mr Emmett’s matter which warranted deviating from the general position of limiting waivers of debt to instances where the debt’s enforcement would cause inequity or financial hardship.

61    There were, unsurprisingly, differences between such reasons as were set forth in the May 2014 letter and the statement of reasons provided pursuant to s 13 of the Judicial Review Act.

62    The repeated references to the “CDDA scheme” are references to the Scheme for Compensation for Detriment caused by Defective Administration.

THE GROUNDS OF CHALLENGE & THE NOTICE OF APPEAL

63    The formulation of the issues for resolution on appeal was found to be as “wanting” as Belshazzar.

64    Before the primary Judge, there was an Originating Application for Judicial Review. That was amended. And there was subsequently a Further Amended Application.

65    On appeal, there was a Notice of Appeal. Not surprisingly, Counsel for the Appellant sought leave to amend during the hearing of the appeal. There was no opposition by Counsel for the Respondent. The Court granted leave.

66    Although leave was granted, it should nevertheless be noted that the granting of leave is not automatic – even in those circumstances where a respondent claims no prejudice and indeed consents to the granting of leave, it forever remains within the discretion of the appellate Court. In the circumstances of the present case the belated application for leave to amend had all the hallmarks of a case being thought out “on the run” rather than careful attention having been given to the submissions to be advanced on appeal. To grant leave to amend too readily may run the risk of transforming the hearing at first instance into a “preliminary skirmish”: cf. Coulton v Holcombe (1986) 162 CLR 1 at 7 per Gibbs CJ, Wilson, Brennan and Dawson JJ; Sobey v Nicol [2007] FCAFC 136 at [72], (2007) 245 ALR 389 at 403 to 404 per Branson, Lindgren and Besanko JJ; Nexus Adhesives Pty Ltd v RLA Polymers Pty Ltd [2012] FCAFC 135 at [7], (2012) 97 IPR 160 at 163 per North, Jacobson and Foster JJ. The responsibility carefully to identify the issues to be resolved rests upon the legal representatives. The identification of those issues cannot depend upon questions being raised by the Court. Nor is that task assisted by opportunistic amendments which seek to take advantage of what might be seen as a “good point” only for any merit in the point to evaporate on closer analysis. It is the responsibility of Counsel to assist the Court; it is not the responsibility of the Court to assist Counsel in the drafting of his pleadings.

67    But leave was granted in the present case. Two further Grounds of Appeal were drafted during the course of a short adjournment during the hearing. None of the existing Grounds of Appeal were abandoned. These two further Grounds of Appeal, with respect, were themselves not all that carefully drafted and needed further “explanation” as the hearing progressed.

68    Whatever may be the deficiencies in the formulation of the Grounds of Appeal, the issues to be resolved on appeal (in very summary form) focussed upon whether the Respondent’s decision not to waive the debt was vitiated by reason of:

    a breach of the rules of natural justice or procedural fairness;

    unreasonableness;

    a misconstruction of s 34(1) of the Financial Management and Accountability Act 1997 (Cth) (the “Financial Management and Accountability Act”); and/or

    error of law in misconstruing s 30AA of the Child Support (Registration and Collection) Act.

The last two Grounds were those raised during the hearing by way of amendment. None of the arguments prevail.

THE REJECTION OF THE GROUNDS OF APPEAL

69    The argument that the Respondent had breached the rules of procedural fairness was without substance. The argument was advanced in a number of different ways.

70    One way in which the argument was advanced was to contend that the Respondent “erred in failing to find that the conduct of the Child Support Agency was procedurally unfair”. As a general proposition it is without substance to contend that a breach of the rules of procedural unfairness may be exposed, not by reason of any procedural unfairness on the part of the decision-maker, but where a claimant has been denied procedural fairness by a separate and distinct government authority. The following observations of Gleeson CJ in Hot Holdings Pty Limited v Creasy [2002] HCA 51, (2002) 210 CLR 438 at 448 provide no support for the Appellant’s case:

[22]    Procedural unfairness can occur without any personal fault on the part of the decision-maker. But if the form of unfairness alleged is the actuality or the appearance of disqualifying bias, and that is said to result from the conduct or circumstances of a person other than the decision-maker, then the part played by that other person in relation to the decision will be important.

That was a case concerning, however, the peripheral involvement of Departmental officers in the preparation of a recommendation and whether that involvement invalidated the decision of the Minister. As Gleeson CJ explained:

[8]    The pecuniary interest said to have given rise to the alleged bias was that of two officers of the Department who were said to have been ‘involved’ in the ‘process’ within the Department leading up to the Director General's advice to the Minister. In each case, the interest concerned the holding of shares in a listed public company which had an option to purchase an interest in the exploration licence if it were granted to the appellant. One of the officers … held shares in the company. The other officer … did not; but his independent, adult son held such shares.

Where it was demonstrated that the Minister had given independent consideration to the issues involved, no reasonable apprehension of bias arose: see McGovern v Ku-Ring-Gai Council [2008] NSWCA 209 at [166] to [167], (2008) 72 NSWLR 504 at 537 to 538 per Basten JA. See also: Coutts v Close [2014] FCA 19 at [63] per Griffiths J. Hot Holdings stands as no authority for the more generally-expressed proposition that a denial of procedural fairness on the part of a separate governmental agency can be visited upon a decision-maker whose decision has otherwise been reached in a procedurally fair manner.

71    The decision-making process in respect of which the Appellant asserted a right to procedural fairness was a decision by the Respondent as to whether or not the liability to pay child support should be waived pursuant to s 34 of the Financial Management and Accountability Act. It is, with respect, not to the point to seek to rely upon a denial of procedural fairness in any decision-making process that was undertaken for the purposes of the Child Support (Assessment) Act.

72    Another way in which the procedural fairness argument was advanced was that “it was necessary for the respondent to reach a conclusion as to the fairness of [the] procedure and conduct” of the Child Support Division. The written submissions relied upon by Mr Emmett conclude that he “could have had no complaint had the respondent acknowledged the [Child Support Division’s] procedural unfairness and still for a lawful reason, declined to waive the debt”. The issue, it is there submitted, “was the respondent’s procedure, not the merits”. But the “defective administration” to which Mr Emmett had been exposed was expressly acknowledged in the statement of reasons provided pursuant to s 13 of the Judicial Review Act. And, notwithstanding that acknowledgment, the Respondent nevertheless proceeded to make his decision.

73    A further manner in which the argument was advanced was to contend that the Respondent failed to take into account submissions advanced by Legal Aid. The letter from Legal Aid, it was common ground, was not before the Respondent. The rules of natural justice or procedural fairness required, so it was submitted, a decision-maker to “listen fairly to any … rational argument”: Mahon v Air New Zealand [1984] AC 808 at 820 to 821 (cited: Annetts v McCann (1990) 170 CLR 596 at 609 per Brennan J; at 619 per Toohey J). But, although the letter was not before the Respondent, the argument now relied upon was canvassed before the Respondent. There was, accordingly, no denial of procedural fairness.

74    However it was advanced, the procedural fairness Ground of Appeal was without substance. To the extent that the Appellant sought to argue that it was procedurally unfair for the Respondent not to take into account the procedural unfairness that Mr Emmett had experienced at the hands of the Child Support Division, such a consideration was not one which the Respondent was obliged to take into account: Minister for Aboriginal Affairs v Peko Wallsend Ltd (1986) 162 CLR 24 at 40 to 41 per Mason J.

75    The second Ground of Appeal alleging unreasonableness is equally without substance. Properly understood, the second Ground of Appeal was but an alternative way of advancing the former Ground.

76    Attempts to define those circumstances in which a decision-maker trespasses beyond the mandate entrusted to him by the Legislature have been formulated in a variety of ways. One of those attempts is the following observation of French CJ in Minister for Immigration and Citizenship v Li [2013] HCA 18, (2013) 249 CLR 332. After referring to the decision of Lord Greene MR in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223, the Chief Justice continued:

[28]    Beyond unreasonableness expressive of particular error however, it is possible to say, as Lord Greene MR said, that although a decision-maker has kept within the four corners of the matters it ought to consider “they have nevertheless come to a conclusion so unreasonable that no reasonable authority could ever have come to it.” In such a case the court may interfere. That limiting case can be derived from the framework of rationality imposed by the statute. As explained by Lord Greene MR, it reflects a limitation imputed to the legislature on the basis of which courts can say that parliament never intended to authorise that kind of decision. After all the requirements of administrative justice have been met in the process and reasoning leading to the point of decision in the exercise of a discretion, there is generally an area of decisional freedom. Within that area reasonable minds may reach different conclusions about the correct or preferable decision. However, the freedom thus left by the statute cannot be construed as attracting a legislative sanction to be arbitrary or capricious or to abandon common sense.

Although the conduct of the Child Support Division and the Department had previously attracted criticism, a fact which the Respondent acknowledged, the Respondent’s decision nevertheless could in no sense be described as “arbitrary or capricious” or one which “abandon[ed] common sense”.

77    Both the third and fourth Grounds of Appeal may be dealt with together.

78    The third Ground of Appeal asserted error in the construction of s 34 of the Financial Management and Accountability Act. Section 34 at the time of the decision provided as follows:

34    Finance Minister may waive debts etc.

(1)    The Finance Minister may, on behalf of the Commonwealth:

(a)    waive the Commonwealth’s right to payment of an amount owing to the Commonwealth;

(b)    postpone any right of the Commonwealth to be paid a debt in priority to another debt or debts;

(c)    allow the payment by instalments of an amount owing to the Commonwealth;

(d)    defer the time for payment of an amount owing to the Commonwealth.

Note:    See also subparagraph 65(2)(a)(ia) (which allows regulations to be made about the Finance Minister considering a report from specified person before waiving a total amount that is more than a specified amount).

(3)    A waiver may be made either unconditionally or on the condition that a person agrees to pay an amount to the Commonwealth in specified circumstances.

(4)    In this section:

amount owing to the Commonwealth includes an amount that is owing but not yet due for payment.

79    The final Ground of Appeal alleged error in the construction of s 30AA of the Child Support (Registration and Collection) Act. Section 30AA provided as follows:

Rule to avoid dual liabilities

(1)    If:

(a)    a registrable maintenance liability (the first liability) relating, in whole or in part, to a particular child, and also relating to a particular payer and a particular payee, is registered; and

(b)    at any time after the registration of the first liability, a subsequent registrable maintenance liability relating, in whole or in part, to the same child, and also relating to the same payer and the same payee, is registered;

the first liability ceases, at the time the subsequent liability is registered, to have effect to the extent only that it relates to the particular child.

(2)    Despite subsection (1), the first liability is treated, for the sole purpose of facilitating the recovery of arrears in respect of any period ending on or before it ceases to have effect, as if it had not ceased to have effect as provided in subsection (1).

Both the May and June 2014 reasons provided by the Respondent referred to Mr Emmett being “liable to pay this amount of child support under Australian law” and to the Respondent not being satisfied that Mr Emmett’s inability to avail himself of “a mechanism by which you could reduce your child support payments” produced an “inequitable outcome”. Had Mr Emmett been properly advised by the Child Support Division of the s 30AA amendment, when he sought its advice in April 2008, he could then have registered the Magistrate’s order and expunged the Australian liability – or at least a part of it. The unqualified statement that Mr Emmett had a “liability … under Australian law” and the conclusion that he suffered no “inequity”, on one approach, could have exposed error of law.

80    The third and fourth Grounds of Appeal may be dealt with together for the simple reason that any error in the construction of either s 34(1) of the Financial Management and Accountability Act or s 30AA of the Child Support (Registration and Collection) Act (assuming that there was such an error) played no part at all in the reasoning of the Respondent.

81    The basis of the Respondent’s reasoning process was that the concerns of Mr Emmett were best resolved by recourse to the Scheme for Compensation for Detriment Caused by Defective Administration. The Respondent thus stated at the outset of his reasons provided pursuant to s 13 of the Judicial Review Act that:

    the consequence of waiver of the debt “would have been at the expense of Ms Berry”. That statement, it emerged, was common ground. The Child Support Division collected child support payments and (in turn) remitted those monies to the recipient. The Respondent considered, and the Appellant conceded, that to waive the debt would have the consequence that outstanding monies would neither be collected nor paid to Ms Berry.

The statement of reasons thereafter went on to record that:

    a reduction in Mr Emmett’s payments “had been legally possible”, but the Respondent was not satisfied that “his inability to avail himself of that was an inequitable outcome” – those statements presumably addressing the lapsed opportunity to register the second Magistrate’s order and hence expunge the Australian liability;

and, most relevantly, the conclusion that:

    the Scheme for Compensation for Detriment Caused by Defective Administration was “the most appropriate forum for investigating Mr Emmett’s claims” in respect to the defective administration of the Department.

82    In reaching that conclusion there had been no procedural unfairness. Mr Emmett had been given an opportunity to advance his arguments as to why the debt should be waived. Those arguments were entertained by the Respondent. But he remained unswayed. There was no error of law in reaching that conclusion. Nor was it unreasonable – the decision had the consequence that Ms Berry received the monies for which there was a liability to pay; and Mr Emmett remained free to make a claim pursuant to the Scheme for Compensation for Detriment Caused by Defective Administration. Such a result was manifestly not unreasonable.

THE REASONS PROVIDED – INCONSISTENCIES?

83    One final issue which briefly should be addressed emerged during the hearing and arose out of the fact that the Respondent had provided to Mr Emmett two sets of reasons for his decision.

84    The first statement of reasons was provided by way of the May 2014 letter. That was the letter communicating to Mr Emmett the Respondent’s decision not to waive payment of his child support debt.

85    The second statement of reasons was provided in June 2014 in response to a request made pursuant to s 13 of the Judicial Review Act.

86    Needless to say, the statement of reasons provided in June 2014 was far more detailed than that provided earlier in May 2014. Part of the explanation for the greater detail provided in the June statement was the fact that that statement needed to set out each of the three requirements imposed by s 13. In providing the reasons set forth in the May 2014 letter there was no requirement for the Respondent to comply with the strictures imposed by that section.

87    One issue which emerged during the hearing focussed upon differences between the May and June 2014 explanations for the same decision.

88    At least three comments need to be made.

89    First, and even short of a duty to provide reasons imposed by statute, an administrator may voluntarily provide an explanation for the manner in which he has proceeded. Where such reasons have been provided, a Court conducting judicial review may examine those reasons with a view to determining whether legal error may be exposed: Qu v Minister for Immigration and Multicultural Affairs [2001] FCA 1299 at [9], per Gray J. But such reasons should not be “overzealously scrutinised”: East Melbourne Group Inc v Minister for Planning [2008] VSCA 217 at [228], (2008) 23 VR 605 at 661 to 662 per Ashley and Redlich JJA; Chief Commissioner of Police v McCann [2015] VSCA 362 at [69] per Ginnane AJA; Assistant Treasurer and Minister for Competition Policy and Consumer Affairs v Cathay Pacific Airways Ltd [2009] FCAFC 105 at [51], (2009) 179 FCR 323 at 337 per Flick J (Spender and Lander JJ agreeing).

90    Second, questions may nevertheless arise as to the admissibility of a statement of reasons – whether they have been provided voluntarily or pursuant to a statutory obligation. Differing views have been expressed regarding admissibility. In Sezdirmezoglu v Acting Minister for Immigration and Ethnic Affairs (1983) 74 FLR 348 at 357. Smithers J observed:

There is a preliminary question concerning the evidentiary status of the statement of reasons provided by the Minister on 15 September 1983.

The statement was not in the form of an affidavit and was merely tendered at the commencement of the hearing. Some guidance as to the status of the reasons can be gleaned from Givaudan & Co Ltd v Minister of Housing and Local Government [1967] 1 WLR 250. In that case the Minister was under a statutory duty to provide reasons pursuant to the Tribunals and Inquiries Act 1958. His Honour Mr Justice Megaw said (WLR at 259):

“The document containing the Minister's reasons is … an important document, required by statute to be prepared for a particular and important purpose, and it must be, and no doubt is, regarded by the Minister as such. The whole of its contents must be assumed prima facie, at least, to have been inserted for a relevant purpose: namely, the setting forth with reasonable precision and clarity of matters which are relevant as indicating and explaining positively or negatively the reasons for the Minister's decision.”

In line with the thrust of these comments I take the view that the statement of reasons provided by the Minister, unless effectively challenged, are evidence of the reasons for his decision …

But the proposition that reasons are evidence “unless effectively challenged” has attracted comment.

91    Subsequently, in Minister for Immigration and Ethnic Affairs v Taveli (1990) 23 FCR 162. Davies and Hill JJ concluded that the primary Judge had correctly rejected the tender of a statement of reasons provided pursuant to s 13; French J (as his Honour then was) concluded that there was error in rejecting the tender. Davies J was of the view that a statement of reasons was admissible if tendered as part of the res gestae. In so concluding, his Honour observed (at 168):

Any statement of reasons which under earlier law would have been received in evidence as part of the record of the challenged decision would be admissible in evidence if tendered by the person affected by the decision or by the decision-maker. Such a statement of reasons would be part of the res gestae, a part of the decision-making process. I would accept that, in these present days, in every instance where the decision-making power required the decision-maker to state reasons for decision, whether at the time of the making of the decision or on request thereafter, eg s 43 of the AAT Act and s 25B(1)(d) of the Broadcasting Act 1942 (Cth), the statement of reasons so delivered would be admissible in evidence, when tendered by either party, as forming part of the decision-making process empowered by the legislation. Just as the reasons which accompany a judicial decision are received as the reasons for the decision, reasons which accompany an administrative decision are evidence of the reasoning process behind that decision.

An unverified statement of reasons which does not fall into this category will be admissible by consent or under any of the ordinary rules of evidence as an admission against the decision-maker or as a business record and so on. However, the tender of the statement of reasons before the trial judge was not founded upon any rule of evidence.

…

It has been the practice of this Court not to receive such a statement, unverified, unless a ground of admissibility is established. It is true that in Sezdirmezoglu v Acting Minister for Immigration and Ethnic Affairs (1983) 74 FLR 348 at 357, Smithers J said:

“… I take the view that the statement of reasons provided by the Minister, unless effectively challenged, are evidence of the reasons for his decision.”

However, the report of the case does not show by whom the statement was tendered or whether there was an objection to the tender.

(Emphasis in original)

Although reaching the same conclusion that the tender of the statement of reasons was rightly rejected, Hill J in separate reasons for decision observed (at 162 to 163):

The mere fact that the statement is required by statute does not in my view provide a reason for the adoption of a different view. In particular the obligation to furnish a statement does not, in my view, render admissible that which was otherwise inadmissible …

As a matter of ordinary principle, a statement made after the event will not generally be received as evidence in favour of the person making the statement … Such evidence is not only self-serving but is a narrative of a past event and purports to be the equivalent of or a substitute for direct testimony of the event it narrates. The exception to this rule that the state of a man's mind may be proved by evidence of the words and acts which identify that state of mind even when not contemporaneous with the time when the state of mind is to be considered …

In considering the question of admissibility it is, of course, always necessary to consider the issue which arises between the parties. In the present case an issue was whether the decision-maker, Mr Luu, had in fact taken into account in making his decision the alleged presence of the respondent, Mr Faka'osi, at the hotel brawl, a matter upon which Mr Faka'osi was not given the opportunity to comment. A statement made subsequent to the making of the decision, not under oath, to the effect that Mr Luu did not take these matters into account in arriving at his decision is, in my view, as much a narrative of a fact as would be a statement by a policeman made some time after an accident of the events he observed and falls within the category of evidence that is not (in the absence of a statutory provision to the contrary) admissible …

Justice French referred to the importance of statutory provisions such as s 13 and continued (at 179):

And it is that statutory context that lays a foundation for the acceptance of a properly authenticated statement of reasons under s 13 as evidence of the truth of what it says, namely, that the findings made, the evidence referred to and the reasons set out were those actually made, referred to and relied upon in coming to the decision in question and that no finding, evidence or reason which was of any significance to the decision has been omitted. That the statement may be used in evidence to support such an inference does not exclude the possibility that a contrary inference may be drawn from its form and contents considered alone or against other evidence in the case. Absent any such contra-indication, the inference that it is an accurate account of the findings and reasons actually relied upon is no more than a piece of circumstantial reasoning not dissimilar in character from that which underlies the so called presumption of regularity or presumption against fraud …

His Honour continued (at 180):

… the statement of reasons can be treated as evidence of the fact that the reasons for decision and the findings on which they were based were as set out in the statement. That is not to say that the use of the term “prima facie evidence” to describe its effect is particularly helpful. It is a piece of evidence to be weighed and assessed like any other.

The person who provided the reasons may not rely upon statements made as evidence of the facts in a self-serving way: Minister for Immigration and Ethnic Affairs v Arslan (1984) 4 FCR 73.

92    In the present case there was no objection to either the May 2014 letter or the subsequently provided statement of reasons furnished pursuant to s 13 of the Judicial Review Act.

93    Third, the significance to be attributed to discrepancies between reasons provided voluntarily and those subsequently provided pursuant to a statutory requirement upon a request being made should be approached with some degree of caution. On the one hand:

    discrepancies between the two sets of reasons may provide the springboard for a reason to question the reliability of the explanation provided.

But, on the other hand:

    no impediment should be placed in the path of an administrator voluntarily seeking to explain at the outset the basis upon which he has made a decision. If an administrator were to be exposed to unwarranted scrutiny by reference to discrepancies between varying accounts of reasons provided, he may well shrink from seeking to explain the basis upon which he has proceeded unless compelled to do so.

To embark too readily upon a course of dissecting possible differences or nuances in the manner in which reasons may be expressed would only be to do the one thing on which there is common agreement: i.e., reasons should not be read with an eye too keenly attuned to discerning error where none truly exists (cf. Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259).

94    There may well be cases where differences between reasons provided at different times by the same decision-maker with respect to the same decision may assume significance. But that is not the present case. The differences between the May and June 2014 explanations are self-evidently due to the necessity to address the three requirements which s 13 imposes. The Respondent was simply not required to do so when the May 2014 letter was written.

CONCLUSIONS

95    None of the Grounds of Appeal have been made out. No appellable error is discernible in the reasons for decision of the primary Judge. Indeed, his Honour’s conclusions are unquestionably correct. Nor is any error exposed, unsurprisingly, by the primary Judge failing to resolve arguments which were not advanced before him. The amended Grounds of Appeal disclose no reason to disturb his Honour’s orders.

96    Concurrence is expressed with the orders proposed by Buchanan and Perry JJ.

Associate:

Dated:    10 May 2016