FEDERAL COURT OF AUSTRALIA

Australian Prudential Regulation Authority v Administrative
Appeals Tribunal [2005] FCA 1916

AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

v ADMINISTRATIVE APPEALS TRIBUNAL & ANOR

NSD 2523 OF 2005

LINDGREN J

20 DECEMBER 2005

SYDNEY

THE COURT ORDERS THAT:

1.      Pursuant to section 50 of the Federal Court of Australia Act 1976 (Cth) and until further order, the affidavit of Marcus Bezzi sworn 16 December 2005 and the exhibits thereto not be published other than to:

(i)      the officers of the applicant and its legal advisers;

(ii)    the members, officers and employees of the first respondent;

(iii)   the second respondent and his legal advisers.

2.      The operation of the decision of the Administrative Appeals Tribunal made on 24 November 2005 in Tribunal proceeding N2005/666 be suspended pending the hearing and determination of this proceeding or further order of the Court.

3.      The hearing of this proceeding be given such expedition as is possible in all the circumstances.

THE COURT NOTES THAT:

4.      There is no order as to costs of the motion brought by notice of motion filed on 16 December 2005.

THE COURT DIRECTS THAT:

5.      The applicant file and serve any further affidavits on which it will rely by 17 January 2006.

6.      The applicant file and serve its submissions five clear working days prior to the hearing date.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

INTRODUCTION

1                     By its application filed on 16 December 2005 commencing this proceeding, the applicant, Australian Prudential Regulation Authority (‘APRA’) applies under ss 5 and 6 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) and s 39B(1A)(a)(c) of the Judiciary Act 1903 (Cth) for review of a decision of the first respondent, the Administrative Appeals Tribunal (‘the Tribunal’) made on 24 November 2005, purportedly under s 37(2) of the Administrative Appeals Tribunal Act 1975 (Cth) (‘the AAT Act’) in proceeding No N2005/666 in the Tribunal (‘the s 37(2) decision’).  The applicant in that proceeding was indicated by the word, ‘Confidential’ and is the second respondent indicated as ‘T’ in this proceeding.  In the Tribunal proceeding, T sought review of APRA’s decision to disqualify him under ss 25(1) and 44(1)(b) of the Insurance Act 1973 (Cth) (‘the disqualification decision’ and ‘the Insurance Act’). 

2                     The s 37(2) decision was made on 24 November 2005 in the course of the hearing of the review of the disqualification decision.  It was that certain documents may be relevant to that review and that the Tribunal therefore required APRA to lodge with the Tribunal within a certain time two copies of each of the documents.  In broad terms, the documents related to certain named individuals other than T who had also been the subject of investigation by APRA. 

A PRELIMINARY MATTER

3                     By notice of motion filed on 16 December 2005, the applicant (APRA) seeks an order pursuant to s 50 of the Federal Court of Australia Act 1976 (Cth) (‘the FCA’) that the affidavit of Marcus Francis Bezzi sworn 16 December 2005 be treated as confidential to the Court, the parties and their legal representatives, until further order.  On 16 December 2005, when I gave leave to APRA to file its application notice of motion and affidavit in Court, I ordered that the second respondent be known as ‘T’ and that documents then already filed and documents to be filed be headed accordingly.

4                     APRA relies on two grounds.  First, there is annexed to Mr Bezzi’s affidavit transcript of the proceeding before the Tribunal.  Subsection 63(14) of the Insurance Act provides that the hearing of such a proceeding is to take place in private and that the Tribunal may, by order, give directions as to the persons who may be present. 

5                     I am informed that Justice Downes, the President of the Tribunal, did give directions limiting the persons entitled to be present at the hearing before him.

6                     Secondly, Mr Bezzi’s affidavit relates to another person not a party and not before this Court.  Mr Beech-Jones, counsel for APRA, has proposed a form of order ‘until further order’ and I think it is appropriate to make the order proposed.

7                     Accordingly, the Court will order, pursuant to s 50 of the FCA Act, that, until further order, the affidavit of Marcus Bezzi sworn 16 December 2005 and the exhibits to that affidavit it not be published other than to (1) the officers and legal advisers of APRA; (2) the members, officers and employees of the Tribunal; and (3) T and his legal advisers.

THE PRESENT MOTION

8                     By the same notice of motion, APRA seeks an order suspending the operation of the s 37(2) decision.  Each respondent submits to such order as the Court may make on the motion, save as to costs.

9                     APRA's contention throughout has been that the documents the subject of the s 37(2) decision are not relevant to the Tribunal’s review of the disqualification decision.

10                  Subsections 37(2) and (3) of the AAT Act provide as follows:

‘(2)      Where the Tribunal is of the opinion that particular other documents or that other documents included in a particular class of documents may be relevant to the review of the decision by the Tribunal, the Tribunal may cause to be given to the person a notice in writing stating that the Tribunal is of that opinion and requiring the person to lodge with the Tribunal, within a time specified in the notice, the specified number of copies of each of those other documents that is in his or her possession or under his or her control, and a person to whom such a notice is given shall comply with the notice.

(3)       This section has effect notwithstanding any rule of law relating to privilege or the public interest in relation to the production of documents.’

11                  The application for review of the decision must be heard by a Full Court, because s 20(2) of the FCA Act provides, relevantly, that the jurisdiction of the Court in a matter coming before it from a tribunal (other than a court) while constituted by, or by members who include, a person who is a judge of the Court, shall be exercised by a Full Court.  Justice Downes, the President of the Tribunal, is, of course, a judge of this Court.

12                  The next scheduled Full Court sitting will be held in February 2006.

13                  On 16 December 2005, APRA applied to Justice Downes for a variation of the s 37(2) notice.  The purpose of the application was, in substance, to delay the requirement of production until the application to this Court, which was launched on that date, was determined.  However, his Honour declined to vary the terms of the notice and published reasons for that decision.  At present the notice requires APRA to produce the documents to the Tribunal by 22 December 2005.

14                  T’s application before the Tribunal for review of the disqualification decision is due to resume on 13 February 2006.  Four days have been set aside for the remainder of the hearing.  It is unlikely that a Full Court will hear and determine the application for review of the s 37(2) decision prior to the expiry of that four day period, although this is not impossible – inquiries reveal that the applicant may be able to be heard by a Full Court early in February 2006.

15                  It seems, however, on the basis of what I was told from the bar table, that, provided the Full Court can reach its decision not too long after that tranche of hearing dates, no great inconvenience will be caused.  The reason is, according to what I was told, that the APRA documents the subject of the s 37(2) notice will probably not become relevant until submissions are made to his Honour, although of course the documents would need to be admitted into evidence first.  The extent of inconvenience to be caused by a stay will depend on whether submissions are made within the tranche of hearing days in February 2006 or at a later time, and on whether the Full Court can reach a decision by mid-February 2006.

16                  For convenience, I set out here his Honour’s reasons for decision of 16 December 2005:

‘[1]     Application has been made before me this morning to vary the terms of a notice under s 37(2) of the Administrative Appeals Tribunal Act1975(Cth) requiring the Australian Prudential Regulation Authority to produce documents pursuant to s 37 of the Act.

[2]      The circumstances in which the notice was issued appear in detail from the transcript of the hearing before me on 24 November 2005, and in particular around page 316 of the transcript.  I will not set the transcript out in these reasons, but they can be referred to to determine the accuracy of what I am about to say.

[3]      My recollection of the way in which the s 37 notice was issued is as follows.  The applicant issued a summons requiring the production of certain documents.  These documents included documents relating to a number of people and particularly one Mr X.  Throughout the last hearing before me, the question of whether those documents were relevant or not was addressed from time to time.

[4]      Mr X was an employee of the same corporation which also employed the applicant.  He was, to some extent at least, involved in matters which ultimately led to the decision of the Australian Prudential Regulation Authority which is presently being reviewed by me.  The Authority has steadfastly maintained that the issues relating to Mr X and the way he was dealt with were irrelevant to these proceedings, and for those reasons the documents relating to that matter are themselves irrelevant and they should be relieved from compliance with the summons issued by the applicant.

[5]      During the course of the hearing, I expressed tentative views that the documents might be relevant because it would be useful for me to know how Mr X had been dealt with as part of the overall importance of achieving consistency in administrative decision-making.

[6]      A point was reached on 24 November 2005 when the respondent, whilst maintaining that the documents were not relevant, actually presented to me a form of s 37 notice which I understood it found acceptable notwithstanding its position in principle.  An important aspect of the form of the notice as issued was to avoid a problem as to whether privileged documents such as legal advice needed to be produced.

[7]      I am naturally aware of the fact that s 37(3) of the Act requires documents under that section to be produced:“...notwithstanding any rule of law relating to privilege or the public interest in relation to the production of documents.”  The extent of that provision is presently under consideration by Ryan J in the Federal Court in Melbourne, and notwithstanding the words of the section, it may be that the Federal Court comes to a determination that documents that are subject to legal professional privilege do not need to be produced under the section.

[8]      The notice which I signed on 24 November accordingly required production of: “…the respondent’s ultimate determination and basis for that determination…” relating to Mr X and others and did not in terms or by implication require the production of legal advice upon which the determination may have been based.  The s 37 notice would, of course, require the production of documents which recorded, for example, that a particular decision had been made because legal advice to a particular effect had been received, but it would not require production of the opinions themselves.  It was in these circumstances that I signed the notice under s 37 with respect to which this application is concerned.

[9]      Senior counsel for the respondent now informs me that the Authority wishes to test presumably the decision underlying my issuing of the notice under s 37(2) by reference to the relevance of the documents.  I have never given any reasoned decision relating to that matter, although I have expressed tentative views during the course of the hearing.  The reason I did not give any reasoned decision was because of the circumstances in which the document was produced to me for signature.

[10]    The application before me is that I should now vary the date in the notice to a date in late January or early February just prior to the continuation of the hearing of this matter.  It is said to me that if I make such a variation to the form of the s 37 notice I will be protecting the status quo pending an application to the Federal Court by the respondent to challenge my decision.  I have decided that I should not accede to the this application and I will now give my reasons.

[11]    First, it seems to me that the circumstances in which the s 37 notice was issued and to which I have referred above and which appear in the transcript should be taken into account.  I further note that what is involved is a potential interruption to the hearing of a matter within the Tribunal.  The Tribunal now has an statutory obligation under s 2A of the Act to: “…pursue the objective of providing a mechanism of review that is fair, just, economical, informal and quick”.

[12]    There are many cases in which it has been said that it can be undesirable to interrupt the hearing of a matter to enable a legal challenge.  This is particularly so when the matter is not a judicial proceeding, but an administrative proceeding.  The provisions of s 2A only seem to me to reinforce the desirability of such an approach. 

[13]    Secondly, I note that it was originally suggested that a reason for my adopting the course that has been proposed would be to enable Ryan J to determine the matter before him because it was relevant to the application before me.  To the extent to which the issue of privilege does not arise before me that argument does not seem to be available.

[14]    Thirdly, I take into account as part of the desirability of the matter being heard and determined as quickly as possible the question of whether there can be any determination of the issues sought to be taken before the Federal Court before this matter is proposed to resume, which is 13 February.  Because s 44 of the Act requires an appeal from me under that section to be heard by a Full Court of the Federal Court it would be likely that if an application under either the Administrative Decisions (Judicial Review) Act 1977 (Cth) or s 39B of the Judiciary Act 1903 (Cth) were taken to a single judge of the Federal Court that that judge would refer the matter to a Full Court.  I know that the Full Court of the Federal Court is sitting in February next year but the prospect of this matter being heard by such a Full Court and determined in time to enable this matter to resume in the Tribunal on 13 February is not to my mind good. Accordingly, I would have to proceed on the basis that there is at least a likelihood that if I were to accede to the application that the matter would not be able to proceed before me as proposed on 13 February.

[15]    Finally, I wish to deal with the matter of substance and the question of whether the documents are relevant to the matter before me.  In my opinion the documents sought to be produced pursuant to the s 37 notice are relevant to the inquiry which I am undertaking.  The matter before me is an application for merits review of a decision of the Authority.  I am not exercising judicial power.  I am exercising executive or administrative power.  It follows that I am not concerned with the lawfulness of the decision under review but whether it is the correct or preferable decision.  To use the words that many judges have used in the past, I am standing in the shoes of the decision-maker, namely the Australian Prudential Regulation Authority.  When I make my decision it will in a very real sense become the decision of the Australian Prudential Regulation Authority.

[16]    The issue in this case relates to the requirements of section 37.  It is in para 37(1)(b) that one finds the requirement for the production of: “Every other document or part of a document that is in the person's possession or under the person's control and is relevant to the review of the decision by the Tribunal.”

[17]    As I have said, subs 37(3) provides that the section applies notwithstanding any rule of law relating to privilege or the public interest in relation to the production of documents.  The Tribunal is itself given power to require the production of documents under the section.  This power fits in with remarks that have been made by judges, particularly judges of the High Court of Australia relating to the function of the Tribunal.  For example, in Bushell v The Repatriation Commission (1992) 175 CLR 408 Sir Gerard Brennan, then a judge of the High Court of Australia and earlier the distinguished first President of this Tribunal said at pages 424, 425:

“Proceedings before the AAT may sometimes appear to be adversarial when the Commission chooses to appear to defend its decision or to test a claimant's case but in substance the review is inquisitorial. Each of the Commission, the Board and the AAT is an administrative decision-maker, under a duty to arrive at the correct or preferable decision in the case before it according to the material before it.  If the material is inadequate, the Commission, the Board or the AAT may request or itself compel the production of further material.”

[18]    In a decision of the High Court given as recently as 6 December this year, namely Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs[2005] HCA 72, the High Court appears to have gone even further in describing the merits review function of Tribunals.  They were speaking of the Refugee Review Tribunal but the terms of their remarks show that they relate to merits review tribunals generally.  In Applicant VEAL of 2002 Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ in a joint judgment said this:

“The Tribunal was not an independent arbiter charged with deciding an issue joined between adversaries.  The Tribunal was required to review a decision of the Executive made under the Act and for that purpose the Tribunal was bound to make its own inquiries and form its own views upon the claim which the appellant made.”

[19]    I say that the High Court may have gone further than it has in previous pronouncements in the passage because so far as I am aware it is the first time that the High Court has referred to a Tribunal being “bound to make its own inquiries”.

[20]    The material relating to Mr X will be relevant to the hearing before the Tribunal in at least two respects.  First, there can be no doubt that Mr X was involved in the activities of the applicant which ultimately led to the decision under review.  He had at least one joint meeting with a superior of both Mr X and the applicant relating to the matters subject to the review.  They prepared together a draft document relating to potential responses to the issue.  The document never apparently proceeded past a draft to a final document but it was nevertheless furnished to the superior.  It follows that the material relating to Mr X will itself be relevant to the issues to the applicant. 

[21]    But to my mind there is another important reason why the material is relevant.  What is relevant in proceedings before a tribunal conducting merits review of a decision is different to what is relevant in adversarial proceedings before a court.  One matter which has always been thought to be important in administrative review is consistency in administrative decision-making.  From the very earliest days of the Tribunal it has stressed the importance of consistency in administrative decision-making.  A related topic to which it has also addressed attention is the taking into account of policy although not to the exclusion of individual justice.  Policy cannot be taken into account unless it is known.  Consistency cannot be achieved unless what there is to be consistent with is known.

[22]    Sir Gerard Brennan in the early years of the Tribunal gave a number of decisions which have proved to be a very important guide to the Tribunal in many areas.  One of these decisions is Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634.  Amongst other things it deals with the significance of policy and the desirability of consistency in administrative decision-making.  In his reasons Sir Gerard Brennan used the word, consistent, or another form of the word 25 times.  The most often cited selection from the quotable parts of the decision, although there are many others I could quote, is the following:

“Inconsistency is not merely inelegant:  it brings the process of deciding into disrepute, suggesting an arbitrariness which is incompatible with commonly accepted notions of justice.”

[23]    The question before me is not whether whatever decision was made so far as Mr X and the others are concerned should bind me in the decision I make.  It is not whether I should follow it as some matter of obligation.  It is merely whether I should be informed of it so that I can consider the important matter of consistency in administrative decision-making along with other matters when determining what should happen in this case.  I might, for example, say that the decision in the case of Mr X was quite wrong, should be departed from and that for the future it would be more appropriate for the Authority to follow the process which led to the decision which was arrived at in the case before me.

[24]    There are many ways in which I might find relevance in the decision short of simply applying it to the extent to which it could be applied in the matter before me.  The question is whether I should be aware of the position and nothing more.  In my opinion it would be inappropriate for me knowing what I do about the association of the activities of the applicant and the involvement in them of Mr X to make a decision in this case in the face of a decision such as the decision of Brennan J relating to the importance of consistency, without at least knowing what the position was with Mr X and why.

[25]    I accordingly propose to leave the s 37 notice as it is.  It will naturally be open to the Authority to make some application to the Federal Court of Australia for whatever interlocutory relief staying the effect of the s 37 notice that it considers appropriate.’

17                  I am told that the draft document relating to Mr X material referred to by his Honour in [20] has in fact been admitted into evidence.  It is the more general material referred to in [21] of his Honour's reasons which has become critical and is of general importance from APRA’s viewpoint.  To put the position shortly, his Honour emphasises the desirability of consistency as between in the administrative decision-making of APRA and the decision-making of the Tribunal.  APRA will wish to argue on the hearing of the present application for review of the s 37(2) decision that consistency of the kind referred to is not ‘relevant’ for the purposes of s 37(2).

18                  It is desirable to address at the outset the question of the circumstances in which the s 37(2) decision was made (referred to in [6], [9] and [11] of his Honour’s reasons).  Mr Beech-Jones, counsel for APRA, took me to p316 of the transcript of the proceeding before his Honour on 24 November 2005.  Senior counsel for APRA, in presenting the form of notice for his Honour’s consideration, said that he was doing so while maintaining APRA’s ‘formal position as to relevance’.  With respect, this was hardly language apt to signal the possibility of APRA’s applying to this Court for review of the President’s decision to issue the notice which APRA had prepared and handed up.  The fact remains that senior counsel for APRA and his Honour seem to have been at cross purposes as to the significance which senior counsel intended his words to bear, and I do not think the circumstances in which the s 37(2) notice was issued should be fatal to the present application.

19                  Mr Beech-Jones has taken me to the authorities referred to by his Honour.  I understand Mr Beech-Jones’s point to be that there should be consistency of principle, but not consistency of result for its own sake.

20                  There are arguable points sought to be raised by APRA on the present application, such as whether the Tribunal was ‘bound’ to make its own inquiries about the decision-making by APRA in other cases (cf Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs[2005] HCA 72 at [26]; and whether the Tribunal was at liberty, in terms of relevance, to do so.

21                  The question then resolves itself into one of the balance of convenience.  APRA submits that once it produces the documents to the Tribunal, the damage is done, because, with respect to the Tribunal, what APRA seeks to establish that the Tribunal itself should not have access to the documents sought in relation to other individuals.  In other words, the problem is not that T may have access to them – a confidentiality issue which could be overcome by an appropriate order of the Tribunal.  The problem is more fundamental – that the Tribunal itself should not have access to the documents.

22                  The matter which has caused me most doubt is that, generally speaking, there should not be a fragmentation of the part-heard case before the Tribunal.  Making the best assessment I can, however, it does seem that no great inconvenience, let alone injustice, will be caused by, in effect, the staying of the operation of the s 37(2) notice.  Indeed, I note that Justice Downes said in his reasons (at [25]) that it would be open to APRA to apply to this Court for whatever interlocutory relief staying the effect of the notice this Court might consider appropriate.

23                  I will suspend the order of the notice and make an order that the hearing be expedited.

CONCLUSION

24                  For the above reasons the Court orders:

1.         The operation of the decision of the Tribunal made on 24 November 2005 in Tribunal proceeding N 2005/666 be suspended pending the hearing and determination of this proceeding or further order of the Court.

2.         The hearing of this proceeding be given such expedition as is possible in all the circumstances.

25                  The Court notes that there is no order as to the costs of the motion brought by notice of motion filed on 16 December 2005.

Associate:

Dated:                          23 December 2005