FEDERAL COURT OF AUSTRALIA

Garrett v Australian Trade Commission [2014] FCA 575

THE COURT ORDERS THAT:

1.    The originating process filed 26 March 2014 be dismissed.

2.    The first applicant's interlocutory application filed 10 April 2014 be dismissed.

3.    The notice to produce dated 19 April 2014 be set aside.

4.    The first applicant is to pay the respondent’s costs of the respondent’s interlocutory application filed 2 May 2014.

5.    The first applicant is to pay the respondent’s costs of the proceeding.

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

REASONS FOR JUDGMENT

Introduction

1    In August 2013, the second named applicant (“the company”) (through the services of the first applicant (“Mr Garrett”) as consultant to the company) applied for a grant under the Export Markets Development Grants Scheme. The scheme, which is administered by the respondent (“Austrade”) under the Export Market Development Grants Act 1997 (Cth) (“the EMDG Act”), provides financial assistance to eligible persons to provide incentives for them to develop export markets. Exporters who qualify for the grant can obtain reimbursement of 50% of their “eligible expenses” on specified promotional activities up to a maximum grant of $150,000: s 63 of the EMDG Act.

2    Mr Garrett has made an application pursuant to the Administrative Decisions (Judicial Review) Act 1977 (Cth) (“the ADJR Act”) for judicial review of two decisions by Austrade in relation to the grant application. The two decisions are described as:

(a)    the decision that an expense of $1.2 million claimed by the company as relating to the establishment of an international marketing office did not qualify as an “eligible expense” for a grant (“the first decision”); and

(b)    the decision to refuse to accept a certificate of solvency of the company that Mr Garrett provided to Austrade for the purposes of s 87C(2) of the EMDG Act (“the second decision”).

3    Mr Garrett seeks a writ of mandamus directing Austrade to finalise the grant application and pay a grant in the amount of $150,000.

4    Austrade objected to the competency of the application under the ADJR Act and further submitted that the Court does not have jurisdiction under s 39B of the Judiciary Act 1903 (Cth) or s 23 of the Federal Court of Australia Act 1976 (Cth) to grant the relief sought. In summary, Austrade contends that:

(a)    the decisions are not reviewable under the ADJR Act;

(b)    Mr Garrett does not have standing to bring the application;

(c)    if the decisions are reviewable, the Court should nonetheless dismiss the application for review because merits review by the Administrative Appeals Tribunal is available under the EMDG Act; and

(d)    the Court, in any event, does not have the power to make an order directing Austrade to pay a grant to the company.

5    At the commencement of the hearing, the company was joined as a necessary party and Mr Garrett, who appeared for himself, was allowed to appear for the company at the hearing.

Is there a reviewable decision?

6    A decision to which the ADJR Act applies means, relevantly, “a decision of an administrative character made … under an enactment”: s 3(1) of the ADJR Act. It is well settled law that the determination of whether a decision is “made … under an enactment” involves two criteria: Griffith University v Tang (2005) 221 CLR 99 (“Griffith v Tang”) at 130-131 [89] per Gummow, Callinan and Heydon JJ. First, the decision must be a decision that a statute impliedly or expressly requires or authorises. Secondly, the decision must itself confer, alter or otherwise affect legal rights or obligations. In Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 (“ABC v Bond”), Mason CJ with whom Brennan and Deane JJ agreed, explained at 337:

That will generally, but not always, entail a decision which is final or operative and determinative, at least in a practical sense, of the issue of fact falling for consideration. A conclusion reached as a step along the way in the course of reasoning leading to an ultimate decision would not ordinarily amount to a reviewable decision, unless the statute provided for the making of a finding or ruling on that point so that the decision, though an intermediate decision, might accurately be described as a decision under an enactment.

Findings which are not themselves required by an enactment but which merely bear upon some issue for determination or some issue relevant to the exercise of a discretion are not “decisions under an enactment” but are merely findings on the way to a decision under an enactment: ABC v Bond at 377 per Toohey and Gaudon JJ; Griffith v Tang at 121-122 [60] per Gummow, Callinan and Heydon JJ.

7    In the present case, neither of the two decisions challenged by the applicants are reviewable under the ADJR Act.

The first decision

8    Mr Garrett said that an Austrade auditor told him at a meeting on 25 February 2014 that the $1.2 million claimed expense did not qualify as an “eligible expense”. Mr Garrett relies on what the auditor told him as constituting the first decision.

9    Whilst it is a statutory condition for a grant that the applicant has incurred eligible expenses in the grant year (s 4(b) of the EMDG Act) the circumstance that an auditor considers that the expense in question is not claimable does not mean that there has been a “decision” which is reviewable under the ADJR Act. Critically, the conclusion reached by the auditor of itself has no statutory significance as the auditor has not, in reaching that conclusion, exercised some power conferred by the EMDG Act. Rather, the auditor’s conclusion is no more than an opinion formed in the course of his duties as an Austrade officer preparatory to, and as a step in the course of, Austrade reaching a decision on the company’s application, which decision has yet to be made by Austrade: ABC v Bond at 337 per Mason CJ (with whom Brennan and Deane JJ agreed), 377 per Toohey and Gaudon JJ; Meredith v Federal Commissioner of Taxation (2001) 64 ALD 120; [2001] FCA 1135 at [21], [22]; Hutchins v Commissioner of Taxation (1996) 65 FCR 269 at 274 per Black CJ and at 277 per Lockhart J. Accordingly, the first decision is not a reviewable decision in the Bond sense.

The second decision

10    On 22 January 2014, the company was ordered by the Court to be wound up in insolvency and Timothy Clifton was appointed as the liquidator. By and under s 87 of the EMDG Act, a grant is not payable if at the time when, or at any time after, a person becomes entitled to the grant the person is “under insolvency administration”. Section 87 is to be read in conjunction with s 87C(1) which prescribes the meaning of “under insolvency administration” for the purposes of s 87. Relevantly, a company is “under insolvency administration” if it is being wound up or if there is a receiver, receiver and manager or, relevantly, “other controller” of property of the company who has functions or powers in connection with managing the company: s 87C(1)(a)(i) and (ii).

11    Sections 87C(2) and (3) relevantly provide that:

(2)    Despite subsection (1), a body corporate that, apart from this subsection, would be under insolvency administration is taken not to be under insolvency administration if there is in force a certificate given by the person administering the body corporate stating that the body corporate is able to pay all its debts as and when they become due and payable.

(3)    In sub-section (2):

person administering a body corporate means whichever of the following has been appointed in relation to the body corporate:

(a)    the liquidator or provisional liquidator of the body corporate;

(b)    the receiver, receiver and manager, or other controller, of property of the body corporate;

…

12    On 14 March 2014, Mr Garrett advised Austrade that he is a controller of the company for the purposes of s 87C(2) and (3) and certified that the company was solvent. Mr Garrett wrote to Austrade in the following terms:

Further to s 87C(2) and 87(3) of the EMDG Act I confirm that I am a controller of the assets of a body corporate Section 87(3)(b).

I hereby certify that [the company] (In Liquidation)(Controller Appointed) is able to meet its debts as and when they fall due.

13    Austrade did not accept Mr Garrett’s certification for the purposes of s 87C(2) and required the certification to be given by the liquidator. On 13 March 2014, Austrade wrote to the liquidator advising that the company had applied for a grant entitlement and that as the company was in liquidation, by reason of s 87 of the EMDG Act the company was ineligible to receive the grant unless the liquidator was able to provide a statement as required by s 87C(2) confirming that the company is “able to pay all of its debts as and when they become due and payable”. The letter further advised that unless the liquidator was able to provide that statement “any grant entitlement for [the company] will lapse”. The evidence does not record whether Austrade had a response to that letter but in evidence is a letter dated 3 April 2014 from the liquidator to Mr Garrett advising that “the liquidation is impecunious”. It may be inferred that a s 87C(2) certificate will not be forthcoming from the liquidator.

14    Mr Garrett argued that the decision of Austrade not to accept his certification is a reviewable decision because without that certificate the company is ineligible to obtain the grant and the grant application must be refused under s 87. However, the determination that Mr Garrett cannot provide the certification for the purposes of s 87C(2) is not a determination which is provided for by the EMDG Act as a step on the way to reaching an ultimate decision on whether the company is entitled to a grant (which decision is yet to be made) but is simply a view which has been taken in the course of considering the company’s application, which view may or may not ultimately bear upon Austrade’s decision, when made. To put it another way, such determination has no operative effect of itself and is no more than a step in Austrade’s deliberative processes.

15    Accordingly, neither of the decisions sought to be challenged are reviewable under the ADJR Act.

Is there reviewable conduct?

16    Mr Garrett relied in the alternative on the contention that both “decisions” constituted reviewable conduct under the ADJR Act. That submission must also be rejected.

17    Section 3(5) of the ADJR Act provides:

A reference in this Act to conduct engaged in for the purpose of making a decision includes a reference to the doing of any act or thing preparatory to the making of the decision, including the taking of evidence or the holding of an enquiry or investigation.

18    In ABC v Bond at 341, Mason CJ dealt with what constitutes reviewable conduct under the ADJR Act:

However, once it is accepted that “decision” connotes a determination for which provision is made by or under a statute, one that generally is substantive, final and operative, the place of “conduct” in the statutory scheme of things becomes reasonably clear. In its setting s. 6 the word “conduct” points to action taken, rather than a decision made, for the purpose of making a reviewable decision. In other words, the concept of conduct looks to the way in which the proceedings have been conducted, the conduct of the proceedings, rather than decisions made along the way with a view to the making of a final determination. Thus, conduct is essentially procedural and not substantive in character. Accordingly, s. 3(5) refers to two examples of conduct which are clearly of that class, namely “the taking of evidence or the holding of an inquiry or investigation”. It would be strange indeed if “conduct” were to extend generally to unreviewable decisions which are in themselves no more than steps in the deliberative or reasoning process.

Accordingly, there is a clear distinction between a “decision” and “conduct” engaged in for the purpose of making a decision. A challenge to conduct is an attack upon the proceedings engaged in before the making of the decision. It is not a challenge to decisions made as part of the decision-making process except in the sense that if the decisions are procedural in character they will proceed the conduct which is under challenge. In relation to conduct, the complaint is that the process of decision-making was flawed; in relation to a decision, the complaint is that the actual decision was erroneous. To give an example, the continuation of proceedings in such a way as to involve a denial of natural justice would amount to “conduct”. That is not to deny that the final determination of the proceedings would constitute a decision reviewable for denial of natural justice.

Relevantly, reviewable conduct is conduct that is essentially procedural in nature.

19    In the present case, the two decisions challenged by Mr Garrett do not amount to a challenge to reviewable conduct. “Conduct” does not embrace unreviewable decisions that are only steps in the deliberative process: Tasmanian Conservation Trust Inc v Minister of Resources (1995) 55 FCR 516 at 547-548 per Sackville J.

other grounds

20    In view of my conclusion that there is no reviewable decision or conduct, it is strictly unnecessary to consider whether the other grounds of objection to competency but for the sake of completeness I make the following observations.

Does Mr Garrett have standing to bring the application?

21    Mr Garrett claims to be a “person aggrieved” by Austrade’s “decisions” and/or “conduct” by reason that he is the managing controller of the company. Austrade put the validity of his status as managing controller into issue by the objection to competency and the submission was put that there are sufficient uncertainties about his appointment that the Court should find that Mr Garrett does not have standing to bring the application. In my opinion, the question of the validity of Mr Garrett’s appointment is open to argument on the material before the Court but as a finding on whether Mr Garrett’s appointment was valid would be obiter dicta, I consider that it would be inappropriate to make a finding on the validity of his appointment (and I make no finding).

22    Mr Garrett also claims to be a “person aggrieved” by Austrade’s “decisions” and/or “conduct” by reason that he is a potential object of the discretionary trust of which the company was trustee before it was placed into liquidation. It is also open to argument that this may be insufficient to give him a real interest in the claim but in the event it is unnecessary to decide whether he is a “person aggrieved”.

Is there an appropriate alternate remedy?

23    Pursuant to s 97(c) of the EMDG Act, “any decision relating to an application for a grant” is a “reviewable decision” for the purposes of ss 98 and 99. Section 98 provides procedure by which a person who is affected by a reviewable decision may request the CEO of Austrade to reconsider it. By s 99, the applicant may have those decisions reviewed in the Administrative Appeals Tribunal. Accordingly, if and insofar as the two “decisions” that are the subject of this application constitute “decisions” within the meaning of s 97, the EMDG Act provides rights of merits review. Austrade argued that the Court therefore should decline to exercise jurisdiction under the ADJR Act if, contrary to Austrade’s submission, the decisions are reviewable under the ADJR Act.

24    The fact that the EMDG Act provides rights of merits review provides a discretionary reason why the Court may decline to exercise jurisdiction under the ADJR Act because adequate remedy is provided for by that Act, but the existence of an alternative remedy would not be determinative that the Court should not exercise jurisdiction: Domaine Finance Pty Ltd v Commissioner of Taxation (1985) 8 FCR 538 at 543 per Fisher J; SmithKline Beecham (Australia) Pty Ltd v Chipman [2002] FCA 674 at [65]-[66], [87]-[88], [105].

Could a writ of mandamus issue?

25    However, the relief sought in the application seeking a writ of mandamus to direct Austrade to pay a grant to the company is not relief that the Court has jurisdiction to make and this would provide a reason to dismiss the application, if otherwise competent. The purpose of a writ of mandamus is to require the person to whom the writ is addressed to fulfil a duty of a public nature which that person is required to fulfil and which remains unfulfilled at the time of the issue of the writ: R v The War Pensions Entitlement Appeal Tribunal; Ex Parte Bott (1933) 50 CLR 228 (“Bott”) at 242 per Rich, Dixon and McTiernan JJ; Hamden v Campbell (No 2) (2012) 57 AAR 189; [2012] FCA 460 (“Hamden v Campbell”) at [31] per Lander J. A writ of mandamus cannot be used to require a public officer to discharge a duty in a particular way; Bott at [243]; Hamden v Campbell at [31]; and mandamus does not lie to compel Austrade to make a grant of $150,000.

Notice to produce

26    By a notice to produce dated 19 April 2014 and served on Austrade, Mr Garrett required Austrade to produce the following documents:

A list of and a copy of every document or thing associated with the Grant Application referred to in the Statement of Agreed Facts served on you and the Federal Court Registry a copy of which is annexed to this Notice to Produce.

In particular any communications between the Respondent and any representative of the Commissioner of Taxation or any other person either employed by or in any other way associated with the Respondent.

27    Austrade filed an interlocutory application on 2 May 2014 to have the notice to produce set aside and seeking an order that the applicant pay the respondent’s costs of the application. The notice to produce should be set aside. First, because the notice to produce constitutes an impermissible fishing expedition and it is well settled law that a notice to produce cannot be used as an alternative to an application for discovery; and secondly, because the documents sought by the notice have no relevance at all to this application: Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (No 3) [2012] FCA 61 at [5]-[6]; Seven Network Limited v News Limited (No 11) [2006] FCA 174 at [6].

conclusion

28    The applicants’ application is to be dismissed as incompetent and the notice to produce set aside.

29    The following orders will be made:

1.    The originating process filed 26 March 2014 be dismissed.

2.    The first applicant’s interlocutory application filed 10 April 2014 be dismissed.

3.    The notice to produce dated 19 April 2014 be set aside.

Associate:

Dated:    5 June 2014