Federal Court of Australia

Alexander Abramov v Minister for Foreign Affairs (No 2) [2023] FCA 1099

ORDERS

THE COURT ORDERS THAT:

1.    Unless a party notifies the Court in writing within 7 days of today that orders to give effect to these reasons have been agreed between them, then the parties are to file and serve submissions (limited to 2 pages) in support of such orders as they propose to give effect to these reasons, together with a minute of order, by 4 pm on 29 September 2023.

2.    Unless a party notifies the Court in writing within 7 days of today that an order as to costs has been agreed between them, then the parties are to file and serve submissions as to costs (limited to 3 pages) by 4.00 pm by 4 pm on 29 September 2023.

3.    The parties have liberty to apply on reasonable notice.

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

REASONS FOR JUDGMENT

KENNY J:

1    Mr Alexander Abramov, who is the applicant in this proceeding, has applied under s 5(1) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act) and ss 39B(1) and (1A)(c) of the Judiciary Act 1903 (Cth) (Judiciary Act) for judicial review. For the following reasons, Mr Abramov succeeds on one ground of his application. He does not succeed on the other grounds.

2    Mr Abramov is a Russian national. Until comparatively recently, he was on the board of the Skolkovo Institute for Science and Technology (Skoltech) and the Russian Geographical Society (RGS). He was also the non-executive Chairman of Evraz plc (Evraz) for some years before his resignation on 11 March 2022. Evraz is a company incorporated in the United Kingdom, with a number of subsidiaries (Evraz Group). The company’s Annual Report & Accounts 2021 (to which both parties referred) disclosed that the Evraz Group is a very large multinational steel and coal-producing conglomerate, and that a substantial part of the Group’s business involves the manufacture of steel products in Russia and Kazakhstan for use in those countries. The same document disclosed that the Evraz Group is also engaged in the production of coal, much of which it supplies to Evraz steel mills, and other major Russian coke and steel producers. It also disclosed that Mr Abramov is effectively Evraz’s second largest shareholder.

3    The Minister for Foreign Affairs (Minister) is the respondent in the proceeding. This is because Mr Abramov challenges his inclusion by the Minister in the Autonomous Sanctions (Designated Persons and Entities and Declared Persons – Russia and Ukraine) List 2014 (Cth) (Russia and Ukraine List 2014) in April 2022 and, again, in September 2022.

4    On 7 April 2022, the Minister (formerly, Senator the Hon Marise Payne) made the Autonomous Sanctions (Designated Persons and Entities and Declared Persons — Russia and Ukraine) Amendment (No 11) Instrument 2022 (Cth) (First Designation Instrument). In so doing, the Minister amended the Russia and Ukraine List 2014. Relevantly for this case, the amendment added Mr Abramov’s name and details as item 103 in Pt I of Sch 2 to the Russia and Ukraine List 2014, as follows:

In consequence, Mr Abramov became a “designated person” for Russia pursuant to reg 6(a) and “declared” pursuant to reg 6(b) of the Autonomous Sanctions Regulations 2011 (Cth) (Sanctions Regulations).

5    The Minister made the Russia and Ukraine List 2014 under reg 6 of the Sanctions Regulations. Relevantly for this case, item 6A in the table in reg 6 was introduced into that table by the Autonomous Sanctions Amendment (Russia) Regulations 2022 (Cth) (Russia Regulations) on 24 February 2022. The title, text and timing of the Russia Regulations and the relevant Explanatory Statement indicate that the Russia Regulations were made in response to Russia’s invasion of Ukraine. The Explanatory Statement recorded:

The purpose of the Autonomous Sanctions Amendment (Russia) Regulations 2022 ... is to introduce new listing criteria under the existing autonomous sanctions regime in relation to Russia in response to that country’s significantly elevated threat to Ukraine’s sovereignty and territorial integrity. Russia’s aggression towards Ukraine presents a serious threat to the international rules-based order which underpins global security.

...

The purpose of a designation is to subject the designated person or entity to targeted financial sanctions. ...

The purpose of a declaration is to prevent a person from travelling to, entering, or remaining in Australia. ...

6    On 16 September 2022 (and after this proceeding was instituted) the Minister (by then, Senator the Hon Penny Wong) made the Autonomous Sanctions (Designated Persons and Entities and Declared Persons — Russia and Ukraine) Amendment (No. 19) Instrument 2022 (Revocation Instrument) under reg 10(3) of the Sanctions Regulations. The Revocation Instrument amended the Russia and Ukraine List 2014 by removing item 103 in Pt 1 of Sch 2, thus ending Mr Abramov’s “designated person” and “declared” status under reg 6 of the Sanctions Regulations.

7    After making the Revocation Instrument and on the same day, the Minister made the Autonomous Sanctions (Designated Persons and Entities and Declared Persons — Russia and Ukraine) Amendment (No. 20) Instrument 2022 (Cth) (Second Designation Instrument). In so doing, the Minister again amended the Russia and Ukraine List 2014, relevantly by re-introducing Mr Abramov’s name and details (again as item 103 in Pt 1 of Sch 2), with the result that Mr Abramov again became a “designated person” for Russia pursuant to reg 6(a) and “declared” pursuant to reg 6(b) of the Sanctions Regulations.

Mr Abramov’s application

8    Mr Abramov’s amended originating application (amended application: see [56] below) in terms sought review of:

(1)    the decision on 7 April 2022 by the Minister for Foreign Affairs, pursuant to s 2 of Schedule 1 to the Autonomous Sanctions (Designated Persons and Entities and Declared Persons — Russia and Ukraine) Amendment (No 11) Instrument 2022 (Cth) ... to amend the Autonomous Sanctions (Designated Persons and Entities and Declared Persons — Russia and Ukraine) List 2014 (Cth) (the List) to:

(a)    designate the Applicant as a “designated person” for Russia; and

(b)    declare the Applicant for the purpose of preventing him from travelling to, entering or remaining in Australia; and

(2)    the decision on 16 September 2022 by the Minister for Foreign Affairs, pursuant to s 1 of Schedule 1 to the Autonomous Sanctions (Designated Persons and Entities and Declared Persons — Russia and Ukraine) Amendment (No 20) Instrument 2022 (Cth) ... to amend the List to:

(a)    designate the applicant as a “designated person” for Russia; and

(b)    declare the applicant for the purpose of preventing him from travelling to, entering or remaining in Australia.

The legislative scheme

9    It is worth bearing in mind that all of the Regulations to which I have so far referred, as well as the Russia and Ukraine List 2014, the First Designation Instrument, the Revocation Instrument, and the Second Designation Instrument are legislative instruments for the purposes of the Legislation Act 2003 (Cth) (Legislation Act). Unsurprisingly, therefore, the legislative scheme of which they are part determined the immediate context in which the issues in this proceeding arise. This context is critical to the following discussion. The following paragraphs identify key provisions of the Sanctions Act and the Sanctions Regulations, to assist the reader in appreciating the parties’ arguments and my reasons for accepting or rejecting them.

The Autonomous Sanctions Act 2011 (Cth)

10    The Autonomous Sanctions Act 2011 (Cth) (Sanctions Act) provided the legislative framework for the Sanctions Regulations (and the Russia Regulations) under which the First Designation Instrument, the Revocation Instrument, the Second Designation Instrument (and the Russia and Ukraine List 2014) were made. (For present purposes, it suffices to say that the Russia and Ukraine List 2014 was made under the Sanctions Regulations, with the amendments to the Sanctions Regulations relevant to this case being made under the Russia Regulations).

11    The objects of the Sanctions Act are set out in s 3:

(1)    The main objects of this Act are to:

(a)    provide for autonomous sanctions; and

(b)    provide for enforcement of autonomous sanctions (whether applied under this Act or another law of the Commonwealth); and

(c)    facilitate the collection, flow and use of information relevant to the administration of autonomous sanctions (whether applied under this Act or another law of the Commonwealth).

Country-specific sanctions

(2)    Without limiting subsection (1), the autonomous sanctions may address matters that are of international concern in relation to one or more particular foreign countries.

Thematic sanctions

(3)    Without limiting subsection (1), the autonomous sanctions may address one or more of the following:

(a)    the proliferation of weapons of mass destruction;

(b)    threats to international peace and security;

(c)    malicious cyber activity;

(d)    serious violations or serious abuses of human rights;

(e)    activities undermining good governance or the rule of law, including serious corruption;

(f)    serious violations of international humanitarian law.

12    There is a definition of ‘autonomous sanction’ in s 4:

autonomous sanction means a sanction that:

(a)    is intended to influence, directly or indirectly, one or more of the following in accordance with Australian Government policy:

(i)    a foreign government entity;

(ii)    a member of a foreign government entity;

(iii)    another person or entity outside Australia; or

(b)    involves the prohibition of conduct in or connected with Australia that facilitates, directly or indirectly, the engagement by a person or entity described in subparagraph (a)(i), (ii) or (iii) in action outside Australia that is contrary to Australian Government policy.

13    Sections 10 to 15 in Pt 2 of the Sanctions Act address specific aspects of the power to provide for sanctions by regulations. Relevantly here, s 10 specifically provides:

10 Regulations may apply sanctions

(1)    The regulations may make provision relating to any or all of the following:

(a)    proscription of persons or entities (for specified purposes or more generally);

(b)    restriction or prevention of uses of, dealings with, and making available of, assets;

(c)    restriction or prevention of the supply, sale or transfer of goods or services;

(d)    restriction or prevention of the procurement of goods or services;

(e)    provision for indemnities for acting in compliance or purported compliance with the regulations;

(f)    provision for compensation for owners of assets that are affected by regulations relating to a restriction or prevention described in paragraph (b).

(2)    Before the Governor-General makes regulations for the purposes of subsection (1), the Minister must be satisfied that the proposed regulations:

(a)    will facilitate the conduct of Australia’s relations with other countries or with entities or persons outside Australia; or

(b)    will otherwise deal with matters, things or relationships outside Australia.

(3)    Despite subsection 14(2) of the Legislation Act 2003, regulations made for the purposes of subsection (1) may make provision in relation to a matter by applying, adopting or incorporating any matter contained in an instrument or other writing as in force or existing from time to time.

…

14    It is perhaps worth noting that s 28, the sole provision in Pt 5, also confers a general regulation-making power referable to matters required or permitted by the Sanctions Act to be prescribed, or necessary or convenient to be prescribed, for carrying out or giving effect to the Sanctions Act.

15    Part 3 of the Sanctions Act concerns offences relating to sanctions. Thus, s 16 prohibits individuals and bodies corporate from engaging in conduct that contravenes a sanction law (being a provision specified by the Minister as such: ss 4 and 6(1)), or a condition of an authorisation under a sanction law).

The Sanctions Regulations

16    Part 2 of the Sanctions Regulations provided for the imposition of sanctions by reference to various criteria. As noted above, the Minister made the First Designation and Second Designation Instruments, which imposed sanctions on Mr Abramov, under reg 6. Regulation 6 (made pursuant to s 10(1)(a) of the Sanctions Act) enabled sanctions to be imposed by reference to a person or entity’s relationship to a specific country.

17    Regulation 6 of the Sanctions Regulations stated:

6 Country-specific designation of persons or entities or declaration of persons

For paragraph 10(1)(a) of the Act, the Minister may, by legislative instrument, do either or both of the following:

(a)    designate a person or entity mentioned in an item of the table as a designated person or entity for the country mentioned in the item;

(b)    declare a person mentioned in an item of the table for the purpose of preventing the person from travelling to, entering or remaining in Australia.

That is, reg 6 conferred a discretionary power on the Minister (see: “may”) to make the legislative instruments designating Mr Abramov as a designated person for Russia under reg 6(a) and declaring him under reg 6(b) but only if Mr Abramov met a criterion referable to Russia in the table in reg 6.

18    At all times relevant to this proceeding, the table in reg 6 included item 6A, as follows:

The effect of reg 6 and item 6A(a) was clear. It was open to the Minister to consider whether to designate Mr Abramov as a designated person for Russia under reg 6(a) and to declare him under reg 6(b) if satisfied that Mr Abramov met the activity description in (a): it was not suggested that Mr Abramov met either activity description in (b) or (c). That is, the Minister had to be satisfied that Mr Abramov “is, or has been, engaging in an activity or performing a function that is of economic or strategic significance to Russia” and that it was appropriate as a matter of discretion to designate him for Russia under reg 6(a) and declare him under reg 6(b).

19    A designation under reg 6(a) and a declaration under reg 6(b) ceases to have effect after three years pursuant to reg 9(1) and reg 9(2) of the Sanctions Regulations, unless extended by the Minister under reg 9(3). Regulation 9(5) further provided that:

(5) To avoid doubt:

(a)    subregulation (1) does not prevent the revocation, under regulation 10, of a designation; and

(b)    subregulation (1) does not prevent the making, under paragraph 6(a) ... of a new designation that is the same in substance as another designation (whether the new designation is made or takes effect before or after the other designation ceases to have effect because of subregulation (1)); and

(c)    subregulation (2) does not prevent the revocation, under regulation 10, of a declaration; and

(d)    subregulation (2) does not prevent the making, under paragraph 6(b) ... of a new declaration that is the same in substance as another declaration (whether the new declaration is made or takes effect before or after the other declaration ceases to have effect because of subregulation (2)).

20    Under subregs 10(1), (2) and (3) of the Sanctions Regulations, the Minister had a discretionary power to revoke a designation under reg 6(a) or declaration under reg 6(b) by legislative instrument on the Minister’s own initiative or on application by “the person or entity to which the designation or declaration relates”. Regulation 11 makes specific provision for such an application, which was to be in writing and to “set out the circumstances relied upon to justify the application”.

21    Part 3 of the Sanctions Regulations contains provisions prohibiting certain conduct designed to ensure that sanctions imposed under the autonomous sanctions regime were effective. For example, being a designated person for Russia, Mr Abramov was subject to the prohibitions in regs 14 and 15 of the Sanctions Regulations. In substance, reg 14 prohibited an asset being made available to, or for the benefit of, a designated person, other than as authorised by a permit under reg 18. Regulation 15 prohibited a person holding a controlled asset (being an asset owned or controlled by a designated person) from using or dealing with such an asset, or allowing or facilitating such use or dealing, other than as authorised by a permit under reg 18. Both provisions constituted a sanctions law for the purposes of the Sanctions Act, and their breach was an offence that could attract serious consequences of the kind set out in s 16 of that Act. See Sanctions Act, s 6 and Autonomous Sanctions (Sanction Law) Declaration 2012 (Cth).

First Designation Instrument

22    While the First Designation Instrument added numerous names and related details to Pt 1 of Sch 1 or Sch 2 to the Russia and Ukraine List 2014, this proceeding is concerned only with the inclusion of Mr Abramov’s name and details in item 103 of Pt 1 of Sch 2.

23    It was undisputed that the Minister relied on a Departmental submission (First Departmental Submission) in making the First Designation Instrument. The First Departmental Submission was entitled “Ukraine: Sanctions against Russian Oligarchs and Senior Officials”, and requested that the Minister take certain urgent action because of the Russian invasion of Ukraine. In particular, the Submission sought the Minister’s “approval to list 67 persons for targeted financial sanctions and travel bans, including 52 Russian oligarchs/elites” (emphasis added). Mr Abramov was included in this latter group. The Submission described the other individuals proposed for listing as senior government officials, senior Russian military officials, and two pro-Russian Ukrainian officials. It advised that the “tranche” of 67 targeted persons “builds on earlier listings of Russian officials and oligarchs … and aligns with sanctions imposed by the US, UK, EU, Canada and Japan”.

24    The First Designation Submission recommended:

25    The Submission further advised the Minister that the 52 Russian oligarchs/elites had “interests in sectors that form a core part of Russia’s economic base”, and that:

These persons have a range of business interests and are a key source of revenue for Putin’s regime. These interests include oil and gas companies, financial institutions, mining, and state-owned infrastructure companies. Particularly prominent individuals include … Alexander Abramov (Chairman of Evraz, and close associate of Roman Abramovich, who you have already listed) ...

...

Of the persons we propose to list, the United States has listed 15, Canada 21, the European Union 25, the United Kingdom 46, and Japan 3. Listing these 67 individuals will demonstrate Australia’s commitment to imposing sanctions on a broad range of persons, in alignment with likeminded partners.

26    The First Departmental Submission also informed the Minister that:

Russia’s National Security Strategy, published in 2021, outlines how national defence and economic strategy (financial stability, technological renewal of industry, construction, communications, energy, agriculture and mining, and development of efficient transport infrastructure) are key national priorities.

It further advised that the majority of the 67 targeted persons have:

... business interests in these national priorities, including e-commerce; petrochemicals; transport; investment holding companies; healthcare; food retail; pharmaceuticals; agriculture; infrastructure; chemical products/fertilizers; telecommunications; nuclear technology; oil and gas sector; engineering; power supply; real estate development; food product manufacturing and delivery; steel production; coal and mineral fertilizers.

27    The First Departmental Submission informed the Minister of the listing criteria for Russia in item 6A of the table in reg 6 of the Sanctions Regulations. The Minister was also given the following further information specifically about Mr Abramov. This information was footnoted as indicated (with the footnotes containing hyperlinks to external websites):

17. Name: Alexander Grigoryevich ABRAMOV

Nationality: Russian

•    Alexander Grigoryevich ABRAMOV is co-founder and Chairman of multinational steel company Evraz.109

•    Evraz’s operations are mainly based in Russia, including steel production, coal mining, iron ore mining and vanadium production. Evraz is among the top steel producers in the world,110 and is one of Russia’s largest taxpayers.111

•    During ABRAMOV’S tenure at Evraz, it is alleged the company was providing steel to the Russian military for use in the production of tanks. 112

•    [Public interest immunity claimed]

•    Given his position in Evraz, it is open for the Minister to be satisfied that ABRAMOV is, or has been, engaging in an activity or performing a function that is of economic or strategic significance to Russia.

109    Companies House – Gov.UK

110    Evraz – Our assets

111    Publications Office (europa.eu)

112    Abramovich-linked steel firm denies providing material for Russian tanks and CONSOLIDATED LIST OF FINANCIAL SANCTIONS TARGETS IN THE UK (publishing.service.gov.au)

Nothing ultimately turns on whether the Minister opened these hyperlinks, although this was in issue at one point in the proceeding: see below at [331]. Also, as indicated, the Minister claimed public interest immunity with respect to the fourth point above: Mr Abramov did not ultimately contest this claim: see below at [116].

28    The Minister signed Pt A of the Decision Record. In so doing, the Minister recorded that she was satisfied that Mr Abramov (and others) met the criteria for designation and declaration set out in item 6A of the table in reg 6 of the Sanctions Regulations. She also indicated that she had considered the statement of case in the Submission respecting Mr Abramov (and others). In a list in Pt C of the Decision Record headed “Decision on designation”, there was the following entry for Mr Abramov:

29    On 7 April 2022, the Minister signed the First Designation Instrument, designating and declaring Mr Abramov under reg 6 of the Sanctions Regulations. The First Designation Instrument came into effect on 8 April 2022.

Factual Background

Commencement of Proceedings – 16 June 2022

30    On 16 June 2022, Mr Abramov instituted proceedings in this Court under the ADJR Act and the Judiciary Act, seeking an order “quashing item 103 of Sch 2 to the [Russia and Ukraine] List, or alternatively an order setting aside the decision to add item 103 of Sch 2 to the List”. The Court later ordered that, to the extent necessary, the applicant have an extension of time to lodge his application for an order of review under the ADJR Act.

Revocation Application – 18 July 2022

31    On 18 July 2022, Mr Abramov’s solicitors also made an application to the Minister under reg 11 of the Sanctions Regulations, for revocation of his listing on the Russia and Ukraine List (revocation application). In substance, Mr Abramov contended that he did not meet the criterion in item 6A(a) in the table in reg 6, and was therefore ineligible for designation or declaration. It was submitted that “Mr Abramov could not realistically play any role that could influence Russia to end its aggression towards Ukraine nor does he or his functions have any relevant connection to that aggression”. Mr Abramov subsequently provided the Minister with a statutory declaration dated 21 July 2022 (first statutory declaration).

32    In a letter of 29 July 2022, the Minister’s legal representatives advised that the Minister would consider the revocation application by reference to “the facts and statutory criteria as at the date of the decision in relation to that application”. The letter warned that, if satisfied the criteria for listing were met and it was appropriate, “the Minister may choose to revoke the original decisions and make a new determination ... based on the material then before her”. The letter assured Mr Abramov that the Minister would provide him with an opportunity to comment on the material before the Minister made her decision.

33    By letter dated 12 August 2022 (12 August 2022 letter) the Department of Foreign Affairs and Trade (the Minister’s Department) invited Mr Abramov to comment on: (1) key issues; (2) material, facts and discretionary considerations (including as identified by the Minister) that might fall for the Minister’s consideration; and (3) appropriate procedure. The letter identified potentially relevant documents (including 29 attachments) and referenced factual propositions about the Evraz group, Mr Abramov’s role in Evraz plc and predecessor companies, Skoltech, and the RGS.

34    Mr Abramov responded to the 12 August 2022 letter by email dated 29 August 2022. The 29 August 2022 response included submissions about: (1) Evraz plc, the Evraz Group and predecessor companies; and (2) Mr Abramov’s relationship with Skoltech and the RGS. It also included Mr Abramov’s second statutory declaration of 27 August 2022.

35    On 31 August 2022, the Minister’s Department sent another letter inviting further comment from Mr Abramov, who responded by an email dated 4 September 2022 (4 September 2022 response). Mr Abramov also provided the Minister with a statutory declaration by a former director of Evraz plc dated 5 September 2022 (former Evraz director’s statutory declaration).

Revocation Instrument – 16 September 2022

36    Mr Abramov does not challenge the Revocation Instrument subsequently made on 16 September 2022 revoking his designation and declaration under the First Designation Instrument. In his written submissions, the Minister contended, however, that Mr Abramov’s grounds of challenge to the Second Designation Instrument “involve[d] arguments that the procedure adopted by the Minister in making [the Revocation Instrument] was affected by error”. The Minister submitted that, “if those arguments were to succeed, then the appropriate relief would be to quash the Revocation Instrument, with the consequence that the Designation Instrument would not, in law, have been revoked”.

Second Designation Instrument – 16 September 2022

37    The Second Designation Instrument, which was made immediately after the Revocation Instrument, amended Pt 1 of Sch 2 of the Russia and Ukraine List 2014 by re-introducing item 103, with the applicant’s name and following details:

The Revocation and Second Designation Instruments were registered on 20 September 2022 pursuant to the Legislation Act.

38    It was undisputed that the Minister relied on a Departmental submission (Second Departmental Submission) in making the Second Designation Instrument. The Second Departmental Submission, which bore the title “Alexander Abramov: revocation application”, advised that, in response to Mr Abramov’s revocation application, the Department had prepared “a new Statement of Case based on contemporary evidence and it remains our view that Mr Abramov meets the listing criteria”. The Department recommended that the Minister revoke Mr Abramov’s current listing and relist him. The Submission, which was addressed to the Minister, requested:

39    Under the heading “Background”, the Minister was informed of various matters, including the First Designation Instrument, these proceedings, the revocation application, relevant correspondence, and the documentary material provided by Mr Abramov in support of his position. Most of this material accompanied the Submission as attachments. The Second Departmental Submission also incorporated a section referred to in the Department’s recommendations to the Minister as a ‘statement of case’. The parties proceeded on the basis that the statement of case was the section of the Second Departmental Submission commencing immediately after the ‘Background’ section. Having referred, amongst other things, to reg 6 (including item 6A in the table in reg 6), the Second Departmental Submission (in what has been referred to as the statement of case) advised the Minister that:

8.    If, having considered Abramov’s application and supporting material, and other material provided to you by Abramov and the Department:

8.1    you are not satisfied that Abramov is or has been engaging in an activity or performing a function that is of economic or strategic significance to Russia; or

8.2    you are satisfied that Abramov is or has been engaging in an activity or performing a function that is of economic or strategic significance to Russia but, in your discretion, you consider that Abramov should not be designated and declared under regulation 6;

then you should by legislative instrument revoke his designation and declaration.

9.    If, however, having considered that material:

9.1    you are satisfied that Abramov is or has been engaging in an activity or performing a function that is of economic or strategic significance to Russia; and

9.2    in your discretion, you consider that Abramov should remain designated and/or declared under regulation 6;

then the Department’s recommendation is that you revoke his designation and declaration ... and make a new decision to designate and declare him under regulation 6(a) and 6(b) to ensure Abramov’s designation and declaration is based on contemporary evidence that has been tested with Abramov. You can also decide to retain his designation and declaration under the [First Designation Instrument].

40    The Second Departmental Submission also advised the Minister that, “[w]e have addressed the issues raised by Mr Abramov in the new Statement of Case”. Indeed, the information in this Submission about Mr Abramov and the entities with which he was reportedly involved was significantly more than the equivalent kind of information in the First Departmental Submission. Under the heading “Activities and functions of economic significance to Russia”, the Second Departmental Submission detailed the Evraz Group (pars 10-17) and Mr Abramov’s roles in Evraz and its predecessors (pars 18-25). It also addressed Skoltech (pars 26-30) and the RGS (pars 33-38) and his roles in those two bodies (pars 31-32; pars 39-41). The following few paragraphs are an abbreviated account of the facts as the Department stated them in the Second Departmental Submission. The sources of the information disclosed in the Submission were apparent in its extensive footnotes. Most sources were available to the Minister in the documents accompanying the Submission.

41    Amongst other things, the Second Departmental Submission recorded that the Evraz Group:

... is one of Russia’s largest employers. It is also one of the largest steel and vanadium producers in the world. Evraz’s 2021 annual report states that over 94% of its employees are located in Russia and the Commonwealth of Independent States region and that Evraz is one of Russia’s largest taxpayers.

After noting Mr Abramov’s response to these matters in his second statutory declaration, the Submission noted Evraz’s importance “for the Russian state by providing construction and railway products for the development of infrastructure”; and that:

It is the leader in the long products and rail segments market in Russia, and estimates that market shares in Russia for its key products were, in the 2021 reporting period, 97% for rails, 69% for beams, 55% for grinding balls and 28% for railway wheels. Evraz’s coal business supplies Evraz steel mills, provides coking coal to major Russian coke and steel producers, and exports coking coal (30.3 million tonnes in 2021) outside Russia. Evraz’s vanadium business is based on processing vanadium slag from its steelmaking operations. It is the world’s largest producer of vanadium, with a global market share of 14%.

The Submission referred to statements in Russia’s National Security Strategy about the strategic significance of the construction, rail and mining sectors to the Russian Government. It also referred to “amendments to the Federal Law on Defence to empower the Russian Government to require companies to enter contracts for the supply of goods, implementation of projects and the provision of services necessary to support operations ... outside Russia”.

42    The Submission also advised the Minister that Evraz (as the ultimate holding company of the Evraz Group) was established under UK law and subject to the regulatory standards applicable to companies listed on the London Stock Exchange. It stated that Mr Abramov was a founder of Evraz’s predecessor company, EvrazMetall, and traced the history of his involvement in that company and the companies historically related to it. The Submission also recorded that Mr Abramov was Chairman of the Evraz Board from 14 October 2011 until 11 March 2022, being the day after the UK announced sanctions on Evraz’s largest shareholder. It went on to advise the Minister that Mr Abramov remained effectively Evraz’s second largest shareholder; that he also had the power to appoint a number of its non-executive directors; and that even if he were unable to ‘control’ shareholder resolutions, or determine Evraz’s activities, his indirect shareholding was “large enough to influence such resolutions and activities”.

43    Regarding Skoltech, the Second Departmental Submission noted that Mr Abramov was a board member from 2012 until December 2021. It noted that Skoltech began in partnership with the Massachusetts Institute of Technology (MIT), “with the vision of being a world-leading academic institute of science and technology”. The Submission noted that the partnership ended in February 2022, in response to the 2022 Russian invasion of Ukraine; and that the US had later sanctioned it, citing its close relationship with Russia’s defence sector. The Submission also recorded that Mr Abramov maintained that he had “played a very minor role” in its affairs and was not involved in any relationship between Skoltech and Russia’s defence sector.

44    Regarding the RGS, the Second Departmental Submission recorded that Mr Abramov had been a member of its Board of Trustees since about March 2010, and that President Putin was its Board Chairman and Russia’s Defence Minister, its President. It noted that, at a Board meeting in 2017, President Putin had presented Mr Abramov with the RGS’s Grand Silver Medal. The Submission observed that the RGS’s objectives included the promotion of the “geographical, historical and cultural heritage of Russia as an object of national pride”; and that its Charter acknowledged that its activities were “based on pursuing its interests in accordance with the national interests of Russia”. It observed that branch activities in the Ukrainian territories of Crimea and Sevastopol “could be characterised as ‘soft power’ activities that support Russia’s attempts to consolidate and maintain power in the annexed Ukrainian territory”. The Submission also noted Mr Abramov’s response, including that: (1) he was unaware of some of these matters and had not attended more than three annual general meetings, at which there were 50 to 100 others; and (2) the Board’s only responsibility was “to sign off on the annual accounts and annual report of activities”.

45    Under the heading “Conclusion as to Statutory [sic] Criteria”, the Second Departmental Submission concluded that it was open to the Minister “to find that Abramov is, or has been, engaging in an activity or performing a function that is of economic or strategic significance to Russia” (referencing item 6A(a) in reg 6 of the Sanctions Regulations) because:

42.1    Evraz has grown to become one of Russia’s largest corporate groups, employers and taxpayers, which operates in key strategic sectors of the Russian economy, including in particular construction, rail and mining. Further, Evraz (through its Russian subsidiaries) is reported to have supplied the Russian military for more than a decade. However, even if these reports are incorrect (as Evraz and Abramov claim), recent amendments to Russian Federal Law empower the Russian Government to require companies such as Evraz plc’s Russia-based subsidiaries to supply it with goods and services to support Russian military operations outside Russia (such as in Ukraine).

42.2    Abramov has personally made a significant contribution to the growth and success of Evraz through his performance of numerous high-level roles within the group over an extended period, including in particular his roles as co-founder and General Director of EvrazMetall from its inception in 1992, CEO and Chairman of Evraz Group SA from December 2004 until January 2006, and Chairman of Evraz Group SA and then Evraz plc from December 2008 to April 2022. ...

42.3     Abramov remains ... the second largest shareholder in Evraz, with the power to appoint directors, notwithstanding his resignation from the role of Chairman (which occurred the day after UK sanctions were announced targeting the largest shareholder) and the fact that he is currently not entitled to appoint directors due to the current size of the board. Given this, and his longstanding contribution to the strategic development of Evraz since its inception, it is open to you to find that he plays and will continue to play an influential role within the group, notwithstanding he is no longer a director and no longer the Chairman.

46    The Second Departmental Submission advised the Minister that nothing said by Mr Abramov denied:

... Abramov’s significant past contribution to the success of the Evraz group’s businesses as a whole from their inception, nor his ability as a substantial indirect minority shareholder to continue to influence those businesses. Nor do they deny the ongoing economic and strategic significance to Russia of both his past contribution and ongoing influence ... irrespective of Abramov’s awareness of or formal responsibility for all of the activities carried out by Evraz plc’s subsidiaries.

47    Regarding Evraz Group’s taxation liabilities, the Submission stated:

[I]t’s the Department’s view that the economic significance to Russia of those tax payments does not depend on them being paid to the Russian central government (as opposed to other government entities within Russia) nor on whose behalf they are made, particularly when Evraz’s activities are what generates the relevant tax liability. Furthermore, Abramov himself estimates that 40% of those (very substantial) tax payments go to the Russian central government, which ‘funds things such as defence’.

48    As to Mr Abramov’s submission that UK-imposed sanctions had “substantially reduced Evraz’s economic significance to Russia”, the Second Departmental Submission responded:

[T]here is no evidence that the UK government sanctions have substantially interfered with Evraz’s operations in Russia, which represents its biggest domestic market. Nor is there any evidence that the sanctions have reduced Evraz’s Russia-based employer or revenue base, or Russian taxes, to a point where Abramov (through his roles and continuing functions at Evraz) can no longer be regarded to have any economic or strategic significance to that country.

The Submission added that, even if UK sanctions were to have reduced Evraz’s economic significance to Russia, it would be open to the Minister to take into account Evraz’s economic or strategic significance to Russia prior to the imposition of those sanctions, because of the terms of item 6A(a) of the table in reg 6.

49    Regarding Skoltech, the Second Departmental Submission affirmed:

Abramov’s roles on the boards of Skoltech and the RGS provide additional evidence on which it is open to you to find that he is or has been engaging in an activity or performing a function that is of economic or strategic significance to Russia. Skoltech, which has been sanctioned by the US, pursues research and education in areas of recognised strategic significance to Russia, and has reportedly partnered with numerous Russian defence enterprises. The RGS, whose board is chaired by President Putin, promotes Russian geographical, historical and cultural heritage as an object of national pride, consistently with the national interests of Russia. Its activities in Crimea and Sevastopol can be characterised as soft power efforts to support Russia’s consolidation and maintenance of power in annexed Ukraine. Through his senior roles in these organisations, Abramov can be seen to have contributed to their promotion of Russia’s strategic interests domestically and abroad.

50    The Submission further stated:

Although Abramov’s role ended recently, he held it for around a decade. His role, however minor, can be seen to have contributed to the strategic direction of Skoltech. In this way he has supported and enabled that institution to engage in a range of activities of strategic significance to Russia, even if the high level nature of his role meant that he was not specifically aware of all of those activities.

51    As to the RGS, the Second Departmental Submission advised:

Abramov similarly submits that his role on the RGS board does not provide a basis to sanction him. Again, he says that he had no knowledge of RGS’s promotion of Russian heritage as an object of national pride, its activities in Crimea and Sevastopol, and other objectives and activities of RGS ... But this does not mean that, through his role as a board member, he cannot be seen to have enabled and supported these activities. Similarly, although he submits that his role was ‘extremely limited’ ... evidently his contribution was considered significant enough to warrant his being presented with an award by President Putin as Chair of the RGS board. Abramov’s role as an RGS board member is therefore relevant to your decision, particularly when considered in combination with Abramov’s other roles and functions.

52    Under the heading, “Other Discretionary Considerations”, the Second Departmental Submission referred to the factors advanced by Mr Abramov that the Minister might consider, including that no other country had sanctioned him and his claim to have no personal or political connections to the Russian Government or President Putin. The Minister was advised that:

The Department assesses it is unlikely that a businessman of Abramov’s standing – with a net worth of US$6.4B (according to Forbes) – and with over 30 years in the steel and coal industry in Russia has no personal or political connection to the Russia Government.

Additionally, Abramov claims that he has no material connection to the Russian invasion of Ukraine. Whether or not he has, or has had, a material connection to the Russian invasion of Ukraine is not relevant to his listing under the Russia listing criteria specified in item 6A of Regulation 6.

Furthermore, even if his assertions are correct, it does not mean his activities and functions are not of economic or strategic significance to Russia, and thereby a lawful object of Australian sanctions. However, these claims may be relevant to the exercise of your discretion.

53    The Second Departmental Submission also recorded Departmental scepticism about the enforceability of the undertakings that Mr Abramov had proffered. As to the adverse effect of sanctions on Mr Abramov and his associates, “particularly certain business ventures in New Zealand”, the Submission observed that:

If, in your discretion, you decide that Abramov should continue to be sanctioned, the effect and intention of designation and declaration under Regulation 6 of the [Sanctions] Regulations is that adverse consequences of this kind will continue to affect Abramov and his associates. This is a matter that you may consider in deciding whether to maintain sanctions against Abramov.

54    The Minister signed Pt A of the Decision Record on 16 September 2022. In so doing, the Minister recorded that she was satisfied that Mr Abramov met the criteria for designation and declaration in item 6A(a) of the table in reg 6 of the Sanctions Regulations; and that, in exercise of her discretion, she would so designate and declare Mr Abramov. She also confirmed that she had considered the Second Departmental Submission and its accompanying material, including Mr Abramov’s revocation application, his 29 August 2022 response, his second statutory declaration, his 4 September 2022 response, and the former Evraz director’s statutory declaration. The Decision Record recorded that:

PART A: DESIGNATION AND DECLARATION

I am satisfied that Alexander Abramov meets the criteria for designation and declaration outlined in Part B below.

I exercise my discretion to:

a.    designate Alexander Abramov as a designated person for Russia.

b.    declare Alexander Abramov for the purpose of preventing him from travelling to, entering or remaining in Australia.

I confirm that, in reaching my decision, I have considered the Ministerial Submission dated 9 September 2022, its attachments, and the attachments to those attachments. In particular, I have reviewed the statement of case prepared by my Department (Attachment A), Mr Abramov’s revocation application (Attachment B) and Mr Abramov’s responses to the Department’s procedural fairness letter (Attachment C and Attachment D).

Part B of the Decision Record set out the criteria in item 6A of the table in reg 6 of the Sanctions Regulations.

55    On the same day, the Minister also signed the Second Designation Instrument, designating and declaring Mr Abramov under reg 6 of the Sanctions Regulations. This instrument came into effect on 17 September 2022.

Grounds of review in amended application (4 October 2022)

56    Mr Abramov filed his amended application on 4 October 2022. This challenged both his first and second listing in the Russia and Ukraine List 2014, pursuant to the First Designation Instrument and the Second Designation Instrument.

57    Mr Abramov’s amended application challenged his first listing in the Russia and Ukraine List 2014 on the basis that the Minister’s stated satisfaction that he “is, or has been, engaging in an activity or performing a function that is of economic or strategic significance to Russia” was “legally unreasonable, and/or irrational or illogical, and/or erroneous”. It also said that his listing involved a denial of procedural fairness that was otherwise contrary to law. Mr Abramov’s written submissions dated 12 September 2022 identified the three grounds of alleged invalidity as follows:

The Minister’s decision to designate and declare Mr Abramov is invalid because:

1.     the Minister failed lawfully to form the requisite state of satisfaction on the basis of the evidence and other material placed before her in relation to Mr Abramov [in that “it was legally unreasonable, and/or irrational or illogical, and/or erroneous” for the Minister to be satisfied that Mr Abramov “is, or has been , engaging in an activity or performing a function that is of economic or strategic significance to Russia”];

2.    the Minister’s failure to consider whether to exercise her discretion to designate or declare Mr Abramov was an error of law and constituted a constructive failure to exercise jurisdiction; and

3.    the Minister failed to accord Mr Abramov procedural fairness

58    At the time the hearing began, Mr Abramov challenged the Second Designation Instrument on the following grounds:

    Ground 4 – constructive failure to discharge the duty to consider his revocation application personally by failing personally to consider his first statutory declaration, and relying instead on a Departmental summary of it.

    Ground 5 – failure to accord procedural fairness in determining the revocation application and in making the Second Designation Instrument, by departing from a previous representation about the procedure the Minister would follow without prior notice to the applicant.

    Ground 6 – that it was not open to the Minister, on the material before her, lawfully to form the requisite state of satisfaction to designate him for Russia under reg 6, in conjunction with item 6A(a) of the table.

    Ground 7 – that the Sanctions Regulations did not empower the Minister to resolve the applicant’s revocation application by revoking his designation and declaration and simultaneously re-designating and re-declaring him.

None of the other grounds enumerated in the amended application were mentioned or developed in written submissions or at the hearing.

Consideration

59    Some issues arose in the proceeding that affected more than one aspect of the case. One such issue concerned the construction of the criterion in item 6A(a) of the table in reg 6 of the Sanctions Regulations. Another issue concerned the nature of the challenged decisions.

Construction issues: general remarks

60    Plainly enough, the Sanctions Act is, broadly speaking, directed to enabling the Minister to impose autonomous sanctions (i.e., sanctions that do not depend on a prior decision of the United Nations Security Council) in pursuit of Australia’s foreign policy. This is reflected in the objects of the Act (s 3), in the definition of autonomous sanctions (s 4) and elsewhere in the Act. In this context, it is worth noting that the legislative conception of an “autonomous sanction” is very broad, and that the lawfulness of any such sanction is necessarily related to Australia’s foreign policy. Thus, under the Sanctions Act, an autonomous sanction includes a measure that “is intended to influence”, whether directly or indirectly, a person outside Australia “in accordance with Australian Government policy”: see para (a) of the definition. Also under that Act, an autonomous sanction includes the prohibition on conduct connected with Australia that directly or indirectly facilitates the engagement by a person outside Australia in action outside Australia that is contrary to Australian Government policy: see para (b) of the definition. In effect, the Sanctions Act gave what senior counsel for the Minister, Mr Herzfeld SC, described as “very considerable latitude… to the judgment[] of the executive”. This is relevant to a number of issues in this proceeding, as discussed below.

61    Further, the definition of “autonomous sanction” in s 4 of the Sanctions Act makes it clear that, under the Act, the imposition of sanctions on individuals is not limited to individuals who are able to exert personal influence on a foreign government or a member of a foreign government. In this case, neither the First Departmental Submission nor the Second Departmental Submission suggested that Mr Abramov had any such capacity. The Second Departmental Submission merely noted that the Minister might consider Mr Abramov’s representations about his lack of capacity to influence either the Russian Government or its President in the context of exercising her discretion: see [52] above. There was no error in this approach.

Submissions about the construction of the criterion in item 6A(a) of reg 6

“Is, or has been” – the applicant’s submissions

62    In order to exercise the power referable to paragraph (a) of item 6A of the table in reg 6 of the Sanctions Regulations, the Minister had to be satisfied that a person or entity “is, or has been, engaging in an activity or performing a function that is of economic or strategic significance to Russia”. The applicant submitted that the use of the words “is, or has been” required the Minister to identify either ongoing conduct having the relevant significance, or an activity or function having that significance that began in the past and continued, or the immediate effect of which continued, to the present. The applicant also submitted that this kind of temporal limitation implied that the activity or function must have the requisite “economic or strategic significance to Russia” at the time the Minister exercised the power to designate or declare a person under reg 6 of the Sanctions Regulations.

Clear and substantial nexus – the applicant’s submissions

63    The applicant submitted, and I accept, that the Sanctions Act and legislative instruments made under it were to be construed having regard to the purposes of that Act. The applicant relied on the definition of “autonomous sanction” in s 4 of the Sanctions Act in submitting that sanctions served an instrumental purpose: that is, “to influence certain persons or entities to act in accordance with Australian Government policy”. Regarding item 6A of the table in reg 6, the applicant submitted that the need for a person’s activity or function to be of “economic or strategic significance to Russia” required a “material nexus (i.e. one which is clear and substantial) between the person and the relevant “situation of international concern” (here: Russia’s aggression towards Ukraine). Mr Merkel KC, senior counsel for the applicant, further submitted that text and context required “a clear and material nexus between the function or activity that is engaged [in] ... and the economic and strategic significance that is necessary to flow from that function”. The applicant supported these submissions by reference to the Replacement Explanatory Memorandum (REM) for the Autonomous Sanctions Bill 2010 (Cth) (2010 Bill), which described autonomous sanctions as “highly targeted measures, applied only to the specific governments, individuals or entities ... that are responsible for, or have a nexus to, the situation of international concern”. He also referred to the consequences of autonomous sanctions, including their penal effect.

64    Further, the applicant submitted that the reference in item 6A(a) to an activity or function of economic or strategic “significance” to Russia referred to an activity or function that was important to or, according to the applicant’s 12 September 2022 submissions, “possibly even momentous” for Russia. The applicant supported this submission by reference to the purpose of reg 6 read with item 6A(a), which, he said, was “to enable the Minister to influence Russia to end its aggression towards Ukraine”. In this context, the applicant also referred to the reference in the legislative history to the desirability of “highly targeted” sanctions. Indeed, Mr Merkel KC submitted at the hearing that:

[T]he purpose of sanctions is to impose them on persons who have a capacity to influence the Russian Government in its activities, and a connection with that government is a vehicle for that influence to occur. ...

And what lies behind that approach ... is that the individuals sanctioned can influence the country the subject of international concern in a manner that accords with Australian Government policy, which, in the present context, is to bring an end [to] the aggression against Ukraine and the invasion that has occurred of its territory. It’s in that context, really, that an individual’s connection with, or capacity to influence the country becomes a critical factor ... to be considered when a sanction decision is made.

65    In this context, the applicant also referred to paragraphs (b) and (c) of item 6A and the remainder of the table in reg 6, which focussed on persons with direct responsibility for situations of international concern or those directly related to such persons. Further, the applicant submitted that, to meet the item 6A(a) criterion, the Minister had to be satisfied that the activity or function of the person to be designated or declared was of the requisite economic or strategic significance to Russia, not just some activity or function of an entity with which the person was associated.

“Is, or has been” – the Minister’s submissions

66    In the Minister’s submission, the words “is, or has been, engaging” in item 6A(a) in the table in reg 6 applied to both present and past conduct, including past conduct that had ceased. The Minister contended that if “has been engaging” referred only to past conduct that is presently continuing, these words would be “entirely superfluous”. Citing Wilkie v The Commonwealth [2017] HCA 40; 263 CLR 487 at [146], the Minister submitted that all the words in the expression “is, or has been, engaging” should be given an operation. The Minister accepted that “the thing that has to be of continuing significance is the activity or function”, although “[t]here may be contestable questions which are for the Minister’s evaluation of the way in which past activities remain of economic or strategic significance”. In summary, Mr Herzfeld SC, for the Minister, contended that the words “is, or has been, engaging” are “covering both past and present conduct, and the limitation to be injected is simply one of reasonable satisfaction”.

Clear and substantial nexus – the Minister’s submissions

67    The Minister contended that there was no basis in the legislative history or scheme to support the applicant’s argument for “a clear and material nexus” between an identified activity or function and its economic or strategic significance to Russia. The Minister submitted that the reference in the REM to the 2010 Bill to “highly targeted measures” did not support the applicant’s narrow approach. Mr Herzfeld SC submitted that the REM described the proposed measures as “highly targeted”, in the sense that “they’re applied to minimise the impact on general populations”. He submitted that this was “in contradistinction, for example, to other kinds of economic measures which might affect a whole country’s population, or other kinds of international measures, such as the use of armed force, which might well have a broader effect on a population”. The Minister submitted that this aligned with the stated legislative purpose of the proposed Act, which was to strengthen Australia’s autonomous sanctions regime “by allowing greater flexibility in the range of measures Australia can implement, thus ensuring Australia’s autonomous sanctions match the scope and extent of measures implemented by like-minded countries”: see REM to the 2010 Bill, p 1.

68    Further, regarding the requirement in item 6A(a) of the table in reg 6 that the Minister be satisfied that the relevant activity or function “is of economic or strategic significance to Russia”, the Minister submitted that the Court should reject the applicant’s attempt to give further content to the word “significance”. The Minister drew attention to the fact that the relevant state of satisfaction concerned “government policy in the sphere of foreign relations” involving economic and strategic matters. Mr Herzfeld SC submitted that the Minister was required to make “a judgment of high policy concern relating to the Australian government’s view of what is significant to Russia in an economic or strategic sense”; and that this was “a judgment of very considerable breadth”. In this context, Mr Herzfeld SC submitted that the Court should not “read in any a priori narrowing words which would involve it in second guessing” the Minister’s judgment “against a vague standard of momentousness or importance”.

Consideration: construction of the criterion in item 6A(a) of reg 6

“Is, or has been”

69    Regulation 6 of the Sanctions Regulations relevantly permits the Minister to make a legislative instrument to designate a person “mentioned” in item 6A of the table in reg 6 as a designated person for Russia; and to declare a person mentioned in an item in the table for the purpose of preventing entry to Australia. The applicant is a person mentioned in item 6A if he meets the description in paragraph (a) of that item. This is so if the applicant is:

[a] person ... that the Minister is satisfied is, or has been, engaging in an activity or performing a function that is of economic or strategic significance to Russia.

(Emphasis added)

There was ultimately little dispute between the parties about the effect of the words “is, or has been”. This said, I am inclined to prefer the Minister’s submissions on this issue to the applicant’s (although little turns on the differences between them).

70    By virtue of reg 6 and item 6A(a) of the table, the Minister may declare a person, and designate a person for Russia, if the Minister is satisfied that that person is engaging in an activity or performing a function that is of economic or strategic significance to Russia at the time the Minister makes the declaration or designation. The Minister may also declare and designate that person even though the person has ceased the activity or function, providing the Minister is satisfied that that activity or function is (still) of economic or strategic significance to Russia. The use of the verb form “has been ... engaging ... or performing” indicates that the activity or function to which these words relate began in the past and has continued for some time thereafter without a clear endpoint: cf Rodney Huddleston and Geoffrey K Pullum, The Cambridge Grammar of the English Language (Cambridge University Press, 2002) p 165. It follows that whether the relevant person has in fact ceased the activity or function at the time the Minister considers making the declaration or designation does not bring the Minister’s power to declare or designate to an end providing the Minister forms the relevant satisfaction. I also accept that, as the Minister submitted, the use of this verb form would be superfluous if the words referred only to past and presently continuing conduct, and that this was not the intended result of the use of this verb form.

No clear and substantial nexus requirement

71    Plainly enough, before the Minister can designate a person in reliance on item 6A(a) in the table in reg 6 of the Sanctions Regulations, the Minister must be satisfied that the designated person is, or has been, engaging in an activity or performing a function that is of requisite significance to Russia. The Minister’s concern here is with that person’s activity or function, rather than with an activity or function engaged in or performed by an entity or entities with which the person is, or has been, associated. I would, however, reject the applicant’s submission that, to rely on item 6A(a) of the table in reg 6, the Minister must be satisfied that there is a clear and substantial nexus between an activity or function of a designated person and the economic or strategic significance of that activity or function to Russia (or, if it matters, the situation of international concern).

72    The applicant’s submission requires words to be read in to item 6A(a) that are not there, even by implication. Item 6A(a) in the table in reg 6 requires only than the Minister be satisfied that the activity or function in which the person is or has been engaging or performing is “of economic or strategic significance to Russia”. I accept that, as the Minister submitted, the reference in the REM to the 2010 Bill to “highly targeted measures” does not support the applicant’s argument. This is because the reference to “targeted” measures here clearly refers to the fact that autonomous sanctions would be applied “only to the specific” individuals, entities or governments, “so as to minimise, to the extent possible, the impact on the general populations of the affected countries”. The use of the word “targeted” did not define the nature of the nexus between the designated person’s activity or function and the economic or strategic significance of that activity or function to Russia.

73    Furthermore, the REM clearly contemplated that autonomous sanctions would be applicable, relevantly, to individuals having “a nexus to” the situation of international concern. To limit the relevant nexus to one that is, as a matter of objective fact, “clear and substantial” as the applicant proposes would defeat the purpose of the 2010 Bill as identified in the REM. This was “to strengthen Australia’s autonomous sanctions regime by allowing greater flexibility in the range of measures Australia can implement, thus ensuring Australia’s autonomous sanctions match the scope and extent of measures implemented by like-minded countries”.

74    I accept the Minister’s submission that there is nothing in reg 6 to limit the activities and functions mentioned in item 6A(a) of the table to activities and functions of “importance” let alone “momentous” economic or strategic significance to Russia. Item 6A(a) requires the Minister to make an assessment about whether a person has relevantly undertaken an activity or function that “is of economic or strategic significance to Russia”. Plainly enough, such an assessment involves a sensitive judgment on foreign policy and other matters. It is, plainly enough, a judgment involving a wide range of considerations. It may call for reference to “a range of materials, including relevant strategic documents published by the Russian Government and information from Australian Government agencies” (Explanatory Statement for the Russia Regulations). I accept the Minister’s submission that there is no justification for the Court in this context to seek to qualify the word “significance” in item 6A(a) in the table in reg 6 by reference to such imprecise measures as importance or momentousness. It is a matter for the Minister whether to form the requisite satisfaction, subject to the requirement to do so in conformity with the standard of legal reasonableness.

Submissions about character of the First Designation Instrument and the Second Designation Instrument (collectively, the Instruments)

75    In written submissions, the Minister contended that neither of the Instruments was a “decision of an administrative character” within the meaning of s 3 of the ADJR Act. The Minister submitted that, for this reason, they were not reviewable under s 5 of that Act. Rather, so the Minister submitted, the decisions expressed in these two Instruments were decisions of a legislative character, having regard to the factors identified in RG Capital Radio Ltd v Australian Broadcasting Authority [2001] FCA 855; 113 FCR 185.

76    Before addressing the parties’ submissions on the issue in more detail, I observe that both parties submitted that nothing much turned on its outcome. Mr Herzfeld SC, for the Minister, submitted that the applicant’s grounds and the Minister’s responses were the same, whether the challenged decisions were reviewable under the ADJR Act or s 39B of the Judiciary Act. He submitted that the standard for review for unreasonableness remained a stringent one under the Judiciary Act. He also submitted that the foreign policy context in this case meant that judicial review was necessarily limited. Mr Merkel KC, for the applicant, submitted that the issue was of limited importance because the applicant maintained that there had been jurisdictional error, including on the ground of unreasonableness and that relief was therefore available to him under s 39B of the Judiciary Act.

77    The Minister submitted that the effect of an instrument made under reg 6(a) of the Sanctions Regulations “is to give content to the general laws in regs 14 and 15”, and that these regulations “regulate the conduct of all persons who might interact with a designated person”. The Minister submitted, “a designation has binding legal effect in the sense of directly affecting the operation of other statutory provisions”. The Minister argued that the effect of an instrument made under reg 6(b) was relevantly similar in that it also affected the content of another law. In this context, the Minister cited reg 2.43(1)(aa)(i) of the Migration Regulations 1994 (Cth), pursuant to which the existence of a declaration is a ground for visa cancellation; and PIC 4003, pursuant to which the existence of such a declaration is a ground for visa refusal.

78    The Minister contended that the Instruments amended the Russia and the Ukraine List 2014 in a manner typical of legislation. The First Designation Instrument added numerous names to the Russia and Ukraine List 2014, which already had many “hundreds of names in it”. The Minister added:

If one had in the [Sanctions] Regulations, or indeed in the Act itself, listed these hundreds of names in [a] Schedule, one could pretty readily see that that is a legislative act because of the sheer number of people that are affected.

79    The Minister relied on the fact that an instrument under reg 6 must be made as a legislative instrument, which Parliament might disallow under s 42 of the Legislation Act. The Minister also relied on the public nature of such an instrument, being both a legislative instrument and an instrument subject to reg 22 of the Sanctions Regulations. The Minister submitted that reg 22 specifically required the publication of a document that set out all currently designated persons and entities “to facilitate the legislative character of a designation in its application to all persons who might deal with a designated person”.

80    The Minister submitted that the criterion applicable to the making of the Instruments was indicative of their legislative character, because item 6A(a) of reg 6 involved making an essentially political judgment. The Minister also relied on the absence of any provision for merits review. Noting that reg 10 enabled the revocation of a designation or declaration made by legislative instrument under reg 6, the Minister nonetheless contended that there was limited opportunity for the executive to vary or control a designation or declaration, once made. The Minister submitted that, while reg 18 conferred a power to issue permits and reg 19 a power to waive the operation of a declaration, these powers were only exercisable in the national interest and, in the case of waiver, also on humanitarian grounds.

81    In written submissions, the Minister submitted that, since the Instruments had a legislative character, the applicant could challenge them only for jurisdictional error under s 39B of the Judiciary Act, and on the more limited grounds available for a decision of a legislative kind. The Minister accepted that her satisfaction had to be formed reasonably in the legal sense, but contended that the Instruments’ legislative character informed the applicable standard of review for the “no evidence”, “erroneous findings” and unreasonableness grounds. In this regard, the Minister relied on Athavle v New South Wales [2021] FCA 1075; 290 FCR 406 at [94]-[97] and Bienke v Minister for Primary Industries and Energy [1994] FCA 626; 125 ALR 151 at 166.

82    At the hearing, Mr Maxwell, for the applicant, submitted that the two Instruments both involved a decision of an administrative character within the meaning of s 3 of the ADJR Act. While he accepted that the factors in RG Capital Radio were relevant to the question of characterisation, he submitted that these factors did not have equal weight. Rather, the principal reason for attributing an administrative character to the Instruments was, he submitted, that they did not create new rules of general application. Rather, so Mr Maxwell submitted, the Instruments applied existing rules to a particular person. Referring to Minister for Industry and Commerce v Tooheys Ltd (1982) 42 ALR 260 at 265; 60 FLR 325 at 331, he submitted that this was “at the core” of the distinction between administrative and legislative decisions. Mr Maxwell submitted that the Sanctions Regulations set out the rules of general application, such as the general prohibitions in regs 14 and 15; and that a decision did not acquire a legislative character simply because it filled out the content of such general prohibitions. He referred, in this connection, to Visa International Service Association v Reserve Bank of Australia [2003] FCA 977; 131 FCR 300 at [589]-[594]. Mr Maxwell submitted that, as in that case so too in this, a designation or declaration merely identified the persons by reference to whom and the assets by reference to which laws of general application were to apply.

83    Mr Maxwell further submitted that, once the Instruments were made, the Minister retained the power to vary or control them in exercise of the power to revoke (reg 10(2)), to grant a permit (reg 18) and to waive the operation of a declaration (reg 19). He submitted that this indicated that reg 6 conferred a power to make an instrument of an administrative character. Citing Applied Medical Australia Pty Ltd v Minister for Health [2016] FCA 35; 246 FCR 555 at [47(x)], he submitted that the Sanctions Regulations had binding effect, not the designation or declaration decisions represented by the Instruments. He also submitted that provision for publication and the absence of merits review were essentially subsidiary factors.

84    In written submissions in reply, the applicant contended that designation and declaration under reg 6 did not create rules of general application. Rather, this was done by regs 14 and 15 of the Sanctions Regulations and reg 2.43(1)(aa)(i) of the Migration Regulations 1994 (Cth). The applicant submitted that the fact that item 6A(a) in the table in reg 6 involved an evaluative judgment was of little significance, given that many decisions of an undoubtedly administrative character involve criteria calling for the same kind of judgment. Referring to Anderson v Minister for the Environment, Heritage and the Arts [2010] FCA 57; 182 FCR 462 at [42], the applicant submitted that provision for disallowance by Parliament was of marginal significance. The applicant also relied on the power in reg 10 as indicative of an administrative character. He further submitted that a decision to designate and declare a person under reg 6 did not bind anyone; rather the Sanctions Regulations had that effect.

Consideration of the character of the Instruments

85    First, I would note that the legislative character of the decisions represented by the Instruments is relevant to whether the applicant must establish jurisdictional error to succeed. Further, if properly characterised as legislative in character, the applicant may also be obliged to satisfy more stringent standards of review than otherwise. Both factors may affect whether the applicant succeeds in his application.

86    Second, I accept that in some cases whether a decision is of a legislative or administrative character does not admit of a ready answer: see RG Capital Radio at [40]-[47]. This is because a decision may have numerous characteristics, none of which is conclusive and some of which point in different directions. In such a case, one must take account of the effect of the decision in the round.

87    Third, as Gummow J noted in Queensland Medical Laboratory v Blewett [1988] FCA 708; 84 ALR 615 at 634, “the Constitution does not forbid the statutory authorisation of the Executive to make laws”. His Honour further explained:

Rather, the federal legislative powers of the parliament ... authorise the parliament to repose in the Executive an authority of an essentially legislative character, at least where the exercise of the authority is subject to a measure of parliamentary control.

...

The delegation of legislative authority has most frequently been effected by reposing a regulation-making power in the Governor-General in Council. ...

However, a delegation by the parliament may also be made to other personae designatae (for example particular Ministers of State for the Commonwealth) subject to parliamentary control by procedures for disallowance by either House. ...

88    Fourth, it is commonly said that the basic difference between a legislative decision and an administrative decision is between creating or formulating “new rules of law having general application and the application of those general rules to particular cases”. Compare Minister for Industry and Commerce v Tooheys Ltd 42 ALR 260 at 265; 60 FLR at 331, citing Commonwealth v Grunseit (1943) 67 CLR 58 at 82. Indeed, the Full Court in RG Capital Radio noted (at [43]) that:

Perhaps the most commonly stated distinction between the two types of decision is that legislative decisions determine the content of rules of general, usually prospective, application whereas administrative decisions apply rules of that kind to particular cases.

89    Notwithstanding this, the Full Court in RG Capital Radio at [47] accepted Gummow J’s statement in Blewett at 635 that:

... to accept the general distinction stated by Latham CJ in Grunseit is not necessarily to accept the further proposition that, to qualify as a law, a norm must formulate a rule of general application; individual norms which apply only to the action of a single person on a single occasion may still be classed as laws.

As Gummow J added at 635, it is therefore “difficult to see how a sufficient distinction between legislative and administrative acts is that between the creation or formulation of new rules of law having general application and the application of those general rules to particular cases”. In conformity with this, Gummow J held in Blewett that a determination made under s 4A(8) of the Health Insurance Act 1973 (Cth) to substitute a new pathology table for that in Sch 1A to the Act was of a legislative character. His Honour reasoned that, since the Schedules to that Act were part of the Act and the determination had the same effect as if the Schedule had been amended by an amending statute, the determination had a legislative character.

90    In this case, it may be accepted that, in designating a person under reg 6(a) or declaring a person under reg 6(b), reg 6 required the Minister to consider a particular person. In this case, the Minister had to consider whether she was satisfied that Mr Abramov fell within the description in item 6A(a) of the table in reg 6. The Minister’s focus was on his activities and functions and their economic or strategic significance to Russia. This kind of focus is commonly indicative of an administrative decision. Compare Visa International at [591]. As the foregoing may indicate, this is not the end of the analysis. This is because designation and declaration have consequences for provisions of the Sanctions Regulations, and other legislative provisions. By designating a person under reg 6(a), the Instruments enlivened the prohibitions in regs 14 and 15. That is, upon designating a person under reg 6, these prohibitions were completed and given life in the sense that they had binding effect as regards the designated person and any assets owned or controlled by the designated person. Compare RG Capital Radio at [77], citing SAT FM Pty Ltd v Australian Broadcasting Authority [1997] FCA 647; 75 FCR 604 at 608-609. Upon being given life and binding effect, the prohibitions became applicable to a potentially large, changing and as-yet unidentified group of people. This analysis is indicative, so it seems to me, of a legislative character.

91    Similarly, the fact that a person has been declared under reg 6(b) enlivens the power to cancel a visa held by that person, or to refuse any visa application made by that person: see reg 2.43(aa)(i) and public interest criterion 4003 of the Migration Regulations 1994 (Cth).

92    Fifth, Parliamentary control is also indicative of legislative character: see RG Capital Radio at [51]-[56]. Pursuant to s 42 of the Legislation Act, the House of Representatives had the capacity not only to disallow the Sanctions Regulations, but also a legislative instrument made by the Minister under reg 6 of those Regulations. That is, the lower House had a measure of oversight and control of the Instruments by which the contested decisions were made. I reject the applicant’s submission that provision for disallowance by Parliament was of marginal significance in this case. I also note that it seems to me that this is not what Foster J intended to affirm in Anderson at [42].

93    Anderson was a case in which the applicant sought judicial review of the Minister’s decision to refuse to make declarations under ss 9 and 10 of the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth) to protect what the applicant believed to be a “significant Aboriginal area” from injury or destruction. Foster J held that the Minister’s decision to refuse to make a declaration was administrative in character, and therefore amenable to review under the ADJR Act. Although emergency declarations were made by legislative instrument and subject to disallowance by Parliament, a refusal to make a declaration only required the Minister to take “reasonable steps to notify the applicant or applicants of his or her decision”. A refusal was not subject to disallowance by Parliament. Foster J held therefore that a refusal was an administrative decision, although a declaration had a legislative character: Anderson at [47], [52]. I accept that, as the Minister submitted, Anderson supports the proposition that, all things being equal, an instrument that is subject to disallowance by the Parliament is indicative of a legislative character.

94    Sixth, a further factor consonant with the legislative character of the Instruments is the requirement for their publication. Since the Instruments are legislative instruments registered pursuant to the Legislation Act, the Instruments are made available to the public at large. Furthermore, designation under reg 6(a) attracts the Departmental obligations in reg 22 of the Sanctions Regulations. These obligations include an obligation to make available to the public on the Departmental website information identifying any currently designated person and the date of that person’s designation. I accept that, as the Minister submitted, this requirement was consistent with the legislative character of designation under a legislative instrument, since it assisted in making the fact of designation publicly available to a person who might deal with a designated person or that person’s assets.

95    Seventh, I accept that the criterion applicable to the making of the Instruments involved an assessment of the economic and strategic significance of the applicant’s activities and functions to Russia. It seems to me, however, that the nature of the assessment is neutral. Similarly, it seems to me that little turns on the revocation power in reg 10, and the power to issue permits in reg 18 and to waive the operation of a declaration in reg 19. I accept that, aside from the revocation power, there is only limited opportunity for the Minister to vary or control a designation or declaration once made. A power to revoke unilaterally might be seen as analogous to the capacity to repeal in the case of primary legislation. A limited opportunity to vary or control a designation or declaration might be seen as indicative of a legislative character since it might be seen as emphasising the importance of Parliamentary control. Equally, a limited opportunity might be seen as indicative of an administrative character, since the issue of a permit and the waiver of a declaration are in the nature of administrative decisions.

96    Further, I accept that, as the Minister submitted, the Instruments amended the Russia and the Ukraine List 2014 in a manner typical of legislation. It does not seem to me, however, that this is a significant factor: at best, it is consistent with the legislative character of the contested decisions. Finally, while the presence of merits review can be a strong indicator of an administrative decision, its absence here is also neutral.

97    Nonetheless, having regard to the effect of designation and declaration in enlivening other legislative provisions, as well as provisions for disallowance and publication, I am of the opinion that the designation and declaration made by the Instruments have a legislative character.

98    This means that the applicant is confined to seeking relief under s 39B of the Judiciary Act, for jurisdictional error on the grounds available for a decision of a legislative kind, and subject to the standard of review applicable to a decision of this character: Athavle v New South Wales at [94]-[97]; Bienke v Minister for Primary Industries and Energy at 166.

The Challenge to the First Designation Instrument

Whether the Minister’s public statements form part of the reasons

99    As already stated, the Minister made the First Designation Instrument on 7 April 2022. As already noted, reg 6 of the Sanctions Regulations empowered the Minister to designate and/or declare a person mentioned in an item in the table in reg 6 for the country mentioned in the item. As noted already, Mr Abramov became a designated person for Russia and a declared person on the basis that he was a person mentioned in paragraph (a) of item 6A of the table in reg 6. That is, he was “[a] person ... that the Minister is satisfied is, or has been, engaging in an activity or performing a function that is of economic or strategic significance to Russia”.

100    The applicant submitted that the public statements made by the Minister at a press conference and in a press release on 7 April 2022 were the Minister’s explanation for listing the 67 persons (including him) for sanctions that day. The applicant noted that the Minister made these statements the same day as she made the First Designation Instrument, and that the record of the press conference and the press release showed that she referenced the 67 people targeted for sanctions in that Instrument. The applicant submitted that the Minister’s public statements at the press conference and in the press release included the material findings of fact on which the Minister relied in reaching the state of satisfaction required to engage item 6A(a) of the table in reg 6.

101    The Minister contended that it was unrealistic to conclude that statements at the press conference or in the press release constituted a statement of the Minister’s reasons for reaching her state of satisfaction as required in paragraph (a) of item 6A of the table in reg 6. I accept the Minister’s submission.

102    The content and nature of these public statements show that they were intended to be abbreviated and generalised communications to the press and the public about the effect of the Instrument she made that day. These public statements were not statements of reasons as to why the Minister was satisfied that the precondition to an exercise of the power to designate and declare had been met with respect to any particular person in the group of 67 people to whom she referred. It is worth noting that her statements at both the press conference and in the press release indicated that the 67 people were a disparate group, including members of the Russian military, members of the Russian elite, oligarchs, Russian Ministers of State and senior Russian government officials. Plainly enough, the specific circumstances that fell for consideration in designating and declaring each individual within the group of 67 were not the same. The statements at the press conference and in the press release did not disclose the specific facts about the applicant that the Minister considered material and justified his designation and declaration. These statements did not, as Mr Merkel KC submitted, constitute the Minister’s “reasons and findings for the designation decision”.

103    The cases to which Mr Merkel KC referred do not lead to a different conclusion. In Port Phillip Scallops Pty Ltd v Minister for Agriculture (Vic) [2018] VSC 589; 238 LGERA 344, Cavanough J ruled that certain public statements made by a State Minister were relevant to the plaintiff’s case about that Minister’s actual reasons for the decision, and were admissible on this basis: see Port Phillip Scallops at [17]. The statements at issue in Port Phillip Scallops are not, however, comparable to the public statements at issue here. This is because the statements in that case concerned the particular fisheries quota in dispute. Unlike the Minister’s statements to the press in this case, the statements at issue in Port Phillip Scallops did not deal in a global way with the diverse circumstances of a significant number of people, each of whom was the subject of individual consideration before a separate decision about each of them was made.

104    For similar reasons, the applicant’s reliance on Greyhound Racing NSW v Cessnock & District Agricultural Association Inc [2006] NSWCA 333 was misplaced. Greyhound Racing NSW concerned a decision made by a statutory authority on the basis of a briefing paper identifying the four relevant factors to be considered by the authority in its decision-making. After making the decision, the authority sent a letter to the respondent and made a media announcement, only referring to two of those factors. This led the Court to infer that those two factors were the primary factors on which the authority had in fact based its decision: see Greyhound Racing NSW at [85]. This reasoning is inapplicable to the public statements at issue in this case. This is because, in contrast to Greyhound Racing NSW, the applicant here seeks to enlarge, as opposed to narrow, the field of material facts, beyond the undisputed evidence concerning the Minister’s actual decision-making concerning him.

105    There is undisputed evidence of the material before the Minister when she made the impugned decision. The Minister’s statements at the press conference and in the press release were extrinsic to the process of making that decision. Further, as noted, the Minister’s statements to the press were not about the applicant specifically. Rather, the press conference and the press release contained generalised statements about a group of 67 people. These statements explained in a general way why the Minister had made the First Designation Instrument with respect to that group, rather than why the applicant fell into the group. The Minister’s statements to the press did not detail the facts about Mr Abramov that the Minister considered justified her reaching the state of satisfaction required to engage item 6A(a) of the table in reg 6.

The applicant’s no evidence ground

106    The applicant’s claim that there was no evidence or other material before the Minister to form the state of satisfaction required by item 6A(a) of the table in reg 6 depended on the Court’s acceptance of his submissions concerning the statements made by the Minister in the press conference and press release of 7 April 2022. The applicant’s case was that there was no evidence for the Minister’s “findings” as recorded in the record of the press conference and in press release: see applicant’s submissions dated 12 September 2022, at [26]-[28]. In this context the applicant relied on Minister for Immigration and Multicultural and Indigenous Affairs v SGLB (2004) [2004] HCA 32; 207 ALR 12 at [38] in support of his contention that the Minister’s state of satisfaction could not lawfully have been formed if there was no evidence to support the material findings of fact on which her satisfaction was based. Since none of the statements made by the Minister in the press conference and in the press release of 7 April 2022 formed part of the Minister’s reasons for designating or declaring Mr Abramov pursuant to reg 6 of the Sanctions Regulations, this ground must fail.

The applicant’s constructive failure to exercise jurisdiction ground

107    As noted earlier, to designate Mr Abramov for Russia and declare him pursuant to reg 6 (as a person mentioned in item 6A(a) of the table) the Minister had, first, to be satisfied that Mr Abramov “is, or has been, engaging in an activity or performing a function that is of economic or strategic significance to Russia”. Second, the Minister had to determine that it was appropriate as a matter of discretion to designate and declare him.

108    The applicant contended that the Minister failed to appreciate that, once relevantly satisfied, she had still to consider whether it was appropriate in the exercise of her discretion to designate and declare him. This, in the applicant’s submission, amounted to a constructive failure to exercise jurisdiction, because the Minister failed to apply the correct test or misunderstood the nature of the power conferred on her. The applicant sought to make out this ground principally by reference to the First Departmental Submission, although senior counsel for the applicant also submitted that other materials accompanying the Submission supported this contention.

109    Mr Herzfeld SC, for the Minister, contended that it was not open to the Court to conclude on the balance of probabilities that the Minister had failed to understand the discretionary nature of the power merely because there was no express reminder to the Minister in the First Departmental Submission that the power was a discretionary one. He referred to Burgess v Assistant Minister for Home Affairs [2019] FCAFC 152; 271 FCR 181 in support of this contention. He also contended that the First Departmental Submission in fact informed the Minister that her decision was a discretionary one. Referring to the Departmental recommendation (see [24] above) at the outset of the Submission, the Minister submitted that the recommendation that the Minister “note… if you do not agree to a designation or declaration” was “inconsistent with any misapprehension that satisfaction as to the criteria compelled a decision”. The Minister further submitted that the statements in the Submission about other countries’ listings and the effect of Australia’s listing “could only have been understood as relevant to the discretion and not to the criteria themselves”.

110    Mr Herzfeld SC also relied on the fact that the Minister had issued the Explanatory Statement for the Russia Regulations (adding item 6A to the table in reg 6: see [5] above) earlier in 2022. He drew attention to the fact that the Explanatory Statement described autonomous sanctions as a “discretionary tool”; and that it stated:

When considering whether to apply autonomous sanctions, the Government considers Australia’s national interest, including bilateral, regional and multilateral equities, and the impact of sanctions on Australia’s economic, security or other interests.

He submitted that this supported the proposition that the Minister understood that “sanctions were discretionary tools”.

111    For the reasons stated below, I accept the applicant’s submission that there was jurisdictional error because there was a constructive failure to exercise jurisdiction.

112    As reference to [24] above shows, the recommendation at the beginning of the First Departmental Submission effectively advised the Minister that her consideration of the Submission could lead to only two possible outcomes. The Submission advised the Minister in substance that, if satisfied that the 67 individuals met the criteria for listing, then she should designate and declare them by recording this appropriately in the Decision Record. The Submission further advised the Minister that if she did not agree to a designation or declaration, then she should initial the “Do Not List” column in the Decision Record, as directed. There was no indication that the Minister had a discretion not to designate or declare Mr Abramov even though the Minister was satisfied he met the listing criteria in item 6A(a) in the table in reg 6. Rather, fairly read, and having regard to recommendation (a)(i), recommendation (a)(ii) merely directed the Minister on what to do if the Minister were not satisfied that a person met the listing criteria. In this context, the use of the word “or” in recommendation (a)(ii) is insufficient to support the Minister’s contention that “or” pointed to a separate and undisclosed discretion. The result was that the Minister was advised in substance that there was only one critical issue for her to decide: whether she was satisfied that each of the 67 persons (including Mr Abramov) met the listing criteria set out in Pt B of the Decision Record. Recommendation (a)(ii) simply indicated what she should do if she was not so satisfied with respect to a particular person. Critically, there was no reference to a third possibility: that it was open to the Minister to conclude that a person met the criteria for designation and declaration but decide, as a matter of discretion, not to designate or declare that person.

113    Part A of the Decision Record also operated to confirm that the Minister only had these two options, there being no reference in Pt A to the third possibility.

114    Further, the material in the Decision Record informing the Minister about Mr Abramov fortifies this reading of the First Departmental Submission. There are five bullet points in the relevant entry: see [27] above. The first three points concerned Mr Abramov’s functions and activities. These points were relevant to the fifth point:

Given his position in Evraz, it is open for the Minister to be satisfied that [Mr Abramov] is, or has been, engaging in an activity or performing a function that is of economic or strategic significance to Russia.

115    Plainly enough, this information was also relevant to whether Mr Abramov met the listing criterion in item 6A(a) of the table in reg 6. It did not point to the existence of a separate discretion to determine whether, even if he met these criteria, the Minister had still to consider the exercise of her discretion whether to designate and/or declare Mr Abramov pursuant to reg 6.

116    The fourth dot point was redacted. It was the subject of a public interest immunity claim made by the Minister. Although the applicant initially contested the claim, at a hearing on 26 August 2022, Mr Berger KC, for the Minister, informed the Court that the parties had reached an agreement. Pursuant to this agreement, the applicant did not pursue his opposition to the claim and the Minister made the following statement to the Court:

The respondent accepts that the information over which public interest immunity is claimed does not bear upon satisfaction as to (a) Mr Abramov’s activities or functions, and (b) the economic or strategic significance to Russia of any of Mr Abramov’s activities or functions. Secondly, ... the information ... over which public interest immunity is claimed is of potential relevance only to the Minister’s decision as to whether to make a designation or declaration in respect of Mr Abramov.

117    The Minister submitted that the Court should infer from this statement that the fourth bullet point was in fact relevant to the exercise of her discretion. I would not do so. If the Minister had given consideration as to whether she should, as a matter of discretion, designate and declare Mr Abramov, the relevance and weight of the fourth dot point or any other consideration would have been for her to determine at the time she made her decision. By agreement between the parties, the Minister has affirmed that the information in that dot point was “of potential relevance only to the Minister’s decision as to whether to make a designation or declaration in respect of Mr Abramov”. This evidently remains the Minister’s opinion. It is not, however, for the Court to determine the relevance of the fourth dot point, including because it does not know its contents.

118    Mr Merkel KC, for the applicant, submitted that I should infer that the fourth point was intended to support the conclusion in the fifth point. I would not do so. This would, it seems to me, be inconsistent with the statement made by agreement on 26 August 2022.

119    The outcome of the dispute about the fourth dot point in the information about Mr Abramov presented to the Minister in the Decision Record does not matter much, however. The fact is that there is nothing in the material before the Court to indicate that, when the Minister made her decision, her attention was directed to the existence of the discretion. This is a much weightier matter.

120    In the absence of any reference to the existence of the discretion, it seems to me that one would naturally understand the statements in the First Designation Submission about other countries’ listings and the effect of Australia’s listing as intended to contextualise the Departmental recommendations, and the steps the Minister was requested to take to give effect to them. These statements do not provide a basis to infer that the Minister was made aware of and exercised the discretion conferred on her by reg 6. I reject the Minister’s contrary submission.

121    To the extent relevant, I accept that, as Mr Merkel KC submitted, the draft Explanatory Statement issued for the First Designation Instrument did not mention the discretionary nature of the power in reg 6. Nor did the draft Statement of Compatibility with Human Rights. Both these documents were before the Minister when she made the First Designation Instrument. These documents provide limited further support for the applicant’s case.

122    I reject the Minister’s submission that the Explanatory Statement for the Russia Regulations indicated that that the Minister had a discretion of the kind conferred by reg 6. In the exercise of that discretion, the Minister might consider the circumstances of a particular person before designating and declaring them. That Explanatory Statement did not concern this kind of discretion. Rather, it concerned a discretion at a higher and more general level, that is, in the framing of foreign and other national policies, including the strategic decision to apply autonomous sanctions as a matter of foreign policy. In any event, though it was before her, there is no reason to believe that the contents of the Explanatory Statement were in the Minister’s mind at the time she came to consider the First Departmental Submission regarding the 67 persons, including Mr Abramov.

123    The First Departmental Submission would have led the reader to conclude that, to the contrary, if the Minister was satisfied that a person met the listing criteria (relevantly, in item 6A(a) of the table in reg 6), then the Minister would designate and declare that person. There is nothing in that Submission to support the conclusion that the Minister considered whether she should designate and declare Mr Abramov even though satisfied he met the criterion in item 6A(a) of the table in reg 6, and that she determined that she should. The Minister’s statement at the hearing on 26 August 2022 that the fourth point was “of potential relevance only to the Minister’s decision as to whether to make a designation or declaration in respect of Mr Abramov” does not overcome this deficiency. It does not provide a sufficient basis to infer that the Minister was aware of the discretion and exercised it. There is, moreover, nothing to indicate that the Minister was aware of, and exercised, the discretion notwithstanding the absence of any reference to it in the First Departmental Submission.

124    For the foregoing reasons, I conclude that, on the balance of probabilities, the Minister failed to appreciate the discretionary nature of the power conferred by reg 6 of the Sanctions Regulations. Burgess is an entirely different case that turned primarily on the proper inferences to be drawn from the Departmental submission relevant to that case. It is of no assistance to the Minister here. In this event, there is a constructive failure to exercise jurisdiction, because the Minister failed to apply the correct test, misunderstood the nature of her jurisdiction, or failed to address the correct questions.

125    In a much-cited passage in Ex parte Hebburn Ltd: Re Kearsley Shire Council (1947) 47 SR (NSW) 416 at 420, Jordan CJ said that there would be a constructive failure to exercise jurisdiction where the decision-maker misunderstood the nature of the jurisdiction to be exercised, and applied a “wrong and inadmissible test”; or “misconceive[d]” the duty to be performed; or failed to address the question that the law prescribed; or misunderstood the nature of the opinion to be formed. There are many examples of the application of this statement, including Sinnappan v State of Victoria [1995] 1 VR 421 at 443-4, to which Mr Merkel KC referred.

126    The error was evidently material. Applying MZAPC v Minister for Immigration and Border Protection [2021] HCA 17; 273 CLR 506 at [38] and Nathanson v Minister for Home Affairs [2022] HCA 26; 403 ALR 398 at [32]-[33], I am satisfied that, as “a matter of reasonable conjecture”, the Minister’s consideration of whether, in the exercise of her discretion, she should designate and declare Mr Abramov pursuant to reg 6 of the Sanctions Regulations might have led to a different decision. For example, the Minister might have considered it relevant that no other country had sanctioned Mr Abramov and/or that he was no longer a member of the Evraz Board. It may also be that, where the relevant error involves a misunderstanding of the nature of the power to be exercised, the Court must necessarily find that acting upon a correct understanding of the nature of the power could have resulted in the making of a different decision: compare Nguyen v Minister for Home Affairs [2019] FCAFC 128; 270 FCR 555 at [45]-[51]; Chamoun v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCAFC 66; 276 FCR 75 at [69]-[70]. It is unnecessary to delve into this question in any detail because, on any analysis, the error identified here was material.

127    I would therefore uphold the applicant’s challenge to the First Designation Instrument, on the ground that there was a constructive failure to exercise jurisdiction.

Failure to form requisite satisfaction lawfully: applicant’s unreasonableness ground

128    As we have seen, the applicant challenged the making of the First Designation Instrument on the ground that the Minister was not lawfully satisfied that Mr Abramov “is, or has been, engaging in an activity or performing a function that is of economic or strategic significance to Russia”, as item 6A of the table in reg 6 required. The applicant submitted that “it was legally unreasonable, and/or irrational or illogical, and/or erroneous” for the Minister to reach that state of satisfaction.

129    In support of this ground, the applicant relied on alleged errors of fact in the Minister’s statements at the press conference and in the press release of 7 April 2022. As explained at [105] above, these statements did not form part of the Minister’s reasons for designating and declaring Mr Abramov pursuant to reg 6 of the Sanctions Regulations. In particular, they did not detail the facts about Mr Abramov that the Minister relied on in reaching the state of satisfaction required to engage item 6A(a) of the table in reg 6. Accordingly, the applicant’s attempt to rely on statements at the press conference and in the press release on 7 April 2022 in support of this ground must fail.

130    I turn to that part of the applicant’s challenge based on alleged errors in the First Departmental Submission. As noted earlier, the Minister signed Pt A of the Decision Record that accompanied the Submission. In so doing, the Minister recorded that she was satisfied that Mr Abramov met the criteria for designation and declaration, and that she had considered the part of the statement of case in the Submission respecting him.

131    The applicant contended that the power conferred by reg 6 in conjunction with item 6A(a) of the table in reg 6 was “narrowly tailored to the instrumental purpose of influencing the Russian Government in relation to the invasion of Ukraine”. The applicant submitted that item 6A(a) was only engaged “with respect to the conduct of persons that has the requisite nexus to Russia’s aggression towards Ukraine”. In the applicant’s submission, none of the matters set out in the submission to the Minister, individually or in combination, were sufficient to enable the Minister lawfully to conclude that he was or had been engaging in activities or functions with that nexus.

132    The applicant also submitted that, regarding the information said to be about him (see [27] above), much of the information was not about him but about the activities and functions of Evraz. In the applicant’s submission, by directing herself to matters relating solely to Evraz, the Minister had conflated the applicant with Evraz, or attributed Evraz’s functions and activities to him without a proper basis. The applicant argued that such an attribution was unjustified. He submitted that the roles of ‘chairman’ and ‘co-founder’ (upon which the Minister relied to connect him with Evraz were merely offices, disclosing no relevant functions or activities. He submitted that the fact he held these offices was insufficient to permit the attribution of Evraz’s functions and activities to him. The applicant submitted that, to justify this attribution, the Minister would have had to conclude that he exercised personal control or influence over Evraz. The applicant submitted that this conclusion was not open to the Minister. The applicant submitted that affidavits filed by him in the proceeding showed that Evraz’s listing on the London Stock Exchange required compliance with stringent regulations precluding his personal control or influence.

133    Separately, the applicant also submitted that it was unreasonable for the Minister to have accepted the “bare allegation” that Evraz had supplied steel to the Russian military for the production of tanks, particularly as the material before the Minister showed that Evraz had denied that allegation. The applicant submitted that the absence of any material indicating that either he or the Board were involved in or had knowledge of the alleged supply exacerbated the unreasonableness of the requisite satisfaction being reached.

134    The Minister contended that the applicant’s case with respect to this ground rested on an erroneous construction of item 6A(a) of the table in regulation 6. The Minister argued that, contrary to the applicant’s construction, this item conferred on the Minister an evaluative latitude that, coupled with the exacting standard required to make out the ground of legal unreasonableness, meant the applicant must fail. The Minister also denied that there had been any “attribution” of Evraz’s activities to the applicant or “conflation” of Evraz’s activities with those of the applicant. Rather, so the Minister submitted, the Minister had turned her mind to the applicant personally, focussing on the activities and functions he performed in connection with Evraz.

135    The Minister also submitted that Mr Abramov’s role as co-founder and chairman of Evraz was rationally capable of supporting the Minister’s satisfaction that he had been engaging in activities or performing functions of economic or strategic significance to Russia. The Minister contended that this conclusion was unaffected by the argument (even if it be accepted) that a non-executive chairman is not involved in a company’s day-to-day operations, or that the co-founding had occurred in the past. Mr Lim, for the Minister, submitted that the applicant’s arguments, taken at their highest, showed only that different views might be open about what could be inferred from the applicant’s role as chairman and co-founder. He submitted that this would fall well short of the conclusion that the Minister’s satisfaction with respect to the applicant was not open on the material before her.

136    Further, the Minister submitted that it was open to her to rely on the material alleging that Evraz supplied steel to the Russian military, and that it was for her to determine what weight, if any, to place on that material. Referring to Minister for Immigration and Citizenship v SZMDS [2010] HCA 16; 240 CLR 611 at [135] and ABT17 v Minister for Immigration and Border Protection [2020] HCA 34; 269 CLR 439 at [19], the Minister submitted that it was irrelevant that the applicant submitted in this proceeding that the allegation was untrue.

137    The Minister contended that it was impermissible for the applicant to challenge the reasonableness of her state of satisfaction by reference to matters set out in affidavits filed in the proceeding, being material that was not before the Minister. While the Minister accepted that extrinsic evidence may be admitted to support an unreasonableness ground, the Minister argued that courts had admitted such evidence only to permit an assessment of a decision in the context of knowledge in a particular technical area. In this context, the Minister referred to Australian Retailers Association v Reserve Bank of Australia [2005] FCA 1707; 148 FCR 446 and Minister for Primary Industries and Energy v Austral Fisheries Pty Ltd [1993] FCA 46; 40 FCR 381. The Minister submitted that extrinsic evidence could not be used to challenge the correctness of the material that lay before the Minister in support of a state of satisfaction on “an essentially political or subjective criterion”. This was not, so Mr Lim submitted, “a criterion that invites admission of extrinsic evidence ... seeking to contradict factual propositions that were instructed to the Minister”.

Consideration – the applicant’s unreasonableness ground

138    For the following reasons, it seems to me that this ground cannot succeed.

139    I accept that, as Mr Herzfeld SC submitted, the standard of legal unreasonableness is high, whether referable to a decision having an administrative or legislative character. Whether a purported exercise of power is so unreasonable that no reasonable administrative decision-maker could have exercised the power as the decision-maker did is a stringent test. See, e.g., Minister for Immigration and Citizenship v Li [2013] HCA 18; 249 CLR 332 at [76] (Hayne, Kiefel and Bell JJ); [105]-[109] (Gageler J); and Minister for Immigration and Border Protection v SZVFW [2018] HCA 30; 264 CLR 541 at [11] (Kiefel CJ); [82] (Nettle and Gordon JJ). In this context, as Hayne, Kiefel and Bell JJ concluded in Li, “[u]nreasonableness is a conclusion which may be applied to a decision which lacks an evident and intelligible justification”. The standard would appear to be even higher where the challenged act or decision is of a legislative character. See, for example, Athavle v New South Wales [2021] FCA 1075; 290 FCR 406 at [94]-[97] (which, unlike this case, concerned subordinate legislation) and Bienke v Minister for Primary Industries and Energy [1994] FCA 626; 125 ALR 151 (which, like this case, involved a decision subject to disallowance by one of the Houses of Parliament) at 166 (Gummow J). The Court must assess the applicant’s contention that the making of the First Designation Instrument was unreasonable in the legal sense according to these principles.

140    First, there is nothing in the text of reg 6, read with item 6A of the table in reg 6, to support the applicant’s submission that the power conferred on the Minister arose only “with respect to the conduct of persons that has the requisite nexus to Russia’s aggression towards Ukraine”. Such a nexus does not fix the boundaries of legal reasonableness. I reject the applicant’s submissions to the contrary. I discuss the proper construction of these provisions at [69]-[84] above. I accept that the Russia Regulations, which introduced item 6A into the table in reg 6, were made in response to Russia’s invasion of Ukraine; but nothing in the text of reg 6, read with item 6A of the table, supports the requirement for which the applicant contends. To accept the applicant’s contention would require the introduction of words into the text that simply do not appear there, either expressly or by implication.

141    Second, I accept that, as the Minister submitted, it was open to the Minister to have regard to the material alleging that Evraz had supplied steel to the Russian military for tank construction. It was essentially for the Minister to determine what weight, if any, she gave this material. In this context, it was irrelevant that the applicant maintained in this proceeding that the allegation was false.

142    Third, I accept the Minister’s submission that, in this case, the applicant’s unreasonableness ground (that the Minister could not reasonably have formed the requisite state of satisfaction) ought be decided by reference to the material before the Minister at the time she decided to designate Mr Abramov for Russia and to declare him under reg 6.

143    At the outset of his written submissions on this ground, the applicant accepted that, if the Court rejected his submission that the Minister’s press statements were, relevantly, her reasons for decision, then “the question whether the Minister has lawfully formed the requisite state of satisfaction is to be determined by asking whether it was open, on the materials before the Minister, lawfully to form that state of satisfaction”. Upon the basis that the Minister has not given reasons, the applicant relied on the well-known statement of Dixon J in Avon Downs Pty Ltd v Federal Commissioner of Taxation (1949) 78 CLR 353 at 360. His Honour there said:

Moreover, the fact that [the decision-maker] has not made known the reasons why he was not so satisfied will not prevent the review of [the] decision. ... If the result appears unreasonable on the supposition that [the decision-maker] addressed himself to the right question, correctly applied the rules of law and took into account all the relevant considerations and no irrelevant considerations, then it may be a proper inference that it is a false supposition. It is not necessary that you should be sure of the precise particular in which [the decision-maker] has gone wrong. It is enough that you can see that in some way he must have failed in the discharge of his exact function according to law.

144    In other parts of the applicant’s written submissions on this ground, however, the applicant referred to his affidavit filed in this proceeding on 13 September 2022. In particular, as part of his argument in support of this ground, the applicant referred to this affidavit in support of the proposition that there was no rational basis to attribute Evraz’s activities and functions to him at the time the Minister designated and declared him under reg 6. This attribution was, so the applicant said, inherent in the information about Mr Abramov set out in the First Departmental Submission, which the Minister confirmed that she had considered in signing the Decision Record.

145    There are at least two difficulties with this approach. First, there is no express and direct attribution of the activities and functions of Evraz to Mr Abramov in the First Departmental Submission, including in the particular information about Mr Abramov: see [27] above. Further, the Submission does not attribute the activities and functions of Evraz to Mr Abramov in the way the applicant would have it, even by implication. Rather, the focus of the Submission is on the importance of Mr Abramov’s own activities as co-founder of the company and his own functions as its Chairman. It is his activities as co-founder and his functions as Chairman of the company that lead to the Submission’s conclusion that “[g]iven his position in Evraz”, it was open to the Minister to be relevantly satisfied. It is true that the information about Mr Abramov includes two sets of information about Evraz: first, the nature of its business, its principal location and taxpayer status in Russia; and, second, the existence of an allegation that the company had supplied steel to the Russian military “[d]uring [the applicant’s] tenure”. These two latter points contextualise the significance of the applicant’s activities and functions as co-founder and Chairman of such a large and globally important company. That is, the Submission is not asserting, even by implication, that Mr Abramov was closely involved in the operations of the company. Rather, it is saying that it might be inferred from the status of the positions he held within such a company that he was or had been engaging in activities or performing functions of economic or strategic significance to Russia. In this regard, it cannot be said that, in reaching the requisite state of satisfaction, the Minister reached a conclusion that lacked evident and intelligible justification: see Li at [76]. Since the standard is even higher in the case of challenge to an act or decision of a legislative character, it is evident that this ground must fail.

146    In any event, even if contrary to my conclusion, the applicant’s reading of the First Departmental Submission was open, that alternative reading would support the Minister’s ultimate satisfaction. This is clearly not a case where “the conclusion ... reached [by the decision-maker] ... “is capable of explanation only on the ground of ... misconception”: Avon Downs at 360.

147    I note that, in the present case, the applicant relied on his own affidavit in support of his contention that the activities and functions of Evraz should not be attributed to him. Ordinarily, of course, material that was not before the decision-maker at the time of the decision will be irrelevant in subsequent judicial review proceedings, and evidence of such material will be inadmissible: see Mackenzie v Head, Transport for Victoria [2021] VSCA 100 at [153]. Both parties accepted as much. There is no hard and fast rule, however; and the admissibility of evidence that was not before the decision-maker will depend on the ground of review and the circumstances of the case: see, for example, Mackenzie at [153].

148    In Mackenzie the Victorian Court of Appeal identified one class of evidence that may be admissible in these circumstances as “[e]xpert evidence that is capable of showing that there was no intelligible foundation for the decision”. Both Australian Retailers Association v Reserve Bank of Australia and Minister for Primary Industries and Energy v Austral Fisheries Pty Ltd fall into this class.

149    In the former case, the applicant contended that the Bank had acted irrationally, and not in accordance with sound economic principles in designating the EFTPOS system under s 11 of the Payment Systems (Regulation) Act 1998 (Cth). The applicant challenged the decision on judicial review. Both parties adduced evidence about the effects of designation. As Weinberg J explained, at [460], however:

When it is put that a body, such as the RBA, acted irrationally, and not in accordance with sound economic principle, the fact that experts in “payment systems” and regulatory theory say that they would have arrived at the same decision must be probative, at least as regards that issue. What is “sauce for the goose, is sauce for the gander”. It follows that evidence by experts that the decision to designate was taken in disregard of fundamental, and quite basic economic principles, must equally be admissible as bearing on the same issue. ...

In other words, the expert evidence in that case was admissible because it addressed technical issues concerned with “payment systems” within the meaning of the relevant Act and the regulatory theory relevant to understanding the effect of the decision under review within the relevant statutory context: cf: Australian Retailers Association v Reserve Bank of Australia at [454]-[460].

150    Minister for Primary Industries and Energy v Austral Fisheries Pty Ltd also falls into this class. The case was an appeal against a declaration made by a single judge that a provision of a management plan under the Fisheries Act 1952 (Cth) was void. An expert in statistics gave expert opinion evidence at first instance as to the existence of a statistical fallacy in the formula for the allocation of catch quotas. The Full Court dismissed the appeal on the basis that the Minister’s exercise of power under s 7B(5)(b) of that Act depended on a formula for the allocation of catch quotas, which produced absurd results as the expert’s evidence had shown. The Court held that the exercise of statutory power was therefore irrational, and no reasonable person could have exercised the power in that way.

151    The evidence on which Mr Abramov sought to rely was not expert evidence serving a purpose akin to that in either of these two cases. Of course, as Mackenzie shows, the admissibility of evidence, which was not before the decision-maker at the relevant time, is not confined to expert evidence. There is no need to discuss other occasions here, however. As I have said, the applicant relied on his own affidavit in support of his contention that the activities and functions of Evraz should not be attributed to him. Since I would not read the First Departmental Submission in this way (see [145] above), the evidence on which the applicant sought to rely was irrelevant and inadmissible. Plainly enough, neither of the cases to which the Court was referred would lead to a different conclusion here.

152    For these reasons, this ground cannot succeed.

Failure to form requisite satisfaction lawfully: the applicant’s erroneous findings of fact ground

153    The applicant further contended that the Minister had failed lawfully to form the state of satisfaction required by item 6A(a) in the table in reg 6 because she had been so satisfied on the basis of erroneous “findings” of fact. The Minister came close to submitting that this was not a tenable ground. For present purposes, however, the applicant’s ground can be understood to support a submission that the Minister failed to address the matters that item 6A(a) of the table in reg 6 required her to address because her satisfaction was reached on the basis of erroneous facts.

154    In support of this ground, the applicant relied on two propositions drawn from the Minister’s public statements to the press on 7 April 2022. Since I have rejected the applicant’s submission that these public statements constituted the Minister’s reasons for designating and declaring Mr Abramov pursuant to reg 6, the errors, if any, in these public statements are irrelevant for present purposes.

155    The two other impugned assertions of fact were, first, that Mr Abramov was co-founder of Evraz and, secondly, that he was its Chairman. These assertions appear in the statement of case about Mr Abramov and the description of his “title” in the list in Pt C of the Decision Record: see [27] and [28] above. There was also a further reference to his position as Chairman of Evraz in the First Departmental Submission under the heading “Background”. As noted already, the Minister signed Pt A of the Decision Record, thereby indicating that she had considered the statement of case about Mr Abramov and was satisfied that he (being a person listed in Pt C) met the criteria for designation and declaration. There was also a description of Mr Abramov as “Co-founder and Chairman of Evraz” in the list in Schedule 1 to the First Designation Instrument.

156    The applicant submitted that the statement that he was a “co-founder” of Evraz was erroneous. In his affidavit filed on 13 September 2022, he deposed that, although he had co-founded EvrazMetall in 1992, he did not co-found Evraz. Rather, so he deposed, Evraz was created in 2011, following decisions by the Board and shareholders of Evraz SA (of which he was non-executive Chairman at the time).

157    Regarding the First Departmental Submission’s description of him as “Chairman of Evraz” or “Chairman of multinational steel company Evraz”, the applicant deposed that he had resigned as Chairman of the company on 11 March 2022. Further, he deposed that, from 14 October 2011 until 11 March 2022, he was a non-executive (and not an executive) Chairman of the company. In this context, he submitted that this was a distinction of consequence, given that the Minister relied on his activities or functions as Chairman in reaching the requisite state of satisfaction.

158    The applicant submitted that the factual errors in the information presented to the Minister in the First Departmental Submission and accompanying documents, and on which she must be taken to have relied in designating and declaring him, vitiated the Minister’s state of satisfaction.

159    Citing Minister for Immigration and Multicultural and Indigenous Affairs v SGLB (2004) [2004] HCA 32; 207 ALR 12 at [38], the applicant submitted that a state of satisfaction will not be lawfully formed where it is “not based on findings or inferences of fact supported by logical grounds”. This would be the case, so the applicant submitted, where a state of satisfaction was based on material findings of fact that were erroneous. In support of this argument, the applicant referred to Duggan v Federal Commissioner of Taxation [1972] HCA 66; 129 CLR 365, Lu v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 340; 141 FCR 346, WCJS v Minister for Home Affairs [2021] FCA 1093, and Chang v Neill [2019] VSCA 151; 62 VR 174. Citing MZAPC, Nathanson, and Chang, the applicant submitted that the factual errors were serious and important to the Minister’s decision, and in consequence deprived him of a realistic possibility of a different outcome.

160    In response to the Minister’s contention that Duggan was not a judicial review proceeding and therefore did not provide authority for this case, the applicant contended that “a statutory appeal from disallowance of an objection is a proceeding in the nature of judicial review”. He supported this proposition by referring to Avon Downs; Amway of Australia Pty Ltd v Commonwealth of Australia [1999] FCA 283; 41 ATR 443 at [20]; and Bosanac v Commissioner of Taxation [2019] FCAFC 116; 267 FCR 169. The applicant further submitted that there was nothing about Duggan to warrant the conclusion that the principle in that case was inapplicable here.

161    The Minister began with the contention that this part of the applicant’s case was “a legally unavailable ground of challenge”. Citing Australian Broadcasting Tribunal v Bond [1990] HCA 33; 170 CLR 321 at 356, the Minister submitted that “[t]here is no error of law simply in making a wrong finding of fact”. Mr Herzfeld SC submitted that the applicant’s approach –

... embraces, in the context of a jurisdictional pre-condition expressed by reference to the decision-maker’s satisfaction, an ability to challenge on objective grounds with extrinsic evidence findings of fact made by the decision-maker along the way. And that would be nothing short of a revolution in administrative law.

162    Senior Counsel submitted that, for the applicant to succeed, the applicant had to show how the making of the alleged factual errors involved a legally unreasonable process of decision-making. He submitted that the applicant had not undertaken this analysis and that:

There’s no suggestion that any factual error of the kind of which the applicant complains means that the Minister didn’t consider the question that the Minister was required to consider.

163    Mr Herzfeld SC contended that the authorities did not support the proposition that material errors going to states of satisfaction are of themselves jurisdictional errors. He submitted that, in each of the cases to which the applicant referred, the applicant had identified the way in which the alleged errors of fact resulted in the Minister failing to perform the task required by the governing legislation. For example, in Lu, the Court held that a mistaken understanding of the applicant’s criminal record meant that the Minister failed to consider the applicant’s actual criminal record as required by law. The Minister submitted that Chang was another example of the same kind of problem. In WCJS, the Court held that the sheer number of factual mistakes in the Minister’s brief impelled the conclusion that the Minister reached the decision through a legally unreasonable (and thus legally unavailable) process of reasoning.

164    The Minister contended that Stephen J’s reasoning in Duggan was inapplicable in the context of the present proceeding because Duggan turned on the specific and unusual terms of the applicable statutory provisions. The Minister referred to Holmes v Deputy Commissioner of Taxation (NSW) (No 2) (1988) 19 ATR 1173 at 1185 in support of the proposition that an appeal to the High Court under s 187 of the Income Tax Assessment Act 1936 (Cth) was relevantly different to a judicial review proceeding. The Minister also noted that in Duggan there was no suggestion that material extraneous to the actual decision-making process affected the outcome. Senior counsel for the Minister further submitted that, if considered in this way, Duggan was support “only for a no evidence ground, or perhaps an irrationality ground”, to be assessed by reference to the material before the decision-maker.

165    In written submissions, the Minister submitted that the challenged findings were not made. Rather:

Her finding was that she was satisfied on the basis of the material before her that the Applicant should be designated. Whether that involved an acceptance of some or all of the facts briefed to her is unknown.

166    At the hearing, however, Mr Lim, for the Minister, properly noted that Schedule 1 of the First Designation Instrument, which included Mr Abramov in the list (at 103), included “Additional information” with the listing. This information noted Mr Abramov as “Co-founder and Chairman of Evraz”: see [4] above. Mr Lim accepted that “that is a finding in relation to the decision”.