FEDERAL COURT OF AUSTRALIA

Wiseway Logistics Pty Ltd v Secretary, Department of Home Affairs [2024] FCA 427

ORDERS

THE COURT ORDERS THAT:

1.    The appeal under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) be dismissed as incompetent.

2.    The Administrative Appeals Tribunal be joined as the second respondent.

3.    The application for judicial review be dismissed.

4.    The applicant pay the first respondent’s costs as agreed or assessed.

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

REASONS FOR JUDGMENT

KENNETT J:

INTRODUCTION

1    The applicant was designated as a regulated air cargo agent (RACA) under the Aviation Transport Security Regulations 2005 (Cth) (the Regulations). Its designation was due to expire at the end of 7 February 2024. Designation as a RACA (which I refer to below as a RACA designation) allowed the applicant to examine and handle cargo for loading on to aircraft, a business which is tightly regulated in view of the safety risks arising from air cargo that is not properly examined or not held securely between examination and loading.

2    On 15 September 2023 the applicant applied for renewal of its designation. A delegate of the respondent decided on 31 October 2023 to refuse to grant that renewal (the refusal decision). The applicant applied to the Administrative Appeals Tribunal (the Tribunal) for review of the refusal decision on 13 November 2023 and sought an expedited hearing of its application.

3    With little progress having been made in preparing the review application for a hearing, on 13 December 2023 the applicant lodged a request for a stay order under s 41(2) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act). Section 41(1) and (2) of the AAT Act provide as follows.

(1)     Subject to this section, the making of an application to the Tribunal for a review of a decision does not affect the operation of the decision or prevent the taking of action to implement the decision.

(2)     The Tribunal may, on request being made by a party to a proceeding before the Tribunal (in this section referred to as the relevant proceeding), if the Tribunal is of the opinion that it is desirable to do so after taking into account the interests of any persons who may be affected by the review, make such order or orders staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relates or a part of that decision as the Tribunal considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review.

4    The order sought by the applicant was:

Pursuant to s 41(2) of the Administrative Appeals Tribunal Act 1975 and in conformance with r 4.43F of the Aviation Transport Security Regulations 2005 the designation of Wiseway Logistics Pty Ltd as a Regulated Air Cargo Agent, is taken to continue until the final determination of the application for review of the Decision by the Administrative Appeals Tribunal.

5    The application for a stay order came on for hearing before the Tribunal on 30 January 2024 and the Tribunal made its decision on the application on 7 February 2024 (the day the designation was due to expire) (the stay decision). The Tribunal refused to grant a stay order. The present proceeding has been brought as an “appeal” under s 44 of the AAT Act from, or alternatively an application for judicial review of, the stay decision.

6    The proceeding was commenced on 7 February 2024. With its designation as a RACA due to expire that night, the applicant made an urgent interlocutory application for a stay of the refusal decision and the stay decision under s 44A(2) of the AAT Act. Nicholas J, as duty judge, made those orders ex parte and listed the matter for further hearing. The continuation of the stay orders was the subject of evidence and argument before Nicholas J on 9 February 2024. On 16 February 2024, his Honour ordered that the stay orders made on 7 February 2024 continue until further order. Although there is an issue as to the competency of the proceeding in so far as it purports to be brought under the AAT Act, the applicant has not sought to appeal from the orders made by Nicholas J and those orders remain in force. The final hearing of the matter was expedited and it came before me on 13 March 2024.

THE COMPETENCY ISSUE

7    The proceeding was originally commenced as an “appeal”, under s 44 of the AAT Act, from the stay decision. Quotation marks are commonly placed around the word “appeal” in this context because the Tribunal is not a court and the jurisdiction that this Court exercises under s 44 is therefore original rather than appellate. The principal relief sought was an order, under s 41(2) of the AAT Act, that the designation of the applicant be taken to continue until the final determination of the review application by the Tribunal.

8    By its “amended notice of appeal from a tribunal” dated 9 February 2024 (the amended notice of appeal) the applicant, in the alternative to “appealing” under s 44, seeks judicial review of the stay decision under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the ADJR Act) or s 39B of the Judiciary Act 1903 (Cth) (the Judiciary Act). Alternative relief is also sought: orders setting aside the stay decision and remitting the matter for determination by the Tribunal differently constituted.

9    The respondent filed a notice of objection to the competency of the “appeal”. However, it was common ground that the Court’s jurisdiction was properly engaged by the application for remedies under the ADJR Act or s 39B.

10    On the basis of the prayers for relief set out in the amended notice of appeal, the competency issue was significant. That is because, on the footing that its proceeding was an “appeal” under s 44, the applicant was seeking to have this Court exercise the power in s 41(2) of the AAT Act. Assuming that to be possible, it would require the Court to reach its own conclusions as to the discretionary factors bearing on the grant of a stay under that provision, including making necessary findings of fact. The relief sought under the ADJR Act and the Judiciary Act was limited to setting the stay decision aside and sending the matter back to the Tribunal for reconsideration.

11    However, the applicant ultimately did not advance any argument that the Court should conclude that a stay order ought to have been granted by the Tribunal; nor did it press the claim for an order involving exercise by this Court of the s 41(2) power. Senior counsel for the applicant agreed that the relief that might be granted was in substance the same whether or not the “appeal” was competent. In these circumstances, little if anything turns on the competency issue.

12    There is a body of authority in this Court standing directly in the way of the “appeal” being considered competent. The earliest decision in this line of cases is Director-General of Social Services v Chaney (1980) 47 FLR 80 (Deane and Fisher JJ) (Chaney) and the most recent is Transcon Holding Pty Ltd v Aged Care Quality and Safety Commission [2020] FCA 780 at [21]-[25] (Abraham J) (Transcon). In Transcon, Abraham J set out relevant parts of the reasoning in Chaney and referred to the other cases (including two further Full Court decisions) that have applied that reasoning. Chaney, Transcon and a number of the cases in between (see, eg, Frugtniet v Tax Practitioners Board [2013] FCA 752; Mahaffy v Administrative Appeals Tribunal [2015] FCA 251; Kumar v Secretary, Department of Social Services [2019] FCA 202) concerned the question whether a decision whether to make an order under s 41(2) was capable of being the subject of an “appeal” under s 44. All are against the applicant’s position.

13    I do not think that there is any scope for distinguishing this line of cases by reference to whether the grant or refusal of a stay order in the circumstances of a particular case can be seen as “determinative” or “independent”, or has a quality of “finality”. Any grant or refusal of an order under s 41(2) attracts those descriptors in that it has legal force and either changes or declines to change, for a time, the substantive statutory rights of the parties to the review. On the other hand, no such order is determinative of any issues at stake in the review application. It is the legal character of the decision that determines whether or not it comes within s 44. Abraham J did not err by stating a principle in general terms that “a refusal to grant a stay cannot be said to determine the outcome of the substantive application to the Tribunal for review, and is not a ‘decision’ for the purposes of s 44(1) of the AAT Act” (Transcon at [25]).

14    Accordingly, the “appeal” from the stay decision is not competent. The relief that may potentially be granted is therefore limited to that provided for in s 16 of the ADJR Act, or constitutional writ relief in the exercise of jurisdiction under s 39B.

15    The parties agreed that, in the light of the applicant’s reliance on the ADJR Act and s 39B, it was appropriate for the Tribunal to be formally joined as a respondent to the proceeding. I will make an order to this effect.

RELEVANT ASPECTS OF THE STATUTORY SCHEME

The Act

16    The Regulations are made under the Aviation Transport Security Act 2004 (Cth) (the Act). Section 3(1) and (2) of the Act identify its “main purpose” as follows.

(1)     The main purpose of this Act is to establish a regulatory framework to safeguard against unlawful interference with aviation.

Note: Division 4A of Part 3 and Divisions 2A and 10 of Part 4 have additional purposes (see sections 38AA, 44C and 74J).

(2)     To achieve this purpose, this Act establishes minimum security requirements for civil aviation in Australia by imposing obligations on persons engaged in civil aviation related activities. In particular, it obliges certain aviation industry participants to develop, and comply with, aviation security programs.

17    “Unlawful interference with aviation” is defined by s 10 and comprises doing or attempting to do any one of several things without lawful authority (s 10(1)), including:

(e)     placing, or causing to be placed, on board an aircraft that is in service anything that puts the safety of the aircraft, or any person on board or outside the aircraft, at risk.

18    Part 4 of the Act deals, among other things, with screening and clearing of passengers, weapons, prohibited items and on-board security.

19    Of present relevance is Division 2A, which deals with examining and clearing air cargo. Section 44B defines these concepts.

(a)    Cargo is “examined” when it undergoes examination in accordance with regulations made under s 44C before being taken on to an aircraft.

(b)    Cargo “receives clearance” if, after being examined, it has been handled in accordance with regulations made under s 44C that prescribe how it is to be handled for this purpose. Cargo can also receive clearance if it is within a category prescribed as not requiring examination and has been handled in accordance with applicable regulations.

(c)    Cargo is “cleared” if it has “received clearance” and, since that time, has been handled at all times in accordance with regulations made under s 44C.

20    Section 44C provides, relevantly, as follows.

44C Requirements for examining and clearing cargo

(1)     For the purposes of safeguarding against unlawful interference with aviation or preventing the use of aviation in connection with serious crime (or both), the regulations may:

(a)     prescribe requirements in relation to one or more of the following:

(i)     examining cargo;

(iii)     receiving clearance;

(iv)     the circumstances in which cargo is required to be cleared; and

(aa)     establish a scheme under which certain persons that carry on a business that includes handling, or making arrangements for transport, of cargo are approved as known consignors;

(b)     establish a scheme under which certain persons that carry on a business that includes the handling, or making arrangements for the transport, of cargo are designated as regulated air cargo agents; and

Note: Regulated air cargo agents are a kind of regulated agent: see the definition of regulated agent in section 9.

(c)     establish a scheme under which certain persons that carry on a business that includes the handling, or making arrangements for the transport, of cargo are accredited as accredited air cargo agents; and

Note: Accredited air cargo agents are a kind of regulated agent: see the definition of regulated agent in section 9

(d)     prescribe conditions that must be complied with by:

(i)     all known consignors, all regulated agents or all aircraft operators; or

(ii)     one or more specified classes of known consignors, regulated agents or aircraft operators; or

(iii)     one or more specified known consignors, regulated agents or aircraft operators; and

(f)     prohibit a person from carrying on a business to the extent that it consists of:

(i)     handling cargo; or

(ii)     making arrangements for the transport of cargo;

unless the person is a known consignor, a regulated agent or an aircraft operator; and

(g)     ...

(1A)     …

(2)     Without limiting subsection (1), the following matters may be dealt with by regulations made under that subsection:

(a)     the examination of cargo by:

(i)     all known consignors, all regulated agents or all aircraft operators; or

(ii)     one or more specified classes of known consignors, regulated agents or aircraft operators; or

(iii)     one or more specified known consignors, regulated agents or aircraft operators;

(b)     the procedures for dealing with cargo examined as mentioned in paragraph (a);

(c)     the places where examination is to be conducted;

(d)     the methods, techniques and equipment to be used for examination;

(e)     the things to be detected by examination;

(f)     the procedures for dealing with things detected by examination;

(g)     the circumstances in which cargo may receive clearance by:

(i)     all known consignors, all regulated agents or all aircraft operators; or

(ii)     one or more specified classes of known consignors, regulated agents or aircraft operators; or

(iii)     one or more specified known consignors, regulated agents or aircraft operators;

(ga)     how cargo is to be handled (including methods, techniques or equipment to be used) in order to receive clearance;

(gb)     how cargo is to be handled (including methods, techniques or equipment to be used) after receiving clearance in order to maintain its status as cleared;

(h)     the supervision and control measures for dealing with cargo that has received clearance;

(ha)     the method for applying for approval as a known consignor and how such applications are dealt with;

(i)     the method for designating a person as a regulated air cargo agent;

(j)     the method of applying for accreditation as an accredited air cargo agent and how such applications are to be dealt with.

21    As noted earlier, the applicant was designated as a “regulated air cargo agent”. That expression is defined in s 9 as “a person designated as a regulated air cargo agent in accordance with regulations made under section 44C”. The only purpose of the definition seems to be to include a person thereby designated in larger categories of persons which are subjected to obligations by or under the Act. A “regulated air cargo agent” is included in the definition of “regulated agent”, which in turn is within the definition of “aviation industry participant” (both defined in s 9).

The Regulations

22    A “regulated air cargo agent” is referred to as a “RACA” in the Regulations: see reg 1.03.

Clearance of cargo

23    Regulation 4.41CA deals with the requirements for cargo to receive clearance (part of the subject matter identified by s 44C(1)(a)). The cargo needs to satisfy one of three tests:

(a)    examination by a RACA in accordance with an “examination notice given to the RACA”, followed by handling by the RACA in accordance with relevant aspects of its “security program”, together with a “security declaration” (reg 4.41CA(2));

(b)    examination by a “cargo examining aircraft operator” in accordance with an “examination notice given to the operator”, followed by handling by that operator in accordance with relevant aspects of its “TSP” (defined in reg 1.03 to mean “transport security program”), together with a “security declaration” (reg 4.41CA(2A)); or

(c)    specification in reg 4.41C or an instrument under s 44B(2)(b)(i) as a form of cargo not requiring examination, handling by a RACA or a cargo examining aircraft operator in accordance with relevant aspects of its security program or TSP, and a security declaration (reg 4.41CA(3)).

Each test also requires the cargo be free of unauthorised explosives.

24    A “security program” must be provided to each RACA at the time it is designated (reg 4.46). Subdivision 4.1A.2A of the Regulations provides for the contents of security programs and for their amendment and variation.

25    A “security declaration” is a document evidencing certain matters that can be issued by a RACA, a cargo examining aircraft operator or a “known consignor”. A “known consignor” is a person approved as such by the Secretary under Subdivision 4.1A.1B of the Regulations. That form of approval is available to persons who carry on “business that engages in originating cargo” (reg 4.41M(1)). Goods that originate with a known consignor and are handled in accordance with its security program do not require examination (reg 4.41C(1)) and can thus receive clearance under reg 4.41CA(3). Thus, approval as a known consignor allows an entity that sends goods to customers by air to have those goods cleared without the need for examination by another party.

26    Goods that require examination in order to receive clearance must be examined in accordance with an “examination notice” given to the RACA or the cargo examining aircraft operator. Regulation 4.41J provides for the Secretary to make an examination notice that sets out requirements as to how cargo must be examined. Pursuant to reg 4.41J(5), the Secretary must give an examination notice to a RACA or operator if the notice provides that it is to be given to the RACA and the Secretary is satisfied that:

(a)    the RACA or operator is capable of examining cargo in accordance with the notice;

(b)    the RACA or operator intends to examine cargo in accordance with the notice; and

(c)    giving the notice to the RACA or operator is in the interests of safeguarding against unlawful interference with aviation.

27    Under reg 4.41JB(2), the Secretary may revoke an examination notice given to a RACA if satisfied on reasonable grounds that:

(a)     the RACA or operator:

(i)     is not capable of examining cargo in accordance with the notice; or

(ii)     is not examining cargo in accordance with the notice; or

(b)     revoking the notice is in the interests of safeguarding against unlawful interference with aviation.

28    Part of the applicant’s argument was that revocation of the examination notice given to a RACA would render that person unable to examine cargo for the purpose of it receiving clearance under reg 4.41C(2), but would not prevent it from performing the function of handling cargo originating from a known consignor under reg 4.41C(3). This point is discussed below.

Designation as a RACA

29    Regulation 4.42 provides that a person is a RACA, for the purposes of s 44C(2)(i) of the Act, if the person:

(a)     carries on a business that includes:

(i)     the handling, or making arrangements for transport, of cargo to be carried on a prescribed aircraft; and

(ii)     the examination, in accordance with an examination notice given to the person, of cargo to be carried on a prescribed aircraft; and

(b)     is designated as a RACA under regulation 4.43A.

30    Regulation 4.43 provides that a person may apply to be designated as a RACA if the person intends to carry on a business that includes the activities referred to in reg 4.42 (that is, handling cargo or making arrangements for its transport and examining it in accordance with an examination notice). Under reg 4.43A(1), the Secretary may either designate or refuse to designate the applicant as a RACA. Regulation 4.43A(5) provides (subject to provision for “stopping the clock” if further information or access to premises for inspection has been sought) as follows.

(5)     If the Secretary does not make a decision under subregulation (1) within 90 days of the application being made the Secretary is taken to have refused to designate the applicant as a RACA at the end of that period.

31    If the decision under reg 4.43A(1) is to designate the person as a RACA, the designation commences on the day specified in the notice of the decision (reg 4.43B(1)) and continues in force until the end of the period specified in the notice unless the designation is revoked (reg 4.43B(3)). The specified period must be at least 12 months but cannot be more than five years (reg 4.43B(4)). The day specified for commencement cannot be earlier than the day the applicant begins to carry on a business that includes the handling of cargo (reg 4.43B(2)).

32    Under reg 4.43D(1) a RACA may apply to the Secretary for renewal of its designation. The application may only be made within the last 12 months of the period of the current designation (reg 4.43D(2)).

33    Regulation 4.43E, under which the refusal decision in the present case was made, is as follows.

4.43E Decision on renewal of designation application

(1)     The Secretary may, in relation to an application made by a RACA under regulation 4.43D:

(a)     renew the RACA’s designation as a RACA; or

(b)     refuse to renew the RACA’s designation as a RACA.

Matters to be taken into account

(2)     In making a decision on the application, the Secretary may take into account:

(a)     any further information provided by the RACA under paragraph 4.43D(4)(a); and

(b)     any further information obtained as a result of any inspections carried out under paragraph 4.43D(4)(b); and

(c)     any other information the Secretary considers relevant.

Notice of decision

(3)     The Secretary must:

(a)     notify the RACA, in writing, of the decision; and

(b)     do so within 90 days of the application being made.

Note:     If the Secretary renews the RACA’s designation as a RACA, the notice must include the duration of the renewed designation—see regulation 4.43G.

(4)     If the decision is to refuse the application, the notice must include the reasons for the decision.

Deemed refusal of application

(5)     If the Secretary does not make a decision under subregulation (1) within 90 days of the application being made the Secretary is taken to have refused to renew the RACA’s designation as a RACA at the end of that period.

(6)     Paragraph (3)(a) does not apply to a decision that is taken to have been made because of subregulation (5).

Stopping the clock

(7)     If the Secretary has requested:

(a)     further information under paragraph 4.43D(4)(a); or

(b)     access for inspection of one or more of the RACA’s sites under paragraph 4.43D(4)(b);

then, for the purposes of paragraph (3)(b) of this regulation and subregulation (5) of this regulation, the 90 day period is extended, for each request made under subregulation 4.43D(4), by the number of days falling within the period:

(c)     starting on the day on which the notice was given; and

(d)     ending on:

(i)     the day on which the information requested in the notice was received by the Secretary, or the inspection was conducted; or

(ii)     if the information or access was not provided within the period specified in the notice—the last day of that period.

34    If the Secretary decides to renew the designation, the renewed registration must also be for a specified period (subject to revocation) of at least 12 months but not more than 5 years (reg 4.43G).

35    Regulation 4.43F, which figured in the applicant’s submissions in the Tribunal and in this Court, deals with situations where an application for renewal has been made but has not been decided before the period of the RACA designation expires. It provides as follows.

4.43F Designation continues until decision on renewal application

If:

(a)     a RACA makes an application for renewal of the RACA’s designation as a RACA under regulation 4.43D; and

(b)     the Secretary has not made a decision on the application before the RACA’s designation is due to cease to be in force;

the RACA’s designation is taken to continue until:

(c)     if the Secretary renews the RACA’s designation as a RACA—the day specified in the notice under subregulation 4.43E(3) as the day on which the renewed designation commences; or

(d)     if the Secretary refuses to renew the RACA’s designation as a RACA—the day the Secretary makes the decision to refuse the application.

36    There are four provisions under which a RACA designation can be revoked.

(a)    Regulation 4.44 requires the Secretary to revoke a designation upon the request of the RACA.

(b)    Regulation 4.44A(1) provides that the Secretary make revoke a designation at any time by notice in writing if the Secretary is “satisfied on reasonable grounds that revoking the designation is in the interests of safeguarding against unlawful interference with aviation”. Revocation has effect on the day notice is given (reg 4.44A(3)). Reasons must be given (reg 4.44A(2)); however, there is no provision for the RACA to be given notice of a proposed revocation under this provision.

(c)    Regulation 4.44B(1) provides for revocation on any one or more of nine more specific grounds. These grounds include provision of false or misleading information and various instances of non-compliance with requirements under the Regulations (including non-compliance with the RACA’s security program: para (g)). Revocation is also authorised, under reg 4.44B(1)(f), if:

(f)     the RACA’s business no longer includes:

(i)     the handling, or making arrangements for transport, of cargo to be carried on a prescribed aircraft; or

(ii)     examining cargo, in accordance with an examination notice given to the RACA, that is to be carried on a prescribed aircraft; …

Before a decision is made to revoke a designation under reg 4.44B(1), the RACA must be notified and invited to make a submission within a specified period (reg 4.44B(2)). Any submission must be considered (reg 4.44B(4)). If the Secretary has not notified the RACA of their decision within 28 days of the end of the period allowed for making a submission, they are deemed to have decided to revoke the designation at the end of that period (reg 4.44B(7)).

(d)    Finally, designation as a RACA is automatically revoked by operation of reg 4.44C if the person designated is subsequently accredited as an AACA (accredited air cargo agent).

THE PRESENT CASE

37    The applicant was designated as a RACA on 8 February 2019 with effect from that date. As noted above, the designation was due to expire at the end of 7 February 2024. The applicant was also issued a security program on 8 February 2019. It appears that the applicant was given an examination notice on 27 February 2019. The examination notice was amended on several occasions between July 2019 and June 2023.

The refusal decision

38    The applicant applied to renew its RACA designation under reg 4.43D(1) on 15 September 2023. The refusal decision was communicated to the applicant in a letter from the Secretary’s delegate, Ms Haniotis (the delegate), dated 1 November 2023.

39    The reasons set out in that letter focused on the applicant’s “compliance performance” during the period of designation. The delegate referred to the following matters:

(a)    23 failures by the applicant to comply with its security program and four failures to comply with its examination notice between 8 February 2019 and 28 October 2020;

(b)    submissions made by the applicant, in response to a notice in February 2021, as to why its examination notice and RACA designation should not be revoked;

(c)    a decision by a delegate on 13 April 2021 not to revoke the examination notice and RACA designation;

(d)    two infringement notices issued to the applicant for strict liability offences resulting in fines;

(e)    a further 17 failures to comply with the security program and seven failures to comply with the examination notice between 13 April 2021 and 15 September 2023;

(f)    inspections conducted by inspectors between 22 May and 20 June 2023 that identified 22 instances of non-compliance; and

(g)    four further infringement notices and 18 non-compliance findings.

40    The delegate considered that the applicant’s non-compliance was systemic and not limited to one operating site. She observed that the applicant had had numerous opportunities to improve its compliance and had not been responsive to educative or administrative approaches. She considered that enforcement action had not proved to be an effective deterrent against non-compliance. She concluded:

On balance, I have formed a view from the relevant information available, that Wiseway have not adequately demonstrated the capability and maturity to meet, maintain and make a meaningful contribution to the safeguarding of aviation. I find that recurring breaches by Wiseway poses [sic] an unacceptable risk to aviation security.

Events following the refusal decision

41    As noted above, the applicant made its application for review on 13 November 2023. On the same day, the applicant’s solicitors wrote to the delegate foreshadowing the application for a stay and seeking urgent provision of the “T” documents for the purpose of expediting the review.

42    A file note of one of the applicant’s staff on the afternoon of 13 November 2023 records a conversation in which he was told, by a Mick Gray from the Department, that the applicant was to be given a notice of revocation of its RACA designation the next day, effective from the following Wednesday (15 November 2023). The applicant’s solicitors immediately wrote again to the delegate, seeking an indication of the grounds on which it was proposed to revoke the designation.

43    By a letter to the applicant dated 14 November 2023, Mr Gray purported to:

(a)    revoke the examination notice given to the applicant, effect from 15 November 2023, with the result that the applicant would no longer be authorised to examine air cargo or issue security declarations;

(b)    give notice that it was proposed to revoke the applicant’s RACA designation under reg 4.44B(1)(g); and

(c)    invite the applicant to make a submission on or before 13 December 2023 as to why revocation of the RACA designation should not occur.

44    The applicant filed an application in this Court on 14 November 2023, seeking an order that the notice dated 14 November 2023 be set aside and urgent interlocutory orders. On 15 November 2023 the applicant’s solicitors wrote to Mr Gray seeking a statement of reasons, under s 13 of the ADJR Act, for the decision to revoke the applicant’s examination notice. Later that day, orders were made by consent setting aside the revocation of the examination notice. Following further correspondence between the applicant’s solicitors and the Department of Home Affairs, the notice of proposed revocation of the RACA designation issued on 14 November 2023 was withdrawn by a letter dated 4 December 2023.

Proceedings in the Tribunal

45    The applicant lodged its request for a stay order on 13 December 2023. It did not come on for hearing in the Tribunal until 30 January 2023.

46    In addition to a substantial body of documentary evidence, both parties relied on statements opining on the applicant’s level of compliance with the obligations imposed on it under the Regulations. The applicant tendered two statements by a consultant, Andrew Christie, two statements by its Chief Operating Officer, Ken Tong, and a statement by its National Perishables Manager, Scott Higgins. The Secretary relied on two statements by a departmental officer, Michelle Pearce.

The arguments on the stay application

47    The Secretary filed a Statement of Issues, Facts and Contentions (SIFC) on 22 January 2024. It conceded that the Tribunal had jurisdiction to grant a stay under s 41(2) of the AAT Act. The SIFC observed that the “key factor informing the refusal” was the “extensive and repeated failure by the Applicant to fulfil its obligations in the handling, examination and clearing of air cargo”. It also asserted that, since the refusal decision, the applicant had “continued to breach its obligations in the handling, examination and clearing of air cargo”, resulting in what were described as “a further 122 offences under the ATSR between 31 October 2023 and 31 December 2023 at a number of the cargo handling and examination facilities it operated during that time”. These “offences” were summarised in the first statement by Ms Pearce.

48    The SIFC referred to the factors listed by Downes J, sitting as President of the Tribunal, in Re Scott and Australian Securities and Investments Commission [2009] AATA 798 at [4] (Scott):

Application having been made for a stay of proceedings under s 41 of the [AAT Act], it is nevertheless incumbent upon me now to consider whether a stay is appropriate. In considering the application, it is appropriate for me to consider a range of matters, including:

1.     The prospects of success.

2.     The consequence for the applicant of the refusal of a stay.

3.     The public interest.

4.     The consequences for the respondent in carrying out its functions depending upon whether a stay is granted or not.

5.     Whether the application for review would be rendered nugatory if a stay were not granted.

6.     Other matters that are relevant, amongst which I would include the length of time that the ban has already been in place and the gap between today and the hearing of the application.

49    In short, the SIFC argued that:

(a)    the extensive history of non compliance by the applicant, while not established by findings of fact in the Tribunal, suggested that its substantive review application had low prospects of success;

(b)    the public interest weighed very strongly against the grant of a stay, because of the importance of the safety of air transport; and

(c)    refusal of a stay would not prevent “re-approval” of the applicant’s RACA designation after the expiry of the current term and thus would not render the application for review nugatory.

50    Although no directions had been made for written submissions, the applicant filed written submissions. This was not done until the evening before the hearing, which excited complaints and criticism from counsel for the Secretary (even though the submissions solidified the case against their client and they readily obtained leave to respond in writing).

51    It is necessary to refer to some aspects of the applicant’s submissions which are relevant to arguments as to whether the Tribunal misunderstood or ignored submissions that were put. For present purposes, the important propositions in the submissions were as follows.

(a)    The legislative context for the making of the primary decision was central to consideration of the “interests of [the] persons who may be affected by the review”, which must inform the exercise of the power in s 41(2) (citing Australian Securities and Investments Commission v Administrative Appeals Tribunal [2009] FCAFC 185; 181 FCR 130 at [51]–[53] (Downes and Jagot JJ) (ASIC v AAT)).

(b)    Two matters of “central importance” emerged from the legislative context in the present case (at [22] of the applicant’s submissions):

a.     First, except to the extent that a designation may be revoked under r. 4.44, 4.44A, 4.44B or 4.44C, designation as a RACA is for a period fixed by the designation subject to the period being extended, as of right, until a decision is made to refuse any renewal application. That decision, once rendered, is a reviewable decision in this Tribunal under r.8.04 – the provision under which this review is brought.

b.     Secondly, non-conformance with examination requirements is relevant to the possible revocation of an examination notice but is irrelevant to the grant of a RACA designation or its revocation under r. 4.44B. That reflects the practical situation that a freight-forwarder may be designated as a RACA but not hold an examination notice for the full period of its designation. Such a freight forwarder can, for example, receive and handle air cargo which has been cleared by approved “known consignors”.

(c)    Following on from the first of these central points, the applicant referred to the decision of the Tribunal in Re Nelson and Tax Agents Board (1993) 26 ATR 1213; 30 ALD 317 at [14]–[15] (Nelson). There, the Tribunal regarded it as appropriate to stay the refusal to renew the applicant’s registration as a tax agent in a manner that generally reflected a provision analogous to reg 4.43F. Nelson was referred to with apparent approval in Shi v Migration Institute of Australia Ltd [2003] FCA 1304; 134 FCR 326 (Tamberlin J) (Shi).

(d)    Regulation 4.43F (which had been invoked in the request for a stay order) was relevant “to the basis upon which the Tribunal will exercise the power under s 41(2) [of the] AAT Act”. The legislative scheme “reconciles the various interests in compliance with the regulatory scheme, the ample powers available to the regulator and the sensible conduct of important and substantial businesses by providing that an existing designation continues until a final decision on the application for renewal is made … If the designation is to be ended earlier than that, revocation in accordance with r. 4.44, 4.44A, or 4.44C is the available and appropriate course”.

(e)    Thus, it was submitted at [35] (albeit point (c) was ultimately not pressed):

In the circumstances the stay must be granted:

a.     It is to be granted as of right until the Tribunal makes a decision on the renewal application;

b.     The legislation provides ample mechanisms for the management of extant risks even if the stay be granted – as the Respondent recognised by its notice of revocation of the examination notice on 14 November in response to the Application for Review and foreshadowing of the stay;

c.     It is an abuse of the Tribunal’s processes to resist a stay in that legislative context because the Respondent so badly messed up the processes for the revocation of the examination notice that the Court set it aside within 2 days.

(f)    The submissions canvassed the prospects of success of the substantive review application. It was accepted that up to late 2023 the applicant’s approach to achieving compliance was marked by “three structural weaknesses”. However, the submissions emphasised that the final decision on the review would depend on the circumstances at the time of that decision; and remedial efforts were under way. The submissions also contended that renewal of the designation would be in the interests of safeguarding against unlawful interference with aviation unless the Tribunal was satisfied that unacceptable risks would arise from both the applicant’s examination of air cargo and its handling of cargo from known consignors. The submissions also included a critique of the allegations concerning non-compliance by the applicant after the refusal decision.

(g)    Submissions were also made on the consequences for the applicant of the refusal of a stay.

52    At the hearing of the stay application, senior counsel for the Secretary began by referring to the late receipt of the applicant’s submissions. Leave to file responsive written submissions after the hearing was sought and granted. After the evidence had been received, senior counsel addressed various factual issues. He described the “real meat of our response to the application” as being what had occurred before the refusal decision. The Secretary “withdrew” 81 of the instances of non-compliance in the period after the refusal decision that had been referred to in Ms Pearce’s statement, but continued to rely on other instances in that period and suggested that some were more serious than initially assessed.

53    Towards the end of his address, returning to the theme of having been served with submissions the evening before the hearing, senior counsel for the Secretary said:

One further point I’d like to make, and I’ll (indistinct words) it’s really by way of foreshadowing further submissions that will be made carefully in writing. It’s this, that in effect in the written submissions that were filed last night at 6 pm, which we haven’t had a chance to respond to in any detail yet, it’s effectively submitted by my learned friends that your hands are tied in effect that you must make a decision to stay the effect of the decision that was made on 31 October 2023. That, we submit and we will submit in writing in much clearer detail than I’ll deal with now, is fundamentally flawed. It’s wrong, we respectfully submit.

(Emphasis added.)

54    The oral address by senior counsel for the applicant began in this way.

SENIOR MEMBER: Thank you (indistinct). Just curious, Mr Brennan, why are my hands tied?

MR BRENNAN: I haven’t put it that way, Senior Member. What I say is this, referred in writing to a decision of Justice Downes and Justice Jago on appeal on the stay, who point to the wording of section 41(2), say the discretion is having considered (audio malfunction), and they - - -

SENIOR MEMBER: Well, it’s not only the interests of the parties, is it? It’s the interest of the travelling public who might fly with cargo.

MR BRENNAN: I accept that. I accept that, absolutely. And I’ll come back to that, but what their Honours say is, that phrase in 41(2) is given content by the specific statutory regime, but when you look at the way different and competing interests are balanced - - -

SENIOR MEMBER: Yes.

MR BRENNAN: You look to the specific regime in assessing the interests of the parties. In this case you’ve got a, and I’ve set it out in writing in some detail, a quite delicate regime which provides for the designation of a RACA, (indistinct) provides for the revocation of the RACA, separately provides for the issue of an examination notice, and the revocation of the examination notice in separate parts.

(Emphasis added.)

55    A little later, the following submission was put.

MR BRENNAN: And so we say once an application is made to the tribunal, the final decision is going to be made by the tribunal. And so we’ve got a regulatory regime which says if you applied renewal you continue, has then a whole series of other powers to regulate you while you continue. We say as a matter of law in that context, you’d conclude readily the stay would be granted. If not, as a matter of law your starting point is applying the reasoning of Justice Downes and Jago. The starting point is the interests of the parties are carefully managed here so the public gets protected through the range of regulatory powers. The applicant maintains its designation.

(Emphasis added.)

56    The Secretary filed written submissions on 1 February 2024 and the applicant filed submissions in reply the next day. For present purposes it is not necessary to go into the contents of these submissions.

The stay decision

57    After summarising the evidence and relevant parts of the statutory scheme, the Tribunal turned to the applicant’s submissions. So far as is relevant to the grounds of review, the Tribunal’s reasons were as follows.

26.     Regulation 4.43F of the ATSR is headed ‘Designation continues until decision on renewal application’. The Applicant contended that it has the effect that the RACA designation continues until the Tribunal determines the review application. This contention is addressed later.

…

Applicant’s submission – Regulation 4.43F

36.     In support of the Application for the stay, the Applicant contended in effect, with comprehensive reference to ATSA, ATSR and cases, that Regulation 4.43F of the ATSR has the effect that the Applicant’s designation as a RACA continues until the Tribunal finally determines the review application. If the Applicant is correct, the stay application was unnecessary.

37.     That provision provides:

[reg 4.43F was then set out]

38.     The Respondent has made a decision on the Applicant’s application for renewal of the RACA designation and that decision was made before the RACA’s designation was due to cease to be in force (8 February 2024). Therefore, the Regulation does not apply. I do not accept the Applicant’s contention. I give Regulation 4.43F of the ATSR no weight in deciding whether to grant the application for a stay.

The Applicant’s submission that the examination notice is not relevant to consideration for renewal of RACA designation

39.     I have carefully read the Applicant’s detailed analysis of the ATSA and ATSR and cases which it claims leads to the conclusion that non-conformance with examination requirements is relevant to the possible revocation of an examination notice but is irrelevant to the grant of a RACA designation or its revocation. It claimed that the practical situation is that a freight forwarder may be designated as a RACA but not hold an examination notice for the full period of its designation. Such a freight forwarder can, for example, receive and handle air cargo which has been cleared by approved ‘known consignors’.

40.     I do not accept the Applicant’s submission. It ignores Regulation 4.42 (set out above). The examination of cargo in accordance with an examination notice given to the person is the business of a RACA. The matters that are relevant to a decision whether to renew a RACA designation include the contents of the application for renewal, any inspections undertaken under Regulation 4.43D(4)(b) and ‘any other information the Secretary considers relevant’ under Regulation 4.43E(2)(c).

41.     The Applicant’s history of non-compliance with examination requirements and the ATSA and ATSR generally are relevant to determining both the present application and the merits of the decision under review in the substantive proceedings.

58    The Tribunal then turned its attention to what it termed the “Scott factors”.

(a)    In view of what appeared to be a long history of persistent non compliance by the applicant with its obligations under the Regulations, together with recent attempts to improve its performance, the Tribunal assessed the applicant as having “some prospect of success” in the substantive proceedings (at [62]).

(b)    It was accepted that the applicant’s business would be seriously affected by the refusal of a stay, customers might be permanently lost and employees might lose their jobs. This was described as a “serious impact on the Applicant’s business”, but one that could be minimised by hearing and determining the substantive matter as soon as possible (at [68]).

(c)    As to the public interest, the Tribunal was not in a position to conclude that the past non-compliance by the applicant was not as serious as suggested. Given the purpose of the regulatory scheme, a cautious approach was appropriate in deciding an application for a stay. The evidence that the applicant was proposing to improve its performance was not enough to satisfy the Tribunal that the risk to the public was minimised to an acceptable degree (at [73]).

(d)    Grant of a stay would impose continuing regulatory functions on the respondent in respect of the applicant, which would involve resources of time and personnel at the expense of taxpayers. The Tribunal considered that this weighed against a stay (at [75]-[78]).

(e)    The Tribunal concluded that refusal of a stay would not render the substantive review application nugatory (at [80]).

THE GROUNDS OF REVIEW

59    Before turning to the applicant’s grounds of review, it is appropriate to note that there was no dispute between the parties as to the Tribunal’s power to make the order sought under s 41(2). That provision, which is set out at [3] above, confers power to make an order “staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relates”. That language could be read as indicating that only a decision that has some continuing “operation” (as a source of rights), or that requires “implementation”, can be the subject of an order. However, in Shi, Tamberlin J held that s 41(2) should not be read narrowly and that a decision not to renew registration was capable of being stayed. This approach has often been followed by the Tribunal and has been referred to without disapproval in this Court: ASIC v AAT at [69] (Downes and Jagot JJ); King Eeducational Service Pty Ltd v Australian Skills Quality Authority [2021] FCA 42 at [44], [48] (Wheelahan J).

60    In Shi at [31], Tamberlin J observed that the effect of granting a “stay” of the decision not to renew the applicant’s registration as a migration agent would be that he “must be taken to continue to be registered” pending the outcome of the Tribunal’s review. This was in circumstances where the adverse decision had been made, and the applicant had approached the Tribunal, around two months before the end of the period of extended registration effected by a provision similar to reg 4.43F (see at [5]-[7] and [10]-[12]). Thus, in a case of the present kind, an order under s 41(2) (notwithstanding that it may be described in a shorthand way as a “stay”) may do more than merely deem a decision refusing renewal not to have been made. The order may override the operation of the statute so as to deem the relevant status to continue, beyond the time when it would ordinarily expire, until the Tribunal makes its decision on the review.

61    Two grounds of review are pressed. They are:

1.    On its proper construction, is reg 4.43F of [the Regulations] a relevant provision to which the Tribunal is required to give weight in considering an application for a stay of a refusal to renew a RACA designation?

4.    Did the Tribunal exceed its jurisdiction by reasoning that the public interest weighs significantly against a stay, for reasons that:

a.    a risk of loss of life and destruction of property would arise from breaches of the regulatory regime by the Applicant;

b.    the Applicant had not complied in full with the regulatory regime over the past five years; and

c.    the Applicant had not satisfied the Tribunal that any risk of loss of life and destruction of property had been minimised to a degree that was acceptable to the Tribunal,

while refusing or failing to consider whether if a stay were granted any such risk could have been appropriately managed by revocation or amendment of the examination notice issued to the Applicant.

Ground 1: relevance of reg 4.43F

62    The relevant aspects of the argument put to the Tribunal by the applicant have been summarised at [51(c)-(f)] above. The applicant submits that the Tribunal misunderstood the argument, and consequently failed to have any regard to reg 4.43F despite its obvious relevance. It is also submitted that either of these errors on its own vitiates the Tribunal’s decision.

Misunderstanding of the argument

63    This issue is not within the scope of ground 1 as articulated in the amended notice of appeal. However, the respondent has dealt with it in submissions and there is no suggestion that any evidence necessary to deal with the point is not before the Court. I therefore treat it as having been raised.

64    The complaint focuses on the Tribunal’s reasons at [26], [36] and [38].

65    Paragraphs [26] and [36] describe an argument that was not put. As is apparent from the account of the proceedings before the Tribunal set out above, the applicant began with a proposition in writing that a stay was to be granted “as of right”, but backed away from this at the hearing. The submission ultimately relied on, as I understand it, was to the effect that reg 4.43F provided a foundation in the statutory scheme (“as a matter of law”) for treating continuity of designation as a powerful interest weighing in favour of a stay. It was certainly never submitted by the applicant that a stay was unnecessary. However, the attribution of an untenable argument to a party by a decision maker (followed by its rejection), while no doubt vexing for the party’s legal team, is not in itself an error capable of requiring the decision to be set aside. What is more significant is whether the decision maker’s reasoning deals with the arguments that actually were put.

66    At [38], the Tribunal observed that reg 4.43F did not apply in the circumstances of the case before it. This was a correct statement on any view (with the delegate having made a decision on the renewal application before the applicant’s RACA designation was due to expire). The Tribunal then said:

I do not accept the Applicant’s contention. I give Regulation 4.43F of the ATSR no weight in deciding whether to grant the application for a stay.

67    This is very compressed reasoning. However, three points are to be noted. First, rejection of the applicant’s argument appears to follow directly from the conclusion that reg 4.43F is inapplicable. Secondly, the Tribunal appears to have understood that the argument went to the issue of whether reg 4.43F was to be accorded “weight” in “deciding whether” to grant a stay. At this stage, therefore, the Tribunal was no longer distracted from the real issues by any impression that the applicant was suggesting that a stay was unnecessary or that there was no choice as to whether to grant it. Thirdly, the conclusion that reg 4.43F is to be given “no weight” follows directly after the rejection of the applicant’s submission. It can be taken as a statement of what follows from that rejection.

68    The well known statements by the Full Court in Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 at 287 (Neaves, French and Cooper JJ) (adopted in Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 271-272 (Brennan CJ, Toohey, McHugh and Gummow JJ)) that the Court “will not be concerned with looseness of language of the Tribunal nor with unhappy phrasing of the Tribunal’s thoughts”, and that the reasons for decision “are not to be construed minutely and finely with an eye keenly attuned to the perception of error”, were made with reference to reasons given by the Tribunal presided over by a Senior Member (as the Tribunal was in the present case). They are apposite here, especially in circumstances where the Tribunal’s decision and reasons were handed down, in circumstances of some urgency, only eight days after the oral hearing and five days after the filing of the applicant’s submissions in reply. The Tribunal’s reasons at [38] are adequate to convey that it understood the gist of the applicant’s argument and rejected it.

69    The statements in Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; 77 ALJR 1088 at [23]-[25] (Gummow and Callinan JJ) and [88] (Kirby J) (Dranichnikov) that to “fail to respond to a substantial, clearly articulated argument” amounts to a constructive failure to exercise jurisdiction and a failure to accord natural justice, which are relied on by the applicant, therefore do not apply here. In any event, these statements need to be understood in their context.

70    The task of the Refugee Review Tribunal (RRT) in Dranichnikov was to determine whether it was satisfied that the appellant was a person in relation to whom Australia had protection obligations under the Refugees Convention. He claimed that he faced persecution in Russia as a member of a “particular social group”. The RRT mischaracterised the particular social group to which the appellant claimed to belong and thus failed to grapple with the reasons why he claimed, in fact, to meet the relevant criterion. The legal test to be applied was not in doubt; the RRT disabled itself from applying that test properly and fairly by misunderstanding the claims.

71    Here, the argument which the Tribunal is said to have misunderstood or failed to deal with was not part of the applicant’s claims as to why its case came within a settled legal test. It was an argument as to the framing (“as a matter of law”, as senior counsel put it) of the factors made relevant by the statute. The argument was either right or wrong (the topic to be considered next).

(a)    If the argument was right, the Tribunal erred by not accepting it and proceeding accordingly. Misconstruing the argument, along the way to rejecting it and proceeding in a way that was contrary to law, does not add anything. Any denial of procedural fairness involved in not responding to the argument as it was put is cured, or rendered irrelevant, by the hearing afforded in this Court and correction of the legal error.

(b)    If the argument was wrong, its acceptance would have led the Tribunal into error. Its rejection—even for misconceived or illogical reasons—avoided that error. Rejection could not lead the Tribunal into any legal error that was material, either in the sense relevant to identifying jurisdictional error (as to which see, eg, LPDT v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2024] HCA 12 at [14]-[15] (Gageler CJ, Gordon, Edelman, Steward, Gleeson and Jagot JJ)) or so as to result in a decision that “involves” an error of law for the purposes of s 5(1)(f) of the ADJR Act (as to which see Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 353 (Mason CJ, Brennan and Deane JJ agreeing)). Similarly, failing to deal with an argument as to the applicable legal test could not properly be seen as depriving the applicant of “the possibility of a successful outcome”, so as to engage principles of procedural fairness (see Minister for Immigration and Border Protection v WZARH [2015] HCA 40; 256 CLR 326 at [56] (Gageler and Gordon JJ)), if the argument was one whose acceptance would itself have led to a decision liable to be set aside.

72    For these reasons, even if persuaded that the Tribunal had misapprehended the applicant’s argument as to the relevance of reg 4.43F, I would not have regarded that as a sufficient basis for setting aside the Tribunal’s decision. It would remain necessary to consider the next issue.

Failure to have regard to reg 4.43F

Authority

73    The starting point for the applicant’s argument was the reasons of Downes and Jagot JJ in ASIC v AAT. In that case, the Australian Securities and Investments Commission (ASIC) had made a banning order against the second respondent under a provision of the Corporations Act 2001 (Cth) (the Corporations Act). One of the consequences of that order was that, by force of other provisions of the same Act and regulations made under it, ASIC was required to publish a notice in the Commonwealth Government Gazette and enter the second respondent’s name on a register. The Tribunal made interlocutory orders including an order staying the banning order under s 41(2) and ASIC sought to have the Tribunal’s order under s 41(2) set aside. ASIC’s arguments in relation to that order, as summarised by their Honours (at [17]), were:

(1)     ASIC must comply with ss 920E(2) and 922A of the Corporations Act by reason of the mere fact of the making of the banning order. It is immaterial whether the banning order is affirmed or set aside by the AAT or is valid or invalid.

(2)     Once the statutory regimes are properly analysed it is apparent that the AAT’s purported orders under s 41(2) of the AAT Act cannot have been made “for the purpose of securing the effectiveness of the hearing and determination of the application for review”. This is because the AAT’s powers under s 41(2) cannot extend to interfering with the carrying out of ASIC’s duties under ss 920E(2) and 922A of the Corporations Act.

(3)     The AAT’s purported orders under s 41(2) of the AAT Act relating to ASIC’s obligations under ss 920E(2) and 922A(1) of the Corporations Act and ASIC’s issue of any media release do not stay or otherwise affect the “operation or implementation of the decision to which the relevant proceeding relates”.

74    Their Honours’ reasoning, so far as relevant to the present issue, is seen in the following extracts.

[49]     For the reasons given below, ASIC’s focus on the power (or lack of power) of the AAT is misplaced. If differently framed, by reference to the AAT’s actual decision in the present case, ASIC’s submissions may have been more persuasive. The reason for this is that the AAT’s power under s 41(2) of the AAT Act is contingent on the AAT having formed an opinion that the making of an order under s 41(2) of the AAT Act “is desirable … taking into account the interests of any persons who may be affected by the review” …

[50]     The power in s 41(2) of the AAT Act … is conditional on the making of a request and the holding of an opinion by the AAT. The required opinion is that it is desirable to make the order. The AAT may only form this opinion after taking into account “the interests of any persons who may be affected by the review”. Accordingly, the AAT must identify for itself and consider the relevant interests. Unless it does so, the AAT cannot form the required opinion …

[51]     The nature of the decision under review will affect the identification of the “interests of any persons who may be affected by the review”. Accordingly, those interests are to be identified by reference to the statutory scheme under which the decision under review was made …

75    Their Honours described the effect of the provisions that had effect following the making of a banning order and the persons who might be affected by a review of the making of the order, and continued:

[52]     Determining whether the making of an order under s 41(2) of the AAT Act is desirable requires resolving these potentially competing interests. In this process of resolution the scheme embodied by the legislation under which the banning order is made is central. The context set by that scheme is a “fundamental element” in the formation of the opinion according to law (R v Hunt; Ex parte Sean Investments Pty Ltd (1979) 180 CLR 322 at 329). The scheme discloses that a banning order protects the public …

[53]     The structure of the scheme also indicates Parliament’s assessment of the appropriate resolution of the competing interests of persons who may be affected by a banning order … For the AAT to form an opinion under s 41(2) of the AAT Act (that it would be desirable and in the “interests of any persons who may be affected by the review” to make an order staying or otherwise affecting the operation or implementation of ASIC’s decision) these elements of the statutory regime, and the balance between the competing interests that they represent, must be treated as a fundamental element in the weighing of the competing considerations.

…

[56]     In the present matter the AAT’s reasons for the making of orders under ss 41(2) and 35(2) of the AAT Act do not disclose consideration of these critical elements of the Corporations Act. The AAT’s reasons appear to proceed on an unfounded assumption that the scheme established by the Corporations Act is either neutral in, or mere background to, the formation of the required opinion of desirability. We do not accept that assumption. Although the reasons briefly address the public interest in [28]-[29], they do not appear to grapple with the context set by the Corporations Act or the importance of the availability of information to the market generally and to existing and potential customers of the second respondent, as a critical element in the public interest.

76    Despite the conclusion expressed at [56], ASIC did not succeed on its application. This was because (as their Honours explained at [58]) ASIC’s argument went further than treating the statutory scheme as critical to the way the s 41(2) power was exercised. ASIC sought to argue that the AAT had no power under s 41(2) to stay the banning order. The passages set out above are therefore, strictly speaking, obiter dicta. However, they are, with respect, clearly correct. The Secretary did not suggest otherwise.

77    Their Honours concluded their discussion of s 41(2) as follows.

[71]     ... We consider that the matters exposed by ASIC’s arguments do not indicate a lack of power to make such orders. Rather, they indicate the careful consideration which must be given by the AAT in any exercise of power under s 41(2) of the AAT Act to the balance of competing rights and interests struck by Parliament as embodied in the terms of the Corporations Act, particularly the balance between the rights and interests of the recipient of the banning order and of the public including existing and potential future clients of the recipient of the banning order. As we have said the scheme which the provisions of the Corporations Act embody — with the potential making of a banning order to remain private unless and until ASIC decides to make such an order after having given the recipient an opportunity to be heard — is not mere statutory background or a neutral factor in the process of the formation of the required opinion about what is desirable under s 41(2) of the AAT Act. The scheme which Parliament has established in the Corporations Act, and the public interest in the right of the market to know relevant information as soon as practicable, must be treated as a fundamental element in the decision-making process required under s 41(2) of the AAT Act.

The statutory scheme in the present case

78    The applicant pointed to several aspects of the scheme of the Regulations which, it submitted by analogy with ASIC v AAT, were fundamental to identifying the interests to be considered and balanced.

79    First, it was observed that designation as a RACA under reg 4.43B does not commence until the person to be designated is actually carrying on business examining and handling cargo and is to be for a period of at least a year (subject to revocation). This indicated an intention that designation was to be “long term”. The same was said concerning reg 4.43G, which provides for the term of a renewed RACA designation.

80    In between the initial term and the renewed term there is the process of application for renewal and a decision on that application. As noted above, reg 4.43D allows an application for renewal to be made only within the last 12 months of the current RACA designation. It can be inferred that that limit was introduced so as to ensure that a decision on renewal would be made relatively late in the term, and could therefore take into account information relevant to the person’s suitability arising out of the conduct of the business over a substantial period.

81    Reg 4.43E, which is set out above at [33], provides for the decision on renewal. The factors or considerations to be taken into account are not spelled out. However, reg 4.43E(2)(a) and (b) make it clear that the Secretary is entitled to take into account information provided under reg 4.43D(4) (which is a process for the Secretary to request information from a RACA) and information obtained by inspection of the RACA’s sites. Information in these categories is obviously relevant to an assessment of the RACA’s conduct of its business, including its compliance with its security program and examination notice. Reg 4.43D(2) therefore indicates (unsurprisingly) that past performance is relevant to the decision whether to renew designation as a RACA.

82    The other aspect of reg 4.43E that should be noted is the provision in reg 4.43(5) for a deemed refusal in the event that the Secretary does not make a decision within 90 days (or a longer period, arising under reg 4.43E(7), if there is an outstanding request for further information). Absent a provision of this kind, inaction by the Secretary would eventually lead to the RACA’s designation expiring without having been renewed. Provision for a deemed refusal means that the RACA’s right to seek merits review under reg 8.04 is enlivened. Obviously, instead of providing for a deemed refusal, the legislator could have included a provision deeming a further designation for some identified period to be granted if no decision was made. The decision not to take that course represents a policy choice.

83    The next aspect emphasised by the applicant was reg 4.43F (also set out above, at [35]). It was central to the applicant’s submissions in the Tribunal and is obviously central to ground 1. It continues the RACA’s designation beyond the time it was due to expire in circumstances where (a) an application for renewal has been made and (b) “the Secretary has not made a decision on the application”. The designation “is taken to continue” until either (c) the start of a new term, if it is granted, or (d) “the day the Secretary makes the decision to refuse the application”.

84    I inquired of counsel for the applicant whether there was any known reason why reg 4.43F uses the formulation “is taken to continue”, when its intention and effect appear to be to bring about an extension of the designation as a RACA by its own force rather than deem something to have been done. Counsel were not able to identify any particular significance in this form of words. The words “is taken to” appear to be simply unnecessary.

85    Some submissions were directed to the question whether the expressions “has not made a decision” in reg 4.43F(b) and “makes the decision to refuse” in reg 4.43F(d) refer only to the making of a decision in fact, or are also engaged by a decision deemed to have been made by operation of reg 4.43E(5). It seems relatively clear that they have the latter meaning, for the following reasons.

(a)    If the absence of an actual decision by the Secretary were sufficient to satisfy para (b), reg 4.43F would come into play in every case where reg 4.43E(5) had already done its work and renewal was deemed to have been refused. The RACA designation would be “taken to continue”, despite the deemed decision to refuse renewal, until a decision was made. This writes reg 4.43E(5) out of the Regulations. A reading that results in redundancy of this kind is to be avoided if possible (see eg Minister for Resources v Dover Fisheries Pty Ltd (1993) 43 FCR 565 at 574 (Gummow J, Hill and Cooper JJ agreeing).

(b)    If para (d) required an actual decision by the Secretary in order to bring a RACA designation as extended by reg 4.43E to an end, the designation would continue in force indefinitely in the absence of a decision. That has two consequences which are unlikely to have been intended. First, the Secretary could effectively extend the designation for a longer period by doing nothing than by actually renewing it (cf reg 4.43G(3)). Secondly, provision for a deemed refusal in the case of inaction by the Secretary would exist up to the end of the initial period of designation but (for no coherent reason) not thereafter.

(c)    The expression “decision” should be given the same meaning in paras (b) and (d) (eg Regional Express Holdings Ltd v Australian Federation of Air Pilots [2017] HCA 55; 262 CLR 456 at [21]). Accordingly, if either of the points I have outlined above is correct, both paragraphs are to be understood to refer to an actual or deemed decision on the application.

86    Reg 4.43F, the applicant submitted, indicates an intention that there is not to be a lacuna in the designation of a RACA. I return to this point below.

87    Other arguments were raised by the appellant concerning the statutory scheme which appear to be separate from the point raised by the ground of review.

(a)    It was submitted in connection with reg 4.43G that, having regard to the scheme of the regulations, risks in relation to aviation security fell to be addressed by revocation and not by decisions on renewal. It can be accepted that, in circumstances where a person is designated as a RACA for a period of up to five years, it will often (perhaps usually) be the case that consideration of revocation under reg 4.44A or 4.44B is the appropriate response to non-compliance with a RACA’s obligations that poses a risk to the safety of aviation. However, it does not follow that these matters are irrelevant to the decision on a renewal application. The whole regime of the Regulations is directed at minimising risks of unlawful interference with aviation, and Division 4.1A is dedicated to minimising the risk of dangerous items finding their way into air cargo. It is hard to see why the process of applying for and renewing designation as a RACA exists, if not to provide a vehicle for the periodic consideration of the level of these risks in connection with the RACA’s operations. Further, as noted above, reg 4.43E(2) confirms the relevance to the decision of information obtained by inspecting the RACA’s sites.

(b)    It was also submitted that risks arising from a RACA’s non-compliance or suspected non-compliance with an examination notice ought to be dealt with through the separate provision that exists for revoking such notices in reg 4.41JB. To the extent that it was submitted that the Tribunal erred in law by approaching the question of the applicant’s prospects of success on the footing that its non-compliance with its examination notice was significant, I reject this submission for two reasons.

(i)    Designation of a person as a RACA or renewal of that designation, where the person does not carry on or intend to carry on a business involving inspection of cargo, is inconsistent with the definition of a RACA in reg 4.42 and the description of the persons entitled to apply for designation under reg 4.43(1). (Arguably also, ceasing to carry on both limbs of a RACA’s business (examination and handling) is a ground for revocation under reg 4.44B(1)(f), although the disjunctive “or” in that paragraph is ambiguous.) These provisions indicate that the ability to examine cargo for the purpose of clearance is at least relevant to whether a person should be designated as a RACA or have their designation renewed.

(ii)    Serious or persistent non compliance with an examination notice is not only relevant to whether the examination notice should be revoked. It is potentially relevant to an assessment of the RACA’s attitude to its obligations under the Regulations, its commitment to aviation safety, and its capacity to implement and maintain systems of work that meet legislative requirements. These are matters relevant to the discretionary decision whether to renew a RACA designation, and correspondingly relevant to consideration of the prospects of successful merits review of a refusal decision.

(c)    Neither of these points, in any event, has a bearing on whether the Tribunal erred in law by giving no weight to reg 4.43F.

Regulation 4.43F

88    Regulation 4.43F promotes continuity of designation as a RACA in defined circumstances and to a defined extent. It operates where there has not been a decision (actual or deemed) on a renewal application before the RACA designation comes to an end. In those circumstances, correctly construed, reg 4.43F continues the designation of the RACA until either a decision is made on the application or renewal is deemed to be refused by operation of reg 4.43E(5). Thus, if the renewal application were made on the last day of the RACA’s period of designation, reg 4.43F would continue the designation for a maximum of 90 days (plus any period for which time had ceased to run by operation of reg 4.43E(7)). After that, renewal would be taken to be refused and the designation would expire (subject to potential merits review). Regulation 4.43F does not respond to a case where the RACA fails to apply for renewal before the end of the specified period (in which case the designation simply lapses). Nor does it respond to a case where renewal is refused or deemed to be refused before the end of the specified period (in which case the RACA designation expires at the end of that period (also subject to potential merits review)).

89    It is not in doubt that reg 4.43F did not and does not apply to the present case (the refusal decision having been made before the applicant’s RACA designation expired). It is also clear that, in a case to which it does not apply directly, reg 4.43F neither continues a person’s designation as a RACA (so as to make a stay order unnecessary) nor obliges the Tribunal to make a stay order. The applicant’s submissions did not go that far. Rather, the applicant’s submissions seek to characterise reg 4.43F as evidencing a policy in favour of continuity of designation which is embodied in the Regulations and which must be taken into account by the Tribunal in an application under s 41(2).

90    The present case is therefore materially different from ASIC v AAT. There, the provisions of the Corporations Act that specified the consequences of a banning order were directly applicable to ASIC’s obligations in respect of the second respondent (who was the subject of the order and the applicant in the Tribunal). Those provisions were therefore central to the task of identifying the “persons who may be affected by the review” and how their “interests” might be affected, which was in turn central to the task of the Tribunal under s 41(2). The persons and the interests that may be “affected by the review” depend on the statutory rights and obligations that are brought into operation, or denied operation, as a consequence of the decision under review. A policy or value, said to be present in some way in the statute but not given effect by any applicable provision, is not made relevant (let alone a “fundamental element”) by this pathway of reasoning.

91    Such a policy or value is relevant, if at all, as an aspect of the “public interest” (cf Scott, above), in that an understanding of where the public interest lies will at least normally involve consideration of the purposes of the applicable legislation. The applicant does not allege that the Tribunal’s consideration of the public interest in this case miscarried for reasons associated with reg 4.43F. If such an argument were raised, I would reject it. The Regulations strike a balance between the interests of “aviation industry participants”, the users of their services and members of the public who could be affected by a failure to prevent “unlawful interference with aviation”. Such “unlawful interference” clearly poses a risk to the physical safety of members of the public and a range of economic interests, which explains the relatively intrusive regulatory regime that the legislation imposes. The Tribunal was alive to this balancing of interests and the importance that the legislative regime attaches to the protection of public safety.

92    A further difficulty in the way of the applicant’s argument is that, as noted above, reg 4.43F embodies a policy in favour of continuity of designation only in particular circumstances and to a limited extent. The legislature should not be taken to be promoting a policy (so as to affect legal rights or administrative decision-making) more broadly or fully than the expression given to that policy in the legislation properly construed. “The language which has actually been employed in the text of legislation is the surest guide to legislative intention”: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) [2009] HCA 41; 239 CLR 27 at [47] (Hayne, Heydon, Crennan and Kiefel JJ), referring to Hilder v Dexter [1902] AC 474 at 477-478 (Earl of Halsbury LC). Provisions in the Regulations that seek to achieve continuity of designation in defined circumstances and to a defined extent are therefore not a proper basis for treating the promotion of such continuity in other circumstances, or to a greater extent, as a necessary element of “the interests of any persons who may be affected by the review” for the purposes of s 41(2). For similar reasons it would be problematic to treat a policy or value, implemented in a limited way by the statutory scheme, as ipso facto an aspect of the “public interest” to some broader or deeper extent. What is or is not in the public interest is a matter to be assessed by the Tribunal.

93    For these reasons the Tribunal did not fall into error by declining to give reg 4.43F any “weight”, in circumstances where the provision was not applicable.

Ground 4: Tribunal’s assessment of the public interest

94    Ground 4 alleges, in substance, that the Tribunal’s assessment of the public interest went astray because it did not consider whether any risks to life and property arising from breaches of the regulatory regime by the applicant could be appropriately managed by separate administrative action on the part of the Secretary; namely, amending or revoking the examination notice issued to the applicant. The error is framed in the amended application as an error of law or an excess of jurisdiction, but is put in the applicant’s written submissions in terms of “irrationality”.

95    The reference to error of law in the notice of appeal can be put to one side. The principles invoked by the applicant’s submissions (which I discuss below) involve errors of a kind which, if established, go to jurisdiction and provide a basis for relief under s 39B of the Judiciary Act as well as the ADJR Act. It is unnecessary—particularly given the incompetence of the “appeal” under s 44—to consider whether these errors come within the concept of “error of law” (cf Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 [2003] HCA 30; 198 ALR 59 at [53]-[57] (McHugh and Gummow JJ)).

96    Section 41(2) does not expressly make any considerations mandatorily relevant to the decision whether to make a stay order (and what form of order to make) except “the interests of any persons who may be affected by the review”. In Scott, Downes J (sitting as President of the Tribunal) observed that it was “appropriate” to consider six identified matters including “the prospects of success” and “the public interest”. After rejecting specific submissions by the applicant concerning the scheme of the Regulations, the Tribunal in the present case structured its reasons by reference to these six factors.

97    In ASIC v AAT, by reference to the scheme of the Corporations Act, Downes and Jagot JJ treated the interests of persons affected by the review as including “the public including existing and potential future clients of the recipient of the banning order”. This illustrates that, where the statute under which the primary decision was made seeks to protect the public or a section of the public, the potential effect of the review on the interests of those persons is necessarily in play as an aspect of the mandatory relevant consideration referred to in s 41(2). There is thus at least some overlap between that consideration and “the public interest”; although the latter concept should be understood to include any effects of the grant or refusal of a stay order, per se, on the public interest (which may possibly extend beyond the interests of persons affected by “the review”).

98    The “public interest” is clearly a broad, evaluative concept. To some extent, invoking the public interest as a factor in administrative decision-making is circular: statutes must be taken to be directed at protecting the public interest; and administrative decision makers, if acting conscientiously, necessarily seek to advance the public interest within the parameters set by the statute under which they exercise power. In Scott, the public interest was listed in between “the consequence [sic] for the applicant of the refusal of a stay” and “the consequences for the respondent in carrying out its functions depending upon whether a stay is granted or not”. In that context it may indicate no more than that the Tribunal should look beyond the interests of the parties to the review and consider whether and how the interests of other persons might be affected by the grant or refusal of a stay order. There is no fixed or defined concept of “the public interest”; it is necessarily a matter for evaluation by the Tribunal in each case.

99    In the present case, the Tribunal regarded the question where the public interest lay as turning primarily on the need to protect what it termed “the safety of air transport”. It said (relevantly) at [69] and [73]:

The Respondent contended that the public interest weighs very strongly against the grant of a stay. The safety of air transport is vital. The Applicant has been deficient (as summarised under the hearing [sic] Prospects of Success), including to some extent after 1 November 2023. The loss of life and destruction of property that may arise from a breach by the Applicant through the destruction of a passenger-carrying aircraft would be catastrophic. So too would the adverse consequences of such an event for Australia’s economy because it would reflect Australia’s failure to honour its obligations as a signatory to the Chicago Convention.

…

I am not in a position to decide whether the Applicant’s history of non-compliance is not as serious as the regulator contends or how satisfactory the Applicant’s remediation responses have been. Those issues are vigorously contested. The purpose of the regulatory regime demands that a cautious approach is appropriate when deciding an application for a stay. The Applicant has had many opportunities over the past five years to establish appropriate practices and procedures to ensure compliance with its regulatory obligations to operate as a RACA. The evidence shows that it has proposals to do so in the future. That is not sufficient to satisfy me that the risk is minimised to a degree that is acceptable so that a stay order may be made.

100    The applicant submits that:

(a)    in circumstances where the Tribunal decided the stay application on the basis of a perceived risk to public safety and property, it was “required to consider whether that risk could appropriately be managed by powers available to the respondent and to the AAT itself”, in particular “amendment or suspension of the applicant’s examination notice”; and

(b)    it was “not open rationally to give the risk to public safety and destruction of property determinative weight without considering whether it would be appropriately managed by measures available to the respondent directed to revoking the examination notice without refusing the stay.

101    The first way the argument is put, in its suggestion of a “requirement” to consider the utility of amending or suspending the examination notice, engages familiar principles concerning mandatory considerations. The argument appears to be that this was an issue which, implicitly, s 41(2) required to be considered in the circumstances of the case as a precondition to a valid exercise of power. However, there is nothing in the statute that requires consideration of an issue framed at that level of particularity: cf Foster v Minister for Customs and Justice [2000] HCA 38; 200 CLR 442 at [23] (Gleeson CJ and McHugh J).

102    The second way the argument was put focuses on rationality. In this connection, it is relevant that the Tribunal was exercising a discretion. For the reasons set out in AJN23 v Minister for Immigration, Citizenship and Multicultural Affairs [2024] FCA 130 at [26] (AJN23), I consider that it is useful to distinguish conceptually between review of discretionary decisions (where the boundaries of the decision maker’s power can aptly be described in terms of reasonableness) and review of the formation of states of satisfaction (where “irrational” is an appropriate label for a conclusion that is not open). In the context of a discretion, as noted in AJN23 at [29]-[36], review for “legal unreasonableness” is generally “outcome focused”. It is possible at least in principle that a glaring deficiency in reasoning could lead to the resulting decision being set aside, but the deficiency would need to be:

one which infected the decision—the purported exercise of power—with the quality of unreasonableness; that is, one which allowed the decision to be characterised as lacking rational foundation or an evident or intelligible justification, or plainly unjust, arbitrary, capricious or lacking common sense.

103    Much the same position would be arrived at if “irrationality” were the appropriate frame of reference. Properly understood, that ground for setting aside a decision requires that the decision itself be one that no reasonable person could reach; or, at least, an irrational finding along the way to the decision on a point that is “critical”: see Masi-Haini v Minister for Home Affairs [2023] FCAFC 126; 298 FCR 277 at [49]-[54] (Markovic, Meagher and Kennett JJ) and the cases cited there.

104    On either approach, even if assessing the public interest without going into whether risk could be managed by steps directed at the examination notice was an illogical piece of reasoning, the error does not vitiate the Tribunal’s decision. The point was material (in that consideration of the issue could realistically have made a difference), but it was not critical: not only was the public interest one issue among several, but the case being mounted against the applicant alleged insecure handling of cargo as well as non-compliance in relation to examination. The decision at which the Tribunal arrived was not arbitrary, capricious, lacking an evident or intelligible justification or a decision that no reasonable decision-maker could have made.

105    In any event, the argument that the Tribunal’s omission to consider whether risks to life and property could be appropriately minimised by taking other action (while making a stay order) was “not open rationally” does not really go beyond expressing the applicant’s strong disagreement with the Tribunal’s approach (cf Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21; 197 CLR 611 at [40] (Gleeson CJ and McHugh J)).

(a)    The applicant accepts that it did not positively submit in the Tribunal that steps should be taken to amend or revoke its examination notice in order to facilitate a stay. It was not irrational for the Tribunal to base its consideration of the public interest on the arguments actually put to it by parties who were represented by senior counsel.

(b)    The Tribunal did accept (at [72]) that the existence of a power to revoke the RACA designation, and the fact that the Secretary had not proceeded with revocation in 2021 and 2023, reduced to some degree the weight to be attributed to the risk to public safety as a consideration. This suggests that the Tribunal might have accepted the potential relevance of other steps that might be taken to limit the applicant’s operations. However, the point is more likely to have been simply some level of doubt as to whether the Secretary’s delegates really considered the risk posed by the applicant to be acute (because they had not followed through on proposals to revoke its RACA designation).

(c)    Any such other steps were not within the Tribunal’s control, and the potential for them to be taken was thus an unstable basis for the grant of a stay. Amendment or revocation of the examination notice required an exercise of power by the Secretary. The examination notice had been purportedly revoked by the notice dated 14 November 2023 (see [43]–[44] above), but this decision was set aside by the consent orders made the following day. There was nothing before the Tribunal indicating why the Secretary had consented to the revocation being set aside or whether any consideration was being given to a further attempt to exercise the power in reg 4.41JB. It was not irrational for the Tribunal to proceed on the basis that the risks to the safety of persons and property posed by the applicant being allowed to continue its operations should be assessed on the basis that the grant of a stay order would result in the applicant being allowed to examine cargo.

106    The Tribunal did not fall into error of the kind alleged in its treatment of the public interest.

Disposition

107    The application will be dismissed.

108    The respondent sought her costs. The applicant did not seek to be heard on costs in the event that it was unsuccessful. There will therefore be an order that the applicant pay the respondent’s costs as agreed or assessed.

Associate:

Dated:    26 April 2024