Consideration
29 The Authority submits that the relevant approvals and registrations, including the varied registrations were affected, procured or induced by the fraud of Imtrade in providing the fictitious name and address of Evergreen as manufacturer in each case. It seeks declarations to that effect.
30 The Authority submits that the approval of each active constituent by the entry pursuant to s 19(2)(a) of the Code in the Record of the relevant particulars was in law not an approval and could be ignored. The same is said of the registrations and the variations to the relevant particulars of registrations under s 20(2)(a) and s 29(1)(h)(i) respectively. This is so, it says, because subject to limited exceptions, a person will not be permitted to keep an advantage obtained by fraud: an administrative decision procured by fraud may be ignored as an invalid decision and of no effect at law. This is what the Authority has purported to do here. It has manifested its view that it may ignore the approvals in the Record and the registrations in the Register, which are each in electronic form, by deleting each of them. They no longer appear in the Record or the Register. It has not purported, as I have said, to cancel the approvals and registrations under the provisions of the Code. The Authority submits that the decision of the Full Court in Leung v Minister for Immigration & Multicultural & Indigenous Affairs (1997) 79 FCR 400 is warrant for their actions.
31 The issue in Leung was whether the Minister for Immigration could, absent an express statutory power to do so, revoke the grant of a certificate of Australian citizenship where the applicants had misled his delegate about their factual circumstances. The appellants sought a certificate of Australian Citizenship, which involved two steps: the Minister must grant the Certificate and the applicant must make the prescribed pledge of commitment. The appellants made representations of fact, asserting that during their time spent overseas they were engaged in activities beneficial to the interests of Australia, namely the promotion and export of Australian goods (rough opals and fresh produce to Hong Kong). On the basis of these representations the Minister exercised his discretion under s 13(1) of the Australian Citizenship Act 1948 (Cth) in favour of the appellants. In fact, the applicant and his wife had both been practicing as medical professionals in Hong Kong for the better part of the time they initially claimed to have been promoting Australian exports. The Certificates were granted. However, before the appellants made their pledges of commitment, it was discovered that the representations of fact were false. The Minister's delegate then decided to 'revoke' the decision to grant the Certificates.
32 The Court was divided in its reasoning. The majority (Finkelstein J and Beaumont J concurring) concluded that as the decision to grant the certificate was procured by fraud it was invalid and could be ignored without any formal process of revocation. It was unnecessary, the majority concluded, to rely upon any express or implied power of revocation under the statute to proceed as it did.
33 Heerey J resolved the appeal on the basis of an implied statutory power to revoke a certificate of citizenship where a statutory criterion for the issue of the certificate did not in fact exist although such a power terminated once the pledge of commitment had been made because a person could not be deprived of citizenship other than by virtue of s 21 of the Citizenship Act. His Honour said:
"there is no general rule or principle of administrative law that decisions based upon a wrong factual basis may be revoked by the decision-maker - still less that such decisions do not need to be revoked and may simply be ignored. The supposed general rule would necessarily extend indefinitely in time and to factual errors for which persons affected by the decision were in no way responsible. Such persons might have arranged their own affairs on the basis of the decision.
34 Finkelstein J however expressed the opinion that:
… the true principle is this. To ignore an invalid decision is not to revoke it. It is merely to recognise that that which purports to be a decision does not have that character. To decide the matter again is not a reconsideration of it. It is in fact the original exercise of the power to make the decision. … Nor is there any need to find either an express or an implicit power of reconsideration. Those doctrines, to the extent that they are applicable to administrative decision-making, only apply to validly made administrative decisions.
35 There has been much controversy as to whether invalid administrative decisions may simply be ignored by the decision-maker without judicial determination. The debate between the absolute and relative invalidity schools of thought is far from resolved. There is a very useful discussion of these in a paper presented by Robert Orr and Robyn Briese at an AIAL Forum in October 2002: Don't Think Twice? Can Administrative Decision Making Change Their Mind? Absolute invalidity means that a decision-maker, and those affected by the invalid decision may just ignore it as if it had never been made. There is no requirement for judicial review to achieve this result. It does not constitute a decision. Support for it is found in Ouslow v R (1997) 192 CLR 69per McHugh J and by some commentators: Sykes, Lanham, Tracey and Esser, General Principles of Administrative Law (4th ed, Butterworths, 1997) at 447.
36 The relative invalidity school argues that invalidity is required to be established by judicial, not administrative, determination and any decision tainted by jurisdictional error is valid and effective in law until such a determination is made. Examples are to be found in Forbes v New South Wales Trotting Club Ltd (1979) 143 CLR 242 at 277 per Aikin J; Ousley v R per Gummow J at 130-131; R v Balfour; ex parte Parkes Rural Distributors Pty Ltd (1987) 17 FCR 26 at 33. It too has support amongst commentators: M Taggart, "Rival Theories of Invalidity" in M Taggart (ed), Judicial Review of Administrative Action in the 1980s - Problems and Prospects (Oxford University Press and the Legal Research Foundation Inc, 1988) at p 70; Aronson and Dyer in Judicial Review of Administrative Action (2nd ed, LBC, 2000) conclude on this issue at p 499:
The truth is that there is no such thing as a complete nullity; it always takes a court decision to say so.
Kirby J cites other strong support both judicial and from legal commentators in Minister for Immigration & Multicultural Affairs v Bhardwaj (2002) 209 CLR 597 at [103]-[104].
37 The concept of absolute invalidity has been rejected by the High Court, at least in the context of judgments and orders of federal courts declared by legislation to be "superior courts" of record: Bhardwaj per Kirby J at [108]; Residual Assco Group Ltd vSpalvins (2000) 202 CLR 629 at 660 [77]; Re Macks; Ex parte Saint (2000) 204 CLR 158.
38 Some cases advocate a position somewhere between the two poles. A J Burr Ltd v Blenheim Borough Council [1980] 2 NZLR 1 at 4 is an example. There, Cooke J said that other than in cases which involve "flagrant invalidity" an administrative decision is generally to be taken to be operative until set aside by judicial determination.
39 The question of invalidity and its consequences was considered by the High Court in Bhardwaj. The respondent, whose student visa was cancelled by a delegate of the Minister for Immigration and Multicultural Affairs applied to the Immigration Review Tribunal for a review of the decision. The Tribunal proposed to deal with the matter on 15 September 1998, and invited the respondent to attend a hearing. Late in the afternoon of 14 September 1998 the Tribunal received, from the respondent's agent, a letter stating that the respondent was ill and would be unable to attend the next day, and requesting an adjournment. By an administrative oversight, the letter did not come to the attention of the member of the Tribunal to whom the matter had been assigned. The Tribunal dealt with the matter on 15 and 16 September, adversely to the respondent, and notified the respondent and his agent on 17 September. The reason given for the Tribunal's decision was that the respondent had not provided any information which suggested that the cancellation of his visa was unfair or inappropriate. When the respondent's agent was informed of the decision, the attention of the Tribunal member was drawn to the letter of 14 September. A new hearing date was arranged. The Tribunal heard the respondent's explanation of the conduct which had resulted in the cancellation of his visa, accepted the explanation, and, on 22 October 1998, revoked the cancellation. The issue in the appeal concerned the capacity of the Tribunal to proceed as it did thereby correcting its own error. The Minister contended that the power of the Tribunal to review the delegate's decision was spent after it made the decision in September.
40 Hayne J attached significance to whether the earlier decision would be set asideby the Federal Court or the High Court under s 75(v) of the Constitution at [147], concluding that where a decision would be set aside the power has not been exercised: [142], [155], [157]. It might seemthat the practical application of such a test by a decision-maker raises its own self-evident difficulties, absent clear authority on all fours, with the circumstances of the case in question. However I do not take his Honour to have been referring to circumstances other than where there is a clear error involved as in his citation at [152] of Dixon J in Posner v Collector for Inter-State Destitute Persons (Vict) (1946) 74 CLR 461 at 483 suggests.
41 How is invalidity to be determined? In the present case, alleged fraud amounting to jurisdictional error is involved. However the facts other than in respect to the variation of relevant particulars in respect of 47 existing valid registrations are in contest. Accordingly,it cannot be assumed that a Court would set aside the decisions of the Authority. Even in respect to the variations to the particulars, I do not think that it could be assumed that the provision of false particulars would lead a Court to declare the underlying valid registrations as thereby invalid. Posited in that way, it might be said that the necessary precondition to the right to ignore a decision, earlier made, has not been established and necessarily requires judicial determination of both fact and law on the question of validity.
42 In Leung the question of fact and law as to whether Mr and Mrs Leung were entitled to the favourable exercise of the discretion under s 13(4)(b)(i) of the Citizenship Act was disputed. The dispute involved questions of fact. The Minister had not purported to rely upon the common law doctrine of vitiation by fraud but rather upon s 33(3) of the Acts Interpretation Act 1901 (Cth) as the source of power to revoke the certificate of citizenship. The AAT resolved the factual dispute in favour of the Minister. Finkelstein J observed that no point had been taken that the AAT lacked jurisdiction and proceeded on the basis that it did. Importantly however, when the matter was before the Full Court the factual controversy had been resolved. It was not in dispute by then that the decision to grant the certificate of citizenship had been procured by misrepresentation. The question was whether in those circumstances the decision to grant the certificate as a result of proven misrepresentation was thereby vitiated.
43 Likewise, the error in Bhardwaj might be characterised as "flagrantly invalid" to use the language of Cooke J in Blenheim. In their joint judgment, Gaudron and Gummow JJ referred to the decision as one which "clearlyinvolved a failure to exercise jurisdiction". Hayne J said that it was not seriously disputed in the Courts below or in the High Court that due to an oversight, the Tribunal had not given the respondent the opportunity to appear and give evidence and present arguments which s 360(1)(a) of the Migration Act 1958 (Cth)required he be given before the Tribunal made the September decision. This was the jurisdictional error involved.
44 Invalidity, in a particular case,may be demonstrated by consensus. In Comptroller General of Customs v Kawasaki Motors Pty Ltd (1991) 103 ALR 661 the Full Court concluded that an administrative order made under the provisions of Pt XVa of the Customs Act 1901 (Cth) could be revoked by agreement of the parties without the necessity for a judicial determination.
45 The concept of invalidity involves questions of mixed fact and law. There may be evidentiary considerations. In Leung, Finkelstein J,drawing on observations by Lord Hoffman in R v Wicks [1998] AC 92 at 115, said at 413:
In other words the presumption of the validity of an administrative decision, to the extent that the presumption is to be made in a particular case, is no more than a rule of evidence pursuant to which a certain assumption will be made by a judge unless there is evidence which contradicts that assumption. As Kirby J said in Ousley at 1594 the presumption is merely a tool in the process of reasoning to a decision. See also Wigmore on Evidence (1981) vol 9, par 2491.
46 In Bhardwaj Hayne J in the same vein said:
If there is no challenge to the validity of an administrative act or decision, whether directly by proceedings for judicial review or collaterally in some other proceeding in which its validity is raised incidentally, the act or decision may be presumed to be valid. But again, that is a presumption which operates, chiefly, in circumstances where there is no challenge to the legal effect of what has been done. Where there is a challenge, the presumption may serve only to identify and emphasise the need for proof of some invalidating feature before a conclusion of invalidity may be reached. It is not a presumption which may be understood as affording all administrative acts and decisions validity and binding effect until they are set aside.
47 Whether an administrative decision ought be presumed to be valid until set aside by a court will depend upon the particular case having regard always to the particular legislation under which the decision was made.
48 In my opinion, the presumption in this case cannot be displaced, merely at the instance of the Authority, in the face of factual questions, the resolution of which is necessary before determining the legal validity or otherwise of the several decisions to approve and to register. It is a fact that incorrect information was given to the Authority by Imtrade concerning the name and address of the manufacturer. Evergreen was a fictitious name. The factual question whether this affected induced or procured the several decisions is disputed. The Authority cannot determine that question for itself.
49 There is a further reason why curial disposition is necessary in this case. The presumption of validity is of particular importance here because the legislation involves a system of approvals and registration affecting innocent third parties. Approvals and registrations require by s 52(1) and (2) respectively to be published by the Authority, at least in the Gazette. The position under s 53 in respect to variations and s 55 in respect to suspensions or cancellations is the same. Approval and registration confers important rights upon third parties such as suppliers and purchasers of chemical products. It also protects them against criminal liability. For example, supply and possession with the intent to supply unapproved active constituents and unregistered chemical products are offences under the Code: ss 74-78. Some offences are indictable offences: s 170 and may involve imprisonment: ss 162, 163. Conviction for offences under the Code may involve forfeiture of property: s 150. Part 7A of the Agricultural and Veterinary Chemicals (Administration) Act 1992 deals with importation, manufacture and export of chemicals. Under Part 7A, it is an offence to import into Australia an active constituent that has not been approved or a chemical product that is not registered: s 69B(1). The removal of the approvals and registrations by merely deleting these electronically has the very real potential to expose innocent third parties to prosecution as well as financial loss. The system of recorded approvals and registrations enables third parties to organise their affairs accordingly.
50 Compliance with the Code may also be the subject of injunctions, as well as action involving the execution of search warrants with Inspectors having powers of entry and seizure.
51 Furthermore, Part 2, Div 5 of the Code empowers the Authority in certain circumstances to suspend or cancel approvals and registrations. Upon cancellation, the Authority must give written notice to interested and approved persons as defined in s 3 and to any other person it believes notice should be given: s 45A(1). After such notice, that person is taken to have been issued with a permit to "possess, have custody of, use or otherwise deal" with the constituent or product for a certain period of time: s 45A(5). A penalty applies for not acting in accordance with the instructions contained in the notice: s 45A(6), ss 74-78. Accordingly, s 45A(5) protects, for a period of time, third parties affected by the cancellation. That protection is not available to them in the circumstances which presently exist. The Authority issued a recall notice to Imtrade under s 101 of the Code. I will consider this in more detail below. It is relevant in the present context to note that under Clause 2 of the Notice, which sets out various definitions, there is included the word "Permit". It is stated to mean a permit under Part 7 of the "Agvet Codes". There is however no operative clause in the Notice concerning permits. A consideration of Part 7 of the Code immediately demonstrates that its provisions are not apt to the circumstances of this case.
52 The observations of Hayne J at [143] and Kirby J at [122] in Bhardwaj are relevant to these third partyconsiderations.
53 In my opinion, it is for this Court to decide the legal question involving as it does a preliminary factual enquiry. Indeed, the Authority seeks declarations from this Court that each approval and each registration was of no legal effect because each was affected, procured or induced by fraud. I will now consider those questions.
54 It is fundamental to the Authority's case that invalidity be established in respect of each approval and registration. It is necessary to establish that the decisions to approve and to register were actually induced or affected by fraud on the balance of probabilities and having due regard to Briginshaw v Briginshaw (1938) 60 CLR 336. This is sometimes referred to as operative fraud. It is not enough to prove a "real suspicion" or a "real possibility": Wati v Minister for Immigration and Ethnic Affairs (1996) 71 FCR 103 at 112-113. Wati on this point was referred to with apparent approval by the High Court in SZFDE v Minister for Immigration and Citizenship (2007) 237 ALR 64 at [25]. The alleged fraud must affect the decision-making process: Minister for Immigration and Citizenship v SZLIX (2008) 245 ALR 501 at [33].
55 French J, at first instance, in SZFDE v Minister for Immigration & Multicultural & Indigenous Affairs (2006) 154 FCR 365 at [74] said:
The finding of fraud should have specified, in one place in the reasons what was said that was fraudulent, how it was fraudulent and how it was acted upon.
This statement was approved by the High Court in that case on appeal: SZFDE at [41].
56 The Authority, as part of its case on the issue of fraud, did not seek to prove what information it actually had received and relied upon in making its several decisions to approve and register under ss 19(1); 20(1).
57 Rather, senior counsel for the Authority referring to the statement of French J said:
We know what was the fraud, we know how it was effected and how it was acted on. It was acted on by the making of the registration. The fact that it was operative … flows from the legislation that it was operative …
58 Accordingly, the case for the Authority is that the provision of the fictitious name and address of Evergreen being particulars prescribed under Regulations 15 and 16 necessarily leads, as a matter of inference, to the conclusion that each approval and registration was procured or induced by fraud. I do not agree.
59 Section 11(1)(a) and (b) together provide in effect that an application to the Authority under s 10 for approval of an active constituent or for registration of a chemical product must be made in writing in or to the effect of the approved form and contain, or be accompanied by, any information that the Authority requires. There is no evidence as to whether the various applications were made in or to the effect of the approved form. No reliance was placed upon the wording of the approved form. It was not referred to in submissions.
60 It is by no means clear just what information for the purposes of s 11(1)(b) the Authority requires generally or required particularly in this case in relation to the grant of the various applications for approval of active constituents and for registration of chemical products.
61 Approval is effected under s 19(2)(a) by entering in the Record of Approved Action Constituents amongst other things the particulars prescribed by Regulation 15. However such approval is effected only after the Authority decides to approve an active constituent: s 19(1) of the Code.
62 A decision under Division 2 of Part 2 to refuse an application for approval of an active constituent or to register a chemical product is reviewable under s 167(1)(a) and a decision to approve either of these applications is reviewable under s 167(1)(b). There is no provision to review the act of recording prescribed particulars in the Record or the Register which gives effect to those decisions.
63 There is no evidence as to what information the Authority had before it in arriving at its several decisions to approve. Even if it had the information prescribed by Regulation 15 this does not mean it was information required for the purposes of s 11(1)(b).
64 There is no evidence as to when the Authority asked for information concerning the name and address of the manufacturer in China. There is no evidence that Imtrade or its agents officers or employees was aware that such information was relevant to their application or putting it another way, that the information was material to the Authority's decision-making process. No reason has been proffered as to why this information was to be regarded as significant other than for the purpose of complying with Regs 15 and 16 which concern events after the relevant decisions were made: cf Sharples v O'Shea (unreported Supreme Court of Queensland, Atkinson J, 18 August 1999 at [66].
65 The position in respect to the registration of chemical products is to the same effect: registration under s 20(2) is effected by the entry in the Register, amongst other things, of the particulars prescribed by Regulation 16. However this occurs only after the Authority decides to register under s 20(1).
66 It is no answer for Mr Suter to say in his affidavit sworn on 5 June 2008 at [14]:
Unless the APVMA was satisfied that the second respondent had provided any information that the APVMA required, under section 14 of the Agvet Code, it could not grant the application for approval or registration. If the second respondent at the time it made its applications for approval of the active constituents and registration of chemical products had told the APVMA in its applications that the information concerning the identity of the manufacturer and site of manufacture to be entered into the Record and the Register respectively was false, or if the APVMA had been aware of the falsity of those particulars, the APVMA would not have granted those applications.
67 That assertion is to beg the question as to what information was required under s 11(1)(b) for the purposes of making decisions under s 19(1) and s 20(1) as distinct from what was required in giving effect to those decisions under s 19(2) and s 20(2). Regulations 15 and 16 are directed not to s 19(1) and s 20(1). The regulations are expressed to be "for the purposes of" subsection s 19(2) and s 20(2) of the Code, respectively and to be "in relation to" the approval of an active constituent and the registration of a chemical product, respectively. The prescribed particulars are accordingly not for the purposes of either s 19(1) or s 20(1) nor are they required in relation to a decision to approve or a decision to register.
68 Applications to vary relevant particulars and the mode of such applications are provided for in ss 27 and 28. These are to the same effect, mutatis mutandis as applications under ss 10 and 11. The submissions of the Authority in respect to the 47 variations of registration are also to the same effect.
69 Fraud requires to be strictly articulated and proved: Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 at 538D per Kirby P. A finding of fraud is not to be made lightly. I am not persuaded that the misinformation provided, at some point, by Imtrade to the Authority led to operative fraud, namely, that the Authority was actually induced by the provision of that information to make the decisions to approve and to register. I am not prepared to infer such fraud merely because Regs 15 and 16 require particulars of the name and address of the manufacturer to be recorded and registered. There are provisions in the Code which lend support to the conclusion that such information is not operative in the making of those decisions.
70 First, the provision of such particulars is not immediately referable to the objects of the Act or Code which as I have indicated centre upon concerns of safety and health of individuals, animals and the environment. The Authority points to paragraph (d) of the preamble to the Code which concerns the creation of a regulatory system that is open and accountable and which gives opportunity for public input with respect to the regulation of chemical and veterinary products. The particulars in question do not, I think, touch on that object. They are particulars which I earlier suggested may well be maintained in the confidential part of each of the Record and Register. Certainly, according to Mr James Suter who is acting CEO of the Authority, in his affidavit in support of the application sworn on 5 June 2008 at [9], the identity of the manufacturer and address of the site at which chemical products are manufactured are kept in the confidential part of the Register.
71 Second, incorrectly recorded or registered relevant particulars may be corrected in the Record and Register by the Authority under the provisions of s 26 of the Code. Furthermore, Part 2, Div 5 of the Code provides for suspension and cancellation of approval or registration. Under s 40(1), it is only if the relevant particulars or conditions for approval or registration cannot be varied to comply with the prescribed requirements that the approval or registration may be cancelled. The legislature has prescribed this approach for cases where the prescribed requirements are not complied with.
72 Third, although under s 145 the provision of false information to the Authority for the purposes of, or in connection with, the consideration by the Authority, in the course of the performance of any of its functions or the exercise of any of its powers under this Code is an offence, it is not a ground of cancellation under s 41. That section provides for cancellation or suspension of approvals and registrations where the continued use of the active constituent or chemical product may be an undue hazard to the safety of people exposed to it, or which may be likely to have an effect that is harmful to human beings or may be likely to have an unintended effect that is harmful to animals plants or things or to the environment.
73 The matters taken together tend against a view that the name and address of a manufacturer is information which the Authority requires under s 11(1)(b) of the Code to which it must be satisfied by reason of s 14(1) and (3)(a).
74 It follows that I am not prepared to find that the several approvals and registrations were affected, procured or induced by fraud. The removal of these by the Authority from the Record and the Register was in each case unlawful.
75 As I foreshadowed,the position is different concerning the variation of relevant particulars to 47 of the existing valid registrations by adding the name Evergreen and its address as an additional manufacturer. It is not to the point that the intention of Imtrade was not to obtain these variations by misrepresentation but rather was to protect their confidential commercial information from competitors. Ironically, this is something for which the Code expressly caters. It is not disputed by Imtrade that these applications under s 27 contained the fictitious name and address. There can be no doubt that, in those respects, the Authority was misled in an operative sense. The false information was the very subject matter of each of the variation applications. The decision to vary the prescribed particulars was accordingly induced by this misrepresentation. However as these variations were of no effect ab initio they cannot, in my opinion, operate to render the pre-existing registrations invalid.
76 Accordingly, other than in relation to the applications for variation of relevant particulars, the declarations sought should be refused. The appropriate declaration in my opinion, in relation to the purported variations is that the variations in each case are of no legal effect. However the declarations are limited to that extent. The 47 valid registrations to which they relate are unaffected.
77 Irrespective of the outcome of this case, the Authority, in my opinion, ought to have sought appropriate relief from the Court rather than resorting to self-help, involving the expunging the approvals and registrations of the Record and the Register. No safety considerations were present. Even if there had been, the Court could have made appropriate interim orders to deal with that situation.