Consideration of appeal
63 It is convenient to deal with the first two grounds of appeal together because they relate to the question whether the Tribunal committed an appealable error of law for the purposes of s 44 of the AAT Act in relation to that aspect of its decision concerning the question whether or not administrative action was taken in a reasonable manner for the purposes of s 5A(1) of the SRC Act. It should also be noted at this point that these two grounds plainly relate to a question of law which, in my view, is properly raised by the amended notice of appeal as relating to the proper construction of s 5A of the SRC Act.
64 For the reasons which follow, I consider that the Tribunal did fall into appealable error.
65 It is to be noted that, in contrast with the position concerning what constitutes "reasonable administrative action" (which is defined non-exhaustively in s 5A(2) of the SRC Act), there is no comparable provision which attempts to define - exhaustively or non-exhaustively - what amounts to "taken in a reasonable manner" for the purposes of that provision. It is necessary therefore, to construe that phrase having regard to the text considered in its context, consistently with the modern approach to statutory construction (see generally, Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27 at [47] per Hayne, Heydon, Crennan and Kiefel JJ; Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 250 CLR 503 at [39] per French CJ, Hayne, Crennan, Bell and Gageler JJ and Thiess v Collector of Customs [2014] HCA 12; (2014) 250 CLR 664 at [22] per French CJ, Hayne, Kiefel, Gageler and Keane JJ).
66 In Keen, which is a decision of the Full Court of the Supreme Court of South Australia, the comparable statutory provision requiring construction was s 30A of the Workers Rehabilitation and Compensation Act 1986 (SA), which relevantly provided:
30A A disability consisting of an illness or disorder of the mind is compensable if and only if -
(a) the employment was a substantial cause of the disability; and
(b) the disability did not arise wholly or predominantly from -
(i) reasonable action taken in a reasonable manner by the employer to transfer, demote, discipline, counsel, retrench or dismiss the worker; or
(ii) a decision of the employer, based on reasonable grounds, not to award or provide a promotion, transfer, or benefit in connection with the worker's employment; or
(iii) reasonable administrative action taken in a reasonable manner by the employer in connection with the worker's employment; or
(iv) reasonable action taken in a reasonable manner under this Act affecting the worker.
67 In Keen, Lander J made the following observations (at 47-48) regarding whether administrative action is taken in a reasonable manner for the purposes of that provision:
Whether the administrative action was taken in a reasonable manner by the employer will depend upon the administrative action, the facts and circumstances giving rise to the requirement for the administrative action, the way in which the administrative action impacts upon the worker and the circumstances in which the administrative action was implemented and any other matters relevant to determining whether the administration (sic) action was taken in a reasonable manner by the employer.
68 It may be noted that the Tribunal referred to that passage from Lander J's judgment in [66] of its reasons for decision. It also referred in [67] to the following passage from Bleby J's judgment in Keen (at 63):
… whether administrative action is taken in a reasonable manner is very much a question of objective fact, and is to be determined against the ordinary standards of reasonable employers in all the circumstances of the case. Whether administrative action is reasonable or is taken in a reasonable manner depends first on the finding of the primary facts as to what occurred in the taking of the administrative action, namely what decision was made, who made it and why it was made, what was done, what was omitted to be done and the factual background against which the decision was made or implemented.
69 The Tribunal noted that the passages from both Lander J's and Bleby J's judgments in Keen had been cited approvingly by judges of this Court. It acknowledged in [66] that, in Martinez (No 2), Robertson J had approvingly cited Lander J's statements and regarded them as relevant to the construction of s 5A of the SRC Act. And the Tribunal further noted in [67] that, in National Australia Bank Ltd v KRDV [2012] FCA 543; (2012) 204 FCR 436 at [51], Cowdroy J approvingly cited the passage from Bleby J's judgment in Keen as establishing that whether conduct can be classified as reasonable is a question of fact.
70 I respectfully agree that these passages from Keen broadly reflect the proper approach to be taken in construing and applying the phrase "taken in a reasonable manner" for the purposes of s 5A of the SRC Act. The Tribunal appears initially to have taken a similar view but, curiously, when it came to apply the relevant part of s 5A to the circumstances here, the Tribunal appears to have adopted a different approach. As is evident from the summary above of the Tribunal's reasons for decision, instead of taking into account all the relevant matters as identified in the passages from Keen as set out above, the Tribunal essentially focused on the question whether the recruitment process was tainted by apprehended bias in an administrative law sense by Mr Mellett's participation on the selection panel.
71 With respect to the Tribunal, that approach was erroneous in law. Not only did it impermissibly equate the doctrine of apprehended bias in administrative law with the question whether or not particular administrative action had been taken in a reasonable manner, but, in any event, the Tribunal did not properly apply the administrative law doctrine of apprehended bias. It is appropriate to expand upon both those matters.
72 As to the first, I see no warrant for treating the reference in s 5A to "taken in a reasonable manner" as being synonymous with the doctrine of apprehended bias in administrative law. It would have been a simple matter for the Parliament to have adopted the familiar language of procedural fairness or natural justice, including the particular limb which deals with bias, if that was intended to be the relevant test. Self-evidently, however, it did not do so. Instead it used the language of whether particular administrative action "had been taken in a reasonable manner", which requires the decision-maker to determine what is essentially a question of fact. In my view, the Tribunal misconstrued the relevant provision by unduly limiting it to a consideration of whether the administrative action in question had been taken in conformity with that aspect of the doctrine of procedural fairness which relates to apprehended bias. Further, in my view, the correct construction of that statutory phrase is that which was adopted by Robertson J in Martinez (No 2) and is reflected in the judgments of Lander and Bleby JJ in Keen, albeit in reference to a similarly worded provision in South Australia's workers' compensation legislation (see [66]-[68] above).
73 There is at least one fundamental difference between the relevant statutory phrase in s 5A and the doctrine of apprehended bias. It relates to the role of the relevant decision-maker. The statutory phrase requires either the primary decision-maker or the Tribunal on a review to decide for himself or herself whether the relevant administrative action was taken in a reasonable manner. In contrast, the doctrine of apprehended bias requires the relevant decision-maker to apply the relevant legal principles through the prism of an informed and fair-minded lay observer (see Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 at [6] per Gleeson CJ, McHugh, Gummow and Hayne JJ). As is evident from [103] and [104] of the Tribunal's reasons for decision (set out in [22] above), the Tribunal applied a hybrid of the two approaches. Some of its findings are expressed in terms of its own direct appraisal of relevant matters, while its ultimate conclusion (which, significantly, was introduced by a reference by the words 'more to the point') was expressed by reference to the appraisal of a fair-minded observer. I reject Mr Grey's submission that these words ought to be viewed as 'surplusage'. In my view, these words highlight the fact that the Tribunal saw this sentence as containing its essential reasoning.
74 Nor do I accept Mr Grey's submission that [103] and [104] of the Tribunal's reasons for decision ought to be regarded as being directed to the concept of the selection process being 'fair and objective' as referred to in the Guidelines. Although there are references in [98] of the Tribunal's reasons for decision to the "ABC's stated policy on recruitment", which appears to refer to the Guidelines, there is nothing in the subsequent paragraphs to suggest that the Tribunal was addressing this particular phrase in the Guidelines. Indeed, even if that were the case, similar issues would arise as to whether the Tribunal would have performed its statutory task under s 5A by reading that phrase as incorporating the administrative law doctrine of apprehended bias.
75 In my view the Tribunal fell into legal error by reasoning as it did.
76 Furthermore, and in any event, the Tribunal appears to have misunderstood or misapplied the doctrine of apprehended bias (whether that doctrine was applied directly or indirectly via the Guidelines). In particular:
(a) the Tribunal appears to have equated a case of pre-judgment (although the Tribunal does not use the language of "pre-judgment", it appears that it viewed Mr Mellett's hostility towards Ms Martin as fitting into that category) with one of conflict of interest;
(b) the Tribunal demonstrated an inadequate appreciation of the relevance of the fact that Mr Mellett was only one of three members of the selection panel;
(c) assuming for the moment that the doctrine of apprehended bias in administrative law was relevant in addressing the question posed by s 5A of the SRC Act, the Tribunal appears to have misunderstood that doctrine and, in particular, failed to appreciate that the hypothetical "fair-minded observer" against whom the relevant test is applied must be attributed with knowledge of all relevant facts and not just a selection of those facts; and
(d) the Tribunal failed to engage at all with the relevance of the fact that the selection panel merely made a recommendation and that the ultimate decision-maker was a third person against whom there was no allegation of apprehended bias.
77 As to the first of these matters, as Spigelman CJ observed in McGovern v Ku-ring-gai Council [2008] NSWCA 209; (2008) 72 NSWLR 504 (McGovern), it is necessary to distinguish between a conflict of interest case and a pre-judgment case because there are at least two relevant differences:
(a) a conflict of interest requires a different analysis as to the relationship, as reasonably perceived, between the interest and the decision. Where a relevant conflict of interest is established, reasonable apprehension flows almost as of course, whereas in a pre-judgment case it is necessary to consider the degree of "closure" of the allegedly closed mind (at [26]);
(b) a different approach is also appropriate where the involvement of an allegedly biased decision-maker is not determinative in the sense that, in a conflict of interest case, it is appropriate to conclude without further inquiry that the statutory requirements of a valid decision-making process had not been complied with (which might also be expressed in terms of the likely view of an independent observer) (at [27]). Spigelman CJ's observations were directed, of course, to the common law doctrine of procedural fairness and not a statutory phrase such as that contained in s 5A of the SRC Act, but they are nevertheless apposite if that doctrine is viewed as having some relevance to that statutory phrase.
78 As to the second matter, there is some uncertainty as to whether the actions of a collegiate body are vitiated if there is a reasonable apprehension of bias in respect of only a minority of its members. For example, different views were expressed on that issue in McGovern. That case involved an allegation that two councillors in a local council were affected by apprehended bias and participated in a decision by a ten member Council in granting consent to a development application. Spigelman CJ observed at [31] that, even if either or both of the councillors had pre-judged the issue and were affected by apprehended bias, "there remains the issue whether that affected the whole of the decision-making process". His Honour held at [31] that "the rotten apple test is not automatically applied" and he indicated at [33] that some remarks by Gummow J in IW v The City of Perth (1997) 191 CLR 1 at 5, which might suggest that it is sufficient if merely one member of a collegiate decision-making body is biased, were obiter remarks which also were made in a particular statutory context.
79 Chief Justice Spigelman stated the relevant principle as his Honour saw it at [45] as follows:
It is necessary to allow for special cases, for example, when a particular member of a collegial body has, or has had, particular influence on the other members. Except in such cases, a rotten apple test is not, in my opinion, the approach that an independent observer "might" reasonably adopt in the usual pre-judgment case. Rather a "but for" test should generally be applied, that is, the Court should ask whether or not the person(s) reasonably suspected of pre-judgment decided the outcome.
80 In McGovern, Basten JA (with whom Campbell JA agreed) took a different view. After noting that, in a case of reasonable apprehension of bias, the Court does not usually inquire into the existence of bias or otherwise as a matter of fact and also after alluding to the possibility that a distinction might exist between cases where a collegiate body operates in public as opposed to private, Basten JA considered that, in the particular facts of McGovern, if it had been established that there was a reasonable apprehension of bias in respect of the two relevant councillors, and even though their votes were not decisive, their participation in the Council's deliberations and decision "may have tainted the proceedings and vitiated the decision" (at [84]-[103]).
81 In my respectful view, the Tribunal did not adequately address any of these issues, other than to state at [103] that it was possible that Mr Mellett managed to quarantine his views from his deliberations as a panel member, but the Tribunal could not "be positively satisfied that that occurred". This not only represents an insufficient attention to the relevance of the fact that the section panel was a collegiate body, but it suggests that the correct test required the Tribunal itself to assess the matter, as opposed to an assessment through the eyes of a reasonable observer.
82 As to the third matter, it is evident from the last sentence of [103] of the Tribunal's reasons for decision (see [22] above) that, in applying the administrative law doctrine of apprehended bias to Mr Mellett, the Tribunal viewed as decisive its opinion that "a fair-minded observer acquainted with the notes would probably apprehend that Mr Mellett might not bring an impartial mind to his role". In my respectful view, if that doctrine was at all relevant to the question posed by s 5A of the SRC Act (which I strongly doubt), it was incumbent upon the Tribunal to attribute to the hypothetical observer not just knowledge of those notes, but also other relevant matters, such as the multi-member composition of the panel and the fact that the panel did not have the power to determine the outcome of the selection process but, rather, assessed the various candidates and made the recommendation to the ultimate decision-maker as to who should be selected for the position.
83 As to the fourth matter, as noted above, Comcare relied on Hot Holdings and Preston in support of its submission that there is no general legal principle that a person who merely investigates or considers and then makes a recommendation to a decision-maker is required to avoid a reasonable apprehension of bias. It is notable that in its discussion of the question whether the decision was taken in a reasonable manner, the Tribunal did not address the relevance of the fact that the selection panel was merely advisory and did not itself select the successful candidate. In my opinion this is one of several factors which the Tribunal was required to assess in determining whether the action was taken in a reasonable manner.
84 Hot Holdings involved an allegation of apprehended bias in circumstances where two departmental officers had been separately involved in advising the Minister about granting an exploration licence in circumstances where each of the officers had a pecuniary interest in the outcome of the Minister's decision. One officer held shares in the company which had entered into an option agreement with the recommended applicant, while the adult son of the other departmental officer who was involved in preparing a recommendation to the Minister that the licence be granted also held shares in the optionee company.
85 By a 6:1 majority, the High Court rejected the judicial review challenge. Key relevant points to emerge from the majority's judgments may be summarised as follows:
(a) Gleeson CJ described at [20] as a 'large question" whether or not it was necessary to define comprehensively the circumstances in which an administrative decision may be impugned upon the ground that some person, other than the decision-maker, associated with the process of decision-making, had a personal interest in the outcome of the proceeds and added that the question "may not have a single answer";
(b) it was not sufficient to address the issue at a high level of generality by reference to "ethical standards of public servants" because, even if a public servant advisor's conduct may have been improper, this does not necessarily vitiate the Minister's decision, but might simply expose the advisor to disciplinary action (at [20] per Gleeson CJ);
(c) where apprehended bias is alleged and is said to result from the conduct or circumstances of a person other than the decision-maker, "then the part played by that other person in relation to the decision will be important" (at [22] per Gleeson CJ);
(d) in Baker v Canada (Minister of Citizenship and Immigration) [1999] 2 SCR 817, an administrative decision was set aside by the Supreme Court of Canada partly upon the ground that an officer who made an immigration decision acted on the basis of a recommendation of a subordinate officer, who examined the case, made detailed notes and comments and expressed opinions which were strongly adverse to the applicant;
(e) Gaudron, Gummow and Hayne JJ agreed at [52] that it was "a large question" whether the principles of apprehended bias should apply to the conduct of a person other the decision-maker who is involved in the process of decision-making. Their Honours observed at [50]:
… Those who place information before decision-makers will often have an interest in the outcome and it will not always be the case that the nature or extent of that interest will be fully revealed to the decision-maker. It would be wrong to say, as a general rule, that in every such case the decision must be considered to be legally infirm. Further, the proposition is one which may mask the making of important assumptions about what are the interests which a particular decision-maker may properly take into account in reaching a decision. There may be cases in which a decision-maker, especially a Minister, may properly have regard to a wide range of considerations of which some may be seen as bearing upon such matters as the political fortunes of the government of which the Minister is a member and, thus, affect the Minister's continuance in office. It has been said that "the whole object" of a statutory provision placing a power into the hands of the Minister "is that he may exercise it according to government policy". It would be wrong to assume that in every case a decision-maker can act only if he or she has the same level of independence and security as a judge and, in that sense, has nothing to gain or lose from the decision made.
(Citations omitted).
(f) the principle of apprehended bias in administrative law posits whether a reasonable observer to whom all reasonable knowledge is attributed might apprehend that the decision-maker might not have brought an impartial mind in making the decision (see [22] per Gleeson CJ and [68] per McHugh J);
(g) McHugh J also observed at [72]:
… A court will not conclude that there was a reasonable apprehension of bias merely because a person with an interest in the decision played a part in advising the decision-maker. The focus must be on the nature of the adviser's interest, the part that person played in the decision-making process and the degree of independence observed by the decision-maker in making the decision. If there is a real and not a remote possibility that a Minister has not brought an independent mind to making his or her decision, the role and interest in the outcome of his or her officers may result in a finding of reasonable apprehension of bias. It would do so in the present case, for example, if either Mr Phillips or Mr Miasi were biased or their circumstances gave rise to an apprehension of bias and either of them had influenced the Minister's decision. Thus, the role played by an adviser is a critical factor in determining whether the interest of an adviser in the outcome of a decision taints the decision with bias or a reasonable apprehension of bias.
86 Preston involved facts which were substantially similar to, but not identical with, the facts here. A public servant was retired from the public service on the grounds of inefficiency. The issue arose whether he had been denied procedural fairness because one member (Ms Cooke) of a three-member advisory committee had earlier disapproved of his work. After carrying out an assessment of the applicant's work (which required him to write reports on various aspects of Family Court proceedings), the advisory committee recommended to the ultimate decision-maker that the applicant be retired. One member of the committee had previously been involved in the applicant's case, "at least in a peripheral way" as described by Wilcox J. Justice Wilcox noted that, according to a file note, Ms Cooke had contacted one of the applicant's counselling supervisors and said that she did not want the applicant's report on a particular case in the Family Court to leave the office, from which Wilcox J inferred that Ms Cooke had read the applicant's report and was critical of it.
87 The assessment committee's recommendation that the applicant be retired from the public service was accepted. The applicant lodged an appeal against that decision to the Retirement and Redeployment Appeals Committee and, for the first time, the applicant complained about Ms Cooke being a member of the assessment committee. The appeals committee affirmed the decision to retire the applicant on the grounds of inefficiency.
88 One of the grounds of judicial review in Preston was that the primary decision to dismiss the applicant was vitiated by Ms Cooke's membership of the assessment committee because her presence on the committee was said to give rise to a reasonable apprehension of bias in the decision-making process. Justice Wilcox rejected that argument. The primary basis for doing so is reflected in the following passages at 13-14 of his Honour's judgment:
Mr Gageler [who appeared for the applicant] was unable to cite authority for the proposition that it is a breach of the rules of natural justice for a statutory decision maker to receive advice from a person having an earlier involvement in the issue and who has formed an opinion concerning its merits. Such a proposition would have far-reaching effects. There are many situations in which statutory decision makers receive advice, including recommendations, from individual officers or committees. In most cases the very reason these people give advice is their prior involvement in the matter. They have information and opinions that may assist the decision maker. Inevitably, they will have views about the merits. The decision maker may receive conflicting advice from different people. He/she may choose what advice (if any) to accept.
No doubt it is true, in the generality of cases, that the decision-maker himself/herself must come to the matter with an open mind. So it is desirable, if not essential, for the decision maker to be a person not previously involved. But there is no reason, in point of principle, to extend this principle to people having a merely advisory role.
89 There were also two separate secondary grounds on which the judicial review challenge was rejected. First, the applicant's failure to challenge Ms Cooke's role on the assessment committee in circumstances where the applicant was aware of Ms Cooke's attitude to the release of his report. Secondly, any denial of procedural fairness at the primary decision-making level was cured by the subsequent appeal.
90 In my respectful view, the Tribunal was required to consider the relevance of the fact that the selection panel was merely an advisory body in determining whether or not the exclusion in s 5A of the SRC Act applied, irrespective of whether or not it was appropriate to view that provision as incorporating the administrative law doctrine of apprehended bias. The selection panel's role as an advisory body was an important matter to be considered in assessing whether or not the relevant administrative action was taken in a reasonable manner for the purposes of s 5A of the SRC Act.
91 The Tribunal's error in misconstruing s 5A of the SRC Act may be described in language used by Robertson J in Martinez (No 2) at [77] in describing a different situation which also involved appealable error:
The error made by the Tribunal… was to be distracted from what was or was not reasonable administrative action taken in a reasonable manner in respect of the employee's employment within the meaning of s 5A of the SRC Act by applying a different statement made for a different purpose, which statement in any event the Tribunal took out of context and misunderstood. It was not the mere fact of misunderstanding the guide that constitutes the error of law but the consequent misunderstanding of the meaning of the statutory language in s 5A which it was the Tribunal's task to apply.
92 That statement was made in circumstances where the Tribunal had proceeded on the erroneous basis that what is "sensible, moderate… tolerable [and] fair" were synonyms for what is administrative action taken in a reasonable manner for the purposes of s 5A(1) of the SRC Act. Although the Tribunal's particular error in Martinez (No 2) was different from the Tribunal's error here, the passage above is equally applicable.
93 The appeal should be upheld on this reasoning alone. For completeness, however, I will now proceed to deal with Comcare's remaining grounds of appeal.
94 The third ground of appeal is that it was not reasonably open to the Tribunal to conclude that Ms Martin's consequent adjustment disorder was not excluded by s 5A of the SRC Act. In my view, there is no utility in considering and determining this ground of appeal in circumstances where it has been found that the Tribunal has misconstrued s 5A of the SRC Act. In my view, it was that fundamental error of misconstruction which distorted the Tribunal's analysis. That error of construction requires the Tribunal's decision to be set aside and the matter remitted to the Tribunal for reconsideration according to law. It is not a matter for the Court to speculate as to what the outcome of that reconsideration will be.
95 The fourth ground of appeal is that the Tribunal failed to give adequate reasons for its decision and focuses upon whether the ABC complied with the Guidelines.
96 As noted above, the Tribunal summarised Ms Martin's contention that one of the reasons why the decision not to appoint her to the cross-media position constituted administrative action which was not taken in a reasonable manner was that the decision was not taken in conformity with the Guidelines. The Tribunal also summarised relevant parts of those Guidelines, including the reference therein to "merit selection" meaning selecting the best person for a vacancy to the application of a selection process that "is fair and objective". The Tribunal also set out relevant extracts from the Guidelines dealing with a situation where a selection panel member believes that their "personal relationship with an applicant could affect an applicant's selection prospects" and the need to ensure that the selection panel does not include persons who could reasonably be perceived to have a conflict of interest in a selection decision (in which context the Guidelines made an express reference to the Policy).
97 Despite these references, however, the Tribunal's reasons leave distinctly unclear whether its conclusion that the decision was not taken in a reasonable manner was because the process did not comply with the Guidelines or the Policy.
98 As noted above, in [98] of its reasons for decision, the Tribunal described the "real issue" in the appeal as whether the recruitment exercise was conducted in accordance with the Policy and, if not, whether the decision was undertaken in a reasonable manner. It is notable, however, that the subsequent analysis by the Tribunal makes no express reference to either the Guidelines or the Policy. It appears that, despite the Tribunal's identification of the "real issue", it arrived at its ultimate conclusion without relying upon any finding by it one way or the other as to whether the process had been conducted in accordance with the Guidelines or the Policy. Accordingly, this ground of appeal should be rejected.
99 It goes without saying, however, that if on the remitter the Tribunal were to rely upon any finding of non-compliance with the Guidelines or the Policy, it would be required to give adequate reasons in respect of those findings, as is required by s 43 of the AAT Act.
100 The fifth ground of appeal is related to the fourth ground of appeal. Comcare argues that, if the Tribunal found that the recruitment process did not conform with the Policy, there was no probative evidence to support any such finding and it was not reasonably open. For the same reasons as those given above in respect of ground 4, this ground should also be rejected. It does not appear that the Tribunal made any such finding.