The Hardiman principle and merits review
46The Hardiman principle has been briefly stated as a rule which "prevents a tribunal from appearing as an active party in judicial review proceedings of one of its decisions. The rule is subject to so many exceptions and extensions that its precise scope is not entirely settled": Mark Aronson and Matthew Groves, Judicial Review of Administrative Action, (5th ed 2013, Lawbook Co) at 756.
47The principle has been widely applied in the context of judicial review in cases such as Oshlack v Richmond River Council (1998) 193 CLR 72, Fagan v Crimes Commission Tribunal (1982) 150 CLR 666 and Murlan Consulting Pty Ltd v Kuringai Municipal Council (2009) 170 LGERA 162. The Commissioner contended that it had been applied in relation to merits review proceedings in such cases as Capricornia Credit Union Ltd v Australian Securities and Investment Commission [2007] FCAFC 112 and Nature Conservation Council of New South Wales v Department of Trade and Investment [2012] NSWADT 195, but the issue has not yet been squarely dealt with and made the subject of a direct holding.
48In TXU Electricity v Office of the Regulator-General, Ashley J extensively reviewed the authorities and considered the categories of cases in which the rule applied, but accepted that the principles he proposed did not properly state the nature and limits of the rule and conceded that it remained uncertain, though clearly subject to many recognized exceptions: at [18] - [21]. Apart from that, the courts have not sought to develop general or overarching principles to explain why the Hardiman principle might or might not apply (see M Groves, "The Hardiman Rule" (2012) 33 Adelaide Law Review 370, 376).
49The remedial powers of many merits review tribunals commonly include the power of remittal. That raises the question whether the remittal power in merits review legitimately gives rise to concerns similar to those expressed in Hardiman so that decision-makers subject to merits review should refrain from active involvement in that review in order to preserve their perceived impartiality if the matter is remitted.
50In the absence of a clear and authoritative exposition by the Courts, the inquiry as to whether the principle applies to merits review must return to the underlying rationale of the principle as its point of departure. A leading case rejecting the application of the principle to merits review and clearly setting out the rationale for that position is Re New Broadcasting Ltd. In that case, in which a company appealed to the AAT against an ABT decision, the ABT appeared before the AAT to explain the reasons for the decision, but made no other submissions.
51In expressing strong disapproval of that approach, Davies J declared that it was wrong to assume that the cautions sounded in Hardiman extended to merits review proceedings. One key ground was that the AAT rarely exercised its power to remit decisions to a decision-maker and instead normally assumed the powers of the primary decision-maker to make a new decision, "in the overwhelming proportion of cases": (1987) 73 ALR 420 at 431. This is because the AAT, like this Tribunal, in merits review proceedings is required to make the "correct and preferable decision" and only remits matters to the original decision maker where this cannot be done (in relation to the AAT see Drake v Minister for Immigration and Ethnic Affairs [1979] FCA 39; 24 ALR 577 at 589 cited with approval in Esber v the Commonwealth (1992) 174 CLR 430 at 440; and Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1 at 18 citing with approval Brennan J in Re Becker and Minister for Immigration and Ethnic Affairs (1977) 1 ALD 158 at 161; and in relation to this Tribunal see the Act, s 30(1) and the Administrative Decisions Review Act 1997 (NSW) (ADR Act), s 63).
52The other main ground on which Davies J held that the rule did not apply in Re New Broadcasting Ltd was that merits review proceedings required respondent agencies to assume a fundamentally different role from that applying in judicial review. Merits review involved the making of a new decision, after consideration of the facts and evidence presented to the tribunal. Davies J (a judge of the Federal Court, and for eight years President of the AAT) considered that the AAT could best exercise the merits review function and reach the correct or preferable decision if it were assisted by the original decision-maker. His Honour noted, at 439 (line 47)-431 (line 2), that this assistance was consistent with the provisions by which decision-makers are normally made the respondent in merits review proceedings by virtue of the Administrative Appeals Tribunal Act 1975 (Cth), s 30(1) - as is the case in this Tribunal under rule 27 of the Rules.
53In the Appeal Panel's view, these considerations apply with equal force in relation to merits review proceedings in this Tribunal, including the present proceedings.
54Further support for the propositions articulated in New Broadcasting is provided by Macedon Ranges, in which the Victorian Court of Appeal acknowledged that a decision-maker normally had "a unique contribution to the review" of the merits of a decision: at [31]. Warren CJ, Maxwell P and Osborn AJA continued:
The decision-maker is the repository of the powers and responsibilities conferred on it by the legislative scheme under which it made the relevant decision. As administrator of that scheme, the decision-maker has experience, knowledge and expertise possessed neither by the tribunal nor any adversarial party appearing in the review proceeding. The decision-maker is the only party to the review proceeding whose participation is governed exclusively by the aims and objectives of the statutory scheme (ibid).
55The observation that most decision-makers acquire considerable expertise in the area they administer and that expertise might often enable them to provide valuable insight into any review of their decisions is inherently credible and deserves considerable weight in this regard: see M Groves, 2012, "The Hardiman Rule" (2012) 30(2) Adelaide Law Review 371, 379.
56All three of those considerations referred to above apply in the present case. First, this Tribunal, like its predecessor the Administrative Decisions Tribunal, seldom exercises its power to remit a decision to a decision-maker and instead almost always make a new, correct and preferable decision. Secondly, as a merits review body, this Tribunal discharges its statutory functions by making the correct and preferable decision on the basis of all the evidence available to it at the time of its review: see ADR Act, s 63. In these circumstances, it is likely to benefit from assistance by the original decision-maker. Thirdly, the ILGA has been made the repository of extensive powers and responsibilities in the administration of the liquor and gambling laws of New South Wales. It has been given an independent status insulating it to a certain extent from ministerial direction or political influence. It is structurally likely to develop extensive expertise and insight into the proper regulation of those fields. No doubt it may draw significantly on the resources of the Commissioner in order to fulfil its role as contradictor of an applicant's case before the Tribunal. That fact, however, does not compromise the ILGA's position and impartiality, nor does it interfere with the Commissioner's ability to perform his role.
57The importance and significance of the distinction between judicial and merits review for these purposes was clearly expressed by the Victorian Full Court in Macedon Ranges Shire Council v Romsey Hotel Pty Ltd at [34]:
First, judicial review is concerned with error of law. There is no room for debate about the merits of the decision under challenge. Secondly, if the decision under review is found vitiated by error of law, the ordinary course is for the decision to be quashed and the matter remitted to the primary decision-maker, which must then carry out the decision-making process afresh in accordance with the legal ruling of the Court. Hence the importance of the decision-maker preserving its impartiality [in judicial review proceedings]: at [34].
58In Warkworth Mining Limited v Bulga Milbrodale Progress Association Inc [2014] NSWCA 105 at [273] - [276], the New South Wales Court of Appeal referred to Macedon Shire, albeit in a somewhat different context, without disapproval.
59The conclusion that the Hardiman principle does not apply generally to merits review proceedings such as the present should not be seen as depriving the Tribunal of the flexibility to deal with special or unusual cases where the appropriateness of joinder of another party is established by the evidence and circumstances in those cases. As the Courts noted in TXU Electricity v Office of the Regulator-General and Fagan v Crimes Commission Tribunal (1982) 150 CLR 666, Hardiman itself is not "immutable". Consistently with that approach, the exclusion of that rule from merits review proceedings should itself be regarded as non-absolute and flexible. In an appropriate case, the Hardiman principle should be applied to permit joinder of another party as the contradictor.
60We therefore conclude that the ILGA is not required to take a purely passive role in these proceedings before the Tribunal challenging one of its decisions. In the circumstances of the case, joinder of the Commissioner to act as a contradictor in the proceedings is not necessary.