Consideration
55" '[T]he common law' usually will imply, as a matter of statutory interpretation, a condition that a power conferred by statute upon the executive branch be exercised with procedural fairness to those whose interests may be adversely affected by the exercise of that power": Plaintiff S10/2011 v Minister for Immigration and Citizenship (2012) 86 ALJR 1019; [2012] HCA 31 (at [97]) per Gummow, Hayne, Crennan and Bell JJ; see also Saeed v Minister for Immigration and Citizenship [2010] HCA 23; (2010) 241 CLR 252 (at [11] - [15]) per French CJ, , Gummow, Hayne, Crennan and Kiefel JJ; Kioa v West [1985] HCA 81; (1985) 159 CLR 550 (at 584) per Mason J, (at 619) per Brennan J; Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564 (at 576) per Mason CJ, Dawson, Toohey and Gaudron JJ. "[W]hat is required by procedural fairness is a fair hearing, not a fair outcome ... [t]he relevant question is about the [administrative decision-maker's] processes, not its actual decision ... the statutory framework within which a decision-maker exercises statutory power is of critical importance when considering what procedural fairness requires": SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63; (2006) 228 CLR 152 (at [25] - [26]) per Gleeson CJ, Kirby, Hayne, Callinan and Heydon JJ.
56The critical question is what is the content of that obligation of procedural fairness, a question which must, as the primary judge recognised (at [20]), be determined by "the circumstances of the case [including], inter alia, the nature of the inquiry, the subject-matter, and the rules under which the decision maker is acting". This reflects the proposition that procedural fairness is a flexible obligation requiring the adoption of fair procedures which are appropriate and adapted to the circumstances of the particular case. This ensures that the statutory power is exercised fairly, in accordance with procedures that are fair to the individual considered in the light of the statutory requirements, in the interests of the individual and the interests and purposes, whether public or private, which the relevant statute seeks to advance or protect or permits to be taken into account as legitimate considerations: Kioa v West (at 584 - 585) per Mason J. The fundamental proposition is that "the concern of the law [in the context of administrative decision-making] is to avoid practical injustice": Minister for Immigration and Multicultural Affairs, Ex parte Lam [2003] HCA 6; (2003) 214 CLR 1 (at [37]) per Gleeson CJ). Whether the obligation to afford procedural fairness has been discharged is not to be evaluated minutely or in a manner divorced from its context: Habib v Director-General of Security [2009] FCAFC 48; (2009) 175 FCR 411 (at [77]) per Black CJ, Ryan and Lander JJ (cited with approval in Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations [2011] FCAFC 88; (2011) 195 FCR 318 (at [64]) per Keane CJ, Lander and Foster JJ).
57I do not find it helpful when determining the content of the Director-General's obligation of procedural fairness to characterise the decision the Director-General is considering making as "quasi-legislative", as Mr Lloyd submitted. Just as "the question of the application of the rules of natural justice is not to be determined merely by affixing [the] label ['legislative'] to describe the character of the task which is under consideration" (Bread Manufacturers of New South Wales v Evans [1981] HCA 69; (1981) 180 CLR 404 (at 432 - 433) per Mason and Wilson JJ; see also (at 415) per Gibbs CJ) so, too, in my view, is it inapposite to seek to limit the content of the obligation by the mere adoption of the label "quasi-legislative".
58That is not to gainsay the relevance to the content of the obligation of procedural fairness of the number of people who will be affected by a decision by the Director-General to include the Proposed Measures in the Accord. In Kioa v West (at 584) Mason J expressed the view that the acts or decisions which attract the duty of procedural fairness are those which directly affect an individual or corporation as such and not simply as a member of the public or a class of the public"; see also Brennan J (at 619 - 620); Deane J (at 632). Spigelman CJ expressed the point somewhat differently in Vanmeld Pty Ltd v Fairfield City Council [1999] NSWCA 6; (1999) 46 NSWLR 78 (at [74]), when he said that "[t]he fact that the exercise of a particular statutory power has effect on a wide range of persons, even in circumstances where the identity of all such persons is difficult to establish, will often impinge, not on the obligation to accord procedural fairness, but on the content of that obligation".
59Mason P (Ipp AJA agreeing) took an intermediate position in Minister for Local Government v South Sydney City Council [2002] NSWCA 288; (2002) 55 NSWLR 381 (at [263]) when he observed, in a passage upon which Mr Lloyd relied, that decisions "capable of affecting a very broad number of persons and institutions in what may broadly be termed a matter of town planning overlaid with political issues ... do not usually attract the principles of procedural fairness at all". However his Honour added that "... they may do so as regards particular interests of particularly affected and identifiable persons".
60Basten JA rationalised the various approaches in Castle v Director General, State Emergency Service [2008] NSWCA 231 where, after referring to Mason J's reasons in Kioa v West (at 584), he said:
"[6] ... [O]ne limitation on the operation of the duty to accord procedural fairness arises from the need to identify the obligation by reference to an individual or class of persons. The obligation must be capable of identification and fulfilment, in a reasonable and practical sense, prior to the making of the decision ... The larger the class of persons reasonably expected to be affected, the less the likelihood that procedural fairness will be attracted and, if it is, the lower the likely content of the duty. Similarly, even though the class of those affected may be small, the duty is less likely to be attracted if membership of the class is variable and not readily ascertained: see, eg, Comptroller-General of Customs v Kawasaki Motors Pty Ltd (No 1) [1991] FCA 519; 32 FCR 219 at 240-241 (Hill and Heerey JJ)." (Emphasis added)
61A range of views have been expressed about how to identify the degree to which individuals must be affected to determine whether an obligation of procedural fairness arises: see M Aronson, B Dyer and M Groves, Judicial Review of Administrative Action, 4th ed (2009) Lawbook Co (at [7.175] - [7.195]). Having regard to the Director-General's concession that the obligation arises in the present case made, no doubt, in recognition of the fact that the Proposed Measures will clearly affect "identifiable persons", it is unnecessary to add to the debate. It is sufficient to accept that Mr Lloyd's submission that the size of the class will affect the content of the obligation is consistent with Spigelman CJ's observation in Vanmeld Pty Ltd v Fairfield City Council and Basten JA's explanation in Castle v Director General, State Emergency Service. The propositions which I set out below concerning underlying principles of procedural fairness must, in their application to the present case, reflect the fact that the decision the Director-General is proposing to make is intended to regulate not only the respondents' operations but also those of all of the 58 licensees in the Accord precinct. It is also necessary to take into account that the potential participants in the accord include a range of groups and individuals who are not necessarily licensees and who may not have a commercial interest in a licence.
62That Director-General's concession that he was obliged to accord procedural fairness to the respondents was appropriate when one has regard to the nature of the power being exercised. The Director-General's proposal to impose more restrictive conditions on the licences of the licensees within the Accord precinct, directly affects each licensee. In FAI Insurances Ltd v Winneke [1982] HCA 26; (1982) 151 CLR 342 (at 360), Mason J affirmed that it was "authoritatively established that the exercise of a power revoking a licence will attract the rules of natural justice, certainly when the revocation results in the loss of a right to earn a livelihood or to carry on a financially rewarding activity". The position is little different, in my view, when one is considering the exercise of a power to impose more restrictive conditions upon the licences of an identified group of licensees within a defined geographic area.
63Before considering the particular circumstances of the case, some general principles should be stated concerning what is required to ensure statutory powers are exercised fairly.
64First, "where the rules of procedural fairness apply to a decision-making process, the party liable to be directly affected by the decision is to be given the opportunity of being heard [which] would ordinarily require the party affected to be given the opportunity of ascertaining the relevant issues and to be informed of the nature and content of adverse material" (emphasis added): SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (at [32]), applying Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd [1994] FCA 1074; (1994) 49 FCR 576 (at 590 - 591).
65However, as a general proposition, an obligation to accord procedural fairness does not require a decision-maker to disclose material of which the decision-maker does not have actual knowledge and does not propose to consider in making the relevant decision. Brennan J stated the fundamental principle in Kioa v West (at 628 - 629) when he explained that "[a] person whose interests are likely to be affected by an exercise of power must be given an opportunity ... to deal with adverse information that is credible, relevant and significant to the decision to be made". His Honour also pointed out that if information was before the repository of the power, then it was not sufficient for it "to endeavour to shut information of that kind out of his mind and to reach a decision without reference to it [because] [i]nformation of that kind creates a real risk of prejudice, albeit subconscious, and it is unfair to deny a person whose interests are likely to be affected by the decision an opportunity to deal with the information".
66Brennan J considered that limiting the disclosure of material to "adverse information that is credible, relevant and significant to the decision to be made" was appropriate because, in his view, "administrative decisions [were] not necessarily to be held invalid because the procedures of adversary litigation are not fully observed: Kioa v West at (628 - 629). Similar remarks have been recorded. Lord Diplock said decisions should not be "over-judicialise[d]": Bushell v Secretary of State for the Environment [1980] UKHL 1; [1981] AC 75 (at 97) and Mason P stated that, "fairness in administrative processes is not grafted to 'the prism of adversarialism' ": Minister for Local Government v South Sydney City Council (at [256]).
67The High Court considered what Brennan J meant by the phrase "adverse information that is credible, relevant and significant to the decision to be made" in Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 72; (2005) 225 CLR 88 (at [16] - [17]). The Court (Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ) pointed out that his Honour's statement had to be understood in light of his earlier statement (Kioa v West, at 628) that "[a]dministrative decision-making is not to be clogged by inquiries into allegations to which the repository of the power would not give credence, or which are not relevant to his decision or which are of little significance to the decision which is to be made" and, too, the emphasis his Honour had given (Kioa v West, at 622) to the proposition that "principles of natural justice, or procedural fairness, 'are not concerned with the merits of a particular exercise of power but with the procedure that must be observed in its exercise' ". Understood in that light, the Court continued:
"17 It follows that what is 'credible, relevant and significant' information must be determined by a decision-maker before the final decision is reached. That determination will affect whether the decision-maker must give an opportunity to the person affected to deal with the information. And that is why Brennan J prefaced his statement about a person being given an opportunity to deal with adverse information that is credible, relevant and significant, by pointing out that there may be information, apparently adverse to the interests of a person, which can and should be put aside from consideration by the decision-maker as not credible, not relevant, or of little or no significance to the decision to be made. 'Credible, relevant and significant' must therefore be understood as referring to information that cannot be dismissed from further consideration by the decision-maker before making the decision. And the decision-maker cannot dismiss information from further consideration unless the information is evidently not credible, not relevant, or of little or no significance to the decision that is to be made. References to information that is 'credible, relevant and significant" are not to be understood as depending upon whatever characterisation of the information the decision-maker may later have chosen to apply to the information when expressing reasons for the decision that has been reached."
68Secondly, the "relevant inquiry is: what procedures should have been followed" rather than "what decision should the decision-maker have made, nor what reasons did the decision-maker give for the conclusion reached": Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (at [19]).
69In Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs, an applicant for a protection visa complained that he had been denied procedural fairness because, in rejecting his application for review of a decision refusing him a visa, the Refugee Review Tribunal reviewed an unsolicited letter received by the Department of Immigration and Multicultural and Indigenous Affairs which made allegations against him, but did not inform him of the existence of the letter or its contents. In affirming the decision under review the Tribunal said it had given no weight to the letter. The High Court held (at [18]) that that statement did not demonstrate that there was no obligation to reveal the information to the Director-General and to give him an opportunity to respond to it before the review was concluded and that "[d]eciding that it could reach its conclusion on other bases did not discharge the Tribunal's obligation to give the appellant procedural fairness."
70The Court (at [19]) explained, adopting what Allsop J (as his Honour then was) said in NIB Health Funds Ltd v Private Health Insurance Administration Council [2002] FCA 40; (2002) 115 FCR 561 (at [84]), that "the necessity to disclose such material in order to accord procedural fairness is not based on answering a causal question as to whether the material did in fact play a part in influencing the decision" but, rather, on ensuring that fair procedures have been applied.
71Thirdly, "an adequate 'opportunity' to be heard may be satisfied in some cases if the gist [gravamen or substance or 'essential features'] of any adverse information is disclosed without the entire text or document in which that information is contained necessarily also being disclosed": Minister for Immigration and Citizenship v Maman [2012] FCAFC 13; (2012) 200 FCR 30 (at [37]) per Flick and Foster JJ; see also Pilbara Aboriginal Land Council Aboriginal Corp Inc v Minister for Aboriginal & Torres Strait Islander Affairs (at [70]) per Merkel J. I shall refer to this proposition as the "gist requirement".
72The primary judge (at [21]) recognised that disclosure of the gravamen of adverse information may be sufficient and quoted the passage I have cited from Minister for Immigration and Citizenship v Maman (at [37]). In that case, Mr Maman, an applicant for a Partner (Residence) visa, sought access to an unfavourable letter written by his former wife/sponsor to which experts, whose opinions were relevant to the decision-makers' ultimately adverse determination, had had regard. The letter was not disclosed to the applicant before the decision to refuse his application was made. The issue on appeal was whether the former wife/sponsor's letter contained new information that was credible, relevant and significant to the experts' opinions, such that, as a matter of procedural fairness, it should have been disclosed to the applicant prior to the decisions being made. Raphael FM held that it should have been. His decision was upheld on appeal Flick and Foster JJ (Katzmann J agreeing).
73The primary judge appears to have concluded (see [21]) that the following paragraph in the plurality reasons in Minister for Immigration and Citizenship v Maman supported the proposition that, despite the "gist requirement", disclosure of the Source Materials was necessary to discharge the appellant's procedural fairness obligation. Thus, his Honour said:
"Nevertheless their Honours concluded (par 42):
'Subject to any statutory qualification of the common law rules of procedural fairness, either the entirety or the substance of such personal information may have to be disclosed if procedural fairness is to be afforded.' "
74Several points should be made about Minister for Immigration and Citizenship v Maman. First, the experts had referred to the unfavourable letter in forming an opinion adverse to the applicant: see, in particular Katzmann J (at [94]). Secondly, the plurality approved (at [38] the proposition that procedural fairness is not denied if the gist of information has been disclosed "sufficient to enable any person wishing to make a submission ... to do so": see Marine Power Australia Pty Ltd v Comptroller-General of Customs (1989) 89 ALR 561 (at 574) per Lockhart J. Thirdly, when the plurality made the remark (at [42]) which the primary judge prefaced with the adverb "nevertheless", their Honours were referring (see [41]) to "information which is intensely 'personal [which] may have to be disclosed to the persons concerned if one party is to be able to properly and adequately respond to the complaints or allegations of another". In that respect, their Honours' reasons reflected Mason J's statement in Kioa v West (at 587) that while, "[i]n the ordinary course of granting or refusing entry permits there is no occasion for the principles of natural justice to be called into play ... if, in fact, the decision-maker intends to reject the application by reference to some consideration personal to the applicant on the basis of information obtained from another source which has not been dealt with by the applicant in his application there may be a case for saying that procedural fairness requires that he be given an opportunity of responding to the matter." Further, from the plurality's perspective (at [57]), it was unnecessary to decide whether "the entire letter or a more appropriately drafted identification of the 'key points' " in it should have been disclosed, because by the time of the appeal, the entire letter had been made available to Mr Maman. The plurality's decision with, which Katzmann J agreed, (see [46], [95]) that Mr Maman had been denied procedural fairness thus did not turn on the failure to disclose the entirety of the letter, but, rather upon that failure and the failure to disclose its gist. Finally, the decision in Maman that the letter should have been disclosed to the applicant recognised that the principles of procedural fairness are flexible and necessarily depend on the facts of each case: see Flick and Foster JJ (at [31]); Katzmann J (at [92]).
75Fourthly, save in certain circumstances to which I refer below, a decision-maker is not obliged to disclose information of which he or she does not have actual knowledge and does not propose to rely upon in making a decision. A decision-maker will not be fixed with constructive notice or knowledge of information in its possession so as to found an allegation of denial of procedural fairness: see Re Minister for Immigration and Multicultural and Indigenous Affairs; ex parte Applicants S134/2002 [2003] HCA 1; (2003) 211 CLR 441 (at [34], [40]) per Gleeson CJ, McHugh, Gummow, Hayne and Callinan JJ.
76McLachlan v Australian Securities & Investments Commission [1999] FCA 244; (1999) 85 FCR 286 illustrates the fourth proposition. In that case, Kenny J (with whom O'Loughlin and Mansfield JJ agreed) held that the Australian Securities & Investments Commission ("ASIC") was only required to make available to a person facing a banning order under s 830 of the Corporations Law (Cth), so much of the material in its possession as it considered "relevant, credible and significant" to the allegations being made or the inquiry being conducted and upon which it intended to rely in hearings before the delegate charged with making the ultimate decision. Her Honour emphasised (at [44] - [45]) that the information of which Brennan J was speaking in Kioa v West (at 628 - 629) was information "adverse to the interests of those concerned upon which the decision-maker proposed to rely, believing it to be relevant, credible and significant" (emphasis added). Her Honour held (at [48]) that it was a matter for the ASIC to identify the matters and the material on which it relied which fell within that description and (at [49]) that "no impermissible prejudice to the appellants flow[ed] from the fact that they are to be denied access to material in the ASIC's possession touching the subject-matter of the hearing which is not relied upon by it".
77As Buss JA (Wheeler and Pullin JJA agreeing) explained in Re Minister for Resources; ex parte Cazaly Iron Pty Ltd [2007] WASCA 175; (2007) 34 WAR 403 (at [328] - [330], [332] ff) the principle that the decision-maker is only obliged to disclose of information actually known to it is consistent with the propositions that the purpose of the law of procedural fairness is to avoid practical injustice (Minister for Immigration and Multicultural Affairs, Re; Ex parte Lam (at [37])) and that the decision-maker must determine what information is "credible, relevant and significant" before the final decision is reached: Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (at [17]).