Apprehended Bias
63 The argument that there was a reasonable apprehension of bias was variously expressed.
64 However expressed, the principles to be applied are nevertheless comparatively well-settled.
65 It may thus be accepted that an allegation as to a reasonable apprehension of bias must be "firmly established": Re JRL; Ex parte CJL [1986] HCA 39, 161 CLR 342 at 352 per Mason J. It is not sufficient if a reasonable bystander merely "has a vague sense of unease or disquiet": Jones v Australian Competition and Consumer Commission [2002] FCA 1054 at [100], 76 ALD 424 at 441 per Weinberg J. An appeal from this decision was allowed, but no reservation was expressed by the Full Court as to His Honour's observations in respect to the allegation as to bias: Jones v Australian Competition and Consumer Commission [2003] FCAFC 164, 131 FCR 216. See also: Reece v Webber [2011] FCAFC 33 at [45].
66 What is required of an administrator is that he retains a mind open to persuasion: Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17 at [71] to [72], 205 CLR 507 at 531 to 532 per Gleeson CJ and Gummow J. It is equally well-accepted, however, that an administrative decision-maker need not approach his task with a "blank mind". In Jia Legeng, Gleeson CJ and Gummow J observed:
[71] … Decision-makers, including judicial decision-makers, sometimes approach their task with a tendency of mind, or predisposition, sometimes one that has been publicly expressed, without being accused or suspected of bias. The question is not whether a decision-maker's mind is blank; it is whether it is open to persuasion. The fact that, in the case of judges, it may be easier to persuade one judge of a proposition than it is to persuade another does not mean that either of them is affected by bias …
[72] ... The state of mind described as bias in the form of prejudgement is one so committed to a conclusion already formed as to be incapable of alteration, whatever evidence or arguments may be presented. Natural justice does not require the absence of any predisposition or inclination for or against an argument or conclusion. (footnotes omitted)
See also: R v Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group (1969) 122 CLR 546 at 553 to 554 per Barwick CJ, McTiernan, Kitto, Taylor, Menzies, Windeyer and Owen JJ; Australian Retailers Association v Reserve Bank of Australia [2005] FCA 1707 at [599], 148 FCR 446 at 591 per Weinberg J.
67 Within these constraints, it was contended on behalf of the Applicant that a reasonable apprehension of bias arose by reason of the failure to address in the February Notice submissions which had been made in response to the earlier January Notice. The Applicant's response to the January Notice, by way of its 8 February 2011 letter, was said to contain "incontrovertible facts". These facts centred upon submissions made in that letter in respect to:
the expenditure of monies on legal costs;
proceedings that had been dismissed in the Administrative Appeals Tribunal;
"the sequence and content of correspondence following" a meeting held in July 2010; and
"the refusal of NTSCorp to make available to DECAC directors genealogical material …".
68 As explained in its Outline of Submissions, the Applicant's contention was that the notice now under challenge:
… did not amend the statement of facts to remove the errors and omissions in the 31 January notice which had been drawn to his attention. The failure to include in the recitation of the facts in the 11 February notice incontrovertible facts favourable to the applicant indicates that the second respondent had already made up his mind. Consequently, a reasonable observer might conclude that the second respondent is not open to persuasion and, therefore, might not make an impartial decision.
The argument thus focussed upon a reasonable apprehension of bias arising out of the fact that the February Notice now under challenge failed to include a recitation of "incontrovertible facts" or failed to address in greater detail submissions previously advanced.
69 Two of these "incontrovertible facts" received particular attention during the course of oral submissions.
70 By way of example, oral submissions focussed particular attention upon the statements made in both the January Notice and the February Notice concerning the expenditure of monies on legal fees. The 8 February 2011 letter addressed these statements made in the January Notice as follows:
15. Given the admission earlier in section 2.2.1 and the fact that the identified period (2008/2009 and 2009/2010) included the time when DECAC's legal advisers were involved in drafting the new constitution and in intense and lengthy negotiations with the State government which resulted in the payment to DECAC of $6.1 million, that conclusion, which is unqualified as to any particular proportion of the legal costs, is an extraordinary statement to make and a completely unsupportable conclusion to reach.
16. Had the Registrar requested DECAC to provide details of the legal costs he would have been made aware of the precise break-up of the legal costs, including how much was attributable to constitutional matters and to gaining for the Dunghutti people the $6.1 million paid by the State. He would have also realised that the costs incurred in the year ending 30 June 2010 included legal work going back for a number of years before that. Had the facts been ascertained, the embarrassing, unqualified conclusion in the second last dot point in section 2.2.1, based as it is on an unfounded assumption, could have been avoided.
Notwithstanding this submission, the February Notice remained in substantially the same terms as the earlier January Notice.
71 The submission now advanced was that the failure to qualify the statements previously made evidenced "a mind … so prejudiced in favour of a conclusion already formed that he will not alter that conclusion irrespective of the evidence or arguments presented …". The submission was that the February Notice should have been re-worded so that the statement previously made was prefaced by (for example): "A part of the significant legal expenditure …".
72 The argument is rejected for a number of reasons.
73 First, the very purpose of a notice issued under s 487-10(1) is to put a corporation on notice as to the concerns that may warrant placing a corporation under special administration and affording the corporation an opportunity to make "representations" before a decision is made. If a corporation is of the view that some facts are "incontrovertible", it may make that very point in its "representations". The mere fact that a delegate has had that submission previously advanced in respect to a notice that is said to be invalid, does not preclude the giving of a subsequent notice repeating facts as previously stated. The delegate may or may not regard the facts as "incontrovertible". The repetition of the same facts in the February Notice now under challenge, it is considered, would not lead a hypothetical bystander to believe that the delegate did not have an open mind.
74 The fact that there are differences between the January Notice and the February Notice, and hence a conclusion that the delegate accepted some comments but not others, does not lead to any apprehension that further submissions would not be entertained and genuinely considered. A primary objective of the 8 February 2011 letter was to seek to have the January Notice set aside. The letter achieved that objective. But matters of concern to the delegate obviously remained. And, as pointed out in the 8 February 2011 letter, the Applicant had available to it (for example) "details of the legal costs". Had that information been provided, there may or may not have been a revision of the terms in which the later February Notice was expressed. But no "details" were provided. The February Notice simply maintained the concern previously expressed and again extended an opportunity to the Applicant to make "representations", including an opportunity to provide the very "details" not yet provided. Although a party is entitled to maintain a position as to the legal ineffectiveness of a notice, it is not considered that any hypothetical bystander would conclude that the delegate was biased by reason of his repeating a concern which had previously not been addressed on its merits when it could readily have been addressed. So informed, the bystander may well question why the information was not provided; but he would not conclude that the delegate had closed his mind to any further consideration.
75 The recognition that a decision-maker need not approach his task with a "blank mind" assumes more importance in the present context where there is a statutory requirement to issue a notice to show cause and thereafter a requirement to "consider any representations the corporation makes to the Registrar" (s 487-10(1)(b)). Before issuing a notice to show cause, a view must necessarily have been formed that there is a sufficient legal and factual basis upon which such a notice should be issued. The withdrawal of one notice to show cause and the issue of a subsequent notice, in the circumstances of the present case, says little other than that there remained a continuing concern as to the conduct of the Applicant. A submission successfully advanced as to the invalidity of a notice cannot preclude the giving of a subsequent notice; nor can such a submission generate in itself a reasonable apprehension of bias if previously expressed concerns are maintained - especially where the submission withholds relevant and readily available information.
76 Nor is the manner in which the delegate addressed in the February Notice the potential relevance of the proceedings in the Administrative Appeals Tribunal the source of any reasonable apprehension of bias. The Tribunal, it may briefly be noted, had been called upon to review a decision of a delegate of the Registrar refusing to register a document titled "Notification of a change to corporation officers' details". There was a dispute between two groups of people who sought to be registered as directors. After two interlocutory hearings, a point of time had been reached when the period of appointment of the elected directors had expired. The Tribunal dismissed the proceeding pursuant to the power granted by s 42B(1)(a) of the Administrative Appeals Tribunal Act 1975 (Cth) as being "frivolous or vexatious": Re Mumbler; Registrar of Aboriginal and Torres Strait Islander Corporations [2009] AATA 786. Given the lack of utility in resolving an application only having arguably historical significance, the order of the Tribunal was hardly surprising.
77 The potential relevance of the Tribunal decision to a determination to be made under s 487-1 was addressed in the February Notice in section 2.1.4 under the heading "Members' concerns regarding the governance of the corporation and AAT proceedings". A principal concern addressed in the notice was again the cost of legal services being incurred. The February Notice thus stated:
On 14 October 2009 Mr RP Handley, Deputy President of the AAT dismissed the application for review of the Registrar's decision and the disputes between certain members and the directors of the corporation continued. The corporation incurred significant legal costs during the AAT proceedings which are reflected in the 2008/09 and 2009/10 financial reports of the corporation. In those two financial years the corporation spent a total of $881,080 on legal costs (not all of which was related to the disputes or the AAT proceedings).
The cost of legal services to the corporation resulting from the disputes was noted by Mr RP Handley, Deputy President in the AAT proceedings at p12:
The time and costs involved in these proceedings continue to mount.
78 The failure to incorporate in the February Notice a reference to the role said to have been taken by the present Applicant in seeking to have the Tribunal proceedings quickly brought to an end and the ultimate dismissal by the Tribunal of the proceeding before it as "frivolous or vexatious", does not provide any basis for a reasonable apprehension of bias. If the Applicant had considered it of relevance to make "representations" referring to its role in the Tribunal proceedings, and presumably "representations" seeking to emphasise its concern to minimise legal costs, it was free to do so. But the omission from the February Notice of a more extensive account of the proceeding before the Tribunal does not render the account in fact given misleading or so incomplete as to manifest any unwillingness on the part of the delegate to maintain an open mind and to genuinely consider any "representations" that may have been made. The purpose of the notice to show cause, it should be recalled, was not to set forth a complete account of past events; its purpose was to outline in as succinct a manner as appropriate the facts to be considered and to put the Applicant in a position to answer - if it wished to do so - the matters of concern to the delegate.
79 Nor do the other "incontrovertible facts" mentioned in the February Notice evidence any reasonable apprehension of bias. No support for any contrary conclusion is provided by British American Tobacco Australia Services Ltd v Laurie [2011] HCA 2, 273 ALR 429. The nature of the comments which there founded a reasonable apprehension of bias, it is respectfully considered, are in no way comparable to the views expressed by the delegate in the January Notice and repeated in the February Notice.
80 One final aspect of the Applicant's argument as to an apprehension of bias should be noted. This aspect concerns the extent of knowledge that should be imbued to the "informed bystander". It was common ground that whether there was a reasonable apprehension of bias was to be judged by reference to the hypothetical informed bystander. Albeit in the context of considering a reasonable apprehension of bias and the need to ensure public confidence in the judiciary, in Johnson v Johnson [2000] HCA 48 at [12], 201 CLR 488 at 493 Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ stated that the "hypothetical reasonable observer of the judge's conduct is postulated in order to ensure that the test is objective …". In other contexts this hypothetical observer has been referred to as "the fair-minded observer": McGovern v Ku-ring-gai Council [2008] NSWCA 209 at [72], 72 NSWLR 504 at 517 per Basten JA.
81 The extent of knowledge that Senior Counsel for the Applicant sought to attribute to the "informed bystander" in the present proceeding was extensive. As has been observed, the "knowledge to be attributed to this bystander may well significantly influence a conclusion as to whether any apprehension of bias is reasonable": Reece v Webber [2011] FCAFC 33 at [55]. An informed bystander, at one extreme, who is informed by reference to all of the facts favourable to one conclusion, may well find any contrary conclusion unsatisfactory and may conclude that any such contrary conclusion could only be reached by a decision-maker affected by bias. But such an informed individual would necessarily cease to be a mere bystander and would certainly cease to be objective. He would be no more than an informed advocate of one party's case.
82 In the present proceeding, it is considered that the hypothetical bystander should have attributed to him knowledge of the statutory context in which the notice to show cause has been issued, the content of both the January Notice and the February Notice, and the correspondence that those notices occasioned. So informed, he could then objectively determine - not the competing merits of the factual assertions being explored - but rather the question as to whether the delegate's mind remained open to persuasion.
83 Rejected is the submission advanced on behalf of the Applicant that the bystander should also be imbued with knowledge of such matters as: negotiations which apparently took place in 2008/2009 with the New South Wales State Government and the payment of in excess of $6 million; the fact of the proceedings before the Administrative Appeals Tribunal and the decision of that Tribunal; and the "wider scene" including "what has happened" with New South Wales native title services. These were identified by Senior Counsel for the Applicant as being "some of the matters" to be attributed to the bystander.
84 It is concluded that such extensive knowledge should not be attributed to the hypothetical bystander. Any contrary conclusion (it should be recognised) may have the tendency for an argument as to an apprehension of bias being the occasion for a party to seek to adduce in judicial review proceedings evidence to support the factual accuracy of the knowledge sought to be attributed and an occasion for a prolonged and unnecessary review of the merits of a party's case.
85 So informed, it is concluded that the hypothetical bystander in the present proceeding would have no concern as to the delegate's mind being foreclosed to a proper and genuine consideration of any such "representations" the Applicant may make.
86 The argument as to an apprehension of bias is rejected.