Ghanem v Australian Research Council

JUDGES: FLICK, JAGOT AND PERRY JJ DATE: 7 October 2014 PLACE: SYDNEY

REASONS FOR JUDGMENT 1 The issue in this matter is whether there should be a grant of leave to appeal and, if so, whether the appeal should be allowed against an order summarily dismissing the whole of an application for judicial review of a decision by the Australian Research Council (the ARC) to recommend to the Minister for Education (the Minister) that the applicant not be granted funding for a research project under the Australian Research Council Act 2001 (Cth) (the ARC Act) and of the Minister's corresponding decision based upon that recommendation. The conclusion we have reached, that leave should be granted and the appeal allowed in part only, discloses yet again the problem with which judges are confronted when attempting to grapple with lengthy and complicated claims by unrepresented parties who lack the legal expertise to identify in a concise and meaningful way their causes of action and claims for relief. The risk which arises, as this and other cases demonstrate, is that an arguable claim which needs to be heard and determined on its merits may exist, albeit a claim unhelpfully buried within a mountain of other baseless allegations and which is not itself clearly articulated or linked to any related relief sought. 2 The applicant, Ashraf Ghanem, is a post-doctoral researcher specialising in chiral catalysts and chiral chromatography. In each of 2009 and 2010, Dr Ghanem submitted a "Future Fellowship proposal" to the ARC seeking funding under the ARC Act for a research project he proposed to conduct. Both applications for funding were refused. Dr Ghanem commenced judicial review proceedings challenging the refusal of his 2009 and 2010 applications. He withdrew those proceedings and entered into a deed of settlement with the "Commonwealth of Australia, represented by the Australian Research Council" on 14 December 2012. Amongst other things, the deed of settlement included an undertaking by the ARC that "any application for funding in which Ashraf Ghanem is named as the Chief Investigator will not be determined to be invalid on the ground that Ashraf Ghanem has reached or exceeded the maximum number of applications for Future Fellowship funding in which he is named as Chief Investigator". 3 This undertaking reflected the then current "Future Fellowships Funding Rules for funding commencing in 2013" approved by the relevant Minister under s 60 of the ARC Act (the 2013 rules). Sections 59 and 60 of the ARC Act require the preparation and approval of funding rules before the start of each year to which Div 1 of Pt 7 of the ARC Act applies. Division 1 of Pt 7 establishes a scheme for financial assistance for approved research programs. Rule 9.1.2 of the 2013 rules provided that: The Future Fellowship Candidate may not submit more than two Future Fellowships Proposals in the funding rounds between 2009 and 2013. This includes Proposals that have been withdrawn after the closing time of submission of Proposals and Proposals which were deemed ineligible by the ARC. 4 As he had submitted Future Fellowships Proposals in 2009 and 2010, rule 9.1.2 prevented Dr Ghanem submitting a further "Proposal" in 2013. The deed of settlement, however, contemplated that Dr Ghanem would be entitled to submit a further Future Fellowship Proposal in 2013. This he did, submitting Future Fellowships Proposal FT 130100026 "Integrated Microsystems for for Chiral Doping Drug Testing in Sports" (the 2013 proposal) to the ARC on 20 February 2013. In accordance with a recommendation by the chief executive officer (the CEO) of the ARC, the Minister did not approve the 2013 proposal for funding. Dr Ghanem was notified of this decision on 8 November 2013. 5 Dr Ghanem commenced judicial review proceedings in respect of the ARC's recommendation and the Minister's decision. In his amended originating application filed on 18 February 2014, a lengthy document which is difficult to follow, he made various claims and allegations in respect of the funding decision including, in paragraph 1, a claim that: Allowing the Applicant to apply for a third time is in disagreement with the law. According to funding rule 9.1.2…under ARC Act sec 59 and 60, the Applicant was ineligible to apply for future fellowship 2013 round and his application should not have been considered from the beginning. 6 On 4 March 2014, the respondents applied for an order summarily dismissing the whole of Dr Ghanem's application for judicial review relying on s 31A of the Federal Court of Australia Act 1976 (Cth) and r 26.01 of the Federal Court Rules 2011 (Cth) (the Court Rules). Section 31A provides that: (2) The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if: (a) the first party is defending the proceeding or that part of the proceeding; and (b) the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding. (3) For the purposes of this section, a defence or a proceeding or part of a proceeding need not be: (a) hopeless; or (b) bound to fail; for it to have no reasonable prospect of success. 7 Rule 26.01(1) of the Court Rules provides that: (1) A party may apply to the Court for an order that judgment be given against another party because: (a) the applicant has no reasonable prospect of successfully prosecuting the proceeding or part of the proceeding; or (b) the proceeding is frivolous or vexatious; or (c) no reasonable cause of action is disclosed; or (d) the proceeding is an abuse of the process of the Court; or (e) the respondent has no reasonable prospect of successfully defending the proceeding or part of the proceeding. 8 On 13 May 2014, the primary judge summarily dismissed the whole of Dr Ghanem's application for judicial review (Ghanem v Australian Research Council [2014] FCA 473). On 23 May 2014, Dr Ghanem filed an application for leave to appeal. The application identified 13 "questions of law", question 6 of which is, in part, as follows: Whether the Applicant was eligible or ineligible to apply for the future fellowship round 2013… 9 This part of question 6 may be inferred to relate to the issue raised in part of ground 1 of the amended originating application, as set out above. 10 Orders made on 10 June 2014 provided for the application for leave to appeal to be heard in advance of any hearing of any appeal should leave be granted and for the leave application to be determined on the basis of the papers only and without any oral hearing. Having reviewed the papers, the Full Court convened an oral hearing confined to that part of question 6 set out above and informed the parties that, if appropriate, it would deal with the issues of leave to appeal and the appeal during that oral hearing. The oral hearing occurred on 1 October 2014. As contemplated, the oral hearing was confined to Dr Ghanem's claim that his funding application "should not have been considered from the beginning". 11 The primary judge accepted the respondents' submissions in respect of that claim. His Honour noted the following at [28]: Dr Ghanem had submitted two Future Fellowships proposals, one in 2009 and another in 2010. His 2013 proposal was, therefore, his third proposal in the funding rounds between 2009 and 2013. For this reason, it appeared to me that Dr Ghanem did not satisfy the eligibility criteria laid down in the 2013 Funding Rules. However, Dr Ghanem told me that, as a term of the settlement of the 2012 judicial review proceeding brought by him in respect of the 2009 and 2010 funding proposals submitted by him, he was given an assurance by the ARC that the CEO of the ARC and the Minister would not treat any 2013 funding proposal submitted by him as invalid by reason only of the fact that it would be his third proposal submitted in the years 2009-2013. The legal significance of his having been given such an assurance was not explored before me. 12 The primary judge continued: 55 At [25]-[28] above, I have referred to Dr Ghanem's argument that funding proposal FT130100026 was not able to be approved under s 51(1) of the ARC Act or recommended by the CEO of the ARC under subs 52(1) of that Act for such approval, as deserving financial assistance under Pt 7 Div 1 of that Act, because Dr Ghanem did not satisfy cl 9.1.2 being part of the eligibility criteria set out in the relevant approved Funding Rules. 56 Dr Ghanem submitted that, if he is correct in his primary contention to the effect that he was not eligible to apply for funding in 2013, the Minister ought not to have made a decision not to approve his proposal since his proposal should never have been submitted to the Minister in the first place. Dr Ghanem went on to submit that there was no evidence to suggest that proper procedures had been followed allowing a waiver or exception to the applicability of the eligibility criterion specified in cl 9.1.2 of the Funding Rules. 57 The advocate who appeared for the respondents at the hearing before me submitted that the underlying premise advanced by Dr Ghanem in support of his submission was incorrect. I took this to mean that the respondents were submitting that, contrary to Dr Ghanem's argument, Dr Ghanem was, in fact, eligible to receive a Future Fellowship in the 2013 round. The respondents' advocate did not develop this submission. On the material before me, there is much to be said for Dr Ghanem's contentions that he was not eligible to receive a grant in the 2013 round and that the ARC's inclusion of Dr Ghanem's proposal in that round was of no effect. If those contentions are correct, then the Minister's decision not to recommend Dr Ghanem's proposal for funding was also of no effect. 58 However, in light of Dr Ghanem's assertion to the effect that, at the time when he settled the 2012 proceeding brought by him, he was assured that the ARC would not treat any funding proposal submitted by him for the 2013 round as invalid merely because of the circumstance that he did not satisfy the eligibility criterion embodied in cl 9.1.2 of the Funding Rules, I have a concern that the ARC may have effectively waived compliance with that clause or otherwise exempted Dr Ghanem from the consequences of his not satisfying the requirements of that clause even though, at the moment, there is no evidence before me proving either of those matters. The ARC did process Dr Ghanem's proposal and it is likely that, one way or another, it took steps to ensure that there was no ongoing difficulty with his eligibility for the 2013 round. 59 The respondents' advocate submitted that I did not have to decide the question of whether Dr Ghanem was, in fact, eligible to be considered for a Future Fellowship in the 2013 round. He submitted that, if Dr Ghanem was not eligible, his whole case is frivolous and is bound to fail because it would not be open to the Court to grant any meaningful relief to Dr Ghanem. He also submitted that if, in truth, Dr Ghanem was eligible to be considered for such a Fellowship in the 2013 round, then the first ground of judicial review raised by Dr Ghanem in the present proceeding must necessarily fail with the consequence that the Court would then be required to move to consider Dr Ghanem's second and third grounds. Either way, so it was submitted, Dr Ghanem's application for judicial review in the present proceeding is self-defeating. 60 I accept the submissions advanced on behalf of the respondents. They are sound. Against the possibility that, in truth, Dr Ghanem was eligible for consideration for a Future Fellowship in the 2013 round, I will therefore now move to consider grounds 2 and 3 raised by him. 13 In his conclusions, the primary judge dealt with the issue of relief as follows: 74 Dr Ghanem seeks a reconsideration of his 2013 funding proposal in the 2014 round. He does not seek to secure a reconsideration of that proposal in the 2013 round. No doubt this is because such a reconsideration would now prove to be impossible. In my view, there is no real prospect that the Court would consider ordering such a reconsideration in the 2014 round. 75 The 2014 round is an entirely separate process into which Dr Ghanem has not entered. The Court does not have the power to order that his 2013 proposal stand as a separate and fresh application in the 2014 round. 76 In addition, even if Dr Ghanem was eligible to be considered for a Future Fellowship in the 2013 round, an order setting aside the Minister's decision not to fund his proposal takes the matter nowhere. As matters presently stand, the Minister did not approve funding for his proposal. An order setting aside that decision would leave Dr Ghanem with no decision, one way or the other, and no order compelling the Minister to reconsider his decision. 14 These conclusions reflect the respondents' submissions that Dr Ghanem's challenges to the validity of the decision refusing funding to to his 2013 proposal were unfounded and that his first claim, that the 2013 proposal "should not have been considered from the beginning", was "self-defeating" because it could not be the subject of any "meaningful relief". 15 It is apparent that the respondents' submissions, accepted by the primary judge, assume that Dr Ghanem was challenging only the validity of the decision to refuse funding to his 2013 proposal. This assumption, it should be said, is consistent with the orders sought in the amended originating application, paragraph 1 of which seeks an order: To put aside the decision made by the Minister not to award the Applicant a Future Fellowship. 16 There is, however, another way of construing Dr Ghanem's amended originating application or, at the least, the relevant part of ground 1. In claiming that the 2013 proposal "should not have been considered from the beginning", Dr Ghanem could be taken to have been challenging not only the validity of the decision to refuse him funding, but also the validity of his own application. If construed in the latter way, the respondents' argument that this claim was "self-defeating" and could not be the subject of any "meaningful relief" would be incorrect. In short, if Dr Ghanem's 2013 proposal is itself invalid then relief could be granted in the form of a declaration to the effect that the application was null and void from the outset. Moreover, such a declaration may have utility depending on the funding rules as approved by the Minister in future. For example, on the assumption that the 2015 funding rules contain an equivalent rule to r 9.1.2 permitting only two applications to be made in the prescribed period it would follow, if Dr Ghanem's 2013 proposal was valid, that he would have applied in both 2010 and 2013 and thereby be precluded from applying for funding for 2015. On the other hand, if Dr Ghanem's 2013 proposal was invalid and a nullity, then he would have made only one application in the previous five years, being that made in 2010, and thus would be eligible to make a further application for funding for 2015. 17 During the oral hearing the respondents, properly, acknowledged that a declaration to the effect that the 2013 proposal was invalid and a nullity may have utility and, if construed in the way outlined above, Dr Ghanem's first claim could not be described as "self-defeating" and incapable of being the subject of any "meaningful relief". The respondents submitted, however, that leave to appeal should not be granted in any event because it could not be concluded that Dr Ghanem would suffer any substantial injustice if leave were refused. That submission turned on the proposition that Dr Ghanem submitted the 2013 proposal in reliance on the deed of settlement pursuant to which he effectively waived or acquiesced in the ARC setting aside the operation of rule 9.1.2. The respondents submitted that it was simply opportunistic for Dr Ghanem, on the one hand, to take the benefit of the deed of settlement by making the application in 2013 which he would not otherwise have been able to make and, on the other hand, when that application was refused, to challenge its validity. 18 There is no doubt that challenging the validity of his own application is opportunistic, particularly in circumstances where he simultaneously contends that the ARC should have recommended that the Minister approve it for funding. Opportunism, however, is no necessary bar to success in litigation. 19 The first difficulty for the respondents is that Dr Ghanem's first claim is reasonably capable of being read as including a challenge to the validity of his own application. In Spencer v Commonwealth (2010) 241 CLR 118; [2010] HCA 28 French CJ and Gummow J at [23] approved the distinction drawn by Lindgren J in White Industries Aust Ltd v Commissioner of Taxation (2007) 160 FCR 298; [2007] FCA 511 at [47] between the existence of a reasonable cause of action and the pleading of that cause. Section 31A does not empower the summary dismissal of a cause of action inadequately pleaded unless the inadequate pleading discloses that there is no reasonable cause of action. Further, as their Honours said at [24], the "exercise of powers to summarily terminate proceedings must always be attended with caution". At [25], they continued: Section 31A(2) requires a practical judgment by the Federal Court as to whether the applicant has more than a "fanciful" prospect of success. That may be a judgment of law or of fact, or of mixed law and fact. Where there are factual issues capable of being disputed and in dispute, summary dismissal should not be awarded to the respondent simply because the Court has formed the view that the applicant is unlikely to succeed on the factual issue. Where the success of a proceeding depends upon propositions of law apparently precluded by existing authority, that may not always be the end of the matter. Existing authority may be overruled, qualified or further explained. Summary processes must not be used to stultify the development of the law. But where the success of proceedings is critically dependent upon a proposition of law which would contradict a binding decision of this Court, the court hearing the application under s 31A could justifiably conclude that the proceedings had no reasonable prospect of success. 20 There is no doubt that Dr Ghanem's claim in respect of the validity or otherwise of his application was inadequately pleaded. Not only that, the claim was but one of a multitude of other inconsistent claims which, as we explain below, the primary judge rightly decided had no reasonable prospect of success and thus were summarily dismissed. That said, however, the inadequacy of the pleading was an insufficient basis on which to summarily dismiss that claim given that, construed as a claim that his own application was invalid, the claim was not self-defeating, had potential utility, and was capable of being the subject of a grant of meaningful relief. The inadequacy of the pleading may have justified an order striking out that part of the amended originating application and requiring Dr Ghanem to identify his claims and the relief sought with greater precision, but that was not the order made. 21 The second difficulty for the respondents is that their submission about the lack of any substantial injustice to Dr Ghanem depends on the very arguments (waiver and acquiescence) which were not explored before the primary judge. These arguments, moreover, are fact-dependent and, apart from the terms of the deed of settlement, remain unknown. As the primary judge observed at [28], the "legal significance of [Dr Ghanem] having been given such an assurance [not to treat his 2013 proposal as invalid] was not explored before me". The summary dismissal of this part of Dr Ghanem's claim precluded those issues from being explored. 22 We are satisfied, consistent with the principles in Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398-9 (Decor v Dart) as to leave to appeal, that leave to appeal must be granted to Dr Ghanem in respect of that part of his originating application challenging the validity of his 2013 proposal. We are also satisfied that the appeal must be allowed to that extent. The decision of the primary judge is attended by sufficient doubt to warrant its reconsideration by the Full Court because the decision assumes that Dr Ghanem was challenging only the validity of the decision and not the validity of his own application in circumstances where the latter challenge, unlike the former, was not "self-defeating" and was capable of being the subject of "meaningful relief". Dr Ghanem would also suffer substantial injustice were leave refused supposing the decision to be wrong because he would be precluded from making an argument that was reasonably open on his amended originating application (that his 2013 proposal was invalid and a nullity) and which, if it succeeds, may have utility by permitting him to make an application for funding for the 2015 year which he otherwise may not be able to make. While the utility depends on the rules as approved by the Minister for the 2015 year (which we are informed by counsel for the respondents have not yet been approved), potential utility is sufficient to make the matter inappropriate for summary dismissal. The appeal must be allowed in part because, while it is not difficult to conceive of a number of arguments which can be put against the claim that the 2013 proposal was invalid and a nullity, it cannot be said that there is no reasonable prospect of the claim succeeding. 23 Given our further conclusions that leave to appeal in respect of the summary dismissal of all other claims should be refused, it is necessary to frame orders confining the grant of leave, the allowance of the appeal, and the remitter to the primary judge to that part only of Dr Ghanem's claim. While Dr Ghanem should have his costs of the leave application and the appeal, the costs of the hearing before the primary judge (the whole of which Dr Ghanem was ordered to pay) should remain at large for future determination by the primary judge. 24 As noted, we have also concluded that leave to appeal in respect of the balance of Dr Ghanem's claims should be refused. 25 First, each of those other claims assumes that the 2013 proposal was validly made. Each claim is thus inconsistent with the claim that the 2013 proposal was not validly made and was a nullity. Having succeeded in obtaining leave to appeal and the appeal being allowed to enable that claim to be fully argued, it cannot be said that Dr Ghanem would suffer any substantial injustice by not being permitted to argue a wholly inconsistent case. The second limb in Decor v Dart, accordingly, is not satisfied. 26 Second, the primary judge's reasons disclose a careful consideration of each of the other claims and a cogent explanation of why each has no reasonable prospects of success. Dr Ghanem's written submissions do not raise any proper foundation for concluding that the primary judge's decision about the other claims is attended by any, let alone sufficient, doubt. 27 The primary judge concluded that, despite the seriousness of Dr Ghanem's allegations of bad faith, none of the voluminous documentary evidence he produced "could conceivably support this allegation" (at [62]). We see no error in that view. Dr Ghanem also claimed that the CEO of the ARC contravened s 52(3) of the ARC Act by merely describing the 2013 proposal as "uncompetitive" when s 52(3)(d) relevantly provides that the recommendation that the CEO makes in relation to a "particular proposal for expenditure on a research program…must include… a statement of the reasons why the proposal is, or is not, recommended for approval under subsection 51(1)". As the primary judge noted at [68] to [70], however, the obligation in s 52(3) has to be understood in the context of the ARC Act as a whole. The CEO was making recommendations to the Minister for all funding proposals of which there were 1,236 in 2013. The briefing note to the Minister which accompanied the recommendations said that all applications had been assessed in accordance with a particular process and that, as a result of that assessment, only 201 applications were recommended for approval. The briefing note said also that a comparison between applications had been undertaken by qualified persons to enable a sensible view to be reached about the relative worth of each application. At [72] the primary judge concluded that: the reasons given in the Statement of Reasons provided by the CEO to the Minister in the Minister's Briefing Note, although ultimately expressed as conclusions, were nonetheless adequately supported by the text of the Briefing Note and the various attachments forwarded with that Briefing Note. The Minister must be taken to have a good appreciation of the process ordinarily undertaken by the ARC in respect of funding decisions. In my judgment, the reasoning which underpinned the High Court's judgment in [Sutton v Commissioner of Taxation (1959) 100 CLR 518] is apt to be applied in the present case. 28 In Sutton v Commissioner of Taxation (1959) 100 CLR 518 (Sutton), the High Court dismissed a challenge to the validity of the Commissioner's reasons for disallowing a taxpayer's claim. In so doing, the Court held that the reasons, although expressed as conclusions without any explanation, were adequate, given that the purpose of the provision was to provide the Taxation Board of Review, not the taxpayer, with the Commissioner's reasons. 29 We do not consider that the primary judge's conclusions about the adequacy of the CEO's statement of reasons to the Minister for the recommendation to be attended by any real doubt. As in Sutton, the statement of reasons is for the benefit of the Minister, not the applicant. The material provided to the Minister was adequate given the nature of the functions required to be performed under the scheme established by the ARC Act. 30 Nothing in Dr Ghanem's written submissions improved his position in respect of these other grounds of review. Where relevant, the written submissions consisted of nothing more than a series of allegations consistent with what had been put to and dismissed by the primary judge, unsupported by any evidence, that the ARC had "dumped the score down in a revenge action" to prevent other people from suing the ARC. The primary judge was right to summarily dismiss these claims. Dr Ghanem also said that he wrongly believed that all the evidence he had filed in the 2010 case and the present matter was to be taken into account by the primary judge. This material cannot be relevant to the claim in respect of which we have granted leave and allowed the appeal. Rather, it must relate to the other inconsistent claims that the decision to refuse funding was invalid, being claims which were premised on the assumption that the application was valid. However, as the respondents submitted, nothing indicates that this material could have led to a different result in respect of those other grounds either. 31 For these reasons, leave should not be granted in respect of the order for summary dismissal insofar as it relates to any ground other than that contained in ground 1 concerning the claimed invalidity of the 2013 proposal. 32 The only other matter which warrants further comment is that these reasons for judgment have been prepared and published expeditiously on the basis, as we understand it, that it is now possible for prospective applicants to submit a funding application for the 2015 funding year. Dr Ghanem's capacity to submit such an application, which founds the potential utility of his claim that the 2013 proposal is a nullity, depends on the outcome of this application for leave and the appeal, as well as the timely resolution of the remaining substantive claim in the proceeding below. I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Flick, Jagot and Perry.