A 'Decision' of an Administrative Character
70 Mindful of the important cautionary observations of their Honours in the joint judgment in Griffith University v Tang (supra) concerning the risks necessarily inherent in a disjunctive consideration of each element comprising the expression 'a decision of an administrative character made or required to be made under an enactment', it nevertheless remains important to consider the true colour of the phrase 'decision of an administrative character' and in particular whether the decision to give a penalty notice is a 'decision' for the purposes of the ADJR Act. Just as 'decision of an administrative character' casts light on the force to be given to the phrase 'under an enactment', the deliberative processes inherent in administrative decision‑making crystallising in a final and conclusive decision informs the force to be given to the notion of a 'decision' for the purposes of the ADJR Act. Plainly enough, the decision by the responsible officer of the respondent is a decision in the sense that the officer turned his (in this case) mind to the giving of the notice. There is no suggestion that the penalty notice is incompetent in the sense that it lacked authority. However, a question arises as to whether the decision to give the penalty notice involved a decision 'reflecting something in the nature of a determination of an application, inquiry or dispute or, in the words of Deane J, "a determination effectively resolving an actual substantive issue"': Australian Broadcasting Tribunal v Bond (supra) per Mason CJ at 336. Recognising that the notion of a decision for the purposes of the ADJR Act has a 'relatively limited field of operation' (Australian Broadcasting Tribunal v Bond, per Mason CJ at 336), a question arises whether the decision, the subject of the present application, is a decision that attracts the operation of the ADJR Act.
71 Only two matters were required to be determined by the decision‑maker in giving the penalty notice under ss 222APE(1). First, whether an estimate had been made by the Commissioner under ss 222AGA(1) of the ITA Act and notice of that estimate given to Bongania. Secondly, whether Mr Antony David Guss was, at the material time, a director of Bongania. Since the same decision‑maker gave both notices, he was the source of the knowledge as to the first. No further inquiry or assessment of fact was required. The determination of the material fact that Mr Guss was, at the relevant time, a director of Bongania, did not give rise to any element of analysis, weighing of competing considerations by reference to any statutory criteria, assessments of the weight or balance to be struck in examining a body of fact or contention, the assessment of the proper application of policy considerations, the evaluation of conflicting merits or other such matters. It simply involved examining the records of the Australian Securities and Investment Commission to isolate, based upon returns Bongania was required to lodge for just such a purpose, whether Mr Antony David Guss was recorded as a director of that company.
72 In one sense, it is of no matter to the Commissioner whether Mr Guss or his wife, neighbour or any other person is a director of Bongania at the material time. All that matters is the giving of a penalty notice to the person who occupies the office at the material time and who is the subject of a liability under the Act by force of s 222APC (or a potential liability subject to the remission of the penalty in the circumstances contemplated by ss 222APE(1)). Of course, once Mr Guss is identified as the relevant person by reason of the Australian Securities and Investment Commission's records, it is critical that the penalty notice is addressed and given to the individual who corresponds with those details because the penalty notice has the capacity to affect the bilateral legal rights and obligations of the Commissioner and that particular individual. Importantly, the question of whether the Commissioner, in exercising the power conferred by ss 222AGA(1), reached a "reasonable estimate" of the amount of the undischarged liability of Bongania to the Commissioner under a remittance provision of the ITA Act or whether, for the purposes of ss 222AGA(2), the Commissioner took into account relevant considerations as the Commissioner was required so to do, is something which no doubt required the relevant measure of deliberation, assessment of statutory criteria and evaluation of particular facts so far as that decision affected Bongania.
73 The provisions of the ITA Act confer certain defences and entitlements upon the company in relation to a notice addressed to it. However, the decision the subject of the challenge in these proceedings is a decision to issue a notice under ss 222APE(1), to Mr Guss. Does that decision reflect the characteristics of a decision for the purposes of the ADJR Act?
74 In Australian Broadcasting Tribunal v Bond, Mason CJ, with whom Brennan and Deane JJ agreed, considered that a decision must reflect something in the nature of a resolution or determination of matters the subject of inquiry or dispute and those matters ought to reflect an actual issue of substance. His Honour considered the examples of the subject matter listed in s 3(2) of the ADJR Act and characterised those matters as 'also indicative of a decision having the character or quality of finality, an outcome reflecting something in the nature of a determination of an application, inquiry or dispute' at 336. His Honour regarded the characterisation of that subject matter as indicative of the essential notion inherent in the primary sense in which the term 'decision' is used in the ADJR Act and also observed that an 'essential quality of a reviewable decision is that it be a substantive determination' at 337.
75 It seems to me, consistent with authority, that a 'decision of an administrative character' in its primary sense (leaving aside for the moment the extended meaning of the term by force of s 3(2) of the ADJR Act) must exhibit two central features. First, there must be a determination, a resolution, a position taken, a judgment made by a decision‑maker. Secondly, that determination must be the emanation of a consideration by the decision‑maker or structural organs of an organisation charged with making a determination, of a matter of substance that necessarily involves some feature of deliberation, assessment or analysis that, in the ordinary course, would comprehend those facets of decision‑making behaviour described at [71].
76 In a number of cases in the Federal Court of Australia, considerable important intellectual effort has been engaged in seeking to plot the point on the continuum at which a decision arose. Was the 'decision' the overt act of communication such as the despatch of a letter, the making of a ruling, the granting of a bylaw, the issue of a notice or, was the decision to be found in the pre‑existing deliberative behaviour or 'mental process' (Evans v Friemann (1981) 53 FLR 229 at 233, per Fox ACJ) or 'thought processes taking place in the mind of the person when considering whether or how to exercise a power or to perform a duty of an administrative character under an enactment' (Ricegrowers Cooperative Mills Ltd v Bannerman and Trade Practices Commission (1981) 38 ALR 535 at 544 per Northrop J). In Ricegrowers, Northrop J took the view that a decision for the purpose of the ADJR Act must reflect a conjunction of such thought processes and 'some overt act by which the conclusions reached as a result of those thought processes are manifested'. His Honour further observed at 544 that:
'The manifestation may take many different forms. It may take the form of a verbal or written communication of the conclusion to the person affected. It may take the form of no action being taken when otherwise a definite action would have been taken. In the present case, the conclusion reached by the Chairman of the Commission was that a notice under s 155 of the Trade Practices Act be served on Ricegrowers. The manifestation of that conclusion took the form of the service of the s 155 notice on Ricegrowers.'
77 His Honour also said at page 544:
'I do not need to decide whether the issue of an s 155 notice is a sufficient manifestation to constitute a decision prior to that notice being served on the person to whom it is directed. It is sufficient to say that in the present case the notice was in fact served. In my opinion the determination by the Chairman to serve the s 155 notice on Ricegrowers carried into effect by the service of that notice, constitutes a decision within the meaning of that word where it appears in s 13(1) of the Judicial Review Act.'
78 The point of immediate relevance is that the giving and service of the notice under s 155 of the Trade Practices Act 1974 (Cth) reflected both a determination of the chairman and the overt act of the giving of the notice. In other words, the giving of the notice, taken as the decision, was the emanation of a very important evaluation and deliberation of those facts and circumstances which caused the chairman to have 'a reason to believe' that Ricegrowers may have information going to the question of whether a contravention of the Trade Practices Acthad occurred which enabled a determination to be made and thus a valid notice to issue. Although the notice was the expression of the decision, it reflected two essential features. First, an evaluation of the critical statutory matters leading to the determination and the overt act of giving and serving the notice. Their Honours, Bowen CJ, Franki and Northrop JJ found it unnecessary to decide the precise content of the 'decision' because the schedule to the ADJR Act operated to exempt the subject matter from the operation of the Act and, accordingly, the Commission was not required to provide reasons for the decision pursuant to s 13(1) of the ADJR Act.
79 In Evans v Friemann (supra), the question was whether a written notification from the Secretary of the Board of Examiners advising Mr Evans that he had passed one and failed two written examinations required of a candidate for admission as a patent‑attorney, was susceptible to challenge as a decision for the purposes of the ADJR Act. His Honour examined the notion of a 'decision' and the 'making of a decision' and concluded that the subject matter of the evaluation was something of significance which led to a reasonably definite, final and conclusive (for immediate purposes) determination expressed in the letter from the Secretary but arising out of the processes of evaluation of the candidate's papers. In Salerno v National Crime Authority & Ors (1997) 75 FCR 133 at 138, their Honours von Doussa, Drummond and Mansfield JJ, observed that the formulation in Bond and Attorney‑General (Cth) v Queensland (1990) 25 FCR 125 of the characteristic of finality or operative effect which a determination must have, could be traced to the judgment of Fox ACJ in Evans v Friemann.
80 In 1980, his Honour Justice Deane, in Director‑General for Social Services v Chaney (1980) 31 ALR 571, as a member of a Full Court comprised of Northrop, Deane and Fisher JJ, considered the notions inherent in the meaning of the word 'decision' in the context of s 44(1) of the Administrative Appeals Tribunal Act 1975. His Honour found the definition of the term in the legislation of little assistance and expressed these observations:
'The word "'decision" is a word of indeterminate meaning. In some contexts, it can refer to the mental process of making up one's mind. In the context of judicial or administrative proceedings, the word will ordinarily refer to an announced or published ruling or adjudication. In such a context, the word "'decision" may be apt to include the determination of any question of substance or procedure, including, for example, rulings on procedural questions such as whether particular evidence should be received, or the meaning of the word may be limited to a determination effectively resolving an actual substantive issue. When the word "decision" has the last mentioned limited meaning it can refer to any such determination whether final or indeterminate (see, eg, Registrar of Workers' Compensation Commission v FAI Insurances Ltd [1977] 1 NSWLR 422 at 448) or be limited to referring only to a determination which effectively disposes to the matter in hand (see, eg,Winter v Winter (1933) NZLR 289 at 295; Penniel v Driffill [1980] WAR 30 at 32)."
81 Justice Deane's notion that a decision ought to reflect a determination effectively resolving an actual substantive issue, was adopted by Mason CJ in Australian Broadcasting Corporation v Bond (supra) in explaining the characteristics of a 'decision' for the purposes of the ADJR Act in defining the 'relatively limited field of operation' of that term. The notion of a resolution or a determination bringing a substantive issue to finality was contrasted with a procedural step which exhibited none of those characteristics and might properly be described as merely a conclusion reached along the way in the course of reasoning leading to an ultimate decision. His Honour, Mason CJ, expressed the view at 338, consistent with the opinion expressed by Ellicott J in Ross v Costigan (1982) 59 FLR 184 that the word 'decision' means an ultimate or operative determination. However, his Honour observed at 338 that to characterise a reviewable decision as one reflecting an ultimate or operative determination does not mean that antecedent conclusions or findings which contribute to the ultimate or operative decisions are beyond reach. A review of the ultimate or operative decision will necessarily 'expose for consideration the reasons which are given for the making of the decision and the processes by which it is made'.
82 It seems to me that what follows from these observations is that the resolution of an issue (particularly an issue of substance) leading to an operative determination must necessarily engage a process of reasoning. In order for a decision to attract the operation of the ADJR Act as a 'decision' of an administrative character, the decision must reflect a conjunction of these features (see also [75]). If an immediately final decision reflected in the issue of a penalty notice does not exhibit the characteristics of a resolution or a determination of a matter in issue deriving from a process of reasoning whether that resolution engages a complex or an entirely unsophisticated process of reasoning, there is no 'decision' for the purposes of the ADJR Act, in this primary sense of the word.
83 Notices issued under the much litigated ss 263 and 264 of the ITA Act are said to be illustrations of the issue of a notice which attracts the operation of the ADJR Act even though those notices are issued unilaterally by the Commissioner and are the exercise of the power untrammelled by any deliberative process. In Industrial Equity Limited v Deputy Commissioner of Taxation (1990) 170 CLR 649, Industrial Equity Limited ('IEL') and Bankers Trust Australia Ltd ('Bankers Trust') sought to set aside a decision made by the Deputy Commissioner of Taxation and an officer of the Deputy Commissioner, Mr Crawley, to issue a document to another officer of the Deputy Commissioner, Mr Carroll, authorising that officer to exercise a right of full and free access to premises occupied by Bankers Trust and documents held by Bankers Trust. IEL also sought to set aside decisions of the Deputy Commissioner requiring IEL to produce particular records for inspection. Those orders were sought by way of order of review pursuant to the ADJR Act. Each application for an order of review resolved ultimately into a question of whether the exercise of the power was for a purpose under the ITA Act.
84 In those proceedings, it was not disputed that a decision to invoke the power under ss 263 and 264 is a decision to which the ADJR Act applies. That concession seems entirely correct as the decision to invoke the power was an operative determination of a matter of substance involving a deliberative consideration of matters central to the exercise of the power. In that sense, the issue of the notices under the sections was the emanation of a quite serious deliberative process. At 655, their Honours Mason CJ and Brennan, Deane, Dawson, Toohey and McHugh JJ described the features or factual matrix of that deliberation in these terms:
'… Mr Crawley said that the Commissioner of Taxation "was and is conducting an audit" into the taxation affairs of IEL and associated entities for the period 1 July 1984 to 30 June 1988; that IEL was a client of Bankers Trust during the period; that Mr Crawley believed Bankers Trust held records relevant to the affairs of IEL during the period in question; that Mr Crawley believed gaining access to those papers would assist in the taxation audit; and that: "It is most important that the Commissioner be in possession of all the material facts and information necessary to determine the taxation liability of Industrial Equity Ltd and associated entities".'
85 Southern Farmers Group Limited v Deputy Commissioner of Taxation & Ors (1989) 21 FCR 66 is to similar effect.
86 Having considered those matters, the decision‑maker reached an operative resolution or determination as the emanation of a deliberative process directed to the relevance and utility of the notices in the conduct of the particular tax audit of the taxation affairs of IEL, and issued the notices.
87 To similar effect is the decision in Salerno v National Crime Authority (supra) where the Full Court of the Federal Court (von Doussa, Drummond and Mansfield JJ) concluded that a decision of the National Crime Authority ('NCA') to utilise a general warrant (pursuant to s 67 of the Summary Offences Act 1953 (SA)) as the basis of a power to enter and search premises and seize material was a determination of sufficient operative effect, materially affecting the legal rights of the addressee of the warrant so as to constitute a 'decision' for the purposes of the ADJR Act. The determination to utilise the warrant was grounded upon an evaluation of those facts and circumstances which enabled a proper warrant to issue. A warrant under the section could not issue without the NCA first being satisfied of the relationship between the conduct of the respondent to the warrant and the investigation in question. A further question involved the utility of the general warrant for the purposes of investigations undertaken by the NCA. No warrant could issue as a unilateral step on the part of the decision‑maker without undertaking not only a deliberative process leading to the issue of the warrant but a careful and responsible deliberative process.
88 It is true that there are many examples in the authorities of a notice being issued or an instrument being brought into existence affecting legal rights and obligations which is taken to be the decision of the decision‑maker. However, in each of those cases the issue of the notice or the instrument is a decision because it reflects an operative determination or resolution of a question in issue (normally of substance) arising out of a process of deliberative evaluation of relevant facts and circumstances upon which the issue of the instrument or notice is predicated. His Honour Justice Gyles in his draft reasons for judgment has identified a number of authorities concerning notices and instruments (such as warrants) which are examples of a unilateral decision not exhibiting any element of deliberation. However, it seems to me that these examples cited by his Honour are, with respect, consistent with the principle identified at [75] and [82] of these reasons.
89 For example, the decision of the Full Court of the Federal Court in Federal Commissioner of Taxation v Pilnara Pty Ltd (1999) 96 FCR 82 involved a question concerning the validity of a notice issued by the Commissioner pursuant to s 264A of the ITA Act. That section conferred a power upon the Commissioner to issue a notice requiring the provision of information or documents relevant to the assessment of a taxpayer being documents outside Australia and information within the knowledge of a person outside Australia. In order for the Commissioner to issue a valid notice, that is, make a valid decision, it was necessary for the Commissioner subjectively to hold the relevant belief concerning a range of particular matters and also for there to be an objective reason for that belief. The issue of the notice was, in every sense, an operative determination arising out of a process of deliberative evaluation of the matters required to be considered upon which the issue of the notice depended.
90 The same position obtains in respect of the warrants issued under the Customs Act 1901 (Cth) and the Telecommunications (Interception) Act 1979 (Cth) in Carmody v McKellar & Ors (1997) 76 FCR 115 (Black CJ, Lindgren and Sackville JJ) where particular connecting factors had to be assessed and a view formed before the warrants could issue. In Pacific Century Production Pty Ltd v Watson (2001) 113 FCR 466 (Whitlam, Dowsett and Stone JJ) the decision to order into quarantine all citrus and grape plants, plant material and plant products located on a particular property under s 35 of the Quarantine Act 1908 (Cth) was the emanation of deliberative evaluation of the conduct of the appellant company in smuggling plant cuttings into Australia and the grafting of those cuttings to plants at the relevant property. The decision did not issue as a unilateral determination divorced from any operative determination upon important deliberative matters upon which the exercise of the power depended.
91 There may be very few circumstances of administrative decision‑making where there is no evident operative determination or resolution emanating from an engaged process of reasoning or a consideration of particular facts and circumstances the resolution of which are required to enable a document, notice or instrument to issue as the overt manifestation of the decision.
92 It seems to me that the issue of a penalty notice to Mr Guss is one such decision.
93 The pre‑existing and independent decision on the part of the Commissioner to make and serve an estimate of the amount of the undischarged liability on the part of the company to the Commissioner under a remittance provision of the ITA Act is of an entirely different character. The bilateral relationship between the Commissioner and Bongania does involve deliberative considerations and the Act itself makes express provision for the considerations the Commissioner must take into account and particular steps open to Bongania in responding to such an estimate.
94 The decision under challenge in these proceedings to issue the penalty notice does not involve any of those considerations and is secondary in nature. It represents a consequential but independent decision to issue a notice to a man who occupied the position of director of the company at the material time and is the subject of a liability to the Commonwealth by operation of the ITA Act. The effect of the penalty notice is to remove (upon the expiration of the relevant time) the prohibition upon enforcement proceedings. In those proceedings, the Commissioner must establish the debt due to the Commonwealth. In that forum, the defendant is entitled to raise any matter that relevantly answers the Commissioner's claim. The process contemplated by the ITA Act is that the Commissioner will seek to recover debts due to the Commonwealth by taking enforcement proceedings once the constraint of the prohibition no longer applies.