Jinshan Investment Group Pty Ltd v Melbourne CC [2015] VCAT 635

1. Pursuant to s 108(2)(a) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic), the Tribunal hearing the proceeding should be reconstituted by members other than the members of the Tribunal who constituted the Tribunal for the purposes of the hearing on 30 March 2015 to 1 April 2015.

1. Direct that the Principal Registrar list the proceeding for directions before the reconstituted Tribunal and for final hearing as determined by the reconstituted Tribunal.

1. Pursuant to s 10(1) of the Appeal Costs Act 1998 (Vic), the Tribunal is satisfied that:
   • (1) the hearing of the proceeding is discontinued;
   • (2) the reason for the discontinuance is not attributable in any way to the act, neglect or fault of any of the parties to the proceeding or their legal practitioners; and
   • (3) a new hearing has been ordered;

and the Tribunal grants an indemnity certificate in respect of each party's own costs of the discontinued proceeding.

instructed by Brigid Ryan, Solicitor, City of Melbourne.

1. This is an application under s 108 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (the 'VCAT Act') by Jinshan Investment Group Pty Ltd ('the applicant') seeking to reconstitute the division of the Tribunal currently hearing this proceeding.
2. The applicant is the owner of land at 20-30 Bourke Street, Melbourne, which is the location of the Palace Theatre. The applicant seeks a permit for the demolition of existing buildings and the development of a multi-level building including basements.
3. The responsible authority, Melbourne City Council ('the Council') failed to grant that permit, and the applicant has brought an application for review under s 79 of the Planning and Environment Act 1987 (Vic). The application for review is in the Major Cases List.
4. On 30 March 2015 a division of the Tribunal presided over Deputy President Helen Gibson, the Head of the Planning and Environment List, and Mr Peter Gray, an architect and member of the Tribunal, commenced a three day hearing of the application for review. The parties before the Tribunal included the Council and the National Trust of Australia (Vic) ('the National Trust').
5. On 10 April 2015, the Tribunal directed that the Council file and serve a set of proposed conditions addressing any residual matters in dispute, the basis of the dispute and the position of the applicant and the Council in respect of these matters. The other parties would then have leave to make submissions about the conditions within a further seven days.
6. On 9 April 2015, the Registrar of the Administrative Division advised the parties by letter that it had come to the attention of the Tribunal that at the commencement of the hearing Deputy President Gibson omitted to declare that she was currently a member of the National Trust. The Registrar advised the parties that the letter would serve as a declaration of the Deputy President's status.
7. The letter of 9 April 2015 also referred the parties to s 108 of the VCAT Act, which empowers parties to apply for the reconstitution of the Tribunal. The Registrar advised that if no request for reconstitution was received by 17 April 2015, the Tribunal as it was presently constituted would continue to determine the proceeding.
8. By a letter dated 15 April 2015 to the Principal Registrar of the Tribunal, the solicitors for the applicant sought such a reconstitution of the Tribunal. The letter refers to the fact that both the National Trust and Melbourne Heritage Action, a heritage advocacy group which is facilitated and supported by the National Trust, are parties to the proceeding, and states that the circumstances of the case, including that allegations of unlawful conduct had been levelled against the applicant by those parties, had given rise to a concern that the Tribunal as currently constituted might not bring an impartial and unprejudiced mind to the resolution of the application.
9. Subsequently, there has been a chain of correspondence between the parties regarding the reconstitution application. The correspondence includes a letter from the solicitors for the National Trust to the Council which is exhibited to an affidavit of Brigid Constance Ryan sworn 14 May 2015.
10. The letter of 14 May 2015 sets out the number of subscribers to the various membership categories of the National Trust and advises that, as the National Trust website and annual reports confirm, Deputy President Gibson is not, and has never been, a board member of the National Trust. The National Trust was unable to provide any further information for privacy reasons.

1. At the hearing of the application for reconstitution, Senior Counsel for the applicant made four main submissions:
   • (1) This was a permit application which involved demolition of what was said to be an important heritage building - the National Trust, Melbourne Heritage Action and the Save the Palace Action Group were all very active parties to the proceeding and had all strongly opposed the application to demolish the Palace Theatre.
   • (2) The allegations made by the National Trust went beyond submissions confined to the merits of the application - the National Trust had alleged that the applicant had acted illegally when it carried out internal demolition works on the building without having obtained a permit to do so.
   • (3) No notice or declaration of the Deputy President's membership of the National Trust had been given at the commencement of the hearing, or during the three days of the hearing. This was despite the fact that the second member of the Tribunal, Mr Gray, had spent five minutes at the commencement of the hearing disclosing his engagements and connections with the firms of the various witnesses to be called in the proceeding; and.
   • (4) The applicant's objections went to the perception of the Tribunal in the wider community. If public confidence was to be maintained in the integrity of planning decision-making in Victoria, it was essential that there be no suggestion that the Tribunal might be influenced by anything other than what it heard in the case.
2. Senior Counsel for the applicant relied on the decision of the High Court of Australia in Ebner v Official Trustee in Bankruptcy[2] as well as other authorities, and contended that a fair minded lay observer might reasonably apprehend that the Tribunal, as currently constituted, might not bring an impartial mind to the resolution of the question it was asked to decide.
3. He highlighted that the National Trust claimed on its website to be the 'premier heritage and conservation organisation' in Victoria. He noted that the National Trust, Melbourne Heritage Action and the Save the Palace Action Group were all interrelated. The co-chair of the Save the Palace Action Group had been called by the National Trust to give evidence in the proceeding. He argued that the cultural heritage significance of the Palace Theatre and the acceptability or otherwise of the proposed demolition on heritage grounds were the sole issues in the proceeding.
4. In response, Senior Counsel for the Council submitted that:
   • (1) The fact that a decision maker had an interest in litigation or an interest in a party to litigation was of no assistance until the nature of the interest, and the asserted connection with the possibility of departure from impartial decision making, was articulated.
   • (2) This was not a case where there could be said to have been a long or close association between the decision maker and a party, or that the decision maker had been involved at a high level with a party.
   • (3) Mere membership was not, in itself, a sufficient basis for disqualification. It was necessary to examine the whole of the circumstances. The nature, duration, proximity, intensity, extent, character and degree of involvement of the relationship between the decision maker and a party were relevant considerations to be accounted for in any finding as to the existence of a reasonable apprehension of bias.
   • (4) There was insufficient information as to the circumstances in which Deputy President Gibson's membership of the National Trust came about, and insufficient articulation as to how that membership might lead a long serving and highly respected Deputy President and member of the Tribunal to bring an otherwise than impartial mind to the resolution of the questions that she is required to decide in this proceeding.
   • (5) Deputy President Gibson had power both to consider the legal issues arising from a submission regarding apprehended bias, and to, if necessary, order the reconstitution of the Tribunal; and
   • (6) Deputy President Gibson's membership of the National Trust was not, in the absence of other information, a sufficient basis for the assertion that a reasonable apprehension of bias had been established.
5. Senior Counsel for the Council also referred to the shades of difference between the Council's submissions as to the internal works and those of the National Trust and other parties. The National Trust's submission on the illegality of the interior works was submitted to have been stronger than that of the Council.
6. Senior Counsel for the Council also referred to decisions of R v Bow Street Metropolitan Stipendiary Magistrates; Ex parte Pinochet Ugarte (No 2);[3] Rajendran v Tonkin;[4] Re Polites; Ex parte The Hoyts Corporation Pty Ltd.[5] He also referred to a passage in the well-known text, Judicial Review of Administrative Action.[6] Finally, he submitted that Tribunals and courts should not be too ready to relinquish the responsibility of hearing and deciding cases, and that where reasonable apprehension of bias is relied on, it must be firmly established.
7. The National Trust and other parties provided letters setting out their position as to reconstitution of the Tribunal. They generally adopted or were supportive of the Council's submissions.

1. Reconstitution is a statutory process provided for by s 108 of the VCAT Act. Section 108(1)(a) provides that at any time before the conclusion of the hearing of a proceeding, a party may apply to the Tribunal for reconstitution for the purposes of the proceeding. Section 108(1)(b) also allows the President, or a member of the Tribunal as currently constituted, to give notice that they seek the reconstitution of the Tribunal.
2. The reconstitution process is then governed by s 108(2). Prior to its amendment by s 13 of the Victorian Civil and Administrative Tribunal Amendment Act 2014 (Vic), the reconstitution process first involved an application to the Tribunal hearing the proceeding. The current form of s 108(2) has removed that first step. Applications under s 108 are now made directly to a presidential member.
3. Nonetheless, and independently of the process provided by s 108, applications for recusal can be made to the Tribunal hearing a proceeding. Under s 98(1)(a) of the VCAT Act, the Tribunal is bound by the rules of natural justice.
4. The rules of natural justice, among other things, require that the Tribunal be, and be seen to be, impartial and unbiased. The test of apprehended bias is whether a fair minded lay observer, having knowledge of the material objective facts, might reasonably apprehend that the Tribunal might not bring an impartial and unprejudiced mind to determining the application before it (see Ebner[7] and Michael Wilson & Partners v Nicholls[8]). An example of an administrative tribunal applying these tests can be seen in Nikjoo v Minister for Immigration and Border Protection.[9]
5. The High Court in Ebner set out a two-step test to determine whether an allegation of apprehended bias is established:

First, it requires the identification of what it is said might lead a [member] to decide a case other than on its legal and factual merits. The second step is no less important. There must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits.[10]

1. In AJH Lawyers Pty Ltd v Careri,[11] the Court of Appeal drew on a wide range of authorities to set out eight principles to assist in determining whether a proper basis for an apprehension of bias is established. As adapted to apply to the Tribunal, they are:

(1) when dealing with an appeal, grounds relating to actual or apprehended bias should be dealt with first, regardless of whether the decision was correct on its merits;

(2) members should not accept recusal simply because a party has asked for it;

(3) when called upon to assess the existence of a reasonable apprehension of bias relating to another decision maker, the test is one which requires no conclusions to be drawn about what factors actually influenced that decision maker's conclusions, or as to what their 'actual thought processes' were;

(4) apprehension refers to an apprehension of the member not deciding a case impartially, as opposed to an apprehension that a case will be decided adversely to one party;

(5) satisfaction of the test for apprehended bias requires two distinct steps - the first is the identification of what might lead a member to decide a case other than on its legal and factual merits, and the second is an articulation of the logical connection between the matter and the feared deviation;

(6) the perception of a lay observer will not be as informed as the perception of a lawyer, particularly a litigation lawyer, but they are taken to have some understanding of modern decision making practice;

(7) a line is drawn between robust indications of a member's tentative views on a point of importance in a proceeding, and an impermissible indication of prejudgment; and

(8) members do not have to devote unlimited time to listening to unmeritorious arguments, but should be cautious of the impression that can be given by rejecting a submission out of hand.[12]

1. While the discretion given to a presidential member of the Tribunal under s 108(2) is of a general character and is not limited by specific criteria, the High Court's decision in Ebner and the other authorities to which I have referred are of considerable assistance in determining how the discretion should be exercised. In the light of Ebner, any application for reconstitution of the Tribunal requires an identification of what it is said might lead the Tribunal to decide the case other than on its legal and factual merits and an articulation of the logical connection between that matter and the feared deviation from the proper course.

1. I have, on balance, come to the conclusion that I should exercise my discretion under s 108(2) to order the reconstitution of the Tribunal.
2. First, the proceeding is fundamentally about heritage matters. The National Trust in Victoria is, like its corresponding organisations in other jurisdictions, the leading heritage body that stands for the preservation of heritage buildings. That is what it, and other associated bodies, are presently doing in relation to the Palace Theatre, as of course they have every right to do.
3. Secondly, the submissions put to the Tribunal went beyond the heritage value of the Palace Theatre and the merits or demerits of the proposed development. In their submissions, the National Trust, Melbourne Heritage Action and the Save the Palace Action Group contended that the internal works already performed by the applicant were illegal, and that the applicant was attempting to demolish the Palace Theatre unlawfully. For example, in the outline of submissions dated 31 March 2015, the National Trust submitted:
   1. The internal works are substantial, but cosmetic. They appear to represent the limit of what the Permit Applicant could remove without obtaining a building permit, or undertaking works which would require alteration to a façade of the building.

40 They include stripping most of the interior of the building. [...]

1. There are however the following things to say about the internal works and lack of internal heritage controls:

41.4 Viewed objectively, the internal works are properly characterised as works for the purpose of demolishing the Palace Theatre, and not works to internally alter a building. [...]

1. The existence of substantial allegations of illegal demolition by the National Trust and related parties does, in my view, and in the circumstances of what is pre-eminently a heritage case, provide a sufficient logical connection between membership of the National Trust and the feared deviation from the course of deciding the case on merits. During submissions, it was said that it was open to the Tribunal to decide the review application without actually forming a view as to the submissions of illegality. I accept that this is so, but it is nonetheless the position that serious allegations of illegal demolition were made, and stand to be decided on the evidence before the Tribunal.
2. Thirdly, it is unfortunate that disclosure of membership occurred following the conclusion of the hearing rather than at its commencement. This was an oversight.
3. Fourthly, and most importantly, the Tribunal has a critical decision making role in relation to planning matters in Victoria. It is an imperative that the impartiality and independence of the Tribunal be, and be seen to be, above reproach. Justice must not only be done, it must be seen to be done. The applicant's proposal is a major development proposal in the Central Business District of Melbourne. It would be of no benefit to anyone if there was ongoing concern as to the impartiality of the Tribunal, or the legality of the decision. Likewise, it would be of no benefit to anyone if there were subsequent applications to the Tribunal for recusal, or appeals to the Supreme Court concerning this issue. It is much better to make a fresh start with a differently constituted Tribunal.
4. While I accept, as the Council submitted, that it has not been shown that Deputy President Gibson's interest in the National Trust has ever extended beyond mere membership, or that she has ever had any involvement in the management of the National Trust, I am nonetheless of the view that, in the circumstances of this case, the need for the administration of justice to be seen to be above reproach is the paramount consideration in the exercise of the discretion conferred by s 108 of the VCAT Act.
5. I add that while it is true that an application for reconstitution of the Tribunal can be made to any presidential member, even in circumstances where the application involves a Deputy President, it was appropriate, and indeed highly desirable, for the application to be heard and determined by the President or a Vice President.
6. In the circumstances, I will order that the Tribunal be reconstituted and that the proceeding be heard anew before the reconstituted Tribunal.

1. Application is made by all parties for an indemnity certificate under s 10 of the Appeal Costs Act 1998 (Vic). I am satisfied that the hearing of this proceeding will be discontinued, and that the reason for the discontinuance is not attributable in any way to the act, neglect or fault of any of the parties to the proceeding, or their legal practitioners. I am also satisfied that it will be necessary for a new hearing to be conducted.
2. In the circumstances, an indemnity certificate will be granted under s 10(1) of the Appeal Costs Act 1998 (Vic) to each party in respect of the party's own costs of the discontinued proceeding.

1. The Tribunal will make orders for the reconstitution of the Tribunal and for the grant of an indemnity certificate.

[1] This is an edited version of oral reasons for decision given on 18 May 2015.

[2] [2000] HCA 63; (2000) 205 CLR 337 ('Ebner').

[3] [1999] UKHL 1; [2000] 1 AC 119.

[4] [2002] VSC 585 [18], [20], [29].

[5] (1991) 100 ALR 634, 641-2.

[6] Mark Aronson, Bruce Dyer and Matthew Groves, Judicial Review of Administrative Action (Thomson Reuters Australia, 4th edition, 2009) 669-70.

[7] [2000] HCA 63; (2000) 205 CLR 337, 344-6 [5]-[10].

[8] [2011] HCA 48; (2011) 244 CLR 427, 437-8 [31]-[34].

[9] [2013] AATA 921 [21].

[10] Ebner [2000] HCA 63; (2000) 205 CLR 337, 345 [8].

[11] [2011] VSCA 425; (2011) 34 VR 236, 241-3 [18]-[25].

[12] AJH Lawyers Pty Ltd v Careri & Ors [2011] VSCA 425 [18]-[25].