CONCLUSIONS ON THE APPLICATION FOR PREROGATIVE RELIEF
31 In our opinion, there is substantial force in the applicant's arguments.
32 The nature of the Full Bench's power to grant, or refuse, leave to appeal was explained by Spender, Moore and Branson JJ in Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission (1998) 89 FCR 200 (at 220):
"It can be seen from s 45(1) that an appeal lies to a Full Bench only with the leave of the Full Bench. Section 45(1) confers a power on the Full Bench to grant leave and s 45(2) requires a Full Bench to grant leave if it forms the opinion that the matter is of such importance that in the public interest leave should be granted. The formation of that opinion dictates that leave be granted. Section 45(2) does not prescribe the test for the grant of leave. It requires the Full Bench to grant leave, if the Full Bench forms the requisite opinion. The conventional considerations for the granting of leave, including whether, in all the circumstances, the decision is attended with sufficient doubt to warrant its being reconsidered by the Full Bench, or whether substantial injustice would result if leave were refused, supposing the decision to be wrong, are not replaced by a different test: rather, s 45(2) provides a further, and obligatory, basis for the grant of leave."
33 In the present case, it is not necessary to consider whether, within the terms of s 45(2), any important public interest considerations existed here. Before us, this matter proceeded, correctly, we think, upon the basis that the Full Bench had to address only the conventional considerations for the grant of leave, and in particular, whether the decision was attended with sufficient doubt to warrant its reconsideration; or whether substantial injustice would result, if leave were refused.
34 On behalf of the second respondent, it is submitted that the Full Bench was correct in rejecting the applicant's contention that questions which were conditions precedent to a jurisdiction arose for determination by the Senior Deputy President here. That submission by the second respondent arose in this context. The applicant had argued before the Full Bench that a finding of fact under s 170CG(3)(a) (whether there was a "valid reason") was jurisdictional, that is, in the nature of a condition precedent. The applicant relied here upon the reasoning in Pawel v Australian Industrial Relations Commission (1999) 94 FCR 231. It was there held by Branson and Marshall JJ that the jurisdictional fact which conditions the exercise of the powers of the Commission under s 170CE(1) is that the applicant is "an employee whose employment has been terminated by the employer" within the provision; so that, on an appeal, the Full Bench would be concerned with whether the Commissioner had reached the right conclusion as to whether the applicant was such an employee; and thus it would not be concerned simply with whether the Commissioner's conclusion was reasonably open.
35 The second respondent submits that a finding of a "valid" reason is not jurisdictional and, accordingly, it argues, no occasion arises for the grant of prerogative relief.
36 It is further submitted for the second respondent that the decision of the Senior Deputy President was, in truth, "discretionary"; and that the Full Bench was not required to consider for itself each of the matters which could have a bearing on whether there was a valid reason for termination for the purposes of s 170CG(3)(a). It is said that, even on an appeal (assuming leave to have been granted), the Full Bench could exercise its powers under s 45(7) only if there were found to be an error on the part of the primary decision-maker; and the Full Bench found no error in considering whether to grant or refuse leave to appeal. Emphasis is placed, in the second respondent's argument, upon the circumstances that s 170CG(3) mandates regard being had not only to certain specified considerations, but, in addition to "any other matters [she] considers relevant"; so that, the submission goes, there is no causal connection between a finding that there was no valid reason for the termination (let alone as to the particular, operative terms of the contract) on the one hand, and a decision that the termination was harsh (etc), on the other.
37 The second respondent further contends that both the primary decision-maker's decision under s 170CG(3) (as to whether the termination was harsh (etc)) and a decision under s 170CE (as to remedy) can properly be described as "discretionary". Reference is made on behalf of the second respondent to Norbis, as follows:
38 In Norbis, it was held that when the Family Court assesses the entitlement to property of the parties to a marriage under s 79 of the Family Law Act 1975 (Cth), the nature of the issues that arise is such that there is little or no scope for giving guidance in the form of binding rules of law.
39 Mason and Deane JJ said (at 518 - 519):
"'Discretion' signifies a number of different legal concepts: see, e.g., the discussion in Pattenden, The Judge, Discretion, and the Criminal Trial (1982), pp. 3-10. Here the order is discretionary because it depends on the application of a very general standard - what is 'just and equitable' - which calls for an overall assessment in the light of the factors mentioned in s. 79(4), each of which in turn calls for an assessment of circumstances. Because these assessments call for value judgments in respect of which there is room for reasonable differences of opinion, no particular opinion being uniquely right, the making of the order involves the exercise of a judicial discretion. The contrast is with an order the making of which is dictated by the application of a fixed rule to the facts on which its operation depends.
The principles enunciated in House v. The King were fashioned with a close eye on the characteristics of a discretionary order in the sense which we have outlined. If the questions involved lend themselves to differences of opinion which, within a given range, are legitimate and reasonable answers to the questions, it would be wrong to allow a court of appeal to set aside a judgment at first instance merely because there exists just such a difference of opinion between the judges on appeal and the judge at first instance. In conformity with the dictates of principled decision-making, it would be wrong to determine the parties' rights by reference to a mere preference for a different result over that favoured by the judge at first instance, in the absence of error on his part. According to our conception of the appellate process, the existence of an error, whether of law or fact, on the part of the court at first instance is an indispensable condition of a successful appeal."
40 In our opinion, the family law background and the very broad language of s 79 ("just and equitable") in that connection distinguish the context in Norbis for present purposes. Here the inquiry is necessarily more focused. As Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ, in considering the constitutional validity of the Industrial Relations Act in the light of the International Labour Organisation Conventions, in Victoria v The Commonwealth (1990) 187 CLR 416 said (at 517):
"[T]he inclusion of the 'harsh, unjust or unreasonable' test is an additional ground of unlawful termination that goes beyond the requirement for the reason for termination to be valid. The terms 'harsh, unjust or unreasonable' are not merely a synonym for 'valid'."
41 The second respondent also refers to, and Norbis was followed in, Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 74 ALJR 1348, a recent High Court decision arising in the following context. By s 170MW of the Act, the Commission is empowered, by order, to terminate a bargaining period, in certain circumstances, namely, that industrial action being taken to support or advance claims in respect of a proposed agreement is threatening (a) to endanger the life, the personal safety or health, or the welfare, of the population or of part of it; or (b) to cause significant damage to the Australian economy or an important part of it. The background facts were that industrial action at the applicant's Hunter Valley No 1 Mine during a bargaining period was taken by the Union and its members in support of claims for a proposed agreement. Boulton J made a termination order under s 170MW, expressing his satisfaction that threats of the kind stated in (a) and (b) above, existed. A Full Bench, acting under s 45(1)(b) granted the applicant leave to appeal, allowed the appeal and set aside the orders of Boulton J. The Union then sought prerogative relief from the Full Federal Court which concluded that the Full Bench had fallen into jurisdictional error by proceeding upon the basis that Boulton J's decision was attended by appellable error. But an appeal from the Full Federal Court was allowed by the High Court.
42 Gleeson CJ, Gaudron and Hayne JJ held that the appeal to the Full Bench was properly described as an appeal by way of re-hearing; but that its powers under s 45(7) (to confirm, quash or vary (etc)) were exercisable only in the event of error. Their Honours said (pars 15 - 18):
"[15] The provision considered in Brideson [No 2] conferred power on the Commission to take further evidence, a provision which is indicative of an appeal by way of rehearing. It also required the Commission to 'make such order as it [thought] fit'. The latter requirement indicated that the Commission's appellate powers were not constrained by the need to identify error on the part of the primary decision-maker, but, rather, that the Commission was obliged to give its own decision on the evidence before it.
[16] The terms of s 45 of the Act are different from the terms of the provision considered in Brideson [No 2]. Unlike that provision, s 45 does not require a Full Bench of the Commission to 'make such order as it thinks fit'. Nor is there anything else in the terms of s 45 to suggest that the powers of a Full Bench are exercisable or, as in Brideson [No 2], are required to be exercised in the absence of error on the part of the primary decision-maker.
[17] Because a Full Bench of the Commission has power under s 45(6) of the Act to receive further evidence on appeal, an appeal under that section is properly described as an appeal by way of rehearing. And because there is nothing to suggest otherwise, its powers under subs (7) are exercisable only if there is error on the part of the primary decision-maker. And that is so regardless of the different decisions that may be the subject of an appeal under s 45.
[18] The Full Court was in error in thinking that the nature of an appeal under s 45 differs according to the nature of the decision under appeal. However, it was correct to hold that, in the case of a discretionary decision, the exercise by a Full Bench of the Commission of its powers under s 45(7) of the Act depends on the decision at first instance being attended by appealable error. That being so, it is necessary to consider the manner in which the Full Bench determined the appeal from Boulton J. Before doing so, however, it is convenient to say something as to the concept of 'a discretionary' decision."
43 Gleeson CJ, Gaudron and Hayne JJ said (pars 19 - 21):
"[19] 'Discretion' is a notion that 'signifies a number of different legal concepts'. In general terms, it refers to a decision-making process in which 'no one [consideration] and no combination of [considerations] is necessarily determinative of the result'. Rather, the decision-maker is allowed some latitude as to the choice of the decision to be made. The latitude may be considerable as, for example, where the relevant considerations are confined only by the subject matter and object of the legislation which confers the discretion. On the other hand, it may be quite narrow where, for example, the decision-maker is required to make a particular decision if he or she forms a particular opinion or value judgment. (Emphasis added)
[20] In the present case, the decision by Boulton J to terminate the bargaining period involved, in effect, two discretionary decisions. The first was as to his satisfaction or otherwise that the industrial action being pursued posed a threat for the purposes of s 170MW(3) of the Act. Although that question had to be determined by reference to the facts and circumstances attending the industrial action taken in support of claims with respect to a certified agreement, the threat as to which his Honour had to be satisfied was one that involved a degree of subjectivity. In a broad sense, therefore, that decision can be described as a discretionary decision. And if Boulton J was satisfied that there was a threat for the purposes of s 170MW(3), that necessitated the making of a further discretionary decision as to whether the bargaining period should be terminated.
[21] Because a decision-maker charged with the making of a discretionary decision has some latitude as to the decision to be made, the correctness of the decision can only be challenged by showing error in the decision-making process. And unless the relevant statute directs otherwise, it is only if there is error in that process that a discretionary decision can be set aside by an appellate tribunal. The errors that might be made in the decision-making process were identified, in relation to judicial discretions, in House v The King in these terms:
'If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so'."
44 Their Honours went on to say (pars 31 - 32):
"[31] There would only have been jurisdictional error on the part of the Full Bench if it had misconceived its role or if, in terms used by Jordan CJ in Ex parte Hebburn Ltd; Re Kearsley Shire Council, it 'misunder[stood] the nature of [its] jurisdiction … or 'misconceive[d] its duty or [failed] to apply itself to the question which [s 45 of the Act] prescribes … or '[misunderstood] the nature of the opinion which it [was] to form'.' The Full Bench did none of those things.
[32] In his reasons for decision, Giudice J proceeded on the basis that the Full Bench could intervene only if there was error on the part of Boulton J. In this his Honour was correct. Giudice J held that there was error on the part of Boulton J. If he was wrong in that view (a matter upon which it is unnecessary to express an opinion), that was an error within jurisdiction not an error as to the nature of the jurisdiction which the Full Bench was required to exercise under s 45 of the Act. Accordingly, it was not an error in respect of which relief could be granted by way of prohibition or mandamus under s 75(v) of the Constitution."
45 In our opinion, insofar as the decision of the Senior Deputy President here may be described as "discretionary", it is a "narrow" discretion in the secondary sense described in par (19) in Coal & Allied, that is to say, one requiring the decision-maker to make a particular decision if he or she forms a particular opinion or value judgment.
46 In the present case, s 170CG(3) required the Senior Deputy President not only to determine (generally) whether the termination was "harsh, unjust or unreasonable", but also, in that connection, to determine (specifically) whether there existed a valid reason for the termination related to the applicant's conduct (see s 170CG(3)(a)). In our view, this legislative scheme does not provide the considerable latitude (to borrow the language in par (19) of Coal & Alllied, above) which is available where the considerations relevant to the exercise of a statutory discretion are confined only by the subject matter and object of the legislation.
47 Further, as was held in Coal & Allied (par 21), even if the discretion is a narrow one, it could, we think, have been challenged before the Full Bench by showing some error in the Senior Deputy President's decision-making process, that is to say, by demonstrating that she has acted on a wrong principle, allowed extraneous or irrelevant matters to guide or affect her, mistaken the facts, or failed to take into account a material consideration.
48 In our opinion, when the reasons of the Full Bench are read as a whole, it appears that the Full Bench proceeded upon the basis that the question of leave, and if granted, the questions in the appeal itself, were to be addressed by a very broad approach to the evidence, and in particular by inquiring whether there was evidence before the Senior Deputy President from which a conclusion that, in assigning FYLD duties, the second respondent had acted in a reasonable way, was open to her. In approaching its task in such a generalised fashion, the Full Bench, with respect, lost sight, we think, of three material considerations that it was bound to take into account: (1) the "discretion" conferred upon the Senior Deputy President was, in truth, a narrow one (of the secondary kind previously described); (2) although there was here, technically, a "discretion", it could still be challenged for error upon the House principles, as was held in Coal & Allied (par 21); and (3) the specific requirements of s 170CG(3)(a) in the context of the particular provisions of cl 2 of the employment contract.
49 The Court must, of course, take care to distinguish between jurisdictional error and errors within jurisdiction, often a difficult matter. In this case, for instance, there are passages in the Full Bench's reasons which, standing alone, could provide ground for thinking that the substance of the matters that concern us were actually addressed. However, as we have implied, the reasons must be read as a whole. It is of significance that the Full Bench, at the outset of the explanation of its own reasoning, instructed itself generally as to its task as follows:
"The appeal against the decision of the Senior Deputy President to dismiss the application made under s.170CE of the Act is brought under s.45. Subsection 170JF(2) provides that such an appeal 'may be made only on the grounds that the Commission was in error in deciding to make the order'.
Under s.45(2), a Full Bench must grant leave to appeal 'if, in its opinion, the matter is of such importance that, in the public interest, leave should be granted'. This provides a further obligatory basis for the granting of leave and does not replace the conventional considerations: see Construction, Forestry, Mining and Energy Union v. Giudice (1998) 159 ALR 1 at 20. In relation to an appeal against the exercise of a discretionary power, the principles to be applied in the determination of the appeal are broadly those which were enunciated by the High Court in House v. The King (1936) 55 CLR 499 at 504-505 (see also Norbis v. Norbis (1986) 161 CLR 513 at 518).
In considering whether to grant leave to appeal in this matter, we have examined whether there was any error made in the exercise of the discretion by the Senior Deputy President. This would include an error of law or fact or in the application of principle which is sufficiently fundamental in character as might persuade a Full Bench on appeal that the decision reached at first instance was not reasonably open. In adopting this approach, we have had regard to the arguments presented by the Applicant both as to jurisdiction and discretion. We have done so even though we do not accept the Applicant's submission that the determination of the s.170CE application in this case involved other than the exercise of discretionary power. Having considered all these matters, we are not persuaded that the decision of the Senior Deputy President is attended with sufficient doubt as to warrant it being reconsidered by an appeal bench or that substantial injustice would result if leave to appeal is refused." (Emphasis added)
50 Whether error falling within the well-known categories identified in House v The King has been established, at least where the asserted error is one of law or fact, rather than the application of a broad standard, is generally not to be determined by the application of the test whether the decision on such a point was "reasonably open". Such asserted errors are generally themselves not the subject of a discretionary judgment but discrete, intermediate decisions made by the primary decision-maker along the way to the final, overall judgment which is regarded as a discretionary one.
51 The question is one of overall impression and, despite the particular phrases in the Full Bench's reasons tending in a contrary direction, it is our firm conclusion that a "reasonably open" test was applied in the consideration of the asserted errors, rather than the test of whether it was seriously arguable that the Senior Deputy President had actually been wrong. Had the latter approach been taken, the focus on the three matters we have identified in [48] above would necessarily have been different. It cannot be said that, had that occurred, the result must necessarily have been the same.
52 We are thus of the view that this error on the part of the Full Bench was jurisdictional in the sense explained in Kearsley, above; that is to say, that the Full Bench, with respect, misunderstood the nature of its jurisdiction, or the nature of the opinion which it was required to form. As Gibbs J said in Sinclair v Maryborough Mining Warden (1975) 132 CLR 473 (at 483) the Full Bench "did not apply [itself]) to all the matters the (legislation) required [it] to consider."
53 We propose to grant the prerogative relief sought.