Unreasonable or irrational
156 Recourse to any contemporary textbook on administrative law will reveal both the origins and the current state of the robust debate as to the parameters of judicial intervention on the ground that an administrative decision is unreasonable or irrational.
157 In "Rationality and Judicial Review of Administrative Action" (2000) 24(3) MULR 543, Dr Airo-Farulla traces the origins of judicial review of administrative action. Originally concerned exclusively with jurisdictional questions, the common law permitted the courts to intervene to quash an administrative decision made without power. That position changed in the 20th century and in varying ways the courts have accepted jurisdiction to review the quality of some administrative decisions. These intrusions have not only created tension between judges but have led to strong statements of concern about "judicial activism". The reality is that the developing doctrines are an inevitable response to the complexity of a modern democratic state where a bureaucratic decision, even one made following a complex process of review, has the potential to inflict significant injustice on an individual.
158 Significant impetus for the courts to develop doctrines permitting a review of the quality of the reasons for an administrative decision came from the reasoning of Lord Greene MR in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223. As Dr Airo-Farrulla points out, one of the striking aspects of Lord Greene's analysis "is the identification of a family resemblance between the doctrines of reasonableness, proper purposes, relevant consideration and so on." Lord Greene's reasons are well known but it is useful to repeat them here (at KB 229):
"It is not to be assumed prima facie that responsible bodies like local authorities will exceed their powers, and the court, whenever it is alleged that the local authority have contravened the law, must not substitute for the local authority. It is only concerned with seeing whether or not the proposition is made good. When an executive discretion is entrusted by Parliament to a local authority, what purports to be an exercise of that discretion can only be challenged in the courts in a very limited class of case … The law recognises certain principles on which the discretion must be exercised, but within the four corners of those principles the discretion is an absolute one and cannot be questioned in any court of law … It is true the discretion must be exercised reasonably … It is frequently used as a general description of the things that must not be done. For instance, a person entrusted with a discretion must direct himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to the matter that he has to consider … Similarly, you may have something so absurd that no sensible person could ever dream that it lay within the powers of the authority. Warrington, LJ, I think it was, gave the example of the red-haired teacher, dismissed because she had red hair. That is unreasonable in one sense. In another sense it is taking into consideration extraneous matters. It is so unreasonable that it might almost be described as being done in bad faith. In fact, all these things largely fall under one head … Theoretically it is true to say - and, in practice it may operate in some cases - that, if a decision on a competent matter is so unreasonable that no reasonable authority could ever have come to it, then the courts can interfere. That, I think, is right, but that would require overwhelming proof, and, in this case the facts do not come anywhere near such a thing."
159 Lord Greene MR's remarks have been understood as allowing review by the courts of the decision-maker's reasons for decision rather than the decision itself. Review on the basis of the type of unreasonableness referred to by Lord Greene MR, now commonly referred to as Wednesbury unreasonableness, has been interpreted by some as being synonymous with irrationality: Gamaethige v Minister for Immigration and Multicultural Affairs (2001) 183 ALR 59 at 61 (per Hill J) and at 63 (per Finkelstein J); Council of Civil Service Unions & Ors v Minister for Civil Service [1984] 3 All ER 935 at 951.
160 In 1972 the High Court was invited in Parramatta City Council v Pestell (1972) 128 CLR 305 to set aside a decision by Parramatta City Council to impose a local rate in part of its area, known as the Dundas Ward. The problem for the Council was that although it could impose a local rate which was designed to raise money to improve part of its local government area, it wanted to exclude some properties within the area to be rated from the obligation to pay the rate, even though those properties would also benefit from the facilities funded from the rate revenue. The area was generally industrial, but the excluded areas were residential.
161 The Court found the decision to impose the rate to be invalid, Barwick CJ saying (at CLR 314):
"I have come to share the Supreme Court's view that, bearing in mind the nature of the proposed works or services, no rational basis could exist for holding at the same time an opinion that the land surrounding these island lots would derive a special benefit from the execution of these works and services and the opinion that those island lots would not."
162 As I understand the Chief Justice, when the essential elements of an administrative decision are defined by statute or in some other manner, the decision may be invalid unless the defined elements are present. If there is no basis upon which an opinion essential to the decision could be supported, the ultimate exercise of the discretion is not lawful.
163 Menzies J put the matter in these words (at CLR 322):
"If it could be shown that the portion defined included land about which the Council concerned could not in reason hold the opinion that it would be specially benefited by the execution of the works, the section would not authorise the making and levying of a local rate."
164 Defining the ultimate question as a matter of power, Menzies J said (at CLR 323):
"A court may interfere only when it appears that the portion defined is so obviously not the land which the execution of the works benefits specially that the court can say that the council's professed opinion that it is, is one that is not in keeping with the section so that the making and levying of a rate on the basis of that opinion is outside its power: Bankstown Municipal Council v Fripp (1919) 26 CLR 385; Coal Miners' Industrial Union of Workers of Western Australia v Amalgamated Collieries of Western Australia Ltd (1960) 104 CLR 437."
165 Since Pestell there have been numerous decisions in which courts have been urged to strike down decisions of an administrative tribunal or government official on the basis of Wednesbury unreasonableness. Some have succeeded but many have failed. The failures have generally been those cases where the decision, although perhaps operating unfairly in the eyes of some people, was nevertheless not deemed to be so irrational as to have been made beyond the authority of the decision-maker. (See Minister for Aboriginal Affairs & Anor v Peko-Wallsend Ltd & Ors (1986) 162 CLR 24.)
166 In Peko the High Court provided a comprehensive statement of the basis upon which a court can intervene and overturn an administrative decision. Mason J confirmed the limits of the court's power, defining it as "to set limits on the exercise of that discretion, and a decision made within those boundaries cannot be impugned" (at CLR 40-41).
167 Although well known, the discussion by Mason J of the approach courts should take when considering a challenge to an administrative decision, where the decision-maker was required to weigh differing considerations, is of such significance in the present matter that it should be repeated. His Honour said (at CLR 41-43):
"It follows that, in the absence of any statutory indication of the weight to be given to various considerations, it is generally for the decision-maker and not the court to determine the appropriate weight to be given to the matters which are required to be taken into account in exercising the statutory power: Sean Investments Pty Ltd v. MacKellar (1981) 38 ALR 363, at p 375; Reg. v. Anderson; Ex parte Ipec-Air Pty Ltd (1965) 113 CLR 77, at p 205; Elliott v. Southwark London Borough Council [1976] 1 WLR 499, at p 507; [1976] 2 All ER 781, at p 788;Pickwell v. Camden London Borough Council [1983] QB 962, at p 990. I say "generally" because both principle and authority indicate that in some circumstances a court may set aside an administrative decision which has failed to give adequate weight to a relevant factor of great importance, or has given excessive weight to a relevant factor of no great importance. The preferred ground on which this is done, however, is not the failure to take into account relevant considerations or the taking into account of irrelevant considerations, but that the decision is "manifestly unreasonable". This ground of review was considered by Lord Greene M.R. in Wednesbury Corporation, [1048] 1 KB 223, at pp.230, 233-234, in which his Lordship said that it would only be made out if it were shown that the decision was so unreasonable that no reasonable person could have come to it. This ground is now expressed in ss 5(2)(g) and 6(2)(g) of the AD(JR) Act in these terms. The test has been embraced in both Australia and England: Parramatta City Council v Pestell (1972) 128 CLR 305, at p.327; Bread Manufacturers of N.S.W. v Evans (1981) 56 ALJR 89, at p 96; 38 ALR 93, at p 106; Re Moore; Ex parte Co-operative Bulk Handling Ltd (1982) 56 ALJR 697; 41 ALR 221, at pp 221-222; Hall & Co. Ltd v Shoreham-By-Sea Urban District Council [1964] 1 WLR 240, at pp.248, 255;[1964] 1 All ER 1, at pp.8, 13; Reg. v Hillingdon London Borough Council; Ex parte Royco Homes Ltd [1974] QB 720, at pp 731-732; Newbury District Council v Secretary of State for the Environment [1981] AC 578, at pp 599-600, 608. However, in its application, there has been considerable diversity in the readiness with which courts have found the test to be satisfied: cf, eg, Wednesbury Corporation, at p.230, and Parramatta City Council, at p.328, with the conclusions reached in South Oxfordshire District Council v Secretary of State for the Environment [1981] 1 WLR 1092, at p 1099; [1981] 1 All ER 954, at p 960; Shoreham-By-Sea Urban District Council, and Minister of Housing and Local Government v Hartnell [1965] AC 1134, at p 1173. But guidance may be found in the close analogy between judicial review of administrative action and appellate review of a judicial discretion. In the context of the latter, it has been held that an appellate court may review a discretionary judgment that has failed to give proper weight to a particular matter, but it will be slow to do so because a mere preference for a different result will not suffice: Lovell v Lovell (1950) 81 CLR 513, at p 519; Gronow v Gronow (1979) 144 CLR 513, at pp 519-520, 534, 537-538; Mallet v Mallet (1984) 156 CLR 605 at 614-615, 622. So too in the context of administrative law, a court should proceed with caution when reviewing an administrative decision on the ground that it does not give proper weight to relevant factors, lest it exceed its supervisory role by reviewing the decision on its merits.
…
The principles stated above apply to an administrative decision made by a Minister of the Crown: Murphyores Incorporated Pty Ltd v The Commonwealth (1976) 136 CLR 1; Re Hunt; Ex parte Sean Investments Pty Ltd (1979) 53 ALJR 552; 25 ALR 497; Padfield v Minister of Agriculture, Fisheries and Food [1968] AC 997; Secretary of State for Education and Science v Tameside Metropolitan Borough Council [1977] A.C. 1014. However, in conformity with the principle expressed in (b) above, namely that relevant considerations may be gleaned from the subject-matter, scope and purpose of the Act, where the decision is made by a Minister of the Crown, due allowance may have to be made for the taking into account of broader policy considerations which may be relevant to the exercise of a ministerial discretion.
168 At times, a divergence of opinion is apparent as to the approach which may be taken by a court where the revealed reasoning process of a decision-maker can be shown to be illogical, in particular in relation to the fact-finding tasks of an administrative tribunal. A finding of fact based on no evidence is an error of law: Hope v Bathurst City Council (1980) 144 CLR 1. Wilcox J has held that where a finding of fact was met by overwhelming evidence to the contrary, the court could interfere: Taveli v Minister for Immigration, Local Government and Ethnic Affairs (1989) 86 ALR 435. It may be debated whether this decision is consistent with the observation by Mason CJ in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 that "[s]o long as there is some basis for an inference - in other words, the particular inference is reasonably open - even if that inference appears to have been drawn as a result of illogical reasoning, there is no place for judicial review because no error has taken place" [emphasis added] (at CLR 356). However, it may be doubted that an inference is reasonably open if there is overwhelming evidence to the contrary.
169 Spigelman CJ took a different approach to the problem in Bruce v Cole (1998) 45 NSWLR 163 and Hall v Green (1999) 48 NSWLR 161. The Chief Justice indicated that when legislation confers a defined discretion on an administrator it should be presumed that the decision-maker would reach a decision by a process of logical reasoning. In my opinion, it is a short step from this proposition to the conclusion that any power given to an administrative decision-maker cannot be validly exercised if the reasoning process supporting the decision is wholly illogical. But this may be to say no more than that the decision is irrational. (See also the decisions of the High Court in: Abebe v Commonwealth of Australia (1999) 197 CLR 510 and Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611).
170 The need for judicial caution was emphasised by Mason J in Peko at 42:
"… in the context of administrative law, a court should proceed with caution when reviewing an administrative decision on the ground that it does not give proper weight to relevant factors, lest it exceed its supervisory role by reviewing the decision on its merits."
171 As I understand the law, the position is that a decision cannot be overturned unless it can be said to be unreasonable or irrational when assessed against objective criteria. To be overturned as irrational, the relevant decision must be incapable of justification. It is not sufficient for the court to simply disagree with the reasons or reasoning process of the decision-maker. Aronson and Dyer summarise the position in these words (at 284):
"[S]o Wednesbury invites a qualitative assessment of the impugned decision, but does not allow an appeal to the judicial review judge's subjective sense of reasonableness. In so far as it appeals to a normative sense, it is to a shared normative sense or even to a range of commonly shared norms. That is, reasonableness is used in an objective sense."
(Aronson & Dyer, Judicial Review of Administrative Action, 2nd ed)