Papoutsakis v Australian Information Commissioner

The statutory scheme 7 The statutory scheme and relevant legal principles with respect to the Privacy Act 1988 (Cth) are set out in the primary judgment at [26]-[38]. In summary, a person may make a privacy complaint to the Commissioner under s 36(1) of the Privacy Act. The Commissioner is required to investigate such complaints (subject to certain exceptions) pursuant to s 40(1). However, s 41(1) provides certain circumstances under which the Commissioner may decide not to investigate, or investigate further, a privacy complaint made under s 36(1). 8 The key provision of the Privacy Act under consideration in these proceedings is s 41(1)(da), extracted below: 41 Commissioner may or must decide not to investigate etc. in certain circumstances (1) The Commissioner may decide not to investigate, or not to investigate further, an act or practice about which a complaint has been made under section 36 if the Commissioner is satisfied that: … (da) an investigation, or further investigation, of the act or practice is not warranted having regard to all the circumstances… 9 As Perry J stated in Simjanovska v Department of Human Services [2019] FCA 499 at [122]: … the apparent purpose of s 41(1) is to empower the Commissioner to decide not to investigate a complaint or to terminate a complaint at any stage when she or he reaches the requisite state of satisfaction, thereby ensuring that public funds and resources are directed towards resolving potentially meritorious complaints.

The primary judgment 10 The Federal Court of Australia is empowered to review a decision of the Commissioner made under s 41(1) of the Privacy Act pursuant to s 39B of the Judiciary Act 1903 (Cth) and s 16 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act). 11 In considering Mr Papoutsakis' application for judicial review of the decision of the Commissioner's delegate not to investigate his complaint further, the primary judge considered whether the Commissioner's decision was an improper exercise of the power conferred by the Privacy Act pursuant to s 5(1)(e) of the ADJR Act, in particular: (a) by the Commissioner taking an irrelevant consideration into account (s 5(2)(a)); (b) failing to take a relevant consideration into account (s 5(2)(b)); or (c) making a decision that is so unreasonable that no reasonable person could have made it (s 5(2)(g)) ([J20]). 12 The primary judge determined that the delegate of the Commissioner did not take irrelevant matters into account, because "[t]here are no matters which are prohibited from being considered, and any matter with even marginal relevance can be considered" ([J40]). The primary judge found that the passage of time and the fact that the respondent to the privacy complaint did not appear to be the same corporate entity as QTIM were relevant considerations for the delegate of the Commissioner to consider ([J41]-[J42]). 13 The primary judge considered that there were no mandatory considerations applicable to s 41(1)(da) of the Privacy Act and cited Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 39-40. Nevertheless, the primary judge was satisfied that the delegate of the Commissioner expressly considered the appellant's claim that he did not consent to the release of information by QTIM. To the extent that the delegate failed to consider that the appellant did not consent to a mortgage broker, Mr Tsiakis or Mr Ford of QTIM collecting and releasing information, the primary judge found that the delegate was "obviously aware" of the appellant's claims that he did not consent orally to the collection or release of information. Mr Ford's file note indicated that the appellant asked him to assist Mr Tsiakis to raise the loan, and the primary judge noted that that would "ordinarily include the need to provide details of other liabilities to any prospective lender" ([J49]). The primary judge found that, even if the appellant's lack of oral consent were a matter that had to be taken into account, there was no error ([J47]-[J48]), and that the fact that the appellant claimed he had not consented is not a basis "to fault the delegate in making [the decision not to investigate] further" ([J49]). 14 Finally, the primary judge held that the decision of Commissioner was not so unreasonable that no reasonable person could have made it. The primary judge pointed out the "high hurdle" required to meet this complaint. He held that there were "cogent reasons" for not investigating the complaint further, such as the passage of time and the difficulties of dealing with conflicting oral versions of the claim, and noted that that on any view, "the decision in this case is not unreasonable" ([J50]). Additionally, most of the material complained of as a breach of privacy was publicly available information - such as his ownership of the properties, and the fact of the mortgages on them. The only "private" information disclosed was the amounts outstanding on each loan, and the primary judge pointed out that "it is hard to imagine a prospective lender not requiring details of the prospective borrower's and guarantors' other liabilities in order for it to assess creditworthiness" ([J52]). 15 The appellant also made allegations of fraud committed by the respondent, which the primary judge considered were not directed at the Commissioner and did not give rise to any grounds of review ([J24]). Instead, the primary judge considered that, were the appellant's version of events to be accepted, the "true villain" was the alleged fraudster (which was not QTIM) ([J51]). 16 The appellant made a number of "late complaint[s]" by email to the primary judge's Associate the night before the primary judgment was set to be delivered. The primary judge considered his claims and found that to the extent they constituted an application to reopen the case after judgment was reserved, the appellant did not suffer any unfairness or prejudice to warrant this relief. 17 The primary judge dismissed the application for judicial review.

The grounds of appeal 18 In the Amended Notice of Appeal filed on 8 November 2024, the appellant lists 16 points under the heading "Grounds of appeal". These can be summarised and consolidated as follows: (a) The primary judge erred in admitting, and making "great use of" a redacted file note of Mr Ford (file note). The appellant took issue with the redaction to a paragraph of the file note. Additionally, the primary judge failed to consider the credibility and reliability of the file note, and questions of bias, considering that the file note was created 6 years after the event (Grounds 1, 2, 14, 15, 16). (b) The primary judge did not provide procedural fairness to the appellant by reason of the redacted file note being admitted without evidence being heard from Mr Ford or the Commissioner (Grounds 1, 2). (c) The primary judge erred by not applying relevant legal and procedural requirements for obtaining valid consent for the release of information (Grounds 4, 5, 6, 7, 8, 9). (d) The primary judge erred by failing to recognise the requirements for a valid loan application and for a second mortgage, which the appellant claims were falsified or affected by fraud (Grounds 6, 7, 8, 9, 10, 11, 12, 13). (e) The appellant sought that the matter be re-heard without the file note being part of the evidence, or alternatively the appeal be upheld and the respondent pay costs (Ground 3). 19 It was clarified during the hearing that the appellant's main complaint was that the balances outstanding on the loans had been disclosed, as he contended, in breach of the Privacy Act. The appellant accepted that the other details as to the three mortgages were publicly available information. 20 The respondent filed a Notice of Contention. Essentially the respondent contended that if the primary judge erred in admitting the file note into evidence, then that error does not constitute an appealable error warranting the grant of a re-trial, essentially on the basis that the exclusion of the file note would not "realistically have resulted" in the primary judge reaching a different decision.

The admission of the redacted file note 21 As provided in Ground 3 of the Amended Notice of Appeal above, the appellant sought that the matter be re-heard without the file note being part of the evidence. The file note is dated 30 August 2022 and was provided by Spirit Super to the investigations officer at the Office of the Commissioner. The author is Mr Ford, who was QTIM's Commercial Lending Manager at the time. There is one sentence redacted in the copy which was part of the Court Book before the primary judge and before the Full Court. The appellant took issue with that part of the file note which suggests that he consented to the release of information, and the fact that the file note is dated some six years after the relevant events, and some time after the complaint was made to the Commissioner. 22 The respondent noted that the document was provided to the respondent by Spirit Super in its redacted form. The respondent submitted that the file note was before the delegate of the Commissioner at the time of his decision and would therefore be admissible as a relevant document under s 56 of the Evidence Act 1995 (Cth). Further, the appellant did not raise any objection to the Court Book being tendered ([J61]), and did not challenge the inclusion of the file note in the Court Book. In fact, the file note was discussed during the hearing and the appellant raised his issues with its contents and the use to be made of it during the hearing before the primary judge. The respondent submitted that even if the document were admitted in error, this would not have produced a different outcome as the primary judge did not rely on the substance of the file note in reaching his conclusion, but merely noted that the document demonstrated that a conflict of evidence existed between the appellant and the file note, which was not relevant to the issues to be considered by the primary judge. 23 We accept the respondent's submissions. The admission of the file note was relevant because it was part of the material before the delegate of the respondent, who, like the primary judge, did not make a finding of fact based on the two competing accounts of the question of consent. 24 Given that the appellant did not object to the admission of the file note even after being taken to it by the primary judge, it is difficult to see how the redaction of the file note was an irrelevant consideration taken into account, a failure to take account of a relevant consideration, or otherwise an error of law. Likewise, the issue of whether the file note was compliant with financial regulatory requirements was not a matter within the scope of the judicial review.

The use of the redacted file note 25 The appellant alleged that the primary judge made "great use" of the contents of the file note to assess his credibility and that the admission of the file note denied him procedural fairness. 26 The primary judgment dealt with the file note at [J12]: Spirit Super provided to the investigations officer a "diary note" dated 30 August 2022 prepared and signed by Mr Ford. The note records that Mr Ford was unable to provide any (contemporaneous) client notes of his interactions with Mr Papoutsakis regarding discussions with Mr Papoutsakis's broker, Mr Tsiakis. That is to say, the note records Mr Ford's memory in 2022 of the interactions in 2016 and is not a contemporaneous record. The note states that Mr Papoutsakis discussed with Mr Ford that Mr Papoutsakis was working with Mr Tsiakis and that it was agreed that Mr Ford would assist Mr Tsiakis "in his efforts to help [Mr Papoutsakis]". Mr Tsiakis was looking for finance of about $500,000 to help Mr Papoutsakis. 27 The primary judge dealt with the contents of the note at [J49]. There, he noted that the note conflicted with the appellant's evidence that he did not consent to the release of the information. His Honour said: The point is that there was a conflict of evidence, or claims, before the delegate. The delegate was deciding whether or not to investigate them further in order to decide which to accept. The fact that Mr Papoutsakis made the claim that he had not consented is no basis to fault the delegate in making that decision. 28 The primary judge, in so considering the file note and as noted above at [22], did not accept the note as necessarily being correct, merely that there was a conflict between Mr Ford's later note and the appellant's contentions. The primary judge also noted that it was not contemporaneous (at [J12]) in a way which indicates his Honour was aware of the vagaries of memory over such a period. 29 While the appellant had an issue with the accuracy of the file note, he did not raise any issues before the primary judge with the fact of the redaction (nor did he suggest that the redacted material may assist his case). The primary judge acknowledged the inherent difficulties of a file note created some six years after the events recounted in it. However, the primary judge did not make a finding that the facts noted in the file note took place; there was no need to do so. The question for the primary judge was whether the delegate had reasonable grounds not to accept the complaint for further investigation. As can be seen from the reasons of the delegate set out in paragraph [5] above, the question of whether, as a factual matter, the appellant authorised the release of the information (being the amount secured under each of the properties) to the proposed lender, Prime Capital, was not a matter which was determined. 30 The appellant contended that the use of the file note led to the "inescapable conclusion that the Appellant was denied procedure fairness, natural justice" (as in original) and contended that Mr Ford or "the respondent" (which in context we assume is a reference to the respondent to the original complaint, Spirit Super) should have been called to explain the nature of the redaction. 31 As noted above, the appellant was given the opportunity to discuss the file note with the primary judge and to make submissions as to its impact. The primary judge did not then go on to make an assessment of the relevant credit issues between the appellant and Mr Ford, or Spirit Super, because he was not, in the task he undertook, required to do so. The appellant did not ask for Mr Ford or for a representative of Spirit Super to be called, and so it is difficult to see any denial of procedural fairness in the way the primary judge dealt with the contents of the file note. 32 Paragraph 12 of the primary judgment demonstrates that the primary judge took into account the fact that there was a dispute between the parties as to whether there was a breach of privacy. There was no need for the primary judge to determine this issue, given the task which the primary judge was called to undertake (see [11] above). Accordingly, the lack of evidence from Mr Leigh or from Spirit Super as to the file note was not a breach of procedural fairness, as not only was it not appropriate for the Court to seek such evidence on its own motion, but it was not relevant to the judicial review of the delegate's decision.

Consent to the loan application, release of information, and second mortgage 33 These grounds (generally, grounds 4-13 of the Amended Notice of Appeal, and summarised at [18(c)-(d)] above) raise issues of whether the primary judge correctly, or at all, considered the following issues:- (a) Data privacy; (b) Validity of the loan application, including signatures and establishment of a second mortgage; and (c) Proper consent for the release of information and the need for validation of the consent by the borrower. 34 In his written submissions, the appellant raised (but did not further develop) questions of financial institutions regulation which, he said, required contemporaneous recording of client instructions. The appellant submitted that the loan application documents did not fulfil certain contractual requirements, such as there being a lack of signatures in the "security column" of the loan application. The appellant further contended that QTIM acted negligently in failing to verify the authenticity of the loan application documents which he claimed were falsified. 35 The appellant also made submissions that, in effect, he had been the victim of a breach of privacy by QTIM by reason of the provision of the amount of the mortgages secured over each of three properties to Prime Capital, when he said he had not consented to that and only wanted one property secured by the second mortgage. He made the following oral submissions: So Spirit Super have acted negligently all the way. All the way, up to the last minute, they have acted negligently against me. They have broken the Privacy Act. They have accepted Prime Capital to be a second mortgagee without notifying me, without my consent. I have to fill forms for them to become a second mortgagee. They have ignored me. I have never given consent to release information about my properties. Every time I was ringing [Mr] Ford back in 2020, right, he was never returning my phone calls. And then I decided to write him some emails. So everything was done between them and Prime Capital and [the mortgage broker's representative]. 36 The appellant made it clear that his position was that he had never authorised a second mortgage, and yet he was charged the sum of $26,606 by Prime Capital for the expenditure on the loan application. He submitted that "they" (Prime Capital) had "created a fraud between them and Spirit Super", and that the primary judge should have considered whether, in fact, he gave his consent to securing second mortgages over his properties or the release of the information as to the sums owing on each mortgage. 37 The respondent dealt with each of these matters by contending that some of these matters were factual matters that may be relevant to the appellant's privacy complaint, and were not amenable to a merits review before the primary judge (for example, whether the release of the appellant's information by QTIM to Prime Capital was a breach of the privacy law). Additionally, the respondent contended that other matters - such as whether the second mortgage was valid given the lack of consent and lack of signatures - were matters which did not fall within the remit of the investigation into the privacy complaint, as they were not matters which related to the appellant's privacy. The allegations of fraud, for example, the respondent said, were properly dealt with by the primary judge in [J24] in determining that the allegations dealt with there were complaints against Prime Capital and the other participants, not the delegate. 38 It is important to recall that the primary judge's task was to review the decision of the delegate in the context of the ADJR Act, not to conduct a merits review of the delegate's decision. In this context, it is difficult to see how questions of whether one or other of the participants in the attempt to obtain a second mortgage for the appellant were involved in fraud came within the original privacy complaint. 39 In our view, the primary judge was correct to restrict himself to the questions arising on a judicial review of the decision not to accept the complaint for further investigation. In doing so, the primary judge considered whether matters which were relevant were not taken into consideration, and whether irrelevant matters were taken into consideration. We agree with the respondent and with the primary judge that the process undertaken by the delegate pursuant to s 41 of the Privacy Act, to determine whether or not to investigate the matter further, did not involve any mandatory considerations (see [J45]). Notwithstanding that, the primary judge noted that the delegate did take into account the fact that the appellant alleged he did not consent to the release of information to QTIM. 40 The considerations raised in these grounds of appeal are either matters not relevant to the decision of the delegate not to investigate the complaint further, or beyond the scope of the privacy complaint, being issues raised in relation to the second mortgage itself or the conduct of the parties apart from the disclosure of the amounts of the sums secured by the mortgages.

Legal Unreasonableness 41 We also agree with the primary judge that the decision taken by the delegate was not unreasonable in the legal sense, given that there were cogent reasons (as set out in paragraph [5] above) for the investigation not to be continued (see [J51]). While it is clear that the appellant has suffered a loss, it is not necessarily a loss cause by any privacy breach. Rather, it is the doings of the various participants in the application for the second mortgage, including his own act of withdrawing from the loan, that has caused his loss. While the appellant did not explicitly raise a ground of appeal based on legal unreasonableness, the thread that the decision not to investigate was unreasonable is found through his oral and written submissions. Accordingly, we have considered whether the delegate reached a legally unreasonable decision. As Greenwood J said in Jones v Office of the Australian Information Commissioner [2014] FCA 285 at [21]: … a requirement of legality in decision-making that a decision be reached according to the rules of reason or, put another way for present purposes, reached reasonably, or not unreasonably reached, is not a vehicle for challenging a decision made in contended error of law and beyond power simply because "disagreement" is found with the "evaluative judgment" of the administrative decision-maker. Challenging an administrative decision-maker's reasoning as illogical or unreasonable may simply be an emphatic way of expressing disagreement with the decision or the merits, and such emphatic disagreement may have "no particular legal consequence" (Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 at [40] per Gleeson CJ and McHugh J). (Emphasis in original). 42 The appellant's focus on the underlying facts of the proposed mortgage transactions and the issues such as fraud and whether financial regulations were complied with appear to reflect his concerns as to the rectitude of the participants in the application for the second mortgage, not with the elements required for a judicial review of the Commissioner's decision not to investigate the complaint. As will be clear from the above determinations of the grounds of appeal, the delegate's decision did not demonstrate any illogicality sufficient to call into aid the legal consequences of legal unreasonableness. 43 There is, in our view, no basis to make the orders sought by the appellant on this general ground.

Disposition 44 The appeal be dismissed with costs, as agreed or taxed. I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices O'Sullivan, Kennett and Needham.