Freedom of Information Act 1982 s. 9

Law and Justice Legislation Amendment (No 1) Act 1995

Migration Act 1958 s. 388

Superannuation Industry (Supervision) Act 1993 ss. 52, 120A and 344(11), Part 25

Attorney-General (NT) v Maurice [1986] HCA 80; (1986) 161 CLR 475

Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd [1979] FCA 21; (1979) 24 ALR 307

Collins v Minister for Immigration and Ethnic Affairs [1981] FCA 147; (1981) 36 ALR 598

Commissioner of the Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501

Cosco Holdings Pty Ltd v Commissioner for Taxation & Anor [1997] FCA 1504

Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577; 2 ALD 60

Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1

Re Fischer and Australian Fisheries Management Authority [2005] AATA 293

Re Mann and Capital Territory Health Commission (No. 2) (1983) 5 ALN N368

Re Spicer Axle Structural Components Australia Pty Ltd and Secretary, Department of Industry, Tourism and Resources [2005] AATA 77; (2005) 83 ALD 104

Re Wertheim and Department of Health (1984) 7 ALD 121

Trade Practices Commission v Arnotts Ltd and Others (No. 2) (1989) 88 ALR 90

Tradigrain Australia Pty Ltd and Export Market Development Grants Board (1984) 6 ALD 442

DECISION AND REASONS FOR DECISION [2005] AATA 1060

1. the respondent lodge and give to the applicants and the party joined copies of:

(a) related to the interpretation and application of the law relating to the decision under review; and

(b) it had in its possession and control when it lodged documents under s. 37(1) of the Administrative Appeals Tribunal Act 1975; and

(2) instructions given in relation to that legal advice;

2. the respondent lodge all "information and documents constituting the 'General Information' and the 'Specific Information' in ... [Counsel's] discussion draft at paragraphs 71.1-7.14" referred to in Counsel's Advice at 3 of T4.14, except to the extent that the information and documents have already been provided in the T documents;

3. the respondent lodge copies of any legal advice and relevant instructions that:

(1) related to the interpretation and application of the law relating to the decision under review; and

(2) came into its possession and control after it lodged documents under s. 37(1) of the Administrative Appeals Tribunal Act 1975;

4. copies of any legal advice referred to in clause 3 of this order be restricted to the Tribunal and its officers and staff and the respondent and its officers and legal advisers.

5. liberty to the parties to apply.

With the support of VBV, VBN and VBT have asked the Tribunal to use its powers under ss. 37(1) or (2) of the Administrative Appeals Tribunal Act 1975 ("AAT Act") to order the respondent, the Australian Prudential Regulation Authority ("APRA"), to produce ten classes of documents to the Tribunal. They do so having earlier asked the Tribunal to review APRA's decision to disqualify him from being a trustee, investment manager or custodian of a superannuation entity. In general terms, I have decided that APRA must give the Tribunal and VBN and VBT any legal advice, and relevant instructions in its possession or control at the time it lodged the T documents. While it is also required to lodge copies of any legal advice or relevant instructions that came into its possession or control after that date, it is not obliged to give them to VBN and VBT.

2. VBN and VBT have asked the Tribunal to order APRA to produce the following classes of documents:

(a) all advices provided by Mr M J Crennan SC and Ms C Mavroudis ("APRA's Counsel") to APRA relating to the interpretation of the relevant law and APRA's procedural obligations other than their advice dated 12 May 2005 and already provided in the documents produced under s. 37(1)(b) of the Administrative Appeals Tribunal Act 1975[1] ("Counsel's Advice");

(b) all instructions given to counsel, whether by APRA or its delegate, Mr P Kennedy,[2] related to APRA's Counsel's Advice and any other Advice given by Counsel (including any memoranda and briefs to APRA's Counsel and file notes of telephone conversations and meetings with APRA's Counsel);

(c) any file notes of conversations between officers or employees of APRA and its delegates, Mr P Kennedy and Ms S Tongue[3] ("Delegates"), or either of them related to instructions provided to them;

(d) any e-mails and other correspondence between APRA and the Delegates related to instructions provided to them;

(e) the draft Statement of Reasons ("SoR") provided to APRA's Counsel by APRA on 10 May 2005 and referred to in Counsel's Advice;[4]

(f) all documents relating to "earlier oral and written advice and to relevant administrative law principles governing the administrative process with which the SOR is concerned"[5] referred to in Counsel's Advice;

(g) the "discussion draft" referred to by Counsel as "our discussion draft" in Counsel's Advice;[6]

(h) all "information and documents constituting the 'General Information' and the 'Specific Information' in our [Counsel's] discussion draft at paragraphs 71.1-7.14" referred to in Counsel's Advice at 3, except to the extent that the information and documents have already been provided in the T documents;

(i) documents relating to the Delegates' position within APRA and their appointment; and

(j) all documents referred to, received by or relied upon in relation to the evidence given before the Senate Committee by Mr Jones, Mr Somogyi, Mr Byres and Dr Roberts.

3. APRA relied on its powers under ss. 120A(2) and (3) of the Superannuation Industry (Supervision) Act 1993 ("SIS Act") to decide to disqualify VBN from being a trustee, investment manager or custodian of a superannuation entity, or a responsible officer of a trustee investment manager or custodian of a superannuation entity.

4. In making its decisions under s. 120A(2), APRA concluded that the trustee of a standard employer sponsored superannuation fund ("Trustee") had contravened the covenants in ss. 52(2)(b) and (c) of the SIS Act in respect of both issues and in s. 52(2)(g) in respect of the crediting rate issue. In essence, APRA reached its conclusions on the basis that the trustee had contravened the covenants in ss. 52(2)(b) and (c) and s. 52(2)(g). In summary, APRA concluded that:

 the Trustee had failed to give adequate and complete information about the changes to its crediting rate policy and the nature of the minimum crediting rate in June. Consequently, it had failed to exercise the same degree of care, skill and diligence as an ordinary prudent person would exercise in dealing with the property of another for whom that person felt morally bound to provide;[7]

 the Trustee did not communicate to the Fund's members all of the information available to it and required by the members to assess the employer sponsors' offer. A trustee acting in the members' best interests would have done;[8] and

 the Trustee did not formulate a crediting rate reserve consistent with its investment strategy.[9]

5. APRA considered that the nature and seriousness of the breaches were such that VBN should be disqualified under s. 120A(2) of the SIS Act. It further concluded, through its delegate, that he was not a fit and proper person and should be disqualified under s. 120A(3).

Relevance of process followed in making the decision under review

6. On behalf VBN, Mr Santamaria QC and Mr Pound of counsel addressed their submissions to all ten categories of documents they seek before addressing each in turn. They were supported in their submissions by Mr Collinson SC with Mr Crutchfield of counsel on behalf of VBT. I will begin with their general proposition that all documents exposing the process by which the decision was made are relevant to the review of the decision.

7. Mr Santamaria pointed first to the suggestion that they draw from the statement of Mr Almond QC to the Tribunal on 2 September 2005.[10] That suggestion is to the effect that there is a clear distinction between the investigative and decision-making processes adopted in the course of making the decision under review. Counsel countered this suggestion by pointing to Mr Crennan's questioning of an officer connected with the management of the fund[11] during an examination under Part 25 of the SIS Act as well as to his providing advice to Mr Kennedy. Counsel then drew my attention to APRA's Statement of Facts and Contentions dated 30 September 2005 and filed in the Tribunal and, in particular, to the following passage:

"Lastly, the Tribunal's attention is drawn to the decision in Kamha v APRA [2005] FCA 480, [41] which might support the conclusion that the Tribunal has jurisdiction only to undertake the second stage of exercising discretion and should take the findings of contravention by the delegate as binding on it."

This passage, they submitted, suggests that APRA contends that the decision-maker's decision should be given some degree of deference by the Tribunal, at least in so far it reviews the discretionary aspects of the decision.

8. Generally speaking, I do not consider that information regarding the process followed by a decision-maker in making the decision under review is relevant in reviewing the merits of that decision. The task of merits review is to determine:

"... whether the decision which the decision-maker made was the correct or preferable one on the material before him. The question for determination of the Tribunal is whether that decision was the correct or preferable one on the material before the Tribunal."[12]

9. The Tribunal's task is not to enquire whether the decision-maker made an error in making the decision. That is the task of courts under the Administrative Decisions (Judicial Review) Act 1977 if a person affected by the decision wants to question the process. The Tribunal's task is not to adjudicate upon whether the decision-maker is able to defend the decision.[13] The task of the Tribunal is to determine the correct process it should follow, follow it, ascertain the law that is applicable and the issues that are relevant, consider the evidence and make findings of fact that are based on that evidence and relevant to the issues, ascertain the decision or range of decisions that can correctly be made in light of the law and the facts and, if more than one, choose the decision that is the preferable decision.

10. Knowing the process followed by the decision-maker may be relevant in some cases but, in others, of peripheral interest only.[14] Far more important is the decision itself for it underpins the Tribunal's jurisdiction and the standing of a person applying for its review[15] or to be joined as a party to a proceeding.[16] More important too is the evidence or the material that the decision-maker has available and that is relevant to the review of the decision. It forms a foundation to which other evidence or material may be added.

11. Given the task that the Tribunal must follow, it is apparent that the Tribunal should not defer to the decision under review. It should not treat the decision under review as the positions from which it needs to be persuaded. To do that would be inconsistent with its role to determine the correct or preferable decision.[17] Determining that correct or preferable decision requires the Tribunal to adopt a neutral position and to consider all legal and factual issues from the beginning.

The requirements of s. 37 of the AAT Act

12. This is the principle underlying the requirements of s. 37 of the AAT Act. In most cases,[18] the person who made the decision under review must lodge two classes of documents. The first is a statement of the reasons for the decision. It must set out the findings on material questions of fact and refer to the evidence or material on which the findings were based as well as give reasons for the decision.[19] The second class of documents comprises:

"every other document or part of a document that is in the person's possession or under the person's control and is relevant to the review of the decision by the Tribunal."[20]

13. In providing the reasons, the statement is intended to make the decision-maker's position clear. If the Tribunal considers that it is not adequate, it may order the decision-maker to lodge an additional statement containing further and better particulars in relation to the matters in respect of which it considers the statement inadequate.[21]

14. The documents that must be lodged form a framework of relevant material to which the parties may add other relevant material. The statement of reasons permits the parties to analyse the decision-maker's reasons. Analysis permits the parties to examine the merits of the reasoning process. If the reasoning process is flawed, they may decide to agree upon another decision that is acceptable to them. Alternatively, the suggestion of a flaw may suggest to them other relevant avenues of enquiry or review. Travelling down those roads may reveal relevant material to add to the foundation of documents already lodged in the Tribunal or new lines of reasoning. Section 37(1) is the beginning of what is, for all practical purposes, an incremental process.

15. It has always been clear that relevance to the review of a decision does not equate to its supporting, or being relevant to, the decision that was actually made. The test is whether the documents are relevant to the review and that incorporates documents that meet that description regardless of whether they support the decision that was made and is now under review.

16. It is said that the test of a document's relevance is an objective test rather than a subjective test that applied under s. 37(1)(b) before it was amended with effect from 16 May 2005.[22] Before its amendment, s. 37(1)(b) had required production of:

"every other document or part of a document that is in his possession or under his control and is considered by him to be relevant to the review of the decision by the Tribunal."[23] (emphasis added)

17. Section 37(1)(b) had to be read with s. 37(2) of the AAT Act. It has not been amended in recent times and has provided at all relevant times:

"Where the Tribunal is of the opinion that particular other documents or that other documents included in a particular class of documents may be relevant to the review of the decision by the Tribunal, the Tribunal may cause to be served on the person a notice in writing stating that the Tribunal is of that opinion and requiring the person to lodge with the Tribunal, within a time specified in the notice, the prescribed number of copies of each of those other documents that is in his possession or under his control, and a person on whom such a notice is served shall comply with the notice."

When ss. 37(1)(b) and 37(2) are read together, it becomes apparent that it would be difficult for a decision-maker to hold a position that he or she did not consider documents relevant to the review of a decision in circumstances in which any reasonable decision-maker would have considered them to be relevant.

How is legal professional privilege established?

18. The party claiming legal professional privilege must establish it on the balance of probabilities and may do so:

"... by pointing to the nature of the documents or by evidence describing the circumstances in which they were brought into existence. But it should not be thought that the privilege is necessarily or conclusively established by reference to any verbal formula or ritual. The court has power to examine the documents for itself, a power which has perhaps been exercised too sparingly in the past, springing possibly from a misplaced reluctance to go behind the formal claim of privilege. It should not be forgotten that in many instances the character of the documents the subject of the claim will illuminate the purpose for which they were brought into existence."[24]

What of legal professional privilege in relation to documents required to be lodged under s. 37?

19. Section 37 "... has effect notwithstanding any rule of law relating to privilege or the public interest in relation to the production of documents."[25] In saying that, s. 37(3) does not provide that all documents lodged under s. 37(1) must be given to other parties. On its face, it means only that documents that are subject to legal professional privilege, or a claim of public interest immunity, must be lodged in the Tribunal.

20. As a general rule, documents lodged with the Tribunal under s. 37(1) are given to the other party or parties to a proceeding. Whether those subject to legal professional privilege should be given in the same way depends on the law relating to legal professional privilege and its inter-relationship with the AAT Act. I summarised these matters in Re Spicer Axle Structural Components Australia Pty Ltd and Secretary, Department of Industry, Tourism and Resources:[26]

"[11] Legal professional privilege is a rule of substantive law. A person may use it to:

... resist the giving of information or the production of documents which would reveal communications between a client and his or her lawyer made for the dominant purpose of giving or obtaining legal advice or the provision of legal services, including representation in legal proceedings.

_(_Daniels Corp International Pty Ltd v ACCC [2002] HCA 49; (2002) 213 CLR 543; 192 ALR 561; 43 ACSR 189 at [9].)

[12] The rationale for the rule is that a person needs to be able to turn to a lawyer for advice and help and, if proceedings begin, for representation. As was explained by Advocate-General Sir Gordon Glynn, people:

... should be able to know what they can do under the law, what is forbidden, where they must tread circumspectly, where they run risks.

_(_A M & S Europe Ltd v Commission of the European Communities [1983] QB 878 at 913; [1983] 1 All ER 705 at 733.)

[13] The party claiming legal professional privilege must establish it on the balance of probabilities and may do so:

... by pointing to the nature of the documents or by evidence describing the circumstances in which they were brought into existence. But it should not be thought that the privilege is necessarily or conclusively established by reference to any verbal formula or ritual. The court has power to examine the documents for itself, a power which has perhaps been exercised too sparingly in the past, springing possibly from a misplaced reluctance to go behind the formal claim of privilege. It should not be forgotten that in many instances the character of the documents the subject of the claim will illuminate the purpose for which they were brought into existence.

_(_Grant v Downs [1976] HCA 63; (1976) 135 CLR 674 at 689; [1976] HCA 63; 11 ALR 577 at 589 per Stephen, Mason and Murphy JJ.)

[14] As a rule of substantive law, it has application beyond legal proceedings: Rich v Australian Securities and Investments Commission (2004) 209 ALR 271; 50 ACSR 242; [2004] HCA 42 at [24] per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ. It is not a rule that permits a court or tribunal to weigh a person's interest in resisting the production of the information or documents either against another's interest in seeing that information or those documents or against a background of the behaviour of the person claiming legal professional privilege. If information or a document is subject to legal professional privilege, a court or tribunal cannot order its production. Legal professional privilege may be waived and I will return to this below: at [39]-[49].

[15] Legal professional privilege may only be abrogated by the clear words of a statute or by necessary implication: Daniels at [11] per Gleeson CJ, Gaudron, Gummow and Hayne JJ."[27]

21. Section 37(3) expressly abrogates legal professional privilege in relation to documents that must be lodged with the Tribunal under s. 37 whether under ss. 37(1) or 37(2). It also appears to do so in relation to relation to the documents that must be given to each other party to the proceeding. They are the documents specified in s. 37(1AE) and are the documents that ss. 37(1) or (1AB) require to be lodged.[28] I say "appears to do so" for regard must be had to s. 37(1AF), which provides that:

(a) a person who has made a decision that is the subject of an application for a review by the Tribunal would, apart from this subsection, be required under paragraph (1)(b) to lodge 2 copies of a document or a part of a document with the Tribunal in respect of the application; and

(b) within the period applicable under subsection (1) the person:

(i) applies to the Tribunal for a direction under subsection 35(2) in relation to the document or part of the document and lodges with the Tribunal, together with the application for the direction, 2 copies of the document or part of the document; and

(ii) gives a copy of the application for the direction to each party to the application for review;

the person is not required to comply with paragraph (1)(b) in relation to the document or part of the document unless and until the Tribunal, after hearing the application for the direction, directs the person to do so."

22. In Re Spicer Axle Structural Components Australia Pty Ltd and Secretary, Department of Industry, Tourism and Resources, I suggested the following resolution of what appears to be a possible contradiction between the requirement to give documents to the other parties to the proceeding and the requirements of s. 37(1AF):

"[29] The resolution of the apparent contradiction lies in s 37(1AF) itself for it effectively removes the decision-maker's obligation to lodge documents pursuant to s 37(1)(b) until the resolution of his application for an order under s 35. No longer being under an obligation to lodge, s 37(1AF) no longer imposes an obligation on the decision-maker to give a copy of the documents to each other party to the proceeding. That is the plain meaning of the section and there is no need to go to extrinsic material: Attorney-General (Qld) v Australian Industrial Relations Commission (2002) 213 CLR 485; 192 ALR 129; [2002] HCA 42 at [113]-[114]."[29]

23. That answers the matter as far as it goes but what of legal professional privilege? Does the addition of s. 37(1AF) to the AAT Act impinge on s. 37(3)? It does not do so on its face. The Second Reading Speech delivered in relation to the Law and Justice Legislation Amendment (No 1) Act 1995 makes no specific reference to the addition. In so far as it is relevant, the Parliamentary Secretary to the Attorney-General said that "... the bill amends the act to give effect to recommendations in the 1991 report of the review of the Administrative Appeals Tribunal".[30] The Report of the Review of the Administrative Appeals Tribunal ("Report") given to the Attorney-General on 29 November 1991 recommended an amendment of the sort achieved in s. 37(1AF). The "problem" with the AAT Act in its then form was said to be that:

"There has always been some difficulty as to the procedure to be followed by the person upon whom the obligation rests to comply with s 37 where some documents or parts thereof are to be the subject of a claim for a confidentiality order under s 35. There is inefficiency in the requirement that the applicant's copy of the s 37 statements and documents are to be lodged first with the Tribunal."[31]

24. As I said in Re Spicer Axle Structural Components Australia Pty Ltd and Secretary, Department of Industry, Tourism and Resources:

"_[31] This passage presupposes that the obligation under s 37(1) was qualified by the confidentiality requirements of s 35 as the AAT Act was then drafted. To accept that as justifying a conclusion that it was indeed qualified would seem to be contrary to the High Court's stricture that (_MFA v R [2002] HCA 53; (2002) 213 CLR 606 ; 193 ALR 184at [46] per McHugh, Gummow and Kirby JJ):

... In recent years, in many contexts, this [High] Court has insisted upon close attention to the language of applicable legislation in preference to other formulations derived from pre-statutory expositions, post-statutory explanations and (in this case) the language of foreign legislation...".[32]

25. Having regard to the whole of s. 37 and to the amendments that have been made to it, it seems to me that documents required to be lodged under s. 37(1)(b) must include those that are subject to legal professional privilege. Those documents must also be given to other parties to the proceeding under s. 37(1AE) unless the Tribunal makes a confidentiality order under s. 35(2). That confidentiality order would not be made as a matter of course on the basis that the document is subject to legal professional privilege. To do so would run counter to the express requirements of ss. 37(1)(b) and 37(1AE) to produce and give documents and of s. 37(3) that the section has effect notwithstanding any rule of law relating to privilege.

26. Section 37(2) raises different considerations. Documents lodged under s. 37(2) must include those that are subject to legal professional privilege. They are not the subject of s. 37(1AE). Having regard to the provisions of ss. 33, 35, 39 and 40 as well as of s. 37(1AE), I have concluded that the Tribunal may not ignore a claim for legal professional privilege when making an order disclosing documents lodged in compliance with an order under s. 37(2). In reaching that conclusion, I adopt the reasons I gave in Re Spicer Axle Structural Components Australia Pty Ltd and Secretary, Department of Industry, Tourism and Resources. If a claim for legal professional privilege is made out, the Tribunal may not order disclosure of that document to any party to the proceeding other than the decision-maker.

27. A claim for legal professional privilege will fail if the privilege has been waived, either intentionally or by implication.[33] As Gibbs CJ said:

"... where there is no intentional waiver the question whether a waiver should be implied depends on whether it would be unfair or misleading to allow a party to refer to or use material and yet assert that that material, or material associated with it, is privileged from production."[34]

28. Except in one limited area, the authorities do not pay any regard to the person's general behaviour with regard to the other party in a proceeding or with regard to other matters. That limited exception arises in relation to communications in furtherance of a fraud or crime[35] but is not relevant to explore in this case. It is the use that is made of the communication by the person who is claiming legal professional privilege and notions of fairness that are relevant in deciding waiver. As the majority of the High Court said in Mann v Carnell:[36]

"... Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of confidentiality which the privilege is intended to protect. ... What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large."[37]

29. Voluntary disclosure of a legal advice does not necessarily equate with waiver of legal professional privilege. In Mann v Carnell, the legal advice was disclosed to the accountants, Ernst & Young. That voluntary disclosure did not necessarily waive privilege.[38] It was disclosed for the purpose of assisting Ernst & Young in understanding the issue upon which they had been asked to comment i.e. whether the practice of "... entering the manufacturing machinery [which, I understand to mean its automotive tooling] in its 'fixed asset register' ..." is a practice in line with general accounting practice. That is disclosure to a limited group of people being, at its narrowest, the partner to whom it was addressed and, at its widest, the firm of Ernst & Young. That was disclosure for one clearly stated and circumscribed purpose. In those circumstances, the Secretary had not used the legal advice in a way that was inconsistent with his claiming that it was confidential.

Are the documents that are not referred to in counsel's advice of 12 May 2005 but sought by VBN and VBT relevant, or may they be relevant, to the review of the decision?

30. Are the documents sought by VBN and VBT "relevant to the review of the decision by the Tribunal" under s. 37(1)(b) or are they documents that "... may be relevant to the review of the decision by the Tribunal ..." under s. 37(2)? Unless they are, there is no obligation to produce them under s. 37 and it is difficult to envisage circumstances in which the Tribunal would order the production and disclosure of documents using its general powers under s. 33 of the AAT Act.

31. Given the nature of merits review by the Tribunal, documents that are relevant in that way must be documents that are connected with or pertinent to the multi-faceted task, or a part of it, that the Tribunal must undertake. To draw from the law relating to subpoenas, it is relevant to ask whether the material has:

"... an apparent relevance to the issues in the principal proceedings, ie, is adjectival, as distinct from substantive, relevance established? ..."[39]

In Trade Practices Commission v Arnotts Ltd and Others,[40] Beaumont J had said:

"The test of adjectival relevance is satisfied if the material has apparent relevance. In my opinion, the documentation called for here could possibly throw light on the issues in the main case. In my opinion, adjectival relevance is established."[41]

32. As part of the Tribunal's task is to identify and interpret the law, documents that are concerned with the interpretation or application of the pertinent law are relevant in reviewing the merits of the decision. That would lead to the conclusion that counsel's advice dated 12 May 2005 is relevant to the review in so far as it relates to the interpretation of the relevant law. By its description, it must have been in APRA's possession or under its control at the time it complied with its obligations under s. 37(1) of the AAT Act. Even though it would have been subject to legal professional privilege, its production is required by virtue of s. 37(3). APRA has correctly included it within the T documents.

33. If APRA had any other legal advice relating to the interpretation of the law in its possession or under its control at the time that it complied with its obligation under s. 37(1), those advices should also be produced and given to VBN and VBT. It matters not whether the delegates actually referred to them. If they are relevant to the interpretation of the law, they are relevant to the review of the decision. This is the requirement of s. 37(1) of the AAT Act and I note that it is also consistent with the less well known requirements of s. 9(1) of the Freedom of Information Act 1982. That section reads, in part:

"This section applies, in respect of an agency, to documents that are provided by the agency for the use of, or are used by, the agency or its officers in making decisions or recommendations, under or for the purposes of an enactment or scheme administered by the agency, with respect to rights, privileges or benefits, or to obligations, penalties or other detriments, to which persons are or may be entitled or subject, being:

(a) manuals or other documents containing interpretations, rules, guidelines, practices or precedents including, but without limiting the generality of the foregoing, precedents in the nature of letters of advice providing information to bodies or persons outside the Commonwealth administration;

...

but not including documents that are available to the public as published otherwise than by an agency or as published by another agency."

34. It may be that APRA, whether directly or indirectly through its delegate(s), has given written instructions to its counsel who have provided legal advice of the sort that I have said must be disclosed. If that is so, it too must be disclosed under s. 37(1)(b). It is relevant to the advice that was given and so relevant to the review of the decision by the Tribunal. That would mean that the instructions given to Mr Crennan and Ms Mavroudis in relation to their advice of 12 May 2005 should be disclosed.

35. It is clear from the opening paragraph of counsel's advice of 12 May 2005 that there are legal advices relating to the procedures or processes to be followed by APRA.[42] These are described as "earlier oral and written advice [that] referred to relevant administrative law principles governing the administrative process with which the SOR is concerned."[43] Relating as they do to process, I do not consider that they, or the instructions provided to counsel, fall within the ambit of s. 37(1). In this case, there is no suggestion that the decision was not made at all. Even if the processes in making it were flawed, the flaws are not relevant to the review of the decision that was made and that affects VBN and VBT. It is arguable that such advices would come within the scope of s. 9 but that is different legislation directed to a different end and not a matter I need to consider further.

36. If legal advices relating to the interpretation of the SIS Act or other applicable law came into APRA's possession after it had prepared and lodged the T documents under s. 37(1)(b), those advices could be documents that come within the ambit of s. 37(2) of the Act. They may be relevant to the review of the decision. The Tribunal could order that they be lodged with it. As s. 37(3) of the AAT Act does not abrogate the law relating to legal professional privilege in relation to the disclosure of such documents, it could not order that they be given to the other parties to the proceeding unless legal professional privilege has been waived. At this stage, it is premature to consider whether legal professional privilege has been waived.

37. File notes of conversations, e-mails and other correspondence between officers or employees of APRA and Mr Kennedy and Ms Tongue and relating to instructions given to them are also sought. Again, they are related to process and more suited to discovery in proceedings for judicial review. On the information that I have and taking into account the nature of the decision under review, I do not consider that they are relevant to the review of the merits of APRA's decision in this case.

38. Similar considerations lead me to decline to order the production of documents relating to the position and appointment of Mr Kennedy and Ms Tongue as APRA's delegates. In some cases, it is relevant to consider whether those purporting to exercise authority have that authority. In reaching that decision, I have had regard to Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd. In that case, the Full Court of the Federal Court was concerned with a decision that had been made to cancel a warehouse licence. There was no statutory power to make that decision. The majority of the Full Court, Bowen C.J. and Smithers J, held that the Tribunal had the power to entertain an application made to it to review such a decision. Bowen C.J. said:

" In the Administrative Appeals Tribunal Act a wide meaning is given to the word 'decision' by s3(3). In s25 it appears to me that the word simply refers to a decision in fact made, regardless of whether or not it is a legally effective decision. The difficulty lies in interpreting the words 'made in the exercise of powers conferred by that enactment'. This may mean that it must be shown there was a decision made:-

(a) in pursuance of a legally effective exercise of powers conferred by the enactment; or

(b) in the honest belief that it was in the exercise of powers conferred by the enactment; or,

(c) in purported exercise of powers conferred by the enactment.

...

Interpretation (c) appears to me to be consistent with the context in the Administrative Appeals Tribunal Act. The Acts committed to the administration of each Minister and his Department are set forth in the Administrative Arrangements Orders published from time to time in the Gazette. There might be a rare case where a decision appeared to have no relationship to one of the Acts committed to the administration of the Minister or Department concerned. However, in the ordinary course, it would be reasonably clear from the objective facts under which enactment or in the exercise of which statutory powers an official had purported to act. The adoption of this view would mean that the Administrative Appeals Tribunal would have jurisdiction to entertain an appeal from a decision in fact made, which purported to be made in the exercise of powers under an enactment. It could then proceed to determine whether the decision was properly made in fact and in law. There is nothing unusual in holding that an administrative decision which is legally ineffective or void is susceptible of appeal: see Calvin v. Carr (1979) 22 ALR 417. I would adopt interpretation (c).

...

Turning to the application of interpretation (c) to the present case, it appears to me that there was a decision to revoke the warehouse licence and this decision did purport to be made in the exercise of powers conferred by the Customs Act. Accordingly, in my view, the Administrative Appeals Tribunal did not lack jurisdiction to entertain the application and deal with it."[44]

39. Smithers J reached a conclusion similar to that of the Chief Justice and, in doing so, illustrated the practical consequences of the situation:

" It is to be noted also that the subjects of reviews are decisions. If an administrator makes a particular decision in the course of government administration, then whether or not he is authorized to do so, there is in fact a decision made. The fact that that decision cannot affect legal rights or liabilities is irrelevant to that fact.

There is a distinction also between a decision, the steps that may be taken to implement it and the legal effect thereof. It does not appear to me to be sound to regard a decision to take certain action as a nullity because such action if taken will not be legally effective. In the case under appeal the letter of 31 October 1977 was the communication of the decision which the Collector had made. The decision preceded that letter. The letter was no doubt the act of purported revocation and because of the statutory definition of 'decision' (see s 3(3) of the Administrative Appeals Tribunal Act set out below) that act may be a decision within the meaning of s 25. But to decide to revoke the licence was also itself a decision according to the natural meaning of that term. Such a decision may have serious results for the citizen. No doubt the officers of the department will act upon it. Thus, after the decision in question had been made they would be expected to refuse to permit goods to be entered to the defendant's warehouse. In this case, also action was taken against the licensee under s 94 of the Customs Act. That action did not necessarily depend upon revocation but in all probability it would not have been taken had the decision to revoke the licence not been made. ..."[45]

40. It is clear that in the Brian Lawlor case there was a decision in fact that was affecting rights and liabilities even though the decision had not been lawfully made. It was a decision to revoke the applicant's warehouse licence and that affected the applicant in that it could no longer undertake the activities that he had previously undertaken when it held the licence. In this case, there was certainly a decision to disqualify VBN from being a trustee, investment manager or custodian of a superannuation entity. Whether it had no effect in law is irrelevant for it had effect in fact and he could not ignore it.

What of the documents referred to in counsel's advice dated 12 May 2005?

41. On behalf of VBN, Mr Santamaria submitted that APRA should disclose the documents constituting the General Information and Specific Information referred to in counsel's advice of 12 May 2005. Those documents were referred to in the context of counsel's making various suggestions in relation to particular paragraphs of the delegate's draft SoR:

"Paragraph 57 -

This paragraph states that the documents dispatched to members did not include all of the information a member would have needed in order to make an informed decision. We suggest that the delegate list what that information is, particularly in light of the submissions made by ... [VBN] at page 136 of ... [the] Response. (In this regard, we refer to the information and documents constituting the 'General Information' and the 'Specific Information' in our discussion draft at paragraphs 71.1-71.4.)"[46]

42. Mr Santamaria referred to the decision of Downes J in Re Fischer and Australian Fisheries Management Authority.[47] Downes J considered whether a report referred to in a letter that had been included in T documents should be disclosed. Its disclosure was resisted on the basis that it was not relevant and that, in any event, its content was contained in material already disclosed. Downes J said:

"... the fact that the report is referred to in the letter ... really makes it relevant so that it ought to be produced. It is not just that the first report is referred to in passing in that letter, it is a central subject which the letter considers. I also note that the letter states that the respondent:

'... considered the [Report] in detail at our meeting in Perth on 16 September 2003.'

It seems to me that the first report is sufficiently bound up with the report which is included in the s 37 documents so that it is itself a document which is required to be processed under s 37."[48]

43. The case of Re Fischer and Australian Fisheries Management Authority required the Tribunal to review policy and so a review of various reports might well have been considered relevant. This case is a little different. How the delegate reached his decision, the evidence on which he relied and the way in which he characterised the evidence or it was characterised for him is of little relevance. At the same time, the reference in the advice to General Information and Specific Information legitimately puts the reader on notice that there is such information. It is to be expected that the information included in those descriptions will have already been included in the T documents. To the extent that it has not, it should have been included in the documents lodged under s. 37(1) and given to VBN and VBT.

44. The first page of the advice give by Mr Crennan and Ms Mavroudis refers to a "draft SOR" and to an "amended draft SOR". I set out only an example of the text in which reference is made:

"We have read and considered the draft Statement of Reasons ("SOR") provided to us ... We have been instructed to 'review the amended draft SOR to provide 'legal clearance' about any legal aspect in or arising from the draft SOR' ... Assuming that our suggestions are accepted, it is our view that, with the qualifications noted in our discussion of the fit and proper person conclusion, the SOR correctly states the relevant principles of law and draws inferences and conclusions which, applying those principles, are reasonably open on the facts. ... The field of administrative law is subject to development and some of the central concepts or benchmarks employed in the cases are expressed in relatively general terms. These factors militate against certainty in prediction of the ultimate outcome of such challenges, but on the material before us we believe that subject to the matters referred to in this Memorandum, the SOR may properly go forward."[49]

45. I do not consider that the draft SoR is relevant to the Tribunal's review of the merits of the decision that was ultimately made. It is the decision that was ultimately made and the reasons for it that are the starting point. In reviewing the merits of a decision, it matters not whether the delegate had earlier decided to make another decision or to rely on another set of reasons. What matters is the decision that he did make. The draft SoR is not relevant.

46. I have reached the same conclusion in relation to the "discussion draft" or "our discussion draft" referred to by Mr Crennan and Ms Mavroudis. It appears to be part of the process of decision-making. Except to the extent that it contains any legal advice as to the law to be applied or followed, I do not consider it to be relevant to the review of the merits decision.

Should an order be made under s. 35(2) in relation to any of the documents that must be lodged under s. 37?

47. The documents that I have decided that must be lodged under s. 37 comprise legal advice. Given that description, I have assumed that they are subject to legal professional, privilege. Section 35(2) of the AAT Act provides that:

"Where the Tribunal is satisfied that it is desirable to do so by reason of the confidential nature of any evidence or matter or for any other reason, the Tribunal may, by order:

(a) direct that a hearing or part of a hearing shall take place in private and give directions as to the persons who may be present; and

(aa) give directions prohibiting or restricting the publication of the names and addresses of witnesses appearing before the Tribunal; and

(b) give directions prohibiting or restricting the publication of evidence given before the Tribunal whether in public or private or of matters contained in documents lodged with the Tribunal or received in evidence by the Tribunal; and

(c) give directions prohibiting or restricting the publication of evidence given before the Tribunal, whether in public or in private, or of matters contained in documents lodged with the Tribunal or received in evidence by the Tribunal; and

give directions prohibiting or restricting the disclosure to some or all of the parties to a proceeding of evidence given before the Tribunal, or of the contents of a document lodged with the Tribunal or received in evidence by the Tribunal, in relation to the proceeding."

48. In considering whether a hearing of a proceeding should be held in private or whether publication, or disclosure to some or all of the parties, of evidence given in, or received by, the Tribunal or of matter in documents lodged in the Tribunal[50] should be prohibited or restricted, the Tribunal must take as the basis of its consideration the principle that it is desirable that the hearing be held in public and that evidence is available to the public and the parties.[51] In a case under the SIS Act, that principle is qualified because the hearing must be held in private.[52] That qualification does not impinge on the requirements of s. 39 of the AAT Act. Subject to ss. 35,[53] 36[54] and 36B,[55] it requires the Tribunal to:

"... ensure that every party to a proceeding before the Tribunal is given a reasonable opportunity to present his case and, in particular, to inspect any documents to which the Tribunal proposes to have regard in reaching a decision in the proceeding and to make submissions in relation to those documents."

49. Apart from claims relating to legal professional privilege, no other grounds are advanced as to why documents that I have decided are relevant should be kept from the other parties. In relation to those that must be lodged under s. 37(1), I am not satisfied that an order should be made under s. 35(2) of the AAT Act. They should be given to VBN and VBT. In relation to those that must be lodged under s. 37(2), I do make an order. That order is required to ensure that there is no breach of legal professional privilege. In doing that, I am acting consistently with the substantive law that has not been displaced by the AAT Act or the SIS Act.

1. the respondent lodge and give to the applicants and the party joined copies of:

(a) related to the interpretation and application of the law relating to the decision under review; and

(b) it had in its possession and control when it lodged documents under s. 37(1) of the Administrative Appeals Tribunal Act 1975; and

(2) instructions given in relation to that legal advice;

2. the respondent lodge all "information and documents constituting the 'General Information' and the 'Specific Information' in ... [Counsel's] discussion draft at paragraphs 71.1-7.14" referred to in Counsel's Advice at 3 of T4.14, except to the extent that the information and documents have already been provided in the T documents.

3. the respondent lodge copies of any legal advice and relevant instructions that:

(1) related to the interpretation and application of the law relating to the decision under review; and

(2) came into its possession and control after it lodged documents under s. 37(1) of the Administrative Appeals Tribunal Act 1975;

4. copies of any legal advice referred to in clause 3 of this order be restricted to the Tribunal and its officers and staff and the respondent and its officers and legal advisers; and

5. liberty to the parties to apply.

I certify that the fifty preceding paragraphs are a true copy of the reasons for the decision herein of

Deputy President S A Forgie,

Signed: ...............................................................

Nathaniel Wills Associate

Date of Directions Hearing 4 October 2005

Date of Decision 21 October 2005

Counsel for VBN Mr J. Santamaria QC with Mr A. Pound

Solicitor for VBN Corrs Chambers Westgarth

Counsel for VBV Mr C. Scerri QC with Mr S. Sharpley

Solicitor for VBV Arnold Bloch Leibler

Counsel for the Respondent (VBN) Mr T. Ginnane SC with Mr C. Archibald

Counsel for the Respondent (VBV) Ms D. Mortimer SC with

Solicitor for the Respondent Australian Prudential Regulation Authority

Actuary D = Paul Francis (Employer's consultant actuary from Towers Perrin)

Actuary E = Steven John Schubert (a second Employer's consultant actuary from Towers Perrin)

Superannuation Committee = AXA's Superannuation Plan Steering Committee

[2] APRA's delegate who made the decision on 9 June 2005

[3] APRA's delegate who, on 3 August 2005, confirmed the decision made on 9 June 2005

[7] SIS Act, s. 52(b)

[8] SIS Act, s. 52(c)

[9] SIS Act, s. 52(g)

[10] Transcript referred to in a letter dated 6 September 2005 from Corrs Chambers Westgarth to APRA: Exhibit JK-6 to the affidavit of Mr Jonathan Alan Kramersh sworn on 30 September 2005:

"Neither Mr Kennedy nor Ms Tong[ue] have ever been employed by APRA on a permanent basis. That is what Mr Brown said and that these persons were engaged by APRA as consultants for the purpose of making delegated decisions without being involved in investigative work. So they are not - they don't have a vested interest in making sure the investigation is successful, as it were, they are people who have been brought in to give some comfort to the fact that they are looking at it with objective eyes."

[12] Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577; 2 ALD 60 at 589; 68 per Bowen CJ and Deane J and 599; 77 per Smithers J

[13] Re Mann and Capital Territory Health Commission (No. 2) (1983) 5 ALN N368 as set out and adopted in Re Wertheim and Department of Health (1984) 7 ALD 121 at 154

[14] Revelation of the process could, on occasion, reveal that no decision had been made at all. In that case, the Tribunal would not have jurisdiction (e.g. Tradigrain Australia Pty Ltd and Export Market Development Grants Board (1984) 6 ALD 442). If revelation of the process merely showed that a decision was improperly or even unlawfully made, that is unlikely to affect the Tribunal's jurisdiction to review the decision: see Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd (1979) 25 ALR 307 at 317 per Bowen CJ and 339-340 per Smithers J.

[15] AAT Act, s. 27

[16] AAT Act, s. 30(1A)

[17] As the Full Court said in Collins v Minister for Immigration and Ethnic Affairs [1981] FCA 147; (1981) 36 ALR 598 at 602:

"It seems to us to be unsound in determining the correctness of a decision to treat the decision itself as being probative of its own correctness."

[18] Section 37 does not apply to a proceeding in the Security Appeals Division to which s. 39A applies: AAT Act, s. 37(1AAA). Its requirements may also be modified by legislation conferring jurisdiction e.g. Migration Act 1958, s. 388

[19] AAT Act, s. 37(1)(a)

[20] AAT Act, s. 37(1)(b)

[21] AAT Act, s. 38

[22] Explanatory Memorandum, cl. 3, Schedule 1, items 124-125

[23] Amended by Administrative Appeals Tribunal Amendment Act 2005, s. 3, Schedule 1, item 124

[24] Grant v Downs [1976] HCA 63; (1976) 135 CLR 674 per Stephen, Mason and Murphy JJ at 689

[25] AAT Act, s. 37(3)

[26] [2005] AATA 77; (2005) 83 ALD 104

[27] [2005] AATA 77; (2005) 83 ALD 104 at 107

[28] AAT Act, s. 37(1AE). Section 37(1AB) relates to particular decisions or classes of decisions made the subject of specific directions by the President.

[29] [2005] AATA 77; (2005) 83 ALD 104 at 111

[30] Hansard, House of Representatives, 30 November 1995 at 4444

[31] Report, Appendix 9, Recommendation 13

[32] [2005] AATA 77; (2005) 83 ALD 104 at 111

[33] Attorney-General (NT) v Maurice [1986] HCA 80; (1986) 161 CLR 475 at 481 per Gibbs CJ and at 493 per Deane J

[34] [1986] HCA 80; (1986) 161 CLR 475 at 481

[35] Commissioner of the Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 556 per McHugh J

[36] [1999] HCA 66; (1999) 201 CLR 1

[37] [1999] HCA 66; (1999) 201 CLR 1 at 13; [29]

[38] [1999] HCA 66; (1999) 201 CLR 1 at 14; [30]

[39] Spender J considered these principles in Cosco Holdings Pty Ltd v Commissioner for Taxation & Anor [1997] FCA 1504 at 10

[40] (No. 2) (1989) 88 ALR 90

[41] (No. 2) (1989) 88 ALR 90 at 103

[43] Referred to in (f) of the documents sought by VBN and VBT

[44] [1979] FCA 21; (1979) 24 ALR 307 at 314-315

[45] [1979] FCA 21; (1979) 24 ALR 307 at 335-336

[47] [2005] AATA 293

[48] [2005] AATA 293 at [6]- [7]

[50] AAT Act, s. 35(3)

[51] AAT Act, s. 35(3)

[52] SIS Act, s. 344(11)

[53] Provides that hearings shall be held in public except in special circumstances.

[54] Provides that disclosure is not required where there is an Attorney-General's public interest certificate.

[55] Provides that disclosure is not required where there is a State Attorney-General's public interest certificate.