Adachi Disability Services Pty Ltd v Commissioner of the NDIS Quality and Safeguards Commission
[2024] FCA 311
•26 March 2024
FEDERAL COURT OF AUSTRALIA
Adachi Disability Services Pty Ltd v Commissioner of the NDIS Quality and Safeguards Commission [2024] FCA 311
File number: WAD 59 of 2024 Judgment of: JACKSON J Date of judgment: 26 March 2024 Date of publication of reasons: 28 March 2024 Catchwords: ADMINISTRATIVE LAW - application for orders suspending operation of administrative decision - serious case to be tried established - vulnerable individuals potentially affected - balance of convenience favours granting brief stay
ADMINISTRATIVE LAW - application for suppression orders - ground of necessity to prevent prejudice to the administration of justice not established
Legislation: Administrative Decisions (Judicial Review) Act 1977 (Cth) ss 5, 15
Federal Court of Australia Act 1976 (Cth) ss 37AF, 37AG
National Disability Insurance Scheme Act 2013 (Cth) ss 9, 73ZN, 73ZS, 100
Cases cited: AA v BB [2013] VSC 120
Australian Competition and Consumer Commission v Air New Zealand Ltd (No 12) [2013] FCA 533
Huikeshoven v Secretary, Department of Education, Skills and Employment [2021] FCA 1359
John Fairfax Group Pty Ltd v Local Court of New South Wales (1991) 26 NSWLR 131
Mohamed trading as Billan Family Day Care v Secretary, Department of Education, Skills & Employment [2020] FCA 900
Re Robins; Ex parte West Australian Newspapers Ltd [1999] WASCA 16; (1999) 20 WAR 511
Rush v Nationwide News Pty Ltd [2018] FCA 357
Division: General Division Registry: Western Australia National Practice Area: Administrative and Constitutional Law and Human Rights Number of paragraphs: 75 Date of hearing: 26 March 2024 Counsel for the Applicant: Ms CL Donald with Mr AJ Sutton Solicitor for the Applicant: Lavan Counsel for the Respondent: Ms J Moore Solicitor for the Respondent: NDIS Quality and Safeguards Commission ORDERS
WAD 59 of 2024 BETWEEN: ADACHI DISABILITY SERVICES PTY LTD (ACN 630 018 058)
Applicant
AND: COMMISSIONER OF THE NDIS QUALITY AND SAFEGUARDS COMMISSION
Respondent
ORDER MADE BY:
JACKSON J
DATE OF ORDER:
26 MARCH 2024
THE COURT ORDERS THAT:
1.Pursuant to s 15(1) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) and subject to the following condition, the operation of the banning order made in respect of the applicant by the respondent on 13 February 2024 is suspended until 5.00 pm AWST on Friday 5 April 2024:
The condition is that the applicant is prohibited for a period of two years from engaging directly or indirectly in the provision of National Disability Insurance Scheme (NDIS) services to any NDIS participant, other than the participants identified as Participant B and Participant P in the second affidavit of Chiedza Mtungwazi sworn on 22 March 2024.
2.By 4.00 pm AWST on Wednesday 3 April 2024, each of the applicant and respondent must file and serve an affidavit providing an update on what further arrangements, if any, have been made in relation to the provision of support services, including tenancy support, to Participant B and Participant P.
3.The hearing of the interlocutory application filed on 25 March 2024 is otherwise adjourned to 10.15 am AWST on 5 April 2024.
4.Any access to:
(a)the second affidavit of Chiedza Mtungwazi sworn on 22 March 2024;
(b)the affidavit of Andreas Nikolas Geronimos sworn on 22 March 2024; or
(c)Any transcript of the hearing on 26 March 2024,
is not to be provided to any non-party without the leave of the Court.
5.By 4.00 pm AWST on Thursday 28 March 2024, the applicant must provide to:
(a)the Public Advocate in its capacity as guardian of Participant B; and
(b)any guardian of Participant P, or if no such guardian exists, Participant P,
notice of these orders, the reasons for decision once published, and the listing on 5 April 2024 (indicating that they may attend that listing and seek leave to be heard and put on evidence).
6.In relation to paragraph 5 above, either party has liberty to apply on 3 hours' notice by informal written application to the Chambers of Justice Jackson.
7.Costs reserved.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
JACKSON J:
The applicant (Adachi) is a provider of services using funding under the National Disability Insurance Scheme (NDIS). That means that Adachi comes within the definition of NDIS provider in the National Disability Insurance Scheme Act 2013 (Cth) (NDIS Act), s 9. Under s 73ZN(1) of that Act, the respondent (Commissioner) has the power to make a banning order prohibiting or restricting specified activities by an NDIS provider in certain circumstances.
On 13 February 2024, a delegate of the Commissioner made a banning order prohibiting Adachi from 'engaging directly or indirectly in the provision of NDIS-funded supports or services to any [NDIS] participant', for a period of two years from the date on which the order took effect (Decision). An NDIS participant is a person with disabilities who is entitled to funding under the NDIS (NDIS Act s 9). The banning order was stated to take effect on 28 February 2024, so as to provide '14 days for the planned and safe transition of NDIS participants' from the care of Adachi. The reasons given for the Decision were essentially that Adachi had failed to comply with measures relating to the handling of complaints and reportable incidents.
After correspondence with Adachi's solicitor, on 26 February 2024 the Commissioner varied the banning order so that it would take effect on Wednesday 27 March 2024 at 5.00 pm AWST.
By application lodged late on the afternoon of Friday 22 March 2024 and so accepted for filing on Monday 25 March 2024, Adachi applied for judicial review of the Decision to make the banning order. While the originating application does not make this clear, it appears that it is made under s 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act). The substantive relief sought is the quashing of the Decision. By interlocutory application, Adachi sought the suspension of the banning order until further order of the Court under s 15(1)(a) of the ADJR Act, and certain non-publication and confidentiality orders.
As to the latter, Adachi's position changed after the lodgement of the interlocutory application. Shortly before the hearing, it provided a minute of proposed orders to:
(a)prohibit the disclosure of the fact that the banning order had been made in respect of it, until the time that the banning order became operative;
(b)prohibit the taking of any recording or notes at the hearing of the application for suspension of the banning order;
(c)prevent access to two specified affidavits filed in support of the application;
(d)prohibit disclosure of the contents of those affidavits, and of the transcript of the hearing to the extent that it records those contents; and
(e)prevent disclosure of the contents of the orders to be made and to suppress the reasons for decision.
The Commissioner opposed the suspension of the banning order. He did not oppose the suppression orders.
I heard the matter as urgent duty judge on 26 March 2024. At the end of that hearing, I made orders suspending the banning order on a conditional basis for a further nine days, and certain ancillary orders. I did not make any of the suppression orders sought, save to provide that access to the two affidavits and the transcript of the hearing was not to be provided without the leave of the Court.
These are my reasons for those orders. I directed that the reasons not be published until 5 April 2024, in case Adachi wished to appeal in relation to the suppression orders it sought.
Suspension of the operation of the Decision
Principles
Section 15(1) of the ADJR Act relevantly provides that, while the making of an application to the Federal Court under s 5 in relation to a decision does not affect the operation of the decision or prevent the taking of action to implement the decision, the Court or a judge 'may, by order, on such conditions (if any) as it or he or she thinks fit, suspend the operation of the decision'.
It was essentially common ground that:
(a)the discretion to suspend the operation of the Decision is constrained only by the subject matter, purpose and scope of the ADJR Act and the legislation under which the Decision was made;
(b)nevertheless, it was helpful and convenient to proceed by analogy to the principles on which interlocutory injunctions are determined, namely that the Court must assess whether there is a serious question to be tried and the balance of convenience, with those factors being interdependent in the sense that the stronger the case is, the easier it may be to establish that the balance of convenience weighs in favour of the applicant, and vice versa.
I agreed that it was appropriate to proceed in this case by reference to those factors. As will emerge, however, under the heading of 'balance of convenience' I was disposed to put much weight on the interests of vulnerable third parties, namely two NDIS participants who, as at the time of the hearing, were still receiving NDIS-funded services from Adachi.
Overview of Adachi's business
The evidence was not contested at this interlocutory stage and it is only necessary to summarise it in overview.
Two affidavits were sworn by Adachi's Chief Executive Officer, Chiedza Mtungwazi. Her first affidavit described three divisions of Adachi's operations. They are:
(a)the provision of NDIS-funded support to two NDIS participants;
(b)the provision of labour hire services to the aged care sector; and
(c)the provision of accommodation and out of home care (OOHC) to children who are under the care of the Western Australian Department of Communities.
The NDIS division used to provide services to a larger number of participants, but the number has dropped since around late 2022. The revenue stream from this division is now only nominal. The revenue stream from the labour hire division was about 10% of Adachi's total revenue. The OOHC business made up the remaining 90% or so.
Compliance concerns
The Decision was the end result of a process under which the Commissioner reviewed Adachi's compliance with the NDIS Act (although Adachi's case is that the Decision was influenced by matters extraneous to those that were explicitly addressed by that process). That process commenced with a compliance notice which the Commissioner issued in December 2021.
It is not necessary to trace that process in detail. The Commissioner raised a large number of issues about whether Adachi had complied with its obligations under the NDIS Act in the provision of services to various NDIS participants. The obligations pertained to complaints handling and the standard of care provided. The process of the Commissioner investigating the concerns and Adachi responding to them included a meeting called a 'Validation Meeting' which occurred between representatives of Adachi and representatives of the Commissioner on 27 October 2022.
On 20 February 2023, a delegate of the Commissioner gave notice to Adachi of the opportunity to make submissions as to why its registration as an NDIS provider should not be revoked and why an order should not be made banning its operation as an NDIS provider.
On 1 March 2023, Adachi told the Commissioner that it no longer wished to renew its registration as an NDIS provider. As a result, that registration has lapsed. However, it appeared from submissions made by both parties about the workings of the NDIS scheme that Adachi still could, and still did, provide NDIS-funded services to NDIS participants even without that registration. If the banning order came into operation, however, it would prohibit Adachi from continuing to do so.
Adachi gave the Commissioner submissions about the notice of intention to make a banning order in July and August 2023. As discussed earlier, the Decision was made on 13 February 2024, with written reasons which said that it was made because of Adachi's lack of compliance relating to complaints and reportable incidents.
After the Decision was made, Adachi applied for internal review under s 100(2) of the NDIS Act. That internal review will result in a further decision, affirming, varying or revoking the Decision, by no later than 21 May 2024. If Adachi is dissatisfied with that further decision, it will be entitled to apply for review to the Administrative Appeals Tribunal.
The basis of the application for judicial review
Adachi sought orders for the suppression of the matters that form the basis of the application for judicial review. While, as set out below, I declined to make those orders, I was satisfied that it is appropriate, and consistent with the principles of open justice, to be circumspect at this early interlocutory stage about the description I give of the basis for the application.
Adachi put on affidavit evidence as to the following matters.
(1)At the Validation Meeting of 27 October 2022, an officer of the Commissioner made comments that could be construed as implying that the Commissioner had already determined that Adachi should be the subject of a banning order, specifically words to the effect of:
You've done very well to submit [an implementation plan], any other organisation would've given up. You shouldn't have bothered though.
…
You should think about leaving the NDIS.
(2)A former officer of the Commissioner told Ms Mtungwazi and a colleague in February 2023 that the Commissioner has an impression that Ms Mtungwazi has assets and has incurred expenses which, it is implied, come from funds the sources of which are unaccounted for. In addition, the Commissioner has noted that Adachi was sponsoring at least one local football club. While the evidence is not explicit, the implication appears to be that 'the NDIS' has an impression that Adachi has been misappropriating NDIS funds.
(3)On 2 February 2024 the National Disability Insurance Agency wrote to Adachi inviting it to give information in response to allegations of serious misconduct of a similar nature. The letter did not give any particulars of the allegations beyond a start date of 7 October 2019 for the alleged conduct.
(4)In February 2024 and then again in March 2024 Adachi came into the possession of screenshots of emails from an employee of Ark Support Coordination Pty Ltd to one of the NDIS participants receiving services from Adachi raising concerns similar to those just described and suggesting that they may be a reason for the Decision.
I will refer to the allegations described in paragraphs (2), (3) and (4) as the allegations. Adachi denies the allegations. It does not appear that Adachi has received any further particularisation of the allegations than has just been given, that is, virtually none.
The only ground for Adachi's application for judicial review articulated thus far is that the Commissioner took the allegations into account in reaching the Decision, without notifying Adachi of the allegations or giving it an opportunity to respond to them before the Decision was made. In doing so, Adachi says, the Commissioner breached the rules of natural justice. Under s 5(1)(a) of the ADJR Act, if made out, that is a ground on which the Decision could be quashed.
Evidence relevant to balance of convenience
Adachi adduced evidence in two areas relevant to the question of balance of convenience.
The first was the evidence about its business divisions, summarised above. The area of the business that will be directly affected when the banning order commences to operate, the NDIS business, is only earning nominal revenue. For the OOHC business, Adachi adduced evidence suggesting that the banning order has led the Department of Communities to terminate its contract to supply those services. It also adduced correspondence from the Commissioner asking for a list of invoices raised by Adachi to the Department, from which it might be inferred (I put it no higher than that) that the Department was aware of the allegations. The withdrawal of the OOHC contracts with the Department appears to have had a substantial effect on Adachi's revenue. There is no direct evidence of any effect, either past or future, on the labour hire component of the business.
The second area of evidence about the balance of convenience concerned the effect of the banning order on the two NDIS participants to whom Adachi was supplying services at the time of the hearing. Once again, it is appropriate to be circumspect and there is no need to describe the evidence in detail. In summary, at least at the time of the hearing:
(1)Both participants have high needs for support. They are vulnerable, for different reasons. For one of the participants, the Public Advocate acts as guardian. It was not clear at the hearing whether any similar appointment was in place for the other participant. However, that participant has the care of a very young child.
(2)Adachi provides, in effect, partially or fully subsidised housing to each of the participants, using NDIS funding. If that service (assuming it is properly characterised as such) were to be abruptly cut off, the accommodation arrangements for each participant (and the child of one of them) would be highly uncertain, to say the least.
(3)Adachi also provided support services to each participant. It is not necessary to describe these; it is enough to say that they help to enable the participants to live independently, that is, not in a residential care facility of some kind. For at least one of the participants, the support provided included important emotional support. There was evidence which, if made out at trial, would suggest that if those supports were suddenly withdrawn, the participants may (in different ways) cause harm to themselves or others around them.
(4)While Adachi has been providing services to the participants, Ark had the role of coordinating those services and the services provided by others for each participant. Adachi, through its solicitors, had been corresponding with Ark since at least 13 March 2024. Adachi submitted that Ark was the coordinator of the services and it was for Ark in the end, presumably with some collaboration from the Agency, to ensure that services were going to be continued to the participants if Adachi was banned from providing them.
(5)There was no direct evidence as to the wishes of the participants themselves. But the evidence adduced by Adachi, such as it was, was to the effect that they were reluctant to change service providers and concerned at the prospect of any change. Ms Mtungwazi expressed the opinion that for each participant, approximately three months was the time necessary to provide for transition to new support service providers.
In addition to that evidence adduced by Adachi, at the hearing the Commissioner handed up an affidavit of one of its officers, Natalie O'Neill, annexing an email from Duane Ashcroft, an Assistant Director of the National Delivery - Scheme Integrity Response Team of the Agency. According to Mr Ashcroft's email:
(1)One of the participants was to be moved to a new supported independent living property on 27 March 2024 and that 'while there is still some reluctance' the participant 'seems somewhat resigned to the fact this must happen'. A new plan was to be approved for the participant on the afternoon of the hearing that was to be 100% managed by the Agency, with a new 'core support provider' possessing the correct registration type to access funding.
(2)Arrangements for the other participant were less advanced, and that participant continued to refuse to engage with the 'Specialist Support Coordinator'. However the Agency intended to move to a plan with 100% funding from it. There was evidence given from the bar table, without objection given the urgent circumstances, that the plan review was to take place on 27 March 2024 and that new funding arrangements could be made within 24 hours after that.
The parties' submissions
The written submissions filed by Adachi in support of the suspension order spent several pages reciting the well-established principles governing applications for stays of orders and interlocutory injunctions. After that, the reasons why a suspension order should actually be made in this case were confined to one paragraph (broken into sub paragraphs) as follows, which was devoid of references to evidence:
(a) In light of there being a serious question to be tried as to whether:
(i)The Respondent's decision was influenced by allegations as to fraudulent conduct of the Applicant, which allegations were not disclosed in the reasons for the Decision, and to which the Applicant was not given the opportunity to respond.
(ii)The Applicant was deprived of natural justice in the decision making process.
(b) The balance of convenience favours the granting of the stay given:
(i)The prejudice the participants will suffer as a result of an unplanned and unsafe transition to a new NDIS provider.
(ii)The further, and significant damage, likely to be suffered by the Applicant by reason of the Banning Order becoming operational, for which damages is not an adequate remedy.
(iii)The utility of the Internal Merits Review will be lost where the Banning Order becomes operational prior to the delivery of the [Internal Merits Review] Decision.
I considered whether the inadequacy of these written submissions might be justified by the urgency with which the application was brought on. I decided that it was not. Adachi had been aware of the banning order since 13 February 2024 and had been aware since 26 February 2024 that, if not suspended, it was going to come into operation at 5.00 pm on 27 March 2024. And yet, it only made the application a mere three working days before that time.
When I asked the solicitor representing Adachi why the application was filed at the eleventh hour, she pointed to voluminous correspondence in which Adachi's solicitors had engaged with the Commissioner and others, after the Decision was notified. But that correspondence, whether useful or not, did not explain why no proceedings were commenced before 25 March 2024. All that was said about it was that Adachi had been unable to clarify the transition arrangements for the two participants.
But Adachi's concern about the banning order, and its desire to have it suspended, was clearly not driven solely by concern about the transitional arrangements for the participants. As explained further below, that concern and desire also appeared to be motivated by a wish not to have the fact of the banning order disseminated and ultimately, of course, to have it set aside.
Adachi's solicitors should have realised that it was incumbent on their client to file the application within a time that permitted the Court and the parties to deal with it in an orderly manner. That is especially so when the Court is being called on to make decisions that might bear on the welfare of vulnerable people. Adachi's solicitors could have continued to correspond with the Commissioner and others both before and after the proceeding was commenced. Adachi's delay in commencing the proceeding, which it has not satisfactorily explained, was a reason against exercising the discretion under s 15(1) of the ADJR Act in its favour. It was by no means determinative; the determinative reasons are set out below. But it was a factor I took into account.
Adachi's brief written submission was supplemented in oral submissions. According to the solicitor representing Adachi:
(1)The matters summarised at [22] above disclose a serious case to be tried of a breach of the rules of natural justice, in that the delegate of the Commissioner arguably took into account the existence of the allegations in making the Decision. I was taken through the evidence on which Adachi relied.
(2)The matters summarised at [26] above indicate that the banning order and, possibly, the allegations have resulted in the loss of Adachi's OOHC business.
(3)If the suspension, and suppression orders, are not granted, then there could be further impact on Adachi's business including further damage to its reputation.
The Commissioner submitted that Adachi's primary purpose of the application for suspension of the operation of the Decision was to delay the enforcement of the banning order pending the outcome of the internal review. He submitted that this purpose does not enliven the Court's power to grant a suspension order under s 15(1) of the ADJR Act: see Mohamed trading as Billan Family Day Care v Secretary, Department of Education, Skills & Employment [2020] FCA 900 at [15]-[21] (O'Bryan J).
As to the serious question to be tried, the Commissioner submitted that the application was grounded in an assumption that the Decision was influenced by the allegations and an alleged failure to give the Applicant an opportunity to respond to them. The Commissioner said that it was evident from the statement of reasons for the Decision that it was made because of Adachi's failure to comply with the compliance notice of December 2021.
As to the balance of convenience, the Commissioner pointed out that the NDIS side of Adachi's business provides only nominal revenue, and its business has further reduced as a result of the decision of the Department of Communities to terminate its contracts regarding OOHC (or not to renew them).
In relation to the two NDIS participants, the Commissioner submitted that, since Adachi is no longer a registered NDIS provider, it is not subject to a range of statutory obligations that would otherwise regulate its provision of services, and its NDIS business therefore falls outside the direct oversight and control of the Commissioner. Further, the Commissioner submitted that the two participants are vulnerable. The compliance concerns and, the Commissioner says, large number of complaints about Adachi mean that they are at risk so long as Adachi continues to be providing services to them. Specific complaints have been raised about Adachi's interactions with one of the participants. The undertaking as to damages which Adachi has provided does not protect those people. The Commissioner also relied on the evidence he tendered about the arrangements that had been reached or were to be reached in relation to the participants.
Therefore the Commissioner submitted that the balance of convenience did not support a stay.
Consideration of suspension order
The Mohamed case cited by the Commissioner supports the submission that the power under s 15(1) of the ADJR Act does not extend to making a suspension order for the purpose of delaying enforcement of a banning order pending the outcome of the internal review. But I did not accept the factual premise of the submission that this was the primary purpose of Adachi's application for suspension. As explained above, the application also appeared to be aimed at ensuring an orderly transition of the care arrangements for the two NDIS participants and, misconceived or not, at stemming further reputational damage to Adachi's business.
I accepted that Adachi had established that there is a serious case to be tried. It adduced evidence which suggests that staff of the Commissioner, among others, had formed an adverse view of it in respect of its use of NDIS funding. 'Suggests' is the operative word there; as the evidence stands at this early stage in the proceeding, it cannot be described as strong. It is either hearsay and, in the case of the evidence about what a former officer of the Commissioner told Ms Mtungwazi in February 2023, little more than innuendo, or it is circumstantial. In addition, there is room to doubt that it was the Commissioner, as opposed to the Agency or other agencies, that had formed that adverse view.
But the evidence needs to be weighed in light of the limited ability that Adachi has had to gather it at this stage of the proceeding. It may improve by the time of the final hearing. For present purposes, the evidence is enough to establish that there is a case to answer that when the delegate of the Commissioner made the Decision, he was influenced by matters that are not referred to in the Decision and were not put to Adachi beforehand, so that Adachi had no opportunity to comment on them. However that case is not strong, at present.
I did not accept that the matters advanced by the Commissioner negatived the serious case to be tried. It was not correct to characterise Adachi's position as based on an assumption; it has advanced evidence that the Decision was based on an adverse view of its use of funding, albeit limited evidence of the quality I have described. And it was not to the point to say that the reasons for the Decision do not reveal that adverse view; Adachi's whole complaint is that the Decision was influenced by unexpressed concerns.
As to the balance of convenience, for reasons that I trust will be self-evident, I was disposed to put a great deal of weight on the welfare of the two NDIS participants. In that regard, I put weight on the submission by the Commissioner that if Adachi were to continue to provide services to them, that may put them at risk. But against that, it must be acknowledged that an important aspect of those services was the financial support for the individuals' tenancy arrangements. It is hard to see how ongoing provision of that service would put them at risk. And any real chance that vulnerable individuals as well as a young child would suddenly be left without a home was not to be countenanced.
Ultimately, what led me to make the orders that I did, though, were the following matters:
(a)one of the participants was about to be moved to new living arrangements with a new Agency managed care plan - if that occurs without undue disruption, the banning order will have no adverse effect on that person, so those circumstances would not require any suspension of the operation of the Decision;
(b)the arrangements in respect of the other participant and the young child were less certain, but it appeared that within a short period of time there would be more certainty in respect of them; and
(c)it was appropriate for the views of the two NDIS participants or, if they do not have the requisite capacity, their guardians, to be sought before a final decision is made.
For those reasons, I ordered a limited suspension of the operation of the Decision for a relatively brief period, accompanied by directions that should have the result of informing the Court of what has transpired in relation to these two participants, and thereby equip it to make such orders as are appropriate going forward.
The suspension is limited because the conditions imposed on it mean that the banning order takes effect generally, in that it prohibits Adachi from providing the specified services, but it does not take effect in relation to these two participants until 5 April 2024. I considered whether it should take effect in relation to one of the participants only, since the arrangements for the other individual seemed to be well in hand. But, in the end, I was persuaded that the latter person's guardian should be given the opportunity to be heard before the banning order takes effect in a permanent way (subject to the ultimate outcome of this proceeding).
The other reasons advanced by Adachi did not persuade me that the balance of convenience favoured any longer period of suspension of the operation of the Decision. From the point of view of Adachi's interests, the revenue it was receiving in respect of the NDIS participants was nominal. In relation to most of its revenue, from the OOHC business, as its solicitor properly acknowledged in oral submissions, the damage had already been done. And in relation to the remaining aspect of the business, labour hire, there was no direct evidence that the banning order had any effect.
As I have said, a motivating factor for the application appeared to be to stem further damage to Adachi's business. But the proposition that a suspension of the banning order would have that effect appeared to me to be speculative. The Decision has been made. Its operation would merely be suspended. Any conception that a suspension represented some measure of disapproval of the Decision by the Court, let alone disapproval of the allegations, would be a misconception. The Court will not make suspension or stay orders in order to signal such disapproval to members of the public who might misunderstand the effect of the orders.
Finally, I did not accept Adachi's submission that the utility of the internal merits review would be lost if the banning order became operational before that review had run its course. As mentioned above, Mohamed is authority that this is not a legitimate purpose of an order under s 15(1) of the ADJR Act. But even putting that aside, the only present NDIS-funded business that will be affected if the banning order takes effect is that which concerns the two identified participants, where the revenue is nominal. If Adachi is successful in the internal review, then the banning order will be lifted and it will be free to provide NDIS-funded services again. The utility of the review will not be lost.
It is for those reasons that I made the limited and conditional suspension orders on 26 March 2024.
Suppression orders
Although the respondent did not oppose the suppression orders Adachi sought, orders of that kind are not made lightly. Adachi was still required to make out good grounds for them.
The orders were sought under s 37AF(1) of the Federal Court of Australia Act 1976 (Cth). That section provides:
The Court may, by making a suppression order or non-publication order on grounds permitted by this Part, prohibit or restrict the publication or other disclosure of:
(a)information tending to reveal the identity of or otherwise concerning any party to or witness in a proceeding before the Court or any person who is related to or otherwise associated with any party to or witness in a proceeding before the Court; or
(b)information that relates to a proceeding before the Court and is:
(i)information that comprises evidence or information about evidence; or
(ii)information obtained by the process of discovery; or
(iii)information produced under a subpoena; or
(iv)information lodged with or filed in the Court.
If an order is to be made under s 37AF of the Federal Court Act, it must be made on one of the grounds identified in s 37AG(1). Neither Adachi's minute of orders nor its written submissions were entirely clear as to the basis on which the orders were sought. Only one of its proposed orders was stated to be on the grounds that it was necessary to prevent prejudice to the proper administration of justice and to protect the safety of a person (s 37AG(1)(a) and s 37AG(1)(c) respectively). However Adachi made no written or oral submission in support of the second of these grounds. From its written submissions, it appeared to be relying solely on the first ground.
It is not necessary to summarise the well-established principles that govern suppression and non-publication orders under Part VAA of the Federal Court Act: see for example the summary in Huikeshoven v Secretary, Department of Education, Skills and Employment [2021] FCA 1359 at [24]-[26]. It is only necessary to repeat the basic points, described more fully in that summary, that 'necessary' in s 37AG is a strong word, cogent evidence of such necessity is needed, and the court will scrutinise the justification for the proposed orders carefully.
In written submissions Adachi articulated why it was necessary, in order to prevent prejudice to the proper administration of justice, to prohibit publication of the matters set out above as follows:
(1)Adachi sought suspension of the banning order on the ground that the delegate of the Commissioner denied Adachi procedural fairness, in that the delegate was influenced by allegations as to fraudulent and criminal conduct which were not put to Adachi before the Decision was made, and which are not mentioned in the written reasons for the Decision.
(2)In seeking suspension of the Decision, and in seeking judicial review, Adachi is required to rely on the fact that the allegations have been made and to refer to the allegations.
(3)Reporting of the allegations of fraudulent and criminal conduct in the media will harm Adachi, including harm to its reputation.
(4)If the allegations are published, that will render the applications nugatory.
Adachi's written submissions sought to support that last point by saying that if suspension of the banning order is granted but the suppression orders denied, then it will likely suffer the same prejudice it seeks to avoid by making the application.
With respect, the basis for that submission was entirely unclear. I have described the substantive applications that Adachi has made above, that is, its originating application for judicial review and its interlocutory application for suspension of the banning order. If those applications were to be granted, that would not result in any restriction on the disclosure of information.
The main relief that Adachi seeks is the quashing of the Decision. The Decision does not refer to any of the allegations of fraudulent or criminal conduct. Adachi's complaint is that the delegate denied Adachi procedural fairness, because he was influenced by the allegations, without ensuring that Adachi was on notice of them and had an opportunity to respond to them. Even if that complaint is made out in full, it will not touch on the truth of the allegations. The Decision will be set aside and it will be for the Commissioner to determine whether to proceed afresh to exercise his power to make or not to make a banning order. But on no view of the possible outcomes, as they presently appear to the Court, will any findings be made as to whether the allegations are well founded or not.
In short, the application for judicial review will not vindicate Adachi's reputation in respect of the allegations. Nor will it lead to an order restraining anyone from repeating or disclosing the allegations. It was therefore impossible to see why Adachi submitted that publication of the fact of the allegations, or their content, would make the applications nugatory. It will still be possible for Adachi to obtain an order quashing the Decision and it would have been open to Adachi to obtain suspension of the operation of the Decision, had I been otherwise prepared to make that order.
When I put these points to the solicitor representing Adachi in oral submissions, she did not dispute them. She made an alternative submission, however, to the effect that it was necessary to prevent prejudice to the administration of justice to suppress the allegations, because Adachi should not be deterred from making its application for judicial review by a concern that doing so will result in further disclosure or dissemination of the allegations.
In certain circumstances, a concern of that kind can mean that a suppression order is necessary to prevent prejudice to the proper administration of justice. In AA v BB [2013] VSC 120 at [187], Bell J made orders suppressing the identities of the appellant, his former spouse and their child. The proceeding was an appeal from a proceeding under the Family Violence Protection Act 2008 (Vic), which (along with the Family Law Act 1975 (Cth)) contained provisions protecting the privacy of parties to proceedings under it. At [189] his Honour observed:
The rationale for the publication restrictions in the substantive proceeding in the Magistrates' Court apply equally in an appeal proceeding in this court. People needing protection from family violence should not fear the loss of their privacy in an appeal. It would deter people from seeking that protection if privacy protection was not to be provided in a subsequent appeal proceeding. The same consideration applies to the other persons involved in a substantive proceeding in the Magistrates' Court, such as respondents, witnesses and children. They should not be discouraged from participation in such proceedings by a fear of being identified in an appeal to this court.
And at [191] his Honour held:
This case falls into categories in which it is acknowledged that non-publication orders might be made. Unless orders were to be made, people - especially vulnerable women and children - would be deterred from seeking legal protection which they need and to which they are entitled. Others would be discouraged from becoming involved in proceedings. Unless orders were to be made, the subject matter of the proceeding would be destroyed. The subject matter of a family violence proceeding is the protection of the safety and wellbeing of the protected person, children and other family members. It would be destroyed or imperilled by loss of privacy in an appeal. Unless orders were to be made, the privacy protections in the Family Violence Protection Act and the Family Law Act would be undermined or lost. It would prejudice the administration of justice in all of these respects for orders not to be made.
The circumstances of the present case are far removed from circumstances of the kind described by Bell J in these passages. The concerns held by Adachi about the consequences of a loss of privacy in connection with this proceeding are quite different, and less pressing, than the kinds of concerns that his Honour describes. They do not pertain to issues of the safety and wellbeing of vulnerable persons. As articulated in oral submissions, they are the concerns of a commercial enterprise about the effect of further disclosure of the fact that certain allegations have been made.
Those concerns are understandable. They may also be legitimate if the allegations are, in truth, unfounded. But in the present circumstances, they do not rise to the level of making it necessary to suppress the fact of the allegations in order to prevent prejudice to the administration of justice. It is well established that mere inconvenience or embarrassment will not found a suppression order: Re Robins; Ex parte West Australian Newspapers Ltd [1999] WASCA 16; (1999) 20 WAR 511 at [15]; see also Australian Competition and Consumer Commission v Air New Zealand Ltd (No 12) [2013] FCA 533 at [7]. Even sympathy for those who suffer damage by reason of publicity of proceedings will not, by itself, be enough: see John Fairfax Group Pty Ltd v Local Court of New South Wales (1991) 26 NSWLR 131 at 142‑143; Rush v Nationwide News Pty Ltd [2018] FCA 357 at [187]. The risk that commencing litigation will lead to the further dissemination of unwelcome allegations is a risk that litigants face every day. Decisions about whether it is worth taking that risk in light of the possible benefits that will follow from the litigation are commonplace. As difficult as such decisions may be, the circumstances on which Adachi relies do not present the cogent case of necessity that is required under s 37AF and s 37AG.
A few further matters reinforce that conclusion. One is that the allegations are just that; allegations. It is open to Adachi to frame them as such in the proceedings before the Court. The second matter is that the allegations as described in the evidence are general and devoid of particulars. That is likely to reduce their sting. The third and final matter is that, on Adachi's own evidence, most of the damage has already been done. It would appear that many people who are concerned with the NDIS, including commercial service providers and people working in government, are aware that the allegations have been made. And Adachi asserts that the banning order has already led to the loss of the OOHC business which, on its evidence, made up 90% of its revenue.
None of that denies the concern of Adachi to seek to vindicate its reputation in the appropriate way, nor its concern about ongoing effects on its business. But those are concerns that arise often in the context of litigation, and do not provide good grounds for suppression orders in the present case.
I had further reservations about making the specific orders Adachi sought. First, Adachi sought an order prohibiting the disclosure of the fact that the Decision had been made. While that fact is the subject of evidence, the order sought went beyond suppression of evidence or submissions about it. It would have prevented the Commissioner from disclosing the fact of the Decision, which of course he knew about before this proceeding was commenced, and independently of the proceeding. It would have prevented that disclosure even if the Commissioner had a legitimate reason connected with the performance of his regulatory functions that had nothing to do with the proceeding. My doubts about the Court 's power to do this were heightened by the fact that the Commissioner has a statutory duty to publish the details of banning orders: NDIS Act s 73ZS.
It can be seen above that s 37AF is specific about the nature of the information that can be the subject of a suppression order or a non-publication order. It includes information tending to reveal the identity of a party or witness before the court or the identity of any person related or otherwise associated with a party or witness. And by reason of paragraph (b), it also includes information that relates to a proceeding before the Court. There has been no discovery or subpoena in this proceeding yet, so at present, the only information that could conceivably be the subject of a non-publication order is information that comprises evidence, or information about evidence, or information that is lodged with or filed in the Court.
In the short period available after Adachi made clear the non-publication orders it sought, it was not possible to research the proper construction of these aspects of s 37AF. Nor did the written or oral submissions of Adachi provided any assistance in that regard. With those caveats, it appeared to me that the specific way in which s 37AF describes the information that can be the subject of a non-publication order may mean that the section does not empower the Court to prohibit the publication of information that exists independently of the proceeding before it. That is, if a fact exists in the world independently of the proceeding, it may not be within the power conferred by s 37AF to prohibit publication of that fact. The power under s 37AF may be limited to the control of the publication and other dissemination of information provided to the Court, or information produced by the Court, in and for the purposes of a proceeding before the Court.
If that is so, a bare order prohibiting the publication of a decision that was made independently of, and prior to the existence of, the proceeding is not within the power conferred by s 37AF. That does not foreclose the possibility that there may be other heads of power of the Court to make an order of that kind, but Adachi did not invoke any. However, since I decided that Adachi has not established the precondition for the making of a suppression order anyway, it was not necessary to reach a firm conclusion about that matter.
The second specific reservation I had was about the same order. It was simply this: the fact of the making of the Decision, and even the written reasons for the Decision, say nothing about the allegations. Adachi pointed to no basis on which the disclosure of the Decision would lead a person not already aware of the allegations to become aware of them. So that order sought went beyond what was necessary to protect the interest on which Adachi relied, even had I found that interest to be sufficient.
The third specific reservation concerned the orders sought to suppress the orders made themselves. Taken literally, that would be an absurdity; it would expose persons to contempt of court for breaching orders of the Court which, by force of those same orders, were unknown to them. In any event, it too would go further than would be necessary to protect the interest asserted. As already explained, the fact that the Court had suspended the operation of the Decision and had made suppression orders (if it had) would not convey anything about the allegations.
A fourth reservation was that a proposed order to prohibit the taking of any recording or notes at the hearing was both unnecessary and extreme. It was unnecessary because there is a general prohibition on a person other than the Court's transcript provider taking any recording of a hearing, without the leave of the Court. It was extreme because to prohibit the taking of notes by any person would be an extraordinary step to take. Very good reason, such as pressing national security concerns, would be required.
Finally, it is necessary to mention that, while the concerns raised by Adachi did not pertain to issues of the safety and wellbeing of vulnerable persons, concerns of that nature did arise on the face of the material. The affidavits that Adachi sought to be made confidential contain information about the identities of disabled individuals (including but beyond the two current NDIS participants) and many details as to the disabilities they face, the care they need and like matters. The Court will always be sensitive to the protection of the privacy of such individuals, where that can be achieved consistently with the principles of open justice. For that reason, I made an order that those two affidavits, and the transcript of the hearing on 27 March 2024, are not to be made available to any non-party without the leave of the Court. If a party seeks that leave, such orders can be made and other measures taken as may be appropriate in the circumstances.
I certify that the preceding seventy-five (75) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Jackson. Associate:
Dated: 28 March 2024
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