Chairperson, Aboriginal and Torres Strait Islander Commission v Commonwealth Ombudsman

[1995] FCA 1116

CATCHWORDS

ADMINISTRATIVE LAW - investigation and report by Commonwealth Ombudsman - power to include findings of individual guilt - disciplinary recommendations - findings and opinions - natural justice - the requirements of procedural fairness

PREROGATIVE RELIEF - mandamus - certiorari - declarations - prohibition

Administrative Decisions (Judicial Review) Act 1977 ss 5, 6
Federal Court of Australia Act s 50
Judiciary Act 1903 s 39B
Ombudsman Act 1976 (Cth) ss 3, 4(1), 4(2), 5(1), 5(2), 8(5), 8(10), 11A, 15(1), 15(2), 15(3), 16, 17, 35A,
Independent Commission Against Corruption Act 1988 (NSW) ss 13(2)(a), 74(5)

Kioa v West [1985] 159 CLR 550
Balog v Independent Commission Against Corruption [1990] 169 CLR 625
Annetts v McCann [1990] 170 CLR 596
Ainsworth v Criminal Justice Commission [1992] 175 CLR 546
Johns v ASC [1993] 178 CLR 408

CHAIRPERSON, ABORIGINAL & TORRES STRAIT ISLANDER COMMISSION V COMMONWEALTH OMBUDSMAN
No. G 72 of 1995

EINFELD J

SYDNEY

21 SEPTEMBER 1995

IN THE FEDERAL COURT OF AUSTRALIA    )
NEW SOUTH WALES DISTRICT REGISTRY    )    No. G 72 of 1995
GENERAL DIVISION  )

Between:CHAIRPERSON, ABORIGINAL & TORRES STRAIT ISLANDER COMMISSION

Applicant

And:COMMONWEALTH OMBUDSMAN

Respondent

REASONS FOR JUDGMENT

EINFELD J                    SYDNEY            21 SEPTEMBER 1995

1. INTRODUCTION

1.1The application and relief sought

The Chairperson (the applicant) of the Aboriginal and Torres Strait Islander Commission (ATSIC) has applied for judicial review of a decision, and conduct leading to the decision, of the Commonwealth Ombudsman (the Ombudsman) to issue a report on 30 January 1995 to the applicant under section 15 of the Ombudsman Act 1976 (the Act) entitled `Investigation of Complaint by New Burnt Bridge Aboriginal Corporation (NBBAC) concerning actions of the Aboriginal and Torres Strait Islander Commission' (the report). The applicant has also applied for review of the decision proposed to be made by the Ombudsman to give certain information to the Prime Minister pursuant to section 16 of the Act, consequentially to have the report tabled in Parliament, and
for further public dissemination of the report, on the grounds that it would be unauthorised by the Act.

The specific grounds of the application in respect of the decision to issue the report are that:

1. the Ombudsman is not authorised to include in a report under section 15 evidence of the type referred to in section 8(10) of the Act;

1. the Ombudsman may not make or express a finding of the guilt of an individual of a criminal or disciplinary offence;

1. the procedures of natural justice as required by the Act were not followed;

1. the report does not contain proper reasons as required by the Act.

The applicant seeks declarations to those effects and additional orders:

1. requiring the Ombudsman to provide sufficient reasons for various conclusions in the report;

1. that the unauthorised parts of the report be quashed;

1. that the Ombudsman be permanently prohibited from further dissemination of the report.

The applicant sought interlocutory orders that until the matter was resolved, the Ombudsman be prohibited from further dissemination or disclosure of the draft and final reports other than to her legal representatives in these proceedings, and that both reports not be otherwise published in the meantime. This claim for interlocutory intervention was resolved by mutual undertakings given to the Court on 14 February 1995. On the applicant's further application, the Ombudsman not opposing, I made an order under section 50 of the Federal Court of Australia Act prohibiting publication of the draft and final reports for the time being. As a consequence, these reasons for judgment have a number of name and title deletions.

1.2  Jurisdiction

The applicant has invoked the jurisdiction of the Court under:

(a)sections 5 and 6 of the Administrative Decisions (Judicial Review) Act 1977,

(b)section 39B of the Judiciary Act 1903 (Cth), and

(3)section 11A of the Ombudsman Act 1976 (Cth).

1. THE OMBUDSMAN ACT

2.1Functions of the Ombudsman

The office of Commonwealth Ombudsman was established by section 4(1) of the Ombudsman Act 1976 (the Act). Its functions are set out in section 4(2) of the Act:

The functions of the Commonwealth Ombudsman are to investigate complaints made to him or her under this Act and to perform such other functions as are conferred on him or her by this Act.

Section 5(1) particularises these functions, including in subparagraph (a) that the Ombudsman

shall investigate action, being action that relates to a matter of administration, taken either before or after the commencement of this Act by a Department, or by a prescribed authority, and in respect of which a complaint has been made to the Ombudsman.

Section 3(7) provides that

unless the contrary intention appears, a reference to the taking of action includes a reference to:

(a)the making of a decision or recommendation;

(b)the formulation of a proposal; and

(c)failure or refusal to take any action, to make a decision or recommendation or to formulate a proposal.

The applicant is a "prescribed authority" for the purposes of the Act (s. 3(1)).

2.2The report

Section 15 commences its requirement that the Ombudsman report on the results of an investigation into a decision, recommendation, act or omission constituting a relevant administrative action by providing in subsection (1) that the section is to apply whenever:

..... after an investigation under this Act into action taken by a Department or prescribed authority has been completed, the Ombudsman is of the opinion:

(a)that the action:

(i)appears to have been contrary to law;

(ii)was unreasonable, unjust, oppressive or improperly discriminatory;

(iii)was in accordance with a rule of law, a provision of an enactment or a practice but the rule, provision or practice is or may be unreasonable, unjust, oppressive or improperly discriminatory;

(iv)was based either wholly or partly on a mistake of law or of fact; or

(v)was otherwise, in all the circumstances, wrong;

(b)that, in the course of the taking of the action, a discretionary power had been exercised for an improper purpose or on irrelevant grounds; or

(c)in a case where the action comprised or included a decision to exercise a discretionary power in a particular manner or to refuse to exercise such power:

(i)that irrelevant considerations were taken into account, or that there was a failure to take relevant considerations into account, in the course of reaching the decision to exercise the power in that manner or to refuse to exercise the power, as the case may be; or

(ii)that the complainant in respect of the investigation or some other person should have been furnished, but was not furnished, with particulars of the reasons for deciding to exercise the power in that manner or to refuse to exercise the power, as the case may be .....

Section 15(2) then directs the Ombudsman to report her adverse opinions to the prescribed authority concerned where this would be appropriate, depending on the particular opinions reached. That subsection states:

Where the Ombudsman is of the opinion:

(a)that a decision, recommendation, act or omission to which this section applies should be referred to the appropriate authority for further consideration;

(b)that some particular action could be, and should be, taken to rectify, mitigate or alter the effects of, a decision, recommendation, act or omission to which this section applies;

(c)that a decision to which this section applies should be cancelled or varied;

(d)that a rule of law, provision of an enactment or practice on which a decision, recommendation, act or omission to which this section applies was based should be altered;

(e)that reasons should have been but were not, given for a decision to which this section applies; or

(f)that any other thing should be done in relation to a decision, recommendation, act or omission to which this section applies;

the Ombudsman shall report accordingly to the Department or prescribed authority concerned.

Section 15(3) stipulates that reasons for the decision must, and recommendations may, be included in the report:

The Ombudsman:

(a)shall include in a report under subsection (2) his or her reasons for the opinions specified in the report; and

(b)may also include in such a report any recommendations he or she thinks fit to make.

Thus the premises for the commencement of the section 15(2) reporting procedure are an investigation into some administrative action which caused the Ombudsman to form an opinion that the action has one or more of the characteristics referred to in section 15(1)(a). For present purposes the most relevant opinions in that paragraph are that the action

1. appears to have been contrary to law,

1. was unreasonable, unjust, oppressive or improperly discriminatory,

(iii).....

1. ..... or

1. was otherwise, in all the circumstances, wrong.

The opinions in this case may also have been that a discretionary action was exercised for an improper purpose or on irrelevant
grounds (s. 15(1)(b)) or on the basis of irrelevant considerations or an omission of relevant considerations (s. 15(1)(c)).

However, these are not the opinions to be reported.  The use of the word "accordingly" in subsection (2) means that only one or more of the subsection (2) opinions are to be provided to the public body concerned, viz. (with one exception concerning the absence of reasons for the decision being investigated), the action which the Ombudsman believes should be taken in consequence of her subsection (1) opinions.

It should at once be observed that, except for paragraph (f), the opinions referred to in subsection (2) are in terms limited and quite contrived. If they were the only terms of reference for the Ombudsman, her office would hardly justify the important role generally and legislatively ascribed to it otherwise. This is partly because in the nature of institutions of this type, the alteration, reversal or amelioration of decisions or actions found to be unlawful, unjust or otherwise wrong, as distinct from their revelation and administrative consequences, will often be too delayed to assist the complainant in a primary sense. Hence the opinion provided for in paragraph (f) that "any other thing should be done" becomes of some significance. So does the provision in section 15(3)(a) insisting on the inclusion of reasons for the opinions specified in the report.

Section 8(10) of the Act also deals with the formation of opinions by the Ombudsman and what is to be done with them:

Where the Ombudsman becomes of the opinion, either before or after completing an investigation under this Act, that there is evidence that a person, being an officer of a Department or of a prescribed authority, has been guilty of a breach of duty or of misconduct and that the evidence is, in all the circumstances, of sufficient force to justify his or her doing so, the Ombudsman shall bring the evidence to the notice of:

(a)if the person is the principal officer of the Department -- the Minister administering the Department;

(b)if the person is an officer of a Department but not the principal officer of that Department -- the principal officer of that Department;

(c)if the person is the principal officer of a prescribed authority -- the responsible Minister in respect of the action under investigation; or

(d)if the person is an officer of a prescribed authority but not the principal officer of that authority -- the principal officer of that authority.

The way this provision appears to work is this:

(a)There is evidence that a public servant has been guilty of

·a breach of duty, or

·misconduct.

(b)  The Ombudsman forms an opinion at any time that the evidence    is sufficient to justify bringing it to the notice of the    Minister or principal officer of the entity concerned.

(c)She brings the evidence to the notice of that Minister or officer.

This notification is not a report under section 15(2). Nonetheless the operative relationship between a section 15(2) report of opinions and a section 8(10) notification of incriminating evidence is essential for the decision in this case. It will be discussed later.

2.3Publication of the report

The Ombudsman has no power to put her recommendations into action, or compel any action on the part of the relevant individual, department or authority. However, there are at her disposal a number of quite persuasive mechanisms to gain the desired results, including the option to make public various aspects of the investigation under section 35A, viz:

(1)Nothing in this Act shall be taken to preclude the Ombudsman from disclosing information, or making a statement, to any person or to the public or a section of the public with respect to the performance of the functions of, or an investigation by, the Ombudsman under this Act if, in the opinion of the Ombudsman, it is in the interests of any Department, prescribed authority or person, or is otherwise in the public interest, so to disclose that information or to make that statement.

This right of publication is powerful notwithstanding the limitations or restrictions built into the section:

(2)The Ombudsman shall not disclose information or make a statement under subsection (1) with respect to a particular investigation where the disclosure of that information, or the making of that statement, is likely to interfere with the carrying out of that or any other investigation or the making of a report under this Act.

(3)The Ombudsman shall not, in disclosing information or making a statement under subsection (1) with respect to a particular investigation:

(a)set out opinions that are, either expressly or impliedly, critical of a Department, prescribed authority or person unless the Ombudsman has complied with subsection 8(5) in relation to the investigation; or

(b)disclose the name of a complainant or any other matter that would enable a complainant to be identified unless it is fair and reasonable in all the circumstances to do so.

(4).....

On the contrary, the Ombudsman may, if in her opinion adequate and appropriate steps have not been taken by the prescribed authority within a reasonable time after being furnished with a report, inform the Prime Minister under section 16 and make special reports to Parliament by virtue of section 17. These sections state:

16.(1)  Where action that is, in the opinion of the Ombudsman, adequate and appropriate in the circumstances is not taken with respect to the matters and recommendations included in a report to a Department or to a prescribed authority under section 15 within a reasonable time after the Ombudsman furnished
the report to the Department or to the prescribed authority, the Ombudsman may inform the Prime Minister accordingly in writing.

(2)Where the Ombudsman furnishes information to the Prime Minister in accordance with subsection (1) in relation to a report, the Ombudsman shall furnish to the Prime Minister with the information:

(a)if a copy of the report has not previously been forwarded to the Prime Minister under subsection 15(6) -- a copy of the report; and

(b)if the Department or prescribed authority to which the report was made has furnished comments concerning the report to the Ombudsman -- a copy of those comments.

(3)In considering whether to furnish information in relation to a report to the Prime Minister in accordance with subsection (1), the Ombudsman shall have regard to any comments furnished to him or her by the Department or prescribed authority to which the report was made.

17.Where the Ombudsman has, in accordance with subsection 16 (1), furnished information to the Prime Minister in relation to a report concerning an investigation made by him or her, the Ombudsman may also forward to the President of the Senate and the Speaker of the House of Representatives, for presentation to the Senate and the House of Representatives, respectively, copies of a report prepared by him or her concerning the investigation for presentation to both Houses of the Parliament, being a report that sets out a copy of any comments furnished to the Ombudsman under subsection 15(5) by the Department or prescribed authority concerned.

In this case the Ombudsman has indicated that she intends to furnish information on this matter to the Prime Minister and that a section 17 tabling in Parliament could follow.

2.4Procedural fairness

The Act expressly identifies the procedural fairness guidelines to be followed by the Ombudsman in section 8(5):

The Ombudsman shall not make a report in respect of an investigation under this Act in which he or she sets out opinions that are, either expressly or impliedly, critical of a Department, prescribed authority or person, unless, before completing the investigation, he [sic] has:

(a)if the opinions relate to a Department or prescribed authority - afforded the principal officer of the Department or authority and the officer principally concerned in the action to which the investigation relates opportunities to appear before him or her, or before an authorised person, and to make such submissions, either orally or in writing, in relation to that action as they think fit; and

(b)if the opinions relate to a person - afforded that person an opportunity to appear before him or her, or before an authorised person, and to make such submissions, either orally or in writing, in relation to the action to which the investigation relates as he or she thinks fit.

In essence this subsection requires that prior to the completion of an investigation any opinions carrying potentially adverse implications about an individual, department or prescribed authority must be `put to' the relevant party who must thereafter be afforded an opportunity to be heard before those adverse opinions are finally embodied in a report.

1. THE HISTORY OF THE DISPUTE

3.1The facts

In November 1992 a complaint was received by the Commonwealth Ombudsman's office concerning the conduct of ATSIC and two members of its senior management in the procurement and funding of management consultants for the design and construction of an Aboriginal housing project.  The specific nature of the complaint is not relevant for the purposes of this decision and, as will become clear, its detailed enunciation here would tend to defeat the purpose of the decision.  Sufficient of the matters investigated will emerge from the later discussion of aspects of the report.

This complaint prompted an investigation by the Ombudsman empowered by section 5(1) which culminated in a draft report being issued to the applicant on 19 September 1994. Because of the critical conclusions she had reached, pursuant to section 8(5) of the Act the Ombudsman invited the Chief Executive Officer of ATSIC and the particular officers reported on to make submissions by 31 October 1994.

ATSIC's reply raised some concerns regarding jurisdictional issues and sought particulars of the criticisms.  By letter dated 1 November 1994 the Ombudsman indicated that she did not consider ATSIC's response adequate and alerted it to her intention to proceed to finalise the report.  ATSIC responded on 11 November with detailed responses to the draft recommendations and reiterated its concerns.  After further correspondence between the parties the date for final submissions was set for 3 December 1994.

On 30 January 1995 a final report was issued pursuant to section 15(2) of the Act with a covering letter stating:

Dear Ms O'Donoghue

NEW BURNT BRIDGE ABORIGINAL CORPORATION
Report pursuant to section 15(2) of the Ombudsman Act 1976

As principal officer of the Commission, please find enclosed the report of my investigation into the complaint received from New Burnt Bridge Aboriginal Corporation, [a town] NSW, in November 1992.

I last wrote to you on 19 September 1994, to provide you with a draft of my report.  Since that time, my staff and I have met on a number of occasions with Ms Turner and Mr Rees, and I have received a number of submissions - on [sic] particular points of the report (from some ATSIC staff) and on my draft recommendations (from the CEO, on behalf of ATSIC generally).

ATSIC management have responded positively to many of my recommendations, but have declined, to date, to acknowledge that serious defective administration has occurred, and that in some circumstances ATSIC staff behaved improperly.

This means that a number of the more serious recommendations remain outstanding.

I now look forward to your response to my report, as the officer with final responsibility on these issues.  As I have indicated to Ms Turner, I would appreciate any comments you wish to make, as well as your final response to my recommendations, within two weeks of today (13 February 1995), whereupon I will decide whether I have any need to report to the Prime Minister, and the shape of my public report.

I have also sent this final report to the Minister for Aboriginal and Torres Strait Islander Affairs, as required by section 15 of my Act.

I look forward to meeting the Commissioners on 9 February 1995, and to your response to my report.

Yours sincerely,

Philippa Smith

Commonwealth Ombudsman

The report included the Ombudsman's opinions, reasons and recommendations.

3.2The attack on the report

The applicant submitted that the report was ultra vires on a number of grounds. Firstly, it was said to contain findings that certain individuals were or may have been guilty of a criminal or disciplinary offence when the Ombudsman is not authorised to make such findings. Secondly, the applicant submitted that the report may not contain disciplinary recommendations. Thirdly, it was alleged that elements of procedural fairness were not adequately complied with. Finally, certain reasons provided by the Ombudsman in accordance with section 15(3) were said to be insufficient.

1. REPORTING ADVERSELY

Insinuations of personal culpability by a major public investigative body carry great stigma and have the potential to do serious harm to reputations.  Given the nature of the claims and the forum in which they are being made here, such reputations may never have the opportunity of being vindicated at a trial. 
Additionally it is not at all unlikely that such conclusions could interfere with any disciplinary process.

4.1  Findings of individual guilt

The applicant said that because of the intention that the report become public, any findings of unlawfulness or administrative misconduct could cause reputations to suffer in circumstances where the protection mechanisms and avenues of redress of the court system are not available.

4.1.1   Common law

The applicant submitted that the Ombudsman is precluded from reporting findings of individual culpability by the terms of her statute and on a broader civil liberties basis.  In the development of the common law in this respect, the courts have regarded the protection of an individual's reputation as a major consideration requiring procedural fairness to be afforded by such bodies as Royal Commissions, the New South Wales Independent Commission Against Corruption (ICAC), and the Queensland Criminal Justice Commission.  On this question, Justice Toohey in Johns v ASC [1993] 178 CLR 408 at 455 highlighted a passage in Annetts v McCann [1990] 170 CLR 596 at 598 from the judgment of Mason CJ, Deane and McHugh JJ:

It can now be taken as settled that, when a statute confers power upon a public official to destroy, defeat or prejudice a person's rights, interests or legitimate expectations, the rules of natural justice
regulate the exercise of that power unless they are excluded by plain words of necessary intendment.

His Honour further explained the basis of this requirement (456):

As Black CJ and von Doussa J noted [in Johns v ASC (1992) 35 FCR 146 at 184], transcripts of examinations are in a quite different position to a report made following an investigation.  In the first case transcripts will contain information which the examinee, in this instance Mr Johns, has sworn to be true.  The opportunity to answer allegations presented itself when he was asked questions and, no doubt, when he was asked to read the record, make any corrections and sign it.  In the second case there may be findings of fact at odds with the evidence of the person examined or with other evidence.  The opportunity to be heard in that situation is an opportunity to comment on the report.

4.1.2   Statutory construction

In the present case the central question is somewhat different.  Rather than a question of the nature and extent of the general requirements of procedural fairness, it concerns, first, whether or not the powers of the Ombudsman extend to making findings of individual guilt, and then whether or not the demands of procedural fairness outlined by the Act were followed.

Balog v Independent Commission Against Corruption [1990] 169 CLR 625 concerned the interpretation of the Independent Commission Against Corruption Act 1988 (the ICAC Act) as regards the extent of the powers of ICAC to make findings of guilt. The appellant successfully contended that if there is a genuine choice of construction of a statute that would impinge on common law rights such as to have charges stated, the privilege against self incrimination and the right of appeal, and a choice that would not impinge on these rights, the latter should be chosen. At 633 the High Court took the view that the inclusion of section 74(5) in the ICAC Act would have been superfluous if the legislature had intended to give ICAC the power to express a finding of the criminal liability of an individual. That particular subsection provided:

A report may include a statement of the Commission's findings as to whether there is or was any evidence or sufficient evidence warranting consideration of --

(a)the prosecution of a specified person for a specified offence; or

(b)the taking of action against a specified person for a specified disciplinary offence; or

(c)the taking of action against a specified public official on specified grounds, with a view to dismissing, dispensing with the services of or otherwise terminating the services of the public official.

Proceeding on the truism that expressions of findings of guilt of an offence in a report which is `bound to be made public' (635) would be likely to have a damaging effect on the person's reputation, and that the subsection would otherwise be superfluous, their Honours concluded that section 74(5) in fact represented a limitation on the reporting powers of the Commission. Thus the Commission's power to include findings in its report was limited to findings that there had been evidence of the particular misconduct stated.
The applicant sought in argument in this case to coin and rely on what she called `the Balog principle' which went something like this:

If there is a potential of damage to an individual's reputation without the requisite safeguards of an open full-fledged court, power to report findings of individual guilt should not be implied into a statute.

Put another way, if there is a valid construction of the Act that does not trample on common law rights such as the right to be treated as innocent until guilt is proved to the satisfaction of a duly constituted Court beyond reasonable doubt, then that construction should be adopted.

The applicant asserted that the Act should be construed to ensure that the common law rights of the individuals reported on are protected, by preventing the Ombudsman from reporting findings of individual guilt.  Two avenues were presented by which this conclusion might be reached.  The first was said to be a parallel argument to the one that was successful in Balog -- that by following established guidelines of statutory interpretation, the interplay of sections 8(10) and 15 of the Act will result in limiting the Ombudsman's powers.

The applicant submitted in this connection that section 8(10) is a parallel limiting section to section 74(5) of the ICAC Act. However, there are differences between these two provisions. Importantly, whereas the ICAC Act contained an extensive range of statements that the Commission could include in its report,
the Ombudsman Act is primarily directed to what can be investigated. Secondly, the ICAC Act provision is drafted in permissive language, of what `[a] report may include', whereas the Ombudsman Act uses the mandatory words that if the Ombudsman forms the opinion that certain evidence exists, she `shall bring it to the notice of' the appropriate persons.

The applicant submitted that the parallel construction is made out by treating sections 8(10) and 15 of the Act as mutually exclusive. On the seemingly correct basis that the section 8(10) procedure is required in respect of any evidence that would tend to incriminate an individual, she argued that once notice of the evidence is brought to the attention of the relevant authority, the Ombudsman can make no further use of the information. In other words, that information may not provide the basis of a section 15 report.

If the applicant's submission is correct, then whenever during an investigation incriminating evidence concerning an individual surfaces, the requirement to comply with section 8(10) will clash with and must replace the requirement to include this evidence in the report as the reason for the opinion formed or the recommendation to be made. This interpretation would thus extend the alleged reporting restrictions to exclude not only opinions directly relating to a person's guilt but even the evidence of the individual misconduct which founded the opinions formed.

The requirement of section 15(3) that reasons in support of opinions be included in the report could not be complied with if this situation pertained. Nor could any substantive operation be given to section 15(2)(f). As a consequence the Ombudsman would simply not be able to report any opinions based upon conduct which may found a criminal or disciplinary charge, including such conduct as fraud, corruption, theft, wilful disobedience of a direction, negligence and favouritism, because the reasons could not be given. This meaning is most unlikely to be the legislative intention of the Ombudsman's statutory charter.

Moreover, the context of section 8(10) is given by subsection (9) which requires the Ombudsman to consult with the responsible Minister, at the Minister's request, before forming what is described as

a final opinion on any of the matters referred to in subsection 15(1) or (2) that are relevant to the action under investigation.

This suggests that section 8(10) is quite independent of section 15. In any event, there is no indication in the statute that sections 8(10) and 15 are to be read as being mutually exclusive, and I can see no logical bar to the Ombudsman complying with the reporting requirements of each section concurrently. In my view, the words `in relation to' the action in section 15(2)(f) give the necessary connection to enable the Ombudsman to report on individuals' conduct, so that the paragraph will require a report
where the opinion is that the action under investigation is one of those covered by section 15(1)(a).

I do not agree with the applicant's submission that section 8(10) of the Ombudsman Act is a limiting subsection similar to section 74(5) of the ICAC Act. Nor do I agree that the only way the Ombudsman can deal with matters of individual culpability is as provided for by one or other of the various paragraphs of section 8(10). Given these differences between the two statutes and the inclusion in this Act of subsections (2)(f) and (3)(b) of section 15, I find that section 8(10) is an additional element of, not a limit on, the Ombudsman's duties to deal with such matters. This case may thus be distinguished from Balog in this respect.

4.1.3  Implied power

The applicant's second argument for excluding findings of guilt was broader in that it relied on one of the fundamental principles of protection of common law rights -- if the statute does not expressly provide for the Ombudsman to report findings, then a power to do so should not be read in.

Nowhere in the Ombudsman Act is there an express power to make "findings", the legislature having several times specifically employed the word "opinion". Furthermore, the fact that the Ombudsman's principal function is investigative and not determinative suggests that she does not need and is not intended to make findings. This intention of the legislature may also be gleaned from the Second Reading Speech on the legislation (Parliamentary Debates, House of Representatives, 29th Parliament 1st Session 2nd Period, pages 1184 and 1185):

The existing methods of checking deficiencies in administration are many and varied....  The duties of the Minister of the Crown are such that he cannot effectively exercise responsibility for all the many activities of departments under his administration.  For these reasons the existing remedies need to be supplemented by an institution for investigating complaints which is independent and thorough, which can go behind the screen hiding the department or authority from the citizen.  The Ombudsman will be able to go behind that screen and report on what he finds.

I do not ascribe a special meaning to the last of those words.  In the context, what the Ombudsman `finds' was used loosely and did not intend to convey `findings' in the legal sense.  The Attorney General (The Hon K.E. Enderby QC) further told Parliament:

The Ombudsman will not be confined to making a report.  He will be able to exercise a personal influence with departments and authorities and he will have the status to do that.  In the grievance field he can act as a conciliator, and he can make suggestions to departments in an informal way.

The intention is that the Ombudsman investigate, report and make suggestions, not make determinations on the issues identified.  I believe that the power to make findings in that sense should not be read into this statute.

4.2Difference between `findings' and `opinions'

On one view 'opinions' are 'findings'.  The applicant submitted that a `finding' is a conclusion that someone `has' committed a wrong, whereas an `opinion' is a conclusion that someone `may have' or `appears to have' committed a wrong.  It was also said that in common legal parlance, the word 'findings' is often linked with facts and 'opinions' with law.  But such formulae cannot be the guidepost -- juries and judges sitting without juries regularly make 'findings' for or against litigants which are statements of both law and fact.  Perhaps to some extent the words take their character from the office and powers of the speaker.  A first instance or trial judge setting out opinions is in substance making findings, whatever the nomenclature.  On the other hand, the administrative nature of the office of Ombudsman and the statutory prescription of her duties preclude her from making findings in any final sense, to the extent that what she purports to do is in fact to express opinions, highly regarded and often far reaching opinions certainly, but opinions nonetheless.

The greatest risk to the two individuals concerned here, presumably the reason this case is before the Court, is the risk to their reputations from the Ombudsman's public produce.  It was therefore submitted that a statement dressed up as a 'finding' may carry more risk of damage to the individual than the expression of the same statement couched as an 'opinion'. But semantics cannot solve this problem.  Whatever the ruminations
of lawyers, the interested public may not understand the legal differences between an 'opinion' and a 'finding' and who has the power to make which.  It is sufficient to say that the Ombudsman is empowered to report her opinions, which includes the reasons for the opinions.  The opinions will ordinarily state that if the evidence upon which they are based is accepted, certain stated conclusions will or may be seen to follow.

That formulation of the Ombudsman's charter is not intended to consign her to prefacing every sentence with the words `In my view' or the like.  Perhaps a bold and obvious disclaimer at the beginning of each of her reports, with a direction that they not be reproduced without the disclaimer, would assist.  But even this course will only be satisfactory if the Ombudsman is in truth reporting her opinions and is not seeking to dress up as opinions what are in substance findings.

4.3Opinions of individual guilt

I have concluded that the Ombudsman may not report findings of individual guilt.  What of opinions?  This question must consider whether or not the Act and the concepts expressed in Balog are circumvented or nullified by allowing the Ombudsman to report opinions of individual guilt where they would not have allowed her to report findings of individual guilt.  The Act expressly allows, even directs, the Ombudsman to report her opinions, but is silent on whether she can report her opinions regarding an individual's guilt.

At the time of Balog ICAC's principal role was identifying and reporting as corrupt or otherwise the conduct investigated. By section 13(1) of the ICAC Act, its functions included:

(a)to investigate any circumstances implying, or any allegations, that corrupt conduct may have occurred, may be occurring or may be about to occur;

(b)to investigate any conduct which, in the opinion of the Commission, is or was connected with or conducive to corrupt conduct;

(c)to communicate to appropriate authorities the results of its investigations; ...

This definition of the investigative function in the terms of whether or not corrupt conduct 'may' have occurred, 'may' be occurring, or 'may' be about to occur, rather than what 'had' occurred, coupled with the restriction in section 74(5) limiting findings to certain evidentiary observations, and the maxim `expressum facit cessare tacitum', viz. express inclusion of something is express exclusion of what is left out, led the High Court to the view that reporting whether or not corruption had in fact occurred was not contemplated or permitted by that Act.

No similar provision exists in the Ombudsman Act. Indeed section 15 is quite different. Thus this applicant cannot rely on the same maxim to bar the Ombudsman from expressing opinions of individual guilt by the reasoning which prevailed in Balog.

The provision in section 8(5) of the Act that reports containing adverse opinions may not be made 'unless' the procedural fairness guidelines are followed does not mean that the Ombudsman may or not report opinions that are critical of an individual. In fact the subsection clearly infers that she may. Whilst there are many opinions critical of a person that stop short of suggesting the guilt of an offence, it was expressly contemplated that both implied and express criticisms would be made. Given the difficulty of defining the differences between 'opinions' and 'findings', it seems clear that the legislature intended not to fetter the range of opinions open to the Ombudsman. Moreover, the Act balances the protection of the reputation of the individuals concerned through the entitlement to procedural fairness against the obvious public importance of investigating misconduct and unlawfulness in the public sector and the Ombudsman's duty to report her opinions on such investigations accompanied by reasons. Accordingly, it is my opinion that the Ombudsman may report opinions touching individual guilt.

4.4Summary of conclusions

(a)The Act does not empower the Ombudsman to make definitive findings of guilt of an individual and this power should not be implied.

(b)The Ombudsman is expressly empowered to report her opinions on action that should be taken to deal with the matters revealed by her investigations.  The reasons for these opinions, which must be supplied, may include opinions on what the evidentiary material appeared to disclose.

(c)In that sense properly reasoned opinions on the issue of individual guilt may be reported.  Similarly reasoned recommendations may be made.

(d)Section 8(10) is not a limit on the Ombudsman's reporting powers under section 15.

1. DOES THE REPORT CONTAIN 'FINDINGS'?

Both genuine opinions and what appear to be findings of fact and law are scattered throughout the report.  Not all of them are of importance but some parts of what the Ombudsman described as her `Summary of Findings' require specific consideration.  It may have been wiser to entitle the section `Summary of Opinions', but I do not think that a document should stand or fall on the basis of its headings.  There is no problem if the substance of the text was limited to opinions.

The only action called for in the report consisted of four recommendations, of which only Recommendation 4 was challenged.  It called for review by ATSIC of the actions of the two identified individuals referred to in the Ombudsman's various findings:

That ATSIC review all of my findings which suggest that the Regional Manager and his Deputy may have failed to fulfil their duty (Appendix 5); and

that in addition to such other action as is appropriate, charges now be laid against both those officers pursuant to section 61 of the Public Service Act 1922, in relation to the prima facie evidence of
misconduct i.e. improperly favouring a consultant, knowingly breaching official guidelines and statutory requirements, failing to consult and negotiate adequately with their client, and failing to account properly to and/or misleading their superiors (including the Commissioners and Minister) and my office.

This recommendation was said to have been justified by findings 1-9, 11, 14-17, 25 and 26.  Additionally Appendices 4 and 5 were said to provide support for the recommendation.

The applicant attacked Recommendation 4 as unauthorised by the statute. I shall deal with this argument of law later. The applicant also submitted that Recommendation 4, the findings on which it was based, and the supporting appendices amounted to findings of individual guilt and therefore may not be included in the report. Highlighted in particular in this regard were findings 3, 5, 7, 9, 15 and 16 and appendices 4C, 4G, and 5. Although the report did not say so, it seems to me that all of these aspects of the report had a sound basis under section 15(1)(a) and could form reasons for Recommendation 4 which in turn was clearly justified by section 15(2)(f) and (3)(b). But it is necessary to analyse each of these elements of the report in turn to see whether instead of being an authorised opinion, it was in truth a determinative finding of fact and law on the subject matter being discussed. The applicant conceded that allegations of knowingly wrongful actions which did not carry the implication of lying were not unlawful.

5.1  Finding 3

The Regional Manager purported to waive the tender requirement for the 1992 project management consultancy worth $221,678-$987,629, when he did not have the power to make this decision, and should have known that in any event, such a waiver was not justified.  In my view, ­the Regional Manager and his Deputy acted in a manner wholly inconsistent with ATSIC guidelines and their delegated authority, and breached their responsibility to both NBBAC and the Commonwealth, to ensure fair, open and cost-effective use of funds.

The first sentence contains allegations of misconduct by an individual.  It is not prefaced by any words suggesting that what follows is the Ombudsman's opinion, yet it clearly states that the action under discussion was made without power and that the named individual should have known that the course he took was not justified.  Nevertheless the applicant conceded that this assertion did not represent an infringement of the statutory requirement for opinions.  However, she did challenge the remainder of the finding.  The second sentence is introduced by the Ombudsman's words `In my view', yet in the supporting reasons for this opinion (page 17 of the report), the Ombudsman clearly stated, as a fact, that the individuals concerned knew or should have known that their actions were "wholly inconsistent with basic accountability requirements".  I hold that this finding and the supporting reasons go beyond mere opinions on the identified evidence and are thus unauthorised by the Act.  They cannot be lawfully published in their present form.  This finding is further discussed in another context in 7.1.1.

5.2  Finding 5

In my view, there are ten instances in which the Regional Manager failed to account properly for the fact that he and his Deputy agreed to waive the tender requirement in February-March 1992; at least four of which appear to be knowing breaches of his duty to be truthful in his official dealings (Guidelines on Official Conduct of Commonwealth Public Servants).

Despite the introductory words 'In my view', the explanatory support for this 'finding' include positive assertions that the individual made a written statement that was "untrue", that he "appears to have repeated such untrue statements ... and enlarged on them ... [to] ATSIC's Fraud Awareness Unit .....", that he "misled" ATSIC's senior management, and that on ten occasions the two individuals must have known that they were misleading the Commissioners or had failed to disclose the waiver when it was their duty to do so.  In this context, Finding 5 goes well beyond an opinion and involves findings of individual culpability.  It is thus not authorised by the statute in its present form.  This finding is discussed in another context in 7.1.2.

The applicants also objected to Appendix 4G which was said to document the ten instances upon which the Ombudsman based her opinions in this regard. The mere citing of instances in support of an opinion will not normally convert the opinion into a set of "findings". However, the Ombudsman added her conclusions and elaborated, without indicating that the contents of the appendix represent her opinion on a matter covered by section 15(1)(a).
The appendix thus also amounts to a collection of findings.  It also cannot be validly published in its present form.

5.3  Finding 7

In my view, the Regional Manager and his Deputy adopted a general position that it was reasonable for them to actively prefer consultants with whom they had already worked - a position that promoted the possibility of favouritism, and in any event exposed the Commonwealth to the risk of public perception that their office might be a site of favouritism or fraud.

Finding 7 is not contrary to law.  It suggested that the practice of the individuals of allegedly preferring consultants with whom they had previously worked at the Commonwealth was at risk of being perceived as favouritism.  In my view, this is an opinion.  The matter was elaborated at page 23 of the report where the Ombudsman expressed the opinion that the practice supported a concern that the individuals "knowingly organised relations with clients in such a way as to assert unwarranted control over their selections".  This fact was said to create a risk that others would perceive this activity to be favouritism, a risk the Ombudsman described as "unjustified".  Whilst this word can in some circumstances represent a judgment, thus injecting the tone of a finding, I do not consider in the context that it has done so here because it is peripheral and surplus to the true substance of the opinion.  This finding is dealt with in another context in 7.1.3.

5.4  Finding 9

Finding 9 also amounts to an allegation of misconduct of the individuals:

In my view, the Regional Manager and his Deputy improperly favoured Mr T by promoting and involving him to an extent beyond any other consultant.  Their actions reflected an actual preference, apparently as a result of the Regional Manager having allowed his friendship with Mr T to affect his judgement.  However, these actions were independent from and undisclosed to the client, without apparent reason; and the Regional Manager failed to protect ATSIC from reasonable allegations of favouritism and partiality, by failing to follow the procedures prescribed by law for avoiding and disclosing his conflict of interest.

Prima facie, these actions were departures from the standard of impartiality required by the Guidelines on Official Conduct of Commonwealth Public Servants, and constitute a serious breach of public trust.

In Balog at 633 their Honours put findings on the one hand and statements regarding a 'prima facie' case on the other in the same class.  I find that the inclusion of the words 'prima facie' to describe the departure from official standards and the serious breach of public trust is tantamount to a finding of personal culpability, and therefore ultra vires the Act.  The last four lines of the opinion cannot be validly published in this form.  This finding is further discussed in 7.1.4.

5.5  Finding 15

In my view, the Regional Manager and his Deputy never completed a written assessment before making this grant on behalf of ATSIC, so breaching their statutory requirements.  In any event, ATSIC is unable to
provide the appropriate written justification for the grant.

There was no objection to this finding itself but to the supporting reasons.  In my opinion, statements that "I do not believe that these documents ever existed" and "I do not accept the statements by the Regional Manager and his Deputy that they can actually recall them" that appear on page 35 and refer to finding 15 were not in breach of the `Balog principle'.  They merely document how the Ombudsman arrived at her opinion.

The last paragraph of Appendix 4C which supported this finding said this:

However, I do not believe that those documents ever existed.  I therefore believe that the Regional Manager and his Deputy breached the requirements of sections 22 and 23 of their Act; and that their evidence to me (and their superiors) was untrue and misleading.

These statements are certainly judgmental in nature and content but in reality they represent, as reasons for Recommendation 4, the Ombudsman's method of demonstrating how the individuals apparently acted contrary to law or otherwise wrongly as provided for in section 15(1)(a)(i) and (v). In fact, taken as a whole 2½ pages, the Appendix was merely an enunciation and collation of evidence supporting the Ombudsman's views. It is therefore not a set of findings. Appendix 4C is not ultra vires. Finding 15 is further discussed in 7.1.6.

5.6Finding 16

In my view, NBBAC's concern that the Regional Manager and his Deputy had been favouring Mr T was not only understandable, but justified - because neither ATSIC, the Regional Manager or ­­­­his Deputy have been able to subsequently provide an adequate explanation for the way in which the grant was reduced.

This finding was not challenged as other than a clear expression of opinion.  But the applicant submitted that the statement on page 36 -- "I can see nothing that defends the Regional Manager and his Deputy from NBBAC's claim that they demonstrated favouritism for Mr T" -- which supports the finding, represented a judgment or finding.  The context in which the statement appears makes clear that it is an expression of opinion on the evidence of the individuals which falls short of a definitive finding.  Finding 16 is valid.  It is also discussed in 7.1.7.

5.7  Appendix 5

Appendix 5 chronicled what it describes as the "apparent" failures by the individuals to fulfil their duties as public servants which the Ombudsman used in support of various findings.  The language is in strong and definitive terms and clearly reflects the Ombudsman's conclusions.  The individual points mentioned are written in a tone far more serious than their descriptive heading would lead a reader to expect.  Words such as 'wrongly', 'breached', 'knowingly misleading', and 'failed', often 'repeatedly', all import a tone reflective of a judgment
having been made as regards the merits and appropriateness of the actions.

It is a fine line to draw.  While not presenting conclusions on merit and illegality, the Ombudsman must have the flexibility to document the evidence upon which a conclusion of unreasonable or wrong conduct may be founded.  But there are important issues of civil liberties and fundamental rights at stake here.  To choose as an example one of the instances used, it is one thing to report with evidentiary support and reasons that a person 'provided a briefing which appears to me to be wilfully misleading'; it is another thing to say that 'he knowingly provided a misleading briefing'.  I hold that Appendix 5 is ultra vires the Act in its present form.

5.8  Conclusions

(a)The use of words such as "in my view", "it appears that", "the evidence given to me (or my office) would appear to disclose that"  or a blanket disclaimer that the report contains only opinions will be helpful but what follows will only be valid exercises of statutory power if the Ombudsman has not in substance made and reported definitive findings or judgments.

(b)In order to form an opinion, the Ombudsman must be free to assess the supporting data and evidence.

(c)In the process of expressing her opinions, the Ombudsman is not restricted in her obligation to report her reasons.

(d)In all the cases other than the few instances identified, the Ombudsman has lawfully expressed her opinions and given reasons based on conclusions apparently formed from the evidence before her.

1. DISCIPLINARY RECOMMENDATIONS

The applicant submitted that a report under section 15(2) of the Act is not permitted to contain recommendations of disciplinary action by reason of the limitations found in section 5(2)(d) of the Act.

6.1Effect of section 5(2)(d)

This provision states:

The Ombudsman is not authorised to investigate:

.....

(d)action taken by any body or person with respect to persons employed in the Australian Public Service or the service of a prescribed authority, being action taken in relation to that employment, including action taken with respect to the promotion, termination of appointment or discipline of a person so employed or the payment of remuneration to such a person;

The applicant submitted that the reference in that paragraph to `discipline of a person' prohibits the Ombudsman from
investigating and thereafter making recommendations with respect to all matters involving the administrative discipline of a relevant person.  She asserted that the words `in relation to' and `with respect to' are not expressions narrowing the scope of the prohibitions, but expanding them.  This suggested construction would severely limit the Ombudsman's investigative power and may lead to her having to ignore relevant wrongdoing uncovered in the course of her investigations.

There is, however, an alternative construction of this subsection, viz. that the Ombudsman is precluded from investigating all actions taken in relation to federal public employment including action taken with respect to discipline.  On this interpretation, paragraph (d) can be broken into tiers:

(a)the Ombudsman is substantively prohibited from investigating `action' taken by anyone with respect to relevant employed persons

(b)'action' means action taken with respect to such persons'  employment

(c)included within the scope of unauthorised enquiries is action taken with respect to the discipline of a person

In my opinion this construction is preferable.  The paragraph does not preclude the Ombudsman from recommending a course of discipline, but she is for example not authorised to investigate
a decision by management to discipline an employee.  This construction is supported by the commonsense notion of avoiding overlap: the Ombudsman is restrained from investigating an area that is being adequately managed by other government bodies, tribunals or courts dealing with employment matters.

The applicant submitted that words "action with respect to the ..... discipline of a person" as they appear in section 5(2)(d) should be interpreted in the same way as "action that relates to a matter of administration" in section 5(1)(a). In both cases the expressions are meant to connect the word `action' to its object. I agree with this proposition, but I do not see how it assists the applicant’s argument. As it appears in section 5(1)(a), the expression empowers the Ombudsman to investigate matters that are related to or somehow connected with administration. As it appears in section 5(2)(d), the phrase precludes the Ombudsman from investigating action taken with respect to employment matters. In my opinion the meaning the applicant sought to place on the words `with respect to the discipline of a person' is misconceived. Those words exemplify a subcategory of actions within the broader subject matter of employment in the public or related service. The Ombudsman is not precluded from investigating matters which may result in the discipline of a public servant, only from investigating actions already taken in this respect.

No suggestion has been made that the Ombudsman has investigated any such actions. There has therefore been no breach of section 5(2)(d).

6.2Reporting disciplinary recommendations

A direct reading of section 15(2)(f) would seem to provide for the Ombudsman to report her opinions on virtually any matters not otherwise excluded. In my view, however, the provision must be read in context, namely that the report is addressed to the department or prescribed authority in a bid to get it to act in accordance with fairness and law. Presumably paragraph (f) does not give the Ombudsman carte blanche to report on anything at all, rather that the words `any other thing' are limited by what is relevant to the particular authority. In this case ATSIC has the scope, if it follows the requisite statutory guidelines, to lay the recommended charges, and Recommendation 4 should be read in that way. Moreover, I am not inclined to read additional words into the provision by section 15(3)(b) entitling the Ombudsman to include in her report any recommendations she thinks fit, so as to empower the Ombudsman only to report any such recommendations provided they are not disciplinary in nature.

Additionally, as already extracted from the Second Reading Speech, it was the intention of Parliament that the Ombudsman make recommendations to the relevant authority.  The word used by the Attorney General in the speech was `suggestions'.

6.3Is this disciplinary recommendation a finding of guilt?

Recommendation 4 cannot be put into effect until certain procedures under the Public Service Act have been complied with. Thus the substance of this recommendation is not finally determinative and is therefore not a `finding'. This is not to say that all disciplinary recommendations would not be findings; it will, as always, depend on the particular words, context and circumstances.

6.4Conclusions

(a)Recommendation 4, which is the only contested disciplinary recommendation, is not a finding of guilt, but the Ombudsman's opinion and suggestion for action under section 15(2).

(b)For this reason I hold that it was not ultra vires.

(c)There is nonetheless potential for consequences adverse to the individuals concerned.  It seems to me that the ultimate validity of this recommendation depends on the validity of the Ombudsman's actions that led to the opinions which collectively support the recommendation.

(d)It is therefore necessary to consider whether procedural fairness was granted in these regards.

1. PROCEDURAL FAIRNESS

7.1The guidelines

Whether or not the guidelines of procedural fairness have been followed are of the utmost importance. The Ombudsman argued, in my view correctly, that once the guidelines of section 8(5) have been followed, she is free to report opinions that are `either expressly or impliedly, critical of any department, prescribed authority or person'. Subsection (5) is thus not a bar to the reporting of adverse opinions but merely a procedural hurdle, so that before completing an investigation the Ombudsman must first afford the object of the proposed criticism an opportunity to appear before her or an authorised person to make submissions.

There are two important aspects to this guideline. Firstly, the opportunity to make submissions must be given prior to the completion of the investigation, presumably to allow the results of the submissions to alter its course. This means that if the opportunity is not or not adequately given, then the report may not be validly made. The legislature intended the Ombudsman to consider timely submissions within the context of an open investigation and report her final opinions with the benefit of these submissions. The applicant raised the highly technical point that a report in violation of section 8(5) cannot be fixed by rewriting after a late opportunity for submissions had been given. I believe that in the event it is found that a section 8(5) opportunity was not given, it is open for the Ombudsman to
reopen the investigation, consider the late submissions, and then amend or affirm her original report.

Secondly, as nothing in the subsection demands that the exact form of words contemplated or intended for the report is to be put to the individual concerned, it is sufficient if the substance of the proposed criticism is put. However, the applicant disputed whether in several of the instances here, the substance of the adverse opinion was put. The Ombudsman asserted that in substance the draft report put to the officers concerned the range of available adverse opinions, whereas the applicant maintained that many of the opinions contained in the draft report stopped short of the adverse opinions contained in the final report and therefore that the draft report did not satisfy section 8(5). The major examples were:

7.1.1   Finding 3

As seen at 5.1, Finding 3 criticised the individuals on three bases:

(a)they had no power to waive the tendering process and the waiver was unjustified

(b)they breached procedural and accountability requirements by failing to record reasons for having done so

(c)they knew or ought to have known that their actions were unjustified and were inconsistent with these requirements

The draft report put the first two of these adverse opinions.  It highlighted an excess of jurisdiction (page 119):

It appears that Mr W breached his delegated authority in granting the waiver...

and also addressed the issue that there were no good reasons to waive the tendering process (page 121):

There is no evidence that Mr W and Mr G had a reason which could justify the waiver ....

It also asserted that ATSIC's procedural and accountability requirements were not followed (page 120):

ATSIC procedures require that documentation must be maintained ....  ATSIC's files do not disclose any record ... amounting to reasons why Mr W and Mr G granted the waiver.

The draft report did not specifically state, however, that the individuals `knew' or `ought to have known' that their actions were unjustified and contravened the relevant accountability requirements.  The question therefore raised is whether the serious allegation of wilfulness, or blatant disregard of procedural and accountability requirements, was put to the individuals by implication.  If not, it would have so altered the
substance of the adverse opinions between the time they were issued in the draft report and their appearance as Finding 3 in the final report that the right of the individuals to be heard on them would have been denied.  In my view, Chapter 7 of the draft report, especially 7.2, clearly put the issue to them.  The individuals concerned provided their reasons for the waiver in a statement in response to the Ombudsman's investigation.  These reasons were dismissed as defective by the Ombudsman who, as just seen at page 121 of the draft report, concluded that there was no evidence of a reason despite standard ATSIC procedures to the contrary.  For officials of their seniority, the implication of their wilful disregard of these procedures and lack of justification is clear.

7.1.2   Finding 5

Finding 5, quoted at 5.2, criticised the individuals for knowing breaches of duty to be truthful and of misleading senior management as well as for failure to account properly for the waiver of the tender requirement.

The draft report addressed the breaches in reporting and accounting for the waiver (page 141):

... it appears that Mr W and Mr G chose not to inform ATSIC management that they had waived the tender requirement for the project management team of Mr K and Mr J

On four of the ten occasions ...  Mr W did not present the issue .....

And at page 142:

On a further four occasions, Mr W and Mr G did not refer to the issue though they clearly should have done so .....

The draft report addressed the issue that the individuals misled management and others (page 143):

While these representations were technically correct, they were misleading in that they did not give any acknowledgment of the earlier waiver.... and did not explain why the tender requirement, previously waived, had now become standard .....

In addition, on two occasions, it appears that Mr W represented that there had never been any intention to grant any waiver; and thus gave an account that was false and misleading ....

And at page 146:

On ten occasions from April 1992 to June 1993, when Mr W or Mr G expressed their view that NBBAC should go to public tender, they did not acknowledge or explain that they had granted the previous waiver.  These omissions led ATSIC management and others to believe that there had been no previous deviation from the standard tender requirement and included:

*Four occasions when Mr W or Mr G failed to mention the waiver when it was clearly their duty to do so; and

*Two occasions when Mr W falsely stated to (1) the Commissioners and (2) ATSIC's Fraud Awareness Unit that no waiver had ever been contemplated.

It also appears that on five occasions, Mr W provided misleading information to ATSIC management .....

It appears prima facie that Mr W and Mr G failed to give an honest account of their actions, and breached their general duty to be truthful in their official
dealings as required of them by the Guidelines on Official Conduct of Commonwealth Public Servants.

As the applicant submitted, the acknowledgment in the draft report that the representations were technically correct was omitted in the final report. In my view, however, this omission does not represent a relevant failure to comply with section 8(5). The important obligation was to put to the individuals the allegation that the representations were misleading. As the text quoted from page 143 of the draft report has shown, there can be no doubt that this element of procedural fairness was met.

The applicant submitted that the draft report did not put to the individuals the criticism that there were knowing breaches of their duty to be truthful in official dealings. In other words, it was said, the final report insinuated that the individuals deliberately lied, whereas the draft report only asserted the making of a statement that was not correct. If true, this fact would in my view be a breach of section 8(5).

However, I believe that the draft report clearly carried an implication that the individuals deliberately told a falsehood, notwithstanding that those exact words were not used.  In addition to the paragraphs already quoted from page 143 of the draft report, the following paragraphs also appeared at pages 143 and 144:

* ..... Mr W's formal briefing to the Infrastructure Branch ..... did not indicate any possibility of a waiver ..... and instead said:

"This office has consistently advised the NBBAC that it is not prepared to waive tenders ....."

..... Mr W and Mr G had consistently advised NBBAC that no public tender was required .....

*On 4 June 1993 Mr W was interviewed by an officer of ATSIC's Fraud Awareness Unit, and said .....

"When the big money came up I said this has got to go to tender.  I said no way in the world I'm going to go along with letters of inexpediency for anything else ....."

However, when the "big money" came up (ie the funds for Stage 1), Mr W indicated that he would "go along with the letters of inexpediency" for that contract, and issued those letters, confirming the waiver in writing...

The draft report's juxtaposition of these statements by Mr W -- viz. that no tenders would be or were waived -- with the events which transpired -- viz. that Mr W was part of, and therefore must have been aware of, a decision to the opposite effect -- clearly carried with it the implication that the Ombudsman considered and was stating that the individual had told a deliberate falsehood.  These paragraphs clearly reveal an allegation that Mr W told a deliberate lie on two occasions.  In fact it was the essence of the draft report.  The only other interpretation could be that the individual was so confused by events that he did not remember his actions and was not concerned enough to check his records -- in other words, an implication of gross incompetence.  This interpretation is the less likely given the overall tone of the draft report but is in the circumstances hardly less adverse than the implication complained of.

Another interpretation of the Ombudsman's words in Finding 5 of `knowing breaches of his duty to be truthful' might be that Mr W knew he had a duty to be truthful and knew that his statement was a falsehood.  The counterpart to this interpretation would be that he knew that what he was saying was false but was unaware of his duty to tell the truth, and in that sense that he did not breach his duty knowingly.  In the context, this conclusion would be absurd: it is impossible to hold that any employee, let alone a public or equivalent servant, does not know of a duty to be truthful.  In any event, in the facts of this case I do not believe that it is a greater slur on a public servant to say that he lied in the knowledge of a duty to be truthful than that he lied without the knowledge that he had that duty.

The applicant also submitted that in the draft report the Ombudsman only referred to two occasions of false and misleading representations whereas the final report mentioned at least four.  I have found at least ten, perhaps eleven, instances of misleading representation in the draft report: see page 146 extracted earlier.  However that may be, it is my opinion that an adequate opportunity was given to the individuals to address Finding 5.

7.1.3   Finding 7

The applicant's assertion was that the use of the word "knowingly" in the previously extracted reasons in support of Finding 7 given at page 23 of the final report (see 5.3) was not
reflected in the draft report. Whilst that assertion is literally true, I do not see it as a breach of section 8(5). In this context `knowingly' did not carry with it a connotation of lying and therefore did not `worsen' the adverse opinion. Moreover, the context of the draft report makes it indistinguishable from the final report in this regard.

The applicant further submitted that nowhere in the draft report was there a mention that the individuals sought to assert unwarranted control over the selection process.  The following statement appeared at page 90:

However, the evidence suggests that the pre-requisite was more restrictive -- that Mr W and Mr G saw Mr K as not preferable because he had not conducted work that was known to Mr or Mr G personally.

To my mind this statement insinuated that the individuals were asserting control over the selection process in that they were requiring that the consultants be known to them personally. Given that the more important allegation of favouritism is conveyed in both the draft and final report, I find that section 8(5) has been complied with in regard to this finding.

7.1.4   Finding 9

The applicant criticised Finding 9, extracted at 5.4, because it stated that the individuals' conduct amounted to a serious breach of public trust.
Two grounds of attack were advanced -- firstly, that the draft report did not suggest that a serious breach of public trust had occurred, and secondly, that even if it did, the Ombudsman had not laid the groundwork to found a charge of breach of public trust in the legal sense of that term, namely that the breach must have been committed knowingly.

In my view the Ombudsman has not made her assertion in the strict legal sense. However, even if these words were meant to convey the strict legal meaning, section 8(5) does not make it necessary for the Ombudsman to prove her allegation. All that is required is that she put the allegation or possibility to the individuals to give them a chance to answer it.

In fact the draft report at page 19 mentioned several breaches of ATSIC policy and procedure including failure to avoid apparent conflict of interest, failure to document or disclose the conflict, and breaches of the standards of impartial conduct required by the Guidelines on Official Conduct of Commonwealth Public Servants. To my mind each of these actions could be a serious breach of public trust either in the legal or lay sense and carries with it the suggested implication, whether stated or not. The final report did not represent a breach of section 8(5) in this respect.

7.1.5   Finding 12

In my view, there is no basis for the Regional Manager's claim that his objection to Mr K was based on any assessment of his experience.

Although it was protected by the introductory words, the applicant submitted that implicit in Finding 12 is the Ombudsman's opinion that the individuals' contention was knowingly false and that that view was not reflected in the draft report which, the applicant said, merely queried the objectivity of Mr W's assessment of the individuals' experience.  I agree that when the report stated at page 32:

The Regional Manager and his Deputy told my office that regardless of Mr K's qualifications, they did not believe he had sufficient experience in comparable work to be a suitable project manager ....

However, the Regional Manager did not assess Mr K's experience .....

it clearly insinuated that Mr W and Mr G lied by alleging that they had reviewed Mr K's experience and found it lacking when this was not so.

For its part, the draft report at pages 85-88 chronicled the disputing evidence regarding the issue, viz. Mr W's and Mr G's assertions that they questioned Mr K about his experience and perused his curriculum vitae, and conflicting evidence by Mr K and NBBAC.

It asserted that Mr W did not investigate Mr K's experience (page 86):

Mr K and NBBAC provided contemporaneous documentary evidence that Mr W chose not to research Mr K's experience.

And at page 87:

Although Mr W and Mr G indicated that they believed that Mr K's prior experience was insufficient, they were unable to provide any evidence of how or why they arrived at this belief.

And at page 88:

There is no evidence that they ever sought any independent professional opinion of Mr K's past work, or references from past clients or employers.

The draft report finally concluded at page 93 that:

It appears their views were unreasonable.  They do not appear to have attempted an objective assessment of Mr K's experience or capabilities...'

Although the draft report did not go as far as expressly stating that the individuals lied, in my opinion, the two statements quoted from pages 87 and 88 carried an implication to that effect by noting the individuals as saying that Mr K's experience was not satisfactory when they did not know what his experience was.

More importantly, however, the conclusion was in truth directed at the individuals' lack of objectivity, not their lying. Thus the significance of any dispute over the issue is substantially lost. This was not a breach of section 8(5).

7.1.6   Finding 15

The finding, extracted at 5.5, and Appendix 4C which supported it, were criticised because they stated, where the draft report had not, that documents that the individuals sought to rely on never existed and therefore that the individuals must have lied.  The draft report again chronicled the evidence and cast serious doubt on the veracity of the individuals' story.  At page 33:

Mr W and Mr G did not offer any other evidence to support the fact that the documents existed.  However, there is evidence that the documents never existed.

And at page 34:

There is nothing to suggest that there is anything unreliable about the evidence from the NBBAC Secretary, Mr R and Dr R ...[to the effect that there were no documents of the kind suggested.]

And at page 35:

ATSIC has no record of a written application or assessment, as required to support the grant of $23,000.  Mr W and Mr G claim to recall an application and an assessment, but this claim was unsupported by any other evidence.

It appears that NBBAC never submitted an application.  It appears likely that Mr G did not carry out a written assessment, and that Mr G made the grant without considering any such assessment ....

These statements clearly insinuated that the individuals' evidence was false, and that the falsity could not have been accidental or due to a loss of memory. This was not a breach of section 8(5).

7.1.7   Finding 16

This finding, previously quoted at 5.6, was criticised because it found a concern both 'understandable' and 'justified' rather than simply `understandable' as was the case in the draft report.  In my view, the applicant put too great an emphasis on the word 'justified', saying that it was tantamount to a finding of actual corruption.  In my view, it was virtually a synonym for "understandable", and really served only to emphasise the point.  This implication was clearly covered by the draft report at page 30:

In the absence of adequate reasons, it was understandable that NBBAC reached the conclusion that Mr W and Mr G were acting capriciously and had been favouring Mr T.

This was not a failure to comply with section 8(5).

7.1.8   Finding 30

This finding was:

In my view, ATSIC management has responded to issues raised by my investigation by accepting incredible versions of the facts, relying on patently irrelevant issues, and misleading the Commissioners - perhaps inadvertently - in order to protect the Regional Manager from official sanction for an apparent breach of duty (the purported 1992 waiver), and out of a refusal to reconsider their own pre-determined position.

It was criticised by the applicant for accusing ATSIC of a cover up to protect the individuals from disciplinary consequences, whereas the draft report did not address the matter at all.  Because a cover up usually carries the implication of an involvement of the persons whose actions are being hidden, I believe that there may also be an inference that the individuals involved here sought, procured or aided and abetted the cover up.

The draft report did deal with the paucity of investigations by ATSIC, its Office of Evaluation and Audit, and its Fraud Assessment Unit, and a degree of bureaucratic obfuscation by ATSIC, but these references cannot be read as other than an allegation of gross incompetence rather than the much more serious insinuations in the final report. This finding was a breach of section 8(5).

7.1.9    Finding 31

This finding which criticised ATSIC for its limp responses to the draft report overall despite the 16 weeks given for this purpose, led to a conclusion that its management culture was seriously defective. The primary attack on this finding was directed towards the lack of reasons to support it, and I shall primarily deal with it under that heading, but it was briefly mentioned as another failure to comply with section 8(5). The history of this matter is related earlier in these reasons for judgment. In my opinion there was no relevant failure by the Ombudsman in this respect.

7.2Other fairness issues

There appeared to be a tentative submission from the applicant that additional requirements of procedural fairness should be imposed in this instance.  As I have earlier stated, these requirements vary according to the circumstances, the nature of the statutory power and the ramifications of not following certain requirements: Kioa v West [1985] 159 CLR 550 at 612. The dispute generally arises when trying to determine the appropriate requirements. Although the express guidelines in section 8(5) do not preclude other rights being available, the applicant has not suggested any additional specific rules that should have been applied here. It is not necessary for me to entertain theoretical fairness options.

7.3Conclusions

(a)Section 8(5) provides that an opportunity for hearing any person or body the Ombudsman intends to criticise must be made available prior to the completion of an investigation. Although the Ombudsman need not put to the individual or department concerned the exact critical opinion in the form it will appear in the final report, she must put the substance of the proposed opinion.

(b)This requirement has been carried out except for the omission from the draft report of a deliberate cover up by ATSIC designed to protect the individuals from revelation of their alleged miscreances, carrying the possible implication that the individuals somehow sought, procured or aided, abetted and assisted this cover up.  These are serious allegations that differ significantly and in an adverse way to what appeared in the draft report.

(c)Other than in this respect, the section 15(2) report is lawful so far as procedural fairness is concerned and may with this exception be published in the form in which it has thus far appeared.

(d)The Ombudsman is entitled to put this additional allegation to ATSIC and the two individuals and to rework the report to take into account any submissions made on their behalf.  Adopting this course would mean that the investigation will have to be reopened in the sense that the relevant recommendations and opinions are rethought in light of any new submissions.  It will not be sufficient merely to amend the particular offending opinion in isolation.

1. REASONS FOR OPINIONS

The applicant submitted that the reasons given in support of Findings 30 and 31 were unsatisfactory. With respect to Finding 30, the absence of an implication that ATSIC's incompetence was part of a deliberate attempt to cover up the events and people under investigation was emphasised by the fact that the reasoning was entirely directed to the opinion that ATSIC's own investigations were lacking. I therefore agree that the reasons given in support of Finding 30 were inadequate. If desired, they may now be supplemented as needed to comply with section 15(3).

On the other hand, Finding 31 contained an opinion of the Ombudsman that because ATSIC has failed to respond to her report in the manner that she envisaged, serious questions must be raised with respect to their competence.  At page 74 she stated:

In my view, this unfortunately suggests a lack of management culture that is sufficiently prepared to admit to clients, or itself, that staff are capable of making mistakes (or worse).

These quite harsh words were the Ombudsman's opinion and they are well supported by the contents and overall tone of her report.  They do not invalidate the report on the basis that the reasons given for the opinion were insufficient.

1. REMEDIES

The final issue is how these conclusions can be effectuated.

9.1Certiorari or order quashing report

Section 15 provides for a report to possess certain contents and section 8(5) states that a report shall not be made unless the section has been complied with. But no sanction for any breaches is provided. I have concluded that a small portion of the report should not have been made in the form in which it has appeared. A similar scenario arose in Ainsworth v Criminal Justice Commission [1992] 175 CLR 546 where Mason CJ, Dawson, Toohey and Gaudron JJ, having found that the requirements of natural justice were not followed by the Queensland Criminal Justice Commission, dealt with the delicate issue of the appropriate remedy at 580:

The function of certiorari is to quash the legal effect or the legal consequences of the decision or order under review.  The report made and delivered by the Commission has of itself, no legal effect and carries no legal consequences, whether direct or indirect.  It is different when a report or recommendation operates as a precondition or as a bar to a course of action or as a step in a process capable of altering rights, interests or liabilities.  A report or a recommendation of that kind may be quashed, that is to say its legal effect may be nullified by certiorari.  But the Commission's report is not in that category.  The report may bear upon the appellants' prospects of obtaining licences ....  However..., the report does not "legally affect ... rights"...  There being no legal effect or consequence
attaching to the report, certiorari does not lie to correct the failure of the Commission to comply with its duty to proceed in a way that was fair to the appellants.

The current applicant is in a similar position.  Although the Ombudsman has included a few findings in her report which I have found to be invalid, the report itself does not affect legal rights.  It can therefore not be quashed.

9.2Prohibition of dissemination

In any case the real issue for the applicant is the prevention of further dissemination of the report.

(a)Prime Minister and Parliament

A few parts of the section 15 report should not have been included in their present form, but given that they have been, a section 16 report to the Prime Minister may not be used to circumvent the invalidities because in my opinion, until there has been a valid section 15 report, section 16 cannot take effect. Consequently a section 17 tabling in Parliament is also not permissible. The High Court indicated in Ainsworth at 581 that:

..... had the appellants had advance notice of the Commission's intention to report adversely, its failure to observe the requirements of procedural fairness would have entitled them to relief by way of prohibition preventing it from reporting adversely  without first giving them an opportunity to answer the
matters put against them and to put submissions as to findings or recommendations that might be made.

No doubt appropriate undertakings can be given, but if not I am prepared to consider a request for an order that the Ombudsman be precluded from issuing a report to the Prime Minister under section 16, and from seeking the tabling of the report in Parliament under section 17, until such time as a valid report has been issued to ATSIC and the individuals concerned and a reasonable time has elapsed thereafter.

(b)Other publication

Similarly section 35A makes specific reference to the procedural fairness requirements of section 8(5) so that reports of the investigation must not be made public unless section 8(5) has been complied with. Therefore if there are no undertakings, I am prepared to consider an order that the Ombudsman be similarly precluded from making her report public pursuant to section 35A.

9.3Mandamus or order for reopening of investigation

Ainsworth apparently does not permit a direction that the Ombudsman reopen her investigation and put the relevant allegations to ATSIC and the individuals.  Mandamus was not available in Ainsworth because the Criminal Justice Commission was not under a duty to investigate and report with respect to the appellants. The case before me is a little different in that the Ombudsman is under a duty to investigate: section 5(1)(a)
`shall investigate'.  However, as was the case in Ainsworth, whether or not the Ombudsman reports her investigation will be dependent on the opinions she forms after the conclusion of the investigation.  As the High Court noted at 580:

In the circumstances of this case, the fact that the Commission was once of the opinion that it should investigate and report with respect to the appellants does not indicate that it is still of that opinion.  If, as will appear subsequently, the Court can make a declaration that, in reporting adversely to the appellants, the Commission failed to observe the rules of procedural fairness, the Commission may well now be of the opinion that it is not appropriate to pursue the investigation of the appellants and make a report with respect to them.  The Court should not make an order which constrains the Commission's freedom to decide that it will not pursue an investigation when the Court can make an order that will otherwise sufficiently protect the appellants.

Although I imagine that she will wish to do so, it is not for me to say whether or not the Ombudsman will seek to resubmit her allegations to the relevant parties, merely that it is not within my power to order her to do so.

9.4Declaratory relief

Ainsworth at 581 makes clear that a declaration that section 8(5) has not been complied with is within the Court's power:

Instead, the report has been made and delivered in accordance with s 2.18 of the Act.  And, although it had no legal effect or consequence, it had the practical effect of blackening the appellants' reputations.  Prima facie, at least, these matters suggest that the appellants are entitled to declaratory relief...

Appropriate declarations should therefore presumably be made in this case.

10.SUMMARY OF PRINCIPAL CONCLUSIONS

10.1The Ombudsman may not express findings of individual guilt, but is free to express genuine opinions on the subject.  If so, she must include in the compulsory reasons for the opinions the evidentiary material relied on which goes to the culpability of the individuals.

10.2The Ombudsman may make recommendations of a disciplinary nature provided the reasons and supporting evidentiary conclusions are not actual or equivalent to findings of individual culpability.  Recommendation 4 is within power and valid.

10.3The Ombudsman's report to ATSIC of 30 January 1995 is authorised by section 15(2) of the Act except in relation to Findings 3, 5, 9 and Appendices 4G and 5.

10.4The Ombudsman's report to ATSIC of 30 January 1995 is authorised by section 8(5) of the Act except in respect of Finding 30.

10.5Insufficient reasons were given for Finding 30.

10.6The Ombudsman may not disseminate the present report under section 16, 17, or 35A of the Act, but may disseminate and publish the report in accordance with those provisions when it has been validly made.

11.ORDERS

11.1The parties are to bring in minutes of the orders and declarations appropriate to these conclusions within 7 days, including orders or declarations as to which if any parts of these reasons should be kept confidential for any period.  If there is no agreement, the parties are to submit their separate orders and declarations within 7 days and have the case relisted at a mutually convenient time shortly thereafter.

11.2Costs will be dealt with by consent or by written submissions.  The parties are to confer and agree on suitable orders or a timetable for the submissions with the process being entirely completed not more than 21 days from today.

For the applicant                   Mr Walker SC and Mr Jackman

instructed by Australian Government Solicitor

For the respondent                  Mr Garling SC and Mr Morris

instructed by Windeyer Dibbs

Dates of hearing  3, 23, 24 March 1995

Written submissions           4 May 1995
completed

Date of judgment  21 September 1995