Cole v Cunningham

[1983] FCA 223

Re: ROBERT WILLIAM COLE; ROBERT JOHN YOUNG; JOHN VINCENT MONAGHAN
And: COLIN FREDERICK CUNNINGHAM
No. G198 of 1982
Administrative Law
5 IR 401

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Bowen C.J.
Sheppard J.
Morling J.

CATCHWORDS

Administrative Law - Judicial Review - Natural Justice - Decision of Public Service Board refusing re-employment application - Whether Board observed rules of natural justice - Whether Board bound by rules of natural justice - Special circumstances - Meaning of "legitimate expectation".

Precedents - Effect of decision of Privy Council.

Administrative Decisions (Judicial Review) Act 1977 ss. 5, 16.

Migration Act 1958 s. 18

Public Service Act 1922 ss. 33, 34, 47B.

HEARING

SYDNEY

#DATE 2:9:1983

ORDER

The appeal be dismissed.

Robert William Cole, Robert John Young and John Vincent

Monaghan pay to Colin Frederick Cunningham his costs of the appeal.

JUDGE1

This is an appeal from the judgment of a single Judge of this Court (Ellicott J) in which he made an order of review pursuant to ss.5 and 16 of the Administrative Decisions (Judicial Review) Act 1977. The order was made in respect of the decision of a delegate of the appellants, who are the members of the Public Service Board, not to re-appoint the respondent to the Australian Public Service. The decision was notified to the respondent on 20 August, 1981.

The respondent was originally appointed an officer in the Public Service on 8 April, 1974. He performed duties in the Department of Immigration and Ethnic Affairs until his resignation on 28 September, 1979. At the time of his resignation he was performing the duties of "a Clerk Class 2/3" in the Visitors' Section. The respondent's resignation was sought because, in the view of his superiors, he had been guilty of misconduct in relation to the performance of his duties.

Amongst his duties was the processing of applications by persons for the extension of temporary entry permits granted to them pursuant to s.6 of the Migration Act 1958. On 21 June, 1979, one Carol Nisha, now the respondent's wife, sought an extension of three months in respect of the temporary entry permit which she had. The permit expired on 21 June, 1979. Miss Nisha was a Fijian citizen. The respondent told her that unless she produced an air ticket to Fiji together with evidence of funds to maintain herself she would have to leave Australia within 10 days. He said that if these were produced to him the following day the problem would be overcome. On 22 June, 1979, she produced an air ticket and a passbook showing that she had $1,400 standing to her credit. The application for the extension was made out by the respondent. He told Miss Nisha to return in seven days. On 25 June, 1979, the respondent issued a temporary entry permit to Miss Nisha for a further three months until 21 September, 1979.

On 29 June, 1979, Miss Nisha called to pick up her passport with the new temporary entry permit stamped in it. The respondent gave it to her and asked her to accompany him on a social outing. The two formed an attachment and from the middle of July 1979 they began to live together. The respondent said that he had not met the applicant before 21 June, 1979.

Early in September 1979 Miss Nisha's passport was damaged by water and she sent it to the Fijian High Commission for renewal. The passport was not received back by her until 28 September, 1979, a week after the second temporary entry permit had expired. The respondent told Miss Nisha that as soon as she received back her passport she should apply for a further permit because of her de facto relationship with the respondent.

However, on 26 September, 1979, the respondent was called to the office of the Assistant Regional Director of the Department, Mr. Mead. He told the respondent that Miss Nisha had been arrested as a prohibited immigrant. A series of conversations ensued.

Mr. Mead expressed concern that adverse publicity from the respondent's association with Miss Nisha would reflect upon the Department. He said it was a very serious matter and he would have to think further about what he would do about it. He said that the respondent and Miss Nisha "can go home tonight and discuss what you are going to do about this."

Later the same day, the respondent had a conversation with Mr. Donald, the officer in charge of his Department. Miss Nisha was present at this conversation in the course of which Mr. Donald said: "Well, talking to you as a mate you could think about marriage. Both of you can stay together and this thing will be defused from the Department's point of view."

At 5 p.m. on 27 September, 1979, (i.e. the day preceding the writing of his letter of resignation) the respondent had a further conversation with Mr. Mead. He told Mr. Mead that he had not done anything wrong and was not going to resign "just to save the department from some bad publicity". After the respondent said this Mr. Mead broke off the conversation and went into the adjoining office of Mr. Austin, the Regional Director of the Department. He returned and then said to the respondent, "I would suggest that you reconsider your attitude. The penalty for harbouring a prohibited immigrant is six months imprisonment. If you get a criminal record it will still be affecting you in 20 years time. If you resign now it will be a normal resignation and you'll leave with a clean record."

On the following day, before writing his letter of resignation the respondent said to Mr. Mead, "All right, I'll write the letter. What do you want me to say in it?". Mr. Mead said: "I'll leave it up to you.", to which the respondent replied: "I don't know of any reason I could use."

Mr. Mead then said: "Well, I assume if you really intend to marry this girl you might want to meet her family and find out something about her background. Whatever you like. It doesn't need to be typed. It can just be a short note in your own handwriting."

The respondent then wrote out his letter of resignation. It said that owing to a personal matter involving himself and Miss Nisha, he found it necessary to join her in Fiji. His resignation was accepted on the day it was offered. Miss Nisha returned to Fiji on 6 October, 1979.

On 16 October, 1979, the respondent sought to withdraw his resignation. He said he would prefer to answer charges before a disciplinary tribunal. In his evidence before the learned primary Judge the respondent said that the contents of his letter of resignation were a fabrication and that the reason he gave was suggested to him by a superior officer who knew he was not going abroad. The reason given was not the reason for his resignation. The real reason was, according to the respondent's evidence, that his superior had said that he would not refer the matter to the federal police to have him charged criminally for harbouring an illegal immigrant if the respondent would resign.

On 19 October, 1979, the respondent was informed that his resignation could not be withdrawn. It had become effective on 28 September, 1979. Miss Nisha subsequently returned to Australia and she and the respondent were married.

On 9 April, 1981, after he had sought re-appointment the respondent was interviewed by a clerk of the Public Service Board who told him that, subject to police and ASIO clearance, he would be offered a position in the Service. However, the next day, the clerk told him that an unsatisfactory report about him had been received from the Department of Immigration.

The account of the facts which we have so far given has been taken substantially from his Honour's judgment. His Honour continued:

"On 2 July 1981 he was interviewed by Mr Callaghan and Miss Gibbons, officers of the Board concerning his application for reappointment. He was told that subsequent to the interview on 9 April, an adverse character report had been received from the Department of Immigration and Ethnic Affairs. He was told that it related to the events which had occurred relating to Miss Nisha in 1979 but, when he requested it, was refused a copy. He was asked what had happened and he gave his version of the events. The report which the Board received from the Department of Immigration and Ethnic Affairs concerning the application was contained in a letter dated 2 July 1981. It stated:- 'In reply to your request of 28 June 1981, the following information is supplied:-

(a) Mr Cunningham was asked to resign from this Department when his involvement was detected in harbouring a Prohibited Immigrant. He further schooled this person to conceal his actions.

(b) While in a position of trust, he used this opportunity to indicate to this person that departmental policy would allow her to stay in Australia, if she "'had a defacto relationship with an Australian. He concealed the fact of her approach to the Department and retained her passport. His resignation was required as the Department wanted Mr Cunningham out of the Department in the shortest time, after his actions were discovered. . . . . . .'"

The letter was not read to the respondent and none of the allegations in it was put to him. As earlier mentioned the decision not to re-appoint the respondent was notified to him by letter dated 20 August, 1981. Amongst other things the letter said:

"I regret to advise that, taking into account all information available to this Office, including our discussions at interview, you cannot be regarded as satisfying Section 34(1)(c), and in these circumstances, I have no alternative but to reject your application for re-appointment."

After referring to the letter his Honour said: "The actual decision not to reappoint the applicant was made by the Board's delegate, Mr Banks. He did so by approving a recommendation made in a report from Mr Callaghan and by directing that the application was not to be re-appointed. A copy of that report which is dated 13 August 1981 is before me. After setting out his version of the history of the matter, Mr Callaghan stated, in paragraph 6 thereof:- '6. There is no doubt in my mind that Mr Cunningham took advantage of his public position and knowledge of Departmental policies and procedures to orchestrate a situation to his own advantage. In doing so he has possibly committed an offence against the Migration Act and has been in breach of Public Service Regulation 35. Further it was not apparent to me at interview that Mr Cunningham was at all contrite about his deceitful actions. Having considered all the circumstances I do not think Mr Cunningham's reappointment would be in the best interests of the Service. I recommend to you that his application for re-appointment be not approved.' Clearly enough the letter from the Department of Immigration and Ethnic Affairs contained some strong criticisms of the applicant of which he was not made aware. It made several serious allegations of concealment and of abuse of his position as an officer."

The principal provision of the Public Service Act 1922 ("the Act") which is in question is sub-sec.473(2). By sub-sec.473(1) it is provided that the Board may reappoint to the Public Service a person who has ceased to be an officer. Sub-sections (1A), (1B) and (1C) prevent the re-appoint of a person to the Public Service if the person ceased to be an officer by reason of his having been dismissed for misconduct. Sub-section 47B(2) is as follows:

"A person may be re-appointed under this section whether or not he is within the appropriate age limits for appointment determined under this Division or possesses the prescribed educational qualification."

Other provisions of the Act to which reference should be made are ss.33 and 34. Section 33 is a general provision empowering the Board to appoint a person to the Public Service as an officer of the Second, Third or Fourth Division. Section 34 (referred to in the letter of 20 August, 1981, notifying the respondent of the decision not to re-appoint him), provides that a person is not eligible for appointment unless he is a British subject and the Board is satisfied that he is a fit and proper person to be an officer of the Service.

The learned primary Judge considered that, in the special circumstances of the case, the respondent's application for re-appointment should not have been refused without his being informed of the nature of the allegations made against him and his being afforded an opportunity of replying to them. His Honour made an order that the Board's decision be set aside. In the submission of senior counsel for the appellants this was not a case where the Board was obliged to accord to the respondent natural justice. He further submitted that, in any event, the rules of natural justice had in fact been observed.

In our opinion the second of these submissions must clearly fail. If the rules of natural justice did apply, it was of the very essence of them that a person in the position of the respondent against whom serious allegations were made, should have been told of the allegations and given an opportunity to reply to them. It is true that he was informed in a general way that the reason for his re-appointment not being recommended was to do with the circumstances under which he resigned in September 1979. It is also true that he was asked whether he wished to say anything about those circumstances. But he was not informed that in the view of the Department of Immigration he was involved in harbouring a prohibited immigrant nor that he was alleged to have schooled Miss Nisha to conceal his actions. Nor was the purport of what is said in paragraph (b) of the letter dated 2 July, 1981, from the Department of Immigration ever put to him.

It follows that the central question in this appeal is whether the appellants were bound by the rules of natural justice. If they were, the appeal must be dismissed.

The learned primary Judge did not hold that sub-sec.473(2) should be construed so as to require the Public Service Board to observe the rules of natural justice whenever a question of re-appointment of an officer to the Service arose. Nor did he hold that the rules of natural justice applied in the case of a first appointment to the Service under ss.33 and 34. He made it very clear in his judgment that the only reason he found for the respondent was that he thought the circumstances of the case were very special. His Honours' view of the sections of the Act were undoubtedly correct. An applicant for appointment or re-appointment to the Public Service is not entitled to natural justice because he, being outside the Service, has no legitimate expectation, let alone right, which can be disappointed or affected by a refusal to appoint him.

The respondent's case is that he was entitled to natural justice because the special facts and circumstances gave rise to a legitimate or reasonable expectation that his application for re-appointment to the Service would not be refused on the ground of prior misconduct unless he were given a proper opportunity to answer allegations of misconduct made against him.

The phrase "legitimate expectation" had its origin in the judgment of Lord Denning M.R. in Schmidt v. Secretary of State for Home Affairs (1969) 2 Ch. 149. Reference to the phrase is found in the judgments of the High Court in the well known trilogy of cases decided in 1977 and reported in Volume 137 of the Commonwealth Law Reports in the order of the dates of their decisions. The cases are Salemi v. MacKellar (No. 2) 137 C.L.R. 396, The Queen v. MacKellar; ex parte Ratu 137 C.L.R. 481 and Heatley v. Tasmanian Racing and Gaming Commission 137 C.L.R. 487. The cases have been discussed in later judgments of the High Court and in judgments of this Court. We would not wish to embark upon yet another analysis of them. But we mention them to show that the implications of what is involved in "legitimate expectation" were left open. We refer particularly to Ratu's case per Masdon J. at p.476 and to Heatley's case where Aickin J. with the agreement of Stephen J. (p.494) and Mason J. (p.494) said (pp.508-9):

"The concept of a 'reasonable expectation' of some entitlement, i.e. an expectation that some form of right or liberty will be available, or will not be taken away without an opportunity for the subject to put his case to the relevant governmental authority armed with the compulsory power in question is a relatively recent development. It was first expressed by Lord Denning M.R. in Schmidt v. Secretary of State for Home Affairs (1969) 2 Ch. 149. . . . . . . . . . . . . It cannot be said that the true extent of the notion that an expectation may be the foundation of a right to compel observance of the relevant principles of natural justice has yet been fully worked out or stated with precision. However we are not here concerned with an expectation of the kind that is referred to in those cases, i.e. an expectation that the relevant governmental authority will exercise its statutory power in a particular manner. What we are concerned with is an expectation on the part of members of the public that they will continue to receive the customary permission to go on to racecourses upon the payment of a stated fee to the racecourse owner."

It is to be observed that his Honour tended to equate legitimate expectation with reasonable expectation.

These cases were referred to by members of the High Court in FAI Insurances Limited v. Winneke (1982) 56 A.L.J.R. 388. That was a case where the Governor in Council refused to renew a licence granted to an insurance company in Victoria authorising it to carry on business as an insurer of liability under workers' compensation legislation. The Court dealt with the case in the context of its being a renewal of licence case. A distinction was drawn between cases concerning the original grant of a licence and those concerning the renewal of a licence already granted. The majority held that in the circumstances of the case the insurance company, which had established a large workers' compensation insurance business in Victoria, was entitled to know the reasons why it was not proposed to renew its licence and to a fair opportunity to answer any allegations of misconduct against it. It was said that it had a legitimate expectation that it would be afforded such an opportunity.

As we read the various judgments, the Court assigned this description to the basis of the company's right to relief because it had no legal right to renewal of its licence. But given that it had a legitimate expectation to the renewal of its licence, it was entitled to natural justice because the terms of the relevant statute did not manifest an intention to override or oust the common law principle that the legislature is not, in the absence of clear words, to be taken as having intended to empower the executive to deprive a person of an existing right, or to disappoint him of a legitimate expectation, without affording him natural justice; see Gibbs C.J. at p.390, Stephen J. at p.391, Mason J. (with whom Stephen J. agreed) at p.399, Aickin J. at p.402, Wilson J (semble) at pp.410-411 and Brennan J. at p.417.

In our opinion the decision in the FAI case does not provide any positive support the respondent's case. That is not only because it was a renewal of licence case and thus in a special category (see, e.g., per Mason J. in Ratu at pp.480-481), but also because it was a case which in the final analysis depended upon the construction of the relevant statute.

However, Aickin J. again left open the ultimate extent of what is involved in "legitimate expectation". He said, "The exact extent of that expression has not been determined . . . ." (p.402). The gate being ajar, the FAI case does not decide that the only path to relief is that ultimately involving the construction of the statute which confers the power, the exercise of which is in question.

The FAI case was decided a month or so after the decision of this Court in Minister for Immigration and Ethnic Affairs v. Haj-Ismail (1982) 40 A.L.R. 341. That was a case where the decision challenged was a deportation order made pursuant to s.18 of the Migration Act 1958. The statutory majority in Salemi and the majority in Ratu had held that the Minister, when exercising his power to deport under the section, was not bound by the rules of natural justice. That was the premise with which the Court in Haj-Ismail commenced its consideration of the problem it there had. The applicant was a prohibited immigrant, but on 20 October, 1980, the Minister had written to the member of Parliament who had made representations on his behalf suggesting that the applicant should lodge "a formal application for change of status". The letter had added, "Provided they (the applicant and his family) are able to make normal immigration health and character requirements they will then be granted change of status of residence". Bowen C.J. and Franki J said (p.348):

"Whether or not there is any room for contending that in some exceptional case, which has not yet emerged, there would arise an obligation, when exercising the power conferred by s.18, to observe the rules of natural justice, remains to be finally determined. It may be noted that since those two cases, s.27 of the Migration Act has been amended to make it a criminal offence to remain in Australia upon the expiration of a temporary entry permit. In the present case, we are of opinion the respondents are not shown to have had a 'legitimate expectation' in the relevant sense. Notwithstanding the statement in the letter of 20 October 1980 differs from the public announcement relied on in Salemi's case in that it was not made to a group but indirectly was made to the respondents themselves, it was not, in our view, such a statement as would give rise to a 'legitimate expectation' still less to any right in the respondents. We are of opinion that there was no obligation on the Minister to observe the principles of natural justice."

Davies J. said (p.358):

"Thus, in determining whether or not the Minister is bound to apply the principles of natural justice, the facts of the particular case may be examined. Just as the effect of the application of the rules of natural justice must vary from case to case depending upon the particular circumstances of the case so the question of whether or not the principles apply is not itself to be determined without regard to those circumstances. Recent cases have adopted the expression 'legitimate expectation' to characterize circumstances which give rise to the application of the rules of natural justice if a decision is to be made contrary to that expectation."

His Honour went on to consider the particular facts of the case and decided that the applicant was not entitled to relief on the ground of denial of natural justice. The Court, however, decided that the applicant was entitled to relief upon other grounds.

Thus, Bowen C.J. and Franki J. were prepared to contemplate, notwithstanding the construction which the High Court in Salemi and Ratu had placed upon s.18 of the Migration Act, that there might be cases, although quite exceptional, the facts of which would oblige the Minister to afford natural justice when considering whether to deport. Davies J. was positively of the view that that was the law.

The trend discernible in Haj-Ismail, perhaps deriving to a degree from the judgment of Stephen J. who was part of the statutory minority in Salemi, was followed through by the Privy Council in Attorney-General of Hong Kong v. Ng Yuen Shiu (1983) 2 W.L.R. 735. Their Lordships said (p.740):

"The narrower proposition for which the applicant contended was that a person is entitled to a fair hearing before a decision adversely affecting his interests is made by a public official or body, if he has 'a legitimate expectation' of being accorded such a hearing. The phrase 'legitimate expectation' in this context originated in the judgement of Lord Denning M.R. in Schmidt v. Secretary of State for Home Affairs (1969) 2 Ch.149, 170. It is many ways an apt one to express the underlying principle, though it is somewhat lacking in precision. In Salemi v. MacKellar (No.2) (1977) 137 C.L.R. 396, 404, Barwick C.J. construed the word 'legitimate' in that phrase as expressing the concept of 'entitlement or recognition by law'. So understood, the expression (as Barwick C.J. rightly observed) 'adds little, if anything, to the concept of a right'. With great respect to Barwick C.J. their Lordships consider that the word 'legitimate' in that expression falls to be read as meaning 'reasonable'. Accordingly 'legitimate expectations' in this context are capable of including expectations which go beyond enforceable legal rights, provided they have some reasonable basis; see Reg. v. Criminal Injuries Compensation Board, Ex parte Lain (1967) 2 Q.B. 864. So it was held in Reg. v. Board of Visitors of Hull Prison, Ex parte St. Germain (No. 2) (1979) 1 W.L.R. 1041 that a 'prisoner is entitled to challenge, by judicial review, a decision by a prison board of visitors, awarding him loss of remission of sentence, although he has no legal right to remission, but only a reasonable expectation of receiving it.'"

Their Lordships then referred to the decision of the House of Lords in O'Reilly v. Mackman (1982) 3 W.L.R. 1096, and said (p.741):

"The expectations may be based upon some statement or undertaking by, or on behalf of, the public authority which has the duty of making the decision, if the authority has, through its officers, acted in a way that would make it unfair or inconsistent with good administration for him to be denied such an inquiry."

It is to be observed that the Privy Council, like Aickin J. in Heatley, equated a legitimate expectation with a reasonable expectation.

The decision of the Privy Council is not binding on this Court. But there is no decision of the High Court or of this Court which runs counter to it. In those circumstances it should be accorded substantial weight. Moreover, the decision is in line with a trend which is to be perceived in the decision of this Court in Haj-Ismail. On this basis a legitimate expectation may be found in the circumstances postulated in the statement from p.741 of the judgment of the Privy Council to which we have just referred.

The question then is whether the circumstances of this case warranted the grant of the relief which the respondent sought. Strong submissions were made by senior counsel for the appellants that the Court would not interfere in a case involving the appointment, as distinct from the dismissal, of staff. Even if one were to draw on the licence cases, the present case was to be likened to those involving the grant of a new licence where relief is seldom given and not to those involving the renewal of licences, which are in a different category. The ramifications for the due administration of the Public Service if these submissions were rejected were enormous. Each time a new appointment was being considered the Board would be bound, if it were minded not to make an appointment on any ground of past misconduct, to inform the applicant of the matters relied upon and afford him an opportunity to furnish an explanation. Such an approach would run counter to fundamental concepts of employment law. Reference was made to Western Suburbs District Ambulance Committee v. Tipping (1957) A.R.(N.S.W.) 273, In re Woolworths Limited and the Federated Storemen and Packers Union Re Preference (1977) A.R.(N.S.W.) 62 and The Queen v. Holmes; ex parte Altona Petrochemical Co. Limited (1972) 126 C.L.R. 529 especially at pp. 568-569.

These are important considerations. But it should be pointed out that it is not sought by the respondent to question or cut down the power of the Board concerning the acceptance or rejection of applicants for appointment or re-appointment. What is put is that the Board should exercise the power fairly, where the circumstances are such as may give rise to unfairness. The mere fact that an applicant has in the past been guilty of misconduct does not restrict or fetter the Board in refusing his application on that ground; on the contrary. In the absence of any special circumstances, the Board has no obligation to afford the applicant an opportunity to furnish an explanation.

In the present case there are additional circumstances which have to be considered. According to the uncontradicted evidence of the respondent, at the time of his resignation he was threatened with a criminal prosecution for harbouring an illegal immigrant. It seems clear that it was that prospect which induced him to resign notwithstanding his denial that he had done anything improper. Some weeks after his resignation he sought to withdraw it and was prepared to face whatever consequences that may have involved. In that way he would have been afforded the hearing which his resignation had denied to him.

When he applied to be re-appointed those who interviewed him had a document which said that he had been asked to resign "when his involvement was detected in harbouring a Prohibited Immigrant. He further schooled this person to conceal his actions". The document also said that he concealed the fact of Miss Nisha's approach to the Department and retained her passport. Although the respondent asked to see the document, he was not permitted to do so nor was he advised of its contents. Although he was given the opportunity to speak generally of the events which led to his resignation, he was not given the opportunity of offering explanations in relation to the precise matters which were alleged against him.

We have already referred to conversations which took place between the respondent and Messrs. Donald and Mead. We think that it is of particular significance that, after speaking to Mr. Austin, the Regional Director of the Department, Mr. Mead told the respondent that if he resigned "it will be a normal resignation and you will leave with a clean record". In our opinion that was a clear representation to the respondent that if he resigned he would leave the Department with an unblemished record. Put another way, it was a representation that no finding adverse to him would be made in respect of the allegations of misconduct. In those circumstances we think the respondent was entitled to hold the reasonable expectation that he would be afforded a reasonable opportunity of answering the allegations should the Department change its attitude towards him and assert (contrary to the representation made to him) that he had left the Department with a blemished record. The representation was not different in character from a statement or undertaking of the kind referred to by their Lordships in Attorney-General of Hong Kong v. Ng Yuen Shiu (supra at p.741) as being a sufficient basis for an expectation of the requisite kind.

On the very special facts of this case we think that the learned primary Judge was correct in finding that the respondent had a legitimate expectation that the question of his future employment in the Public Service would not be decided on the basis that his past record in the Department was blemished. If, contrary to that expectation, his past record was to be treated by the Department as blemished, the law required that he be afforded a proper opportunity to be heard.

In the result the appeal is dismissed with costs.