Marine Hull & Liability Insurance Co Ltd v Hurford

Re: MARINE HULL LIABILITY INSURANCE COMPANY LIMITED
And: CHRIS HURFORD and THE INSURANCE COMMISSIONER
No. G 341 of 1985
Administrative Law
(1986) 4 ANZ Insurance Cases 60-717

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Fox J.
Davies J.
Morling J.

CATCHWORDS

Administrative Law - insurance - Notice given by Treasurer to appellant under s.62 Insurance Act 1973 - No prior opportunity to be heard given to appellant - Provision in s.63 Insurance Act 1973 for review by A.A.T. of Treasurer's decision to issue notice - whether requirement that natural justice be accorded appellant satisfied by existence of right of review by A.A.T. - whether in all cases any duty to accord prior hearing excluded by right of review - importance of facts in a particular case.

Insurance Act 1973 (Cth) ss.52, 60, 62, 63

Administrative Decisions (Judicial Review) Act 1977 s.5(1)(a)

Administrative Appeals Tribunal Act 1975

Twist v. Randwick Municipal Council (1976) 136 CLR 106 cons.

F.A.I. Insurances Limited v. Winneke (1982) 151 CLR 342 ref'd to

Kioa v. West (1986) 60 ALJR 113 cons.

R. v. Marks; ex parte Australian Building Construction Employees Builders Labourers Federation (1981) 147 CLR 471 ref'd to

HEARING

SYDNEY

#DATE 18:6:1986

ORDER

1. The appeal be dismissed.

2. The appellant pay the respondents' costs of the appeal.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

This is a case involving the application of s.5(1)(a) of the Administrative Decisions (Judicial Review Act) 1977 which relates to denial of natural justice. The facts and relevant legislation are set out in the judgment of Morling J. and of Wilcox J., from whom the appeal comes, and I shall not repeat them. The facts as they were presented to the trial judge were very brief indeed. There was a notice given by the Treasurer under s.62 of the Insurance Act 1973 and a formal admission that no opportunity had been given to the appellant to be heard before the directions in the notice were issued. The trial judge found it necessary to make a number of assumptions with which there has been no quarrel. It also appears that argument before him proceeded on the basis that no evidence was put forward by the respondent of any circumstance of urgency which precluded the giving to the appellant of an opportunity to be heard before the notice was given. This implied concession was not disputed before us.

The conclusion of the judge was that while there was, or otherwise would have been, a requirement to observe the rules of natural justice, the duty to give a prior hearing was sufficiently satisfied, or was displaced, by the provisions of s.63 of the Insurance Act. This section provides machinery for seeking reconsideration by the Treasurer of his decision and further machinery for giving a right of appeal thereafter to the Administrative Appeals Tribunal. Emphasis was placed particularly on s.63(9), the effect of which is to give ready access to the Administrative Appeals Tribunal to obtain a stay respecting the operation of the notice.
My conclusion, concurring in the result with that of Wilcox J., is that there was not in the present case evidence of a denial of natural justice.
For myself, I would read together the two sections mentioned (with the associated references to the Administrative Appeals Tribunal Act) and ask the one question, - whether there is a requirement that a body corporate has a right to be heard by the Treasurer before he issues his directions? I am not at present satisfied that this should be answered in the negative in all cases; it is sufficient that the evidence does not disclose a denial of natural justice in the present case.
My view that there may be cases which call for a "hearing" is strongly influenced by the damage, quite likely of a permanent nature, which directions can effect immediately they are given. To most, if not all bodies corporate which are insurers, reputation for stability and reliability are all important and once perception of these is damaged the position may be irretrievable. The Treasurer is required by sub-section (2) of s.62 to cause a copy of a notice of the kind now in question to be published in the Gazette. In the present case, no notice has yet been published.
The reconsideration and appeal provided for in s.63 (Part VI of the Act) certainly acknowledge the need to provide for review and in many, perhaps most cases, any damage done can be sufficiently rectified, in due time.
Section 62 is one only of the provisions to which s.63 relates. It may be said of course that reconsideration by the Treasurer, after publicity (as provided for in s.63) is rather inconsistent with any notion of a hearing before the issue of the directions by the same person, the Treasurer. However, there is not in the Act an expression of unequivocal intention that the rules of natural justice be excluded so far as they relate to the issue of the notice, and I do not think one is to be implied. The difficulty may be in getting an adequate reconsideration by the Treasurer once the directions have been issued. The oddity lies rather in the fact that the Treasurer is to reconsider his own decision after it has been announced formally, a process in which the body corporate may understandably not have great confidence.
Section 62, under which the directions were given, is in Part V of the Act. The giving of a notice under the section is conditioned upon there being made or having been made an investigation into the affairs of the body corporate under Part V. The notice may be issued during the currency of the investigation or after its conclusion.
Section 52 provides for the appointment of an inspector by the Insurance Commissioner. The Commissioner must first give the body corporate an opportunity to show cause why, on grounds he must specify, an inspector should not be appointed. If cause is not shown to the satisfaction of the Commissioner, the Treasurer may appoint an inspector if satisfied that it is in the public interest to do so. (s.52(2)). An inspector may enter, examine books and take copies of books and documents. He may require "prescribed persons" to produce documents, give assistance, and appear before him for examination. A "prescribed person" thus being examined is entitled to legal representation (s.57). An inspector may make one or more interim reports to the Treasurer, and shall, on completion of the investigation, make a final report (s.60(1)). The inspector is to make recommendations in his report but the institution of criminal proceedings is to be the subject of a separate memorandum to the Treasurer. Subject to the advice of the Attorney-General, a copy of a report is to be given to the body corporate (s.60(5)). Where a copy of a report has been given to a body corporate it may be published. A court, before which proceedings are brought under the Act, or in respect of matters dealt with in the report, may order that a copy of the report be given to a body corporate or person against whom proceedings are brought (s.60(8)).
It was submitted on behalf of the respondents that the absence in s.62 of any provision similar to that in s.52(1), giving the body corporate an opportunity to show cause why an inspector should not be appointed, the conclusion should be drawn that the rule audi alteram partem was excluded. I do not accept this submission. Different situations are being dealt with and the opportunity to be heard will usually provide wider scope than does showing cause in relation to stated grounds. More particularly, the role of natural justice is to ensure fairness throughout. The receipt of a report (assuming one is received) does not constitute satisfaction of the rules of natural justice. We do not know in this case whether a copy of the inspector's report was sent to the appellant.
A body corporate which is being investigated by an inspector would usually have a considerable opportunity to know why it is being investigated and of particular matters in which the inspector has shown an interest. If it receives a copy of the report it should be well informed as to matters upon which the inspector has reported adversely and as to the action he recommends.
The point is however, that the body corporate as such, may have little opportunity to present to the decision-maker in an organised way facts and arguments contrary to what is stated in the inspector's report, or any other material upon which a decision might be based, before it is made.
It is this absence of a real opportunity to be heard, combined with the possibly drastic result of the issue of the notice, which at present inclines me to the view that there is scope for the operation of the rules of natural justice, in an appropriate case, at a time before the notice is issued. There may be cases in which a denial of natural justice will be involved because an adequate opportunity to be heard is not given before the directions are decided upon and the notice given. This is however a matter of evidence. The conclusion is not reached simply by an examination of the two sections, combined with knowledge of the fact that no such opportunity was given. It is necessary to know more of the facts in a particular case so that one can conclude that, looking at the position as a whole, there has been an absence of fair procedure in the relevant respect. There is in the present case insufficient material upon which a conclusion can be reached that there was a denial of natural justice.
I would therefore dismiss the appeal with costs.

JUDGE2

The issue in this appeal is whether the principles of procedural fairness, a part of the rules of natural justice, were complied with by the Acting Treasurer when, on 23 September 1984, he issued the following directions pursuant to s.62(1)(a), (b) and (e) of the Insurance Act 1973 (Cth) :

"(a) Marine Hull and Liability Insurance Company Limited shall not issue policies or undertake liability under contracts of insurance on and from the date of receipt of this notice;

(b) Marine Hull and Liability Insurance Company Limited shall not renew policies on and from the date of receipt of this notice; and

(c) Marine Hull and Liability Insurance Company Limited shall not dispose of or otherwise deal with any asset."

A consideration of the issue has been complicated by the fact that, before the learned trial Judge, there was no evidence other than the directions of the Acting Treasurer together with an admission made on behalf of the respondents that, neither before nor after the making of the decision to give those directions, did the Acting Treasurer give to the appellant an opportunity to be heard upon the question as to whether or not the directions should be given. In my opinion, the view of the parties that that was a useful admission was unduly simplistic and wrong. The issue in the case was never whether the applicant had been given an opportunity to be heard but whether the principles of procedural fairness had been complied with.
I accept that, in the giving of the directions under s.62 of the Insurance Act 1973 (Cth), the Acting Treasurer was under a duty to act fairly, in the sense of according procedural fairness. The principles to be applied have recently been restated in Kioa v Minister for Immigration and Ethnic Affairs (1985) 62 ALR 321. At pp.345-6, Mason J said :

"It is a fundamental rule of the common law doctrine of natural justice expressed in traditional terms that, generally speaking, when an order is to be made which will deprive a person of some right or interest or the legitimate expectation of a benefit, he is entitled to know the case sought to be made against him and to be given an opportunity of replying to it (Twist v Randwick Municipal Council (1976) 136 CLR 106 at 109; 12 ALR 379 at 382-3; Salemi (No.2) (CLR) at p.419; Ratu (CLR) at p.476; Heatley v Tasmanian Racing and Gaming Commission (1977) 137 CLR 487 at 498-9; 14 ALR 519 at 528; FAI Insurances Ltd v Winneke (1982) 151 CLR 342 at 360, 376-7; 41 ALR 1 at 13; Annamunthodo v Oilfields Workers' Trade Union (1961) AC 945). The reference to 'right or interest' in this formulation must be understood as relating to personal liberty, status, preservation of livelihood and reputation, as well as to proprietary rights and interests.

.....

The law has now developed to a point where it may be accepted that there is a common law duty to act fairly, in the sense of according procedural fairness, in the making of administrative decisions which affect rights, interests and legitimate expectations, subject only to the clear manifestation of a contrary intention. It seems that, as early as 1911, Lord Loreburn LC understood that this was the law when he spoke of the obligation to 'fairly listen to both sides' being 'a duty lying upon every one who decides anything' (Board of Education v Rice (1911) AC 179 at 182). ...".

Wilson, Brennan and Deane JJ expressed views to the same effect.

I see nothing in the Insurance Act 1973 (Cth) which excludes this obligation to accord procedural fairness. It was put by Mr L. Katz, counsel for the respondent, that the Acting Treasurer was under no duty to comply with principles of natural justice for a person affected by any directions given had a right to apply for re-consideration by the Treasurer and, if dissatisfied with the result of the re-consideration, a further right to apply to the Administrative Appeals Tribunal for review of the directions on their merits. I do not accept that such rights exclude the operation of the principle adumbrated above. The existence of a right to have a matter re-considered and of a right to have a matter reviewed by the Administrative Appeals Tribunal may well affect the nature of the procedures which ought to be adopted in complying with the rules of natural justice but, ordinarily, it does not exclude them. The legislative provisions considered in Twist v Randwick Municipal Council (1976) 136 CLR 106 and Pearlberg v Varty (1972) 1 WLR 534 were quite different. As Mason J said in Kioa's case, cited above, at page 347 :

"... The critical question in most cases is not whether the principles of natural justice apply. It is : what does the duty to act fairly require in the circumstances of the particular case? ...".

The variable content of the rules of natural justice has been made clear on many occasions. Thus, in Salemi v McKellar (No.2) (1977) 137 CLR 396 at 444, Stephen J said

"It is, no doubt, now a truism that in cases in which the rules of natural justice are applicable the procedural consequences will not necessarily be uniform. On the contrary they will depend upon what Kitto J. describes, in Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation (1963) 113 CLR 475, at p.504, as 'the particular statutory framework' within which they are to apply. But not only will their effect and application thus vary depending upon the character and function of the particular statutory tribunal or person in relation to whose deliberations they are invoked (Ridge v Baldwin per Lord Reid (1964) AC at pp.65, 72, they may also vary from case to case although each be conducted before one and the same tribunal or person. Kitto J. gave recognition to this fact in the course of his reasoning in the Mobil Oil Case (1963) 113 CLR at p.504. In Durayappah v Fernando their Lordships' reference to particular instances in which the existence of great urgency would require the limitation, 'timeously, perhaps severely', of the right to be heard, although never justifying a denial of that right (1967) 2 AC at p.346, emphasizes how much the concept of fairness, inherent in the audi alteram partem rule, may require to be moulded to the particular circumstances of the case. In Furnell's Case

(1973) AC at p.679, their Lordships cited with approval what was said by Tucker LJ in Russell v Duke of Norfolk (1949) 1 All ER 109, at p.118, that 'the requirements of natural justice must depend on the circumstances of each particular case and the subject matter under consideration'."

Likewise, in Kioa's case, cited above, Mason J said, at pp.346-7 :

"Where the decision in question is one for which provision is made by statute, the application and content of the doctrine of natural justice or the duty to act fairly depends to a large extent on the construction of the statute. In Mobil Oil Aust Pty Ltd v FC of T (1963) 113 CLR 475, Kitto J pointed out (at pp 503-4) that the obligation to give a fair opportunity to parties in controversy to correct or contradict statements prejudicial to their view depends on 'the particular statutory framework'. What is appropriate in terms of natural justice depends on the circumstances of the case and they will include, inter alia, the nature of the inquiry, the subject matter, and the rules under which the decision-maker is acting (R v Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group (1969) 122 CLR 546 at 552-3; National Companies and Securities Commission v News Corp Ltd (1984) 58 ALJR 308 at 314; 52 ALR 417 at 427-8, 434).

In this respect the expression 'procedural fairness' more aptly conveys the notion of a flexible obligation to adopt fair procedures which are appropriate and adapted to the circumstances of the particular case. The statutory power must be exercised fairly, that is, in accordance with procedures that are fair to the individual considered in the light of the statutory requirements, the interests of the individual and the interests and purposes, whether public or private, which the statute seeks to advance or protect or permits to be taken into account as legitimate considerations (cf Salemi (No.2) (CLR at p 451, per Jacobs J)."

Wilson, Brennan and Deane JJ expressed like views. At p.370, Brennan J accepted that, even though the principles of natural justice applied in the circumstances of a case, the content of those principles may be diminished "even to nothingness".

In this light, I turn to the provisions of the Insurance Act 1973 (Cth). It is relevant that s.62 appears in Part V, a Part which makes provision for an investigation into the affairs of an insurance company. In that Part, s.52 provides that where it appears to the Insurance Commissioner that a body corporate authorised under the Act to carry on insurance business is or is about to become unable to meet its liabilities or has contravened or failed to comply with a provision of the Act or a condition or direction applicable to it under the Act, he may, by notice in writing, require it to show cause why, on such grounds as he specifies, an inspector should not be appointed in respect of the body corporate. If cause is not shown to the satisfaction of the Commissioner, the Treasurer may, if he is satisfied that it is in the public interest to do so, by instrument in writing, appoint an inspector to make an investigation in respect of the body corporate. The Treasurer must, in the instrument of appointment, specify the matters into which the investigation is to be made. Sections 54 to 58 deal with the conduct of an inspection, and provide for the examination of relevant persons and documents and for the representation of persons being examined by a barrister or solicitor. Section 60 provides for the making of a report or reports by the inspector to the Treasurer. Section 62(1) provides, inter alia,

"62.(1) Where an investigation into affairs of a body corporate is being or has been made under this Part and it appears to the Treasurer that the body corporate is, or is about to become, unable to meet its liabilities or has contravened or failed to comply with a provision of this Act or a condition or direction applicable to it under this Act, he may, by notice in writing served on the body corporate, give any one or more of the following directions :

(a) a direction that the body corporate shall not issue policies or undertake liability under contracts of insurance;

(b) a direction that the body corporate shall not renew policies;

.....

(e) a direction that the body corporate shall not dispose of or otherwise deal with an asset of the body corporate or an asset of the body corporate included in a class of assets specified in the direction;

.....".

Section 62(2) provides :

"62.(2) The Treasurer shall cause a copy of a notice under paragraph (1)(a), (b), (c) or (d) to be published in the Gazette."

Section 63, in Part VI, provides that a person affected by a reviewable decision of the Treasurer or of the Commissioner, including directions given under s.62, may request re-consideration of the decision and, if dissatisfied with the result thereof, may apply to the Administrative Appeals Tribunal for review of the decision. Pursuant to the Administrative Appeals Tribunal Act 1975 (Cth), the review will be a full merits review. See Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577.
It will be observed that directions under s.62 may only be given after the Treasurer has appointed an inspector to investigate specified matters being the whole or some part of the affairs of the body corporate. The conduct of the investigation and the matters being investigated will necessarily be known to the body corporate. Furthermore, in the ordinary course of events, the body corporate will have a fair opportunity to put a case to the inspector in relation to the matters which the inspector is investigating. Certainly, records of the body corporate and officers of the body corporate will be the subject of examination by the inspector. In the ordinary course, these provisions, plus the right to obtain re-consideration of the directions and the right to obtain review by the Administrative Appeals Tribunal of any direction given under s.62, will satisfy all the requirements of procedural fairness. The body corporate will have been accorded procedural fairness by having been made aware of the matters into which the investigation is made, by having had an opportunity to be heard in the investigation and by having a right to be heard again on the merits by the Treasurer and by the Administrative Appeals Tribunal should it challenge any directions given under s.62.
That is not to say that there will never be a case in which the Treasurer should give notice of a matter to the body corporate to be affected by directions proposed under s.62 of the Insurance Act 1973 (Cth). If, for example, the Treasurer, in making a direction under s.62, was not acting on a report given to him by the inspector, or was acting upon a matter which had not been fully dealt with by the inspector, it may well be necessary for the Treasurer, in a case in which there was no urgency, to give to the body corporate an opportunity to put a case why the direction should not be given. In such and like situations, the particular circumstances of the case may well require notice to the body corporate if the body corporate is to be accorded procedural fairness. For example, in Kioa's case, cited above, at page 349, Mason J held, because of the particular circumstances of the case :

"... that there are two matters ... in respect of which fairness demands that the applicant should have the chance of replying."

In the present case, there was no evidence of any such particular circumstance which required the giving of notice to the appellant.
It was submitted by Mr B.W. Rayment, QC, senior counsel for the appellant, that a right to be heard was imported into the making of directions under s.62 of the Insurance Act 1973 (Cth) because significant damage to the body corporate could be effected by the publication of the notice of the directions in the Gazette, pursuant to s.62(2), before the body corporate could have the decision re-considered by the Treasurer or reviewed by the Administrative Appeals Tribunal.
However, s.41(2) of the Administrative Appeals Tribunal Act 1975 (Cth) empowers the Tribunal to make an order staying publication in the Gazette of such a notice. The section provides :

"41.(2) The Tribunal or a presidential member may, on request being made, as prescribed, by a party to a proceeding before the Tribunal (in this section referred to as the 'relevant proceeding'), if the Tribunal or presidential member is of the opinion that it is desirable to do so after taking into account the interests of any persons who may be affected by the review, make such order or orders staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relates or a part of that decision as the Tribunal or presidential member considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review."

An order prohibiting the publication in the Gazette of a notice under s.62(1) of the Insurance Act 1973 (Cth) would be an order affecting "the ... implementation of the decision to which the relevant proceeding relates ..." and accordingly the Tribunal is empowered to make such an order. Section 63(9) of the Insurance Act 1973 (Cth) authorises the Administrative Appeals Tribunal to make the order not only when a substantive application has been made to the Administrative Appeals Tribunal but also when a person affected by a reviewable decision has requested that the decision be re-considered by the Treasurer or the Commissioner.

The learned trial Judge rejected a contention that the Tribunal would not be able to deal expeditiously with a request for a stay order and, in my opinion, rightly did so. It is not to be assumed that the Administrative Appeals Tribunal would be unable to make a stay order during the time it would take the Treasurer to cause a copy of the notice of his directions under s.62 to be published in the Gazette or that the Treasurer would not act with propriety and hold publication in the Gazette when informed of the applicant's desire to obtain re-consideration of the directions.
In the circumstances, the admission by counsel for the respondent that the Acting Treasurer did not give to the appellant a right to be heard before making the directions of itself was insufficient to establish that procedural fairness was not accorded to the appellant.
In my opinion, the appeal should be dismissed with costs.

JUDGE3

This is an appeal from a decision of a judge of the court dismissing an application brought under s.5(1)(a) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the Judicial Review Act"). The application was brought by the appellant, which is an authorised insurer under the Insurance Act (Cth) 1973. The decision in respect of which it sought an order of review was the decision of the first respondent to cause to be published in the Commonwealth Gazette a notice of certain directions given by him to the appellant on 23 September 1984 pursuant to the provisions of s.62(1) of the Insurance Act, which provides, in part, as follows:

"62. (1) Where an investigation into affairs of a body corporate is being or has been made under this Part and it appears to the Treasurer that the body corporate is, or is about to become, unable to meet its liabilities or has contravened or failed to comply with a provision of this Act or a condition or direction applicable to it under this Act, he may, by notice in writing served on the body corporate, give any one or more of the following directions:

(a) a direction that the body corporate shall not issue policies or undertake liability under contracts of insurance;

(b) a direction that the body corporate shall not renew policies;

. . .

(e) a direction that the body corporate shall not dispose of or otherwise deal with an asset of the body corporate or an asset of the body corporate included in a class of assets specified in the direction;

The notice of 23 September 1984 was in the following terms:

"I, Chris Hurford, Acting Treasurer, pursuant to sub-section 62(1) of the Act, hereby direct that:

(a) Marine Hull and Liability Insurance Company Limited shall not issue policies or undertake liability under contracts of insurance on and from the date of receipt of this notice;

(b) Marine Hull and Liability Insurance Company Limited shall not renew policies on and from the date of receipt of this notice; and

(c) Marine Hull and Liability Insurance Company Limited shall not dispose of or otherwise deal with any asset."

At the hearing before the learned judge the respondents admitted that at no time did the Acting Treasurer give to the appellant an opportunity to be heard upon the question whether the directions contained in the notice of 23 September should be given. No evidence was called on the hearing of the application, the parties being content to allow the fate of the application to be determined by reference only to the admission to which I have referred and to the form of the legislation. It appears from his Honour's reasons that the parties argued the matter before him upon the basis that there were no circumstances of urgency which justified the Acting Treasurer giving the directions without affording the appellant an opportunity of being heard.
The trial judge held that the power conferred upon the Treasurer by s.62 is a power the valid exercise of which requires adherence to the principles of natural justice, and that there was an obligation on the Treasurer to afford the appellant an opportunity of being heard before he gave his directions. However, he further held that the appellant was not entitled to relief under the Judicial Review Act because s.63 of the Insurance Act evinces a legislative intention that, in the event of the Treasurer giving directions under s.62 without affording natural justice to the affected insurer, the directions are not invalid in law but are merely susceptible of challenge under the provisions of s.63 of the Insurance Act. That section is of central importance to the appeal and it is necessary to refer to it in some detail.
Section 63(2) provides that a person affected by a "reviewable decision of the Treasurer" who is dissatisfied with the decision may, by notice given to the Treasurer, request him to reconsider the decision. The reasons for the request must be stated (s.63(3)). A "reviewable decision of the Treasurer" is defined by s.63(1) to mean a decision of the Treasurer to which Part V applies. The effect of s.62(3) is that a decision to give directions under s.62 is such a decision. Upon receipt of a request for reconsideration, the Treasurer is bound to reconsider the decision and may confirm, revoke or vary the decision (s. 63(4)). Reasons must be given (s.63(6)). The decision is deemed to be confirmed if no decision in relation to the reconsideration is made within twenty-one days (s.63(5)). Applications may be made to the Administrative Appeals Tribunal for review of decisions of the Treasurer that have been confirmed or varied under s.63(4) (s.63(7)).
No right is given to obtain review by the Tribunal of an original decision giving notice under s.62, and the reconsideration process must be completed before an appeal may be made to the Tribunal. However, provision is made for the making of interim orders by the Tribunal. Sub-section 63(9) provides that upon the making of a request for reconsideration under s.63(2), the provisions of s.41 of the Administrative Appeals Tribunal Act apply as if the making of the request were the making of an application to the Tribunal for a review of that decision. Section 41 of that Act gives the Tribunal wide power to make orders staying the operation or implementation of a decision for the purpose of securing the effectiveness of the hearing and determination of the application for review, and such orders may be made ex parte. For the purposes of a review of a decision of the Treasurer the Tribunal must be constituted by a presidential member and two non-presidential members each of whom have special knowledge or skill in relation to insurance business (s.63(10) and (11)). The effect of all these provisions is to set up a tribunal with wide powers to hear and determine appeals against decisions of the Treasurer to give notices under s.62.
Whether a statutory right of appeal against a decision excludes the rules of natural justice in the making of that decision or is the exclusive remedy available to a person who wishes to challenge the validity of a decision arrived at in breach of those rules is a question of construction of the statute which gives the right of appeal. See Twist v Randwick Municipal Council (1976) 136 C.L.R. 106 at 111 and 118 and F.A.I. Insurances Limited v Winneke & Ors. (1982) 151 CLR 342 at 362-363. As I have observed the learned trial judge held that the appellant was not entitled to relief because he was of the opinion that the Insurance Act evinces a legislative intention that s.63 thereof provides the only remedy available to an insurer who wishes to challenge the validity of directions given under s.62. His Honour's finding that there was an obligation on the Treasurer to afford the appellant an opportunity of being heard before giving the directions on 23 September was challenged by the respondents who filed a notice of contention to enable that finding to be argued on the hearing of the appeal.
The reasons given by the trial judge for reaching his decision on the matter raised by the respondents' notice of contention are most persuasive. The effects which directions given by the Treasurer under s.62 may have on the business of an insurer are so serious as to require (in the absence of a clear indication to the contrary) the application of the common law rule that a statutory authority having power to affect the rights of a person is bound to hear him before exercising the power. As Mason J. observed in Kioa v West (1986) 60 A.L.J.R. 113, at 127) the law has now developed to the point where there is a common law duty to act fairly in the sense of according procedural fairness, in the making of administrative decisions which affect rights and legitimate expectations, subject only to the clear manisfestation of a contrary statutory intention. And in the same case Brennan J. said (at p. 139) that it is seldom possible to say that the legislature intends to exclude observance of the principles of natural justice in the exercise of a statutory power which is apt to affect individual interests.
The argument that the common law rule does not apply to the making of decisions under s.62 depends largely upon the right of review conferred by s.63. But there is no inconsistency between the existence of the right of review and an obligation to observe the rules of natural justice in arriving at a decision under s.62. Thus, although it was held in Twist that the only remedy available to a person adversely affected by the council's decision was to pursue the right of appeal given by the statute, Mason J. said (at p. 117) that the function entrusted to the council imposed upon it a duty to act fairly and Jacobs J. said (at p. 118) that he could not conclude that the legislature intended to exclude the right of an owner in natural justice to be heard by a council on the question whether an order ought to be made in the first instance.
It was submitted on behalf of the respondents that, in the generality of cases, the power conferred by s.62(1) will have to be exercised in circumstances in which, to give notice to an insurer would frustrate the purpose for which the power is conferred. This was said to be a factor tending in favour of a conclusion that the legislature did not intend to impose a duty on the Treasurer to give to an insurer an opportunity of being heard before deciding to exercise the power. I accept that there may well be cases in which the giving of notice to an insurer would frustrate the purpose for which the power is conferred, but I am not persuaded that this will be so in the generality of cases. Even if it were, I do not think it would lead to the result for which the respondents contend. As Brennan J. pointed out in Kioa (at p.140) the principles of natural justice have a flexible quality (which he described as "chameleon-like") which evokes a different response from the respository of a statutory power according to the circumstances in which the power is to be exercised. After referring to many of the leading cases which establish that proposition, his Honour said (at p.141):

"An implication that a statutory power is conditioned on observance of the principles of natural justice does not prevent the repository of the power from modifying procedure to meet the particular exigencies of the case. Where the circumstances are such that the purpose for which the power is conferred would be frustrated if notice were given of an intention to exercise it or of the grounds on which it is intended to exercise it, the power may be exercised peremptorily without giving such notice to a person whose interests are likely to be affected (see The Commissioner of Police v Tanos (1958) 98 C.L.R. 383, at p. 396; Featley, at pp. 513-515; De Verteuil v Knaggs

(1918) A.C. 557, at pp. 560-561). In such cases, a peremptory exercise of the power is valid, though the power is conditioned on the observance of the principles of natural justice. It must therefore be accepted, as one commentator points out (G. Johnson 'Natural Justice and Legitimte Expectation in Australia' (1985) 15 Federal Law Review 39, at p. 71), that 'the contents of natural justice range from a full-blown trial into nothingness'. Yet Tucker L.J. said in Russell v Duke of Norfolk, that there is an irreducible minimum required by the principles of natural justice, namely, that 'the person concerned should have a reasonable opportunity of presenting his case'. If his Lordship's view be right, it would be necessary to hold that if, in some circumstances, perhaps unusual circumstances, a power may need to be exercised peremptorily, no exercise of that power is conditioned on observance of the principles of natural justice. But it would be wrong to attribute to a legislature such an intention. Rather, the intention to be implied when the statute is silent is that observance of the principles of natural justice conditions the exercise of the power although in some circum stances the content of those principles may be diminished (even to nothingness) to avoid frustrating the purpose for which the power was conferred. Accepting that the content of the principles of natural justice can be reduced to nothingness by the circumstances in which a power is exercised, a presumption that observance of those principles conditions the exercise of the power is not necessarily excluded at least where, in the generality of cases in which the power is to be exercised, those principles would have a substantial content."

Thus both considerations of principle and dicta of the highest authority afford strong support for the trial judge's finding that there was an obligation on the Treasurer to afford the appellant an opportunity of being heard before giving the directions on 23 September. However, in view of the opinion I have formed as to the fate of the appeal, I find it unnecessary to reach a firm opinion on the question raised by the respondents' notice of contention.
In my opinion his Honour's decision to dismiss the application under the Judicial Review Act was correct because the exclusive remedy available to the appellant was the procedure for review by the Administrative Appeals Tribunal. In Twist (supra), Barwick C.J., after observing that, in the absence of a contrary intention disclosed in the legislation, the court will insist that statutory powers be exercised only after an appropriate opportunity has been afforded the person whose interests are the subject of the exercise of the power, said (at p. 110):

"But, if the legislation has made provision for that opportunity to be given to the subject before his person or property is so affected, the court will not be warranted in supplementing the legislation, even if the legislative provision is not as full and complete as the court might think appropriate. Thus, if the legislature has addressed itself to the question whether an opportunity should be afforded the citizen to be relevantly heard and has either made it clear that no such opportunity is to be given or has, by its legislation, decided what opportunity should be afforded, the court, being bound by the legislation as much as is the citizen, has no warrant to vary the legislative scheme. But, if it appears to the court that the legis lature has not addressed itself to the appropriate question, the court in the protection of the citizen and in the provision of natural justice may declare that statutory action affecting the person or property of the citizen without affording the citizen an opportunity to be heard before he or his property is affected is ineffective."

In that case an owner of a building had been served with a notice under s.317B (1) of the Local Government Act, 1919 (N.S.W.), which enables a council to order the owner of a building to demolish it if the building "is in such a dilapidated or unsightly condition as to be prejudicial to the property in or inhabitants of the neighbourhood". Section 317B (5) gives an unrestricted right of appeal to a District Court judge from the making of the order. The appeal is a full appeal on facts and on law in which the appellant is entitled to call evidence. The appeal court is not precluded from considering afresh any discretionary considerations which might have affected the making of the demolition order. In Twist, Mason J., after observing that the cases should not be regarded as deciding that the presence of an appeal to another administrative body is an absolute answer to a departure from natural justice or the standard of fairness, said (at p. 116):

"With all this in mind I return to the specific question which has arisen here where the appeal provided for is an unrestricted appeal to a court involving a hearing de novo. The decision from which the appeal may be taken is one affecting public amenity and in some circumstances one affecting public safety. Sub-section (2) recognizes that there may be an element of urgency in securing compliance with the council's order by providing that in the event that the order is not obeyed 'the council may with all convenient speed enter upon the building and the land upon which it stands and execute the order'.

"Having regard to the subject matter of the section, the nature of the order which the council is empowered to make, the degree of urgency which may attend the execution of the order and more particular ly the comprehensive nature of the appeal to a District Court judge, I am of opinion that s.317B (5) should be read as providing the exclusive remedy available to an owner who wishes to challenge the validity or correctness of an order made under s.317B (1)."

See also, The Queen v Marks; Ex parte Australian Building Construction Employees Builders Labourers' Federation ("the B.L.F. Case") (1981) 147 CLR 471 at p 484 where Mason J. referred to Twist as deciding that the existence of a full statutory right of appeal on facts and law was indicative of a legislative intention that the citizen's only right of redress against the council's failure to give him an opportunity to be heard before making a demolition order was by way of appeal.

The appellant submits that the review procedure provided by s.63 does not give an insurer a full and effective appeal. Therefore, so it is argued, the legislation does not evince an intention either to supplant the rules of natural justice in the making of a decision to give directions or to confine the remedy available to an insurer to a review by the Administrative Appeals Tribunal. I do not agree with this submission. In my opinion, s.63 of the Insurance Act, when read with the Administrative Appeals Tribunal Act, affords a full and effective right of appeal on matters of fact and law to an insurer served with a notice under s.62 of the Insurance Act.
Section 63 gives the insurer a right to have reviewed by the Tribunal a decision to confirm or vary any direction given in a notice by the Treasurer. Section 28 of the Administrative Appeals Tribunal Act gives the insurer a right to obtain from the Treasurer a statement in writing setting out material findings of fact, with reference to the evidence upon which those findings were based, together with reasons for the decision which is sought to be reviewed. The Tribunal's procedures and powers are, for relevant purposes, similar to those of a court. Any person who has duly applied to the Tribunal for a review of a decision becomes a party to the proceeding before the Tribunal (s.30 (1)(a)); a party to the proceeding may appear in person or may be represented by some other person (s.32); the Tribunal is required to ensure that a party is given a reasonable opportunity to present his case, to inspect any documents to which the Tribunal proposes to have regard in reaching a decision and to make submissions in relation to those documents (s.39); the Tribunal is empowered to take evidence on oath or affirmation (s.40(1)(a); a person may be summoned to appear before the Tribunal to give evidence and to produce documents (s.40(1A)).
For the purpose of reviewing a decision, the Tribunal may exercise all the powers and discretions which are conferred on the person who made the decision and is required to make a decision in writing, and to give reasons (ss. 43(1) and (2)). It is empowered to make a decision affirming, varying or setting aside the decision under review and, if it sets aside a decision, it may make a decision in substitution for the decision so set aside or may remit the matter for reconsideration (s.43(1). There is a right of appeal upon a question of law to this court (s.44(1)). All these provisions lead to the result that there is an unrestricted right of review on all matters of fact and law. This right is no less effective than the right of appeal under s.317B of the Local Government Act considered in Twist or the right of appeal under s.35 of the Conciliation and Arbitration Act considered in B.L.F.
It is true that s.33(1)(c) of the Administrative Appeals Tribunal Act provides that the Tribunal is not bound by the rules of evidence and may inform itself on any matter in such manner as it thinks appropriate. However, a provision to the same effect in s.40(1)(b) of the Conciliation and Arbitration Act 1904 apparently was not thought by the High Court in B.L.F. to diminish the appeal to the Full Bench to anything less than a complete and adequate avenue of appeal.
Counsel for the appellant pointed out that the effect of a direction under s.62 may be significant and immediately effective, and that considerable time may elapse before a hearing on the merits takes place before the Tribunal. He submitted that s.63 did not provide a full and effective right of appeal against the giving of a notice under s.62 because the Treasurer is obliged by s.62(2) to cause a copy of the notice to be published in the Gazette. It was conceded that the Administrative Appeals Tribunal would have power under s.41(2) of its Act to make an order restraining publication of a notice pending hearing of the review. However, it was argued that since s.63(10) of the Act requires the Tribunal to be constituted by three members for the purposes of a review of a decision made under s.62, there could be difficulty in obtaining a restraining order in sufficient time to prevent publication of the notice. Thus, so it was argued, an insurer affected by a notice given by the Treasurer might be irretrievably damaged by the implementation of the decision before the review procedures were invoked. I do not think it should be assumed that the President of the Tribunal would be unable to constitute an appropriately qualified tribunal to hear expeditiously (if necessary, ex parte) an application for interlocutory relief under s.41(2). There is no reason to suppose that the difficulty in obtaining interlocutory relief from the Tribunal would be any greater than the difficulty in obtaining interlocutory relief from a court. The task of obtaining relief from the Tribunal is eased by s.63(9) which provides that where an insurer makes a request to the Treasurer under s.63(2) that he reconsider his decision, s.41 of the Administrative Appeals Tribunal Act applies as if the making of the request were the making of an application to the Tribunal for a review of that decision.
The legislation in Twist provided for a right of appeal to a court and, to that extent, the case is distinguishable from the present, where the right of appeal is to an administrative tribunal. However, in B.L.F. the right of appeal against the decision of a Deputy President of the Conciliation and Arbitration Commission was to a Full Bench of the Commission which, of course, is not a court. That circumstance does not appear to have been regarded by the High Court as being of significance: see especially per Mason J. at p. 484. No doubt, if the right of appeal given by a statute is to an administrative tribunal and not to a court, that may be a circumstance which may lead to the statute being construed as not evincing an intention that the right of appeal to the administrative tribunal is the exclusive avenue of appeal. But in my view it will be only one of the matters to be taken into account. I do not regard it as being a matter of significance in the present case because of the unrestricted right of appeal on all matters of law and fact which is available in the review proceedings before the Administrative Appeals Tribunal.
For these reasons I would dismiss the appeal with costs.

[1986] FCA 239

18 JUNE 1986