Oliveri v Administrative Appeals Tribunal

[1997] FCA 1303

FEDERAL COURT OF AUSTRALIA

ADMINISTRATIVE LAW - review of decision of Administrative Appeals Tribunal - respondent sought closed hearing before Tribunal - Tribunal directed that material be kept confidential until cross-examination of the applicant - whether applicant denied natural justice - whether respondent entitled to a “legitimate forensic advantage”

Administrative Appeals Tribunal Act 1975 (Cth), s 35, s 37
Administrative Decisions (Judicial Review) Act 1977 (Cth), s 6(1)(a)

Australian Postal Commission v Hayes (1989) 23 FCR 320, considered
Drake v Minister For Immigration And Ethnic Affairs (1979) 46 FLR 409, applied
Re Taxation Appeals - NT94/281 and NT94/291 21 AAR 275, applied

DOMINIC OLIVERI v ADMINISTRATIVE APPEALS TRIBUNAL AND ANOR
N298 of 1996

MADGWICK J
27 NOVEMBER 1997
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 298 of 1996

BETWEEN:

DOMINIC LAURENCE OLIVERI
APPLICANT

AND:

AND:

ADMINISTRATIVE APPEALS TRIBUNAL
FIRST RESPONDENT

MICHAEL GREGORY JONES
SECOND RESPONDENT

JUDGE(S):

MADGWICK J

DATE OF ORDER:

27 NOVEMBER 1997

WHERE MADE:

SYDNEY

MINUTES OF ORDER

THE COURT ORDERS THAT:

1. The direction of the Tribunal be set aside.

1. The matter is to be remitted to the Tribunal for determination according to law.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 298 of 1996

BETWEEN:

DOMINIC LAURENCE OLIVERI
APPLICANT

AND:

AND:

ADMINISTRATIVE APPEALS TRIBUNAL
FIRST RESPONDENT

MICHAEL GREGORY JONES
SECOND RESPONDENT

JUDGE(S):	MADGWICK J
DATE:	27 NOVEMBER 1997
PLACE:	SYDNEY

REASONS FOR JUDGMENT

Background

The applicant, Mr Oliveri, a solicitor, was declared bankrupt on 23 December 1993. On 5 October 1994, the second respondent, the trustee of the bankrupt’s estate, made an assessment of Mr Oliveri’s annual income from the date of bankruptcy for the purpose of determining the amount that Mr Oliveri was to contribute towards his bankrupt estate. The trustee did not consider Mr Oliveri’s claim that he only earned $300 per week gross as a solicitor to be a reasonable one, having regard to his qualifications and experience. Pursuant to s 139Y of the Bankruptcy Act 1966 (Cth), the trustee assessed Mr Oliveri’s income to be $65,000, and indicated that he believed this assessment to be “quite conservative”, based on “an expected salary for a solicitor of [Mr Oliveri’s] experience at the lower range for a small sized firm”. 

Mr Oliveri lodged an application for review of the trustee’s decision with the Administrative Appeals Tribunal on 3 November 1994. On 20 September 1995, the trustee brought an application under s 35(2) and (3) of the Administrative Appeals Tribunal Act 1975 (Cth) (“the AAT Act”) to file material that would not be disclosed to Mr Oliveri until counsel had an opportunity to cross examine him. It was counsel’s submission that the purpose of the material was to provide the trustee, as respondent in the proceedings, with a “legitimate forensic advantage” that would otherwise be lost if the material was revealed to Mr Oliveri. The Tribunal agreed to a closed session, in the absence of Mr Oliveri and his counsel, in order to examine the purpose and the substance of the material upon which the trustee wished to rely. The result of the closed hearing was the Tribunal’s direction that:

“Being prima facie satisfied that it is desirable to do so by reason of their confidential nature, it is directed, pursuant to sub-section 35(2) of the Administrative Appeals Tribunal Act 1975 (Cth) (“the Act”) that, until the hearing, documents, namely affidavit material, contained in a sealed envelope and forwarded by the Respondent to the Tribunal, be prohibited from publication or disclosure to all persons, including the Members and staff of the Tribunal.”

Counsel for Mr Oliveri later wrote to the Tribunal and requested a written statement setting out the Tribunal’s reasons for the direction.  In a letter of reply dated 20 October 1995, the District Registrar of the Tribunal stated:

“[The presiding Senior Member] has asked me to inform you that the provisions of section 35 of the Act were invoked after your submissions and those of Mr Durston for the Respondent were carefully considered. The Senior Member considered that after having heard Mr Durston’s submissions, that a section 35 order should be made so as not to inhibit the effectiveness of cross examination in the conduct of the case. She relied on the law as it stands in the case of Australian Postal Commission v Hayes and Anor (1989) 87 ALR 283, which as you may know was also followed by the President of this Tribunal in Re Taxation Appeals - NT94/281 and NT94/291 21 AAR 275.”

Section 35 of the AAT Act provides:

“35.   (1AA)...

(1)Subject to this section, the hearing of a proceeding before the Tribunal shall be in public.

(1A)....

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

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

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

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

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

(3)       In considering:

(a)whether the hearing of a proceeding should be held in private; or

(b)whether publication, or disclosure to some or all of the parties, of evidence given before the Tribunal, or of a matter contained in a document lodged with the Tribunal or received in evidence by the Tribunal, should be prohibited or restricted;

the Tribunal shall take as the basis of its consideration the principle that it is desirable that hearings of proceedings before the Tribunal should be held in public and that evidence given before the Tribunal and the contents of documents lodged with the Tribunal or received in evidence by the Tribunal should be made available to the public and to all the parties, but shall pay due regard to any reasons given to the Tribunal why the hearing should be held in private or why publication or disclosure of the evidence or the matter contained in the document should be prohibited or restricted.”

Mr Oliveri sought a review of the Tribunal’s decision under s 6(1)(a) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (“the ADJR Act”), substantially on the ground that, through being excluded from the hearing and by not being provided with adequate or proper reasons for the decision, he was denied natural justice, or procedural fairness as it is more commonly now called.

In the course of argument before me, it came to light that the Tribunal had made its decision on oral submissions from the respondent’s counsel without supporting affidavits or other evidence and that, although the relevant material has since been filed, it had not been produced before the Tribunal at the time the decision was made.  Counsel for the respondent was also unable to assure the Court that that material had not been relied upon by the trustee when making his assessment of Mr Oliveri’s taxable income. 

Conclusions

If this material had been so taken into account, then the proper course would have been for that material to be disclosed, or at least identified, and lodged with the Tribunal in accordance with the requirements of s 37 of the AAT Act. Section 37 provides:

“37.(1)     Subject to this section, a person who has made a decision that is the subject of an application for a review by the Tribunal must, within 28 days after receiving notice of the application (or within such further period as the Tribunal allows), lodge with the Tribunal 2 copies of:

(a)a statement setting out the findings on material questions of fact, referring to the evidence or other material on which those findings were based and giving the reasons for the decision; and

(b)every other document or part of a document that is in the person`s possession or under the person's control and is considered by the person to be relevant to the review of the decision by the Tribunal.”  (emphasis added)

Sections 35 and 37 imply, and a commonsense approach to procedural fairness requires, that except in rare cases an applicant is entitled to view those documents upon which the original decision‑maker has relied. If one assumes that the relevant material was not relied on by the trustee, then, on the hypothesis advanced on behalf of the respondent (namely, that the material could diminish Mr Oliveri’s credibility), the material ought to have been considered by the trustee (and, inescapably, also by the Tribunal) to be “relevant” to the Tribunal’s decision, since disbelief of Mr Oliveri was the basis of his decision. As such, the material should have been lodged with the Tribunal: that it may not have been relied upon by the trustee does not obviate the obligation of lodgment imposed by s 37 of the Act.

The issue of the trustee’s forensic ability to impeach Mr Oliveri’s credit, while no doubt going to the heart of the matter, would not justify a failure to lodge relevant material with the Tribunal.  Had it been lodged, it would have been available for inspection by the Tribunal on the issue of whether it ought not be disclosed to Mr Oliveri.
In any event, whether or not the respondent had taken the relevant material into account was a question which should have been known to or determined by the Tribunal.  It is fundamental that, as was said in Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409 by Bowen CJ and Deane J at 419, “the question for determination of the Tribunal is not whether the decision which the decision maker made was correct or preferable one on the material before him.  The question for the determination of the Tribunal is whether that decision was the correct or preferable one on the material before the Tribunal.”  As Wilcox J stated in Australian Postal Commission v Hayes (1989) 23 FCR 320 at 328, the rationale of s 37 is that “as the Tribunal is to stand in the shoes of the original decision maker and to make the decision which is the correct or preferable one, on the material before it, in relation to the subject decision...it is necessary that it have all the material which was before the original decision maker”.  It seems that the Tribunal did not seek to ensure that it was in possession of what the original decision-maker had before him.

The respondent sought to rely on Hayes as authority for the proposition that it was within the scope of the Tribunal’s discretion, and a proper exercise of that discretion, for the Tribunal to exclude Mr Oliveri from the hearing and from subsequently viewing the relevant material in order to protect a “legitimate forensic advantage”.  In Hayes, the Tribunal had directed that a witness, who had claimed she had suffered certain injuries, be allowed to view a video that would, it was thought, refute her claims as to the extent of those injuries at the commencement of her evidence in chief, rather than during cross examination.  Wilcox J held that the Tribunal’s direction amounted to a denial of procedural fairness because the effect of that direction was that the witness’ evidence could not properly be tested under cross examination.

However, Wilcox J drew a distinction between a situation where the “relevant material” came into existence after the primary decision had been made (as had occurred in Hayes) and one where the relevant material was relied upon by the original decision maker and thus required to be lodged with the Tribunal under s 37. His Honour went on to observe that, although ordinarily documents filed with the Tribunal will be made available to the parties, “if it appears that the production of a particular document at a particular stage to a particular person (even a party) will result in a denial of procedural fairness, the Tribunal may make a direction restricting access at that stage; even to a document which was considered by the original decision maker”.  However, his Honour said that this would be “an exceptional case” and that “it is not easy to envisage circumstances under which it would be necessary” (at 328).  Such an approach is consistent with that taken by Mathews J in Re Taxation Appeals - NT94/281 and NT94/291 21 AAR 275 (also reported as Applicant v Deputy Commissioner of Taxation 41 ALD 683). In that case, her Honour held that the circumstances in which the Tribunal could justifiably withhold relevant material from a party to a proceeding would be rare. Although her Honour considered herself bound by the decision in Hayes, she did not consider that that case established a general principle that material to which a party might otherwise be entitled to access could routinely be withheld because it might alert that party to potentially adverse material, and thus deprive the other party of the benefit of surprise during cross examination.  I agree with her Honour.

In my opinion, there is no conflict between the approaches taken in the two cases.  While Mathews J pointed out, and I agree, that since Hayes was decided there is now much more of a “cards on the table” approach to litigation and a move away from the traditional adversarial tactics of ambush and surprise during cross-examination, both judges emphasized the rarity of cases in which it would be appropriate not to disclose material actually relied on by the primary decision-maker. I agree with them. It is not only a matter of procedural fairness, it is a question also of recognising that one of the policies underlying s 35 and s 37 is the discouragement of the continuance of worthless appeals to the AAT and the bringing of the litigation into proper focus. If an appellant cannot know what was before the primary decision-maker, how can the appellant or his/her legal advisors know whether it is worthwhile to proceed with the appeal? Further, in the absence of such knowledge, the presentation of pertinent facts and arguments to the Tribunal is likely to be seriously impaired. 

In cases such as this one, where the material was or may have been before the primary decision-maker and where a legitimate forensic advantage is sought to be gained by the respondent, the possible loss of such an advantage must also be weighed against the forensic and other detriments to the applicant in being denied access to the material which had been relied upon to reach a decision adverse to his or her interests.  In most cases, indeed in all but exceptional circumstances, such a detriment to an appellant outweighs the loss of any advantage by the respondent.  Experience shows that, in a great proportion of cases, apparently powerful material for cross-examination is neutralised on hearing the witness’ explanation and that what appears powerful to a party does not impress the independent tribunal of fact.  Films of people whose claimed disabilities are in issue, as in Hayes, provide the most common example of the truth of these observations.  To say that much is not to entertain any naive conception as to the propensity of people, including applicants to the AAT, on occasions, consciously or unconsciously to embellish or feign their cases.  At the very least, the Tribunal should critically examine the material for itself before deciding to diminish the ordinary procedural rights of an appellant. 

Turning back to the circumstances in this case, the Tribunal’s failure to determine whether the material was relied upon by the trustee amounted, in my view, to an error of law. Insofar as the Tribunal did not require that material, which should have been lodged with the Tribunal under s 37, to be so lodged, that was another error of law. Not to examine the material for itself, in order to weigh properly the competing detriments, before deciding to deny Mr Oliveri access to it, was a third error. The matter should be sent back to be dealt with according to law. If the respondent wishes to make an application that Mr Oliveri not inspect the material which has been filed, then the Tribunal can consider the matter in accordance with the principles herein set out.

Accordingly, I order that the direction of the Tribunal be set aside.  The matter is to be remitted to the Tribunal to be dealt with according to law.

I certify that this and the preceding six (6) pages are a true copy of the Reasons for Judgment of the Honourable Justice Madgwick.

Associate:        
Date:               27 November 1997

Appearances

Counsel for the Applicant:            G Rundle
Solicitor for the Applicant:            Self
Counsel for the Respondent:        D Durston
Solicitors for the Respondent:       Australian Government Solicitor

Date of hearing:  28 April 1997