Productivity Partners Pty Ltd and Australian Skills Quality Authority
[2018] AATA 4878
•21 December 2018
Productivity Partners Pty Ltd and Australian Skills Quality Authority [2018] AATA 4878 (21 December 2018)
Division:GENERAL DIVISION
File Numbers: 2017/4304, 2017/4305, 2017/4306
Re:Productivity Partners Pty Ltd
APPLICANT
AndAustralian Skills Quality Authority
RESPONDENT
DECISION
Tribunal:Senior Member Theodore Tavoularis
Date:21 December 2018
Date of written reasons: 18 January 2019
Place:Brisbane
The application for the hearing days of these matters to be vacated is granted. The outstanding Directions in these matters are also vacated.
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Senior Member Theodore Tavoularis
CATCHWORDS
PRACTICE AND PROCEDURE – application to vacate the hearing and for matter to be held in abeyance – where Applicant is also subject to civil penalty proceedings in the Federal Court – relevant considerations – penalty privilege – interests of justice – hearings vacated
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth), ss 2A, 30, 33
Education Services for Overseas Students Act 2000 (Cth), s 83
National Vocational Education and Training Regulator Act 2011 (Cth), s 39CASES
Environmental Protection Authority v Caltex Refining Co Pty Ltd
(1992-1993) 178 CLR 477
McMahon v Gould(1982) 7 ACLR 202
Migration Agents Registration Authority v Frugtniet[2018] FCAFC 5
Sterling Pharmaceuticals Pty Limited v The Boots Company (Australia) Pty Limited (1992) 34 FCR 287
Wide Bay Conservation Council Inc v Burnett Water Pty Ltd[2008] FCA 1900
SECONDARY MATERIALS
Administrative Appeals Tribunal General Practice Direction
REASONS FOR DECISION
Senior Member Theodore Tavoularis
18 January 2019
BACKGROUND
On 21 December 2018, I heard an urgent application from Productivity Partners Pty Ltd (‘the Applicant’), which sought to adjourn the hearing of this matter, listed from 4-22 February 2019. At the interlocutory hearing, I granted the application for the hearing to be adjourned. These are the reasons for that decision.
In the instant case, the Applicant is appealing decisions of the Australian Skills Quality Authority (‘the Respondent’) to:
(a)Cancel the Applicant’s registration as a registered training organisation (‘RTO’) under s 39(1) of the National Vocational Education and Training Regulator Act 2011 (Cth) (‘the NVR Act’);
(b)Cancel the Applicant’s registration as a registered provider on the Commonwealth Register of Institutions and Courses for Overseas Students (‘CRICOS’) pursuant to s 83(3)(c) of the Education Services for Overseas Students Act 2000 (Cth) (‘ESOS Act’); and
(c)Deny the Applicant’s application to withdraw its registration as an RTO and its registration as a registered provider under the ESOS Act.
The fundamental basis of the Respondent’s decisions was its finding that the Applicant had failed to comply with its obligations under the relevant legislation. In the Respondent’s submission, the Applicant failed to take sufficient steps to ensure that its students were genuine and appropriate students being suitable for, and having the capacity to undertake, the courses in which they were enrolled. The consequence of the Respondent’s decisions for the Applicant is significant: they fundamentally affected the Applicant’s ability to carry on its business.
The Respondent seeks in the instant proceedings for its decisions to be upheld and findings that certain officers of the Applicant were not fit and proper people to be involved in an RTO. These officers relevantly include Mr Ian Cook and Mr Blake Wills. None of the officers have been joined in the present proceedings, although it was planned for Mr Cook to give evidence at the hearing now sought to be vacated.
This latter contention arises from a decision made by, inter alia Mr Cook and Mr Wills, to change the Applicant’s enrolment procedures, which resulted in a sizeable increase in the Applicant’s student intake in the second half of 2015.
On 8 November 2018, these already-complex proceedings became even more complex. The Australian Competition and Consumer Commission (‘ACCC’) commenced proceedings against the Applicant, its parent company, Mr Cook and Mr Wills.
While the ACCC proceedings and the instant proceedings are in different fora, they feature different government agencies. While the cause of action (or equivalent) are different in each of the proceedings, that does not preclude there being a significant overlap in the substance of the two proceedings. Indeed, the Applicant has provided me with an extensive statement comparing the overlapping contentions between the ACCC proceedings and the instant proceedings.[1]
[1] Exhibit KMG-1, pp 132-135.
Relying on the similarities in the allegations in the two hearings, the Applicant applied for the instant proceedings to be adjourned – and the hearing vacated – until the conclusion of the ACCC proceedings in the Federal Court. The Respondent has opposed this request.
THE LEGAL TEST
The first step in determining whether or not I should vacate the hearing is to ascertain what I must be satisfied of in order to vacate a hearing. The starting place for this inquiry, of course, must be the Administrative Appeals Tribunal Act 1975 (Cth) (‘the Act’).
Under s 2A of the Act, the Tribunal has the following objective:
In carrying out its functions, the Tribunal must pursue the objective of providing a mechanism of review that:
(a) is accessible; and
(b) is fair, just, economical, informal and quick; and
(c) is proportionate to the importance and complexity of the matter; and
(d) promotes public trust and confidence in the decision-making of the Tribunal.
The procedure taken by the Tribunal is, in turn, governed by s 33, which relevantly provides:
(1) In a proceeding before the Tribunal:
(a) the procedure of the Tribunal is, subject to this Act and the regulations and to any other enactment, within the discretion of the Tribunal;
(b) the proceeding shall be conducted with as little formality and technicality, and with as much expedition, as the requirements of this Act and of every other relevant enactment and a proper consideration of the matters before the Tribunal permit;…
The Act does not make mention of the specific procedure for adjourning or vacating hearing dates. Mention is, however, made in the Tribunal’s General Practice Direction, which relevantly provides:
4.38 We will not adjourn a hearing date unless there are good reasons to justify the adjournment. In general, the following matters are not, of themselves, sufficient reasons for an adjournment to be granted:
(a) the unavailability of counsel; or
(b) the consent of the other party.
Importantly, ‘good reasons’ is apparently intended to be a lower threshold than the ‘particular and compelling reasons’ considered necessary by the General Practice Direction if the adjournment request is made ‘less than ten working days before the hearing’, which is itself a lower standard than the ‘exceptional reasons’ considered necessary to adjourn a hearing if the adjournment request is made on the day of the hearing.[2]
[2] General Practice Direction, [4.41].
Ultimately, both the Applicant and the Respondent accept that the question of whether or not to adjourn the hearing dates and stay these proceedings is a matter which falls within the discretion of the Tribunal under s 33 of the Act.[3]
[3] Respondent’s Submissions, [11]; Applicant’s Outline of Submissions, [14].
The Applicant has argued that the Tribunal’s power to effectively stay these proceedings is analogous to that of the Federal Court, and that the Tribunal should consider the guiding factors identified in Sterling Pharmaceuticals Pty Limited v The Boots Company (Australia) Pty Limited.[4] There, Lockhart J identified the following factors as being relevant:
[4] (1992) 34 FCR 287.
• Which proceeding was commenced first.
• Whether the termination of one proceeding is likely to have a material effect on the other.
• The public interest.
• The undesirability of two courts competing to see which of them determines common facts first.
• Consideration of circumstances relating to witnesses.
• Whether work done on pleadings, particulars, discovery, interrogatories and preparation might be wasted.
• The undesirability of substantial waste of time and effort if it becomes a common practice to bring actions in two courts involving substantially the same issues.
• How far advanced the proceedings are in each court.
• The law should strive against permitting multiplicity of proceedings in relation to similar issues.
• Generally balancing the advantages and disadvantages to each party.[5]
[5] Sterling Pharmaceuticals Pty Limited v The Boots Company (Australia) Pty Limited (1992) 34 FCR 287, 291.
The Respondent, meanwhile, relied on McMahon v Gould,[6] to which the Applicant also relied. In McMahon, a liquidator brought proceedings for fraud and breach of duty against a director of a company. The director was, at the same time, subject to criminal proceedings and applied for a stay of the civil proceedings pending the completion of the criminal proceedings. Ultimately, Wootten J considered it inappropriate to stay those proceedings. His Honour considered the following ‘guidelines’ relevant in determining whether or not a stay should be granted:
[6] (1982) 7 ACLR 202.
(a) Prima facie a plaintiff is entitled to have his action tried in the ordinary course of the procedure and business of the court (Rochfort v John Fairfax & Sons Ltd at 19);
(b) It is a grave matter to interfere with this entitlement by a stay of proceedings, which requires justification on proper grounds (ibid);
(c) The burden is on the defendant in a civil action to show that it is just and convenient that the plaintiff's ordinary rights should be interfered with (Jefferson v Bhetcha at 905);
(d) Neither an accused (ibid) nor the Crown (Rochfort v John Fairfax & Sons Ltd at 21) are entitled as of right to have a civil proceeding stayed because of a pending or possible criminal proceeding;
(e) The court's task is one of “the balancing of justice between the parties” (Jefferson Ltd v Bhetcha at 904), taking account of all relevant factors (ibidat 905);
(f) Each case must be judged on its own merits, and it would be wrong and undesirable to attempt to define in the abstract what are the relevant factors (ibidat 905);
(g) One factor to take into account where there are pending or possible criminal proceedings is what is sometimes referred to as the accused's “right of silence”, and the reasons why that right, under the law as it stands, is a right of a defendant in a criminal proceeding (ibidat 904). I return to this subject below;
(h) However, the so-called “right of silence” does not extend to give such a defendant as a matter of right the same protection in contemporaneous civil proceedings. The plaintiff in a civil action is not debarred from pursuing action in accordance with the normal rules merely because to do so would, or might, result in the defendant, if he wished to defend the action, having to disclose, in resisting an application for summary judgment, in the pleading of his defence, or by way of discovery or otherwise, what his defence is likely to be in the criminal proceeding (ibidat 904–5);
(i) The court should consider whether there is a real and not merely notional danger of injustice in the criminal proceedings (ibidat 905);
(j) In this regard factors which may be relevant include:
(i)the possibility of publicity that might reach and influence jurors in the civil proceedings (ibidat 905);
(ii)the proximity of the criminal hearing (ibidat 905);
(iii)the possibility of miscarriage of justice eg by disclosure of a defence enabling the fabrication of evidence by prosecution witnesses, or interference with defence witnesses (ibidat 905);
(iv)the burden on the defendant of preparing for both sets of proceedings concurrently (Beecee Group v Barton);
(v)whether the defendant has already disclosed his defence to the allegations (Caesar v Somner at 932; Re Saltergate Insurance Co Ltd at 736);
(vi)the conduct of the defendant, including his own prior invocation of civil process when it suited him (cf Re Saltergate Insurance Co Ltd at 735–6);
(k) The effect on the plaintiff must also be considered and weighed against the effect on the defendant. In this connection I suggest below that it may be relevant to consider the nature of the defendant's obligation to the plaintiff;
(l) In an appropriate case the proceedings may be allowed to proceed to a certain stage, eg, setting down for trial, and then stayed Beecee Group v Barton).[7]
[7] Ibid, 206-207.
I note that the present circumstances are not perfectly analogous to those in McMahon v Gould. There, it was the defendant in both civil and criminal proceedings who sought to stay the former proceedings. Here, it is the applicant in civil/administrative law proceedings before the Tribunal and the defendant in civil proceedings in the Federal Court that seeks a stay of the former proceedings. Further, not only is the Applicant’s role in the proceedings different to that of the defendant in McMahon, but the proceedings on which it relies in its application for these proceedings to be stayed are civil, albeit civil proceedings where it could be subject to a penalty.
Conversely, it seems to me that the principles enunciated in Sterling Pharmaceuticals may be more apposite to the present case, if only because in that case, both proceedings were civil. However, I do recognise that it lacks the “right to silence”-style issues of McMahon, which are relevant here due to the question of whether penalty privilege can be asserted.
Noting the above, I do however consider that the principles set out in McMahon and those in Sterling Pharmaceuticals are on the whole persuasive as to the appropriate course of action for me to take, in terms of staying the proceedings.
I note, too, that the question of whether or not I should stay these proceedings is in some ways distinct from the question of whether it is appropriate for me to vacate the hearing date. The General Practice Direction states that ‘If we grant an adjournment, we will re-list the case as soon as possible’.[8]
[8] General Practice Direction, [4.42].
It seems to me that the Applicant’s request is not just that the hearing dates be vacated, but that the instant proceedings effectively be held in abeyance until such a time as the ACCC proceedings are concluded. That is, that this matter ought not be re-listed as soon as possible after the vacated hearing dates. Accordingly, the standards envisaged in the General Practice Direction are not quite apposite to this case. Rather, although a part of the Applicant’s request is that the hearing dates be vacated, the principles governing the holding of a matter in abeyance or staying proceedings are most relevant to this case. The crux of this is that this power should be exercised ‘where the interests of justice so require’.[9]
[9] Wide Bay Conservation Council Inc v Burnett Water Pty Ltd [2008] FCA 1900, [26].
I will now proceed to address the parties’ submissions on whether or not these proceedings should be stayed.
SHOULD THESE PROCEEDINGS BE STAYED?
Possible injustice?
A central contention of the Applicant rests on the effects of it, and its former directors, possibly being subject to civil penalties as a result of the ACCC proceedings. I should begin by noting that penalty privilege – the rough equivalent of the criminal law privilege against self-incrimination in the case of civil penalties – does not apply in the Tribunal unless there is express legislative intent that it does.[10] Even if it did, I accept that penalty privilege does not apply to corporations, and so would not in any event apply.[11]
[10] Migration Agents Registration Authority v Frugtniet [2018] FCAFC 5, [34].
[11] See Environmental Protection Authority v Caltex Refining Co Pty Ltd (1992-1993) 178 CLR 477.
However, that does not obviate the need to discuss the possible effects of extant civil penalty proceedings on a party.[12] I accept that:
A prior civil proceeding may still in theory have a potential to embarrass a respondent corporation in relation to its defence of a later civil penalty or criminal proceeding. It is though for that corporation to demonstrate that this is more than an abstract concern.[13]
[12] See Wide Bay Conservation Council Inc v Burnett Water Pty Ltd [2008] FCA 1900, [30].
[13] Ibid.
It is precisely this that the Applicant has sought to show. The essential argument is that there is a very real risk of forensic prejudice to the Applicant, should the Tribunal proceedings move to the hearing stage.[14] This possible prejudice takes two forms. First, in relation to the Applicant directly, it says it would be forced to make certain forensic choices in the Tribunal proceedings which would affect the choices it could make in the ACCC proceedings. This would give the ACCC in particular a forensic advantage in the penalty proceedings. Secondly, as penalty privilege does not apply before the Tribunal, it and the witnesses – especially Mr Cook, who has already provided affidavits in the Tribunal proceedings – may be subject to procedural unfairness in terms of the kinds of evidence they may give.
[14] Applicant’s Outline of Submissions, [20]-[21].
Mr Cook’s solicitors has provided an affidavit indicating that:
(a)He intends to claim penalty privilege in the ACCC proceedings;
(b)He seeks to ‘maintain and protect’ this right in the Tribunal proceedings; and, accordingly
(c)He is not willing to give evidence in the Tribunal proceedings while he may be subject to penalties in the ACCC proceedings.
Mr Wills has not been named as a witness in the Tribunal proceedings.
In relation to this latter point, the Respondent noted that Mr Cook’s unwillingness to give evidence would not prejudice the Applicant in the Tribunal proceedings as Mr Cook cannot claim penalty privilege before the Tribunal and can be compelled to give evidence under summons, if required. Further, it contended that this evidence may be subject to a confidentiality order under s 35 of the Act to assuage any fears of the witnesses.
I agree with the Respondent that the Tribunal will be able to compel the evidence of Mr Cook and others. However, in the Applicant’s submission, the very fact that the Tribunal can hear this evidence is a factor which militates in favour of staying the proceedings.
With respect to the Respondent’s point about the s 35 order, I consider the Applicant’s submission that I ought not rely on an order that has not already been made – and that may not be made in light of the Tribunal’s general expectation under s 35(1) that its proceedings be in public – to be persuasive. Particularly in light of the late stage of these proceedings, the fact there is no confidentiality order over the Applicant’s name and the findings the Respondent wants me to make, I accept that the practical difficulties of making such an order and truly protecting the witnesses who may claim penalty privilege are substantial. This would greatly complicate the Tribunal proceedings.
If a s 35 confidentiality order is not made, I accept that the very fact that Mr Cook et al could be compelled to give evidence puts the Applicant in a bind which is contrary to the interests of justice. In my view, were these proceedings not to be stayed, the Applicant would be faced with a choice. On the one hand, it could fully prosecute the Tribunal proceedings, calling the evidence of Mr Cook and others. However, by doing so, it would either be greatly complicating these proceedings by virtue of the confidentiality order as discussed above, or it would be entering onto the public record evidence which may open lines of attack for the ACCC. On the other hand, it could effectively shut up shop and greatly restrict its prosecution of the Tribunal proceedings to preserve its interests in the ACCC proceedings.
The former circumstance would deprive the Applicant of its usual suite of forensic choices in the ACCC proceedings. The latter would deprive it of its usual suite of forensic choices in the Tribunal proceedings. I consider this to be largely a zero-sum game for the Applicant – in either circumstance, it could be inhibited in its ability to deal with what are clearly matters of great significance. Accordingly, I find that the prejudice the Applicant would suffer if the Tribunal proceedings were dealt with before the ACCC proceedings would be great. This is, to my mind, a very real, as opposed to notional, risk of injustice.
Further, I find that Mr Cook, who it appears would have to be compelled to give evidence before the Tribunal, would suffer an injustice. The fact he cannot claim penalty privilege before the Tribunal means that the Tribunal’s proceedings have a very real ‘potential to embarrass… [his] defence of a later civil penalty or criminal proceeding’,[15] here the ACCC proceedings. The prospect of a confidentiality order provides some salve to this, but it is insufficient to my mind to find that no injustice would occur. The Respondent will ask the Tribunal to make a finding about Mr Cook, with such finding being very similar to the finding the ACCC is asking the Federal Court to make of him. After the hearing, the Tribunal will have to make a finding, one way or the other.
[15] Wide Bay Conservation Council Inc v Burnett Water Pty Ltd [2008] FCA 1900, [30].
It was discussed at the interlocutory hearing that Mr Cook and Mr Wills could apply to be joined to the Tribunal proceedings under s 30(1A) of the Act. In the Respondent’s submission, they could therefore better-defend their rights. Well may that be the case, but they have not done so. It would be inappropriate for me to act on the assumption that they would. Accordingly, on the facts and evidence before me, I find that, if the Tribunal proceedings were to continue before the ACCC proceedings, it would result in an injustice to Mr Cook and to Mr Wills.
I next turn to the question of the relevance of the fact the Applicant commenced the proceedings before the Tribunal, but is the respondent in the ACCC proceedings. In most cases, the party which seeks proceedings to be stayed is the defendant in both matters. Thus, the interest the defendant seeks to interfere with is the interest of a plaintiff in being able to pursue their litigation in the ordinary course of a court’s business. Here, the interest at play is slightly different. The Applicant lodged its application for review by the Tribunal of a decision of the Respondent which negatively impacted its rights under a legislative scheme. Due to the strict timelines for review in administrative law (as opposed to the lengthy time periods in which someone can pursue a cause of action in most courts), the Applicant was faced with the choice of accepting the Respondent’s decision, or challenging a decision it perceived to be incorrect. It had fewer than two months in which to make this decision to preserve its rights. Consequently, it is reasonable that it would not wait until the prospect of ACCC proceedings had abated before lodging its application with the Tribunal. Accordingly, I do not consider that the Applicant’s role as applicant in the present proceedings changes the application of the above-mentioned principles in any relevant way.
Similarly, the Respondent’s role is not so much to defend that decision, but to guide the Tribunal to the correct or preferable decision. Further, the Respondent is an agency of the Commonwealth government. It represents the Commonwealth and exists to protect the Australian public from harm. Indeed, it is the agency whose decision is being reviewed. Accordingly, I find that it has a comparable interest in the proceedings continuing as a plaintiff would have.
The effect of concurrent proceedings
I turn next to the practical effects of the litigation of the Tribunal and ACCC proceedings concurrently. While there is some question of expense and of resource-expenditure, I do not give those considerations much weight. To the extent they are relevant, they favour the idea that the hearing should be adjourned – it is self-evidently more resource-intensive for the Applicant to prepare for two significant legal cases concurrently.
More significant in my view is the possibility of conflicting judgments. Plainly, decisions of the Federal Court are of greater precedential value than those of the Tribunal. If there were conflicting findings between the Tribunal and the Federal Court, it would greatly increase the likelihood of an appeal in the Tribunal proceedings and would, to my mind, open the possibility of eroding the ‘public trust and confidence in the decision-making of the Tribunal’.[16] Accordingly, I consider that this weighs in favour of the Tribunal proceedings being stayed.
[16] Administrative Appeals Tribunal Act 1975 (Cth), s 2A(d).
The effects of a long adjournment
The Respondent also sought to draw my attention to the possible prejudices it and the public may suffer as a result of these proceedings being adjourned.
First, I must recognise that these proceedings are almost ready to come to hearing. This means that although there will necessarily be a delay in coming to the hearing, there is unlikely to be a significant temporal gap between the conclusion of the ACCC proceedings and the hearing of the Tribunal proceedings. Thus, I doubt that the adjournment of these proceedings will be overly long.
Secondly, the Respondent has submitted that a ‘long adjournment has the potential to allow people who are not fit and proper persons to remain involved in the running of RTOs.’[17] While that may be the case, as the Respondent itself has noted, the RTO it was referring to, Site Skills, has been granted a stay of decision by the Tribunal in separate proceedings to the ones at present.[18] It has submitted that it will seek for that stay order to be set aside if these proceedings are stayed.[19]
[17] Respondent’s Submissions, [50].
[18] Ibid, [45].
[19] Ibid, [46].
Ultimately, however, that is not a consideration that is relevant to the present proceedings – or at least not one I can reasonably rely on. The question of whether an existing stay order made under s 41 of the Act should be set aside is a question for the Member presiding over those proceedings, not for me. I note, however, that if the Respondent does indeed make good on that suggestion, the very harm it decries – allowing people who it says are not fit and proper persons to continue to be involved in the running of RTOs – would not be incurred. In any event, I consider it improper to pre-judge these proceedings by making a finding that any of those individuals are not fit and proper persons. That is one of the issues in the Tribunal proceedings, which is vigorously contested by the Applicant. Accordingly, while there may be a harm to the public, that harm is, in my mind, outweighed by the interests of justice.
Thirdly, I recognise that Wootten J in McMahon considered as persuasive the entitlement of a plaintiff to have its action tried in the ordinary course of the procedure and business of the court.[20] In the Respondent’s submission, this applies equally to proceedings in the Tribunal. Presumably, it also contends that a correlative entitlement exists for defendants. I accept that this is the case. However, this entitlement can be displaced, provided it is in the interests of justice. It is more a statement of the starting position for these kinds of proceedings, rather than a factor which will weigh one way or another in the proceedings.
[20] See McMahon v Gould (1982) 7 ACLR 202, 206.
CONCLUSION
Ultimately, I am persuaded that it is in the interests of justice for the Tribunal proceedings to be stayed until the conclusion of the ACCC proceedings in the Federal Court. In reaching this conclusion, I find the procedural differences between the Tribunal and the ACCC to be particularly persuasive. In order to preserve its rights, the Applicant had little choice other than to lodge proceedings with the Tribunal. Although Tribunal proceedings lack a formal burden of proof, I understand that the Applicant intends to run something of a positive case. Conversely, in the ACCC proceedings, the Applicant must defend allegations brought forward by the ACCC, and its witnesses can claim penalty privilege.
In these circumstances, to allow the Tribunal proceedings to continue, where witnesses who would otherwise claim penalty privilege – and who intend to do so in the ACCC proceedings – cannot, and where any decision made by the Tribunal may run contrary to the findings of fact made by the Federal Court, would not be in the interests of the administration of justice. While of course the Tribunal has a responsibility to ensure its proceedings are managed in a way that is economical and quick, its proceedings must also be just and promote public confidence in the decision-making of the Tribunal.
In light of the above, I am satisfied that the interests of justice require the present proceedings be stayed. Accordingly, I direct that the hearing dates of this matter, and all present directions, be vacated.
I certify that the preceding 46 (forty -six) paragraphs are a true copy of the reasons for the decision herein of Senior Member Theodore Tavoularis
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Associate
Dated: 18 January 2019
Date of hearing: 21 December 2018 Counsel for the Applicant: Mr J Giles SC Solicitors for the Applicant: MinterEllison Counsel for the Respondent: Mr D O'Donovan & Ms S Wright Solicitors for the Respondent: Australian Government Solicitor
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