The Hearing and Bias Rules
5. CONTENT OF THE HEARING RULE
The content of the rules requiring a fair and unbiased hearing are immensely flexible and provide no sure guide to action
They do not require ‘court-like’ proceedings
Fair hearings may be conducted on the papers, the person who decides does not always have to conduct the hearing, rules of evidence do not apply to administrative decision-makers, and refusal of cross-examination or legal representation is not as a general rule a denial of procedural fairness. It depends on what fairness requires in the particular circumstances.
5.1 Must the Person Who Decides Hear?
White v Ryde Municipal Council [1977] 2 NSWLR 909
FACTS: The Council had for a long time received complaints about White’s smelly cats. The Local Government Act Section 289(e) empowered the council to ‘control and regulate the keeping of animals, in particular dogs, cats, pigs, pigeons and poultry.’ The Council’s health surveyor reported that White kept 20-30 cats, and on that basis, the Council’s General Purposes Building and Development Committee recommended the Council prohibit White keeping more than two cats at a time.
Council adopted the recommendation and informed White that he could be fined for not complying and offered him an opportunity, within four days, to make oral or written representations as to why the resolution should not be given effect. The Committee refused White’s request for his legal representative to be present, so White addressed the Committee himself. The surveyor who made the inspection was at the hearing, but did not participate in deliberations. The Committee recommended the Council affirm its earlier resolution and they did so. A year later, White was convicted of non-compliance with the order and fined. He appealed.
PRINCIPLE: Municipal councils do not have to personally hear every case if there is a special committee in place to assist them and make recommendations. The decision maker must, however, have before him all of the relevant materials (evidence and submissions of those entitled to be heard).
HELD: REYNOLDS JA:
- Procedural Fairness was implied.
- “what will be sufficient to satisfy the requirement depends on the circs of the particular case, a well as upon the nature of the statutory power… the requirement of natural justice has a fluctuating content”
- The general proposition is "he who decides must hear." - but in some situations decision maker sets up a specialist board to decide, this is ok so long as the board has all the evidence and representations before them.
- The general proposition is not a universal requirement, it is to be understood in the sense that the decision maker must have before him the evidence and submissions of those entitled to be heard.
- The decision making body need not hear and see the actual submissions in the hearing.
- It is commonplace for councils’ to act on the recommendation of a specialist committee.
- In this case normal procedure should not be abandoned and, in any case, it was probable the White would be more benefited from the committee conducting the hearing than the council. (at 923)
- Question of legal representation; a simple factual matter meant there was no right to legal representation.
- The decision-making authority (council) was appraised of all the relevant material to evaluate the recommendation and the force of the representations made by White.
- Held the hearing was proper as it accorded with all notions of fairness.
FAI Insurances Ltd v Wineke (1982) 151 LR 342
FACTS: The Workers Compensation Act 1958 (Cic) Section 72(1)(a) provided for approval by the Governor in Council (GiC) of insurers for workers compensation liability, with GiC meaning the Governor with the advice of the Executive Council.
The Workers Compensation Regulations 1975(Vic) Regulation 201 prohibited a company from carrying on any insurance business against workers compensation liability without having obtained approval of the GiC.
Regulation 202(1) provided for approvals to be given on an annual basis. Regulation 202(2) provided that when granting any approval or renewal ‘regard shall be had to the commitments and financial position of the applicant and in the case of renewal to the observance of these regulation by the applicant.’
FAI had done workers compensation in Victoria for twenty years. It applied for a renewal, and admitted when disclosing their financial positions, that they had failed to meet two criteria prescribed in the Minister’s statement. BUT, they submitted that they were illegal as it went beyond the provisions of Regulation 202(2). FAI requested that if they were not going to be renewed, that notice and an opportunity to make submissions and provide evidence be given on the issue. FAI was refused renewal on account of several financial concerns, and they were not given a hearing. FAI appealed.
Principle: Hearing rule; a statutory authority that has the power to affect a person’s rights is bound to hear him before exercising that power. This is especially pertinent where it is the renewal (vs. application) of a licence and where the loss of it affects earning capacity. The hearing function can be delegated to someone who does not make the final decision.
HELD:
- The fundamental rule, the hearing rule, is that a statutory authority having power to affect the rights of a person is bound to hear him before exercising the power. (Mason J)
- The exercise of revoking a licence will attract the rules of natural justice, more so than an application for a licence at first instance. This is especially where the loss of the licence means a loss of a right to earn a livelihood or to carry on a financial rewarding activity.
- The Governor in Council is still bound by the rules of natural justice even though it would be unlikely he would hold the hearing himself, his duty would extend to allowing the applicant adequate opportunity to present its case.
- This opportunity can be given through delegation to a committee or the responsible Minister, who can consider submissions and report back.
- It matters not that the person or persons to whom this function is delegated do not make the ultimate decision. (at 370-371)
- The statute looks only to the Governor in Council to ensure that the application is dealt with fairly and justly. FAI won the appeal as it should have been given a chance to answer the matters raised by the Minister in his report.
- NB not same as a multi stage decision making process like O’Shea because the parole board had statutory functions to perform; to interview O’Shea as well as accept medical reports. O’Shea was a different situation; clearly multi stage decision making.
- Here no formal statutory responsibility but decision maker sets up a committee. This is fine as long as the committee has all evidence before it.
5.2 Notice
- Prior notice that a decision adversely affecting interest is to be made is the minimum content of procedural fairness.
- Notice is required to understand the nature and ambit of the allegation so as to prepare a response.
Bond v Australian Broadcasting Tribunal (No 2( (1988) 84 ALR
Facts: The ABT commenced inquires under statute into the commercial broadcasting licences held by a number of companies owned by Bond. It was an investigatory proceeding, that is, not bound by the rules of evidence. The companies requested particulars of the issues of the inquiry and they received a list of issues relating to the fitness of these companies to hold such licences. The Tribunal refused a further request that more particulars be given and that they could order witness and lead the evidence in chief. Bond and companies sought review under the ADJR Act, they eventually appealed to the High Court.
Principle: A party in an inquisitorial proceeding has a right to be informed of the nature of the inquiry and the issues being investigated, and if allegations have been made- the nature of those allegations- so as to not be ‘left in the dark’. Witnesses of the inquiry belong to the inquiry, and the applicant has no right to determine their ordering etc unless they are part of a case specifically put by them to the tribunal.
Held: WILCOX J:
- The tribunal is bound by the rules of natural justice as its findings may adversely affect parties. (Kioa v West)
- The inquiry is inquisitorial – it is an investigation by the tribunal into desirability of taking certain action. The court can only intervene where the tribunal has fallen or is likely to fall into legal error.
- Bond argued that the inquiry turns adversarial once witnesses are brought, but the court rejected the idea of treating the proceedings like litigation. Firstly, the witnesses are not the parties’ witnesses, they are for the inquiry and the tribunal is bound to follow the evidence wherever it leads.
- ‘Further and better particulars’ is an appropriate request for a criminal or civil trial, but not to committal proceedings or inquiries where the evidence is followed to wherever it leads and where before the inquiry it would be wrong for the decision makers to express tentative views about what they think the outcome of proceedings may be.
- The duty of the tribunal is to ensure that the applicants are made aware of the material placed before the tribunal and which is relevant to the exercise of any power in a manner adverse to their interests.
- If there are specific allegations being made then fairness would require the release of particulars of those allegations. If on the other hand it is a general inquiry, particulars would be impractical and ineffective.
- Question: Does the failure to supply particulars result in the applicants being “left in the dark” about the type of findings and orders that may be made against them?
- “A person potentially affected by the outcome of an inquiry is entitled to understand the nature of the inquiry and the issues being investigated; otherwise meaningful participation becomes impossible”. This understanding will be just the subject matter of the inquiry, framed in terms of issues and relevant powers, with no view as to the relevant facts or likely outcome. As the inquiry unfolds, it may be necessary to make further disclosures.
- Other disclosures would be okay if the decision maker needs more information from the parties.
- Whether left in the dark depends on the circumstances of the inquiry as a whole. Generally must know the nature of the inquiry or the risk faced.
- No denial of procedural fairness in refusing to supply further and better particulars
The ‘Bond camp’ witnesses
- Witnesses belong to the inquiry, not the parties. The decision maker decides the order and time of them being heard.
- If Bond decides to put a positive case to the inquiry or bring new evidence then he is entitled to.
- Bond may call additional witnesses’ oral evidence. In doing this (presenting their own case), they are entitled to decide which witnesses to call and their order and will be entitled to take those witnesses as their evidence in chief.
Re Macquarie University; ex p Ong (1989) 17 NSWLR 113
Facts: A head of school whose conduct was the subject of investigation by a committee of the University Council was entitled to notice of a new set of allegations regarding his competence, notwithstanding the fact that he had declined to attend the committee's hearings in relation to the first set of allegations concerning his failure to cooperate with the Vice-Chancellor.
Principle: For procedural fairness there must be notice, identification of the issues, and person must have adequate time to prepare. A body is obliged to give to a person who might be adversely affected notice of a new set of allegations made against him even though he sought not to be heard on an earlier and different set of allegations.
Held:
- Content of the notice depends on the nature of the inquiry. For example where there is a general inquiry as opposed to specific allegations.
- Dr Ong did not know that the new allegations would be the subject of the committee’s report.
- A denial of procedural fairness occurs even though the person affected had notice of the facts on Committee’s recommendation would have critical if not decisive influence on the council.
- Entitled to have access to material and hearing
- Distinguishable from O’Shea (political).
- Original allegations that he failed to work properly with the Vice-Chancellor; but was not told that he was also being investigated on the basis of incompetence. Needed notice of these allegations to prepare.
- NOTICE that there will be a committee to consider the issues - also adequate time to prepare is important.
- A body is obliged to give to a person who might be adversely affected notice of a new set of allegations made against him even though he sought not to be heard on an earlier and different set of allegations. The person must also be given adequate time to prepare with respect to these allegations.
- Cross reference; Vice Chancellor’s letter: by the writing of a letter and handing it to the committee on the day of sitting amounted to the accuser being present during the proceedings. This is a breach of procedural fairness.
Continued on page 2
Continued
Mahon v Air New Zealand Ltd [1984] AC 808
Facts:
Senior Justice Mahon oversaw the Royal Commission into the deaths of
the New Zealand citizen's who died in an Air New Zealand flight. Mahon
found there had been incompetent airline procedures and also that false
evidence was given by officials of ANZ which was based on a
predetermined plan of deception of the Royal Commission to conceal the
airlines mistakes. Declared the evidence as lies and ordered ANZ to pay
$150,000 to the cost of the Royal Commission. Mahon appealed to the
Privy Council after the CA found that the order for costs was
procedurally unfair.
The person making a finding in the
exercise of such a jurisdiction must base his decision upon evidence
that has some probative value. …The decision to make the finding must
be based upon some material that tends logically to show the existence
of facts consistent with the finding and that the reasoning supportive
of the finding, if it be disclosed, is not logically self-contradictory
(Lord Diplock at 820-821)
Held:
- If you are to base your
decision on adverse material, that adverse material has to be tested.
In Mahon's conduct, he had not articulated that he was minded to reject
the evidence he was hearing on the basis that they were lying.
- He should have said "I think you were lying" and allowed a response.
-
Must listen fairly to relevant evidence that conflicts with the
finding, that is, the affected person must not be ‘left in the dark’
about the risk of the finding being made and deprived of the
opportunity to adduce additional material of probative value.
- In
this case it was a breach of procedural fairness that there was no
probative evidence of a plan of deception through destruction of
documents. Appeal dismissed
Minister for Immigration and Ethnic Affairs v Pochi (1980) 31 ALR 666
Facts:
An appeal from a decision of the AAT under the AAT Act. Plaintiff
recommends the revocation of decision of Minister that the defendant be
deported. The question for determination that was before the Tribunal
was whether on the material before the Tribunal, the decision which the
administrative decision maker made was the correct or preferable one.
Principle:
It is a well established principle that findings of material fact must
ordinarily be based on logically probative material and that the
decision of the tribunal, where relevant questions of fact are in
issue, must be based on the facts and not on mere suspicion or
speculation. (Deane J at 689)
Held:
- Deane J: When an
alien is liable to be deported the general rule must be that the
conduct relied upon to show that the deportation order is in the best
interest of Australia must be proved not merely suspected.
- The
tribunal and the Minister are equally free to disregard formal rules of
evidence, but this assurance of flexible procedure can not go so far as
to justify orders without basis in evidence having rational, probative
force.
- There is nothing to suggest that it was legislative
intent (in the AAT Act 1975) that the tribunal should be free either of
the requirement that its decision must be based upon findings of
material fact or the requirement that such findings of material fact be
based on logically probative material.
- Attack on tribunal failed – it has not been shown that the tribunals decision was affected by error of law.
But see:
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321
-
Courts are not there to adjudicate on findings of fact because finding
of fact (including an inference drawn from primary facts) are no more
than a step along the way to ultimate determination – however the
determination which may be made based on the finding of fact vitiated
by error of law ss5(1)(f) and ss6(1)(h) or made without evidence
ss5(1)(h) and ss6(1)(h) may be reviewable.
Mason CJ:
i) Was there a reviewable decision?
- In general findings of fact aren’t reviewable independently of the ultimate decision.
- Can only examine conduct on procedural grounds.
ii) Grounds of review
-
The making of findings and drawing inferences in the absence of
evidence is an error of law (i.e. findings are unreasonable). There is
no error of law in simply making an incorrect/illogical finding of
fact.
- Error of law under the ADJR act is intended to bear the
same meaning as at common law. I.e. cannot review findings of fact,
except where there has been an error of law.
- “ a finding of fact
will then be reviewable on the ground that there is no probative
evidence to support it and an inference will be reviewable on the
ground that it was not reasonably open on the facts, which amounts to
the same thing.”
- No errors of law were made in the course of findings of facts.
Deane J:
-
Procedural fairness requirements mean decision makers must not make
arbitrary decisions; findings of fact must be supported by probative or
logical evidence.
- The requirements of procedural fairness can vary depending on the statute supporting them.
-
In general, procedural fairness requires decision maker’s to act
rationally, reasonably, not arbitrarily, material/relevant
considerations be included and immaterial considerations be ignored,
decisions of fact must be supported by probative material. If this is
not observed, it will be an error of law.
8. THE RULE AGAINST BIAS
Single test for bias in public decision making:
- Might a
reasonable observer apprehend that the decision maker might not resolve
the matter with a fair and unprejudiced mind: Angliss; Liversey;
Stollery; Polities; Laws; Ebner
- Actual bias does not have to
be proved. Ebner’s case establishes that there is no separate, free
standing rule of automatic disqualification for direct pecuniary or
proprietary interest.
- Is a “possibility” test rather than probability
- The same “possibility” test applies to courts and administrators
-
The test accommodates the wide variety of situations in which it must
be applied through attribution of knowledge to the reasonable observer:
see eg. Re RRT; ex p H Understanding of nature of proceedings, issues
and conduct of decision maker
- In some jurisdictions, an exception has been made for ‘domestic tribunals’.
-
Because of the flexibility of the rule against bias, types of
disqualifying bias cannot be categorised. Some examples follow.
Remember however that the overarching question is whether the
reasonable observer might perceive bias.
Examples of Disqualifying Bias:
- Pecuniary and proprietary interests of the decision maker or a close family member in the outcome
- Association with one of the parties relevant to the issues
- Prejudgment of the issues or credibility
- Hostility to one of the parties
- Personal prejudice
- Prosecutor acting as adjudicator
-
Procedure (e.g. Over-intervention in proceedings, hearing one party
behind the back of the other without disclosure; accuser having
greater access to the decision maker than the accused)
8.1 Pecuniary Interest
-
Prior to Ebner there was automatic disqualification on proof of a
direct, personal and more-than-trivial pecuniary or proprietary
interest (in the outcome).
- This shift is succinctly summarised by Kirby in Hot Holdings at 60 (p79 SR)
-
Note Kirby disagreed with this shift in Hot Holdings “both as a
matter of adherence to established legal authority and as a matter of
legal principle and policy, I disagreed with the decision to depart
from the rule in Dimes … recognising the “special class” of
disqualification where there is “direct pecuniary interest in the
outcome of the proceedings”. Ebner, so far as it concerns the recusal
of judges and like decision-makers, puts Australia at odds with the
strict law and practice observed, in this regard, in other common law
countries. It does so at a time when there are strong reasons of legal
policy for adhering to the strict and separate rule”
Eber v Official Trustee in Bankruptcy (2000) 176 ALR 644
PRINCIPLE:
Pecuniary interest alone will not equate to automatic disqualification.
In the case of ownership of shares, it must be ascertained whether the
outcome of the litigation could have an effect on the judge’s financial
interest.
- There is no separate and free-standing rule of automatic
disqualification for direct pecuniary or proprietary interest (as
existed in Webb v Queen, R v Gough, HL in Pinochet (No 2); Dickason v
Edwards) rejected because “in its possible application to relatively
common situations, its meaning is unclear”: Ebner
- Instead – need to apply the “reasonable apprehension test”
-
The circumstances that a judge has a “pecuniary interest” in the
outcome will result in disqualification on the reasonable apprehension
test.
Held: GLEESON CJ, McHUGH, GUMMOW, HAYNE JJ:
-
There is a fundamental principle that court cases, civil or criminal,
must be decided by an independent and impartial tribunal Bias,
whether actual or apprehended connotes the absence of impartiality
-
In Webb v Queen, Deane J identified 4 distinct though overlapping
categories of cases involving disqualification by reasons of appearance
of bias interest, conduct, association and extraneous information
[convenient frame of reference]
- There is no justification for having different principles for interest and association
-
In each case ... the question must be how it is said that the existence
of the “association” or “interest” might be thought (by the reasonable
observer) possibly to divert the judge from deciding the case on its
merits … the bare identification of an “association” will not suffice
to answer the relevant question. [especially given that “ownership,
direct or indirect, of shares in a corporation is but one possible form
of association with, and potential interest in, a litigant or a case”]
-
In the practical application of the test of apprehended bias, financial
conflicts of interest are likely to be of particular significance
[often more concrete in nature than other interests, and when the
primary facts are known, easier to identify / public perception that
they are more insidious than other forms of interest in their likely
effect upon impartiality]
- The primary factual consideration
[whether there was a realistic possibility that the outcome of the
litigation would affect the value of the relevant judge’s shareholding
in the bank] – was a relevant factual consideration and not the
ultimate test
Noted that the nature of the judge’s association
with a litigant may be more complicated, as in Pinochet (No 2) and the
possible effect of the outcome of a case upon the value of assets owned
by a judge may be a matter of serious difficulty.
- However, in
the ordinary case where a judge owns shares in a listed company which
is a party to, or is otherwise affected by, litigation, and there is no
other suggested form of interest or association, the question whether
there is a realistic possibility that the outcome of the litigation
would affect the value of the shares will be a useful practical method
of deciding whether a fair-minded observer might hold the relevant
apprehension
- If have a financial interest in the outcome,
apprehension of bias rule will disqualify judge. But where it is that a
clear outcome of a case would have no bearing on value of shares (court
determines this on the facts) and there is no other suggested pecuniary
interest, the judge will not be found to have a pecuniary interest.
-
Rejected the submission that there is a separate and free-standing rule
of automatic disqualification which applies where a judge has a direct
pecuniary interest, however small, in the outcome of the case over
which the judge is presiding
- Note: that the failure of the
judge to disclose his acquisition of shares in the Bank was of no legal
consequence his silence could not reasonably support an inference of
want of impartiality
The content of the rules requiring a fair
and unbiased hearing are immensely flexible and provide no sure guide
to action. They do not require ‘court-like’ proceedings.
Fair hearings may be conducted on the papers, the person who
decides does not always have to conduct the hearing, rules of evidence
do not apply to administrative decision-makers, and refusal of
cross-examination or legal representation is not as a general rule a
denial of procedural fairness. It depends on what fairness requires in
the particular circumstances.