McMillan, John --- "Administrative tribunals" [2000] ALRCRefJl 14; (2000) 76 Australian Law Reform Commission Reform Journal 67

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Reform Issue 76 Autumn 2000

This article appeared on pages 67 – 73 of the original journal.

Administrative Tribunals

Administrative tribunals play a major role in the civil justice system in reviewing the merits of Commonwealth administrative decisions. In this article John McMillan* discusses the development of the Commonwealth administrative tribunal system and the proposals for change made by the Australian Law Reform Commission (ALRC) in its new report Managing justice (ALRC 89).

Public discussion of dispute resolution in the Australian civil legal system is mostly a discussion of the role that courts play in resolving disputes and ensuring justice. It is particularly the decisions of higher level courts such as the High Court and the Federal Court that are the usual focus of analysis in media reports and law journal articles. In the same vein, the media reports of the ALRC’s review of the civil justice system have also tended to focus on the segment of the inquiry that has looked at the way in which disputes are resolved by federal courts.

Administrative tribunals, though often overlooked in discussion of the civil justice system, in fact play an integral role in that system. Their role in the settlement of disputes between citizen and government is particularly important. The statistics of the caseload of tribunals illustrate this point. The main five tribunals that constitute the Commonwealth tribunal system – the Administrative Appeals Tribunal (AAT), the Social Security Appeals Tribunal (SSAT), the Migration Review Tribunal (MRT), the Refugee Review Tribunal (RRT), and the Veterans’ Review Board (VRB) – receive more than 40,000 applications each year for review of Commonwealth government decisions. This compares with the 1,000 or so applications for review of government decisions received each year by the Federal Court (close to 70 per cent of which deal with the single area of migration decision making).

Development of the tribunal system

The Commonwealth system of administrative tribunals has developed over the past 25 years. The centrepiece of the system, the AAT, was established in 1975 following the recommendations of a report in 1971 that proposed a new system of administrative law for the Commonwealth.¹ The function of the Tribunal was to review the merits of decisions in selected areas of Commonwealth administrative decision making. The Tribunal could look at all aspects of a decision – the law, the facts, and the underlying issues of policy and discretion – and substitute a new decision if, in the Tribunal’s view, that would be the preferable course.² Other review bodies would operate alongside the Tribunal, principally, the Commonwealth Ombudsman, who could investigate whether there had been defective administration by a Commonwealth agency; and the Federal Court, which could undertake judicial review (that is, a review of the legality) of administrative decisions.

The creation of the AAT marked a turning point in the development of administrative law in Australia.³ Implicit in the creation of the AAT was an acknowledgment by government of the importance of external review, by an independent legal body, of the disputes that arise between government agencies, on the one hand, and individuals and corporate entities, on the other. As well, there was a recognition that courts alone could not exclusively perform the external review function. One reason had to do with the breadth of the issues that would be likely to arise in administrative law cases. As well as legal questions, there would often be a need to resolve disputed factual claims, and to strike a balance between the demands of individuals, and the government objective of ensuring consistent treatment of government clients. Other perceived advantages of a tribunal system were reduced cost, informality, less reliance upon ^{legal representation, and appointment of non-lawyers to the tribunals.}

For a while, the AAT stood alone in the Commonwealth tribunal system. Some existing tribunals were abolished and their jurisdiction transferred to the AAT.⁵ Other areas of decision making that, for the first time, were to be subjected to merit review were usually allotted to the AAT. This changed during the 1980s, with the creation of the SSAT, the VRB, the RRT and the Immigration Review Tribunal (since replaced by the MRT). The creation of the newer tribunals meant that in areas of high-volume administrative decision making, the principal review body would be a specialist tribunal that could proceed in a more informal and expeditious manner than might otherwise occur in the AAT. The link with the AAT was preserved in the case of the SSAT and the VRB, from which a right of appeal lay to the AAT.

A number of themes were reflected in the creation of the new tribunals. The earlier preference for a general-jurisdiction tribunal (the AAT) was tempered by the view that specialist tribunals also had a role to play. There was also a perception, rightly or wrongly, that the AAT had itself become too formal and adversarial, and that the objectives that underlay the creation of an administrative tribunal system could not be met within the structure of a single, monolithic tribunal that was strongly imbued with traditional legal culture. Another theme had to do with the belief within some government agencies that there should be a closer relationship between the agency and the tribunal reviewing its decisions, particularly as to financial liaison and the responsibility of the agency for appointment of tribunal members.

Appraisal of tribunals

The appraisal of tribunals undertaken by the ALRC as part of the review of the federal civil justice system is one of many similar studies undertaken in the past two decades. The role of tribunals figured strongly in a major study of the legal system undertaken by the Access to Justice Advisory Committee in 1994. The Committee concluded that ‘a comprehensive, principled and accessible system of merits review’ is essential to an administrative justice system.⁵ Each of the specialist tribunals has also been the subject of a separate study, either at the time of the tribunal’s creation or subsequently.⁶ The most comprehensive study of the tribunal system was undertaken by the Administrative Review Council (ARC) in a report published in 1995, Better decisions: Review of Commonwealth merits review tribunals.⁷

The ARC study looked at most aspects of the Commonwealth tribunal system – the objectives of merit review; the structure of the tribunal system; the implementation of tribunal decisions within government; the relationship of tribunals to government; and tribunal management, procedures and membership. The tone of the report was decidedly in support of the tribunal system, the ARC concluding that tribunals provided ‘a relatively fair and accessible mechanism’, which had ‘gone a significant way towards meeting the overall objective of ensuring that all administrative decisions of government are correct and preferable’.⁸ Accompanying benefits perceived by the Council were an overall improvement in the quality of administrative decision making, more awareness within government of legal constraints, and the better provision of reasons for decision.

A core recommendation of the Better decisions report was that the existing tribunals be amalgamated into a new tribunal, the Administrative Review Tribunal (ART), with a two-tier structure. The first tier would contain a number of specialist divisions (migration, taxation, welfare rights, commercial, veterans’ payments, and general), in which the initial review of decisions would occur. These divisions would retain the culture of informality and flexibility that was a feature of the specialist tribunals that were being replaced. The second tier of the ART would be an appeal tier, that would permit an appeal from the first tier on an issue of general significance, or where there appeared to be a manifest error in the first tier decision.

The federal government announced in 1998 that it accepted the proposal to establish the ART,⁹ but implementation of the announcement has been slow in coming. It is now expected that legislation will be introduced in the parliament this year, for a projected commencement date of the new ART in 2001. It is also expected that the new structure will be a modification of the earlier ARC proposal. The government foreshadowed that there will be no appeal in migration decisions from the first to the second tier; and that the VRB will continue to operate alongside the new ART.

Overall the studies conducted by the ARC and by other bodies have served to expose the range and complexity of the options that abound in creating a tribunal system. There is, in short, no single or ideal model for a tribunal. The proposal for a two-tier ART illustrates this point. At first glance it would appear that a two-tier structure is a deluxe option, which gives primacy to the public interest in allowing multiple opportunities for testing government decision making, as against the public interest in the efficient and economical settlement of disputes. On the other hand experience suggests that a two-tier structure can be more practical, as both sides to a dispute will usually accept an informal and speedy examination of their dispute at the first tier, safe in the knowledge that an appeal to the second tier is available to correct a manifest error.

Difficult choices have to be made in respect of many other features of the tribunal system. To rely upon oral hearings before a tribunal as the preferred method of dispute resolution runs the risk of adversarialism and of placing the parties at a disadvantage according to their level of representation or their presentation skills. However, to opt instead for a system in which the tribunal primarily decides on the basis of the papers submitted by the parties can place a demanding obligation upon the tribunal to conduct inquiries into unresolved issues. An associated danger is that a self-initiated inquiry by a tribunal may have an appearance of bias, especially if the tribunal is pursuing a doubt it harbours as to the credibility of a submission made by one of the parties.¹⁰

Another important consideration in designing a tribunal system is that the range of decisions made by government agencies varies widely, as do the appropriate methods for resolving disputes about the correctness of those decisions. Procedures that are appropriate for a dispute about social security entitlements may be inappropriate in a dispute about the liability of a multinational corporation to taxation. All tribunals are directed by the statute under which they are established to give effect to values that enhance access to justice – flexibility, informality, procedural efficiency, and substantial justice.¹¹ How those values should be applied in practice will always be relative to the nature of the dispute to be resolved and the stance taken by the parties.

The ALRC study

The terms of reference for the ALRC’s study into the civil justice system gave an equal focus to the role of federal courts and tribunals. That, in itself, was notable, as a recognition that administrative tribunals were in the mainstream of the civil justice system and should not be typecast differently. The scope of the study of tribunals was later narrowed by an amendment of the terms of reference in 1997 to exclude three areas already examined by the ARC or under consideration by the government – the structure of the tribunal system, the management of tribunals, and the range of decisions reviewable by merit review tribunals. In the result, the major theme of the ALRC study became the way in which tribunals go about resolving the disputes before them.

A central theme of the ALRC’s analysis – both as to courts and tribunals – is that litigation should be seen as a continuum, stretching from the commencement of proceedings to their final disposition. The responsibility of a tribunal to settle the case before it should be as extensive, and seen as far more than an obligation to conduct a hearing and deliver a judgment. Whether the tribunal fulfils its objective of resolving the dispute in an efficient and acceptable manner, and of lessening reliance upon adversarial conflict between the parties, will depend on the character of the early stages of the proceeding as much as upon the culminating stage.

This theme is heavily reflected in the ALRC’s proposals concerning tribunals. Considerable stress is placed on the importance of effective case management as a means of achieving a settlement of a dispute either at an early stage or without the need for a contested hearing. A variety of methods for augmenting the importance of the preliminary stages were considered by the ALRC – pre-hearing conferences; case officers; conference registrars empowered to make statutory directions; referral of similar cases to the same member; empowering a tribunal to decide in the absence of delayed presentation of evidence by a party; compulsory settlement conferences in compensation matters; and adjustment of the rules on award of legal costs to encourage early resolution and settlement.

Another prominent theme in the ALRC’s report is that administrative review is frequently concerned with the clarification of uncertain or unresolved factual assertions by a party. What, for example, is the extent of a person’s illness or injury? Was a marriage genuine? Will a person suffer persecution if returned to another country? The evidence before the tribunal on those and other issues might be incomplete, or in some cases of questionable reliability. To expect the applicant in each case to prove every legal and factual assertion would be to ignore the situation of many government clients, and would doom them to an early defeat in administrative review. But to expect either the government agency to disprove each assertion, or the tribunal to undertake an independent investigation, would also be unrealistic. How, then, should the role of the tribunal be defined?

The thrust of the ALRC’s report is that increased emphasis should be given, both legislatively and in the practice of tribunals, to the obligation of tribunals to play an active role in investigating the case at hand. That is, tribunals should eschew the guiding principle of the adversarial system that it is for each party to conduct their own case and for the court or tribunal to adjudicate in that context. The alternative approach recommended by the ALRC was that the new ART should issue guidelines to members obliging them to investigate, so far as is practical, each fact raised by a party that is essential to the matter in dispute. The report drew attention, as well, to the role that multi-member panels can play in elucidating the issues, by combining the different expertise of members, and by enabling one member of the panel to play an active role in testing and questioning the evidence without the appearance of bias infecting the whole process. The report argues also for developing arrangements whereby an agency can provide greater investigative assistance to a tribunal, and for requiring parties to agree on the appointment of a single expert in a case.

The proposals just mentioned also illustrate another important theme in the ALRC’s report to do with the special nature of administrative review: it should not simply be regarded as the adjudication of a dispute between two parties, but should be viewed as the resolution of a dispute in which one of the parties is a government agency. A characteristic of government is that it is invested with an immense reservoir of legal capacity that can be used to control the fortunes and interests of members of the public and corporate entities, variously by regulation, coercion, the award of benefits, and the recognition of entitlements. There are expectations, embedded deeply in the constitutional fabric of the country, as to the special responsibility of government to act in the public interest when exercising that legal capacity and in resolving disputes that arise in the process.

There are, again, many points in the discussion that reflect that emphasis. The ALRC’s analysis commences with the observation that administrative review is not a zero-sum game, intended to identify the winner from two competing parties. The object is correct and fair administration, imbued with principles of legality, rationality, openness and participation. A raft of proposals address that theme: there should be a clarification of the role of agencies and their representatives to assist the tribunal to reach the correct or preferable decision; tribunals should control the representation and participation of parties so as to ensure no imbalance between the parties; a continuing obligation should be imposed on all parties to disclose documents relevant to the review; an active professional development and training program for tribunal members should be instituted; more consideration should be given to deciding on the papers, as a method of reducing case duration; and case management models should be adapted to suit different jurisdictions.

The fruits of the ALRC study go well beyond the final report and recommendations. The publications of the ALRC at the earlier stages of the inquiry contain a wealth of information on the development of the Commonwealth tribunal system, the constitutional and legal framework for tribunals, the management of tribunals, and the statistics on tribunal operations: see, in particular, ALRC issues paper 24, Review of the adversarial system of litigation: Federal tribunal proceedings (ALRC IP 24); chapter 12 of ALRC discussion paper 62, Review of the federal civil justice system (ALRC DP 62) and two reports of data on AAT proceedings derived from an empirical study of the AAT including an extensive case file survey.¹²

The inquiry also involved extensive consultation between the ALRC and the members and staff of administrative tribunals, and other interested parties and experts. That, in turn, prompted the tribunals to undertake separate studies into their own case management procedures and statistical holdings, the product of which is usefully reflected in the ALRC’s final report. In short, the ALRC inquiry did more than simply produce a report: it set in motion another important phase in the consolidation and refinement of the Commonwealth tribunal system

Administrative review - some pressure points

There is another group of themes touched upon by the various reports on tribunals, sometimes directly, but more often by allusion. It has to do with the tensions that are inherent in a system of merit review of government decision making by administrative tribunals.

One area of tension arises from the fact that tribunals cherish their independence yet are located within the executive branch of government. There is, with varying intensity, an expectation within government that administrative review should comport with the realities of executive government. Chief among these is that the quality of decision making will always be relative to other factors, such as the need to heed government policy, to strive for consistency, and to operate efficiently within resource and budgetary constraints. Tribunals, on the other hand, are primarily attuned to upholding the precepts of administrative justice, chief among which is the need to focus on the case at hand and to reach a correct or preferable decision.

There are shades of this tension reflected in the ALRC report, for example, in the ALRC’s support for the development of management performance standards for evaluating tribunal performance. There is mention too of the importance of executive-level consultation between agencies and tribunals.

Another area of tension, dealt with more prominently in the report, concerns the standard of quality that should be achieved in administrative review. Tribunals shoulder an amalgam of statutory and common law duties to be thorough, to observe procedural fairness, to be just, and to reach a correct or preferable decision. But the quality of all decision making, whether at the executive or review stage, is conditioned heavily by the time and resources that can be expended on a case. The quality of justice is and always has been a relative concept. Dealing with this tension is an acute challenge for Commonwealth administrative tribunals.

This tension permeates much of the discussion in the ALRC’s report, especially the discussion of case management, of the use of multi-member panels, of the duty of investigation borne by tribunals, and of whether tribunals should adopt a practice of deciding ‘on the papers’ without an oral hearing.

A third major tension that impinges on administrative review stems from a party’s right to appeal to the Federal Court for review of the decision of a tribunal.¹³ Ultimately it falls to the Court to define how administrative review should be undertaken. Throughout two decades of administrative review, there has been recurring controversy concerning the standards defined by the Federal Court, most notably concerning the precepts of adversarial justice which the Court has imposed on tribunals.¹⁴ The controversy continues to the present, the most recent episode relating to the demands imposed by the Court on tribunals as regards the comprehensiveness of the reasons for decision which a tribunal is expected to prepare.¹⁵

There is a surprising absence of any discussion of this tension by the ALRC in its final report¹⁶ – surprising in light of the fact that ‘the relationship between courts and tribunals’ was an item in the terms of reference for the inquiry. It is, accordingly, an issue that awaits formal analysis in a subsequent inquiry.

Finally, there is the human factor at work in administrative review. Decisions are made by people, both at the primary and at the review stage. There is an expectation that decisions at the review stage will be more soundly based, because of the professional experience of the review personnel, the opportunity they have for extended reflection on the decisions under review, and the more comprehensive presentation of evidence and submissions before them. Nevertheless, instances will arise in which different minds would reach a different opinion on the merits of a case. There are, in short, differing views – both over time, and in individual cases – as to what constitutes good administration. Periodically too there are complaints that some tribunal decisions, in fastening upon an insignificant error in a decision, display a ‘gotcha’ frame of mind on the part of the review body. There is at times a perception on the part of those whose decisions are being reviewed that the goalposts are located in shifting sand.

The next step

A theme emphasised by the ALRC’s report is that there is a need for flexibility so that each tribunal may adapt its practices and procedures to the nature of its jurisdiction. Doubtless that is important, but a singular emphasis on flexibility could jeopardise the adoption by government and tribunals of a set of essential principles to guide the development of administrative review in the coming years.

^{Whichever tribunal is under consideration, there are common issues to be confronted, concerning the objectives of administrative review, the professional responsibilities of tribunal members, the rights of applicants, and the duties of government agencies in relation to the tribunal. Those issues have been addressed in the various reports, but the simplicity of the principles is in danger of being obscured by the weight of the discussion and analysis that has now occurred. Perhaps it is time to} distil the wisdom of the past 25 years to provide a benchmark for the future. Possibly it is a task that could be undertaken by the Administrative Review Council, in collaboration with the tribunals and interested non-government organisations.

*John McMillan is a Reader in Law, Australian National University; and Consultant, Government Services Group, Clayton Utz.

Endnotes

1. Commonwealth Administrative Review Committee Report Parl Rep No 144 of 1971 (Kerr report). The report, and the development of the Commonwealth administrative law system, are analysed in R Creyke and J McMillan (eds) The Kerr vision of Australian administrative law - At the twenty-five year mark ANU Centre for International & Public Law Canberra 1998.

2. See Administrative Appeals Tribunal Act 1975 (Cth) s 43; and Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60 at 68.

3. Generally, see the essays collected in J McMillan (ed) The AAT - Twenty years forward Australian Institute of Administrative Law Canberra 1998.

4. The development of the tribunal system is traced in Administrative Review Council Better decisions: Review of Commonwealth merits review tribunals, (ARC report 39) AGPS Canberra 1995 Appendix B.

5. Access to Justice Advisory Committee Access to justice: an action plan AGPS Canberra 1994, para 13.9.

6. For example, ARC The structure and form of social security appeals, ARC report 21 AGPS Canberra 1984; Review of the social security review and appeals system A report to the Minister for Social Security (Guilfoyle report) Canberra August 1997; Independent Inquiry into the Repatriation System Report (Toose report) AGPS Canberra 1975; ARC Review of pension decisions under repatriation legislation, (ARC report 20) AGPS Canberra 1983; ARC Review of migration decisions (ARC report 25) AGPS Canberra 1986; and Committee for the Review of the System for Review of Migration Decisions Non-adversarial review of migration decisions: The way forward AGPS Canberra 1992.

7. ARC report 39.

8. id, para 2.24.

9. D Williams ‘Reform of merits review tribunals’ News release 3 February 1998. For discussion of developments, see R Creyke ‘The Administrative Appeals Tribunal - What’s happening?’ Current Issues Brief (8) 1999-2000, Cth Parliamentary Library.

10. For example, see Sun Zhan Qui v MIEA [1997] FCA 1488; (1997) 151 ALR 505; Meadows v MIMA [1998] FCA 1706; Selliah v MIMA [1999] FCA 615; and Asif v MIMA [1999] FCA 1487.

11. For example, Administrative Appeals Tribunal Act 1975 (Cth) s 33; Migration Act 1958 (Cth) s 353 (MRT) and 420 (RRT); Social Security Act 1991 (Cth) s 1246.

12. ALRC Part one: Empirical information about the Administrative Appeals Tribunal ALRC Sydney June 1999; ALRC Part two: Empirical information about the Administrative Appeals Tribunal ALRC Sydney June 1999.

_{13. See AAT Act s 44; and Migration Act Part 8. There is no right to appeal directly from the SSAT or the VRB to the Federal Court, although} there can be ADJR review of their proceedings in the Federal Court. Another source of legal tension impinging on tribunals is associated with the restrictions on merit review deriving from the Constitutional separation of judicial and executive power, discussed in J McMillan ‘Merit review and the AAT: A concept develops’ in McMillan, note 3 above at 35-38.

14. For example, Sullivan v Department of Transport [1978] FCA 48; (1978) 20 ALR 323 (concerning the obligation of the AAT to allow parties to conduct their own case); Australian Postal Commission v Hayes [1989] FCA 176; (1989) 23 FCR 320 (concerning reception of video evidence); and Meadows v MIMA [1998] FCA 1706 (concerning the evaluation of credibility by a tribunal). See also D Pearce ‘Judicial review of tribunal decisions - The need for restraint’ (1981) 12 F L Rev 167; B J McMahon ‘The impact of Federal Court appeals on the AAT: A view from the tribunal’ in McMillan, above note 3 at 123; and T Thawley ‘Adversarial and inquisitorial procedures in the AAT’ (1997) 4 AJAL 61.

15. An issue critically analysed in J McMillan ‘Federal Court v Minister for Immigration’ [1999] AIAdminLawF 8; (1999) 22 AIAL Forum 1. There is also a direct conflict within the Court as to the legal implications of a defective statement of reasons: cf MIMA v Yusuf [1999] FCA 1681 and Xu v MIMA [1999] FCA 1741.

16. The issue was addressed in ALRC Review of the adversarial system of litigation: Federal tribunal proceedings ALRC Sydney 1998 (ALRC IP 24).