Submission by the Commonwealth Ombudsman

Submission by the
Commonwealth Ombudsman

RESPONSE TO CONSULTATION PAPER

ADMINISTRATIVE REVIEW COUNCIL – JUDICIAL REVIEW IN AUSTRALIA

aPRIL 2011

Submission by the Commonwealth Ombudsman, Allan Asher

July 2011

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Introduction

The Commonwealth Ombudsman (the Ombudsman) safeguards the community in its dealings with Australian Government agencies by:

• achieving improvement in policy, process and procedural practice arising from administrative deficiencies or systemic failure, as identified through independent review of complaints about Australian Government administrative action
• fostering good public administration that is accountable, lawful, fair, transparent and responsive
• assisting people to resolve complaints and/or remedies to injury arising from government administrative action
• developing policies and principles for accountability

As Commonwealth Ombudsman Mr Allan Asher, is a member of the Administrative Review Council (ARC).

Background

In April 2011 the ARCpublished its consultation paper about Judicial Review in Australia. The consultation paper sets out the ARC’s previous considerations and recommendations providing an historic perspective for its current inquiry into available judicial review mechanisms.

Under the Ombudsman Act 1976 (CTH) (the Act) the Ombudsman investigates the administrative actions of Australian Government agencies and prescribed authorities A person aggrieved by a decision of a government agency may have access to internal review processes, statutory rights to have a decision reviewed by a tribunal or may apply for judicial review to the court. However, in certain circumstances the Ombudsman may be the only practical right of review for a person dissatisfied with a decision or actions of a government agency.

Broadly, the Ombudsman supports measures to make government more accountable and transparent in its decision making. In this respect, proposals that are put forward to extend the rights of the public to have decisions judicially reviewed as opposed to restricting a person’s rights would be considered favourably by this office.

The ARC poses a series of questions seeking input into the current situation with respect to judicial review mechanisms.We welcome this opportunity to respond to the ARC’s consultation Paper and hope that our submission may usefully inform the ARC’s Inquiry.

SUBMISSION

The consultation paper poses 30 questions discussing a broad range of matters relevant to judicial review in Australia. Our submission focuses on those issues directly relevant to our work in fostering good public administration that is accountable, lawful, fair, transparent and responsive. For ease of reference we have cross referenced by way of footnote our areas of interest with the questions posed in the consultation paper.

(i)Executive schemes[1]

Governments rely increasingly on executive power instead of enacting legislation to underpin the distribution of benefits and delivery of services to members of the public.Legislative based schemes undergo the checks and balances of the legislative process prior to commencement, however executive schemes by their nature endure far less, if any scrutiny by Parliament as they are established by governments in power relying on the executive power in the Constitution.[2]

The main advantages of executive schemes are that they can be quickly established and flexibly adapted to suit current and changing circumstances. However, the advantages of that flexibility and adaptability poses risks to a scheme with regard to ensuring that decision making is accountable and transparent. There may be insufficient record keeping and limited guidance materialleading to inconsistent decision making, if schemes are flexibly adapted to satisfy current needs. Also, the very nature of executive schemes means that there will be limited access to any mechanism to have decisions reviewed.

Decisions made under executive schemes are not subject to review under the Administrative Decisions (Judicial Review) Act 1977 (ADJR Act), which covers only decisions made under an enactment.[3] Nor are the merits of such decisions reviewable by generalist or specialist administrative tribunals. There are only very restricted rights of judicial review to the High Court or Federal Court, arising under the Constitution[4] and the Judiciary Act 1903.[5]The ARC has twice recommended that the ADJR Act be extended to include administrative decisions made under non-statutory schemes. However, the Ombudsman is the only non-judicial oversight body that can review decisions made under executive schemes. The Ombudsman does not have determinative powers and only has the power to make recommendations to an agencyafter reviewing a decision made under an executive scheme.

In the Ombudsman’s 1999 report about the operation of the scheme for Compensation for Detriment caused by Defective Administration (CDDA)[6] and his2009 report about Executive Schemes[7]this office raised concerns about poor decision making practices as well as the lack of effective review rights for persons dissatisfied by decisions made under executive schemes. In the Executive Schemes report we expressed the view that ‘a fundamental drawback of executive schemes is that a person who is adversely affected by an agency’s decision has no right of review under the ADJR Act.[8]

Concerns that were raised in the Executive Schemes report about poor decision making processes such as the lack of internal guidelines for investigators and decision makers, poor recordkeeping and inadequate reasons given to claimants when notified of decisions, gives strong support for our view that decisions made under an executive scheme should be subject to external scrutiny including statutory judicial review. In our view if there is capacity for a person to exercise a right of review and have a decision exposed to independent and external scrutiny the decision making processes of an agencywill improve.

TheOmbudsman’s office has investigated and published reports about many types of executive schemes including funding programs administered by government agencies. In 2007, the Ombudsman published a report about the Australian Film Commission’s assessment of film funding applications in which it was recommended that it was critical that unsuccessful applicants be provided with the reasons why their applications were not successful.[9] A précis of the report is provided below.

Providing reasons to unsuccessful film funding applicants
The complainant approached the Ombudsman dissatisfied with the response of the Australian Film Commission (AFC)to his requests for information about the determination process and guidelines for eligibility for short and feature film funding.
Our investigation identified that the AFC published a non-exhaustive list of nine criteria for applicants for funding. However, unknown to an applicant a further eight criteria were applied by the AFC decision makers when considering applications.
The Project Committee of the AFC was the funding decision maker. The only records that were maintained about its decisions consisted of recommendation forms that our investigation revealed did not address all of the criteria relied on to make the funding decisions, did not indicate reasons for not approving applications and was indicative of the extensive interviews that were undertaken by the Committee as part of the process.
We concluded that the AFC policy of not providing unsuccessful applicants with written reasons for the Committee’s decision was contrary to the principles of good administrative practice. It was recommended that the AFC have a policy that, upon request, written reasons are provided to unsuccessful applicants, that applicants are advised that written reasons are available if their application is refused, and that officers engaged in the assessment of funding applications be informed of their responsibilities in providing reasons and being accountable for those reasons.

(ii)Extending the test for judicial review[10]

The ARC raised issues in the consultation paper about establishing a test for judicial review with a view to making the focus of the test either relevant to the characteristics of the decision maker or relevant to the nature of the decision being made. The Ombudsman supports the focus of a test for judicial review that enables greater use and reliance on judicial review mechanisms compared to a test that reduces accessibility or limits jurisdiction. In this respect, if the focus of a statutory test for judicial review is focused on the characteristics of the decision maker, such as a Commonwealth officer, there is a concern that this could limit accessibility to judicial review.

In relation to the debate about whether judicial review should extend to decisions of all bodies exercising public power which necessarily includes private bodies, again the view of this office is that accessibility to judicial review should not be limited if it is restricted only to decisions of public bodies.

As noted in the consultation paper, the powers of the Ombudsman extend to Commonwealth service providers, which enables this office to investigate the actions of entities under arrangements to deliver services on behalf of the Commonwealth, such as service providers to immigration detention centres. If the Ombudsman forms the view that an agency and/or a service provider has not acted reasonably, in relation to an administrative action relevant to the matters listed in s 15 of the Act, the Ombudsman can make recommendations by way of a report to the agency. If judicial review is extended to include decisions made by private entities that are providing services for the Commonwealth or exercising a public power (and are likely to be amenable to the Ombudsman’s jurisdiction) then a more determinative remedy may be provided.

(iii)Providing reasons for administrative decision making[11]

Reasons contribute to rationality in decision making as they require decision makers to closely consider relevant criteria for making decisions, and counter arguments and information that must be taken into account in the decision making process. Reasons ensure transparency in decision making and enhance public confidence in Government. Reasons improve consistency in decision-making which promotes fairness in public administration. When similar decisions can be compared, and contrasting decisions can be distinguished, it assists a person to understand the decision that has been made. Reasons promote accountability in Government as they provide a basis on which people may seek to question and challenge decisions.

The Ombudsman supports the general principle of a right to reasons for administrative decisions.It is particularly important that reasons are provided in circumstances where a failure to do so would be a breach of natural justice, where there is a right of appeal, or where the decision in question is of a judicial nature.

The Ombudsman otherwise supports, at the very least, a general right of an interested party to request and receive reasons for administrative decisions, expanding upon the remedy that is currently provided by the ADJR Act. The Ombudsman supports the view that any general right to (or ability to request) reasons should be available once a final decision has been made, and in relation to all decisions made under statute or in reliance of the executive power.

The Ombudsman’s work focuses on resolving complaints and improving public administration. A common cause of complaints is the adequacy of reasons provided by agencies for administrative decisions. It is the Ombudsman’s experience that providing a clear explanation of the reasons for a decision can reduce a person’s concerns, even if the decision cannot be altered. Giving reasons for a decision can also be of practical assistance. For example, it may assist the affected person to decide whether to make a fresh application, or to seek review or reconsideration of the decision to approach this office.

One of the themes that continue to arise from our investigations concerns deficiencies in the decision making processes of agencies and a failure to provide adequate reasons. In 2007, we published a report about the Department of Industry, Tourism and Resources’ failure to provide adequate reasons for a decision to refuse a research and development grant application.[12] A précis of the report is outlined below.

Failure to provide reasons to an R&D applicant
The Ombudsman received a complaint about the (then) Department of Industry, Tourism and Resources’ (the Department) processing of an application for a Research and Development Start Grant. Under the scheme, grant applications were decided by the Industry Research and Development Board (the Board). A function of the Department was to provide grant applicants with written notice of the Board’s decision
The complainant had applied for an R & D grant on two occasions. On the first occasion, the Board refused the application on the ground that it was not expected to yield an appropriate return in national benefits to Australia. The Department’s decision letter, which relied on Board minutes, did not explain the specific aspects of the application which led the Board to this conclusion.
When the applicant requested feedback from the Department, he used the additional information provided to make a second application. The Board refused the second application for the same reasons as the first application, and again its minutes did not record the reasons for its conclusions. Consequently, the Department’s decision letter did not adequately explain the Board’s reason’s for refusing the application.
After the investigation, the Ombudsman decided that the Department’s decision letters did not meet the standard set out in the ARC’s Practical Guidelines for Preparing Reasons for Decisions. In the Ombudsman’s view It was incumbent on the Department to provide adequate reasons to the applicant, particularly as the applicant incurred additional costs in the preparing and submitting of the second application. The Ombudsman concluded that this amounted to defective administration by the Department and recommended that adequate reasons be provided to the applicant and that officers receive better training about providing reasons for their decisions.

Another frequent complaint to this office is that an agency has made an incorrect decision. While the Ombudsman respects the responsibility of agencies to decide the merits of a claim or application, the provision of reasons for decisions enables the Ombudsman to examine whether the agency has made a decision based on incorrect or incomplete information, ignored relevant information, or not applied the principles of natural justice.

In the Ombudsman’s experience, effective record keeping systems are more likely to assist in the provision of reasons. The design of electronic case management systems, for example, cancontribute to consistency in decision making by incorporating case flow provisions compelling decision makers to identify relevant facts and issues before recording reasons for outcomes.

The Ombudsman understands that Government agencies are turning increasingly to computer systems to automate or assist in the administration of programs. The Ombudsman supports the view that the use of automated systems for decision making should not obviate the need to provide reasons for decisions. The Ombudsman considers that automated systems that are properly constructed should have the capability to generate statements of reasons.

The Ombudsman recognises that in some circumstances it may be difficult to provide individualised reasoning in the automated decision making process. However, persons affected by administrative decisions need to understand the basis of decisions or criteria relied on in the decision being generated. These should be provided in any letters or decisions which are automatically generated.In our view, the benefits for achieving good public administration that is potentially conferred by automated decision-making processes should not be at the expense of justice or fairness for adversely affected individuals.

The Ombudsman recognises that under certain circumstances, it would be problematic to provide reasons for decisions. This includes circumstances where, for example, the provision of reasons might disclose information which could compromise confidentiality, or have adverse consequences for the protection of national security, law enforcement, public safety or commercially valuable information.

A key objective of the Ombudsman is to foster good public administration within Australian Government agencies, ensuring that the principles and practices of public administration are sensitive, responsive and adaptive to the interests of members of the public. The Ombudsman holds the view that, generallya failure to provide adequate reasons for administrative decisions should be regarded as defective administration.

(iv)Guidelines for a statement of reasons[13]

The Ombudsman recognises that agencies could consider a general statutory scheme requiring the provision of reasons to be a burden, and that the current requirements in the ADJR Act to provide a statement of reasons canplace significant demands on agency resources. However, in many situations, a less formal method of providing reasons may be an appropriate method to inform an affected party of the reason for a decision.

The Ombudsman considers that, where provided, statements of reasons should always be in writing. In most instances, letters are likely to be sufficient to notify an individual of the outcome of administrative decisions. These letters should set out in plain English, the relevant facts and material considerations which the decision maker relied on in making the final decision. Statements of reasons should also include relevant information about rights of review, including internal review and statutory review mechanisms, where applicable.

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[1] Question 5 of Consultation Paper

[2] Section 61 of the Constitution

[3] Section 3 of the ADJR act

[4] Section 75 of the Constitution

[5] Section 39B of the Judiciary Act 1903

[6] Commonwealth Ombudsman, Putting things right: Compensating for Defective Administration, August 1999, Report No.11/2009

[7] Commonwealth Ombudsman, Executive Schemes August 2009, Report No.12/2009

[8] Commonwealth Ombudsman, Executive Schemes August 2009,Report No.12/2009

[9] Commonwealth Ombudsman, Australian Film Commission, Investigation into the Assessment of Film Funding Applications, May 2007, Report No.02/2007

[10] Question 6 and 7 of the Consultation Paper

[11] Questions 15, 17& 19 of the Consultation Paper

[12] Commonwealth Ombudsman, “Department of Industry, Tourism and Resources; Failure to provide adequate reasons for a decision refusing an R & D grant application”, Report No.13/2007

[13] Question 18 of the Consultation Paper