Public Service Board of NSW v Osmond

(1986) 159 CLR 657

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(Decision by: Gibbs CJ)

Between: Public Service Board of NSW
And: Osmond

Court:

Judges:
Gibbs CJWilson J
Brennan J
Deane J
Dawson J

Subject References:
Administrative Law

Hearing date: 7 November 1985
Judgment date: 21 February 1986

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Decision by:
Gibbs CJ

1. In 1982 the respondent, Mr Osmond, who had for many years been an officer employed first under the Public Service Act 1902 (N.S.W.), as amended, and more recently under the Public Service Act 1979 (N.S.W.), as amended ("the Act"), which repealed the earlier statute, applied for appointment by way of promotion to a vacant position of Chairman, Local Lands Boards. The appropriate Department Head recommended that another applicant, Mr Galvin, should be appointed. Both the respondent and Mr Galvin were eligible for appointment to the position. The respondent appealed to the appellant, the Public Service Board of New South Wales ("the Board"), under s.116 of the Act. The appeal was heard, and the respondent was later informed orally that the Board had dismissed his appeal. The respondent requested the Board to give reasons for its decision but the Board refused to do so. The respondent then applied on summons to the Supreme Court of New South Wales for declaratory and other relief. The matter came at first instance before Hunt J. who held that the Board was not obliged to give reasons for its decision to dismiss an appeal brought pursuant to s.116 of the Act and dismissed the respondent,' summons. An appeal was brought by the respondent to the Court of Appeal, which by a majority (Kirby P. and Priestley J.A.; Glass J.A. dissenting) declared that the Board was obliged to give reasons for its decision to dismiss the respondent's appeal and ordered the Board to perform its legal duty by giving reasons for its decision. The Board now appeals by special leave to this Court.

2. The appointment for which the respondent applied was one which was required by s.61 of the Act to be made by the Governor on the recommendation of the appropriate Department Head. Sub-sections (1) and (2) of s.62 provide as follows:

"(1)

In this section, 'efficiency', in relation to an officer eligible for appointment to a vacant position, means-

(a)

the possession by that officer of qualifications, determined by the Board in respect of that position, for the discharge of the duties of that position and his aptitude for the discharge of those duties; and

(b)

the merit, diligence and good conduct of that officer.

(2)

In deciding to make a recommendation for the appointment of an officer to a vacant position, the appropriate Department Head shall, out of the group of officers eligible for appointment to the vacant position, prefer-

(a)

the officer whose efficiency is, in the opinion of the Department Head, greater than that of any other officer in that group; or

(b)

where, in the opinion of the Department Head, there is no officer in that group entitled to preference under paragraph (a), the officer who, under section 58, is senior to any other officer in that group."

Section 58 lays down the rules by which the seniority of officers is to be determined. Section 116(1) of the Act gives a right of appeal to the Board against certain decisions or determinations of the Board or a Department Head, and it is common ground that there was a right of appeal against the determination of the Department Head in the present case. Sub-sections (2) and (3) of s.116 provide as follows:

"(2)

The Board shall consider the appeal and the grounds thereof, and any further evidence in relation thereto which the Board may deem necessary for the proper determination of the appeal, and may allow or disallow the appeal.

(3)

The decision of the Board on the appeal shall be final and, if the appeal relates to a decision or determination of a Department Head, shall be deemed to be the decision or determination of the Department Head."

3. The practice followed by the Board of notifying its decisions orally was apparently a long-standing one. Regulation 57 of the regulations made in 1917 under the Public Service Act 1902 required the Board to notify the applicant and the permanent head of its decision as soon as convenient after the hearing of an appeal or reference, but did not require such notification to be in writing. Regulation 34 of the present regulations, which took effect on 22 March 1985, after the decision of the Board in the present case, now requires the Board to notify its decision in writing. However there has not been at any material time, and is not now, any statutory provision which requires the Board to give reasons for its decision on an appeal under s.116. No appeal lay from that decision, although certain other decisions of the Board may be taken on appeal to the Government and Related Employees Appeal Tribunal established under the Government and Related Employees Appeal Tribunal Act 1980 (N.S.W.).

4. The Board contends that the proceedings brought in the Supreme Court by the respondent were barred by s.65A(6) of the Act which provides inter alia:

"Without affecting the Government and Related Employees Appeal Tribunal Act, 1980, no proceedings, whether for an order in the nature of prohibition, certiorari or mandamus or for a declaration or injunction or for any other relief, shall lie in respect of-

...

(c)

the appointment or failure to appoint a person to a position in the Public Service, the entitlement or non-entitlement of a person to be so appointed or the validity or invalidity of any such appointment."

It was held by the majority in the Court of Appeal that s.65A, on its proper construction, does not apply to appeals brought under s.116. It was further held by the learned President that in any case the section would be ineffective to protect the actions of the Board from scrutiny by the Court if there had been (inter alia) a denial of natural justice. Having regard to the conclusion which I have reached on the principal issue in the case I need not consider these questions.

5. Kirby P. based his conclusion that the Board was bound to give reasons for its decision on the broad principle that the common law requires those entrusted by statute with the discretionary power to make decisions which will affect other persons to act fairly in the performance of their statutory functions. He said:

"The overriding duty of public officials who are donees of statutory powers is to act justly, fairly and in accordance with their statute. Normally, this will require, where they have a power to make discretionary decisions affecting others, an obligation to state the reasons for their decisions. That obligation will exist where, to do otherwise, would render nugatory a facility, however limited, to appeal against the decision. It will also exist where the absence of stated reasons would diminish a facility to have the decision otherwise tested by judicial review to ensure that it complies with the law and to ensure that matters have been taken into account which should have been taken into account or that matters have not been taken into account which ought not to have been taken into account."

He recognized exceptions to the obligation to state reasons, for example, where it would be otiose to do so, or where it was clear by inference or otherwise what the reasons were, or where the giving of reasons would disclose confidential information or invade privacy. However he said that the present case did not fall within any exception to the rule. Priestly J.A. expressed a more guarded view and declined to lay down any general propositions about the right to reasons where such a right is not given by statute. He held that the rules of natural justice applied to the appeal to the Board and that those rules, in the circumstances of the present case, required that reasons be given for the decision of the Board on the appeal.

6. With the greatest respect to the learned Judges in the majority in the Court of Appeal, the conclusion which they have reached is opposed to overwhelming authority. There is no general rule of the common law, or principle of natural justice, that requires reasons to be given for administrative decisions, even decisions which have been made in the exercise of a statutory discretion and which may adversely affect the interests, or defeat the legitimate or reasonable expectations, of other persons. That this is so has been recognized in the House of Lords (Sharp v. Wakefield [1891] AC 173 , at p 183; Padfield v. Minister of Agriculture, Fisheries and Food [1968] AC 997 , at pp 1032-1033, 1049, 1050-1054 and 1061-1062) and the Privy Council (Minister of National Revenue v. Wrights' Canadian Ropes, Ltd. [1947] AC 109 , at p 123); in those cases, the proposition that the common law does not require reasons to be given for administrative decisions seems to have been regarded as so clear as hardly to warrant discussion. More recently, in considered judgments, the Court of Appeal in England has held that neither the common law nor the rules of natural justice require reasons to be given for decisions of that kind: Reg. v. Gaming Board, Ex parte Benaim [1970] 2 QB 417 , at pp 430-431; Payne v. Lord Harris [1981] 1 WLR 754 , at pp 764, 765; 2 All ER 842 , at pp 850-851. It has similarly been held that domestic tribunals are not bound to give reasons for their decisions; see McInnes v. Onslow-Fane (1978) 1 WLR 1520 ; 3 All ER 211 and earlier authorities collected in Pure Spring Co. Ltd. v. Minister of National Revenue (1947) 1 DLR 501 , at pp 534-535.

7. The contrary view appears to have been expressed by Lord Denning M.R. in Breen v. Amalgamated Engineering Union [1971] 2 QB 175 , but that was a dissenting judgment and if it was intended to suggest that reasons must be given for the decision of a statutory or domestic body whenever the circumstances make it fair to do so it is inconsistent with Reg. v. Gaming Board, Ex Parte Benaim, in which the judgment of the court was written by Lord Denning M.R. himself, and with Payne v. Lord Harris, a decision to which Lord Denning M.R. was a party. In Breen v. Amalgamated Engineering Union Lord Denning M.R., at pp 190-191, was discussing together three questions which, although they may be connected by the facts of a particular case, are in principle distinct - whether the statutory or domestic body should give reasons for its decision, whether the person likely to be affected by a decision should be given an opportunity to be heard before the decision is made and whether if a decision were given without reasons the court might infer that no good reason existed. Where the rules of natural justice require that a body making a decision should give the person affected an opportunity to be heard before the decision is made, the circumstances of the case will often be such that the hearing will be a fair one only if the person affected is told the case made against him. That is quite a different thing from saying that once a decision has been fairly reached the reasons for the decision must be communicated to the party affected. As the judgments in Padfield v. Minister of Agriculture, Fisheries and Food show, the fact that no reasons are given for a decision does not mean that it cannot be questioned; indeed, if the decision maker does not give any reason for his decision, the court may be able to infer that he had no good reason. That, again, is quite a different question from that which now concerns us.

8. Reference was made to Norton Tool Co. Ltd. v. Tewson [1973] 1 WLR 45 , at p 49; 1 All ER 183 , at p 187 and Alexander Machinery Ltd. v. Crabtree (1974) ICR 120, at p 122, where Sir John Donaldson, sitting as the President of the National Industrial Relations Court, whose jurisdiction was limited to a consideration of questions of law, held that the failure of the industrial tribunal from which the appeal was brought to give reasons was an error of law. These decisions may be explained by the fact that s.12 of the Tribunals and Inquiries Act 1971 (U.K.) provided (inter alia) that where any such tribunal as is specified in Schedule 1 to that Act gives any decision it shall be the duty of the tribunal to furnish a statement, either written or oral, of the reasons for the decision if requested, on or before the giving or notification of the decision, to state the reasons. Schedule 1 to that Act included a reference to the industrial tribunals for England and Wales established under s.12 of the Industrial Training Act 1964 (U.K.) and s.100 of the Industrial Relations Act 1971 (U.K.) provided that tribunals established under s.12 of the Industrial Training Act 1964 shall (inter alia) exercise the jurisdiction conferred on industrial tribunals by or under the Industrial Relations Act 1971. The industrial tribunals whose decisions were under appeal in these two cases were exercising a jurisdiction under the Industrial Relations Act 1971. The two decisions of Sir John Donaldson were considered by the Court of Appeal in Reg. v. Immigration Appeal Tribunal, Ex parte Khan (Mahmud) (1983) QB 790, where Lord Lane C.J. said, at p 794:

"Speaking for myself, I would not go so far as to endorse the proposition set forth by Sir John Donaldson that any failure to give reasons means a denial of justice and is itself an error of law. The important matter which must be borne in mind by tribunals in the present type of circumstances is that it must be apparent from what they state by way of reasons first of all that they have considered the point which is at issue between the parties, and they should indicate the evidence upon which they have come to their conclusions."

The immigration appeal tribunal from whose decision an appeal was brought in that case was also under a statutory obligation to give reasons for its decision: see The Immigration Appeals (Procedure) Rules 1972 (U.K.), par.39 (Halsbury's Statutory Instruments (1979), vol.2, at p.40). It would be wrong to think that any of these three cases made any departure from established principle or recognized the existence of a duty at common law to give reasons for administrative decisions; the obligation to give reasons depended on statute.

9. The view that there is no general rule of the common law that reasons should be given for administrative decisions is accepted by the text writers: see Wade, Administrative Law, 5th ed. (1982), at p.486; de Smith, Judicial Review of Administrative Action, 4th ed. (1980), p.148 and Flick, Natural Justice, 2nd ed. (1984), p.130. The same view has been taken by judges of the High Court of New Zealand (Reg. v. Awatere (1982) 1 NZLR 644, at p 646; Potter v. New Zealand Milk Board (1983) NZLR 620, at p 625; Baker v. Public Service Board (1982) 2 NZLR 437, at p 444 and cf. T. Flexman Ltd. v. Franklin County Council (1979) 2 NZLR 690, at p 698) and by courts in Canada (Pure Spring Co. Ltd. v. Minister of National Revenue; Reg. v. British Columbia Turkey Marketing Board, Ex parte Rosenberg (1967) 61 DLR (2d.) 447, at p 450). In New South Wales, the Court of Appeal in Taylor v. Public Service Board (1975) 2 NSWLR 278, at p 291, rejected the contention that a decision of the Board on the hearing of a charge against an officer for a breach of discipline should be quashed because the Board failed to give reasons for its decision. Samuels J.A., with whom the other members of the court concurred, distinguished Giris Pty. Ltd. v. Federal Commissioner of Taxation (1969) 119 CLR 365 , at pp 373, 384, which had been cited in support of the contention, and added, at p 291:

"No other authority in support of the submission was offered, and R. v. Gaming Board for Great Britain; Ex parte Benaim and Khaida is against it. So the submission fails."

This Court dismissed an appeal from that decision of the Court of Appeal, but did not consider the present question: see 137 C.L.R. 208 . Priestley J.A. in the present case said that the decision was distinguishable because in Taylor v. Public Service Board the officer was entitled to appeal by way of rehearing whereas in the present case the respondent had no right to appeal from the decision of the Board. We are not now concerned to decide whether on a proper approach to precedent, the Court of Appeal ought to have followed its previous decision in Taylor v. Public Service Board (which had already been followed and applied in the unreported case of Jet 60 Minutes Cleaners Pty. Ltd. v. Brownette (8 June 1982, Court of Appeal)) but whether the law which it enunciated was correct.

10. Before passing from this discussion of the authorities it is necessary to refer very briefly to four further groups of decisions mentioned by Kirby P. in the course of his judgment. First, there are a number of Canadian decisions which, as the learned President says, have examined the entitlement to a notice of reasons: Nicholson v. Haldimand-Norfolk Regional Board of Commissioners of Police (1979) 1 SCR 311 , at p 328; Proctor v. Sarnia Board of Commissioners of Police (1980) 2 SCR 727 , at p 732; Re Campbell and Stephenson (1984) 5 DLR (4th) 676, at p 680; Re Evershed and The Queen (1984) 5 DLR (4th) 340, at p 344. Upon examination it will be seen that all of these cases decide, not that reasons must be given for a decision finally reached, but that a person or body which is considering making a decision which will adversely affect another should generally give notice to that other of the reasons why the proposed action is intended to be taken so that the person affected will have a fair opportunity to answer the case against him. I have already pointed out that that is an entirely different question from that now under consideration. Secondly, Kirby P. discussed a number of cases in Canada and New Zealand in which the courts have considered the principle enunciated by the Court of Appeal of New South Wales in Pettitt v. Dunkley (1971) 1 NSWLR 376, at p 388, that

"an obligation, concerning the giving of reasons, lies upon any court, including an intermediate court of appeal, so far as it is necessary to enable the case properly and sufficiently to be laid before the higher appellate court".

The decision in that case that the failure to give reasons was an error in law may have broken new ground, but there was nothing new in saying that judges are under an obligation to give reasons where that is necessary to enable the matter to be properly considered on appeal. It has long been the traditional practice of judges to express the reasons for their conclusions by finding the facts and expounding the law: (see Deakin v. Webb (1904) 1 CLR 585 , at p 604-605 and Jacobs v. London County Council [1950] AC 361 , at p 369) and there have been many cases (some of which are collected in De Iacovo v. Lacanale (1957) VR 553, at pp 558-559) in which it has been held that it is the duty of a judge or magistrate to state his reasons. That does not mean that a judicial officer must give his reasons in every case; it is clear, to use some of the words of Woodhouse P. in Reg. v. Awatere, at p 649, that there is no "inflexible rule of universal application" that reasons should be given for judicial decisions. Nevertheless, it is no doubt right to describe the requirement to give reasons, as Mahoney J.A. did in Housing Commission of New South Wales v. Tatmar Pastoral Co. (1983) 3 NSWLR 378, at p 386, as "an incident of the judicial process", subject to the qualification that it is a normal but not a universal incident.

That does not mean that the requirement is an incident of a process which is not judicial but administrative; there is no justification for regarding rules which govern the exercise of judicial functions as necessarily applicable to administrative functions, which are different in kind. Moreover, the principle that judges and magistrates ought to give reasons in any case in which an appeal lies from the decision provides a quite inadequate basis for the suggested further principle that a body exercising discretionary administrative powers must give reasons to enable persons affected by the exercise of the power to bring proceedings for judicial review. That suggested principle would undermine the rule, well established at common law (see R. v. Northumberland Compensation Appeal Tribunal. Ex parte Shaw [1952] 1 KB 338 , at p 352) that reasons do not form part of the record, for the purposes of certiorari, unless the tribunal chooses to incorporate them.

11. Thirdly, Kirby P. referred to three decisions of this Court given under the Income Tax Assessment Act 1936 (Cth), as amended. In Giris Pty. Ltd. v. Federal Commissioner of Taxation Barwick C.J., at p 373, and Windeyer J., at p 384, held that the Commissioner was under a duty, if requested, to inform the taxpayer of the reasons for the opinion which he had formed under s.99A of that Act. These remarks by Barwick C.J. were cited with approval by Owen J. in Federal Commissioner of Taxation v. Brian Hatch Timber Co. (Sales) Pty. Ltd. (1972) 128 CLR 28 , at p 60, and held to be applicable in cases arising under s.80A of the Income Tax Assessment Act: see also Kolotex Hosiery (Australia) Pty. Ltd. v. Federal Commissioner of Taxation (1975) 132 CLR 535 , at p 541. It is unnecessary for present purposes to consider whether the observations in those cases were intended to indicate what the Commissioner should do as a matter of fairness rather than what he was required to do as a matter of legal obligation: cf. Robinson v. Deputy Commissioner of Taxation (1984) 52 ALR 719 , at pp 724-726. If it was intended to suggest that the Commissioner was under a legal obligation, that conclusion must have depended upon the view which the Court took of the effect of the particular provisions of the Income Tax Assessment Act: cf. Taylor v. Public Service Board, at p 291. Certainly those decisions do not establish any new general principle of the common law.

12. Fourthly, Kirby P. referred to a line of Indian decisions in which it has been held to be "settled law that where an authority makes an order in exercise of a quasi- judicial function, it must record its reasons in support of the order it makes": Siemens Engineering and Manufacturing Co. of India Ltd. v. Union of India (1976) AIR 1785, at p 1789. This, it was there said, is "a basic principle of natural justice". These decisions appear to state the common law of India, although without a detailed knowledge of the course of decisions in that country it would be hazardous to assume that they have not been influenced by the provisions of the Constitution of India or by Indian statutes. A similar remark may be made regarding American authorities, such as Dunlop v. Bachowski (1975) 421 US 560 (44 Law Ed 377). When the rules of the common law of Australia are unclear or uncertain assistance may be gained from a consideration of the decisions of other jurisdictions, but when the rules are clear and settled they ought not to be disturbed because the common law of other countries may have developed differently in a different context. If the common law of India or that of the United States requires reasons to be given for administrative decisions, it is different from that of Australia.

13. Finally, the learned President adverted to considerations of policy. Most people would agree that it is desirable that bodies exercising discretionary powers of the kind now under consideration should as a general rule give reasons for their decisions. As Professor Wade said, op. cit., at p.486:

"The giving of reasons is required by the ordinary man's sense of justice and is also a healthy discipline for all who exercise power over others."

However, considerations may be advanced in opposition to the suggestion that there should be a general rule requiring the giving of reasons for administrative decisions. These include the possibility that an additional burden will be cast on administrative officers and that increased cost and delay may be entailed and the further possibility that a reform of this kind might in some cases induce a lack of candour on the part of the administrative officers concerned. Kirby P. recognized that any general principle requiring the giving of reasons would need to be subject to exceptions and said that in any case the exercise by the courts of their discretion to refuse relief would prevent any such principle from having an oppressive operation. However, even if it be agreed that a change such as he suggests would be beneficial, it is a change which the courts ought not to make, because it involves a departure from a settled rule on grounds of policy which should be decided by the legislature and not by the courts. Legislatures elsewhere than in New South Wales have introduced statutory reforms of administrative law and have imposed an express requirement that reasons shall, if requested, be given for certain administrative decisions: see s.13 of the Administrative Decisions (Judicial Review) Act 1977 (Cth), s.8 of the Administrative Law Act 1978 (Vict.) and s.12 of the Tribunals and Inquiries Act 1971 (U.K.). Where these reforms have been introduced they have usually been preceded by an extensive review of the policy considerations involved, and the requirement to give reasons has often been limited so that it does not apply to decisions to which its application is thought, as a matter of policy, to be inappropriate. Section 13 of the Administrative Decisions (Judicial Review) Act is an example of a carefully qualified provision. New South Wales has not introduced similar legislation. Kirby P., in his judgment, said that:

"where a number of relevant Parliaments have enacted laws elaborating modern conceptions of administrative justice and fairness, it is appropriate for the judiciary in development of the common law in those fields left to it, to take reflection from the legislative changes and to proceed upon a parallel course."

He found support in remarks made by Lord Diplock in Warnink v. Townend & Sons (Hull) Ltd. [1979] AC 731 , at p 743:

"Where over a period of years there can be discerned a steady trend in legislation which reflects the view of successive Parliaments as to what the public interest demands in a particular field of law, development of the common law in that part of the same field which has been left to it ought to proceed upon a parallel rather than a diverging course."

With the greatest respect, Lord Diplock did not intend to say that because there has been a trend of legislation in one jurisdiction, the courts of a different and independent jurisdiction should develop the common law of that jurisdiction on a parallel course. Such a proposition would be as impossible to sustain as it would be to put into practice when different states had taken different legislative courses. The common law of New South Wales cannot be judicially modified to make it accord with the statute law of, say, Victoria. The present case in my opinion is one to which the words of Lord Simon of Glaisdale in Miliangos v. Frank (Textiles) Ltd. [1976] AC 443 , at p 480 can aptly be applied:

"I do not think that this is a 'law reform' which should or can properly be imposed by judges; it is on the contrary essentially a decision which demands a far wider range of review than is available to courts following our traditional and valuable adversary system - the sort of review compassed by an interdepartmental committee."

I respectfully agree too with the comment made by Glass J.A. in the present case:

"The proposal (i.e. the submission by counsel for Mr Osmond) would subject New South Wales administrative tribunals to control by the courts in a blunt undiscriminating way as compared with the finely tuned system operating federally. I believe that judicial innovation under these circumstances is not justified."

14. It remains to consider whether, notwithstanding that there is no general obligation to give reasons for an administrative decision, the circumstances make this a special case in which natural justice required reasons to be given. The rules of natural justice are designed to ensure fairness in the making of a decision and it is difficult to see how the fairness of an administrative decision can be affected by what is done after the decision has been made. However, assuming that in special circumstances natural justice may require reasons to be given, the present is not such a case. The issues before the Board were simple and well defined: which of the two officers had the greater efficiency, and if neither of them had greater efficiency than the other, which was the senior? The respondent had the means of knowing what issues were canvassed on the appeal, and could readily infer whether the Board's conclusion rested on par.(a) or on par.(b) of s.62(2) of the Act. Neither the provisions of the Act nor the circumstances of the case justified the conclusion that the rules of natural justice required the Board to communicate the reasons for its decision.

15. I have dealt with this question at what may be regarded as tedious length in deference to the judgments of the majority of the Court of Appeal. In truth, however, I regard the law as clear. There was no rule of common law, and no principle of natural justice, requiring the Board to give reasons for its decision, however desirable it might be thought that it should have done so.

16. I would allow the appeal. Conformably to the condition imposed when special leave was granted, the Board should pay the costs of the appeal.