Public Law Essentials: Procedural fairness

Procedural fairness in administrative decision-making relates to the fairness of the procedure by which a decision is made. This concept is also referred to as natural justice, and generally requires that a decision be made with appropriate fairness and detachment.

The two primary rules of procedural fairness are the “hearing rule” and the “bias rule”.

This Public Law Essentials discusses the principles and practicalities of procedural fairness:

• the origins of the the procedural fairness obligation
• the content of procedural fairness obligation
• practical recommendations for decision-makers to ensure compliance with procedural fairness.

Where does procedural fairness come from?

Procedural fairness has evolved from its origins as a duty for public authorities to act fairly and with common sense in the exercise of public power.

Procedural fairness is also viewed as being critical to underpin robust decision-making, by encouraging decision-makers to adopt processes that require them to hear all sides of the story, thoroughly consider the evidence before them, and to be impartial and objective in reaching their decision.

The requirement to afford natural justice was first expanded to include Government decision-makers in Cooper v Board of Works for the Wandsworth District (1863) 143 ER 414, when the Court of Common Pleas held that the requirement to afford natural justice applied to the Wandsworth Board of Works. In Cooper, the Board made a decision to demolish Mr Cooper’s house, but did not give prior notice to Mr Cooper before the demolition occurred. The Court held that the Board’s decision was invalid because the Board had not complied with natural justice when making its decision.

Chief Justice Erle (with Justices Willes and Byles agreeing) stated that the power of the Board to authorise the demolition of Mr Cooper’s house:

"is a power carrying with it enormous consequences… and it seems to me to be a power which may be exercised most perniciously, and that the limitation which we are going to put upon it is one which ought, according to the decided cases to be put upon it, and one which is required by a due consideration for the public interest. I think the board ought to have given notice to the plaintiff, and to have allowed him to be heard…

I cannot conceive any harm that could happen to the district board from hearing the party before they subjected him to a loss so serious as the demolition of his house; but I can a great many advantages which might arise in the way of public order, in the way of doing substantial justice, and in the way of fulfilling the purposes of the statute, by the restriction we put upon them, that they should hear the party before they inflict upon him such a heavy loss."

In Australia, the duty to afford natural justice or procedural fairness was previously implied from a duty to act fairly when exercising a power affecting the rights, interests and legitimate expectations of a person. The concept of procedural fairness was first recognised as a common law duty in Kioa v West (1985) 159 CLR 550. Justice Mason (as his Honour then was) stated:

"The law has now developed to a point where it may be accepted that there is a common law duty to act fairly, in the sense of according procedural fairness, in the making of administrative decisions which affect rights, interests and legitimate expectations, subject only to the clear manifestation of a contrary statutory intention."

When does the duty to afford procedural fairness arise?

It is well established that in the absence of clear, contrary legislative intention, administrative decision-makers should assume that they owe a duty of procedural fairness to a person whose interests, rights or liberties will be affected by the decision (see Minister for Immigration and Border Protection v WZARH (2015) 256 CLR 326, per Kiefel, Bell and Keane JJ). Legislative intention can also exclude or limit procedural fairness obligations, or prescribe how procedural fairness is to be undertaken.

When interpreting a statute, courts will presume that Parliament did not intend to exclude procedural fairness obligations, unless an intention to do so is made unambiguously clear.

Whether the duty to afford procedural fairness has been limited or excluded by legislation is a matter of statutory construction. The key question is whether the legislation is drafted to limit or exclude the decision-maker’s obligation to afford procedural fairness. An intention to exclude procedural fairness must be clearly expressed in the legislation, and courts will generally proceed on the basis that legislation should be construed in a way that implies a duty of procedural fairness.

Examples of procedural fairness being expressly limited or excluded by statute include:

• the Minister’s discretionary power to refuse or cancel a person’s visa under section 501(3) of the Migration Act 1958 (Cth). Under section 501(3), the Minister may decide to refuse or cancel a person’s visa if the Minister reasonably suspects that the person does not meet the character test and is satisfied that the decision is in the national interest. The heading to section 501(3) includes the text “natural justice does not apply”, indicating clear legislative intent to exclude the Minister’s obligation to afford procedural fairness when exercising the power under that provision.
• in Leghaei v Director-General of Security [2005] FCA 1576, the Federal Court considered the duty to afford procedural fairness in the making of an “adverse security assessment” by ASIO. The primary judge found that, upon considering the balance to be struck between the public interest in national security and a duty to disclose critical issues on which an administrative decision is likely to turn, the content of procedural fairness was “reduced, in practical terms, to nothingness”.

What is required to comply with the fair hearing rule?

The hearing rule requires that an affected person have the opportunity to be heard on the critical relevant factors on which a decision will turn, and to understand and respond to information that is adverse to the affected person’s interests. Practically, the fair hearing rule will often require that a person be provided with an opportunity to review and make submissions on information to be considered by the decision-maker that may adversely affect the person’s interests in relation to the decision.

In determining the content of the procedural fairness obligation in a particular case, decision- makers and courts will look to the statutory context of the decision-maker’s power to make the decision. Factors such as the nature of the decision being made, purpose of the legislative scheme, and any statutory procedural fairness processes prescribed by the legislation will affect the precise content of the procedural fairness obligation.

Depending on the circumstances, the hearing rule may require that a decision-maker:

• provide an affected person with prior notice that a decision that may adversely affect their interests will be made (eg. Ekinci v Civil Aviation Safety Authority (2014) 227 FCR 459);
• disclose any new evidence to an affected person to enable them the opportunity to rebut or comment on the new material presented (eg. Comcare v Wuth (2018) 260 FCR 89); and
• bring an affected person’s attention to the critical issues upon which an administrative decision is likely to turn (see Minister for Immigration and Multicultural Affairs; ex parte Lam (2003) 214 CLR 1 per McHugh and Gummow JJ).

However, the hearing rule does not require the decision-maker to disclose all information submitted or enable the affected person to comment on all the relevant material, as this would make the decision- making process inevitably more time-consuming. Further, decision-makers can achieve compliance with the hearing rule by providing summaries of confidential documents.

For example:

• in Annetts v McCann (1990) 170 CLR 596, the High Court held that the parents of a child who had died had a common law right to be heard in opposition of a finding adverse to their interests. Their right to make submissions was limited to the precise nature of their identified interest. In this case, the parents’ interest was to protect their own and their son’s reputation. The parents therefore had a right to be heard on that issue, even though they did not have an entitlement to make submissions on the general subject matter of the inquest.
• in Stowers v Minister for Immigration and Border Protection (2018) 265 FCR 177, the Full Court discerned unfairness in the Assistant Minister not putting Mr Stowers specifically on notice as to which particular parts of material before the Assistant Minister might be relied on, or any indication as to how that material could be characterised in considering whether to accept or reject Mr Stowers’ representations about the cancellation of his visa.
• in Fletcher v Federal Commissioner of Taxation (1988) 19 FCR 442, the Federal Court found that there was a denial of procedural fairness as a consequence of the AAT’s failure to raise a matter that it later relied on to determine the decision. This failure meant that the Applicant had no opportunity to consider the question and put submissions to the Tribunal as to whether such findings should be made.
• in Wilson Transformer Company Pty Ltd v Anti- Dumping Review Panel (2022) 290 FCR 1, the Full Court held that it was sufficient for the decision-maker to disclose the substance of confidential information to the other parties for the purposes of procedural fairness, without disclosing the actual document itself.

Sometimes, relevant legislation will include statutory requirements for procedural fairness, outlining procedures for the decision-maker to follow when making a decision to ensure that all parties whose interests may be affected by the decision have an opportunity to respond to and comment on the decision. For example, the Migration Act 1958 (Cth) prescribes the procedure by which the Minister (or their delegate) must notify an individual of the potential cancellation of their visa, and provide an opportunity for the individual to provide a response to that proposed cancellation.

Another example is the Environment Protection and Biodiversity Conservation Act 1999 (Cth), which contains a prescribed statutory procedural fairness process that the Minister must follow to invite and receive comments from specific stakeholders before making a decision to approve or not approve a controlled action.

However, an affected person does not need to be afforded infinite opportunities to respond. If a person has been made aware of the potential for a relevant decision to be made but has not sought to provide comment, the decision-maker does not have to seek out and warn the person that such a decision be made, even if their interests may be affected by the decision.

A notice must provide sufficient information for an affected person to make effective use of the right to make representations in opposition of the proposed exercise of power. The notice should:

• outline the nature of the decision and its possible consequences;
• provide details of when, where, and how a submission to the decision-maker can be made;
• state the time allowed for a response to be made; and
• disclose the critical issues to be addressed, and the information that is credible, relevant, and significant to the issues.

What is required to comply with the bias rule?

The test for bias is whether the hypothetical, fair- minded observer would view the decision-maker as impartial. The rationale behind the bias rule was explained by Chief Justice French, writing extra- judicially, who stated that an appearance of bias is “likely to detract from the legitimacy of a decision and so undermine confidence in the administration of the relevant power” (Robert French, “Administrative Law in Australia: Themes and Values Revisited” in Matthew Groves (ed), Modern Administrative Law in Australia: Concepts and Context (Melbourne: Cambridge University Press, 2014) 25, 47). The rule against bias applies to administrative decision-makers as well as courts, though it is accepted that the nature of the decision-maker and the decision being made will be relevant to a determination as to whether the decision is affected by bias.

The clearest form of actual bias in a decision-making process is if the decision-maker has an interest that will be affected by the outcome of their decision. In most cases, apparent bias is enough to disqualify a decision-maker. An apprehension of bias can arise from what the decision-maker says or does. For example:

• If the decision-maker ignores evidence or chooses to dismiss it for insufficient reasons, this may indicate hostility to one side or that the decision-maker has formed a prejudgment that is not open to persuasion.
• If a decision-maker makes public comments or statements about the decision prior to the decision being made, this might lead to a successful challenge on the basis of prejudgment, because the decision-maker has indicated an inclination to a particular conclusion (see Asset Energy Pty Ltd v Commonwealth Minister for Resources [2023] FCA 86).
• If a decision-maker has a prior relationship or involvement that might lead to a reasonable apprehension that the decision-maker would not bring an impartial mind to the decision-making process (see Isbester v Knox City Council (2015) 255 CLR 135).

What happens if there is a breach of procedural fairness?

A breach of procedural fairness is a legal error and may affect the validity of a decision where it has deprived the affected person of a successful outcome.

An affected person may challenge a decision on the basis that the decision-maker failed to afford procedural fairness by seeking judicial review of the decision – either under the relevant judicial review legislation (for example, section 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth)) – or, in the case of a breach of natural justice by a Commonwealth official affecting the proper exercise of the official’s statutory power, the grant of a constitutional remedy under section 75(v) of the Constitution. The burden of establishing a breach of procedural fairness lies with the applicant seeking judicial review.

An affected person who is unhappy with the outcome of a decision that they believe has been affected by a failure to afford procedural fairness may also seek a different outcome by commencing merits review. A decision by a Tribunal on merits review can correct a breach of procedural fairness in the original decision.

If the Court finds that there was a breach of procedural fairness, it may find that the decision is legally invalid. The Court may then order that the decision be set aside, with the decision-maker to remake the decision in accordance with the law.