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09 Jul 2020

Administrative law updater: Help! Do I owe a duty of procedural fairness?

By John Carroll, Neil Cuthbert and Richard Donaldson

Most decisions that affect rights, interests and legitimate expectations will require procedural fairness. But how do you work out if procedural fairness is excluded?

What is the problem decision-makers face?

We have previously written about the fundamental importance of procedural fairness in administrative decision-making following Kioa v West (1985) 159 CLR 550. Decision-makers are aware that they should act on the basis that all decisions adverse to a person's rights, interests or legitimate expectations attract procedural fairness obligations unless there is a clear statutory intention to the contrary. But how do you work out if a statute has excluded these obligations?

How did Caligiuri approach this issue?

The Victorian Court of Appeal tackled this question recently in Melbourne Water Corporation v Caligiuri [2020] VSCA 16, finding that there is no right to be heard prior to the publication of a notice of acquisition under section 19 of the Land Acquisition and Compensation Act 1986 (Vic).

The Court of Appeal demonstrated the importance of examining a statute closely to identify the construction that would best give effect to its overarching purpose. In doing so, the Court of Appeal sought to avoid an interpretation that would lead to the undesirable outcome of creating possible delays and uncertainty in the process of compulsory acquisition of land under the Land Acquisition Act.

The facts and decision in Caligiuri

The case before the Court of Appeal related to the compulsory acquisition, by two water authorities, of some land in Beverage, Victoria that was subject to a contract for sale. The Land Acquisition Act contained three procedural steps culminating in a compulsory acquisition:

  • the reservation of the land under a planning instrument;
  • the service on interested persons of a notice of intention to acquire the land; and
  • the publication of the notice of acquisition to effect the transfer of the land.

The purchaser sought to challenge the validity of the compulsory acquisition of the land on the basis that they had not been afforded procedural fairness at the relevant stages prior to the publication of the notice of acquisition. The Land Acquisition Act contained an explicit procedural fairness requirement in relation to the first step, being the reservation of the land under a planning instrument. However, the reservation of the land could be obviated upon recommendation by the Attorney-General and certification by the Governor in Council that reservation was "unnecessary, undesirable or contrary to the public interest". This had occurred in Caligiuri.

The trial judge agreed that the purchaser was owed a duty of procedural fairness, but that it was the exercise of the power to acquire the interest in the land by publishing a notice of acquisition that attracted this obligation, rather than the anterior steps (recommendation, certification or service of the notice of intention to acquire). The trial judge thought that this obligation required the water authorities to give the purchaser the right to be heard before they issued the notice of acquisition.

The Court of Appeal allowed the authorities' appeal. The Court concluded that the statutory framework disclosed a clear legislative intention to exclude a right to be heard prior to the publication of a notice of acquisition.

In reaching its conclusion, the Court of Appeal considered a number of indicia drawn from the structure of the Land Acquisition Act, including:

  • the Land Acquisition Act included a number of procedural steps, including the reservation of the land under a planning instrument, the service on interested persons of a notice of intention to acquire the land, and the publication of the notice of acquisition to effect the transfer of the land;
  • the Court considered that those procedural steps formed part of an integrated process culminating in the land vesting in the relevant authority;
  • there was an explicit procedural fairness requirement at the first step in that process, that is, as a function of the requirement to reserve the land for a public purpose. The reservation process provided the landowner with a comprehensive opportunity to contest the decision to acquire the land;
  • in these circumstances, the Court accepted that it was unlikely that Parliament intended that there be "multiple rights to be heard" in the acquisition process, particularly where the rights arising from the need to reserve land under the relevant planning scheme were so comprehensive (even although reservation of the land could be removed by certification, as happened here);
  • the Court determined that, of the available alternatives, this was the preferable construction because imposing a further right to be heard prior to issuing a notice of acquisition would lead to an undesirable outcome, resulting in delays affecting all interested persons who received notices of acquisition but who would be kept out of the compensation to which they may be entitled during the procedural fairness period; and
  • the timing of the notice of acquisition was also significant. The Land Acquisition Act contemplated that service of the notice of acquisition on interested persons would take place after its publication, that is, after the acquisition occurred. It would be an odd result to afford procedural fairness after the required decision had already been taken.

These matters led the Court of Appeal to find that that the legislative framework operated as a single process that excluded the implication of additional procedural fairness obligations aside from those expressly provided for by the legislature.

After Caligiuri, here's what you need to remember

While the outcome of this case is specific to the Land Acquisition Act, the decision in Caligiuri is a clear example of the process that decision-makers should go through to work out whether a right to procedural fairness has been excluded by a particular statute.

Notably, a comprehensive right to be heard at the initial stage of a statutory process (even if it may be removed by certification) may indicate that multiple rights to be heard were not intended to be implied into later stages of the process. Of course, this will depend on the structure of the statutory scheme in question. There are examples of multi-stage decision-making schemes, such as the Professional Services Review under the Health Insurance Act 1973, that are rich with explicit procedural fairness requirements at each stage: see National Home Doctor Service Pty Ltd v Director of Professional Services Review [2020] FCA 386.

Decision-makers should therefore assume that all decisions attract procedural fairness obligations unless there is a clear and contrary statutory intention of the kind present in Caligiuri.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.