Case: Freeman v Secretary, Department of Social Security (1988) 19 FCR 342
Outcome: applied
Authority submitted that there is a clear line of authority that in cancellation cases, such as the present, a review Tribunal is required to have regard to the circumstances at the time of the decision and not those that followed it: Freeman v Secretary, Department of Social Security (1988) 19 FCR 342; Hospital Benefit Fund of WA v Minister for Health, Housing and Community Services (1992) 39 FCR 225; Nong v Minister for Immigration and Multicultural Affairs [2000] FCA 1575 ; (2000) 106 FCR 257; Minister for Immigration and Multicultural Affairs v Sharma [1999] FCA 31 ; (1999) 90 FCR 513; and Aged Care Standards and Accreditation Agency Ltd v Kenna Investments Pty Ltd [2004] FCA 843 ; (2004) 138 FCR 428. The respondent submitted that the 'clear line of authority' referred to by the Authority, beginning with the decision of Davies J in Freeman , in support of the submission that the correct point in time is the time of the decision under review, is not directly relevant to the present question and can be distinguished because those authorities relate to different legislative provisions. The respondent analysed the reasoning of the Court in Freeman . That case, it was said, is commonly cited as authority for the proposition that the relevant point in time at which the Tribunal is to determine a person's entitlement will differ, depending upon whether the decision under review was a decision refusing to grant an entitlement or whether it was one cancelling an existing entitlement. Where the decision is to refuse an entitlement, the point in time is the date of the Tribunal's decision, and where the decision is to cancel an entitlement, the Tribunal is limited to considering the state of affairs as it existed on the date of the decision under review. The respondent submitted that critical to the Court's reasoning in Freeman was that in that case the Tribunal had affirmed the decision under review to cancel the applicant's pension. This meant that 'no further matter [remained] for the Tribunal's consideration' (at 345) and any entitlement of the applicant for a further pension would only 'revive' when a fresh application for a pension had been made (at 345, 346). The respondent submitted that Freeman should not be taken as authority for any general principle that administrative decisions may be categorized either as 'cancellation' decisions or 'refusal' decisions, to which vastly different regimes of review are applicable. If it does, then it was respectfully submitted that it was wrong and should not be followed. It was submitted that any attempt to apply such a universal categorisation to 'cancellations' and 'refusals' merely distracts from the primary question, which is to identify the issues required under the particular legislation. The question here, according to the respondent, should therefore focus on whether s 303(1)(f) itself 'fixes a point in time'. The respondent submitted that there is nothing in s 303(1)(f) of the Act to suggest that the point in time for the determination of the fitness and integrity issue is to be limited to the date of the Authority's decision, and that the Tribunal is not entitled to take account of developments which have occurred up until the date of the Tribunal's decision. The respondent said: 'Indeed, a consideration of the provision suggests that the point in time should be the situation as it has developed by the time of the Tribunal's decision.' The respondent pointed out that the present case was, of course, factually different from Freeman, in that here the Tribunal set aside the Authority's decision to cancel the respondent's registration and substituted it with a decision to caution the respondent subject to conditions, whereas in Freeman the Tribunal had affirmed the decision to cancel the applicant's pension, so that 'no further matter [remained] for the Tribunal's consideration' . In Freeman, therefore, any entitlement of the applicant for a further pension would 'revive' only when a fresh application for a pension had been made. Here the decision had been set aside ab initio , so that the parties were placed in the position that they would have occupied had the decision never been made, so that the respondent had the benefit of the extant decision granting him registration: See Secretary, Department of Social Security v O'Connell (1992) 38 FCR 540, 549 550. The Tribunal therefore remained a part of the 'continuum' of the administrative decision-making process, and there was no impediment to it determining what were the appropriate orders to be made, as at the date of the Tribunal's decision. The respondent submitted that the only specific complaint made by the Authority as to 'irrelevant' evidence taken into account by the Tribunal, related to the respondent's 'current practice' and his 'current success rate'. When considered in the context of all the evidence before the Tribunal, both of these pieces of evidence were relevant either because they related to events that occurred before the cancellation decision, or they were after-acquired evidence. The respondent submitted that, on any view of s 303(1)(f) , the Tribunal was therefore entitled to take account of the evidence referred to as the respondent's 'current practice' and his 'current success rate' in relation to the cancellation decision. In addition, the respondent submitted that whether or not the Tribunal was entitled to take the after-acquired evidence into account in relation to the cancellation decision, it was undoubtedly required to take it into account in relation to the suspension decision and the two refusal decisions. On the Authority's case and the authority of Freeman , the point in time for those decisions would have been the date of the Tribunal's decision. Given that the Tribunal gave a joint decision on all four decisions under review, it was not possible for the Authority to establish with any degree of probability that the evidence of the respondent's 'current practice' and his 'current success rate' was necessarily taken into account in relation to the cancellation decision. The respondent noted that at no time during the Tribunal's hearing did the Authority object to the reception of the evidence relating to respondent's 'current practice' and his 'current success rate'. It was put that this may be relevant to the issue of costs should the Authority succeed in this appeal. The Authority submitted that in Freeman the issue for determination by the Tribunal was whether the decision to cancel on the date of the original cancellation was the correct or preferable decision, not whether the applicant was entitled to a benefit at the time of the Tribunal's decision. The Authority submitted that that is the same in this case. The question for the Tribunal was whether its cancellation decision in July 2003 was the correct or preferable decision, not whether the respondent might be eligible to be registered in September 2005. In Freeman , Davies J indicated that it is important to have regard to the nature of the decision. The distinction his Honour saw as critical was between: a decision to refuse to grant a pension or benefit where there was an ongoing entitlement, which can be seen as part of a continuum; and a decision to cancel a pension made on a particular date. A decision of this kind has no ongoing nature, once made it is spent. Davies J noted that, under the Social Security Act 1947 (Cth), once a benefit is cancelled it may only be paid again following a fresh application. That is also the position in the present legislative context. Where a migration agent has had his registration cancelled, he would need to apply for registration afresh and cannot make such an application for five years (s 292). In this sense, the present case is even stronger than that considered by Davies J in Freeman . Davies J noted that a further distinction between entitlement decisions and cancellation decisions is that in the former case but not the latter the Tribunal can decide entitlement throughout the relevant continuum up to its decision. This is not possible in cancellation cases because if the cancellation decision was correct or preferable, there is no further step. That is also the position here (and probably in all cancellation cases). The Authority noted that the respondent had sought to distinguish this case on the basis that the legislation is different. However, the Authority argued, no material difference was identified. The only difference is the one noted above and it tends to show that this case is even more clear cut than that in Freeman . It was also observed that the power to cancel pensions in the Social Security Act was not restricted to being exercised at some point in time. This, it was said, was not part of Davies J's analysis, contrary to the respondent's submissions. The Authority noted that the Full Court in Hospital Benefit Fund of WA v Minister for Health, Housing and Community Affairs approved the analysis of Davies J in Freeman (at 234.5). In that case, the legislation tied the primary decision-maker to a small period of time after certain rule changes were notified. The Court found that the Tribunal faced the same question as the primary decision-maker, which required it to look at the time the original decision should have been made. The legislation in that case is different from that in the present. However, the Authority submitted, the core principle is that the Tribunal must answer the same question as was answered by the primary decision-maker. For the reasons given by Davies J in Freeman , in a cancellation case, that involves whether the decision to cancel on the actual date of the cancellation was the correct or preferable decision. The Authority observed that this analysis was also endorsed and applied by Weinberg J in Sharma at 524 526 [61] [63] and, in the context of review of a decision to cancel a visa under the Act, by Katz J in Nong (albeit through reference to Weinberg J in Sharma , who applied Freeman ) at [29] [31]: '[29] As I understood the submission, at least in the form in which it appeared in Mr Nong's written outline of submissions filed in advance of the hearing before me, it was that the MRT had erred in not concluding that, on 6 January 2000, the date of its decision, Mr Nong was in compliance with condition 8202. [30] That submission may be dealt with quite briefly. [31] The MRT was not concerned, in making its decision, with the issue whether Mr Nong was or was not in compliance with condition 8202 on 6 January 2000, the date of its own decision. Rather, it was concerned with the issue whether Mr Nong had or had not been in compliance with condition 8202 on 30 March 1999, the date of the delegate's decision: see, for example, the discussion of the nature of the review function of the MRT's predecessor in Minister for Immigration and Multicultural Affairs v Sharma [1999] FCA 31 ; (1999) 90 FCR 513 at 524-526 [61] - [63] (Weinberg J). (Emphasis added.)' The Authority observed that in Aged Care Standards and Accreditation Agency , Branson J considered that only limited assistance was gained from categorising decisions as cancellation decisions or entitlements decisions (at [26]). Her Honour considered that it was necessary to consider the nature of the decision involved. In that case, the Tribunal was to review a decision to vary the period of accreditation for an aged care provider (this decision did not fit readily into the cancellation entitlement dichotomy). Her Honour considered that, in the legislation before her, the fact that a decision could be made only after an audit report was obtained and only within 14 days of receipt of that report was important. However, her Honour also applied the reasoning of Davies J in Freeman in concluding that the decision was not part of an administrative continuum. Her Honour also observed at [30] [31]: [30] ... In my view, the Tribunal would be undertaking a quite different process from that which the Principles required the accreditation body to undertake were it to review a decision made under s 3.24 by reference to factual material remote in time from the review audit report. In particular, I consider that on review of a decision made under s 3.24 it is not open to the approved provider to seek to undermine the significance of the review audit report, and the recommendations included in it, by calling evidence of improvements in its practice and procedure implemented after the date of the decision and in response to the review audit report and recommendations. [31] I conclude that the Tribunal would not be addressing the same questions as the applicant was required to address if it were to determine whether, at the time of the Tribunal's decision, the decision of the applicant under s 3.24 of the Principles can be seen to be the correct or preferable decision. This is not to say that the Tribunal cannot receive evidence of facts that occurred after the date of the decision under review. However, to be relevant to the Tribunal's decision, that evidence must, in my view, bear on the merits of the decision as at the time that it was required to be made.' In summary, the Authority submitted, by way of reply, that: (1) Applying the principles stated in Freeman , the review of a decision to cancel a migration agent's registration on a particular date involves a determination of whether that decision was the correct or preferable decision at that date. (2) Where a decision is made to cancel, say because an agent does not have the necessary ambit of knowledge of migration procedures at the time of the decision (as shown by a track record of failings in this regard), a review applicant cannot show that that was not the correct or preferable decision by acquiring the relevant knowledge thereafter. If the person has become eligible, he or she may then be able to apply for registration afresh. (3) Similarly, where a decision is made to cancel because of massive and serious violations of the Code of Conduct, it would be absurd if a review applicant could seek to rely upon compliance with the Code after the date of the decision. Compliance achieved by enforcement proceedings is not what the legislation is designed to achieve. Agents are required to comply with the legislation when registered. (4) For these reasons and the reasons outlined above, this Court should follow Freeman and the cases that have applied it and conclude that the question before the Tribunal, in relation to the cancellation decision, was whether the decision to cancel on 14 July 2003 was the correct or preferable decision having regard to the circumstances pertaining up to that time. (5) The respondent argued that it would be against the policy of the Act if the Tribunal were not permitted to have regard to events following the cancellation decision. He suggests there is no reason why the Tribunal should not find that it has become satisfied of s 303(1)(e) if an agent becomes bankrupt during the review processes. The Authority says that this reasoning is flawed and not necessary. A later bankruptcy does not indicate that any earlier decision to cancel because of lack of integrity was the correct or preferable decision. It is irrelevant to that question (or without more would be). The Authority could, of course, cancel the registration afresh on the basis of the bankruptcy when it becomes aware that that has happened. A person whose registration was wrongfully cancelled should not have it affirmed simply because a reason to cancel it subsequently arises. There is also a fresh power to cancel when a proper reason arises. Likewise, a person whose cancellation was correct or preferable should not be able to avoid that proper consequence because of actions taken after the decision to rectify perceived deficiencies. (6) Contrary to the respondent's submission, no part of the Authority's argument requires the notion of fitness or character to be narrowly construed. However, success rates in late 2003 and 2004 simply have no bearing on the respondent's fitness before that time; nor does any absence of subsequent breaches of the Code. (7) It may be accepted that evidence of 'character' after the date of the decision could be relevant because 'character' has been held to involve the enduring moral qualities of a person. So, for example, evidence that a person has lied or not been frank in their evidence after the date of the decision would be relevant not directly as breaches of a rule requiring honesty but as an indicia of a person's enduring moral qualities. An inference would be available that an adult prepared to lie to or mislead the Tribunal (or just not be frank) at its hearing had the same moral qualities at the time of the decision. However, this reasoning does not mean that evidence relating to every criteria post the cancellation decision is relevant. For example, evidence that an agent has knowledge in 2004 simply does not show that he had that knowledge in 2003. (8) The respondent's reliance upon Peko-Wallsend is misconceived. The Authority does not say that the Tribunal may not have regard to the most up to date evidence at hand. However, it has to be evidence that is relevant to the question at hand; the position in July 2003. (9) Contrary to the respondent's submission, the absence of a time limit for the making of a decision to cancel does not have the result that the Tribunal is required to make its decision on the basis of all evidence up to the time of its decision: Freeman ; Nong . (10) The respondent seeks to get some assistance from extrinsic materials. It is said that his construction is consistent with the object stated in the passage quoted. However, without conceding that this is a proper use of extrinsic materials, it may be answered by noting that the Authority's construction is also consistent with that object. (11) Contrary to the respondent's submission, it would not be inimical to the achievement of the objects of the provisions if the Tribunal could not have regard to adverse developments that happened after the making of the decision under review. The Authority would be having regard to such conduct and is ideally placed to take appropriate action even if a review is pending in relation to an earlier decision (indeed this happened in this very case, when the respondent's registration was suspended while the cancellation review was pending). (12) It would, however, be inimical to the achievement of the objects if agents who have been cancelled for failing to comply with the Code of Conduct or failing to maintain necessary knowledge can avoid that legislated consequence by relying upon subsequent improved conduct and subsequent compliance. A system of this kind is less likely to be effective in ensuring that agents comply at all times if there is a perception that (the consequences of) breaches can be avoided. (13) The respondent's submissions at [34] supra misconceive Davies J's reasons in Freeman . They did not turn upon the fact that the Tribunal had affirmed the cancellation decision but upon the nature of the decision under review. The respondent's argument is some kind of bootstraps argument. The Tribunal's decision is being challenged because it failed to appreciate the nature of its task. That task does not have a different nature according to the conclusion it reaches at the end of the task. (14) The respondent submitted that all the evidence relied upon by the Tribunal in addressing the question it answered (as at September 2005) would have been available if it had asked itself the correct question (as at July 2003). This is said to support a futility argument. This Court should not accept the proposition that the Tribunal's error (it is implicitly admitted by the respondent that it did answer the question as at September 2005 and, on the Authority's submissions as to law this would be an error of law) could not have made a difference. (15) First, some of the evidence was not relevant to 14 July 2003: (a) 'Is this form of file note taking ... does this represent approximately what your current practice would be with taking files notes--- Yes ... .' (AB 550) (b) 'Is that representative of your current practice in relation to client agreements?' (AB 551) (c) 'Mr Shi, do you now keep copies or is it your practice to keep copies of letters on file to your clients? Yes, yes.' (AB 555.3) (d) The evidence of his success rate from the beginning of 2003 until August 2004 presented in a form that did not disclose that rate as at July 2003. (AB 566 567, 575 576, 803, 775 776) (16) In any event, even if the evidence were all relevant it may have been weighted differently if the correct question were asked. The Court should remit the matter to the Tribunal if it finds that the Tribunal misunderstood its task. (17) As the Tribunal dealt with all four review decisions together, the Court cannot be sure that the Tribunal did not have regard to the later evidence only in relation to the decisions of later dates. The point is, however, that the Tribunal dealt with them all together when it needed to separate the decision according to their nature and the evidence that was relevant to each. The fact that it did not do this proves the Authority's case rather than the reverse. After having considered the relevant provisions of the Act, the authorities to which I was referred and the respective submissions of the parties, I have concluded that the 'clear line of authority', beginning with the decision of Davies J in Freeman , upon which the Authority relies, does govern the position in relation to the cancellation decision and that the question which the Tribunal had to ask itself was whether, on 14 July 2003, the correct or preferable decision was to cancel the respondent's registration; in other words, the question which the Tribunal had to ask itself was whether, as at that date, the respondent was not a person of integrity or was otherwise not a fit and proper person to give immigration assistance. I am of the view that the Tribunal did not ask itself this question. Rather, it asked itself whether, at the time of its decision, the respondent was not a person of integrity or was otherwise not a fit and proper person to give immigration assistance. I am impelled to the view that the Tribunal asked itself the wrong question by reference to the Tribunal's 2 September 2005 reasons, in particular at [14], [15] [17] and [24]: See the particular passages at [21] supra.