FEDERAL COURT OF AUSTRALIA Nonnenmacher v Merit Protection Commissioner [1999] FCA 942 ADMINISTRATIVE LAW – application to review decision of Promotional Appeal Committee – whether the Committee failed to consider and/or take into account a relevant consideration and therefore breach the rules of natural justice – whether the procedures of the Committee were unfair in that they prohibited a party from making "derogatory comments or unsupported claims" Administrative Decisions (Judicial Review) Act 1977 (Cth),s 5 Public Service Act 1922 (Cth), ss 50B, 50D Hamblin v Duffy (No 2) (1981) 55 FLR 228, cited Kioa v West (1985) 159 CLR 550, cited Hurt v Rossall (1983) 77 FLR 173, cited GARRY JAMES NONNENMACHER v MERIT PROTECTION COMMISSIONER & ORS NG 549 of 1998 O'CONNOR J SYDNEY 9 JULY 1999 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 549 of 1998 BETWEEN: GARRY JAMES NONNENMACHER Applicant AND: merit protection commissioner First Respondent ANNA LE THANH Second Respondent RONALD SCOLARO Third Respondent ARTHUR RORRIS Fourth Respondent THE SECRETARY TO THE DEPARTMENT OF DEFENCE Fifth Respondent KAREN HAY SIXTH Respondent JUDGE: O'CONNOR J DATE OF ORDER: 9 JULY 1999 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The application be dismissed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 549 OF 1998 BETWEEN: GARRY JAMES NONNENMACHER Applicant AND: MERIT PROTECTION COMMISSIONER First Respondent ANNA LE THANH Second Respondent RONALD SCOLARO Third Respondent ARTHUR RORRIS Fourth Respondent THE SECRETARY OF THE DEPARTMENT OF DEFENCE Fifth Respondent KAREN HAY Sixth Respondent JUDGE: O'CONNOR J DATE: 9 JULY 1999 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is an application made pursuant to s 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the ADJR Act") to review the decision of a Promotional Appeal Committee ("the Committee") that the appeal by the sixth respondent, Miss Karen Hay ("Miss Hay"), pursuant to s 50B of the Public Service Act 1922 (Cth) ("the Public Service Act"), against the promotion of the applicant, Mr Garry James Nonnenmacher ("Mr Nonnenmacher") to position 9050 with the Research-core Section of the Defence Corp Support Centre, Sydney West, New South Wales, of the Department of Defence, be allowed. 2 On 11 February 1999 the applicant was granted to leave to file a Further Amended Application. The grounds of the Further Amended Application are: a. That pursuant to s 5(1)(a) of the ADJR Act there was a breach of the rules of natural justice in connection with the making of the decision. In particular, in making its decision the Committee failed to consider a reference from Mr Ramsay Zarif which the applicant had provided to it in accordance with the procedures and guidelines of the Committee. b. That the making of the decision was an improper exercise of the power conferred by s 50D of the Public Service Act in that the Committee failed to take a relevant consideration into account in the exercise of the power within the meaning of ss 5(1)(e) and 5(2)(b) of the ADJR Act. c. The procedure of the Committee which (i) prohibited a party from making "derogatory comments or unsupported claims against any individual" and (ii) required a responding party to lodge his or her appeal statement before seeingthe appellant's statement was in breach of the rules of natural justice (s5(1)(a) of the ADJR Act) because Mr Nonemacher was prevented by this procedure from identifying to the Committee factual errors in Mrs Hay's application and her appeal statement. 3 The applicant seeks an order quashing or setting aside the decision of the Committee that the appeal by Miss Hay against the promotion of Mr Nonnenmacher be allowed and an order directing that the appeal by Miss Hay be dealt with by a Promotional Appeal Committee according to law. LEGISLATIVE FRAMEWORK 4 Section 50B of the Public Service Act provides, relevantly, that: "50B. (1) An officer who considers that he is more entitled than another officer to promotion to the vacant office to which the other officer has been promoted under section 50 may, subject to subsections (1A) and (1B), appeal against the promotion of the other officer to that office. (1A) Except in prescribed circumstances, an officer is not entitled to appeal against a particular promotion unless the officer applied for that promotion. (1B) An officer is not entitled to appeal against a non-appellable promotion." 5 Section 50D provides that: "50D. (1) Where an appeal is or appeals are made under section 50B in respect of a promotion, the Committee shall form an opinion as to the most efficient of the officers concerned, namely the officer promoted and the officer or officers who has or have appealed. (2) For the purpose of forming an opinion as to the most efficient of the officers concerned, the Committee shall have regard to: (a) the abilities and qualifications, experience, standard of work performance and personal qualities of each officer, to the extent that the Committee considers that those matters are relevant to the performance of the duties of the office; and (b) if and only if the Secretary who made the promotion has indicated that, for the purpose of forming an opinion under section 50A, the Secretary had regard to the potential of officers for further career development in the Service, or the ability of officers to perform the duties of other offices in the Department of the same or equal classification – that matter. … (4) Where the Committee has formed an opinion as to the most efficient of the officers concerned, the Committee shall: (a) unless paragraph (b) applies – allow or disallow the appeal or appeals so as to give effect to its opinion; or (b) if the Committee has also formed an opinion that none of the officers concerned is capable of efficiently performing the duties of the office – disallow the appeal or appeals and cancel the promotion." 6 The relevant provisions of the ADJR Act in respect of this application are as follows: "5 Applications for review of decisions (1) a person who is aggrieved by a decision to which this act applies that is made after the commencement of this act may apply to the court for an order of review in respect of the decision on any one or more of the following grounds: (a) that a breach of the rules of natural justice occurred in connection with the making of the decision; (b) that procedures that were required by law to be observed in connection with the making of the decision were not observed; … (e) that the making of the decision was an improper exercise of the power conferred by the enactment in pursuance of which it was purported to be made; … ". FACTUAL BACKGROUND 7 The applicant joined the Commonwealth Public Service in the Department of Defence in July 1980, working at the Defence National Storage and Distribution Centre ("DNSDC") at Moorebank in south western Sydney. He has continued to work at DNSDC since that time. In 1985 he joined the Stocktaking sub-section, which is part of the Research Section, as an administrative officer. 8 In 1989 he was promoted to the grade of Administrative Service Officer Class 3 (ASO3) which is his current classification. His job has entailed the planning, management and monitoring of the stocktaking programme for DNSDC and included the supervision and training of staff. 9 From time to time the applicant performed, temporarily, roles both within and without the Research Section at more senior levels. In May 1997 he commenced duties, on a temporary basis, as an ASO4 as second-in-charge of the Research Section. The position (9050) was a newly created permanent position. 10 In early December 1997 that position was advertised to be filled by a permanent appointee. The applicant applied for the position. 11 The only other applicant who was granted an interview for that position was Miss Hay. Miss Hay was also an AS03 working in the stocktaking sub-section. Miss Hay started in DNSDC in 1989 and transferred to the stocktaking sub-section in 1993. From time to time she reported to the applicant. Selection Advisory Committee 12 On 28 January 1998 the applicant attended an interview before a Selection Advisory Committee comprising Mr Stenhouse (the officer in charge of the Research Section), Mr Hyde (an officer of the DNSDC Development Branch) and Mrs Schulze (an officer responsible for DNSDC personnel matters). The Selection Advisory Committee considered the applicant the more suitable candidate. 13 On 6 February 1998 the applicant was advised that he had been selected for promotion to the position under s 50 of the Public Service Act. Promotional Appeal Committee 14 Miss Hay then appealed under s 50B of the Public Service Act (set out above). As a result the Merit Protection and Review Agency ("MPRA") established a Promotional Appeal Committee to determine the appeal. 15 The Promotional Appeal Committee was comprised of the Ms Anna Le Thanh (the convenor appointed by the MPRA), (second Respondent) Mr Ron Scolaro (the nominee of the Department of Defence), (third Respondent) and Mr Arthur Rorris (the nominee of the Clerical and Public Sector Union), (fourth Respondent). 16 The MPRA advised the applicant of the appeal by letter. This letter included a document setting out a number of matters. These related to the appeal statement a party was invited to submit and also to the conduct of the hearing. 17 Miss Hay lodged her appeal statement with the MPRA prior to 8 April 1998. 18 On 8 April 1998 the applicant lodged his appeal statement with the MPRA and, his evidence states, briefly examined Miss Hay's statement. The applicant claims that while preparing his appeal statement he had identified several factual errors in Miss Hay's initial application but regarded himself as unable to comment on those matters by the instructions in the MPRA letter not to make "derogatory comments or unsupported claims against any individual". 19 On 23 April 1998 the applicant lodged a written reference with the MPRA from Mr Ramsay Zarif. This reference was intended to be included in the papers concerning the appeal. Mr Zarif is a Senior Officer and the business manager of DNSDC, to whom both the applicant and Miss Hay, (through Mr Stenhouse) report. 20 On 28 April 1998 the Committee conducted hearings in relation to the appeal. The applicant and Miss Hay appeared before the Committee separately. The applicant says the Committee did not ask him to comment on Miss Hay's statement, except to ask him to respond to any comments she had made about him. The applicant claims he continued at that stage to consider that the instructions in the MPRA advice prevented him from pointing out the factual errors in Miss Hay's initial application and appeal statement to the Committee. Later on 28 April the applicant was informed that Miss Hay's appeal had been successful and that she would be immediately promoted to the position. The Committee's decision was by majority, with Mr Scolaro, the nominee of the Department, dissenting. 21 For the purpose of the hearing of these proceedings the following facts were agreed between the parties: 1. Mr Scolaro did not receive Mr Zarif's reference evidence dated 17 April 1998 prior to the Committee hearing and deliberations on 28 April 1998. 2. Ms Le Thanh and Mr Rorris did receive Mr Zarif's reference dated 17 April 1998 prior to the Committee hearing and deliberations on 28 April 1998. 22 The first, second, third, fourth and fifth Respondents did not make submissions as to the merit of this application. DID THE COMMITTEE FAIL TO CONSIDER AND/OR TO TAKE INTO ACCOUNT A RELEVANT CONSIDERATION AND THEREFORE BREACH THE RULES OF NATURAL JUSTICE? 23 As noted above it is agreed that all of the members of the Committee did not have a copy of Mr Zarif's reference. The applicant submits that this situation prevented the consideration of this relevant material "in toto" by the Committee. As a result, it failed to take into account a relevant consideration. The statutory scheme created to deal with appeals of this kind requires the relevant Committee to take into account material provided by members (s 52B). One of the members of this Committee did not do so and the applicant submits that, even though that member came to a decision favourable to the applicant, this amounts to a breach of the rules of natural justice because this member might have persuaded the others to give greater weight to the reference than they apparently did he, as the Department's representative, was, it was submitted in the best position to evaluate its worth. 24 Neither party argued that the general rules of natural justice do not apply to the proceedings of the Committee considering this appeal (Hamblin v Duffy (No 2) (1981) 55 FLR 228 at 238-9). However what will amount to a required level of natural justice will depend on the statutory framework of the particular proceedings and, in addition, the circumstances of the particular case. (Kioa v West (1985) 159 CLR 550 at 585 per Mason J). 25 The Committee has no required procedural steps in the process of making a decision on an appeal application. They have, in fact, a wide discretion to conduct the appeal as they see fit. The sixth respondent argues that this case is about the precise procedural requirements necessary to abide by the principles of natural justice in a case such as this and that the loss of an opportunity to convince others of the value of a reference is not a denial of natural justice as two of the three members had it and took it into account, describing it as a "glowing report"and these two members as the majority, made the decision which was adverse to the applicant. Further s 13 of the Merit Protection (Australian Government Employees) Act 1984 (Cth) provides that the decision of the majority is in effect the decision of the Committee. 26 However it is arguable that, at least, each party to the appeal process is entitled to know the case he or she has to meet and then have an opportunity to present his or her case including all relevant material to all the members of the appointed Committee. The applicant argues that the failure of the Committee to have available to all its members the reference of Mr Zarif, was a substantial failure to ensure Mr Nonnemacher was given a proper opportunity present his case. 27 The Committee having no fixed procedural obligation established by statute that it must follow in reaching its opinion as to the more efficient of the officers, relies on parties to provide statements and relevant material. It may however make its own enquiries. The applicant relied on Hamblin v Duffy (No 2) (above) and Hurt v Rossall (1983) 77 FLR 173 to support its submission on this point. In Hamblin, allegations were disclosed by the Committee to the appellant who refuted them and suggested the Board speak to persons nominated by her for verification. Their failure to do so amounted, Lockhart J found, to a breach of natural justice. By analogy, here the applicant has asked the Committee to read a reference and take it into account. One member (of three) did not. The applicant argues that the fact that the person who did not take the reference into account made a decision in favour of the applicant while the two who did take it into account decided against him is beside the point. The procedure was deficient and thus natural justice denied. 28 Similarly in Hurt's case, the Committee had a duty statement for the relevant position different from that held by the appellant. The result was that the appellant misunderstood questions asked of him and this was held by the Full Court by majority, to be a denial of natural justice. 29 There is no evidence before the Court that the Zarif reference was raised or questions asked about it at the Committee hearing. However, a post counselling session memorandum tendered by consent to the Court supports the conclusion that the majority decision would not have been affected by Mr Scolaro referring to the report in discussions, because they described the report as "glowing". 30 Although the applicant argues that the whole scheme of the appeal system under consideration emphasises the importance of evidence from supervisors in assisting the Committee to determine relative efficiency, the situation in this case is that the majority did have the relevant material and considered it. Even though the material was significant, its not being available to Mr Scolaro did not in the end materially affect the decision. It would be otherwise of course if no member had considered the reference. 31 Further Mr Scolaro had had the opportunity to persuade the other two members of his view that Mr Nonnemacher should be preferred and he had material, including another favourable reference from a work supervisor, with which to do that. 32 The sixth respondent submitted that as the relief sought here is discretionary that the failure to provide the reference in the circumstances of this case discussed above would not warrant the exercise of the discretion in the applicant's favour, it being highly unlikely that any difference of outcome would have resulted. There is, in my view merit in that submission. The procedural error did not, in fact create prejudice. WERE THE PROCEDURES OF THE COMMITTEE UNFAIR IN THAT THEY PROHIBITED A PARTY FROM MAKING "DEROGATORY COMMENTS OR UNSUPPORTED CLAIMS"? 33 The applicant argues that he was also denied natural justice because he was: 1. required to lodge his initial appeal statement before seeing the statement of the appellant and 2. not able to make "derogatory comments or unsupported claims against any individual". 34 The Gazette information, to which a party is specifically referred by the MPRA, directs parties that "any unfavourable comments about another party" should be included in the written statement lodged by that party. The applicant submits that as this statement must be lodged before being given access to the other parties' statement and therefore it does not give persons in the position of the applicant a proper opportunity to present his case. This would be a justified complaint and an unfair procedure if no other opportunity to comment were provided. This however is not the case. 35 There is provision in the procedures for the filing of further statements if parties wish and in fact an oral hearing was conducted in this case where further opportunities were available. The applicant however, submits that these opportunities were inhibited by the MPRA advice document which provides that statements "should not include derogatory comments or unsupported claims against any individual". Mr Nonnenmacher had identified factual errors in Miss Hay's statement once he had access to it but considered that to point them out in writing or raise them at the hearing would breach the advice about "derogatory comments". Not having an unfettered ability to make submissions at large was, the applicant submits, a error of procedure. As the rule prohibiting derogatory comments had no utility and, in this case, resulted in Mr Nonnemacher not believing he could raise factual errors in the other parties' application, it created the risk of prejudice. 36 The difficulty with the applicant's submissions on these points is that: 1. There is a requirement, as set out in the Gazette information, to provide "any unfavourable comments about a party" in the written statement. Unfavourable comments are clearly contemplated as this process of appeal is a comparative one directed at comparing individuals. The advice which refers to derogatory comments is made in the context of unsupported claims. The applicant's case is that he could demonstrate factual errors in the statement made by Miss Hay. They would not then fall on any reasonable interpretation into the category of unsupported claims or be regarded as derogatory. 2. The fact that provision for critical comment was specifically made in relation to the written statement (filed before access to the other party's material) did not prevent this kind of comment being made in supplementary statements or at the oral hearing. In my view the effect of the advice as to "derogatory comments" on any individual applicant must be assessed objectively. There was no challenge by the sixth respondent to the affidavit evidence that the applicant did, in fact, consider himself inhibited by the advice. His position however, was not a reasonable one, particularly considering the requirement of the process to evaluate the other parties' material in a critical way. Mr Nonnemacher knew he was "competing" with Miss Hay. He was obliged in written form, and had the opportunity orally, to present his evaluation of her claim on his own behalf. He was not on his own evidence obliged to resort to derogatory or unsupported claims to do so. His evidence is, in fact, that he could demonstrate flaws in her application and would have done so if given the opportunity. His conclusions as to the effect of the advice as to derogatory material is unreasonable, and not a consequence of the actual appeal procedures. 37 This application concerned two main grounds – a failure to properly consider a reference and inappropriate procedures. 38 As to the first ground, there was an admitted error but the consequences were not such that it would warrant setting the decision aside as a discretionary matter. In relation to the Committee procedures as to filing of statements and the advice as to derogatory or unsupported claims, in my view, no breach of natural justice is made out. 39 The application is dismissed. I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice O'Connor. Associate: Dated: 9 July 1999 Counsel for the Applicant: V F Kerr Solicitor for the Applicant: Marsdens, Solicitors Counsel for the First, Second, Fourth and Fifth Respondents: T Howe Solicitor for the First, Second, Fourth and Fifth Respondents: Australian Government Solicitor Counsel for the Third Respondent: G T Johnson Solicitor for the Third Respondent: Low & Associates Counsel for the Sixth Respondent: C Howell Solicitor for the Third Respondent: Geoffrey Edwards & Co Date of Hearing: 24 May 1999 Date of Judgment: 9 July 1999