WAYNE VASTA MICHAEL MCKINNON and CIVIL AVIATION SAFETY AUTHORITY

[2010] AATA 500

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 500

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2008/0261, 2385

GENERAL ADMINISTRATIVE DIVISION		)
Re		WAYNE VASTA MICHAEL MCKINNON

Applicants

And CIVIL AVIATION SAFETY AUTHORITY

Respondent

DECISION

Tribunal Mr P W Taylor SC, Senior Member

Date6 July 2010

PlaceSydney

Decision The Tribunal directs, pursuant to section 35(2)(b) of the Administrative Appeals Tribunal Act 1975, that public disclosure or publication of the Quality System Compliance Internal Audit Report dated 10 August 2006 and 6 October 2006, (Exhibit A11) be prohibited and that disclosure of the document be restricted to the Senior Member hearing the proceedings, the Tribunal staff, the Auscript staff, CASA and its legal advisers, and the Applicants and their legal advisers and experts.

...................[sgd]...........................

Mr P W Taylor SC
  Senior Member

CATCHWORDS

PRACTICE AND PROCEDURE – proceedings – freedom of information – application for confidentiality order – basis for consideration – order granted

Administrative Appeals Tribunal Act 1975 s 35

Australian Securities and Investments Commission v Administrative Appeals Tribunal [2009] FCAFC 185; (2009) 181 FCR 130

Australian Securities and Investments Commission v PTLZ (2008) 48 AAR 559

Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230

Re Pochi and Minister for Immigration and Ethnic Affairs (1979) 26 ALR 247

REASONS FOR DECISION

6 July 2010 Mr P W Taylor SC, Senior Member

1. In the course of these proceedings the Applicants tendered a Qantas Airways Limited (“Qantas”) internal audit report. The report is dated 6 October 2006 and relates to an audit carried out on (or perhaps more accurately, commenced on) 10 August 2006. Qantas seeks an order under s 35(2) of the Administrative Appeals Tribunal Act (“AAT Act”) restricting the disclosure of that document.

2.      The internal audit report is related to a deal of public controversy, in the period from about mid 2006 until mid 2007, about air safety issues, particularly in relation to Qantas.  I summarised the background to that controversy in the section of the substantive Reasons for Decision on the review applications by Mr McKinnon and Mr Vasta.  The heading for that section of the Reasons for Decision is “Background to the information requests”.  It is plain from that summary that the general thrust of the internal audit report, was reported in the media and on more than one occasion.  The Applicants contend, in effect, that the contents of the report have, in a real practical sense, already entered the public domain.  Alternatively, they contend that the disclosure of the report is desirable to permit proper and informed evaluation of matters that are in the public domain.

3. Section 35(2) of the AAT Act confers four specific powers that apply generally to Tribunal proceedings. They include powers:

(a)to prohibit or restrict publication to the parties of evidence given to the Tribunal, and matters contained in documents lodged with, or received in evidence by, the Tribunal;

(b)to prohibit or restrict other publication of evidence given to the Tribunal and matters contained in documents lodged with, or received in evidence by, the Tribunal.

4. In the exercise of the powers conferred by s 35(2) of the AAT Act the Tribunal must take as the “basis of its consideration” the principle expressed in AAT Act s 35(3). That principle is that it is desirable that:

(a)hearings of proceedings before the Tribunal should be held in public, and

(b)the public and the parties should have access to:

(i)evidence given before the Tribunal,

(ii)the contents of documents lodged with the Tribunal or received in evidence by the Tribunal.

5.      In taking that principle as the “basis of its consideration” the Tribunal must, nevertheless, pay “due regard” to the reasons given to the Tribunal why the hearing should be held in private, or why publication or disclosure of the evidence or the matter contained in the documents should be prohibited or restricted.

6.      The obligation to pay “due regard” to the reasons proffered for publicity restrictions is beguiling in its apparent simplicity, but potentially complex in practice.  In Australian Securities and Investments Commission v Administrative Appeals Tribunal [2009] FCAFC 185; (2009) 181 FCR 130 the Federal Court was concerned with orders the Tribunal had made staying the operation and implementation of an ASIC banning order under Corporations Act s 920A requiring the Tribunal applicant to be referred to by pseudonym, providing for a private hearing and restricting the publication and disclosure of evidence and lodged documents.

7. The principal focus of the judgment was the scope of the Tribunal’s stay powers under AAT Act s 41(2), in the face of apparently mandatory publication obligations the original decision triggered under the Corporations Act. But the Court emphasised the approach required by proper exercise of the AAT Act s 35 power. This emphasis is apparent in the following passage of the judgment of Downes and Jagot JJ:

[74]... it is important to emphasise certain aspects of the statutory provisions. Although s 35(1) is subject to the balance of the section, it establishes a norm. The norm is that the proceedings before the AAT shall be in public. This norm is reinforced by the requirements of s 35(3) which expressly confirm the principle that it is desirable that hearings be held in public. It follows that when deciding whether it is satisfied that it is desirable to exercise its powers under s 35(2), the AAT is required to form a state of satisfaction which recognises the existence of the norm and the values it is intended to protect. This, no doubt, is why Brennan J in Re Pochi and Minister for Immigration and Ethnic Affairs (1979) 36 FLR 482 at 510 described the power in s 35(2) to depart from this norm as one to be exercised “sparingly”. It also explains the approach in Australian Securities and Investments Commission v PTLZ (2008) 48 AAR 559; [2008] FCAFC 164 at [6], [41] and [42] ... emphasising that the words of s 35(3) require this principle of the desirability of hearings to be in public to be “the basis” of the AAT’s consideration of adopting a different approach (in contrast, for example, to “a basis” for that consideration).

8.      The decision referred to in this passage - Australian Securities and Investments Commission v PTLZ (2008) 48 AAR 559 at [41] and [42] - had emphasised the primacy of the “public hearing” desirability. In so doing it warned against conflating the task involved in exercising the s 35(2) power with other powers which, while also containing the general “desirability” criterion, lacked the additional emphasis provided by “the basis of … consideration” provision in AAT Act s 35(3). It would seem that the purpose of this warning was to discourage exercise of the AAT Act s 35(2) powers merely by an impressionistic comparison of the factors for and against public accessibility.

9.      This emphasis is consistent with other statutory provisions that dictate regard to particular considerations in the exercise of a statutory power.  In Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230, the NSW Court of Appeal had this to say about a statutory requirement “to have regard to” specified considerations:

[41]The content of the statutory requirement “to have regard to” a specific matter has been discussed often and is not in dispute. Spigelman CJ (with whom Macfarlan JA and Young JA agreed) said the following in Commissioner of Police for New South Wales v Industrial Commission of New South Wales & Raymond Sewell [2009] NSWCA 198 at [73]:

[73]A statutory requirement to “have regard to” a specific matter, requires the Court to give the matter weight as a fundamental element in the decision-making process. (R v Hunt; Ex parte Sean Investments Pty Ltd (1979) 180 CLR 322 at 329; R v Toohey; Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327 at 333 and 337–338; Zhang v Canterbury City Council [2001] NSWCA 167 ; (2001) 51 NSWLR 589 at [71]–[73]). An equivalent formulation is that the matter so identified must be the focal point of the decision-making process. (See Evans v Marmont (1997) 42 NSWLR 70 at 79–80; Zhang supra at [73].)

10.     The potential import of the “basis of ... consideration” obligation is apparent from Brennan J’s observation in Re Pochi and Minister for Immigration and Ethnic Affairs (1979) 26 ALR 247 at 270:

To exclude the public from a hearing is a serious step, for the Tribunal is required by statute (s 35(3)) to “take as the basis of its consideration the principle that it is desirable that hearings of proceedings before the Tribunal should be in public”. This is a principle which is binding upon courts of justice ...  and which is calculated to ensure that public confidence in proceedings to administer justice is both warranted and maintained. It is a principle of particular importance to a Tribunal which is engaged in reviewing the exercise of administrative power, for administration has hitherto been a cloistered process ... and its exposure to public scrutiny is calculated to enhance greater public confidence in it.

11. The AAT Act does not specify the considerations that inform assessment of desirability as against the sufficiency of the reasons advanced to justify restriction. But two general considerations are discernible. First, there is a concern to uphold the intrinsic efficacy of the Tribunal’s review function. The concept of “intrinsic” efficacy addresses both general and particular interests. The general interest is that of discouraging perceptions of secrecy in the review process lest that perception undermine both confidence in the impartiality, and the true reality, of rigorous merits review. The particular, and perhaps partly competing, interest is the apprehension of a merely Phyrric determination of the contentious issues, where disclosure either inhibits, or entirely negates, the real practical impact of the proceedings. Secondly, there is the concept of “procedural” efficacy, which can be regarded as a concern with the adequacy of the information available to the review process. In that regard Brennan J suggested in Pochi at 272 that the basic purpose of the s 35(2) powers was:

... to secure to the Tribunal the availability of as much relevant information as possible, without violating the confidentiality which a party, a witness or the public is properly entitled to preserve (though a proper entitlement to confidentiality is not lightly established). A court may be constrained to violate that confidentiality in order to conduct its proceedings in public; but the Tribunal’s powers are intended to facilitate the flow of relevant information to it, and if the exclusion of the public or even of a party is essential to preserve the proper confidentiality of the information needed to determine the application, that is a price which has to be paid, however reluctantly.

Qantas’ contentions

12.     Qantas contends that the internal audit report is an internal document, expressed in direct language, that properly reflects focussed internal discussion and concern, but which is inappropriate for public dissemination.  It complains that publication of the report, and the information it contains, could be misleading, and significantly adverse to Qantas’ commercial business. 

13.     An additional contention is that disclosure would contravene the principles, of restricted disclosure of air safety related information under the Convention of International Civil Aviation 1944 (“the Chicago Convention”).  I summarised Qantas’ general contentions in relation to this Convention in the Reasons for Decision on the substantive applications (under the heading “Qantas’ position in relation to the SDRs”).  Although the matters I there summarised were directed to the question of disclosure of the “Service Difficulty Reports”, substantially the same emphasis can be placed on the question of disclosure of the internal audit report.

The Applicants’ contentions

14.     The Applicants’ contention is that there has already been substantial disclosure of the controversy to which the internal audit report relates.  Indeed, there has been a degree of public debate, including responses from CASA, Qantas and SIA Engineering Co.  (I referred to these matters in paragraphs 8 and 10 of the substantive reasons.)  The Applicants contend that since that degree of public debate has occurred, and at least with the partial participation of the entities I have just named, it is inappropriate to make or continue any limited disclosure order in relation to the internal audit report.

15. The Applicants contend Qantas’ submissions relying upon the Chicago Convention, and Annexure 13 in particular, are misplaced. There is no relevant departure by Australian domestic practice from the International Civil Aviation Organization Standards or Recommended Practices. The Applicants note that Qantas’ submissions effectively concede that, in Australian law, the Chicago Convention does not operate to preclude disclosure of the contentious audit report. The Applicants say, and ultimately Qantas did not really dispute, that the Chicago Convention principles were merely relevant considerations. But the controlling principles were provided by the Tribunal’s powers under AAT Act s 35.

Decision – restricted disclosure

16.     I reject the Applicants’ basic contentions in support of disclosure of the internal audit report.  Despite the “basis of consideration” principle, it is necessary to pay due regard to the nature of the document in question.  It is also necessary to pay due regard to both its role in the present proceedings and its independent status under the FOI Act, as if it had been one of the documents to which the substantive requests directly related.

17.     So far as the nature of the document is concerned it is self evidently a critically important document.  Moreover, it is one that would not ordinarily be expected to be available for public discussion.  Indeed, given the extraordinary energy and complexity that is involved in airline maintenance and safety issues (and to which I allude in the substantive Reasons for Decision) it is difficult to conceive any circumstances in which such a document would be publicly released.  Its very purpose is to facilitate critical internal evaluation of safety related problems, or potential problems.  Such a purpose is fundamental to achieving and maintaining proper standards.  It is a purpose that is unlikely to be achieved without candour, plain language and lack of undue sensitivity to the risks and vagaries of public discussion, misunderstanding or malicious manipulation.  In my opinion, it is highly undesirable that documents that owe their origin to such a particular purpose, and which do express criticism intended to prompt appropriate intra organisational responses, should be the subject of public disclosure.  It is undesirable unless good reasons exist to demonstrate that public disclosure is desirable and appropriate.

18.     So far as the role of the document in the present proceedings is concerned, its tender served three purposes.  First, it underscored the general public interest in aviation safety.  It did this by giving a degree of content to the subject matter of the controversy and public discussion to which I referred in paragraphs 8 and 10 of the substantive Reasons for Decision.  Second, it tended to highlight the likelihood that documents responsive to the Vasta and McKinnon requests had not been produced.  Third, it tended to demonstrate the legitimacy of the public interest in, and concern about, the matters to which the internal audit report related.  The Applicants’ general contention was that, having regard to the substance of the matters in the report, there were very real arguments that disclosure of the documents to which their respective document requests related was (i) very much in the public interest and (ii) most unlikely to have any unreasonable adverse effect – either on Qantas or on the future supply of information to CASA. 

19.     But whilst the internal audit report had a relevance to the substantive FOI applications, it was not a document that fell within their scope (because Qantas not CASA, had possession of it).  It is nevertheless instructive to consider the question of the likely disclosure of the internal audit report if it had been identified as a document in CASA’s possession, and was responsive to either of the two FOI applications.  Having regard to its contents, I have no doubt that it would have been an exempt document.  This is so for substantially the same reasons that I considered the documents I described as “Qantas SDR documents” are exempt.  The internal audit report is an internally generated document produced for Qantas’ own purposes in relation to a critically important, and highly sensitive, aspect of its commercial operations.  The discipline and perspective with which it was created likely owe nothing to the legitimate self interest restraints that would apply to the authorship and content of such a document if the risk of public dissemination had been taken into account.  I consider that public disclosure of such a document, if its production had been sought from CASA, would have been quite precluded by the exemption ground in FOI Act s 43(1)(c)(ii) – at the least.

Decision

20.     I direct that public disclosure or publication of the Quality System Compliance Internal Audit Report dated 10 August 2006 and 6 October 2006, (Exhibit A11) be prohibited and that disclosure of the document be restricted to the Senior Member hearing the proceedings, the Tribunal staff, the Auscript staff, CASA and its legal advisers, and the Applicants and their legal advisers and experts.

I certify that the 20 preceding paragraphs are a true copy of the reasons for the decision herein of Mr P W Taylor SC, Senior Member

Signed:         ..............[sgd]..................................................................
  Associate

Dates of Hearing  19-22 April 2010
Date of Decision  6 July 2010
Counsel for the Applicants  Mr T Brennan
Solicitor for the Applicants  Ms R Eagles, Sparke Helmore
Solicitor for the Respondent  Mr A Anastasi, CASA
Solicitor for Qantas Airways Limited         Mr M Mackrell, Norton White