Supreme Court New South Wales

• Medium Neutral Citation: O'Hara v Independent Liquor & Gaming Authority [2014] NSWSC 880
• Hearing dates: 27 June 2014
• Decision date: 16 July 2014
• Jurisdiction: Common Law
• Before: Davies J

Decision

1. Extend time to commence proceedings to 13 February 2014.

2. Dismiss the Amended Summons.

3. The Plaintiffs to pay the Defendants' costs.

• Catchwords: ADMINISTRATIVE LAW - judicial review - decision of Independent Liquor and Gaming Authority - application to increase gaming machine threshold at venue - whether Authority had a fixed rule for the local government area - whether prejudgment - speech by Chairman immediately following determination discussing the application - Chairman expresses personal views about gambling and gaming machines - whether apprehended bias - reasons for determination - not statutorily mandated - reasons prepared later by consultant to the Authority - reasons going beyond discussions at meeting where application determined - whether top down ex post facto reasoning - reasons approved by four of five members of Authority - one member had retired - whether her absence invalidated reasons - effect of invalidating reasons on determination made
• Legislation Cited: Administrative Law Act 1978 (Vic); Gaming and Liquor Administration Act 2007 (NSW); Gaming Machines Act 2001 (NSW); Uniform Civil Procedure Rules 2005 (NSW)
• Cases Cited: Carroll v Sydney City Council (1989) 15 NSWLR 541; McGovern v Ku-ring-gai Council [2008] NSWCA 209; (2008) 72 NSWLR 504; Michael Wilson & Partners Limited v Nicholls [2011] HCA 48; (2011) 244 CLR 427; Minister for Immigration, Local Government and Ethnic Affairs v Taveli (1990) 23 FCR 162; Minister for Immigration & Multicultural Affairs v Jia Legeng [2001] HCA 17; (2001) 205 CLR 507; Rendell v Release on Licence Board (1987) 10 NSWLR 499; Sherlock v Lloyd [2010] VSCA 122; (2010) 27 VR 434
• Texts Cited: M Aronson and M Groves, Judicial Review of Administrative Action (5th ed, 2013, Thompson Reuters)
• Category: Principal judgment
• Parties: Daniel O'Hara (First Plaintiff); Campbell Rogers (Second Plaintiff); Independent Liquor & Gaming Authority (First Defendant); Attorney-General in and for the State of New South Wales (Second Defendant)
• Representation: Counsel: J M Ireland QC (Plaintiffs); Submitting Appearance (First Defendant); P Herzfeld (Second Defendant); Solicitors: McGirr Lawyers (Plaintiffs); Crown Solicitors Office (First and Second Defendants)
• File Number(s): 2014/46226

Judgment

1 The Plaintiffs challenge a decision of the Independent Liquor & Gaming Authority that refused an application by the Plaintiffs to increase the number of poker machines permitted at the Fairfield Hotel. The First Plaintiff is a director of the company that owns the hotel and the Second Plaintiff is the licensee of the hotel.

Background

2 On 19 December 2012 the Plaintiffs made an application to the Authority pursuant to s 34 of the Gaming Machines Act 2001 (NSW) to increase the gaming machine threshold at the Hotel from 23 to 30. On 29 August 2013 the Authority, consisting of five persons, determined that it was not satisfied that granting the application would provide an overall positive benefit to the local community.

3 The Plaintiffs were advised by email on 31 August 2013 of the refusal and on 2 September 2013 the Plaintiffs were advised of the reason for the refusal.

4 Thereafter, the Plaintiffs requested a statement of the Authority's reasons. The general counsel to the Authority, Bryce Wilson, who had attended the meeting on 29 August, prepared a draft of the reasons in consultation with the Chief Executive, one of the five members. The draft was reviewed by each of the members of the authority who participated in the decision other than Ms Sharryn Brownlee, who by that time was no longer a member of the Authority. Various changes were made to the draft before it was approved, signed by the Chairman Chris Sidoti and sent to the Plaintiffs on 14 November 2013.

5 On 22 November 2014 Mr Sidoti made a speech for the National Association for Gaming Studies Annual Conference which made reference to the Plaintiffs' application in which he made a number of statements including the following:

(a) We have been particularly concerned about the transfers of additional poker machines into Band 3 local government areas - those that have the highest density, the highest expenditure and the lowest socio economic data (p. 615)

(b) Even when the number of machines to be transferred is relatively small, we have tended to take a hard line (p.615)

(c) Fairfield is a Band 3 area and has the lowest socio economic data of any local government area in the Sydney metropolitan area (p. 617)

(d) From the point of view of the Authority there was no way we could consider the addition even of seven poker machines into (Fairfield) local government area (p. 617) (by the Plaintiffs)

(e) The issue for us was not what they were doing but the implications of transferring more poker machines, even to good venues, within the Fairfield local government area (p. 617)

(f) I do not and never have gambled with money at all (p. 620).

(g) I hate gambling and I despise poker machines (p. 620).

(h) I personally (am) a dedicated non-gambler (p. 621).

The appeal

6 The decision of the Authority was made on 29 August 2013 and notified on 31 August 2013. Under Rule 59.10, proceedings for judicial review must be commenced within 3 months of the date of the decision. The Summons was filed on 13 February 2014. This was principally because the Plaintiffs were awaiting the reasons for the decision. The Plaintiffs require an extension of time. That is not opposed by the Defendants. Time is extended for the commencement of the proceedings until 13 February 2014.

7 Contrary to r 59.4 Uniform Civil Procedure Rules 2005 (NSW), neither the Summons nor the Amended Summons stated the grounds upon which relief was sought in the appeal. Pursuant to orders made by the Court the Plaintiffs were directed to file and serve particulars of the grounds on which they sought relief. No such particulars were filed, but by a letter of 7 March 2014 the Plaintiffs' solicitors wrote to the Crown Solicitor setting out the following grounds for judicial review:

1. The Authority's decision was reached in breach of natural justice.

2. The Authority did not bring an open-minded and unbiased consideration to the application in that Mr Christopher Sidoti, the chairperson of the Authority, was at the time of the decision strongly opposed to gaming machines as a matter of principle and was ostensibly unable to give consideration to the application on its merits.

3. The recommendation of the Office of Liquor, Gaming and Racing put forward to the Authority to approve the application was ignored.

4. The reasons for the decision were not prepared or articulated by the Authority itself, but rather were prepared by Mr Bryce Wilson who was not a member of the Authority and took no part in the deliberations of the Authority, and purportedly signed by Mr Sidoti on behalf of the Authority who was, ostensibly, unable to give open-minded and unbiased consideration to the application.

8 In response to a letter from the Crown Solicitor asserting that the first ground was too vague to be a proper particular, the Plaintiff's solicitors wrote on 11 March 2014 saying:

Ground 1 in our letter of 7 March 2014 sets out the principle to be considered by the Court. The decision of the Authority was affected by bias.

A biased Tribunal involves a breach of natural justice. The particulars of bias are found in Grounds 2 and 3.

Ground 4 is an independent ground which goes to jurisdiction.

9 Notwithstanding the identification in that letter of the grounds on which the Plaintiffs sought review, when the Plaintiffs filed and served their outline of submissions their grounds of challenge were said to be these:

1. The decision of the Authority was invalid because it was contrary to the terms of the Gaming Machines Act in that the Authority (ILGA) did not make the relevant determination.

2. The Authority took into account irrelevant considerations because the decision applied a fixed "rule" that no further poker machines should be introduced into the Fairfield local government area contrary to the Act, which requires such applicants to be considered on their merits.

3. The Authority gave no reasons, or no adequate reasons for its purported determination in that the Reasons delivered on 15 November 2013 were not the reasons of the Authority. That was a document prepared by Mr. Wilson expressing his own process of reasoning constructed well after the decision of the Authority on 29 August 2013 and which was not the basis of the deliberations of the attending members of the Authority on 29 August 2013. Nor were Mr. Wilson's reasons adopted by all of the attending members subsequently.

4. The purported decision of the Authority should be set aside for ostensible bias because a reasonable observer might reach the conclusion that the members of the Authority might have a closed mind to the introduction of further gaming machines into the Fairfield local government area on any terms and consider that fixed view prevented the Authority from bringing an unbiased assessment to the plaintiffs' application for the additional gaming machines at the Fairfield Hotel.

10 At the hearing of the application Mr Ireland QC identified two substantive grounds upon which the challenge to the Authority's decision was made. The first ground was one of apprehended bias. That had two aspects. First, it was said the Authority had a 'fixed rule' for the Fairfield LGA. Secondly, it arose because of Mr Sidoti's expressed personal views about gambling and poker machines. The second ground was a jurisdictional ground that the statutory function of the Authority miscarried. That was put on two bases. First, it was said the function miscarried by the way reasons were prepared by Mr Wilson dealing with matters that did not form part of the decision on 29 August 2013. Secondly, it was put on the basis that one of the members of the Authority, Ms Brownlee, had ceased to be a member of the Authority from 10 October 2013.

The legislation

11 Section 3 of the Act sets out the objects of the Act as follows:

3 Objects of Act

(1) The objects of this Act are as follows:

(a) to minimise harm associated with the misuse and abuse of gambling activities,

(b) to foster responsible conduct in relation to gambling,

(c) to facilitate the balanced development, in the public interest, of the gaming industry,

(d) to ensure the integrity of the gaming industry,

(e) to provide for an on-going reduction in the number of gaming machines in the State by means of the tradeable gaming machine entitlement scheme.

12 The power to apply for and obtain an increase in the gaming machine threshold falls within Part 4 of the Act entitled "Gambling harm minimisation measures". Section 32 gives power to the Authority to set the maximum number of approved gaming machines that may be authorised to be kept in the hotel.

13 Section 33 requires the Authority to classify each local government area of the State as either a Band 1 LGA, a Band 2 LGA or a Band 3 LGA.

14 Section 35 requires, subject to irrelevant exceptions, that a threshold increase application under s 34 be accompanied by a local impact assessment (LIA). A LIA is to be a class 1 LIA or a class 2 LIA as determined by the section.

15 Fairfield is classified as a Band 3 LGA. Accordingly, under s 35(4) a class 2 LIA was required.

16 Section 36 relevantly provides:

36 Approval of LIA by Authority

(1) If a LIA is required to be provided with a threshold increase application, the application cannot be approved unless the Authority approves the LIA.

...

(3) The Authority may approve a LIA only if it is satisfied that:

(a) the LIA complies with the requirements of this Division and the regulations in relation to the LIA, and

(b) the LIA has demonstrated that gambling activities in the relevant venue will be conducted in a responsible manner, and

(c) in the case of a class 1 LIA:

(i) the proposed increase in the gaming

machine threshold for the relevant venue will provide a positive contribution towards the local community where the venue is situated, and

(ii) the relevant venue is not, if the venue is a new hotel or comprises new club premises, situated in the immediate vicinity of a school, hospital or place of public worship, and

(iii) the LIA has adequately addressed any community concerns arising out of the consultation process under the regulations.

(d) in the case of a class 2 LIA:

(i) the proposed increase in the gaming machine threshold for the relevant venue will have an overall positive impact on the local community where the venue is situated, and

(ii) the relevant venue is not, if the venue is a new hotel or comprises new club premises, situated in the immediate vicinity of a school, hospital or place of public worship, and

(iii) the LIA has adequately addressed any community concerns arising out of the consultation process under the regulations.

...

(5) If any submissions are made in relation to a LIA in accordance with the regulations, the Authority must take those submissions into consideration in deciding whether to approve the LIA. [Emphasis added]

The Reasons of the Authority

17 As noted earlier, the decision to refuse the application was notified by email on 31 August. On 2 September 2013 the Plaintiffs received an email from the Authority in these terms:

The application received by the Authority on 19 December 2012 for a threshold increase of 9 at the Hotel (Application) was considered by the Authority at its meeting convened on 29 August 2013.

The Category 2 Local Impact Assessment that accompanies the Application was not approved, by reason that the Authority was not satisfied that the proposed increase in the gaming machine threshold for the hotel will have an overall positive impact on the local community where the venue is situated for the purposes of section 36(3)(d) of the Gaming Machines Act 2001 (Act).

Accordingly, the Application was refused under section 34 of the Act.

In making this decision the Authority considered the Application, the Local Impact Assessment and all submissions received in relation to this matter, and considered relevant provisions of the legislation, including but not limited to section 3 of the Act.

The Authority will provide a letter with a short statement of reasons in around 21 days.

In the meantime, the Authority notes that it would be open to you, by virtue to section 35(2)(b) of the Act, to make a fresh application for the threshold increase that you had sought, accompanied by an application to transfer the relevant number of entitlements, without the need to provide a Local Impact Assessment, should you elect to source the proposed gaming machine entitlements from other hotels within the Fairfield Local Government Area.

18 The Reasons provided by the Authority dated 14 November 2013 are voluminous. They extend to 48 pages and 185 paragraphs. The Reasons set out the LIA, the submissions received from the Plaintiffs and a large number of other parties. The section of the Reasons entitled "Decision and reasons" comprises 90 of the 185 paragraphs of the document. What is contained in paragraphs 172 to 185 can reasonably be taken as a summary of the decision. Those paragraphs say:

172. The Fairfield LGA is a "Band 3" local government area with a very high density of gaming machines, a very high level of average EGM expenditure and socio-economic data that indicates considerable socio-economic disadvantage. Parliament has prescribed that even a modest threshold increase in these circumstances shall be subject to the Class 2 LIA procedures and assessment of the "overall" positive impact test that is prescribed by section 36(3)(d) of the Act.

173. Accepting for the purposes of this decision the Applicant's costing of its proposed harm minimisation measures and direct donations to local community organisations, the Authority is satisfied, on the basis of the Applicant's initial LIA, that the Hotel will provide a total quantifiable benefit to the local community to the value of $930,700.

174. Averaging the gross revenue disclosed by the Applicant from the operation of the existing 23 gaming machines on the Hotel premises during the financial years ending June 2012 ($3,638,084) and June 2013 ($5,503,178.72), being the two financial years during which the Applicant has been operating the Hotel, the EGMs have been making an average gross revenue per machine per annum of $198,723.00.

175. Seven new machines taking this average gross revenue will amount to $1,391,062.00 in additional gross revenue per annum. While the Applicant has proposed that the revenue of these additional machines be discounted to only 50% of the current average revenue for the first year, 70% of the current average in the second and 90% of the current average for the third, the Applicant has not provided any persuasive evidentiary basis for this submission other than by arguing that the new machines should not be expected "from day one" to earn the same revenue as the existing machines. The Authority cannot accept the Applicant's statement in its response to the Council that in fact it will operate the additional machines, over the first three years, at a loss of $893,580. This assertion has not been made elsewhere and contradicts what the Applicant has said in its other submissions.

176. The Authority does not approve this aspect of the Applicant's amended LIA proposal and finds that the current average annual takings per machine on the Hotel premises provides a more objective basis as to what each additional machine may be expected to earn each year over the course of a five year period looking forward. The Applicant has not provided the Authority with data or independent evidence to establish that newly installed machines should take some three years to reach the average takings that are achieved by the existing machines on the premises. The Authority is satisfied that this submission artificially reduces the expected revenue from the new machines, which will in turn will (sic) reduce the amount of revenue that is likely to flow to problem gamblers in the local community.

177. Over the course of a five year period into the future, the Authority is satisfied that the Hotel will be likely to receive $1,391,062 x 5 ($6,955,310) in additional gross revenue from the seven EGMs. Taking the midpoint (41%) of the Productivity Commission's identified range on the contribution that problem gamblers are likely to make to the EGM revenue of a business the Authority is satisfied that over five years the quantifiable detriment to the local community should be valued at 41% x $6,955,310 or $2,782,124.

178. Alternatively, if the Authority is wrong and the Applicant's proposed harm minimisation practices are so effective that they place the Hotel at the lower end of the Productivity Commission's identified range for the contribution of problem gamblers to revenue (22%) then the quantifiable detriment to the local community would be valued at 22% x $6,955,310 or $1,530,168.

179. Even if the Authority accepted the Applicant's proposal (which it does not) that only 15% of the expected additional revenue should be attributed to problem gamblers in the local community then that would amount to $1,043,296.00 in quantifiable detriment.

180. The Authority is satisfied that there are likely to be substantial unquantifiable detriments that will flow to the local community from the operation of the proposed additional machines, in light of the unquantifiable costs of problem gambling that have been identified in the Productivity Commission's 2010 Report, which comprises the most comprehensive recent review of the research into the impact of EGM gambling.

181. The social and economic impact of problem gambling on EGM machines is of particular concern in a gaming venue that is located within one of the most socio-economically disadvantaged suburbs in one of the most disadvantaged local government areas in New South Wales.

182. The Authority accepts that there will some modest intangible benefit provided to casual EGM users in the local community from the grant of the Application. Local residents who chose the Hotel as a place to play EGMs will derive entertainment from using those machines, and be less troubled by crowding in the gaming room that may otherwise occur during the periods of peak use that have been identified by the Applicant. The extent of that benefit is quite limited by the many venues, large and small, that offer EGMs across the local community.

183. The Authority also accepts that individuals benefiting from assistance from those community organisations that the Hotel will help to support during its three year spending programme may receive some ongoing intangible benefit from having received intervention or assistance at a time in their lives that they needed it.

184. However, in conclusion, having considered the quantifiable and unquantifiable benefits and detriments found by the Authority, the Authority is not satisfied that the proposed increase in the gaming machine threshold in the venue will have an overall positive impact on the local community where the venue is situated, and for this reason the LIA is not approved.

185. Accordingly, the Authority refuses the Application under section 34 of the Act.

Ground 1: Apprehended bias

19 In Michael Wilson & Partners Limited v Nicholls [2011] HCA 48; (2011) 244 CLR 427 the majority judgment of Gummow ACJ, Hayne, Crennan and Bell JJ reaffirmed at [31] that the test to be applied in determining whether a judge is disqualified by reason of the appearance of bias is whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide.

20 However, as the High Court made clear in Minister for Immigration & Multicultural Affairs v Jia Legeng [2001] HCA 17; (2001) 205 CLR 507 at [180] to [182] the judicial paradigm may have to be adapted for other decision makers in different statutory contexts. Similar sentiments were expressed by Spigelman CJ in McGovern v Ku-ring-gai Council [2008] NSWCA 209; (2008) 72 NSWLR 504 at [11].

21 The Plaintiffs rely on two separate parts of the Chairman's speech to submit that a fair-minded reasonable observer would conclude that the issue had been prejudged. The first matter concerned what was said in sub-paragraphs (a) to (e) of [5] above. These paragraphs were said to demonstrate a 'fixed rule' that did not enable the Authority to bring an open mind to the application.

22 The second matter concerned the Chairman's personal views set out in sub-paragraphs (f), (g) and (h) in [5] above. It was submitted that to a reasonably objective observer there was an appearance of partially.

23 In McGovern Spigelman CJ said:

[14] Although the Australian test for apprehended bias, as expressed in terms of two "mights", sets a low threshold, with respect to a pre-judgment case the identification of what constitutes a lack of 'impartiality' or of 'prejudice' in the mind of the decision-maker involves an issue of some specificity.

[15] The test for pre-judgment in Australian law is, in my opinion, to the same effect as that identified by the Supreme Court of Canada in Old St Boniface Residents Association v Winnipeg (City) [1990] 3 SCR 1170 where, in the terminology of the majority judgment: the decision-maker must be "capable of being persuaded" (at 1197c); pre-judgment is of such an "extent" that contrary representations "would be futile" (at 1197d-e); statements said to constitute pre-judgment must be an "expression of final opinion ... which cannot be dislodged" (at 1197f); the position of the person must be "incapable of change" (at 1197g). The "incapable of persuasion" test was applied again in Save Richmond Farmland Society v Richmond [1990] 3 SCR 1213 at 1224g.

[16] A similar approach has been adopted in Australia on pre-judgment issues in Jia Legeng where, in the joint judgment of Gleeson CJ and Gummow J, their Honours referred to a test of whether the decision-maker "is open to persuasion" (at [71] and [105]), or whether the "conclusion already formed [is] incapable of alteration, whatever evidence or arguments may be presented" (at [72]).

[17] To similar effect are the observations of Hayne J, namely, that a decision-maker will apply his or her opinion "without giving the matter fresh consideration in the light of whatever may be the facts and arguments relevant to the particular case" (at [185]). His Honour went on to refer to the test terms of whether "the evidence will be disregarded" (at [186]).

[18] Also to similar effect are the observations of Gaudron and McHugh JJ in Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 at 100 that the decision-maker "will not alter that conclusion irrespective of the evidence or arguments presented". In that case, members of the Tribunal had filed a defence which encompassed a pleading asserting the fact into which the Tribunal was to inquire. Their Honours concluded that that act was based on the evidence known to them at the time of the pleading. It was not appropriate to conclude that "the members of the Tribunal will not decide the case impartially when they hear the evidence and arguments ... at the ... inquiry" (at 101).

...

[23] The "open to persuasion" test is an appropriate formulation for bias by pre-judgment, to which the dual "might" test of apprehended bias must be applied; that is, that an independent observer might reasonably apprehend that the decision-maker might not be open to persuasion.

24 A little background is necessary to understand how the Authority goes about its decision making process. What follows is derived from the evidence of Mr Wilson.

25 When a matter is to be considered at a monthly meeting of the Authority the staff assisting the Authority prepare an "Authority Paper". This serves as a briefing document for the Members to provide an overview or summary of the matter under consideration, and to identify quickly the nature and history of the application. The Authority Paper typically has a number of attachments which are critical documents relating to the matter for the consideration of the Authority.

26 Where a matter concerns an application to the Authority, the Authority typically attaches the key submissions in support of and in response to the application. The Authority Paper may also attach other information relevant to the Authority's decision. Where the application is for an increase in the maximum number of gaming machines that may be kept on the premises of a hotel or club, material setting out the gaming machine expenditure data at the applicant venue and data pertaining to the local community, including socio-economic data, will typically be attached.

27 Sometimes there are recommendations or observations in an Authority Paper. They are for the purpose, generally, of drawing the members' attention to particular matters that the author of the Authority Paper thought important rather than suggesting the course of action that should be followed.

28 One exception is commentary on whether an application and any supporting documents, for example a LIA meet the minimum procedural, consultation and content requirements specified in relevant legislation and regulations. Unless those requirements are met the Authority may not have jurisdiction to assess the merits of the application.

29 The Authority Papers must be submitted not less than one week prior to the day of the meeting to enable the individual members to have sufficient time to read the material involved in advance of the meeting.

30 The briefing material, including the Authority Papers, is read by the members prior to the meeting. There is discussion at the meeting as the members work through the agenda. More straightforward matters are determined within a matter of minutes but others require longer discussion. Mr Wilson said that a discussion of about 15 minutes or more is a relatively lengthy discussion.

31 In the present case the application was considered at the Authority's meeting on 29 August 2013. All five members of the Authority attended the meeting and Mr Wilson was present.

32 Prior to the meeting of the Authority on 29 August 2013, the Authority had determined on 9 August 2013 an application by the Mt Pritchard District and Communities Club for an increase in the maximum number of gaming machines permitted to be kept at that venue (the Mounties application). That application concerned a venue also located in the Fairfield local government area. The determination in regard to that application required the Authority to consider extensive submissions on statistics produced by the Australian Bureau of Statistics and data on gaming machines for the suburb of Fairfield and the Fairfield local government area from the Office of Liquor, Gaming and Racing.

33 Mr Wilson's evidence of his recollection of the discussion at the meeting of 29 August 2013 concerning the application by the present Plaintiffs was this:

a. The discussion took place over the course of about 10-15 minutes. (As noted in paragraph 32 above, this is a lengthy discussion relative to other matters typically considered by the Authority at its meetings.)

b. Several Members, including the Chairperson, the Chief Executive, Mr Brodie and Ms Brownlee made observations on the Authority Paper to the effect of "the SEIFA data for Fairfield is very low" and "gaming machine expenditure is very high".

c. Throughout the discussion, all five members were opposed to granting the Application.

d. At one point, Ms Brownlee said words to the effect of "we all know the situation in Fairfield - the ABS stats are terrible and the gaming machine density is very high, do we really want to put more machines in this venue on what is proposed?"

e. At one point, Mr Brown said words like "I could accept this proposal if the machines were being sourced from within Fairfield, but not otherwise."

f. Though I cannot now recall any further specifics, I recall the Members referring the Authority Paper on a number of occasions, specifically the gaming machine data set out in the Authority Paper.

g. At one point during the discussion I said to the Chairperson words to the effect "I take it that the Authority [will] be applying a consistent approach to that used in Mounties?" and the Chairperson and the Chief Executive both said "Yes". By this I understood that the same cost benefit analysis undertaken in the determination of Mounties Application to the assessment of "quantifiable benefit" and "quantifiable detriment" over a period of five years would be applied in the Application.

h. The Chairperson concluded the discussion with words to the effect of "I just can't justify putting more gaming machines into Fairfield on the basis of this proposal". The Deputy Chairperson said words to the effect of "I agree". The other members said words to the effect of "agree"' or "it's a no from me".

i. The Chairperson then said words to the effect: "The Authority is not satisfied that granting the Application would provide an overall positive benefit to the local community. When you notify him let the applicant know that he can apply to increase his threshold without an LIA if he sources the machines from within Fairfield'.

34 The relevant part of the minutes of the meeting of 29 August read as follows:

6.01 Application for GM increase LIA Class 2 - Fairfield Hotel

Resolution 67/8 The Independent Liquor and Gaming Authority resolve to refuse the application for local impact assessment Category 2 under section 34 of the Gaming Machines Act 2001 (Act). The authority was not satisfied that the proposed increase in the gaming machine threshold for the hotel will have an overall positive impact on the local community where the venue is situated as required under section 36(3)(d) of the Gaming Machines Act 2001 (Act).

35 Mr Wilson said that he made minimal notes of the discussion of the matter which did not extend beyond the words recorded in the minutes.

(a) Was there a 'fixed rule' that resulted in a prejudgment?

36 Since the Authority commenced operations there have only been four applications, apart from the present one, for a gaming machine threshold increase that required the submission of a class 2 LIA. Those applications and their outcomes were these:

(1) The South Wagga Sports and Bowling Club - refused 28 October 2011;

(2) The Citigate Sebel Hotel - granted 27 July 2011;

(3) Strathfield Sports Club - partially approved 28 February 2013;

(4) The Mounties applications - refused 9 August 2013.

37 Subsequent to the refusal of the Mounties application, that applicant made a further application to increase the gaming machine threshold of the Club by 20 machines on the basis that the gaming machine entitlements would be sourced from within the Fairfield LGA. That further application was approved in principle by the Authority at a meeting on 18 December 2013 and formally granted at a meeting on 26 February 2014.

38 Since the Authority commenced operations it has received 88 threshold increase applications that required a submission of class 1 LIA. Of those, 68 have been approved, five were withdrawn, two have been refused and 13 are pending.

39 As is apparent from a reading of the whole of the reasons, the underlying approach of the Authority to reach a view about either a 'positive contribution' or 'an overall positive impact' (s 36(3)) is an economic one, although intangible benefits are also considered, as Mr Wilson made clear in his oral evidence. It was not submitted that such an approach was an impermissible one. Such an approach was open to the Authority under the terms of the Act. Accordingly, there is no occasion to examine whether there ought to have been a different application of the economic data or a different arithmetical approach by the Authority.

40 Nor was it submitted that it was inappropriate for the Authority to draw on its experience with the Mounties application which had employed a similar economic and arithmetical approach.

41 In Jia Legeng Gleeson CJ and Gummow J, in discussing apprehended bias through pre-judgment, said:

[72] The test which was applied both by French J and by the Full Court was orthodox. It accords with the decisions of this Court in Laws v Australian Broadcasting Tribunal and Johnson v Johnson. The state of mind described as bias in the form of prejudgment is one so committed to a conclusion already formed as to be incapable of alteration, whatever evidence or arguments may be presented. Natural justice does not require the absence of any predisposition or inclination for or against an argument or conclusion. This preliminary argument should be rejected

42 Hayne J said:

[187] In the case of a court, it will usually be self-evident that the issue, if an issue of fact, is one which ought to be considered afresh for the purposes of the particular case by reference only to the evidence advanced in that case. Other decision-makers, however, may be under no constraint about taking account of some opinion formed or fact discovered in the course of some other decision. Indeed, as I have already pointed out, the notion of an "expert" tribunal assumes that this will be done. Conferring power on a Minister may well indicate that a particularly wide range of factors and sources of information may be taken into account, given the types of influence to which Ministers are legitimately subject. It is critical, then, to understand that assessing how rules about bias, or apprehension of bias, are engaged depends upon identification of the task which is committed to the decision-maker. The application of the rules requires consideration of how the decision-maker may properly go about his or her task and what kind or degree of neutrality (if any) is to be expected of the decision-maker.

[188] Section 501(2) of the Migration Act (in the form in which it stood at the time of the Minister's decisions concerning these visa holders) was engaged if "having regard to" either "the person's past criminal conduct" or "the person's general conduct" the Minister was "satisfied that the person is not of good character". The subject about which the Minister was required to be satisfied was a subject which required the formation of a value judgment. It required the development of a view about what kinds of conduct are, or may be, inconsistent with being of good character. It obviously permitted the formation of a view that, in the absence of some countervailing consideration, certain kinds of past criminal conduct would sufficiently demonstrate that a person was not of good character. If the Minister formed such a view, and announced that this was the view that had been formed and would be applied in the administration of the Act, there could be no suggestion that the Minister had thereby prejudged any application which was to be made. The most that could be said is that the Minister had stated an understanding of what was meant by the statutory expression "is not of good character" and had indicated how the Act would be administered. So long as the meaning adopted revealed no error of law (which it would if the meaning assigned lay outside the permissible range of circumstances that could be embraced by the expression) there could be no challenge to what was done. Given that the decision-maker is the Minister, the expression can be seen to embrace a wide range of permissible views.

[189] Moreover, the Act, by authorising the Minister to reach the relevant value judgment by having regard to "the person's past criminal conduct", as opposed to "the person's general conduct", permitted the Minister to form the view that certain kinds of past criminal conduct necessarily and inevitably demonstrated that a person was not of good character. Again, so long as the meaning which was thus assigned to the expression "is not of good character" revealed no error of law, the fact that the Minister announced that he or she proposed to administer the Act according to that understanding could not be said to constitute the prejudgment of any particular case that may later arise.

[190] There is no prejudgment in such a case because of the nature of the statutory task. It is to reach a degree of persuasion (satisfaction) that a value-laden standard ("is not of good character") is met. The determination of that standard is not a task which the Act requires the Minister to undertake wholly anew each time it is suggested that there may be a case for the exercise of the discretionary power, conferred by the Act, to cancel or refuse a visa. It was open to the Minister to determine the standard to be applied in a way that left little or no room for debate about its application in an individual's case.

[191] Determining the standard in that way would not fetter the exercise of a discretion. The relevant discretion which falls for exercise is the discretion to refuse to grant or, in these cases, to cancel a visa if s 501(2) applied to the person. All that the Minister does, in the circumstances posited, is announce the particular construction that the necessarily imprecise statutory standard will be given in certain kinds of case.

[192] Once it is recognised that there are elements of the decision-making process about which a decision-maker may legitimately form and hold views before coming to consider the exercise of a power in a particular case, it is evident that the area within which questions of actual or apprehended bias by prejudgment may arise is reduced accordingly. Indeed, in a context such as the present, if there is a cause for complaint, analysis will often reveal that the complaint is one of error of law in the construction of the relevant provision, not one of bias or apprehended bias....

43 The fact that a matter is decided in accordance with a general policy, provided that consideration is given to the individual application and evidence, does not indicate prejudgment by a fixed rule: Carroll v Sydney City Council (1989) 15 NSWLR 541 at 550. The adoption of guidelines is often useful and sometimes necessary: Rendell v Release on Licence Board (1987) 10 NSWLR 499 at 504.

44 The scheme of the Act requires classification of each local government area of the State into one of three Bands. It requires a LIA of either a class 1 type or a class 2 type depending on the increase sought and the Band in which the local government area is situated. As the annual report of the Authority makes clear:

These classes are determined to recognise the number of machines sought to be transferred and local factors such as the gaming machine density, gaming machine expenditure and evidence of socio-economic risk factors.

45 The different basis that must be established for a class 1 LIA (a positive contribution) and a class 2 LIA (an overall positive impact) is a further indication that the particular character and needs of the area are relevant considerations and do not constitute pre-judgment. The Authority must act in accordance with the objects of the Act. Further, it is significant that Part 4 of the Act which deals with applications to increase gaming machine thresholds is entitled "gambling harm minimisation measures".

46 That statutory context would legitimately allow the Authority to have a general policy that no additional gaming machines should be permitted in any particular local government area, provided that a proper consideration is given to the particular application made. That would not amount to a fixed rule or a prejudgment.

47 Mr Wilson's evidence about what was said at the meeting is a further indication that there was no fixed rule. The matter was discussed for 10-15 minutes which, relatively speaking, was a lengthy discussion. That is inconsistent with applying a fixed rule. Further, the Chairman is reported as saying:

I just can't justify putting more gaming machines into Fairfield on the basis of this proposal. [Emphasis added.]

48 Moreover, the fact that a later application by the Mounties, where machines were sourced from within the Fairfield area, was allowed is a further indication that a fixed rule did not operate.

(b) The Chairman's personal views

49 What was contained in Mr Sidoti's speech was very unfortunate for two reasons. First, it commented on a decision by the Authority made immediately prior to the speech and during a period in which a review was permitted by an application to the Supreme Court (this present decision), as well as referring to two other recent decisions. Secondly, Mr Sidoti publicly disclosed personal views that he held that related directly to his statutory function.

50 Persons who sit on tribunals or are members of a decision-making body that affect the rights of parties and which are subject to the oversight of this Court should be extremely cautious about discussing matters that they have recently decided and should probably never publicly disclose personal opinions that they might hold about matters that relate to the office they hold or the function they perform. To do so in either case is only liable to result in applications for a review of decisions made by them and is likely to undermine the respect and authority of the tribunal on which they sit or the body of which they are a member.

51 Whilst it is understandable that Mr Sidoti may have wished to explain publicly the way that the Authority went about its tasks, it was entirely inappropriate to do so by reference to decisions that had so recently been made.

52 Nevertheless, when the speech as a whole is read, particularly that part of it that discusses the Authority recent decisions, a fair-minded observer could not reasonably conclude either that the Authority might have a fixed rule approach to Fairfield LGA nor that other than an open mind was brought to bear on applications made to the Authority. The Act itself recognises the harm that can come from gaming machines. As noted, the first object of the Act is to minimise harm associated with gambling. The fifth object is to provide for an ongoing reduction in the number of gaming machines.

53 What Mr Sidoti's speech was endeavouring to do was to show how the Authority went about balancing the issues that it needed to consider. The following aspects of the speech bear this out:

We appreciate some of the difficult challenges that are involved in regulating lawful substances in ways that minimise the harm that they do to the community. Alcohol and the practice of gambling are inherently dangerous and that's why they're subject to regulation, but they are lawful because that's the political decision that's been taken and, I would say, still a political decision that is reflective of the majority of community opinion, and so the challenge for a regulator is to provide the appropriate balance between those aspects of community opinion that support the legalisation of these dangerous activities, the policy positions expressed in the legislation enacted by the Parliament and the realisation that the activities are inherently harmful.

...

We're there to implement the law as it stands to the best of our ability, while reflecting the implementation and interpretation of the broader social policy objectives that we as an Authority are responsible for seeking. So it in that delicate -balance in a challenging area and from time to time there is a great deal of public, political and media interest in what we do - but striking the balance is what we have to ensure.

We have two principal intentions in our work. We have to enable residents and others in New South Wales to enjoy the entertainment, that is both alcohol and gambling, to which lawfully they are entitled to have access -, but we must give the highest priority under the legislation to community safety and harm minimisation. We have to recognise that the activities are lawful, as I have indicated, but that they are inherently dangerous, and its in that area, that area of striking balances, that is particularly difficult for us.

Under the legislation there are particular areas of obligation imposed upon the industry and within the Authority's jurisdiction. We consider applications to increase gaming machine thresholds. We can sometimes, generally take into account the views of communities expressed by a Local Impact Assessment. With small increases we don't have to go through a Local Impact Assessment process, but nonetheless we have to look at community impact.

No matter which of those areas of activity we undertake, we have to be conscious of harm minimisation, but we also have a statutory obligation to look to what is called the balanced development of the industry and so balancing the two, again, becomes a difficulty that we face.

[He then discussed the two different classes of LIA.]

But one thing I want to emphasise is that in both cases there are discretions vested in the Authority to make decisions in accordance with the overall objectives of the Act and one of the principal objectives is the objective of harm minimisation. So even in circumstances where only a Local Impact Assessment Class 1 is required, and even where the test that we have to apply is one of positive contribution, any positive contribution, we still have discretions on whether we finally grant the application, taking into account some of the harm minimisation findings or concerns that might be expressed.

In New South Wales, under the legislation, all local government areas are divided into three bands. The classification depends on three factors: the existing density of gaming machines, the existing levels of expenditure on gaming machines, and then socio economic indices - indicators of advantage or disadvantage, within that local community.

[He then discussed the division of LGAs into Bands.]

As I've indicated, there are significant discretions available to the Authority and we have to take into account, in applying those discretions, the objectives of the legislation. There is the objective of harm minimisation but there is also an objective relating to the development of the industry.

...

We've been particularly concerned about the transfers of additional poker machines to band 3 local government areas - those that have the highest density, the highest expenditure and the lowest socio economic data. Even where the number of machines to be transferred is relatively small, we have tended to take a hard line. So the three examples of recent refusals relate to those kinds of circumstances.

[The first concerned the application Wagga Wagga]

The second refusal that I want to refer to was one relating to a very, very large club in the Fairfield local government area in Sydney. Mounties has, I think, the largest number of poker machines of any venue in New South Wales and it was proposing to increase its numbers from, as you see, 561 to 621, that is an increase of 60 machines.

The proposal originally was to transfer those machines from two other registered clubs owned by Mounties located in the Manly area in Sydney. In the Manly area machines return an average income revenue per machine roughly, from memory, a tenth of what they return in Mt Pritchard, so there was a very clear commercial advantage for the club in transferring the machines from Manly to Mt Pritchard. It already owned the machines, they were in a subsidiary club, or two subsidiary clubs located in the Manly area.

During the course of the hearing, the club moved away from a commitment to transfer those particular machines but it was still the case they would be coming into the Fairfield LGA from outside it and Fairfield is a band 3 LGA and has the lowest socio economic data of any local government area in the Sydney metropolitan area and we said no.

The third is an example at the opposite end of the scale of a very small increase in a hotel from 23 to 30, an increase of only seven machines, but again it was located in the Fairfield local government area and, I've already indicated, Fairfield has the highest density, amongst the highest expenditure and the lowest socio economic data, and from the point of view of the Authority, there was no way that we could consider the addition, even of seven poker machines, into that local government area at this time.

In the case of both Mounties and the Fairfield Hotel, there was no question raised whatsoever that the responsible gambling practices that were being carried out in the places were not exemplary. In fact, the Fairfield Hotel has received a number of awards for its restaurant and its management and many other aspects of it. It has sounded like and seemed to us to be a first class facility. Mounties has some of the best responsible gambling practices in the state. So the issue for us was not what they were doing but the implications of transferring more poker machines, even to good venues, within the Fairfield local government area.

These are examples only of the way in which the Authority is thinking and acting. We're doing so in a context that is a bit different from other states. Certainly in New South Wales we have the largest number of poker machines in Australia, but there are laws and programs that are seeking to reduce the number, albeit incrementally and albeit at a tortuously slow pace. For every three machines that are transferred, one licence has to be surrendered is the basic approach, with a couple of exceptions.

It's applied far more strictly than it is in other jurisdictions. ...

So for us looking at our responsibilities, we are talking not about the addition of poker machines at a state wide level. We're not increasing the numbers. In many respects in fact, by approving transfers, we're reducing the numbers because of the obligation to surrender a third. What our responsibilities are is to look at where those machines should be placed and how the transfers should be effected. In doing that, we have to take into account the impact on local communities, as in these three examples that I've given you.

...

One of the difficulties I find with the sensitivities of debates about gambling is that sometimes politicians are reluctant to look at some of the hard data and the likely demographic trends and strike first, rather than reacting long after the event. I probably should put in a footnote here that I do not and never have gambled with money at all. I consider that my entire life has been a big enough gamble, why should I put money into it as well? I hate gambling and I despise poker machines, but I also know that wherever prohibition has been tried it hasn't worked and I'm very anxious that the prohibition approach towards on-line gambling, or many areas of on-line gambling, may well be causing more trouble than enough.

And although I don't have any policy conclusions or even concluded policy views, I really think this is an area where we need to be closely examining what has happened. ...

There are things that the law can do that address some of the problems that Jamie has referred to. Even the problems arising from the High Court case, for example, and the casino can be as addressed by changes in the law. So there are limitations in the way we can deal with the internet, but there are things that can be done and I personally, as a dedicated non gambler, feel very anxious that we are not even having the discussion - at least not at a serious level. That's one of the future shapes of gambling that is already occurring outside the law and outside regulation, and I don't know that that is necessarily a good idea.

54 In Jia Legeng Hayne J said:

[185] Saying that a decision-maker has prejudged or will prejudge an issue, or even saying that there is a real likelihood that a reasonable observer might reach that conclusion, is to make a statement which has several distinct elements at its roots. First, there is the contention that the decision-maker has an opinion on a relevant aspect of the matter in issue in the particular case. Secondly, there is the contention that the decision-maker will apply that opinion to that matter in issue. Thirdly, there is the contention that the decision-maker will do so without giving the matter fresh consideration in the light of whatever may be the facts and arguments relevant to the particular case. Most importantly, there is the assumption that the question which is said to have been prejudged is one which should be considered afresh in relation to the particular case.

[186] Often enough, allegations of actual bias through prejudgment have been held to fail at the third of the steps I have identified. In 1894 [in R v London County Council; Re Empire Theatre (1894) 71 LT 638 at 639], it was said that:

"preconceived opinions - though it is unfortunate that a judge should have any - do not constitute such a bias, nor even the expression of such opinions, for it does not follow that the evidence will be disregarded". (emphasis added)

Allegations of apprehended bias through prejudgment are often dealt with similarly.

55 Matters both within the speech and extraneous to it lead me to the view that a fair-minded observer could not reasonably conclude that the Chairman's might have prejudged the issue. First, although he disclosed his own views about gambling and poker machines, he acknowledged that prohibition had never worked. Secondly, his expressed concern in that part of the speech was more related to online gambling. Thirdly, the speech is replete with references to the need to balance amongst community entertainment and enjoyment, the development of the industry and harm minimisation.

56 It is also apparent from the fact that a subsequent application by the Mounties was approved, and that other applications for increases in a threshold have been approved ([36] above), that Mr Sidoti's expressions of opinion have not meant that evidence has been disregarded or that his personal views have influenced the outcome of applications.

57 Those matters show that the Chairman was "open to persuasion" and that his opinion was not applied without giving the matters consideration: McGovern at [16] - [17].

Ground 2: The jurisdictional basis

58 The Authority is not required to provide reasons for its decisions except for those expressly required by legislation. Applications to increase the threshold for an applicant's gaming machines is not a matter stipulated in the legislation. The Authority's Guideline issued in November 2012, paragraph 15, provides that, in cases other than where it is required to provide reasons by legislation and where it has a practice of doing so in relation to revoking or varying liquor licences in contentious or complex matters, if an applicant or other interested party makes a written request for detailed reasons in relation to a decision under, inter alia, the Gaming Machines Act 2001 (NSW), the Authority will consider each request on a case by case basis.

59 In his affidavit Mr Wilson sets out the usual procedure for the preparation of reasons where reasons are to be provided for a decision. The first draft is prepared by departmental staff present at the meeting of the Authority at which the decision is made or is prepared by Mr Wilson. He usually drafts the reasons in the more complex cases.

60 Mr Wilson also gave evidence about what sometimes happens at the end of discussion at a meeting about a particular matter (paragraph 27 of his affidavit). It was agreed that this did not happen in the present case. I said that I would rule on the admissibility of this paragraph in my final judgment. I am satisfied that the paragraph has no relevance to a consideration of the present matter. The paragraph should be rejected.

61 Where Mr Wilson prepares a draft of the reasons and he has been present at a meeting of the members of the Authority, hearing the discussion prior to the decision gives him the immediate notice of the matters which should be included in the draft of the Statement of Reasons.

62 Once the draft is prepared it is circulated by email to the Chief Executive and other members for their input and adoption. Often that input is not merely editorial but is substantial, extending sometimes to matters that were discussed at that meeting by individual members but are not reflected in the draft decision presented to them. Sometimes changes in emphasis are made while at other times further explanation is given as to why the Authority made a particular finding from that included in the draft. Sometimes there is a discussion of a broader policy that the Authority may wish to draw to the attention of industry.

63 In relation to this application, on 30 August 2013 Mr Wilson sent an email to Ms Olgica Lenger, who manages the gaming machine licensing section, with the suggested words to be put in the email that went to the Plaintiffs' on 2 September 2013 ([17] above).

64 Thereafter, in the weeks that followed, Mr Wilson commenced work drafting the Authority's Statement of Reasons in respect of the application. In doing so, he had several discussions with the chief executive about how key issues arising from the Applicant's submissions and the broader gambling research would best communicate the Authority's position on the application in a manner that reflected a consistent approach to the assessment of community benefit and detriment that the Authority had taken in the Mounties application.

65 On 17 October 2013 Mr Wilson sent an advanced draft by email to the chairman, the deputy chair, the chief executive and Mr Brown for their input. By that date Ms Brownlee was no longer a member of the Authority as her term had expired on 10 October 2013.

66 On 18 October 2013 Mr Brown sent an email noting a typographical error but otherwise approving of the draft.

67 On 24 October 2013 Mr Wilson received an email from the Chairman attaching a copy of marked up changes that he wanted to be made to the document.

68 On 29 October 2013 Mr Wilson received an email from Mr Amati which said that he was happy with the version of the report that incorporated the comments from the Chairman and Mr Brown.

69 On 12 November 2013 Mr Wilson received an email from the Chief Executive confirming that he was satisfied with the draft.

70 Thereafter, on 14 November 2013 the Reasons signed by the Chairpman was forwarded to the Applicant.

71 The Plaintiffs submitted that in circumstances where Mr Wilson prepared the reasons on the basis of his own examination of the application and where he had taken no notice of the meeting, the statutory function of the Authority miscarried. They submitted that the evidence showed that the reasons contained in the lengthy document provided to the Plaintiffs contained vast amounts of material that were not considered or discussed at the meeting of the Authority when it resolved to refuse the application. In particular, the arithmetical difference of about $200,000 in determining the Plaintiffs' income from the machines, that differed from what was contained in the Authority paper, was not discussed by the members of the Authority at the meeting.

72 The Plaintiffs submitted that the combination of those two matters showed that the reasoning process was a top down ex post facto reasoning process. It was further invalidated, the Plaintiffs submitted, by the fact that one of the members who participated in the decision, Ms Brownlee, played no part in the provision of the reasons.

73 In Sherlock v Lloyd [2010] VSCA 122; (2010) 27 VR 434 the Victorian Court of Appeal held at [74] that where an administrative tribunal had no obligation to provide reasons it could not be correct to say that the Tribunal's failure to provide reasons or adequate reasons was of itself an error of law. The Court also held at [42] that s 8(1) of the Administrative Law Act 1978 (Vic), which required the Tribunal to furnish a person with a statement of reasons for its decision if requested to do so, did not mean that the giving of inadequate reasons was intended to be a condition of validity of the decision.

74 As noted earlier, the Authority is not required by the Gaming Machines Act to provide reasons for acceding to or refusing applications to increase the threshold. The Plaintiffs do not suggest that the Authority is under an obligation to do so, but they say that if reasons are provided they must be the reasons of the Authority and not the reasons of some consultant or other person.

75 However, in the absence of an obligation to provide reasons, I agree with the Victorian Court of Appeal that inadequate reasons provided at the discretion of the decision making body cannot impugn the validity of the decision itself. A fortiori, the manner of preparation of the reasons cannot affect the validity of the decision. Although the first draft of the reasons was prepared by Mr Wilson, he received input initially from the Chief Executive and subsequently from three other members of the Authority. Ultimately, those four members agreed with the form of the reasons that were signed by the Chairman and forwarded to the Plaintiffs.

76 In Minister for Immigration, Local Government and Ethnic Affairs v Taveli (1990) 23 FCR 162 French J suggested (at 178-179) that a statutory duty to provide reasons is not discharged by an ex post facto justification of a decision. However, it is doubtful that his Honour's statement could apply where there is no statutory obligation to give reasons. As Aronson and Groves Judicial Review of Administrative Action (5th Ed, 2013, Thompson Reuters) say at 8.460:

There would need to be shown a clear connection in the legislation between reasons and a valid exercise of the power. Where there is inadequacy of the reasons, or perhaps some other problem associated with them, the only relief available is ordinarily an order to produce adequate reasons rather than an order that impugns the decision itself.

77 I do not consider that the absence of Ms Brownlee's ratification of the reasons can affect the validity of the decision. Section 14 of the Gaming and Liquor Administration Act 2007 (NSW) stipulates that a quorum for the meeting of the Authority is a majority of its members. Section 16 says that a decision supported by a majority of the votes cast at a meeting of the Authority at which a quorum is present is the decision of the Authority. Section 17 enables the Authority to transact its business by the circulation of papers amongst the members and a resolution in writing approved in writing by a majority of those members is to be regarded as a decision of the Authority.

78 In McGovern one of the issues for consideration was whether the decision- making process is invalidated in circumstances when there was alleged to be apprehended bias in respect of two members of a local council. The issue was what effect their disqualification would have on the decision of the council.

79 Spigelman CJ said:

[45] It is necessary to allow for special cases, for example, when a particular member of a collegial body has, or has had, particular influence on the other members. Except in such cases, a rotten apple test is not, in my opinion, the approach that an independent observer "might" reasonably adopt in the usual pre-judgment case. Rather a "but for" test should generally be applied, that is, the Court should ask whether or not the person(s) reasonably suspected of pre-judgment decided the outcome.

[46] This approach does not call for an inquiry into "the extent to which that person may have influenced the majority", to use Gummow J's terminology. It will generally be sufficient just to count the votes. Further inquiry would only be called for on the part of the independent observer where there is clear reason for engaging in it. The purpose identified by Gummow J can be served by a simple "but for" rule, at least in the usual case of a collegial decision-making process.

[47] This appears to have been the approach of Deane J in Laws at 92:

"... If the Tribunal as a whole is affected by the actuality or the appearance of such prejudgment, the Tribunal will, subject to the possible operation of the doctrine of necessity, be precluded from embarking upon that proposed inquiry. If the Tribunal as a whole is not so affected but some of its members are, those members will, subject again to the possible operation of the rule of necessity, be disqualified.

In most cases where a statutory tribunal can be validly constituted by some only of its members, the actuality or the appearance of disqualifying bias on the part of a particular member or particular members will affect those members only and will not taint the tribunal as a whole. If, for example, the actuality or appearance of bias on the part of a particular member or particular members results from a relationship or activities unconnected with membership of the relevant tribunal, there is not, without more, any reason in fairness, principle or common sense why the other members of that tribunal or the tribunal itself should be affected or disqualified. Even where the actuality or the appearance of bias on the part of a particular member or particular members has resulted from the discharge of the relevant tribunal's functions, it will ordinarily be possible to say that neither the parties nor a fair-minded, informed lay observer would entertain a reasonable apprehension that the tribunal as a whole was affected by the disqualifying bias of a particular member or members. The circumstances of a particular case may, however, be such as to give rise to a reasonable apprehension that the relevant tribunal as an institution is affected by disqualifying bias. ..."

[48] I agree with this reasoning.

80 In that case two councillors were said to have made up their minds in advance of the decision being made by the council. Although Spigelman CJ dismissed the suggestion that this meant they had prejudged the matter or that the apprehended bias principle operated against them, he said:

[62] Alternatively, even if Councillor Ryan and Councillor Ebbeck had not voted, the result would have been the same. If either or both could be said to have predetermined the issue, and the apprehended bias principle applied to them, it could not be said that the principle applied to the Council itself. The "but for" test, identified at [45] above as the relevant test in a bias by predetermination case, is not satisfied.

81 I do not overlook the fact that Basten JA came to the opposite conclusion at [103] and that Campbell JA said at [237] that he would approach the case by assuming rather than deciding that if two of the councillors met the legal test for reasonable apprehension of bias the Council's decision as a whole would be vitiated. Campbell JA acknowledged at [242] that the case law did not speak with unanimity on the point.

82 I prefer the analysis and conclusion of Spigelman CJ. However, the issue in the present case is not the same. The point is not that Ms Brownlee was or might have been disqualified for some procedural fairness or natural justice wrongdoing. The point is only whether her absence from the process of ratifying the reasons invalidated that process.

83 In my opinion, there are three reasons why it did not. First, for reasons already given, a problem with the reasons of the Authority cannot invalidate the decision in circumstances where, because there is no legislative requirement for reasons, there is no connection made between the decision and the reasons.

84 Secondly, the evidence of what took place at the meeting, slight as it may be, points strongly to the fact that Ms Brownlee was entirely supportive of the decision (see [33] (b), (c) and (d) above) and the abbreviated reason provided to the Plaintiffs on 2 September 2013.

85 Thirdly, the approach in the reasons was a similar approach to that taken with the Mounties application. Ms Brownlee was familiar with that decision, having taken part in it only a short time before.

86 In no sense were the reasons infected or affected by any invalidating behaviour on Ms Brownlee's part as was alleged to be the case in McGovern. She simply did not and could not join in them. The other four members did. They constituted a quorum. They were unanimous in supporting the reasons. The reasons were not invalidated by Ms Brownlee's lack of involvement.

Conclusion

87 I make the following orders:

1. Extend time to commence the proceedings to 13 February 2014.

2. Dismiss the Amended Summons.

3. The Plaintiffs are to pay the Defendants' costs.

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Decision last updated: 16 July 2014