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Re Hunter Valley Developments Pty Limited; Anthony Neary Walker; Mende Brown v the Honourable Barry Cohen Minister of Home Affairs and Enviroment [ 1984] FCA 176 ; (1984) Admn 96-034 /; 3 FCR 344 (5 July 1984)

FEDERAL COURT OF AUSTRALIA

Re: HUNTER VALLEY DEVELOPMENTS PTY LIMITED; ANTHONY NEARY WALKER; MENDE BROWN
And: THE HONOURABLE BARRY COHEN MINISTER FOR HOME AFFAIRS AND ENVIROMENT
No. G.426 of 1983
Practice - Administrative Law
(1984) ADMN 96-034 /  [1984] FCA 176 ; 3 FCR 344

COURT

CATCHWORDS

Administrative Decisions (Judicial Review) Act 1977, s.11

Administrative Law - Judicial review - Application for extension of time to make application for orders of review - Administrative Decisions (Judicial Review) Act 1977 (Cth), s. 11(1)(c). Observations concerning the circumstances in which an extension of time for bringing an application for orders of review of administrative decisions will be ordered.

Duff v. Freijah [1982] FCA 159; (1982) 62 FLR 280; Ralkon Agricultural Co. Pty Ltd v. Aboriginal Development Commission [1982] FCA 153; (1982) 43 ALR 535; Lucic v. Nolan (1982) 45 ALR 411; Chapman v. Reilly unreported (Federal Court of Australia, Neaves J., 9 December 1983); Doyle v. Chief of Staff [1982] FCA 124; (1982) 42 ALR 283; Douglas v. Allen [1984] FCA 77; (1984) 1 FCR 287; Hickey v. Australian Telecommunicati ons Commission (1983) 48 ALR 517; Wedesweiller v. Cole [1983] FCA 94; (1983) 47 ALR 528; Lovatt v. Le Gall (1975) 10 SASR 479; Sophron v. The Nominal Defendant [1957] HCA 27; (1957) 96 CLR 469; L. Grollo Darwin Management Pty Ltd v. Victor Plaster Products Pty Ltd [1978] FCA 17; (1978) 33 FLR 170, referred to.

HEARING

D.M.J. Bennett Q.C. and L. Katz, for the respondent.

Cur. adv. vult.

Solicitors for the applicants: Parish Patience.

Solicitor for the respondent: Australian Government Solicitor.
G.F.V.

ORDER

2. The applicants are to pay the respondent's costs of this application.

Orders accordingly.

DECISION

2. The applicants are persons concerned with the making of a feature film which was originally given the working title of "Huck and Jim" but which was more recently re-titled "On the Run". The producer of the film was the third applicant Mr Mende Brown. He is also a director of Pigelu Pty Limited which acted as the production company in relation to the film. Mr W F Anderson, Managing Director of Hunter Valley Developments Pty Limited, the major investor in the film, acted as Executive Producer of the film. The second applicant, Mr A N Walker, is a practising solicitor who acted as Associate Producer of the film.

3. In November, 1981 Mr Brown submitted to the Department of Home Affairs and Environment an application for a Provisional Certificate, pursuant to s.124ZAB of the Income Tax Assessment Act. Thereafter, there was considerable correspondence between Mr Brown and the Department, upon the question whether the proposed film was one in relation to which the Minister could be satisfied that, when completed, it would be a "qualifying Australian film". The critical question was whether the film would have a "significant Australian content": see the definitions in s.124ZAA of the Act. In the result, the Minister indicated that he was not so satisfied and no provisional certificate was ever granted.

4. Notwithstanding this position the producers decided to proceed with the production of the film, taking the view that they would be likely to persuade the Minister that the completed film qualified for a Final Certificate pursuant to s.124ZAC. The issue of the Final Certificate is, under the scheme of Division 10BA of the Act, the critical event in terms of tax benefits. The shooting of the film commenced at the beginning of March, 1982. Production was completed about 15 June, 1982 when an answer print was struck.

5. Early in June, 1982, in anticipation of the completion of the film, the producers engaged the services of Marsden Management Pty Limited, a management consultant company controlled by Mr J M Mason. Mr J M Mason's brother, Mr R K Mason, is a well known film producer and his services were enlisted in the application for a Final Certificate. Messrs Mason attended a meeting with officers of the Department in Canberra on 8 July, 1982. Thereafter there was some correspondence regarding the information which the Department would require in order to advise the Minister in relation to a Final Certificate and Mr Brown took the opportunity of setting out reasons why the Minister should take the view that the film, as completed, had a significant Australian content. The formal application for a Final Certificate was lodged with the Secretary of the Department about 15 November, 1982. On 31 December, 1982 the then Minister, the Hon. D T McVeigh, wrote to Mr Brown a letter in the following terms:

"I refer to your application dated 15 November
1982 seeking a final certificate for the film
entitled "On the Run" as a qualifying Australian
film under section 124ZAC of the Income Tax
Assessment Act 1936.

I note that Mr Wilson, then Minister for Home
Affairs and Environment, wrote to you on 30
December 1981 stating that he was unable to
determine that the proposed film would have a
significant Australian content. At that time
you had applied for a provisional certificate
under section 124ZAB of the Act. Mr Wilson
confirmed this view in further letters to you of
8 January and 17 March 1982.

I have considered carefully your application for
a final certificate for this film and, having
regard to all the information before me, I am
unable to satisfy myself that the film "On the
Run" has a significant Australian content and,
therefore, in my view, the film is not a
qualifying Australian film."

7. The applicants had been aware, before the receipt of the Minister's letter, of the availability to them of the Administrative Decisions (Judicial Review) Act as a means to challenge a legally erroneous decision of the Minister in relation to certification. In his affidavit Mr Walker referred to the receipt from counsel in April 1982 of written advice as to the availability of the Act in respect of the Minister's decision not to grant a Provisional Certificate.

8. Notwithstanding this knowledge, no immediate action was taken either to request reasons or to seek review of the decision set out in the letter of 31 December 1982. The reason, according to Mr Anderson, was that he was aware of continuing contact between Messrs Mason and the Department and that the Messrs Mason were arranging a conference with the Minister to be held in February. That conference was held on 10 February 1983. It was attended by Mr Anderson, Mr J M Mason and Mr R K Mason. There was, apparently, a fairly detailed discussion about the content of the film and this concluded with the Minister indicating that the decision would be reviewed. On 11 February 1983 Mr R K Mason wrote to the Minister setting out information regarding the film, apparently to record matters discussed orally.

9. The Minister did, apparently, further review the matter but he did not change his mind. On about 22 February 1983 he forwarded a telex to Mr R K Mason in the following terms:

"'ON THE RUN'

I REFER TO OUR MEETING OF 10 FEBRUARY AND YOUR
LETTER OF 11 FEBRUARY 1983 CONCERNING THE ABOVE
FILM APPLICATION. OVER THE WEEKEND I HAD THE
OPPORTUNITY TO VIEW THE FILM AND REVIEW THE
APPLICATION FOR FINAL CERTIFICATION.

AFTER DUE CONSIDERATION, I REMAIN UNABLE TO
SATISFY MYSELF THAT THE FILM IS A QUALIFYING
AUSTRALIAN FILM UNDER DIVISION 10BA OF THE
INCOME TAX ASSESSMENT ACT 1936. I AM STILL OF
THE OPINION THAT THE NUMBER OF NON AUSTRALIAN
ELEMENTS IS SUCH THAT THE FILM DOES NOT HAVE A
SIGNIFICANT AUSTRALIAN CONTENT.

AS THIS FILM PROJECT HAS NOW BEEN REJECTED ON
FIVE OCCASIONS - TWICE IN REGARD TO FINAL AND
THREE TIMES IN REGARD TO PROVISIONAL
CERTIFICATION, I REGRET TO SAY NO USEFUL PURPOSE
WOULD BE GAINED FROM ANY FURTHER REVIEW.

I UNDERSTAND THAT MR BARRY SMITH OF MY
DEPARTMENT HAS ADVISED YOU INFORMALLY OF MY
DECISION."

11. Notwithstanding the apparent finality of the Minister's conclusion, Mr Anderson retained the belief, as he put it in para 13 of his affidavit, "that if further representations were made to him he would change his mind". Mr Anderson decided that he should "exhaust these other avenues before instituting any proceedings in the courts to review the Minister's decision". He decided to engage another consultant to make further representations to the Minister. There was, however, some delay in further action. Mr Anderson was distracted during March and April by a number of other matters, including problems in relation to his business of land development, a serious illness suffered by his wife, and a visit to Los Angeles in relation to the distribution of the film in the United States of America. For those reasons it happened that he had taken no action to engage another consultant when, at the end of April, 1983, he met the Special Minister of State, the Hon. Mick Young, at a luncheon. As a result of this introduction he had an interview with Mr Young at his office and requested him to make representations on his behalf to the Hon Barry Cohen, who had by then become the Minister for Home Affairs and Environment. Mr Young did make representations but without avail. On about 21 June 1983 Mr Anderson received from Mr Cohen a letter setting out information regarding the scheme of the legislation and concluding:

"I stress that I am not the final Court of Appeal
in the certification of films. Your film has
been considered fully on five separate
occasions, by two different Ministers, twice in
regard to the final and three times in regard to
provisional certification. It has been rejected
on all five occasions. My Department has
advised that protracted and detailed
consideration has been given to this matter
already and that the film remains unacceptable
for certification under the taxation provisions
for films."

"Final Certification for the film 'On the Run'

We advise that we act for Mr Mende Brown, the
producer of the film 'On the Run'.

Certification has been rejected on previous
occasions with the reason given to date that the
film lacks 'sufficient Australian content',
without further explanation.

Accordingly, we enclose an application from Mr
Brown for a statement by the Minister, setting
out your findings on material questions of fact
and giving reasons for your final decision,
pursuant to the relevant provisions of the
Administrative Decisions (Judicial Review) Act,
as amended."

14. As I have already indicated, the applicants do not now press for an order to compel the Minister to furnish a statement under s.13 of the Act. However, they place some reliance on the making of the request in July 1983 as an indication to the Minister that the applicants were dissatisfied with the position and of their reliance upon their rights under the Act. Mr Cohen did become aware of the request. On 27 August 1983 he wrote to Messrs Parish Patience referring to the history of the matter and expressing the view that under those circumstances he was under no obligation to provide further reasons for the decision.

15. I interpolate that, even whilst the request under s.13 was before the Minister, a further attempt had been made to obtain a reversal of the Minister's decision. Whilst on holiday in Fiji in July Mr Anderson had met a Mr Stephen Carney, a government relations consultant carrying on business in Canberra. On 9 August 1983 he and Mr Walker conferred with Mr Carney and commissioned him "to do whatever he could to persuade the Minister to issue a final certificate". Mr Carney did have discussions with officers of the Department but to no avail. On 25 August 1983 he forwarded to Mr Anderson a telex in which he expressed the opinion that the prospect of gaining a certificate for the film "appears to be practically nil". He went on to add some comments about the request for reasons pursuant to s.13 of the Act, then under consideration.

16. After the receipt of Mr Cohen's letter declining to furnish further reasons, Mr Anderson decided to seek advice from counsel as to the likelihood of succeeding in an application to review the Minister's decision. For various reasons considerable delay occurred, with the result that it was not until 17 November 1983 that firm advice was received as a result of which the applicant decided to file the present application. Even then, there was further delay. The application was not filed until 29 December 1983 and, because of some misunderstanding by Mr English, it was not served until 15 February 1984.

17. Section 11 of the Administrative Decisions (Judicial Review) Act does not set out any criteria by reference to which the Court's decision to extend time for an application for review under s.5 is to be exercised. Already there have been a number of decisions of Judges of this Court, all sitting at first instance, dealing with the approach proper to be taken. They differ a little, both in language and in emphasis, but I venture to suggest that from them may be distilled the following principles to guide, not in any exhaustive manner, the exercise of the Court's discretion:

18. (a) Although the section does not, in terms, place any onus of proof upon an applicant for extension an application has to be made. Special circumstances need not be shown but the Court will not grant the application unless positively satisfied that it is proper so to do. The "prescribed period" of 28 days is not to be ignored (Ralkon v Aboriginal Development Commission [1982] FCA 153; (1982) 43 ALR 535 at p 550) Indeed it is the prima facie rule that proceedings commenced outside that period will not be entertained (Lucic v Nolan (1982) 45 ALR 411 at p 416) It is a pre-condition to the exercise of discretion in his favour that the applicant for extension show an "acceptable explanation of the delay" and that it is "fair and equitable in the circumstances" to extend time (Duff at p 485; Chapman v Reilly, Neaves J, 9 December 1983, not reported, at p 7).

19. (b) Action taken by the applicant, other than by making an application for review under the Act, is relevant to the consideration of the question whether an acceptable explanation for the delay has been furnished. A distinction is to be made between the case of a person who, by non-curial means, has continued to make the decision maker aware that he contests the finality of the decision (who has not "rested on his rights": per Fisher J in Doyle v Chief of Staff [1982] FCA 124; (1982) 42 ALR 283 at p 287) and a case where the decision maker was allowed to believe that the matter was finally concluded. Compare Doyle, Chapman, Ralkon and Douglas v Allen (Morling J, 3 April 1984, not reported) at p 18 with Lucic at pp 414-415 and Hickey v Australian Telecommunications Commission (1983) 48 ALR 517 at p 519. The reasons for this distinction are not only the "need for finality in disputes" (see Lucic at p 410) but also the "fading from memory" problem referred to in Wedesweiller v Cole [1983] FCA 94; (1983) 47 ALR 528.

20. (c) Any prejudice to the respondent including any prejudice in defending the proceedings occasioned by the delay is a material factor militating against the grant of an extension: see Doyle at p 287, Duff at pp 484-485, Hickey at pp 525-527 and Wedesweiller at pp 533-534.

21. (d) However, the mere absence of prejudice is not enough to justify the grant of an extension: Douglas at p 18, Lucic at p 416, Hickey at p 523. In this context, public considerations often intrude (Lucic, Hickey). A delay which may result, if the application is successful, in the unsettling of other people (Ralkon p 550, Becerra pp12-13) or of established practices (Douglas p 19) is likely to prove fatal to the application.

22. (e) The merits of the substantial application are properly to be taken into account in considering whether an extension of time should be granted: Lucic p 417, Chapman p 6.

23. (f) Considerations of fairness as between the applicants and other persons otherwise in a like position are relevant to the manner of exercise of the Court's discretion: Wedesweiller at pp 534-535.

24. In considering the authorities it is, I believe, important to bear in mind the point made by Sheppard J in Wedesweiller at p 531, relating to the diversity of decisions of to which review may be sought under the Act:

". . . there will be some cases which may be
decided upon considerations which affect only
the immediate parties. It will be
appropriate to consider whether the delay
which has taken place has been satisfactorily
explained, the prejudice which may be caused
to an applicant by the refusal of an
application, the prejudice which may be
suffered by the Government or a particular
department if the application is granted and,
generally, what the justice of the case
requires. In other cases wider
considerations will be involved."

26. It is in relation to the former category of cases, ie those "which affect only the immediate parties" that the approach adopted by Bray CJ in Lovatt v LeGall (1975) 10 SASR 479 at p 485 in respect of private litigation but adopted in this context in both Doyle at p 287 and Duff at p 485, is apposite namely:

"If the defendant has suffered no prejudice,
as when he was well within the limitation
period of the plaintiff's claim, or where the
excess period of time is small, or where he
cannot show that he has lost anything by
reason of the delay, it may well be that the
Court will not find it difficult to come to
the conclusion that it is fair and equitable
in the circumstances to grant extension".

28. I now turn to an application of the principles I have summarized to the facts of this case. Mr Bennett argues that the applicants have not made out a case for extension so as to displace th prima facie rule that an application shall be made within twenty-eight (28) days of the relevant decision. Expressed another way, there is no "acceptable explanation" of the delay. The relevant decisions relied upon by the applicants were notified respectively by a letter of 31 December 1982 and a telex of 22 February 1983. In relation to the first decision the twenty-eight (28) day period expired on 28 January 1983. At that time, arrangements were being made by Messrs Mason for a conference with the Minister in early February. It seems to me that Mr Anderson and his colleagues were justified in deciding against filing any application with the Court pending the outcome of that conference. Such action may well have proved unnecessary and even prejudicial to the holding, or to the success, of the conference. At the conference the Minister promised a review and the applicants were justified, in my opinion, in continuing to withhold action until the Minister's decision was known.

29. The Minister's telex was apparently sent on 22 February 1983. Mr Anderson says that he learnt of the content of the telex on 1 March. The period of twenty-eight (28) days in respect of this second decision expired on 22 March. During the months of March and April there were no negotiations, or contact, with the Minister (either Mr McVeigh or his successor, Mr Cohen, who took office during that period), or the Department. However, during these two months Mr Anderson was considerably involved in other matters, including a serious illness of his wife who was hospitalised for two weeks between 4 March and 18 March and for a further period of almost four weeks between 25 April and 20 May. It is true, as Mr Bennett points out, that during this period there was nothing to prevent Mr Walker, who was a solicitor, filing an Application with this Court but it is not difficult to understand that the applicants preferred to wait until Mr Anderson, whose company was the major investor, was able to turn his mind to the question and give instructions before they embarked upon any litigation.

30. Mr Anderson met Mr Young at the end of April and apparently arranged to see him in his official capacity shortly thereafter. He saw Mr Young in mid-May and Mr Young promised to make representations with Mr Cohen. Once again, it seems to me not unreasonable for Mr Anderson to prefer an approach to the new Minister, through one of his colleagues, at that stage rather than immediately to commence litigation which might have had the result of prejudicing the outcome of the representations. Mr Cohen's answer was received about 21 June.

31. I do not have any great difficulty in reaching the conclusion that, in respect of the period between the date of the respective decisions and 21 June 1983, the applicants have disclosed an adequate explanation of the delay.

32. A greater difficulty arises in relation to the period of six months which elapsed between the date of Mr Cohen's letter and the date of the filing of the present application. It took five weeks for the solicitors to write to the Minister requesting a statement of reasons under s.13. Within about one month they received an answer indicating that no further reasons would be provided. By that date, the end of August, Mr Carney's approach was also known to have failed. There was, therefore, no discernible alternative other than to make application to the Court for a review of one or both of the decisions. Yet it took four months for the application to be prepared and filed. The explanation given relates to the difficulties of obtaining conferences with suitable counsel. Mr Bennett has submitted that these difficulties should be given little weight. Whilst it was understandable that the applicants should desire the advice of particular counsel having special expertise in the area, this did not preclude the filing of an Application in the meantime. The Application could have been abandoned had the advice been pessimistic. Mr Bennett drew attention, by way of analogy, to a passage in the judgement of Fitzgerald J in Lucic at pp 417-418:

"Although in the event it does not matter, I
am quite unpersuaded that an absence of legal
aid at any time impeded the relatively formal
step of the filing of an application which
could later be expanded (s.11(6) ). Indeed,
I doubt whether the legislative intention
that applications for review be considered
expeditiously should be permitted to be
frustrated by any delay in obtaining a grant
of legal aid, except in exceptional
circumstances. It seems to me that, in
general at least, it is for the Legal Aid
Commission to meet times fixed by statute or
by the courts rather than for an absence of
legal aid to provide an excuse for
non-compliance".

34. My second comment is that even though the Minister had responded negatively to the request for a statement of reasons under s.13 of the Act, that request must have had the effect of alerting Departmental officers to the possibility, if not the likelihood, of an application for review of the decision under s.5 of the Act. They knew that the applicants had, in the past, strongly contested the various decisions to refuse certificates, provisional or final. They were aware of the cost of production of the film. They must have been aware of the considerable taxation implications, as far as the applicants were aware, of obtaining a Final Certificate. I think that it is most unlikely that they believed that the Minister's letter in late July would close the matter. There is no evidence to suggest that the Department regarded the matter as complete.

35. Thirdly, the adequacy of an explanation for delay is intimately related to the nature of the case. The distinction drawn in Wedesweiller between a case which is merely inter-parties and a case involving elements of public interest in relation to other people, practices or the need for finality is here relevant. The point goes beyond absence of prejudice. An applicant concerned to challenge a decision which has implications for other people or for day to day public administration may properly be regarded as being under a heavier duty to act expeditiously than is an applicant who is aware that his case has no such implications.

36. Not without hesitation, but having regard both to the nature of the relevant decisions and to the circumstances which occasioned the delay between late July and December, I am of the view that the explanation given by the applicants should be regarded as adequate.

37. Mr Bannon contended that there was no evidence that the respondent would, in any way, be prejudiced by the delay in filing the Application. Indeed, he contended that the delay could only be to the advantage of the Commonwealth since it must postpone the date, should it arise, at which the applicants would be entitled to taxation relief. Mr Bennett did not contest this proposition save to refer to the undesirability, having regard to the possible future unavailability of witnesses and the frailty of human memory, of the postponement of the hearing. He did not suggest that any particular problem had yet arisen and there is no such evidence. Whilst I think that it is important that steps be taken to ensure the hearing of the substantive application as soon as possible, I do not regard the postponement of the hearing consequential upon the delay in commencing the proceedings as being a significant factor militating against the grant of an extension of time.

38. In this case, and in contrast to most of the cases which have arisen in the Court and which predominantly involve employment or industrial decisions there is here no suggestion that any other person is affected, for good or ill, by the decision which has been made. The only consequence of the decisions to refuse the Final Certificate is to deny the applicants the taxation benefits which they would otherwise have obtained. The only implications of the case are, therefore, the extent of their taxation liabilities. Although the relevant decision is a ministerial decision made under a statutory authority, this is a case very similar to inter-parties private litigation, involving no other persons. The principle enunciated by Bray CJ is particularly applicable.

39. Finally, in relation to the merits of the substantive application I note that this matter was before Morling J on 1 June 1984 in connection with objections to the production of documents on subpoena. On that occasion counsel for the respondent indicated that his client would not oppose the application for extension of time upon the basis that there would be no merit in the substantive application, were it to be argued. Under those circumstances, I must approach the matter upon the basis that the current application is not to be treated as futile because of the lack of substantive merit. That negative expression, of course, reflects the fact that I have not attempted any evaluation of the applicants' prospect of success in the substantive application, should time be extended.

40. For the above reasons, I regard it as appropriate to grant an extension of time for filing a substantive application. However, I think it is important to ensure that there will be expedition in relation both to the filing and prosecution of that application. The order I propose to make will therefore require that any Application be filed promptly and be made returnable without delay. On the return date I propose to make directions for a tight timetable which will enable the matter to be heard at an early date.

41. Mr Bennett submitted that, whatever the result, his client should have an order for payment by the applicants of his costs of this application. In opposition, Mr Bannon mentioned two factors, neither of which I regard as persuasive. The first matter was that the various Ministers had been prepared to receive representations asking for reconsideration of the decision and that in that situation commercial people, such as the applicants, might well be hesitant to bring the matter to Court. It seems to me that that submission overlooks the fact that there was a consistent course of refusal by the various Ministers and that the new discussions, at each point, occurred at the behest of the applicants and their various advisors. I do not think that a respondent is to be prejudiced in relation to costs because he is prepared politely to receive submissions seeking reconsideration. The second point made by Mr Bannon was that it would have been open to the respondent to consent to an order for extension and thus avoid the necessity for hearing. There may be cases where the appropriateness of an order extending time is so evident that it is unreasonable for a respondent to resist the application. That is not this case.

42. In Wedesweiller Sheppard J made the costs of the successful application for extension of time costs in the applications for review. There were special features about that case which may have dictated that result. In the normal course an applicant for extension of time under s.11 should pay the costs incurred by the respondent in relation to the application. This is the general provision of the Federal Court Rules in relation to an application for an extension of time under the Rules: see O.62r23 and L Grollo Darwin Management Pty Limited v Victor Plaster Products Pty Limited [1978] FCA 17; (1978) 19 ALR 621 at pp 629-630 relating to the corresponding provision of the High Court Rules. I see no reason to distinguish between a case of an application for extension of time limited by the Rules and a case, such as the present, in which the applicant seeks an extension of the time limited by an Act.

43. There is a long line of authority to support the general rule that a successful applicant should pay the costs of the respondent of an application to set aside a default judgement: see Ritchie "Supreme Court Procedure NSW" para 34.5.4 and cases cited therein. Those authorities are based upon the fact that the default of the applicant has occasioned the necessity for the making of the application and that a respondent, other than in exceptional circumstances, should not be prejudiced in costs because of the applicant's default. The same principle applies to this case. Had the present applicants complied with the time requirements of s.11 this application would not have been necessary. The applicant should pay the respondent's costs of this application.