Commonwealth of Australia v Stamatov [1999] FCA 105 (18 February 1999)

Last Updated: 26 October 2004

FEDERAL COURT OF AUSTRALIA

Commonwealth of Australia v Stamatov [1999] FCA 105

DISCRIMINATION LAW – racial discrimination in employment – judicial review – non-citizen granted employment in defence establishment subject to obtaining security clearance – employee citizen of country where background checking impossible – whether dismissal because clearance could not be obtained "by reason of" national original – whether procedures for obtaining security clearance discriminatory – direct or indirect discrimination – whether discrimination "based on" or "by reason of" national origin – reasonableness of requirement.

WORDS & PHRASES – "national origin"

Administrative Decisions (Judicial Review) Act 1977 (Cth)
Racial Discrimination Act 1975 (Cth), ss 9(1), 9(1A), 15, 18 25Z(1)(b)(ii)

International Convention on the Elimination of All Forms of Racial Discrimination, 1965


Langer v Correctional Services Division-Department of Justice (Victoria) (1993) EOC 92-547 referred to
Ellenbogen v Human Rights and Equal Opportunity Commission and Others (1994) EOC 92-564 referred to
Macedonian Teachers’ Association of Victoria Inc v Human Rights and Equal Opportunity Commission unreported Weinberg J, 21 December 1998 applied
Macabenta v Minister of State for Immigration and Multicultural Affairs unreported, Full Court Federal Court, 18 December 1998 applied
De Silva v Minister for Immigration and Multicultural Affairs unreported, Full Court Federal Court, 24 November 1998 referred to
Ealing London Borough Council v Race Relations Board [1971] UKHL 3; [1972] AC 342 cited
Macabenta v Minister of State for Immigration and Multicultural Affairs (1998) 154 ALR 591 referred to
March v Stramare (E & MF) Pty Ltd [1991] HCA 12; (1991) 171 CLR 506 referred to
Human Rights and Equal Opportunity Commission v Mt Isa Mines (1993) 46 FCR 301 cited
Ebber v Human Rights and Equal Opportunity Commission (1995) 129 ALR 455 cited
Australian Medical Council v Wilson (1996) 68 FCR 46 cited


COMMONWEALTH OF AUSTRALIA v HUMAN RIGHTS AND EQUAL OPPORTUNITY COMMISSIONER KATHLEEN McEVOY & VENELIN STAMATOV

NO. SG 34 OF 1998


VON DOUSSA J
ADELAIDE
18 FEBRUARY 1999

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SG 34 OF 1998

BETWEEN:	COMMONWEALTH OF AUSTRALIA Applicant
AND:	HUMAN RIGHTS AND EQUAL OPPORTUNITY COMMISSIONER KATHLEEN McEVOY First Respondent
AND:	VENELIN STAMATOV Second Respondent
JUDGE:	VON DOUSSA J
DATE OF ORDER:	18 FEBRUARY 1999
PLACE:	ADELAIDE

THE COURT ORDERS THAT:

1. The application for an order of review be granted.

2. The decision of the Human Rights and Equal Opportunity Commission of 9 February 1998 be set aside.

3. The application for cross review be dismissed.





Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SG 34 OF 1998

BETWEEN:	COMMONWEALTH OF AUSTRALIA Applicant
AND:	HUMAN RIGHTS AND EQUAL OPPORTUNITY COMMISSIONER KATHLEEN McEVOY First Respondent

AND:	VENELIN STAMATOV Second Respondent

JUDGE:	VON DOUSSA J
DATE:	18 FEBRUARY 1999
PLACE:	ADELAIDE

REASONS FOR JUDGMENT

VON DOUSSA J:

1 Before the Court are two applications under the Administrative Decisions (Judicial Review) Act 1977 (Cth). The first is by the Commonwealth of Australia (the applicant) seeking to review a decision of the first respondent, a member of the Human Rights and Equal Opportunity Commission (the Commissioner), made after an inquiry held under s 25A of the Racial Discrimination Act 1975 (Cth) (the RDA) into a complaint by the second respondent Venelin Stamatov, against his former employer, the Department of Defence (the Department).

2 The second application has been brought by Mr Stamatov to review part of the decision of the Commissioner with which he is dissatisfied.

3 Mr Stamatov lodged a complaint on 1 May 1996 with the Equal Opportunity Commission of South Australia as agent for the Human Rights and Equal Opportunity Commission alleging unlawful discrimination on the ground of his race, national or ethnic origin, in respect of his continuing employment and dismissal from employment with the Department of Defence. He alleged discrimination contrary to s 15 of the RDA in relation to employment. He argued that he had suffered discrimination which was either direct and therefore unlawful pursuant to s 9(1) of the RDA, or indirect and therefore unlawful under s 9(1A) of the RDA.

4 In reasons for decision dated 9 February 1998 the Commissioner found that the complaint made by Mr Stamatov against the Department (referred to in the reasons as the Respondent) was substantiated, and made the following determinations:

"a). I declare that the Respondent has engaged in conduct rendered unlawful by the Act and I direct that the Respondent not repeat such unlawful conduct and amend its procedures relating to security assessment accordingly;

b) I direct that the Respondent provide to the Complainant a reference for the purpose of employment, relating to the period of the Complainant’s employment with the Respondent, making it clear that the termination of the Complainant’s employment with the Respondent implies nothing negative concerning the Complainant’s trustworthiness or level of security risk. The terms of this reference are to be agreed between the parties.

c) I direct the Respondent to pay to the Complainant the sum of $10,000 within thirty days of the date of this determination."

5 The grounds of the applicant’s application for an order of review contend that the decision was wrong in law because the Commissioner misconstrued the RDA, and made findings of fact which were unsupported by the evidence. The applicant seeks an order quashing or setting aside the whole of the decision and determinations, and a declaration that the Department has not engaged in conduct rendered unlawful by the RDA.

6 Mr Stamatov in his application contends that the Commissioner made errors of law in assessing the monetary award to be paid to him. He seeks an order setting aside the award, and referring the matter back to the Commissioner for further consideration.

7 It is common ground between the parties that Mr Stamatov was born in Bulgaria on 9 April 1961. He gave sworn evidence at the inquiry that he had attended school and obtained his initial tertiary qualifications in Varna, the biggest city in Bulgaria. He obtained qualifications as a chemical engineer specialising in defence issues relating to production and quality control of armaments. Subsequently he obtained a scholarship to study at the Leningrad Technological Institute and undertook post graduate studies there which he completed in 1989. He married in 1985, and at about April 1989 he and his wife decided to emigrate to Australia. They made application to do so in 1990.

8 Mr Stamatov gave evidence that from September 1989 to November 1991 he worked with Metalchim Group in Bulgaria, in a workshop with a small group of engineers and technicians involved in upgrading and improving existing armaments. He then took up employment with Belchem Limited in Bulgaria where he worked as a senior engineer concerned with the production of industrial explosives and the quality control of explosives for use in an industrial context. He worked as an administrator and production engineer and was responsible for safety issues. In the course of his work he was sent to Russia. In September 1993 he took up a position as international sales director with another company, Salve Rex Co, in Bulgaria where he worked as a trade commissioner in the former USSR responsible for marketing and quality control of products including ammunition.

9 Mr Stamatov obtained a visa to enter Australia in mid 1994. He migrated to Australia on 6 January 1995 as an independent migrant on the basis of his professional skills. He obtained permanent resident status in Australia.

10 On 28 September 1995 the recruitment officer of the Head Defence Centre – Adelaide wrote to Mr Stamatov inviting him to apply for a position at the Proof and Experimental Establishment, Port Wakefield, as a technical officer level 4 (TO4). By letter dated 30 November 1995 Mr Stamatov was advised by the Department that he had been successful in his application for the TO4 position and that he would be employed on temporary contract until he fulfilled all eligibility requirements for entry into the Australian Public Service. Those eligibility requirements included, in his case, obtaining Australian citizenship, passing a medical examination, and obtaining the specified security clearance of Secret. Mr Stamatov understood that his continued employment was conditional upon fulfilling these requirements. He commenced employment on those terms on 4 December 1995. The undisputed evidence at the inquiry was that Mr Stamatov was selected on merit and was the only appropriate candidate amongst a number who had been interviewed for the position, and the Commissioner so found.

11 Mr Stamatov’s employment came to an end on 1 May 1996. By letter dated 24 April 1996 he was advised by the Department that his temporary employment would terminate because he was unable to be provided with a security clearance at the Secret level. The letter advised him that:

"Initially your application for a security clearance was denied by the Defence Security Branch (SA/NT). The Deputy Head of Defence Centre – Adelaide then requested a reconsideration of this decision from the Assistant Secretary Defence Security in Canberra. A formal reply has now been received from the Assistant Secretary which supports the original decision that you are ineligible to be provided with a security clearance at the Secret level."

12 The reason for Mr Stamatov’s inability to obtain a Secret classification was described in a minute from Mr Peter Zadow dated 19 December 1995 to the head of Defence Security Mr Glanmore Philip, as follows:

"Security clearance papers were forwarded for processing and because the nationality criterion was not met, the papers were returned to the Personnel Section with the advice that the clearance request could not be considered without a request for waiver on the nationality criterion being made and that because of Mr Stamatov’s background, country of origin and short period of residence in Australia, it was my opinion that such a waiver was unlikely to be granted."

13 Mr Zadow was the Department’s regional director in South Australia. He said in his minute to Mr Philip that whilst he had the delegation to deny the waiver request, he sought Mr Philip’s support in doing so because of a request that he had received from Major McNicholas who had been instrumental in employing Mr Stamatov. Mr Zadow wrote, in part:

"Whilst I sympathise with the employing officer, I cannot recommend that the requested waiver be granted, for the following reasons:

a) Mr Stamatov is a Bulgarian national who has been in Australia for less than twelve months.

b) Bulgaria is a country where background checking is unable to be conducted (confirmed with ASIO).

c) To issue such a waiver would conflict with EMICA policy (para 407 SECMAN 5).

d) Third country access would also possibly be involved."

14 Major McNicholas had advocated interviewing Mr Stamatov as part of the clearance process, although he acknowledged that this was not normally required for a Secret level clearance. However, this suggestion was not pursued and a waiver of the nationality criterion was denied.

15 Mr Stamatov gave evidence that he sought to appeal to high authorities within the Department against his dismissal but received no response. He made a second appeal and received a reply advising that he could not receive a security clearance because of his past, because he came from Bulgaria he could not be checked.

16 The requirements of eligibility and suitability for a security clearance are set out in chapter 4 of the Department’s Personnel Security Vetting Manual known as SECMAN 5 – edition 4. The following provisions of chapter 4 have relevance:

"Scope

401. This chapter describes policy and standards for eligibility and suitability for security clearances. To be eligible for a security clearance a person must meet the age and nationality criteria. To be suitable for a security clearance a person’s circumstances must be able to be checked adequately, and favourably assessed.

...

Nationality Requirement

403. Loyalty to Australia should be evident in personnel to whom access is to be granted. Australian citizenship is taken to be indicative of this. Therefore, ordinarily only Australian citizens will be considered for an Australian security clearance. However it can be determined by the Security Vetting Authority to be in the national interest to grant a security clearance to a person or to persons who have a specific qualification skill who are not Australian citizens. Instances when non-Australian citizens, who are not permanent residents of Australia, may be granted a security clearance, include overseas recruitment campaigns and the direct transfer of overseas Service personnel to the ADF.

...

Waivers to the Nationality Requirement

406. Chapter 5 describes the requirements to be taken into account and procedures to be followed when requesting waivers of the nationality requirement.

407. Waivers, if approved, will be granted in accordance with the principles established in DI(G) OPS 13-4 – Release of Classified Military Information To Other Countries. That is, classified information will ordinarily only be disclosed to a foreign national if the information is releasable to the government of the individual’s country of nationality. Similarly, limitations will be imposed on the resultant security clearances.

408. Personnel to whom waivers are granted are required to apply for Australian citizenship when they become eligible to do so, and to accept Australian citizenship when offered. Those who decline to do so or who are not granted Australian citizenship will have their security clearances reviewed, with the likely outcome that the clearance will be downgraded or rescinded.

...

Checkable Backgrounds – Residence in Other Countries (list of those Countries held by RSO)

421. Visits to, or residence in, certain countries can create:

a. an inherent vulnerability to pressure or inducement,

b. a potential for shifts in personal values and loyalties, or

c. a segment of a person’s background that is unlikely to be able to be adequately checked.

422. Of fundamental consideration is the country, the length of time and possible consequences of the time spent in the country. These factors are related to likely threats and vulnerabilities, and may by themselves present potential risks to classified defence material that are deemed unacceptable.

...

Restrictions on Issue of Waiver

424. A waiver cannot be issued for an uncheckable background. Vetting may be commenced but no clearance issued without the written approval of ASSEC, DSEC-N, DSEC-A, or DAF-POL as appropriate."

425. When there has been a visit to, or residence in an overseas country for a period of 12 months or more that is considered unsuitable for background checking purposes, the security vetting agency is to ensure that the subject is interviewed. A check of immigration records should where possible be also conducted. The vettee should be notified that such a check will be conducted and where possible the consent of the vettee should be obtained. Immigration checks would indicate entry and exit from Australia and other relevant details. These checks should normally be only carried out if the person was an adult (ie 18 years or over). Those persons may, at the discretion of the security vetting agency, be considered for a security clearance up to SECRET level. Additionally, people from the list of countries held by the Regional Security Office (RSO) are required to be interviewed regardless of the level of clearance sought."

17 Paragraph 425 was the subject of debate in the course of the inquiry. The evidence established, and the Commissioner so found, that para 425 is applicable where a security clearance is sought in respect of an Australian citizen who has visited or resided in an overseas country for a period of twelve months or more, and had no application in respect of a person who does not hold Australian citizenship.

18 Mr Philip explained in his evidence that the checkability of an applicant’s background refers to not only the individual’s personal and specific background relating to identity and history, but also to issues of the kind identified in SECMAN para 422. He said:

"The other element that’s vitally important to a security clearance is a check with the appropriate security authorities of the countries within which the person being checked has resided to determine if there are any security concerns in relation to that individual, and that’s the check that cannot be undertaken in this case."

19 Checkability is possible where there can be a reasonable belief that the answer which may be obtained from another country can be regarded as meaningful. The notion of checkability is elastic and goes to issues of credibility, not just objective facts. Checkability is very much dependent on national politics and defence and other relationships. Accordingly, the issue of checkability includes consideration of arrangements put in place between countries to enable checks to occur. The checkability of a person’s background may change, and a country may change its checkable status as international arrangements and political issues change.

20 At times relevant to Mr Stamatov’s employment, ASIO advised the Department that Mr Stamatov’s background was uncheckable. The Commissioner found that under those circumstances Mr Stamatov could not be granted a waiver of the nationality requirement: SECMAN para 424. Whilst the second sentence of para 424 appears to contemplate that specified people, including the Assistant Secretary, Security (Mr Philip) might issue written approval for a clearance, Mr Philip in evidence explained that this discretionary power was not exercisable where the applicant had an uncheckable background.

21 The Commissioner found as a fact, on the basis of Mr Philip’s evidence, that at times relevant to Mr Stamatov’s employment, a person coming from Bulgaria was a person who has in that respect an uncheckable background. The Commissioner accepted that ASIO had reached that conclusion and advised the Department accordingly. The Commissioner found that Bulgaria was at the relevant times a country where background checking was unable to be conducted.

22 The Commission ultimately concluded that there had been both direct discrimination in breach of ss 9(1) and 15(1), and alternatively, indirect discrimination in breach of s 9(1A). Those sections relevantly provide:

"9.(1) It is unlawful for a person to do any act involving a distinction, exclusion, restriction or preference based on race, colour, descent or national or ethnic origin which has the purpose or effect of nullifying or impairing the recognition, enjoyment or exercise, on an equal footing, of any human right or fundamental freedom in the political, economic, social, cultural or any other field of public life.

(1A) Where:

(a) a person requires another person to comply with a term, condition or requirement which is not reasonable having regard to the circumstances of the case; and

(b) the other person does not or cannot comply with the term, condition or requirement; and

(c) the requirement to comply has the purpose or effect of nullifying or impairing the recognition, enjoyment or exercise, on an equal footing, by persons of the same race, colour, descent or national or ethnic origin as the other person, of any human right or fundamental freedom in the political, economic, social, cultural or any other field of public life;

the act of requiring such compliance is to be treated, for the purposes of this Part, as an act involving a distinction based on, or an act done by reason of, the other person’s race, colour, descent or national or ethnic origin.

(2) A reference in this section to a human right or fundamental freedom in the political, economic, social, cultural or any other field of public life includes any right of a kind referred to in Article 5 of the Convention.

...

15.(1) It is unlawful for an employer or a person acting or purporting to act on behalf of an employer:

(a) to refuse or fail to employ a second person on work of any description which is available and for which that second person is qualified;

(b) to refuse or fail to offer or afford a second person the same terms of employment, conditions of work and opportunities for training and promotion as are made available for other persons having the same qualifications and employed in the same circumstances on work of the same description; or

(c) to dismiss a second person from his employment;

by reason of the race, colour or national or ethnic origin of that second person or of any relative or associate of that second person."

23 The Commissioner in reaching her conclusions referred to s 18 which provides:

"18. Where:

(a) an act is done for 2 or more reasons; and

(b) one of the reasons is the race, colour, descent or national or ethnic origin of a person (whether or not it is the dominant reason or a substantial reason for doing the act);

then, for the purposes of this Part, the act is taken to be done for that reason."

24 It will be noted that SECMAN, para 401, imposes both "eligibility" and "suitability" requirements. The eligibility requirements depend on age and nationality criteria. The age criterion is of no relevance to Mr Stamatov’s complaints. The nationality criterion, as para 403 demonstrates, is one relating to Australian citizenship. The Commissioner applied the decision of the President of the Commission in Langer v Correctional Services Division-Department of Justice (Victoria) (1993) EOC 92-547 and of the Federal Court in Ellenbogen v Human Rights and Equal Opportunity Commission and Others (1994) EOC 92-564 where it was held that distinctions based on citizenship are not prohibited by the RDA. The issues agitated by the parties both before the Commissioner and before this Court concerned the suitability requirement, namely, that an applicant to be suitable for a security clearance must be able to be checked adequately and favourably assessed. On his claim under s 15 of the RDA, Mr Stamatov contended that in deciding that he had an uncheckable background, and therefore failed to meet the suitability criterion, the Department acted "by reason of ... (his) national ... origin". It was not argued that the Department had acted by reason of his race, colour or ethnic origin.

25 Mr Stamatov also argued that whilst the RDA did not apply to a requirement as to citizenship, SECMAN, para 403, made provision for waiver of the requirement as to Australian citizenship. He argued that in his case the Department’s refusal to grant a waiver was a further factor that contributed to his dismissal. He argued that the refusal was "based on ... (his) national ... origin" as it was because of his national origin that his background was uncheckable.

26 The question whether the Department acted "by reason of" Mr Stamatov’s national origin may not be the same question as whether the Department’s acts were "based on" his national origin: see Macedonian Teachers’ Association of Victoria Inc v Human Rights and Equal Opportunity Commission unreported, Weinberg J, 21 December 1998. The phrase "based on" may have a wider meaning than the phrase "by reason of", and may include acts involving a distinction, etc. done "by reference to" race, colour, descent or national or ethnic origin. The Commissioner, as I understand her reasons, has treated the relevant inquiry under both sections as the same.

27 Relevant to claims of direct discrimination under ss 9(1) and 15(1), the Commissioner, in the course of her findings of fact said:

"...an individual’s country of origin may not be relevant to the decision as to whether that individual’s background is checkable, as that individual’s background may encompass more than their country of origin. However, country of origin may well be relevant to the question of checkability and I am satisfied that although there may have been other elements in the checkability of Mr Stamatov’s background, his country of origin, that is Bulgaria, was a central feature in the checkability of his background...

Finally, I am satisified that the refusal of a waiver of nationality in Mr Stamatov’s case was on the basis of his country of origin: that is, because he came from Bulgaria. Because of his national origin Mr Stamatov’s application for security clearance was not determined on his personal merits, but on his national origin."

28 In making her findings on direct discrimination the Commissioner said:

"The [Department] submitted that Mr Stamatov’s inability to obtain an appropriate security clearance was because he had an uncheckable background not because of his national origin: while I accept that there may be other elements in his background besides his national origin as a Bulgarian, I am satisfied that a significant component of his uncheckable background was the fact that he came from Bulgaria: that is, his national origin.

...

Because of Mr Stamatov’s national origin (Bulgaria), the [Department] did not make any enquiries or investigations as to his circumstances which would permit any assessment to be made for the purpose of a security classification. That is, the decision of the [Department] to make no enquiries as to Mr Stamatov’s circumstances and background involved a distinction, exclusion or restriction based on his national origin...The only element of Mr Stamatov’s ‘uncheckable background’ which was articulated at the inquiry or in evidence before the inquiry was that he was a Bulgarian national and that Bulgaria is a country where background checking is unable to be conducted. In any event, pursuant to section 18 of the Act, that his national origin was only one of several factors is nevertheless sufficient."

29 Senior Counsel for the applicant, Mr Quick QC, contends that the Commissioner has in these passages misconstrued the meaning of "national origin", and that there was no evidence to support findings that because of his national origin the Department made no inquiries. The applicant contends that "national origin" does not mean nationality, place of residence, or the place from whence a person comes; on the contrary it means the country of birth.

30 Senior Counsel for Mr Stamatov, Mr Kourakis QC, contends that "national origin" should be more widely interpreted. He submits that national origin:

"...does not mean just the country in which that particular person was born. Nation of origin is a reference to the nation to which the individual can be reasonably considered a citizen...[not] necessarily mean in a formal sense but in the sense that the individual associates themselves with that body politic...which is the nation.

Place of birth might be one factor but not a determinative factor. Length of residence and period of residence, language, and no doubt there are other facts and circumstances which would all go into the melting pot of any assessment of the nation of origin for any particular person."

31 It is apparent that in adopting the phrase "race, colour, descent or national or ethnic origin" in s 9, and the phrase "race, colour or national or ethnic origin" in s 15, Parliament has transported into the domestic law of Australia, through the RDA, text from Article 1.1 of the International Convention on the Elimination of All Forms of Racial Discrimination. That Convention is a Schedule to the RDA. Neither the Convention nor the RDA contains a definition of "national origin". The meaning of that expression has however, been considered in a number of cases. My task is made easier as these cases have been reviewed and considered recently in Macabenta v Minister of State for Immigration and Multicultural Affairs unreported, Full Court Federal Court, 18 December 1998. See also De Silva v Minister for Immigration and Multicultural Affairs unreported, Full Court Federal Court, 24 November 1998.

32 The Full Court in Macabenta at 12 expressly agreed with the following passage from the speech of Lord Cross in Ealing London Borough Council v Race Relations Board [1971] UKHL 3; [1972] AC 342 at 365-6:

"There is no definition of ‘national origins’ in the Act and one must interpret the phrase best one can. To me it suggests a connection subsisting at the time of birth between an individual and one or more groups of people who can be described as ‘a nation’ – whether or not they also constitute a sovereign state...

Suppose, for example, that a man of purely French descent marries a woman of purely German descent and that the couple had made their home in England for many years before the birth of the child in question. It could...be said that the child had three ‘national origins’: French through his father, German through his mother and English not because he happened to have been born here but because his parents had made their home here. Of course, in most cases a man has only a single ‘national origin’ which coincides with his nationality at birth in the legal sense and again in most cases his nationality remains unchanged throughout his life. But ‘national origins’ and ‘nationality’ in the legal sense are two quite different conceptions and they may well not coincide or continue to coincide."

33 Macabenta concerned the application of s 10 of the RDA, but the Full Court, at 12, expressly held that the same meaning should be given to the expression "national origin" in s 9 of the RDA as in s 10. In my opinion the same meaning should also be given to the expression in s 15. The Full Court upheld the interpretation given to the expression by the primary judge, Tamberlin J. His Honour said (Macabenta v Minister of State for Immigration and Multicultural Affairs (1998) 154 ALR 591, at 598):

"Over a lifetime, a person may acquire a number of different ‘nationalities’ which, depending on the legal regimes in force in any particular country, may be held successively from time to time or even simultaneously where States recognise dual nationality. In these circumstances it may often be a matter of substantial difficulty to determine the relevant nationality of a person for the purpose of a particular regulatory regime. On the other hand, the expression ‘national origin’ is a narrower concept and more readily determined because it is limited to ‘origin’, which is fixed at birth and incapable of change. In framing an International Convention and legislation to implement its provisions against the background of many different legal systems, there is much to be said for preferring a more specific criterion which can be more readily determined with greater certainty.

In the present case the criterion adopted is whether the person, at the time of entry into Australia, held a valid passport of a specified country. This is not a reference to the national origin of the person."

The Full Court at 11 said:

"National origin may in some cases be resolved by a person’s place of birth. In other cases it may be necessary to have regard to the national origin of a parent or each parent or other ancestors either in conjunction with the person’s place of birth or disregarding that factor. If by reference to matters of national origin one can expose a racially-discriminatory law, then the Convention will have served its purpose. However, no Convention purpose is in any manner frustrated by drawing a distinction between national origin and nationality, the latter being a purely legal status (and a transient one at that)."

34 In my opinion the applicant is correct in its submission that the Commissioner has misconstrued the meaning of national origin. The Commissioner has treated the expression as referring rather to his nationality, and as being descriptive of the place from which he has come. The Commissioner has not confined the meaning of national origin to characteristics determined at the time of birth – either by the place of birth or by the national origin of a parent or parents, or a combination of some of those factors.

35 The evidence from Mr Philip, who was the Department’s officer whose evidence bore directly on the security issues, was clear that the elements of checkability which caused Mr Stamatov’s background to be uncheckable concerned checks with security authorities in the place where the applicant had resided. The checks were concerned with the activities of the applicant and were unrelated to national origins within the meaning of that expression as construed in Macabenta. The fact that Mr Stamatov had been born in Bulgaria of Bulgarian parents was an irrelevant coincidence. A person of any other national origin that had lived his or her adult life in Bulgaria, and had followed the educational and employment pursuits of Mr Stamatov would also have a background that was uncheckable.

36 Mr Philip’s evidence, which the Commissioner accepted, was that Bulgaria is a country where background checking of the activities of a person is unable to be conducted, and for that reason a person arriving in Australia from Bulgaria, after residing there for an extended period, is a person who has an uncheckable background. That was the reason for the Department acting as it did in relation to Mr Stamatov’s employment. The evidence does not reasonably admit of a finding that any birth-time characteristic of Mr Stamatov, attributable to his place of birth or the national origin of his parents, was a factor in the decision that Mr Stamatov had an uncheckable background.

37 It was contended on Mr Stamatov’s behalf that the minute from Mr Zadow to Mr Philip provided clear evidence that the decision to refuse a waiver of nationality was based on Mr Stamatov’s national origin. In that memorandum Mr Zadow advanced as reasons against recommending waiver that "Mr Stamatov is a Bulgarian national who has been in Australia for less than twelve months" and "Bulgaria is a country where background checking is unable to be conducted". In my opinion these reasons refer not to Mr Stamatov’s place of birth or the national origin of his parents, but to the fact that he was a citizen of Bulgaria and had been living and working in Bulgaria before his arrival in Australia. This construction of the minute, in my opinion, gains support from the earlier statement in the minute that "because of Mr Stamatov’s background, country of origin, and short period of residence in Australia" Mr Zadow considered that the grant of a waiver was unlikely. Mr Zadow is plainly referring to the country from which Mr Stamatov had recently come, not to characteristics that arose at the time of his birth.

38 In my opinion the conclusion that the Department contravened ss 9(1) and 15(1) of the RDA is based on a misinterpretation of the expression "national origin". This is an error of law. The decisions of the Commissioner that the acts of the Department constituted direct discrimination contrary to ss 9(1) and 15 must be set aside for that reason.

39 In Macabenta, the Full Court at 14 held that the words "by reason of", which appear in s 15 of the RDA, require the practical application of the causation principles explained in March v Stramare (E & MF) Pty Ltd [1991] HCA 12; (1991) 171 CLR 506. In Human Rights and Equal Opportunity Commission v Mt Isa Mines (1993) 46 FCR 301 Lockhart J at 321, in discussing the meaning of the words "by reason of" in the definition of discrimination in the Sex Discrimination Act 1984 (Cth) said that the phrase implies a relationship of cause and effect. In the present case, the evidence does not admit of a finding that Mr Stamatov’s place of birth or the national origins of one or both his parents played any causative part in the employer’s decision not to continue his employment, and to dismiss him. On the evidence, and findings of fact of the Commissioner, s 15 can have no application.

40 In Macedonian Teachers’ Association of Victoria Inc v Human Rights and Equal Opportunity Commission Weinberg J held that the words "based on" used in s 9 have a wider meaning than the words "by reason of", and include acts done "by reference to" a person’s national origin. Again, there is no evidence, or finding of fact by the Commissioner, that could reasonably support a conclusion that the acts of the employer in failing to waive the nationality criterion of eligibility because Mr Stamatov had an uncheckable background, was a decision made by reference to his place of birth or the national origins of his parents or one of them.

41 On the alternative claim by Mr Stamatov that he had been the victim of indirect discrimination, the Commissioner held that s 9(1A) of the RDA involved four elements: there must be a term, condition or requirement imposed on the complainant; that term, condition or requirement must not be reasonable having regard to the circumstances of the case; the complainant must be unable to comply with that term, condition or requirement; and the requirement to comply must have the purpose or effect of interfering with the recognition, enjoyment or exercise, on an equal footing, by persons of the same race, colour, descent or national or ethnic origin as the complainant of any relevant human right or fundamental freedom as set out in the RDA. No issue arose on the first and third of these requirements. Plainly the Department imposed a condition requiring a security clearance, and Mr Stamatov was unable to comply with it.

42 The fourth of the requirements identified arises by virtue of para (c) of s 9(1A). The language of that section is not without difficulty: see Ebber v Human Rights and Equal Opportunity Commission (1995) 129 ALR 455 at 480-481 and Australian Medical Council v Wilson (1996) 68 FCR 46 at 80-82. With respect to the Commissioner, it seems to me that she has misdescribed the group which is to be used for the comparison required by the paragraph. The group with whom the complainant’s position is to be compared is not persons of the same race, colour, descent or national or ethnic origin as the complainant. Such a test would allow indirect discrimination of large groups. The comparison, to adopt the description given by Sackville J in Australian Medical Council v Wilson at 81, is between "persons of the same group as the complainant" with "members of other groups, regardless of whether or not those other groups are required to comply with the same condition".

43 The Commissioner concluded that the group whose rights or freedoms would be interfered with by the condition requiring a security clearance comprised "any non-Australian citizen Bulgarian national (Mr Stamatov’s circumstances)". The Commissioner said:

"That is quite clear from the SECMAN manual and the evidence: a non-citizen with an uncheckable background cannot have the nationality criterion waived. Bulgaria is a country where such background checks cannot be conducted. In the evidence it was made clear, and I have found, that Mr Stamatov’s national origin, from Bulgaria, was a significant factor in his ‘uncheckability’. This factor (although there may have been others, in his case), would apply to any other person from Bulgaria. I am satisfied that the way in which the requirement for a security clearance was to be established, through the SECMAN procedures and ASIO advice, was such that Mr Stamatov could not comply with it; and was such that other non-Australian citizens of Bulgarian national origin could not comply, with the effect of nullifying or impairing their enjoyment or exercise on an equal footing of their capacity to maintain certain employment."

44 In my opinion the expressions "Bulgarian national" and "national origin" are again being accorded a meaning by the Commissioner that departs from the meaning of "national origin" in the RDA. The Commissioner’s reference to her earlier finding "that Mr Stamatov’s national origin, from Bulgaria, was a significant factor in his ‘uncheckability’" refers back to her earlier findings that:

"However, country of origin may well be relevant to the question of checkability and I am satisfied that although there may have been other elements in the checkability of Mr Stamatov’s background, his country of origin, that is Bulgaria, was a central feature in the checkability of his background."

and:

"I am satisfied that the refusal of a waiver of nationality in Mr Stamatov’s case was on the basis of his country of origin: that is, because he came from Bulgaria. Because of his national origin Mr Stamatov’s application for security clearance was not determined on his personal merits, but on his national origin."

45 The expression "country of origin" is ambiguous in that it may refer to the place where he was born, or it may refer to the place where he lived and worked before he came to Australia. As the evidence did not suggest that Mr Stamatov’s place of birth or the national origin of his parents was a relevant element in that part of Mr Stamatov’s background that could not be checked, it would seem that the Commissioner was using "country of origin" as descriptive of the place where he had lived and worked. Such a meaning is also suggested by the last of the above findings where "country of origin" is used as meaning the place where he came from.

46 In my opinion when the expression "national origin" is given the meaning attributed to it by the Full Court in Macabenta, the evidence before the Commission could not support a finding that other non-Australian citizens of Bulgarian national origin comprised a group who could not comply with such a condition. The effect of the evidence was that the relevant aspects of checkability depended not upon characteristics that arose at the time of birth, but upon where the non-Australian citizen had lived and worked thereafter. The evidence cannot reasonably support the view that other non-Australian citizens of Bulgarian national origin who had lived their lives in countries where background checks could be conducted could not comply.

47 Having concluded that the security clearance condition had the purpose or effect proscribed by s 9(1A)(c) of the RDA, the Commissioner then considered whether the condition was one "which is not reasonable having regard to the circumstances of the case": s 9(1A)(a). The Commissioner held that the requirement of a security clearance imposed by the Department was not in itself unreasonable, but the requirements of the SECMAN document as to the way in which it was to be complied with was not reasonable having regard to the circumstances of the case.

48 The Commissioner’s reasons for this conclusion depend upon the provisions of the SECMAN document and in particular paragraphs 424 and 425. The Commissioner said:

"The SECMAN document indicates that if the applicant for the security clearance is an Australian citizen who has nevertheless spent a significant period of time in an area in such a way that gives that person an uncheckable background, it is reasonable to conduct an interview and proceed with other investigations as part of the process of the security assessment. The SECMAN document also establishes that it is reasonable where a person is a non citizen to waive the requirement for citizenship if that person appears to have a checkable background. However, the SECMAN document appears to make it clear that if a person is a non citizen with an uncheckable background there are no assessments that can be carried out even to commence an assessment. Mr Philip also made this clear in his evidence. Given the acknowledgement in the SECMAN document that an interview and other forms of investigation may be useful as part of the assessment of a person, even if that person is not a citizen or has an uncheckable background, I am satisfied that it is not reasonable in the circumstances to impose a different process in respect of a person who is not a citizen and who comes from a country which is regarded as one where background checking is unable to be conducted, such as Bulgaria. Under those circumstances I am satisfied that the way in which this requirement imposed on Mr Stamatov (the requirement not in itself unreasonable) was to be complied with was not reasonable having regard to the circumstances of the case. Because of the way in which compliance with the requirement was processed, Mr Stamatov could not comply with it."

49 I am unable to agree with the conclusion reached by the Commissioner. In my opinion the SECMAN document does not indicate that an interview and other forms of investigation may be useful as part of the assessment of a person who is not an Australian citizen and has an uncheckable background. Mr Philip in his evidence said that para 424 provides a complete prohibition to waiver if a person has an uncheckable background, and that to embark upon any form of investigation where it is established that the background is uncheckable would be futile. The evidence establishes that Mr Stamatov had a background that is uncheckable which meant that he could not obtain a security clearance at the Secret level however the requirement was imposed.

50 The evidence does not support a view that there was any likelihood that Mr Stamatov could obtain a security clearance, however that requirement was imposed. Indeed, elsewhere in her reasons the Commissioner found that had further inquiries been made, presumably in consequence of a waiver of the nationality requirement, it was unlikely that his employment would have continued because the requirement for a security clearance would have remained. The Commissioner said that she was satisfied that even had the Department acted in compliance with the provisions of the RDA, it was most likely that Mr Stamatov’s employment would have ended on or about 1 May 1996 in any event because he would not have obtained the appropriate security clearance.

51 In my opinion it was not open on the evidence to hold that the condition, reasonable in itself, was to be treated as not reasonable because of the means by which it was applied to Mr Stamatov under the SECMAN procedures.

52 For these reasons I consider the applicant has established that the findings of discrimination made by the Commissioner were effected by error of law. In my opinion the findings of direct and indirect discrimination, and the determinations made by the Commissioner, should be set aside.

53 As I consider the determination should be set aside it is not strictly necessary to consider the remaining issue raised by the applicant, nor the application for an order of review brought by Mr Stamatov. However, I shall briefly refer to them.

54 When Mr Stamatov was dismissed, the Department, through Major McNicholas, gave him a reference in very favourable terms. It concluded with Major McNicholas saying "I unreservedly recommend Mr Stamatov to any potential employer and am willing to provide any further information that might be required", but the letter did not explain the reasons why his employment had come to an end. Notwithstanding this reference, paragraph (b) of the Commissioner’s determination directed that a reference be given to Mr Stamatov which made it clear that the termination of his employment "implies nothing negative concerning the complainant’s trustworthiness or level of security risk". The applicant contends that this determination was beyond the power provided in s 25Z(1)(b)(ii) of the RDA because it was not a reasonable act of redress. The applicant argues that the Department is not able to say anything about the trustworthiness or level of security risk of Mr Stamatov for the very reason that his background is uncheckable. The applicant contends that it is unreasonable to require the Department to give a positive assurance about the character of Mr Stamatov when it is not possessed of factual material which justifies doing so.

55 If it were necessary to decide the matter I would hold that it is within power for the Commissioner to direct that a reference be given which makes it clear that the termination of Mr Stamatov’s employment implies nothing negative concerning his trustworthiness, although, I must say, that I find it difficult to read the reference that has already been given other than as a glowing one which negatives any lack of trustworthiness. On the other hand, I would hold that it is not reasonable for the Commissioner to require the Department to go further and say that the termination of Mr Stamatov’s employment implies nothing negative concerning the level of security risk.

56 The application by Mr Stamatov challenges the basis for the assessment of the sum of $10,000 ordered to be paid to him. It is contended that this sum so underestimates the loss suffered by Mr Stamatov that it reflects an error of law, and in particular a failure by the Commissioner to value the chance that Mr Stamatov’s employment would have continued had the Department taken the steps which the Commissioner considered were required by the RDA, and in particular, waiver of the nationality requirement and the commencement or investigations by an interview.

57 I have already indicated that the Commissioner found that even if further inquiries had been made, and had the Department complied with the requirements of the RDA, it was most likely that Mr Stamatov’s employment would have ended on or about 1 May 1996 in any event.

58 Notwithstanding these findings, the Commissioner said that she accepted that Mr Stamatov had suffered loss in that it would be more difficult to obtain employment in the area of expertise than it would otherwise have been because of the loss of employment with the Department, and that he has been greatly embarrassed and humiliated by his dismissal. I think it is clear from the reasons that the award was intended to compensate for these losses.

59 In light of the findings made by the Commissioner, I do not think any occasion arose for the Commissioner to embark upon a valuation of a chance that Mr Stamatov’s employment may have continued had the other steps envisaged by the Commissioner been taken. In my opinion the complaint that the assessment was inadequate cannot be sustained.

60 The application for an order of review by the Commonwealth of Australia will be granted. The decision under review will be set aside. Mr Stamatov’s application for an order of review will also be dismissed.

61 I will hear the parties as to costs.

I certify that the preceding sixty-one (61) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice von Doussa.

Associate:

Dated: 18 February 1999

Counsel for the Applicant:	Mr D M Quick QC with Mr S C Cole
Solicitor for the Applicant:	Australian Government Solicitor
Solicitor for the First Respondent:	Susan Roberts
Counsel for the Second Respondent:	Mr C J Kourakis QC with Mr D Bulloch
Solicitor for the Second Respondent:	Parks Legal Service Inc.
Date of Hearing:	7 December 1998
Date of Judgment:	18 February 1999