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Federal Court of Australia |
Last Updated: 31 January 2007
FEDERAL COURT OF AUSTRALIA
Wight v Honourable Chris Pearce, MP, Parliamentary Secretary to the Treasurer [2007] FCA 26
CONSTITUTIONAL LAW – external affairs power – whether the Foreign Acquisitions and Takeovers Act 1975 (Cth) is supported by s 51(xxix) insofar as it applies to persons not ordinarily resident in Australia – where law deals with acquisition of real property inside geographic limits of Australia – whether external affairs power supports laws with some operation inside Australia – whether application to persons not ordinarily resident in Australia is a sufficient external element to constitute a valid law with respect to external affairs.
CONSTITUTIONAL LAW – aliens power – whether Foreign Acquisitions and Takeovers Act 1975 (Cth) supported by s 51(xix) insofar as it applies to non-citizens – where Act applies to both citizens and non-citizens not ordinarily resident in Australia – effect of s 5A of Act.
CONSTITUTIONAL LAW – acquisition of land on just terms – whether ss 4(6) and 21A of Foreign Acquisitions and Takeovers Act 1975 (Cth) are subject to s 51(xxxi) – whether there was any acquisition within the terms of s 51(xxxi).
PROPERTY – where property held jointly – where one joint tenant becomes sole registered proprietor – whether applicant acquired an interest in the property pursuant to s 12A of Foreign Acquisitions and Takeovers Act 1975 (Cth).
ADMINISTRATIVE LAW – where applicant required to provide notice of proposal to acquire land – where respondent granted approval on the basis of invalid notice – whether valid notice required for a decision to be made under s 25 of Foreign Acquisitions and Takeovers Act 1975 (Cth) – whether open to respondent to consider making a divestiture order under s 21A(4) of Act.
ADMINISTRATIVE LAW – procedural fairness – where
respondent alleged ‘serious visa violations’ against applicant in
correspondence
– whether applicant given adequate opportunity to respond
to adverse information – whether respondent under obligation
to invite
comment from applicant regarding adverse information and conclusions not
obviously open – whether failure to invite
comment invalidates decision to
make divestiture order.
ADMINISTRATIVE LAW – whether respondent
had regard to whether acquisition of property was contrary to national interest
in making decision to
make divestiture order – relevant principles.
Held:
1. External affairs power supports making of laws with some operation inside Australia – Foreign Acquisitions and Takeovers Act 1975 (Cth) within the scope of the power insofar as it applies to persons not ordinarily resident in Australia.
2. Foreign Acquisitions and Takeovers Act 1975 (Cth) supported by aliens power insofar as it applies to non-citizens.
3. Foreign Acquisitions and Takeovers Act 1975 (Cth) not subject to s 51(xxxi) – impairment of applicant’s rights with respect to property insufficient to attract operation of s 51(xxxi) in any event.
4. Applicant acquired an interest in property within the meaning of s 12A of the Foreign Acquisitions and Takeovers Act 1975 (Cth).
5. Valid notice required for a decision to be made under s 25 of Foreign Acquisitions and Takeovers Act 1975 (Cth) – no effective decision under s 25 of the Act – open to Minister to consider making a divestiture order under s 21A(4) of the Act.
6. Respondent under obligation to give notice that alleged visa violations may be taken into account in decision to make divestiture order and to invite comment – failure to give notice and invite comment amounted to breach of rules of procedural fairness sufficient to invalidate decision to make divestiture order.
7. No basis established for finding that respondent was not satisfied that acquisition is contrary to national interest.
Application granted for orders in the nature of certiorari and mandamus.
Acts Interpretation Act 1901 (Cth) s
19
Crimes Act 1914 (Cth) s 19B
Federal Court of Australia Act
1976 (Cth) s 21, s 23
Foreign Acquisitions and Takeovers Act 1975
(Cth) s 21A
Judiciary Act 1903 (Cth) s 39B(1A) s 78B
Migration
Act 1958 (Cth) s 425
Protection of Movable Cultural Heritage Act
1986 (Cth)
Trade Practices Act 1974 (Cth) s 4(6)
Foreign
Acquisitions and Takeovers Regulations 1989 reg 3
Associated Provincial Picture Houses Ltd v
Wednesbury Corporation [1947] EWCA Civ 1; [1948] 1 KB 223 cited
Burton v Mayor etc of
London Borough of Camden [2000] UKHL 8; [2000] 2 AC 399 cited
Chu Kheng Lim v
Minister for Immigration, Local Government and Ethnic Affairs [1992] HCA 64; (1992) 176 CLR
1 cited
Commissioner for Australian Capital Territory Revenue v Alphaone
Pty Ltd (1994) 49 FCR 576 considered
Conwest Global Communications
Corporation v Treasurer of the Commonwealth of Australia (1997) 147 ALR 509
cited
Cunliffe v The Commonwealth [1994] HCA 44; (1994) 182 CLR 272
considered
Director of Public Prosecutions, Re; Ex parte Lawler [1994] HCA 10; (1994)
179 CLR 270 considered
F Hoffman-La Roche and Co AG v Secretary for Trade
and Industry [1975] AC 295 cited
Kioa v West [1985] HCA 81; (1985) 159 CLR 550
considered
Leisure Entertainment Pty Ltd v Willis (1996) 64 FCR 205
cited
Minister for Immigration and Multicultural and Indigenous Affairs,
Re, ex parte Palme [2003] HCA 56; (2003) 216 CLR 212 considered
Mutual Pools and
Staff Pty Ltd v The Commonwealth [1994] HCA 9; (1993) 179 CLR 155
considered
Navarrete v Minister for Immigration and Multicultural and
Indigenous Affairs [2004] FCA 1723 cited
Patterson, Re; Ex parte
Taylor (2001) 207 CLR 291 distinguished
Pidoto v The State of
Victoria [1943] HCA 37; (1943) 68 CLR 87 cited
Polyukhovich v The Commonwealth [1991] HCA 32;
(1991) 172 CLR 501 considered
Project Blue Sky Inc v Australian
Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 applied
Russell v Duke of
Norfolk [1949] 1 All ER 109 cited
Shaw v Minister for Immigration and
Multicultural Affairs [2003] HCA 72; (2003) 218 CLR 28 considered
Smith v ANL Ltd [2000] HCA 58;
(2000) 204 CLR 493 cited
SZBEL v Minister for Immigration and
Multicultural and Indigenous Affairs [2006] HCA 63 cited
Taylor, Re;
Ex parte Natwest Australia Bank Ltd (1992) 37 FCR 194 cited
The Queen
v Australian Industrial Court; Ex parte CLM Holdings Pty Ltd [1977] HCA 6; (1977) 136 CLR
235 cited
Theophanous v Commonwealth of Australia [2006] HCA 18; (2006) 80 ALJR 886
cited
Vassis, Re; Ex parte Leung (1986) 9 FCR 518 cited
Victoria
v The Commonwealth (Industrial Relations Case) [1995] HCA 45; (1995) 187 CLR 416
considered
Waterhouse v Minister for the Arts and Territories (1993)
43 FCR 175 applied
XYZ v The Commonwealth [2006] HCA 25; (2006) 80 ALJR 1036
considered
Bradbrook MacCallum and Moore, Australian Real Property
Law (3rd ed, 2002) 340 referred
to
MARIE
MADELINE WIGHT v THE HONOURABLE CHRIS PEARCE, MP, PARLIAMENTARY SECRETARY TO THE
TREASURER
SAD 231 OF 2005
BESANKO J
29 JANUARY
2007
ADELAIDE
|
AND:
|
THE COURT ORDERS THAT:
1. There be an order in the nature of certiorari quashing the order made by the respondent on 23 February 2005 under s 21A(4) of the Foreign Acquisitions and Takeovers Act 1975 (Cth) (‘the Act’) and relating to the land known as 481 Esplanade, Grange, in the State of South Australia, being the said land comprised in File Plan 42, Allotment 6, Hundred: Yatala; Subdivision: Grange (‘the property’).
2. There be an order in the nature of mandamus, requiring the respondent to exercise his discretion pursuant to s 21A(4) of the Act and relating to the property according to law.
3. The cross-claim be dismissed.
Note: Settlement and entry of orders is dealt with in Order 36 of the
Federal Court Rules.
|
BETWEEN:
|
MARIE MADELINE WIGHT
Applicant |
|
AND:
|
THE HONOURABLE CHRIS PEARCE, MP, PARLIAMENTARY SECRETARY TO THE
TREASURER
Respondent |
|
JUDGE:
|
BESANKO J
|
|
DATE:
|
29 JANUARY 2007
|
|
PLACE:
|
ADELAIDE
|
REASONS FOR JUDGMENT
1 On 23 February 2005 the Parliamentary Secretary to the Treasurer made an order directing the applicant, Marie Madeline Wight, to dispose of her interest in the land at 481 Esplanade, Grange, in the State of South Australia (‘the property’) by midnight (Canberra time) on 31 May 2005 to any person or persons approved in writing by the Treasurer. The order, which I will call ‘the divestiture order’, was made by the Parliamentary Secretary to the Treasurer under s 21A(4) of the Foreign Acquisitions and Takeovers Act 1975 (Cth) (‘the Act’).
2 Ms Wight has not complied with the divestiture order. She claims that it is invalid and in her application to this Court she seeks a declaration and orders in the nature of certiorari and mandamus. She also claims that a section in the Act is invalid because it is beyond the power of the Federal Parliament. She seeks to invoke the original jurisdiction of the Court under s 39B(1)(1A)(b) and (c) of the Judiciary Act 1903 (Cth) and ss 21 and 23 of the Federal Court of Australia Act 1976 (Cth). The Court’s jurisdiction to hear and determine the applicant’s claim is not in issue.
3 The respondent to the proceedings is the Honourable Chris Pearce MP, Parliamentary Secretary to the Treasurer. It is common ground that insofar as the Act refers to the Treasurer that includes a reference to the respondent because the respondent was acting for or on behalf of the Treasurer (Acts Interpretation Act 1901 (Cth) s 19). In these reasons I will need to refer from time to time to correspondence written to and by officers in the Department of the Treasury. For convenience, I will refer to it as correspondence to and from the Treasurer.
4 The respondent has filed a defence and cross-claim. In the cross-claim the respondent seeks an order that the applicant dispose of her interest in the property to a person or persons who are Australian citizens and who are not associates of the applicant, as that term is defined in the Act. Neither party submitted that this Court did not have jurisdiction to make such an order. The applicant submitted that, assuming it was otherwise appropriate to make an order under s 35, the particular order sought by the respondent is not appropriate having regard to the provisions of the Act. For reasons I will give, the order made by the respondent on 23 February 2005 is invalid. In those circumstances, the cross-claim must be dismissed.
5 The applicant is not an Australian citizen. She is a citizen of the Swiss Confederation. The applicant is a gynaecologist and obstetrician. In 1987 she married Dr Niels-Peter Buchholz and in 1994 she came to Australia and, in particular, South Australia, with Dr Buchholz. There are five children of the marriage between the applicant and Dr Buchholz, three of whom reside in Australia. In early 1995 the applicant and Dr Buchholz purchased the property as joint tenants. There is a substantial family home on the property and the applicant claims to have lived on the property for all or most of the period from 1995 to the present.
6 The marriage between the applicant and Dr Buchholz failed and in April 1997 Dr Buchholz left Australia. There were protracted proceedings in the Family Court of Australia between Dr Buchholz and the applicant. It is not necessary to set out all the details. On 27 April 2001 the Honourable Justice Murray made orders as to the distribution of property between the parties, including an order that Dr Buchholz transfer his interest in the property to the applicant. Dr Buchholz appealed against those orders and although he achieved a measure of success on the appeal, the order that he transfer his interest in the property to the applicant was not altered. On 30 July 2004 the applicant became the sole registered proprietor of the property. The applicant has since remarried. Her current husband is Mr Ronald Moster Wight and he is an Australian citizen.
7 The divestiture order made by the respondent was made on 23 February 2005. On that day the respondent signed a notice in the following form:
‘COMMONWEALTH OF AUSTRALIA
Foreign Acquisitions and Takeovers Act 1975
ORDER UNDER SUBSECTION 21A(4)
WHEREAS –
(A) Marie Madeline Wight is a foreign person for the purposes of section 21A of the Foreign Acquisitions and Takeovers Act 1975 ("the Act");
(B) Marie Madeline Wight has acquired an interest in the Australian urban land described in the Schedule ("the Land");
NOW THEREFORE I, Chris Pearce, Parliamentary Secretary to the Treasurer, for and on behalf of the Treasurer, pursuant to subsection 21A(4) of the Act, being satisfied that the acquisition by Marie Madeline Wight of the interest in the Land is contrary to the national interest, direct Marie Madeline Wight to dispose of the interest in the Land by midnight (Canberra time) 31 May 2005 to any person or persons approved in writing by the Treasurer.
This order comes into operation on the day that is 30 days after it is published in the Gazette.
Dated this 23rd day of February 2005
(signature)
Parliamentary Secretary to the Treasurer
SCHEDULE
Land known as 481 Esplanade, Grange, in the State of South Australia, being the land comprised in File Plan 42, Allotment 6, Hundred: Yatala; Subdivision: Grange.’
That notice was served on the applicant on 24 February 2005.
8 Prior to making the divestiture order the respondent was given a minute dated 18 February 2005 from a Mr Chris Legg, who at that time was the general manager of the Foreign Investment Policy Division. The minute is a three-page document and it incorporated a further sheet entitled ‘Additional Information’. I will refer to the four pages as ‘the minute’. The minute is what the respondent had before him, and all he had before him, when making the divestiture order. I will need to refer to the minute in more detail later but for present purposes it is enough to say that after setting out certain information the author made the following recommendations:
‘Accordingly, I recommend that you:
• sign the attached Divestiture Order pursuant to sub-section 21A(4) of the Act requiring Dr Wight to dispose of her interest in 481 Esplanade, Grange by midnight (Canberra time), 31 May 2005;
• authorise advice to Dr Wight that no action will be taken under the penalty provisions of the Act in relation to her breach of the Act on condition that she disposes of her interest in the property by midnight (Canberra time), 31 May 2005;
• make clear to Dr Wight that the Government will take legal action against her if she fails to comply with this Order; and
• delegate to the Executive Member responsibility for approving specific purchasers in accordance with the requirements of the Act.’
Under the recommendations the following appeared:
‘Recommendations
Agreed/Not agreed
/2005’
The respondent signed the minute, circled the word ‘agreed’ and inserted the date, 23 February 2005.
9 The applicant tendered an agreed book of documents, two affidavits and one other document. There was no cross-examination of the deponents. The respondent did not give or call evidence.
Relevant statutory provisions
10 The long title to the Act provides that it is an Act relating to the foreign acquisition of certain land interests and to the foreign control of certain business enterprises and mineral rights.
11 In this case, I am concerned with the acquisition of interests in Australian urban land, a term which is defined in s 5. The property is Australian urban land. Section 21A provides (relevantly):
‘(1) In this section:
"foreign person" means:
(a) a foreign corporation in which a natural person not ordinarily resident in Australia or a foreign corporation holds a substantial interest; or
(b) a foreign corporation in which 2 or more persons, each of whom is a natural person not ordinarily resident in Australia or a foreign corporation, hold an aggregate substantial interest.
(2) Where the Treasurer is satisfied that:
(a) a foreign person proposes to acquire an interest in Australian urban land; and
(b) the proposed acquisition would be contrary to the national interest;
the Treasurer may make an order prohibiting the proposed acquisition.
(3) Where the Treasurer makes such an order in relation to an interest in Australian urban land, he or she may also make an order in relation to:
(a) a specified foreign person; or
(b) a specified foreign person and specified associates, or the persons included in a specified class of associates, of that person;
directing that that person shall not, or none of those persons shall, whether alone or together with any other or others of them, acquire:
(c) any interest in the land or other thing concerned; or
(d) any such interest except to a specified extent.
(4) Where a foreign person has acquired an interest in Australian urban land and the Treasurer is satisfied that the acquisition is contrary to the national interest, the Treasurer may make an order directing the foreign person to dispose of that interest within a specified period to any person or persons approved in writing by the Treasurer.
...
(7) The Treasurer shall not refuse to approve a person for the purposes of subsection (4) unless the Treasurer is satisfied that the person is a foreign person and that it would be contrary to the national interest for that person to acquire the interest concerned.’
12 Section 21A is given an extended operation by s 4(6) of the Act. That is achieved by expanding the definition of ‘foreign person’. Section 4(6) is in the following terms:
‘(6) Without prejudice to its effect apart from this subsection, this Act also has, by force of this subsection, the effect it would have if references in section 21A to a foreign person were references to:
(a) a natural person not ordinarily resident in Australia;
(b) a corporation (other than a foreign corporation) in which a natural person not ordinarily resident in Australia or a foreign corporation holds a substantial interest;
(c) a corporation (other than a foreign corporation) in which 2 or more persons, each of whom is either a natural person not ordinarily resident in Australia or a foreign corporation, hold an aggregate substantial interest;
(d) the trustee of a trust estate in which a natural person not ordinarily resident in Australia or a foreign corporation holds a substantial interest; or
(e) the trustee of a trust estate in which 2 or more persons, each of whom is either a natural person not ordinarily resident in Australia or a foreign corporation, hold an aggregate substantial interest.’
13 The drafting technique whereby s 21A is given an extended operation by s 4(6) is similar to that used in the Trade Practices Act 1974 (Cth) and considered by the High Court in The Queen v Australian Industrial Court; Ex parte CLM Holdings Pty Ltd [1977] HCA 6; (1977) 136 CLR 235.
14 The applicant is not within the definition of ‘foreign person’ within s 21A(1) of the Act. If s 21A applies to her it is by reason of the fact that she is a natural person not ordinarily resident in Australia within s 4(6)(a).
15 A natural person may be a citizen of Australia or a non-citizen. In the case of a natural person who is a citizen, there is no definition in the Act of ‘resident’ or ‘ordinarily’. There are a large number of cases which have examined the meaning of those words in various statutory contexts. It seems that the words are not terms of art and the question is one of fact and degree and that a person may have two places of residence: Re Vassis; Ex parte Leung (1986) 9 FCR 518 at 524-525 per Burchett J; Re Taylor; Ex parte Natwest Australia Bank Limited (1992) 37 FCR 194 at 197 per Lockhart J. The particular problem of a person possibly being ordinarily resident in two places does not arise here because the criterion in s 4(6) is ‘not ordinarily in Australia’.
16 In the case of a natural person who is a non-citizen, the position under the Act is quite different. In s 5A the Act defines the circumstances in which a non-citizen is taken to be ordinarily resident in Australia and therefore outside the extended operation of the Act. If he or she does not fall within the circumstances in s 5A then the non-citizens are taken to be ordinarily resident outside Australia and therefore within the extended operation of the Act. Section 5A of the Act is in the following terms:
‘(1) For the purposes of this Act, a natural person who is not an Australian citizen is ordinarily resident in Australia at a particular time if and only if:
(a) the person has actually been in Australia during 200 or more days in the period of 12 months immediately preceding that time; and
(b) at that time, either:
(i) the person is in Australia and the person’s continued presence in Australia is not subject to any limitation as to time imposed by law; or
(ii) the person is not in Australia but, immediately before the person’s most recent departure from Australia, the person's continued presence in Australia was not subject to any limitation as to time imposed by law.
(2) For the purposes of paragraph (1)(b), but without otherwise limiting the generality of that paragraph, a person’s continued presence in Australia is subject to a limitation as to time imposed by law if the person is an unlawful non-citizen within the meaning of the Migration Act 1958.’
17 Section 21A, which I have already set out and which deals with the power of the Treasurer to prohibit an acquisition or, in the case of an acquisition which has taken place, to require the disposal of the interest which has been acquired, must be read with s 25 and other sections of the Act. Section 25 gives the Treasurer the power in certain circumstances to decide that the Commonwealth Government has no objection to a proposed acquisition instead of making an order prohibiting the acquisition. Section 25(1C) was amended in 2001 (Act No 31 of 2001) by the deletion of the existing subsection and the addition of two new subsections (1C) and (1D). Both parties argued the application by reference to the section as amended and I will proceed on that basis. The relevant subsections of s 25 are as follows:
‘(1) This section has effect where the Treasurer receives:
(a) a notice from a person stating that the person proposes to acquire shares, assets or interests or to enter into an agreement or enter into or terminate an arrangement;
(b) a notice from a corporation stating that the corporation proposes to issue shares; or
(c) a notice from a corporation stating that it is proposed to alter a constituent document of the corporation.
(1A) Where the Treasurer is empowered to make an order under subsection 18(2), 19(2), 20(2), 21(2) or 21A(2) in relation to the acquisition, agreement, arrangement, issue or alteration specified in the notice, the Treasurer may, instead of making such an order, decide that the Commonwealth Government has no objection to the proposal specified in the notice, provided that the person or corporation complies with conditions that the Treasurer, when making the decision, considers necessary in order that the proposal, if carried out, will not be contrary to the national interest.
(1B) Where the Treasurer makes a decision under subsection (1A), the person or corporation shall be given advice in writing of the decision, being advice that includes a statement of the conditions to be complied with, before the end of 10 days after the day on which the decision is made.
(1C) If the person or corporation:
(a) is given an advice under subsection (1B) of a decision; and
(b) carries out the proposal to which the decision relates; and
(c) does or fails to do an act, resulting in a contravention of a condition set out in the advice;
the person or corporation is guilty of an offence punishable on conviction, by:
(d) in the case of a natural person--a fine not exceeding 500 penalty units, or imprisonment for a period not exceeding 2 years, or both; or
(e) in the case of a corporation--a fine not exceeding 2,500 penalty units.
(1D) If the person or corporation:
(a) is given advice under subsection (1B) of a decision; and
(b) carries out the proposal to which the decision relates:
the Treasurer may only make an order under subsection 18(4), 19(4), 20(3), 21(3) or 21A(4) in relation to the acquisition, agreement, arrangement, issue or alteration specified in the notice if:
(c) the person or corporation is convicted of an offence against subsection (1C) in relation to a condition; or
(d) an order is made under section 19B of the Crimes Act 1914 in relation to the person or corporation in respect of such an offence.
...
(5) In this section, notice includes a notice furnished under section 26 or 26A.’
18 In these reasons, for convenience, I will refer to a decision under s 25(1A) as an ‘approval’ although, strictly, it is a decision that the Commonwealth Government has no objection to a proposal.
19 Section 26A provides for compulsory notification of certain transactions which fall within s 21A. It provides (relevantly):
‘(1) In this section, person to whom this section applies means:
(a) a natural person not ordinarily resident in Australia;
(b) a corporation in which a natural person not ordinarily resident in Australia or a foreign corporation holds a substantial interest;
(c) a corporation in which 2 or more persons, each of whom is a natural person not ordinarily resident in Australia or a foreign corporation hold an aggregate substantial interest;
(d) the trustee of a trust estate in which a natural person not ordinarily resident in Australia or a foreign corporation holds a substantial interest; or
(e) the trustee of a trust estate in which 2 or more persons, each of whom is either a natural person not ordinarily resident in Australia or a foreign corporation, hold an aggregate substantial interest.
(2) Where a person to whom this section applies:
(a) enters into an agreement by virtue of which he or she acquires an interest in Australian urban land and did not, before entering into the agreement, furnish to the Treasurer a notice stating his or her intention to enter into that agreement; or
(b) having furnished a notice to the Treasurer stating his or her intention to enter into an agreement by virtue of which he or she is to acquire an interest in Australian urban land, enters into that agreement before:
(i) the end of 40 days after the day on which the notice was received by the Treasurer; or
(ii) the day on which advice is given that the Commonwealth Government does not object to the person entering into that agreement (whether or not the advice is subject to conditions imposed under subsection 25(1A));
whichever first occurs;
the person is guilty of an offence and is punishable, on conviction, by a fine not exceeding 500 penalty units or imprisonment for a period not exceeding 2 years, or both.
(3) Where:
(a) a person enters into an agreement by virtue of which he or she acquires an interest in Australian urban land; and
(b) the provisions of the agreement that relate to the acquisition of the interest do not become binding until the fulfilment of a condition or conditions set out in the agreement;
the person shall not be taken, for the purposes of subsection (2), to have entered into the agreement until the time when those provisions become binding.’
20 Section 26A is important because in relation to the circumstances to which it applies, it provides for compulsory notification to the Treasurer of transactions within s 21A. Section 27 is also important because it provides that a notice does not have effect for the purposes of ss 25, 26 and 26A unless it is in accordance with the prescribed form and complies with the directions set out in the form. In my opinion, it displaces the rule that might otherwise apply by virtue of s 25C of the Acts Interpretation Act 1901 (Cth) that strict compliance with the form is not required and substantial compliance is sufficient.
21 It is common ground that the applicant is not an Australian citizen and that her continued presence in Australia is subject to a limitation as to time imposed by law. By reason of s 5A of the Act, she is a natural person not ordinarily resident in Australia within s 4(6) of the Act. If section 4(6) is valid, or valid to the extent that it applies to natural persons who are non-citizens, then she is a ‘foreign person’ for the purposes of s 21A of the Act.
22 A notice under s 26A of the Act was apparently given to the Treasurer by the applicant and her former husband shortly prior to the acquisition of the property in early 1995. I say apparently because, although the notice appears to bear the signatures of the applicant and her former husband respectively, it is common ground that the applicant did not place her signature on the notice. The circumstances under which somebody falsely placed on the notice what purported to be the applicant’s signature were not the subject of evidence. In March 1995 the proposed acquisition of the property by the applicant and her former husband was apparently granted approval subject to conditions by the Treasurer under s 25(1A) of the Act.
23 If the notice given in early 1995 was effective or, if an effective notice is not a necessary precondition to the granting of an approval under s 25(1A), the power under s 21A(4) is not engaged unless one of (c) or (d) of s 25(1D) has occurred. It is common ground that in this case neither has occurred. In other words, the applicant has not been convicted of an offence against s 25(1C) in relation to a condition attached to the decision, nor has an order been made under s 19B of the Crimes Act 1914 (Cth) in relation to the applicant in respect of such an offence.
The applicant’s contentions
24 The applicant contends that the Act does not apply to her and therefore the divestiture order is invalid because s 4(6)(a) is not a valid law of the Federal Parliament. In the alternative the applicant contends that if it is a valid law, nevertheless, the power in s 21A(4) was not engaged in this case because the requirements of s 25(1D) were not met and therefore the divestiture order is invalid. The applicant further contends that even if these two contentions fail, the divestiture order made by the respondent is invalid because, before it was made, the applicant was not accorded procedural fairness. In the further alternative, the applicant contends that the order is invalid because the respondent was not in fact satisfied that the acquisition is contrary to the national interest within s 21A(4). In her application and statement of claim the applicant also contended that the divestiture order is invalid because the respondent applied a policy and did not genuinely consider the merits of the matter before him or because his decision was unreasonable in the Wednesbury sense (Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] EWCA Civ 1; [1948] 1 KB 223). At the hearing of the application, those two submissions were abandoned.
25 In relation to the applicant’s first contention, the contention may be dealt with by reference to the facts stated to this point. In relation to the applicant’s other contentions, I will need to set out the facts in more detail when considering the contentions.
The alleged invalidity of s 4(6)(a) of the Act
26 Notices under s 78B of the Judiciary Act 1903 (Cth), were given but none of the Attorneys-General sought to intervene. The Solicitor-General for the Commonwealth appeared for the respondent.
27 Section 21A of the Act is a law with respect to foreign corporations and is within the legislative competence of the Federal Parliament (s 51(xx)). The extended operation of the section effected by s 4(6)(a) to apply to natural persons not ordinarily resident in Australia is said by the respondent to be within the legislative competence of the Federal Parliament because it is a law with respect to external affairs (s 51(xxix)). That contention is contested by the applicant. In the alternative, the respondent submits that s 4(6)(a), insofar as it applies to non-citizens, is within the legislative competence of the Federal Parliament because it is a law with respect to aliens (s 51(xix)). In other words, the respondent submits that even if s 4(6)(a) is partially invalid, it can be read down to apply to those natural persons who are aliens, that is to say, non-citizens, particularly when regard is had to the terms of s 5A.
28 The respondent’s first argument requires a consideration of the scope of the external affairs power and whether s 4(6)(a) of the Act falls within that power. If that argument fails, the respondent’s second argument requires a consideration of whether s 4(6)(a) can be read down to apply to non-citizens and therefore as a law with respect to aliens.
29 The scope of the external affairs power has been considered by the High Court in a number of recent decisions. Both parties referred extensively to the decisions in Polyukhovich v The Commonwealth [1991] HCA 32; (1991) 172 CLR 501 (‘Polyukhovich’) and Victoria v The Commonwealth (Industrial Relations Case) [1995] HCA 45; (1995) 187 CLR 416 (‘Victoria v The Commonwealth’).
30 In Polyukhovich, Dawson J said of the external affairs power (at 632):
‘[T]he power extends to places, persons, matters or things physically external to Australia. The word "affairs" is imprecise, but is wide enough to cover places, persons, matters or things. The word "external" is precise and is unqualified. If a place, person, matter or thing lies outside the geographical limits of the country, then it is external to it and falls within the meaning of the phrase "external affairs".’
The reasons for judgment of the other Justices were to similar effect: Mason CJ at 528-531; Deane J at 599-603; Gaudron J at 695-696; McHugh J at 712-714.
31 In Victoria v The Commonwealth, Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ said (at 485) (footnotes omitted):
‘Of course the scope of the legislative power is not confined to the implementation of treaties. The modern doctrine as to the scope of the power conferred by s 51(xxix) was adopted in Polyukhovich v The Commonwealth. Dawson J expressed the doctrine in these terms:
"[T]he power extends to places, persons, matters or things physically external to Australia. The word ‘affairs’ is imprecise, but is wide enough to cover places, persons, matters or things. The word ‘external’ is precise and is unqualified. If a place, person, matter or thing lies outside the geographical limits of the country, then it is external to it and falls within the meaning of the phrase ‘external affairs’."
Similar statements of the doctrine are to be found in the reasons for judgment of other Justices: Mason CJ; Deane J; Gaudron J; and McHugh J. They must now be taken as representing the view of the Court.’
32 In XYZ v The Commonwealth [2006] HCA 25; (2006) 80 ALJR 1036 the High Court considered the validity of provisions of the Crimes Act 1914 (Cth) which made it an offence for a person defined as an Australian citizen or a resident of Australia while outside Australia to engage in sexual intercourse with a person under 16 years of age, or to commit an act of indecency on a person under 16 years of age. By a majority of five to two, the Court held that the legislation was valid under the external affairs power. Of the majority, Gleeson CJ and Kirby J each wrote separate judgments and Gummow, Hayne and Crennan JJ prepared joint reasons. Callinan and Heydon JJ dissented.
33 Gleeson CJ referred to the plaintiff’s argument to the effect that the external affairs power was limited to a power to make laws with respect to relations between Australia and other countries. He said that to accept that argument would involve overruling the decision in Polyukhovich. Gleeson CJ held that Polyukhovich had been correctly decided and he said (at [10]) (footnotes omitted):
‘For this argument to succeed, it would be necessary for the Court to depart from the decision in Polyukhovich v The Commonwealth, and to decide that the construction placed upon s 51(xxix) by every member of the Court in that case was wrong. In my view, the Court, upon reconsideration, should hold that Polyukhovich was correctly decided insofar as the decision bears upon the question of construction that arises in this case. Insofar as the decision goes beyond that, and bears, for example, upon Ch III of the Constitution, it is not presently relevant and it is unnecessary and inappropriate to say anything further about it. There was a difference between the view of s 51(xxix) taken by Mason CJ, Deane J, Dawson J, Gaudron J and McHugh J, on the one hand, and the views of Brennan J and Toohey J on the other. That difference does not affect the point presently in issue. Polyukhovich held that the external affairs power covers, but is not limited to, the matter of Australia's relations with other countries. It also includes a power to make laws with respect to places, persons, matters or things outside the geographical limits of, that is, external to, Australia. That conclusion represents the current doctrine of the Court on the external affairs power, and should be maintained because it is correct.’
34 Gummow, Hayne and Crennan JJ said (at [30]) that the modern doctrine of the scope of the power was as expressed by Dawson J in Polyukhovich (at 632).
35 Kirby J identified what he considered to be a number of difficulties with the ‘geographical externality principle’ and therefore put it to one side. He decided the case by reference to whether the laws were laws with respect to a ‘matter of international concern’ [66]-[117].
36 It is well established that the grant of legislative power with respect to external affairs, as with other heads of power, should be construed with all the generality that the words admit.
37 The issue before me is whether s 21A as extended by s 4(6)(a) is a law with respect to a person outside the geographical limits of Australia within the statement of principle referred to above. The respondent submitted that it clearly is because it operates with respect to a person not ordinarily resident in Australia. The applicant submits that it is not because the true character of the relevant sections is that they constitute a law with respect to the acquisition of property in Australia and they lack a sufficient element of ‘externality’ to bring them within the external affairs power. In fact, the applicant went further and submitted that the relevant sections did not constitute a law with respect to external affairs because they did not ‘deal entirely with places, persons, matters or things which are external to Australia, but rather regulate conduct within Australia’.
38 There are two important aspects to s 21A(4) as extended by s 4(6)(a) and they are first, a natural person not ordinarily resident in Australia, and secondly, the acquisition of Australian urban land. The statutory definition of Australian urban land is land situated in Australia that is not used wholly and exclusively for carrying on a business of primary production. If those two matters are present then the Treasurer’s power to make a divestiture order is enlivened if he or she is satisfied the acquisition is contrary to the national interest.
39 The statement by Dawson J in Polyukhovich refers, among other things, to persons outside the geographical limits of Australia.
40 Clearly, a person not ordinarily resident in Australia might come to Australia from time to time, but I do not think that that means the concept of not being ordinarily resident in Australia lacks an element of externality. To say that a person is not ordinarily resident in Australia means that ordinarily that person is outside the geographical limits of Australia.
41 It follows that one matter, namely, a person not ordinarily resident in Australia, is a matter geographically external to Australia and the other matter, namely, the acquisition of Australian urban land is a matter geographically internal to Australia.
42 The question which arises is whether s 21A(4) and s 4(6)(a) must relate only to matters external to the geographical limits of Australia in order to fall within the external affairs power. If so, this law would fail to meet that test because it only operates when conduct is carried out in Australia, namely, the acquisition of urban land in Australia. The applicant submitted that Polyukovich was authority for the proposition that to fall within the external affairs power a law must deal ‘entirely’ or ‘wholly’ with a place, person, matter or thing geographically external to Australia. She referred to the reasons for judgment of Dawson J (at 641) and Gaudron J (at 695). The law in Polyukovich did deal entirely or wholly with acts, matters and things geographically external to Australia and it was held to be within the external affairs power. Their Honours’ observations are to be read in that context and they are not authority for the proposition that a law only falls within the external affairs power if it deals entirely or wholly with a place, person, matter or thing geographically external to Australia.
43 I do not think the mere fact that the law is only engaged if conduct occurs within Australia of itself disqualifies the law from being a law with respect to external affairs. There seems to be no reason to say that simply because the law also relates to conduct in Australia or produces a certain result or effect in Australia that it is not a law with respect to external affairs. I reject the applicant’s submission that s 4(6)(a) is invalid because it does not deal entirely with places, persons, matters or things outside the geographical limits of Australia.
44 The applicant submits in the alternative that the relevant provisions are not a law with respect to external affairs because the element of geographical externality is insufficient and because the pith and substance of the relevant provisions is conduct in Australia.
45 The question raised by that submission is not an easy one. It requires a characterisation of the relevant provisions. In Polyukhovich, Deane J said (at 602):
‘Whatever may have been the position before the emergence of Australia as a fully independent sovereign State, it should now be accepted that any law which can properly be characterized as a law with respect to any matter, thing or person occurring or situate outside Australia is a law with respect to "External affairs" for the purposes of s 51(xxix). In referring to "a law with respect to any matter ... occurring ... outside Australia", I intend to include, among other things, what Jacobs J described (see above) as "any matter or thing done or to be done or prohibited to be done outside the boundaries of the Commonwealth". As has been mentioned, that broad view of the scope of the power conforms with settled principles of constitutional construction.’
46 The relevant provisions only operate in relation to a class of persons who are geographically external to Australia. I think this can be said even though the actual criterion is that the person is not ordinarily resident in Australia. They are the only persons affected by the relevant provisions. The location of the class of persons affected by the relevant provisions is an important characteristic of them, albeit that another feature of them is conduct within Australia, that is to say, the acquisition of Australian urban land. In my opinion, for the purposes of determining whether the relevant provisions are a law with respect to external affairs, it is sufficient that the relevant provisions apply only to a class of persons geographically external to Australia.
47 In my opinion, the relevant provisions are a valid exercise of the external affairs power.
48 Even if I am wrong, and the relevant provisions are not a valid exercise of the external affairs power, I am of the opinion that so much of s 4(6)(a) as applies to non-citizens is a valid exercise of the Federal Parliament’s power to make laws with respect to aliens and that s 4(6)(a) can be read down accordingly.
49 In Shaw v Minister for Immigration and Multicultural Affairs [2003] HCA 72; (2003) 218 CLR 28 Gleeson CJ, Gummow and Hayne JJ (Heydon J agreeing at 87 [190]) said (at 35[2]) (footnote omitted):
‘The power conferred by s 51(xix) supports legislation determining those to whom is attributed the status of alien; the Parliament may make laws which impose upon those having this status burdens, obligations and disqualifications which the Parliament could not impose upon other persons. On the other hand, by a law with respect to naturalisation, the Parliament may remove that status, absolutely or upon conditions. In this way, citizenship may be seen as the obverse of the status of alienage.’
50 In Cunliffe v The Commonwealth [1994] HCA 44; (1994) 182 CLR 272 (at 315-316) Brennan J (as he then was) made the following observations as to the aliens power (at 315-316) (footnotes omitted):
‘The power to make laws with respect to aliens, unlike the majority of the powers conferred by s 51 of the Constitution, is not a power to make laws with respect to a function of government, a field of activity or a class of relationships: it is a power to make laws with respect to a class of persons. If, in its operation, a law affects a class of persons with respect to whom there is a power to make laws, the law may have the character of a law with respect to persons of that class. But it is neither necessary nor sufficient that the law should change, regulate or abolish the rights, duties, powers and privileges of the relevant class treated merely as members of the general public or of a substantially wider class than the class of persons who constitute the subject matter of the power. For example, a law which requires notification of symptoms of a disease after entry to Australia by aliens and citizens indifferently is not a law with respect to aliens – though it may be a law with respect to quarantine. But if and to the extent that the law discriminates between the public at large and the relevant class of persons (whether textually or in its operation), there is an indicium that the law is a law with respect to persons of that class. That indicium may suffice to give the law the character of a law with respect to persons of that class and, if the discrimination is in a matter peculiarly significant to that class, the law will bear that character. In this respect, the aliens power is similar to the corporations power considered in Actors and Announcers Equity Association of Australia v Fontana Films Pty Ltd. In that case, s 45D(1)(b)(i) of the Trade Practices Act 1974 (Cth), which protected the businesses of trading corporations was held to be supported by s 51(xx) of the Constitution as a law with respect to trading corporations.’
51 A narrower view of the aliens power has been taken on occasion (see Gaudron J in Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs [1992] HCA 64; (1992) 176 CLR 1 at 57) but I am satisfied that the views expressed by Brennan J in Cunliffe v Commonwealth (supra) are the principles binding on me. The applicant argued the matter by reference to those principles.
52 In my opinion s 4(6)(a) applies to natural persons who are citizens of Australia and those who are not. The applicant asked me to draw that conclusion and, in that context she referred me to regulation 3(k) of the Foreign Acquisitions and Takeovers Regulations 1989. That regulation was made under s 12A(8) of the Act and provides that the Act does not apply to an acquisition of Australian urban land by a foreign person who is an Australian citizen not ordinarily resident in Australia. The regulation cannot be used to construe the Act, but it is of no moment because, in my opinion, it is clear that s 4(6)(a) applies to both natural persons who are Australian citizens and those who are not.
53 I have no doubt that had s 4(6)(a) been expressed so as to apply only to natural persons who are not Australian citizens, or had it been drafted so as to deal separately with natural persons who are not Australian citizens, then the section insofar as it applied to non-citizens would be a valid exercise of the aliens power. The question is whether s 4(6)(a) can be read down so as to apply only to non-citizens not ordinarily resident in Australia.
54 Section 15A of the Acts Interpretation Act 1901 (Cth) provides as follows:
‘Every Act shall be read and construed subject to the Constitution, and so as not to exceed the legislative power of the Commonwealth, to the intent that where any enactment thereof would, but for this section, have been construed as being in excess of that power, it shall nevertheless be a valid enactment to the extent to which it is not in excess of that power.’
55 I was referred to the authorities which have considered the circumstances in which a legislative provision which is partially invalid will be read down: Pidoto v The State of Victoria [1943] HCA 37; (1943) 68 CLR 87 per Latham CJ at 108-111; Victoria v The Commonwealth (supra) per Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ at 501-503. But for s 5A there might have been some difficulties in the way of reading down s 4(6)(a) so that it applied only to non-citizens not ordinarily resident in Australia. For example, there would be the difficulty of a law expressed in general terms and arguably no clear guide as to Parliament’s intention as to an appropriate limitation. However, I do not think that those types of difficulties arise here, because by providing in s 5A what is in effect a statutory statement or definition of non-citizens who do and do not fall within the definition of natural persons caught by s 4(6)(a) the Federal Parliament has sufficiently revealed an intention that that subsection should operate in relation to non-citizens even if it is otherwise invalid. Section 4(6)(a) insofar as it applies to non-citizens is a valid exercise of the aliens power.
56 The applicant made reference to the Federal Parliament’s power to make laws with respect to the acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws (s 51(xxxi)). Initially, the applicant contended that ss 4(6) and 21A of the Act could not be justified by reference to this head of power because, first, the acquisition was not for any purpose in respect of which the Parliament had power to make laws, and secondly, the acquisition of property was not on just terms. At the hearing, counsel for the applicant said that he was prepared to concede for the purposes of the argument that if there was an acquisition of property it was on just terms. The respondent contends first that ss 4(6) and 21A stand outside the scope of s 51(xxxi) and, secondly, that in any event, there was no acquisition of property within the terms of s 51(xxxi). In my opinion, both of the respondent’s submissions should be accepted.
57 Certain laws have been held to fall outside s 51(xxxi) and within another supporting head of power. Examples include laws which impose a fine or penalty or laws effecting or authorising seizure of the property of enemy aliens or the condemnation of prize. The test for determining if a law falls outside the scope of s 51(xxxi) has been variously stated. In Mutual Pools and Staff Pty Ltd v The Commonwealth [1994] HCA 9; (1994) 179 CLR 155 Brennan J said (at 179-180):
‘Although s 51(xxxi) abstracts from other heads of power the power of acquisition which that paragraph itself confers, it does not thereby abstract the power to prescribe the means appropriate and adapted to the achievement of an objective falling within another head of power where the acquisition of property without just terms is a necessary or characteristic feature of the means prescribed.
In each of the cases in which laws for the acquisition of property without the provision of just terms have been held valid, such an acquisition has been a necessary or characteristic feature of the means selected to achieve an objective within power, the means selected being appropriate and adapted to that end. Therefore a law which selects and enacts means of achieving a legitimate objective is not necessarily invalid because the means involve an acquisition of property without just terms. What is critical to validity is whether the means selected, involving an acquisition of property without just terms, are appropriate and adapted to the achievement of the objective. The absence of just terms is relevant to that question, but not conclusive. Where the absence of just terms enhances the appropriateness of the means selected to the achievement of the legitimate objective, the law which prescribes those means is likely to fall outside s 51(xxxi) and within another supporting head of power. If it were otherwise, the guarantee of just terms would impair by implication the Parliament's capacity to enact laws effective to fulfil the purposes for which its several legislative powers are conferred. It would be erroneous so to construe grants of legislative power as to fetter their exercise by implying that s 51(xxxi) precluded the enactment of laws under other heads of power where the laws involved an acquisition of property without just terms, even though laws of that kind are appropriate and adapted to the execution of those powers in the public interest.’
58 In Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 271, Deane and Gaudron JJ said (at 285):
‘It is not necessary to repeat what we say in Mutual Pools with respect to the effect of the words "for any purpose in respect of which the Parliament has power to make laws". However, it is necessary to elaborate a little on the phrase "acquisition of property on just terms". Because s 51(xxxi) operates as a constitutional guarantee, the words "acquisition" and "property" are to be construed liberally . However, the power conferred by s 51(xxxi) is one with respect to "acquisition of property on just terms". That phrase must be read in its entirety and, when so read, it indicates that s 51(xxxi) applies only to acquisitions of a kind that permit of just terms. It is not concerned with laws in connexion with which "just terms" is an inconsistent or incongruous notion. Thus, it is not concerned with a law imposing a fine or penalty, including by way of forfeiture, or a law effecting or authorizing seizure of the property of enemy aliens or the condemnation of prize. Laws of that kind do not involve acquisitions that permit of just terms and, thus, they are not laws with respect to "acquisition of property", as that expression is used in s 51(xxxi). It follows that a law which effects or authorizes forfeiture of property in consequence of its use in the commission of an offence against the laws of the Commonwealth stands outside s 51(xxxi).’
This passage from the reasons for judgment of Deane and Gaudron JJ was cited with approval by five Justices of the High Court in Theophanous v Commonwealth of Australia [2006] HCA 18 at [55]- [56].
59
The Act controls the acquisition of property in Australia by a foreign corporation or a natural person not ordinarily resident in Australia. That control involves power to prohibit a proposed acquisition, to approve a proposed acquisition and, in relation to an acquisition which has taken place without approval, to require a person to dispose of the property acquired. It is difficult to see how the subject matter of the Act could be properly controlled or regulated without the power to make a divestiture order.
60 Having regard to the principles which I have identified, in my opinion ss 4(6) and 21A(4) stand outside the scope of s 51(xxxi).
61 I also agree with the respondent’s second submission that in any event the degree of impairment of the applicant’s rights with respect to the property is insufficient to attract the operation of s 51(xxxi). In Waterhouse v Minister for the Arts and Territories (1992) 43 FCR 175 the power of a Minister to grant or withhold a permit for an object to be exported to a purchaser under the Protection of Movable Cultural Heritage Act 1986 (Cth) was held to be an insufficient impairment of the rights of the owner of a valuable Australian painting to attract the operation of s 51(xxxi) (see the discussion of Black CJ and Gummow J at 180-185; Smith v ANL Ltd [2000] HCA 58; (2000) 204 CLR 493 per Gaudron and Gummow JJ at 505 [23]). In my opinion, similar reasoning can be applied here. The applicant is required to sell the property, but the class to whom she cannot sell the property is very limited (s 21A(7)).
62 In my opinion, s 4(6)(a) of the Act is a valid exercise of the Federal Parliament’s power to make laws with respect to external affairs. If I am wrong, s 4(6)(a) insofar as it applies to non-citizens is a valid exercise of the Federal Parliament’s power to make laws with respect to aliens and can be read down accordingly.
Was the power in s 21A(4) engaged?
63 The applicant submits that the divestiture order was invalid because the power in s 21A(4) to make an order was not engaged. She submits that an approval was granted by the Treasurer in 1995 and the proposal which was the subject of the approval was carried out. In those circumstances, the right to exercise the power in s 21A(4) had not arisen because (as was common ground) neither of the matters in s 25(1D) (c) or (d) had occurred.
64 The respondent submits that the notice preceding the ‘approval’ in 1995 was not effective and that an effective notice was an essential precondition to an approval for the purposes of s 25(1D). If there was no approval for the purposes of s 25(1D) then that section did not operate as a bar to the exercise of the power in s 21A(4) of the Act. In the alternative, the respondent submits that the acquisition by the applicant of her former husband’s interest in July 2004 was sufficient to engage the power in s 21A(4).
65 Before considering the rival contentions it is necessary to say something more about the facts which are relevant to the contentions.
66 As I have said, the applicant admits that the signature which appears on the notice preceding the acquisition of the property in 1995, and which purports to be her signature, is not in fact her signature. How this came about was not the subject of evidence. For some time, the Treasurer corresponded with the applicant on the basis that a valid approval had been granted in 1995 and his concern was whether there had been compliance with the conditions attached to the approval. Then the applicant asserted to him that she had not signed the notice which preceded the approval. She went further and asserted that she was not aware of ‘the agreement with FIRB’. In an electronic mail message she sent to the Treasurer in April 2004 the applicant said:
‘Sir, the house at Grange was bought bona fides as our family residence. As shown in the court transcript, my former husband forged my signature to documents provided to you and I had no knowledge of the agreement with FIRB. ...’
The court transcript referred to in this passage is a transcript of the evidence given in the proceedings in the Family Court.
67 The first question is whether the notice given before the acquisition of the property in 1995 was a valid notice within the provisions of the Act. The Foreign Acquisitions and Takeovers (Notices) Regulations prescribe the form of the notice for the purposes of s 26A, and, as I have said, s 27 provides that a notice does not have effect for the purposes of ss 25, 26 or 26A unless it is in accordance with the prescribed form and complies with the directions set out in the form. Regulation 4(3) provides that the prescribed form of notice under s 26A of the Act is Form 3 in the Schedule. Regulation 8 provides as follows:
‘(1) A notice under section 25, 26 or 26A of the Act furnished by a natural person shall be signed:
(a) if the person is not ordinarily resident in Australia – by that person or by his Australian agent; or
(b) in any other case – by the person furnishing the notice.
(2) A notice under section 25, 26 or 26A of the Act furnished by a corporation shall be signed by a person authorized in writing by the corporation to sign the notice for and on behalf of the corporation.’
There is no question here of a person signing the notice as the applicant’s Australian agent.
68 The prescribed form in the Schedule is in part as follows:
‘Form 3 Notice under section 26A
(subregulation 4 (3))
Foreign Acquisitions and Takeovers Act 1975
NOTICE UNDER SECTION 26A
General Directions
1. The person submitting this Notice must annex to the Notice any documents required under regulation 6 of the Foreign Acquisitions and Takeovers (Notices) Regulations to be annexed to this Notice.
2. Where the space provided in this Notice is insufficient to insert the required particulars, show the particulars in a separate annexure to this Notice.
3. This Notice must be signed in the manner prescribed by regulation 8 of the Foreign Acquisitions and Takeovers (Notices) Regulations.
To the Treasurer,
Notice is given under section 26A of the Foreign Acquisitions and Takeovers Act 1975, that (1) ........................................................................, being the person particulars in relation to whom are set out in Part I of this Notice, intends to enter into an agreement (2) by virtue of which he, she or it is to acquire an interest in (3) ............................................................., being an interest in Australian urban land, the details of which are set out in Part II of this Notice.
The particulars specified in Part I and Part II of this Notice, being in accordance with the directions relating to those Parts, are, to the best of my knowledge, information and belief, true and correct.
Signed by (4) .................................................
Full name .................................................
(1) Insert name of natural person, corporation or trustee giving notice.
(2) A person who enters into an agreement of the kind referred to in subsection 26A(3) of the Act is considered to be a person who intends to enter an agreement.
(3) Insert name of property in which an interest is to be acquired.
(4) To be signed by natural person giving notice or his or her Australian agent (if natural person not ordinarily resident in Australia) or person authorised in writing to sign this Notice on behalf of a corporation or trust estate.’
69 The requirement in paragraph 3 of the Form is a direction set out in the Form within s 27 of the Act and it refers to reg 8 and the requirement that a natural person giving the notice must sign the form. The applicant is one of the two natural persons required to give a notice by reason of the provisions of s 26A. She was proposing to acquire with her former husband Australian urban land. She did not complete the notice in accordance with the provisions of the Act. It seems to me that a notice has not been given for the purposes of s 25 of the Act and the notice did not have effect for the purposes of that section. Having regard to the terms of s 27 I do not think that conclusion can be avoided by reference to the notion of substantial compliance even if it was otherwise appropriate to find that there had been substantial compliance.
70 An effective notice not having been given, the second question is whether the operation of s 25(1D) is contingent upon the giving of an effective notice. The circumstances in which an act done in breach of a condition regulating the exercise of a statutory power will invalidate that exercise were considered by the High Court in Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 at 388-390 per McHugh, Gummow, Kirby and Hayne JJ. Their Honours said that the relevant question is not whether the condition is mandatory or directory, but whether, by reference to the language of the relevant provision or provisions and the scope and object of the statute as a whole, it was a purpose of the legislation to invalidate an act done in breach of the condition.
71 In my opinion, by reason of the terms of s 25, the operation of s 25(1D) is contingent upon the giving of an effective notice. Section 25(1) provides that the section has effect where the Treasurer receives a notice. Section 25(1D) refers to ‘advice’ given under s 25(1B). The ‘advice’ is of a decision under s 25(1A), and a decision under s 25(1A) relates to ‘the acquisition ... specified in the notice’ and the decision which may be made is that there is ‘no objection to the proposal specified in the notice’. Furthermore, the offence of contravening a condition referred to in s 25(1C) is linked to the advice of a decision under s 25(1B). In my opinion, there was no effective decision and therefore advice within the provisions of s 25 because there was no proposal specified in a notice and there was no proposal specified in a notice because the purported notice was not effective for the purposes of s 25(1A).
72 As far as the acquisition which took place in 1995 is concerned, s 25(1D) did not operate as a bar to the respondent exercising the power in s 21A(4). It was the acquisition which took place in 1995 which was relied on by the respondent for the purposes of his decision to make the divestiture order.
73 In those circumstances, it is not strictly necessary for me to consider the respondent’s alternative submission that in 2004 there was an acquisition within s 21A(4) when the applicant’s former husband transferred his interest in the property to the applicant, who then became the sole registered proprietor of the property. The submissions on this issue went no further than the question of whether or not there had been an ‘acquisition’ within s 21A(4) in 2004. The applicant submits that by reference to general concepts of real property law there was no acquisition in 2004 because the applicant, who was a joint tenant of the property, was already (ie, prior to becoming the sole registered proprietor) seised of the whole of the estate or interest: Bradbrook MacCallum and Moore, Australian Real Property Law (3rd ed, 2002) 340 [10.02]. It has been said that a joint tenant cannot assign his or her interest but, rather, one of two joint tenants may enter into a transaction by way of release of the estate: Burton v Mayor etc of London Borough of Camden [2000] UKHL 8; [2000] 2 AC 399. In response to this submission of the applicant, the respondent referred to s 12A of the Act. That section relevantly provides:
‘(3) For the purposes of this Act, a person acquires an interest in Australian urban land even if:
(a) the person acquires the interest jointly with another person or persons;
(b) the person has previously acquired an interest in Australian urban land; or
(c) the interest is an increase in the amount of an existing interest of the person in Australian urban land.’
74 I think there was an increase in the applicant’s interest within the terms of s 12A(3)(c) when she became the sole registered proprietor of the property and therefore an ‘acquisition’ within the Act.
75 However, there are a number of further matters which arise once this conclusion is reached and these further matters were not the subject of detailed submissions. They are as follows:
1. The respondent was aware of the proposed acquisition in 2004 and, in fact, agreed to it taking place, although he did so on the applicant agreeing to sell the property and without the formal approval procedures prescribed by the Act being followed.
2. A question may arise as to whether the power to make an order requiring the applicant to dispose of the whole of the property is engaged, having regard to the particular interest acquired by the applicant in 2004.
3. The minute containing the recommendations adopted by the respondent makes it clear that it was the acquisition in 1995 which formed the basis of the order made by the respondent under s 21A(4). A question may arise as to whether, in those circumstances, the respondent’s decision can only be considered by reference to that acquisition.
76 There may well be clear answers to these possible difficulties. Nevertheless, had it been necessary, I would have invited the parties to make submissions on these matters before deciding if the divestiture order should be upheld by reference to the acquisition in 2004. As it happens, I do not need to do that because I have reached the conclusion that s 21A(4) was engaged by the acquisition in 1995.
77 My conclusions to this point are that the relevant provisions of the Act are valid and that it was open to the Treasurer to consider making a divestiture order under s 21A(4) of the Act. I turn now to consider the various judicial review grounds advanced by the applicant in support of her submission that the divestiture order is invalid.
Was there a breach of the rules of procedural fairness in connection with the divestiture order?
78 In order to consider this issue, it is necessary to set out the facts in more detail.
79 In order to understand what follows it is important to bear in mind that for a time the Treasurer proceeded on the basis that there was a valid and effective approval for the acquisition of the property in 1995 and his concern was whether the conditions attached to the approval had been and were being complied with. Those conditions were that the applicant and her former husband use the property as their principal place of residence and not for rental purposes, and when they ceased to reside at the property it was to be sold to Australian or other eligible purchasers.
80 On 20 August 1999 the Treasurer wrote to the applicant and her former husband reminding them of the conditions of the approval given in March 1995 noting that their Australian visas were valid until 9 June 1996 and asking for advice as to the current position. The concern of the Treasurer at that point was whether there was compliance with the conditions. A solicitor acting for the applicant’s former husband replied to the Treasurer’s letter and advised him of the proceedings in the Family Court. She advised the Treasurer that the applicant’s former husband had left Australia in 1997 and that the applicant was in Australia on a tourist visa which the solicitor said she understood expired in January 2000. On 13 December 1999 the Treasurer wrote to the solicitor acting for the applicant’s former husband stating that the property should be sold within 3 months ‘to an Australian or other eligible purchaser’.
81 It seems that little then occurred while the proceedings in the Family Court between the applicant and her former husband were heard and determined. After the determination of the appeal to the Full Court of the Family Court the Treasurer started corresponding with the applicant’s solicitors and then with the applicant. By late 2003, the Treasurer was calling upon the applicant to sell the property by reason of the fact that neither she nor her former husband was using it as their principal place of residence. Furthermore, the applicant was advised that she was liable to prosecution under s 25(1C) of the Act for breach of the condition that the property be used as her principal place of residence. There is reference in the correspondence from the Treasurer at about this time to what were said to be ‘serious visa violations’ by the applicant, but no details of the alleged violations were provided.
82 The correspondence between the applicant and the Treasurer in or about April 2004 reveals that the Treasurer was asserting that the applicant and her former husband should sell the property to Australian citizens who were not associates and, that failing that being done within a certain period of time, the applicant would be prosecuted under s 25(1C) of the Act for breach of conditions that either or both the applicant and her former husband reside in Australia or use the property as their principal place of residence. As I have said, at this time the applicant asserted that her former husband had forged her signature on the original application and that she was not aware of the conditions. She said that she wished to keep the property.
83 On 13 May 2004, the Treasurer wrote to the applicant and said (among other things):
‘Your former husband’s departure from Australia in 1997 therefore constituted a breach of the Act as did, prima facie, your failure to continue to use the property as your principal place of residence commencing in 1998-1999. While you may dispute the interpretation placed on your absences overseas and residence in Broken Hill during this period, there is no doubt that your departure from Australia at the end of 2002, and your failure to inform this office of this and of your changed visa status, placed you in breach of your obligations.
Your subsequent marriage to an Australian citizen has no influence or bearing on your entitlement to continue to own the property at Grange.
...
In summary, I am satisfied that both you and your former husband are in breach of obligations entered into under the FATA, that you have been clearly informed of this on a number of occasions since 1999 and have had ample opportunity to respond, and that you have failed to satisfactorily address our concerns on this matter. I therefore urge you to act on the proposals made in Mr Kitchen’s letter to your solicitor of 13 April 2004, and provide advice by 30 May 2004 that you have entered into a marketing agreement to sell the property at 481 Esplanade, Grange, South Australia by 30 August 2004. Should such advice not be provided by that date, I will have no alternative but to refer the matter to the Director of Public Prosecutions for prosecution under the provisions of the FATA. I attach a copy of Mr Kitchen’s 13 April letter for ease of reference.’
84 In June 2004, the applicant gave written undertakings to the Treasurer and on the basis of those undertakings the Treasurer did not object to the applicant accepting a transfer from her former husband of his interest in the property. Those undertakings were as follows:
‘1. To place the property at 481 The Esplanade, Grange in the State of South Australia on the market for sale immediately upon the transfer of the interest of my former husband NIELS PETER BUCHHOLZ in the said property to me is registered.
2. To provide a copy of the Sales Agency Agreement for the sale of the said property to you immediately upon such agreement being signed by me.
3. To sell the said property to Australian citizens who are not associates (as defined in Section 6 of the Foreign Acquisitions and Takeovers Act 1975) of either myself or my said former husband.
4. To obtain your approval for any such sale.
5. To effect the sale of the property, within 3 months of the execution of the Sales Agency Agreement, subject to my receiving reasonable and genuine offers for the purchase of the said property.’
85 The applicant entered into a sales agency agreement with Westside Realty Pty Ltd, trading as Professionals Henley Beach, on 3 August 2004, for the sale of the property by private treaty at a price of $1.5 million to $1.7 million. The agreement was a sole agency agreement effective to 1 January 2005.
86 The Treasurer wrote to the applicant by letter dated 25 October 2004 advising her that he had advice that a valuation on the property of $1.5 million to $1.7 million ‘is considerably higher than current market valuation’ and that given that she had not yet sold the property she ‘should now consider selling the property at auction by 30 November 2004 for a current market valuation’. By letter dated 8 November 2004, the applicant advised the Treasurer that she had decided not to auction the property.
87 The Treasurer made contact with the applicant’s agent and on 15 November 2004 he was advised by the agent that the applicant had ‘reassessed’ her asking price to $1.1 million to $1.2 million.
88 On 14 December 2004 the Treasurer wrote to the applicant. The letter is an important one and I set it out in full:
‘FOREIGN INVESTMENT IN AUSTRALIA
I refer to our previous correspondence regarding the property at 481 Esplanade, Grange, South Australia (the property) and your continued ownership of that property.
As advised previously, as a foreign person within the meaning provided by the Foreign Acquisitions and Takeovers Act 1975 (FATA), you have certain obligations under the requirements of that legislation and the Government’s foreign investment policy. We are concerned that, for whatever reason, you feel these obligations do not apply to you and have decided not to comply with our requests over the past several years to dispose of your interest in the property. For example, it is our view that the current marketing arrangement for the property does not represent a reasonable attempt to market the property as the asking price is way above any reasonable valuation.
We have been extremely patient in this matter but our patience is now being sorely tested.
We have sought further legal advice on this matter taking into account your advice that back in 1995 your former husband forged your signature on the legal notice forms and undertakings given to the Government in respect of the purchase of the subject property.
The nub of this legal advice is that if your signature was forged, then, under law, you did not give the required formal notice of your purchase of that legal interest back in 1995. As such, the Government’s powers to require divestment under section 21A(4) of the Foreign Acquisitions and Takeovers Act 1975 (FATA) for acquisitions that are contrary to the national interest remain intact. To give you reasonable opportunity to make further representations in this matter, I am informing you that, in mid-January 2005 we will be seeking from the Minister a formal order under the provisions of the FATA legally requiring you to dispose of your interest in the property in question by 30 April 2005. While we do not intend at this stage to prosecute you for your previous failures to observe our requests in this matter, failure to dispose of the property in line with this order will result in a recommendation to the Minister to begin prosecution under the appropriate provisions of the FATA as soon as practicable after 30 April 2005. There will be no scope to extend this sale deadline.’
89 The importance of this letter is it puts the applicant on notice that an order under s 21A(4) may be made by the Treasurer.
90 On 25 January 2005 Westside Realty Pty Ltd wrote to the Treasurer advising him that the applicant had withdrawn the property from sale in December 2004 ‘indicating she didn’t want to sell’, and that at that time there was an offer which the agent believed was reasonable and that the agent believed that the offeror was still interested.
91 I have already set out details of the order made by the respondent on 23 February 2005 as set out in the notice ([7] above).
92 I have also referred to the minute and the recommendations contained in the minute ([8] above).
93
The main points made in the minute are as follows:
1. The case involved a long history of non-compliance with foreign investment policy requirements. This is a reference to the fact that there had been breaches of the conditions attached to the approval given in 1995.
2. The applicant was not making serious efforts to sell the property and ‘had turned down several reasonable offers for the house’.
3. There was no reason to doubt the applicant’s assertion that her signature was forged, but if that was so then she did not submit a valid legal notice prior to the joint purchase of the property. That meant that a formal divestment order could be issued.
4. After referring to the fact that the applicant would no doubt argue that she should not be penalised for the deceptive conduct of her former husband, the minute states:
‘However, we consider there are strong grounds on which to issue the divestment order. These are:
• Dr Wight, by her own submission, did not submit a notice as required by the FATA;
• She has not been eligible under the Government’s foreign investment policy to hold established real estate as she does not hold the requisite visa status and has not done so for some years. Dr Wight has not resided in the property as her principal place of residence on several occasions as required by the governments [sic] foreign investment policy. These absences included a period of a year when she was required to leave Australia by DIMIA because of separate visa violations. It is understood that these visa violations have yet to be resolved and that she returned to Australia utilising a new passport in the name of Wight rather than Huber Buchholz.
• Dr Wight has refused to co-operate with us and the timeframe in the Order will not prevent her getting a very good price for the house (she paid about $400,000 for it and had offers over $1 million recently). Moreover, subject to her obtaining an eligible visa in the future, she will be able to apply for approval to buy residential property and we would not propose preventing her from doing so, provided she complies with this Order.’
94 That part of the minute which was the sheet entitled ‘Additional Information’ contains a chronology of relevant events. A number of the statements in that document are relevant. First, it is said that in addition to claiming that her signature was forged, the applicant claimed that ‘the foreign investment guidelines do not apply to her as she personally did not provide a formal foreign investment application or undertaking’, and a little later it is said that between 2001 and 2003 the applicant maintained her belief that she was not subject to the Act and the ‘Government’s foreign investment policy’. Secondly, it is said that the applicant married an Australian citizen in 2002 and sought a spousal visa allowing her to remain in Australia. This was refused because of ‘separate visa violations’. Thirdly, it is said that despite her undertaking to sell the property the applicant had ‘refused several reasonable offers for the property, currently valued in excess of $1 million’.
95 It was common ground between the parties that in making a decision under s 21A(4) of the Act, the respondent was bound to accord procedural fairness to the applicant. The applicant submits that the respondent failed to accord her procedural fairness in one or more of the following three ways:
1. In the circumstances, she was not given sufficient notice of what was proposed and sufficient time to respond.
2. She was not advised of adverse information from third parties which was part of the information provided to the respondent and to which he is taken to have had regard.
3. In the information provided to the respondent, and to which he is taken to have had regard, adverse conclusions were drawn against the applicant which were not obvious on the known material. The applicant should have been given the opportunity to comment on those adverse conclusions before a decision was made.
96 There is no provision in the Act which expressly deals with the content of the rules of procedural fairness.
97 In Kioa v West [1985] HCA 81; (1985) 159 CLR 550 (‘Kioa’), Mason J (as he then was) (at 582) referred to the fundamental rule of the common law doctrine of natural justice that, generally speaking, a person is entitled to know the case against him and to be given an opportunity of replying to it. Brennan J (at 612-616) referred to the authorities to the effect that the content of the rules of natural justice will depend on the circumstances of the particular case, including the nature of the jurisdiction or power exercised and the statutory provisions governing its exercise. Brennan J considered whether there was an irreducible minimum required by the principles of natural justice, namely, that ‘the person concerned should have a reasonable opportunity of presenting his case’ (Russell v Duke of Norfolk [1949] 1 All ER 109 per Lord Tucker at 118). Brennan J said (at 615-616):
‘Yet Tucker LJ said in Russell v Duke of Norfolk [179] , that there is an irreducible minimum required by the principles of natural justice, namely, that "the person concerned should have a reasonable opportunity of presenting his case". If his Lordship's view be right, it would be necessary to hold that if, in some circumstances, perhaps unusual circumstances, a power may need to be exercised peremptorily, no exercise of that power is conditioned on observance of the principles of natural justice. But it would be wrong to attribute to a legislature such an intention. Rather, the intention to be implied when the statute is silent is that observance of the principles of natural justice conditions the exercise of the power although in some circumstances the content of those principles may be diminished (even to nothingness) to avoid frustrating the purpose for which the power was conferred.
Accepting that the content of the principles of natural justice can be reduced to nothingness by the circumstances in which a power is exercised, a presumption that observance of those principles conditions the exercise of the power is not necessarily excluded at least where, in the generality of cases in which the power is to be exercised, those principles would have a substantial content.’
98 There is no reason to think that the purpose for which the power in s 21A(4) is conferred would be frustrated if the general principles of procedural fairness were applied and, in those circumstances, the applicant was entitled to know the case against her in the sense of the matters which favoured the making of an order and given the opportunity of responding to those matters.
99 In Kioa, it was also made clear that an applicant entitled to natural justice is entitled to be told of adverse information obtained by the decision-maker from third parties and which he or she proposes to take into account and to be given the opportunity to respond to that information. Brennan J referred to the obligation and identified its limits in the following passage (at 628-629) (footnotes omitted):
‘A person whose interests are likely to be affected by an exercise of power must be given an opportunity to deal with relevant matters adverse to his interests which the repository of the power proposes to take into account in deciding upon its exercise: Kanda v Government of Malay; Ridge v Baldwin per Lord Morris; De Verteuil v Knaggs . The person whose interests are likely to be affected does not have to be given an opportunity to comment on every adverse piece of information, irrespective of its credibility, relevance or significance. Administrative decision-making is not to be clogged by inquiries into allegations to which the repository of the power would not give credence, or which are not relevant to his decision or which are of little significance to the decision which is to be made. Administrative decisions are not necessarily to be held invalid because the procedures of adversary litigation are not fully observed. As Lord Diplock observed in Bushell v Environment Secretary:
"To ‘over-judicialise’ the inquiry by insisting on observance of the procedures of a court of justice which professional lawyers alone are competent to operate effectively in the interests of their clients would not be fair."
Nevertheless in the ordinary case where no problem of confidentiality arises an opportunity should be given to deal with adverse information that is credible, relevant and significant to the decision to be made. It is not sufficient for the repository of the power to endeavour to shut information of that kind out of his mind and to reach a decision without reference to it. Information of that kind creates a real risk of prejudice, albeit subconscious, and it is unfair to deny a person whose interests are likely to be affected by the decision an opportunity to deal with the information. He will be neither consoled nor assured to be told that the prejudicial information was left out of account. The allegation in par 22 was apparently credible, relevant and damaging. The failure to give Mr Kioa an opportunity to deal with it before making an order that Mr and Mrs. Kioa be deported left a risk of prejudice which ought to have been removed. There was nothing in the circumstances of the case - neither in the administrative framework created by the Act nor in any need for secrecy or speed in making the decision - which would have made it unreasonable to have given Mr and Mrs Kioa that opportunity. The failure to give Mr Kioa that opportunity amounts to a non-observance of the principles of natural justice.’
The principle referred to in this passage is well established and, for present purposes, needs no further elaboration (see Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd (1994) 49 FCR 576 (‘Alphaone’) at 590-591.
100 The principles governing the applicant’s third submission are relatively clear, although they can give rise to difficulties in terms of application. Ordinarily, a decision-maker is not required to invite comment from an applicant as to the decision-maker’s provisional views or mental processes (F Hoffman-La Roche and Co AG v Secretary for Trade and Industry [1975] AC 295 per Lord Diplock at 369). However, a decision-maker may be under an obligation to invite comment from an applicant on an adverse conclusion based on known material if that conclusion is not an obvious and natural conclusion from that material. In Alphaone, the Full Court of this Court (Northrop, Miles and French JJ) put the matter in the following way (at 591-592):
‘Where the exercise of a statutory power attracts the requirement for procedural fairness, a person likely to be affected by the decision is entitled to put information and submissions to the decision-maker in support of an outcome that supports his or her interests. That entitlement extends to the right to rebut or qualify by further information, and comment by way of submission, upon adverse material from other sources which is put before the decision-maker. It also extends to require the decision-maker to identify to the person affected any issue critical to the decision which is not apparent from its nature or the terms of the statute under which it is made. The decision-maker is required to advise of any adverse conclusion which has been arrived at which would not obviously be open on the known material. Subject to these qualifications however, a decision-maker is not obliged to expose his or her mental processes or provisional views to comment before making the decision in question.’
101 Allsop J applied this principle in Navarrete v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 1723.
102 The principle was referred to in passing by Gleeson CJ, Gummow and Heydon JJ in Re Minister for Immigration and Multicultural and Indigenous Affairs, ex parte Palme [2003] HCA 56; (2003) 216 CLR 212 at 219 [21]- [22] (footnotes omitted):
‘Further, it does not readily appear how the principles of procedural fairness could be engaged in the manner contended for by the prosecutor. It may be accepted, as the prosecutor submitted, that his entitlement extended to the rebuttal of, and comment by way of submission upon, adverse material received by the decision-maker from other sources. That stops short of supporting a complaint of the nature essentially involved here of the "pitch" or "balance" in the statement of relevant considerations in the Submission. Further, as indicated above, there is no substance in any complaint of unfair or prejudicial "lack of balance".
Reference was made by the prosecutor to the decision of the Full Court of the Federal Court in Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd. Nothing there said supports any different conclusion to that just expressed. The Full Court's statement of principle was as follow:
"Where the exercise of a statutory power attracts the requirement for procedural fairness, a person likely to be affected by the decision is entitled to put information and submissions to the decision-maker in support of an outcome that supports his or her interests. That entitlement extends to the right to rebut or qualify by further information, and comment by way of submission, upon adverse material from other sources which is put before the decision-maker. It also extends to require the decision-maker to identify to the person affected any issue critical to the decision which is not apparent from its nature or the terms of the statute under which it is made. The decision-maker is required to advise of any adverse conclusion which has been arrived at which would not obviously be open on the known material. Subject to these qualifications however, a decision-maker is not obliged to expose his or her mental processes or provisional views to comment before making the decision in question."’
103 Alphaone was also referred to in the recent decision of the High Court in SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63. That case raised a question as to whether the Refugee Review Tribunal had advised, or sufficiently advised, an applicant for review of matters it relied on in dismissing the application. The case turned on the obligation of the Tribunal under s 425 of the Migration Act 1958 (Cth) and the facts of the case. The Court did make some observations about what was said to be a dichotomy between an obligation to advise of adverse conclusions which have been arrived at which would not obviously be open on the known material, and the lack of an obligation to advise of a decision-maker’s mental processes or provisional views. After referring to the passage in Alphaone set out in [100] above, the Court said (at [30], [31] and [32]) (footnotes omitted) :
‘Particular attention was directed in argument in this Court, as it had been in the courts below, to the Tribunal's conclusion that the three identified elements of the appellant’s story were not "plausible". Was that a conclusion "which would not obviously be open on the known material"? Or was it no more than a part of the "mental processes" by which the Tribunal arrived at its decision?
Stated in this way, the argument seeks to elucidate the content of the requirements of procedural fairness by setting up a dichotomy. There are two reasons to exercise considerable care in approaching the problem in that way. First, it is far from clear that the two categories that are identified (conclusions not obviously open on the known material, and mental processes of decision-making) encompass all possible kinds of case that may fall for consideration. Secondly, there is a very real risk that focusing upon these two categories will distract attention from the fundamental principles that are engaged.
In Alphaone the Full Court rightly said:
"It is a fundamental principle that where the rules of procedural fairness apply to a decision-making process, the party liable to be directly affected by the decision is to be given the opportunity of being heard. That would ordinarily require the party affected to be given the opportunity of ascertaining the relevant issues and to be informed of the nature and content of adverse material." (emphasis added)
The Act defines the nature of the opportunity to be heard that is to be given to an applicant for review by the Tribunal. The applicant is to be invited "to give evidence and present arguments relating to "the issues arising in relation to the decision under review". (emphasis added) The reference to "the issues arising in relation to the decision under review" is important.’
Towards the end of the reasons for judgment, the Court made the following observation (at [49]):
‘Finally, even if the issues that arise in relation to the decision under review are properly identified to the applicant, there may yet be cases which would yield to analysis in the terms identified by the Full Court of the Federal Court in Alphaone. It would neither be necessary nor appropriate to now foreclose that possibility.’
104 The significance of a lack of balance in a submission is that it is likely to support a conclusion that there are adverse conclusions that are not obviously open on the known material and therefore should be put to an applicant or claimant for his or her comment. Of course, it does not mean that a submission expressed in strong or forceful terms is in itself in breach of the rules of procedural fairness.
105 I turn now to apply these principles to the facts of this case.
106 The applicant’s first submission must be rejected. The respondent’s letter dated 14 December 2004 advised the applicant that the respondent considered that the applicant did not think that obligations under the Act applied to her and that she had not complied with requests made of her to dispose of the property. It also gave the applicant notice that the respondent considered that the then marketing arrangement for the property was not reasonable because the asking price was ‘way above’ any realistic valuation. It further advised the applicant that in view of her assertion that her former husband had forged her signature, the respondent considered that she had not given the required formal notice of her purchase of her legal interest in 1995. In those circumstances, the power to make a divestiture order in relation to acquisitions that are contrary to the national interest arose and such an order would be sought from the Treasurer in mid-January 2005. Finally, it advised the applicant that the respondent considered that her previous failures could be the subject of a prosecution but that would not take place if she disposed of the property in line with the order.
107
In her affidavit, the applicant states that she did not understand what this letter was saying. She states that she did not understand the terms ‘divestiture’ or ‘order’. She was not sent a copy of s 21A(4) of the Act, nor were its terms explained to her by the respondent. She states that she did not do anything in response to the letter because she did not think that there was anything else that she could do.
108 In my opinion, having regard to the long history of the matter, the letter was adequate to put the applicant on notice as to the order which was proposed and, in general terms, of the type of considerations that might be relevant to the respondent’s decision. Furthermore, I think the applicant was given adequate time to respond.
109 In relation to her second submission the applicant identified five matters referred to in the minute which she said should have been put to her for her comment before a decision was made. Those matters are as follows:
1. The legal advice received from the Attorney-General’s Department.
2. The information that offers for the property of over $1 million had been recently received by the applicant.
3. The information as to the ‘separate visa violations’ by the applicant said to have been the reason for the refusal of a spousal visa in 2002.
4. The information as to the further reference to ‘visa violations’ by the applicant said to be unresolved.
5. The advice received from the applicant’s marketing agent that the applicant had refused ‘several reasonable offers for the property valued in excess of $1 million’.
110 As to the matter referred to in paragraph 1, I do not think that there was an obligation on the respondent to provide to the applicant the legal advice she had received from the Attorney-General’s Department. The letter dated 14 December 2004 sufficiently advised the applicant of what it called the ‘nub’ of the legal advice and there was no obligation to provide the actual legal advice to the applicant.
111 As to the matters referred to in paragraphs 2 and 5, they are matters referred to in the minute which were not specifically put to the applicant. However, by reason of the Treasurer’s letter dated 14 December 2004, the applicant was on notice that the respondent considered that the marketing arrangement for the property was unrealistic and the applicant was asking more for the property than was warranted. Furthermore, the topic itself goes to the timing of any order rather than whether the applicant should be required to dispose of the property. I do not think that I would grant relief based on the respondent’s failure to advise the applicant of the matters referred to in paragraphs 2 and 5.
112 As to the matter referred to in paragraphs 3 and 4, the applicant was not advised by the respondent’s letter dated 14 December 2005 that her alleged visa violations may be relevant to the question of whether an order would be made under s 21A(4) of the Act. The precise details of the alleged visa violations are not clear. The applicant put evidence before me of the different types of visa she has held since 1996 and she asserts that on 31 October 2001 her medical practitioner visa was cancelled by the Department of Immigration and Multicultural and Indigenous Affairs because she had failed to commence work and that she was subsequently granted a bridging visa. She states that this was the only time that a visa held by her had been cancelled. Whether that be the case or not, and whether or not that is what the minute was referring to when it referred to visa violations, the fact is that it is a matter the respondent may have taken into account in reaching his decision. By reason of the fact that it is unclear what is being referred to it is not possible for me to conclude that the applicant would not have been able to say anything on the topic that may have assisted her case. The failure by the respondent to give notice to the applicant that alleged visa violations may be taken into account and invite comment from her constituted a breach of the rules of procedural fairness and, in my opinion, that is sufficient to vitiate the decision to make the divestiture order.
113 In those circumstances it is not strictly necessary for me to consider the applicant’s third submission to the effect that the minute contained adverse conclusions that were not obvious conclusions on the known material and that for that reason they should have been put to the applicant for her comments. However, I will consider the submission in case there is an appeal from my decision.
114 The applicant identified six features of the minute which she said supported her third submission. Those features are as follows:
1. The assertion that the case had a long history of non-compliance with foreign investment policy requirements dating back several years.
2. The assertion that the applicant had not resided on the property as her principal place of residence on several occasions as required by the government’s foreign investment policy.
3. The assertion that the applicant had maintained that the foreign investment guidelines do not apply to her as she personally did not provide a formal foreign investment application or undertaking.
4. The assertion that after July 2004 and for a period of six months or so the applicant was not making serious attempts to sell the property and had turned down several reasonable offers for the property.
5. The fact (as asserted by the applicant) that nothing is said in the minute about the national interest.
6. The fact (as asserted by the applicant) that there was nothing in the minute favourable to her case.
115 As to the matter referred to in paragraph 1, the applicant points to the fact that she was only in a position to sell the property after the transfer in July 2004. However, the non-compliance referred to in the minute is the alleged non-compliance with the conditions attached to the ‘approval’ in 1995 of which the applicant was aware by no later than July 2001. From the material put before the Court, it is clear that the applicant left Australia on a number of occasions from June 1996 onwards. It is clear that the applicant was aware that her departures from Australia, her status in this country and her residence at the property were of concern to the respondent. The conclusion that there had been a long history of non-compliance dating back several years whether it be right or wrong does not fall outside the class of an obvious conclusion on the known material. The same can be said of the matter referred to in paragraph 2 which is linked to the first.
116 In my opinion, the same can also be said of the matter referred to in paragraph 3. When threatened with prosecution for breach of the conditions attached to the 1995 approval, the applicant did assert that her breach (without expressly accepting that she was in breach) should be excused because her husband forged her signature. She chose not to respond to the respondent’s letter dated 14 December 2004 and I do not think the adverse conclusion in the minute falls outside the category of an obvious conclusion on the known material.
117 As to the matter referred to in paragraph 4, I do not think it is sufficient to justify the granting of relief for the same reasons I have given in relation to this topic in the context of the applicant’s second submission (see [111] above).
118 As to the matters referred to in paragraphs 5 and 6, I do not think that these support the applicant’s submission. Even if there was a failure to consider the national interest (a matter discussed below) that might support relief on other grounds but it does not support a submission that there was an adverse conclusion which should have been put to the applicant for comment on the basis that it is not an obvious conclusion on the known material. The same may be said of the assertion that there is nothing said in the minute in favour of the applicant’s case.
Was the Treasurer satisfied the acquisition is contrary to the national interest?
119 The applicant submits that I should infer that in fact the respondent was not satisfied that the acquisition is contrary to the national interest. The applicant submits that that is the proper inference having regard to the following:
1. that (in the applicant’s submission) there is no reference in the minute to any matter conceivably relevant to the issue of national interest;
2. that the respondent gave no reasons for his conclusion that the acquisition is contrary to the national interest; and
3. the respondent did not give evidence and therefore the inference should be more readily drawn.
120 I am not prepared to infer that the respondent was not in fact satisfied that the acquisition is contrary to the national interest. In the notice of the order dated 23 February 2005 ([7] above) the respondent states that he is satisfied that the acquisition ‘is contrary to the national interest’. The minute refers to the provisions of s 21A(4) and to that part of the subsection which refers to the national interest. It is clear that it was a matter which was brought to the respondent’s attention. It is true that in terms of the minute the particular matters relevant to the national interest are not clearly identified. Furthermore, the respondent did not give reasons for his decision and he did not give evidence. However, care needs to be exercised in this area because of the broad nature of the concept of the national interest. A court will be slow to interfere with a Minister’s decision as to what is in the national interest on the ground that a matter not taken into account was relevant to the national interest or a matter taken into account was irrelevant to the national interest: Leisure Entertainment Pty Ltd v Willis (1996) 64 FCR 205 at 220; Conwest Global Communications Corporation v Treasurer of the Commonwealth of Australia (1997) 147 ALR 509 at 525. A court will also be slow to interfere with a Minister’s decision as to what is in the national interest under the guise of an argument that it should be inferred from the material before the decision-maker that he or she was not in fact satisfied that the acquisition was contrary to the national interest.
121 The applicant submits that the question whether the Treasurer is satisfied that an acquisition is contrary to the national interest is a jurisdictional fact and that it is not made out if the matters the Treasurer took into account do not support a reasonable and rational conclusion to that effect. She referred to the reasons for judgment of Kirby J in Re Patterson; Ex parte Taylor (2001) 207 CLR 291, in particular at 504-505 [338]. The reasons of Kirby J do seem to support the submission advanced by the applicant, but I would not apply them in this case. None of the other Justices in Re Patterson; Ex parte Taylor (supra) took a similar approach. For example, Gaudron J, who did discuss the concept of national interest, decided the case on the basis that the Minister asked herself the wrong question (at 417-420 [74]-[82]). If there is a jurisdictional fact in this case it is not whether the acquisition is contrary to the national interest but, rather, whether the Treasurer was satisfied that the acquisition is contrary to the national interest. A question of that nature would not turn, ordinarily at least, on the Court’s conclusion as to whether the material before the Minister provided a reasonable or rational foundation for the conclusion reached by the Minister.
122 I reject the applicant’s submission that the respondent was not in fact satisfied that the acquisition is contrary to the national interest.
Conclusion
123 For these reasons I make the following orders:
1. An order in the nature of certiorari quashing the order made by the respondent on 23 February 2005 under s 21A(4) of the Foreign Acquisitions and Takeovers Act 1975 (Cth) (‘the Act’) and relating to the land known as 481 Esplanade, Grange, in the State of South Australia, being the said land comprised in File Plan 42, Allotment 6, Hundred: Yatala; Subdivision: Grange (‘the property’).
2. An order in the nature of mandamus, requiring the respondent to exercise his discretion pursuant to s 21A(4) of the Act and relating to the property according to law.
124 The applicant’s application for a declaration that s 4(6)(a) of the Act is beyond the power of the Federal Parliament and is void and of no effect is refused. The respondent’s cross-claim is dismissed.
125 I will hear the parties as to whether any other orders should be made
and as to costs.
Associate:
Dated: 29
January 2007
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Solicitor for the Applicant:
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Counsel for the Respondent:
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Solicitor for the Respondent:
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Date of Hearing:
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Date of Judgment:
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URL: http://www.austlii.edu.au/au/cases/cth/FCA/2007/26.html