Australia: Everything happens for a reason … But you don't always have to tell people what it is

Last Updated: 22 November 2013
Article by Caroline Bush and Jan Cumming

Key Points:

There is no general common law obligation on decision-makers to give reasons, but a statute might impose it.

The High Court has recently restated the position that there is no general common law obligation on administrative decision-makers to give reasons for their decisions in the absence of an express statutory requirement: Wingfoot Australia Partners Pty Ltd v Kocak [2013] HCA 43, confirming Public Service Board of NSW v Osmond (1986) 159 CLR 356.

Accordingly, the legal consequence of failing to provide reasons or providing inadequate reasons depends upon the statutory context.

The High Court has also clarified that a failure to give adequate reasons can, in a particular statutory context where reasons are expressly required, constitute a failure to make a valid decision.

The facts

Mr Kocak had been employed in making tyres by Wingfoot, a tyre manufacturer from 1992 to 2001. In 1996, he injured his neck when pulling a spool of heavy rubber towards himself. By 2009, Mr Kocak suffered from a significant medical condition of the neck/cervical spine.

Mr Kocak claimed that the 1996 neck injury caused his current significant condition and sought a declaration of entitlement to medical expenses pursuant to the Accident Compensation Act 1985 (Vic). Wingfoot denied liability and claimed that the 1996 incident was unrelated to the present condition.

At Wingfoot's request, the Magistrates Court referred three medical questions to a Medical Panel for determination pursuant to the Accident Compensation Act 1985:

  • what is the nature of Mr Kocak's neck/cervical spine condition;
  • was Mr Kocak's employment with Wingfoot a significant contributing factor; and
  • to what extent does the condition result from or is materially contributed to by the 1996 injury?

The Medical Panel's answers to these questions were critically important as its opinion was binding for the purposes of determining the question or matter under or for the purposes of the Accident Compensation Act 1985 (although the High Court found that the opinion was binding only for the purposes of the matter in which the medical question arose and was not binding for the purposes of all matters such as the subsequent determination of Mr Kocak's common law claim for damages). The Medical Panel was obliged to give written reasons.

Mr Kocak had substantial expert medical opinion backed by radiographic evidence to support his claim that a neck injury suffered in the course of his employment making rubber tyres for Wingfoot in 1996 was a cause of his present serious medical condition. However, the Medical Panel found that the 1996 injury was merely a soft tissue injury that could not possibly have caused his chronic neck/cervical spine condition.

The Victorian Court of Appeal quashed the opinion of the Medical Panel. It found that the Panel was obliged to provide a comprehensible explanation for rejecting Mr Kocak's expert medical opinions and for preferring Wingfoot's expert medical opinions over them. As the reasons did not provide this explanation, they were not proper or adequate reasons. Wingfoot then sought special leave to appeal to the High Court.

The High Court answers the "question of public importance": how good must the reasons be?

The High Court unanimously allowed Wingfoot's appeal from the Court of Appeal. The High Court held that, in the context of the Victorian legislation, while inadequacy of reasons is an error of law on the face of the record so that a court can quash the Medical Panel's opinion, there was no utility in issuing a writ of certiorari to quash the decision in this case, as the proceedings in which medical questions had been referred to the Medical Panel for binding determination had been finally determined. The High Court also found that, in the circumstances of this case, the Medical Panel's reasons were adequate.

Although the unavailability of certiorari was sufficient to dispose of the appeal in this case, the High Court went on to consider the "question of public importance": were the Medical Panel's reasons inadequate to meet the standard required of a written statement of reasons, and what standard of reasons was required for a valid decision in the context of this particular statutory scheme where the decision-maker was expressly required to prepare written reasons.

The High Court found that the Medical Panel's reasons met the standard of reasons required; the Medical Panel's duty to give reasons is "no more nor less than a statutory duty" and that the required standard is to be to be determined as an exercise in statutory construction.

As the Medical Panel's function under the relevant Act was to form its own opinion and not to adjudicate on the parties' opposing experts, the High Court found that there was no obligation to explain the reasons for rejecting the opinions of the parties experts, only to explain the opinion formed by the Medical Panel itself. As the objective of requiring written reasons within the scheme of the Act was found to be to obtain reasons "adequate to enable a Court to see whether the decision does or does not involve any error of law", the High Court found that:

"The statement of reasons must explain the actual path of reasoning by which the Medical Panel in fact arrived at the opinion the Medical Panel in fact formed on the medical question referred to it. The statement of reasons must explain that actual path of reasoning in sufficient detail to enable a court to see whether the opinion does or does not involve any error of law. If a statement of reasons meeting that standard discloses an error of law in the way the Medical Panel formed its opinion, the legal effect of the opinion can be removed by an order in the nature of certiorari for that error of law on the face of the record of the opinion. If a statement of reasons fails to meet that standard, that failure is itself an error of law on the face of the record of the opinion, on the basis of which an order in the nature of certiorari can be made removing the legal effect of the opinion."

In the High Court's view, the Medical Panel's opinion met the required standard as the primary judge had found, and no further reasoning was required to enable a court to see whether the opinion does or does not involve any error of law. In this case, the Court of Appeal was found to have erred by imposing a judicial standard of reasons on an expert body for no additional legal benefit.

The High Court found that discussions in cases decided in the context of other statutes and academic discussion on the value of reason-writing did not assist in the Court's task of determining the standard of reasons required of a particular decision-maker in a particular statutory context as the standard of reasons required "can vary markedly with the context".

What does this mean for administrative decision-makers?

This case firmly establishes that there is no general common law obligation on decision-makers to give reasons. However, it also makes clear that in the right statutory context an express obligation to give reasons may form the basis of a precondition for a valid decision. Finally, it is clear that the content of the obligation and the standard of reasons required in any particular decision-making context is ultimately a question of statutory interpretation.

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

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