Substantive legitimate expectations in Australian administrative law.

• Jurisdiction: Australia
• Author: Groves, Matthew
• Date: 01 August 2008

[Judicial review of administrative action has" traditionally had a procedural focus. This means that courts examine the procedure by which a decision is made, rather than the decision itself. A denial of natural justice is no exception to review--a person dissatisfied with an administrative decision has long been able to complain about the fairness of the decision-making process but not the fairness of the decision itself. English law has recently developed a doctrine of 'substantive unfairness' by which an expectation about the outcome of a decision-making process can be protected by the courts in a strong sense. The strength of the protection given under this new doctrine seems to blur the distinction between process and outcomes, which leads judicial review in a radical new direction. This article explains the English doctrine of substantive unfairness and considers whether it can and should be adopted in Australia.]

CONTENTS I Introduction II The Concept of Legitimate Expectations III Substantive Legitimate Expectations in England IV Coughlan: The Acceptance of Unfairness in Its Own Right V The Post-Coughlan Adjustment and Entrenchment of the Doctrine in England A The Refinement of Coughlan B 'Conspicuous Unfairness'--A Separate Head of Review or a Sign of Abuse of Power? C The Doctrinal Break between Estoppel and Public Law D The Separation of Powers E Observations on Coughlan and Its Progeny VI The Australian Reception of the Substantive Legitimate Expectation Doctrine A The Procedural Conception of the Legitimate Expectation Doctrine B The Rejection of Estoppel in Public Law C Unfairness in the Form of Inconsistent Treatment D Constitutional Objections to the Substantive Legitimate Expectation Doctrine E Can a Remedy for Serious Administrative Injustice Bypass Constitutional Objections to the Substantive Legitimate Expectation Doctrine? F What of the Constitutional Position at the State Level? G Reflections on Australian Objections to the Substantive Legitimate Expectation Doctrine VII Concluding Observations I INTRODUCTION

Governments and their agents may create expectations regarding the manner in which administrative powers will be exercised. Expectations of this nature can be generated in many different ways, such as by the issue of policies or procedures to guide the exercise of discretionary powers. Expectations regarding the future exercise of administrative powers may also be generated by public statements or representations, perhaps even promises, or by adoption and regular application of a certain practice. But just as expectations about the exercise of administrative powers may be created, they may also be disappointed. They may be disappointed when a governmental agency has acted in breach of a promise or undertaking made to a particular person or to a class of persons. They may also be disappointed when a government agency has not applied current policy or guidelines in determining a particular case, and without good reason. In such a case, the complaint may be that the policy has been applied inconsistently, perhaps in a way which reflects improper discrimination. In other cases, an existing policy may be changed and a new one applied to the disadvantage of people who stood to benefit from the earlier policy and who may even have conducted their affairs in reliance upon it.

Courts in England and some other jurisdictions have recently accepted that there can be circumstances in which government agencies should be required to fulfil the legitimate expectations they have created. (1) This approach endows an expectation with a substantive quality because it enables the expectation to determine or strongly influence the outcome of, rather than simply the procedures for, administrative decision-making. Australian courts, in contrast, have generally taken the view that expectations about the exercise of administrative powers may only give rise to procedural rights. (2) On this view, an expectation about the exercise of an administrative power might, at best, oblige a decision-maker who intends to act contrary to that expectation to notify affected people and provide them with an opportunity to argue against that course. But the law in Australia imposes no restraints upon a decision-maker beyond these procedural requirements.

This article examines the different approaches governing legitimate expectations in England and Australia. It traces the development of the English approach by which courts can now require governments and their agencies to honour expectations they have created. The article also considers whether it is open to Australian courts to adopt a similar approach without violating fundamental constitutional principles. It will be argued that the increasing role of the Australian Constitution as a source of guiding principle in Australian judicial review, and the associated conceptions of the separation of powers and the limitations on judicial power that flow from the Constitution, preclude any judicial enforcement of substantive legitimate expectations in Australia. But first, attention must be given to some preliminary questions. What precisely is a 'substantive legitimate expectation'? How may it arise? And how does it differ from the more traditional 'procedural legitimate expectation'?

II THE CONCEPT OF LEGITIMATE EXPECTATIONS

The scope of the duty to observe the requirements of procedural fairness is now extremely wide. It is well-settled that the duty extends to virtually every exercise of a statutory power which might have an adverse effect on an individual unless there is a very clear legislative indication to the contrary. (3) Therefore, in almost all cases the important question now is not whether the requirements of procedural fairness apply but what they require in a particular instance. But that was not always the case. During the evolution of procedural fairness, or natural justice as the doctrine was commonly called in this earlier period, many cases focused on the 'threshold question' of whether the doctrine applied. The answer to this preliminary question often depended on whether the courts could identify a particular reason or circumstance why natural justice ought to apply. The doctrine of legitimate expectation contributed to the expansion of the duty to observe the requirements of natural justice by extending the duty beyond the relatively narrow range of rights and interests to which natural justice had traditionally applied. (4)

The legitimate expectation doctrine was invoked in a range of cases, the common theme of which was the principle that when administrative officials had created or induced a belief in a person about the possible exercise of their powers, any change affecting this belief should be conditioned by the rules of natural justice. The earliest cases involved people who held a licence, permit or visa which entitled them to enjoy a particular benefit. (5) In these cases, it was held that the grant of the licence, permit or visa created an expectation in the grantee that they would enjoy that benefit for its expected duration and that the benefit would not be ended prematurely unless the person was granted the right to argue against that course. The legitimate expectation doctrine provided important procedural benefits in these cases, namely, the right to be notified of, and to be heard in opposition to, the revocation of an existing benefit.

As the legitimate expectation doctrine gained acceptance, it was invoked in a wider range of cases, which can be conveniently summarised into four categories. (6) The first was cases in which a person had relied upon a policy or norm of general application but was then subjected to a different policy or norm. The second category, which was a slight variation on the first, included cases in which a policy or norm of general application existed and continued but was not applied to the case at hand. A third category arose when an individual received a promise or representation which was not honoured due to a subsequent change to a policy or norm of general application. A fourth category, which was a variation on the third, arose when an individual received a promise or representation which was subsequently dishonoured, not because there had been a general change in policy, but rather because the decision-maker had changed its mind in that instance.

The legitimate expectation doctrine in these various manifestations was criticised as serving little purpose. More particularly, it was said to be a procedural device that added 'little, if anything, to the concept of a right.' (7) But proponents of the legitimate expectation doctrine suggested that it enabled natural justice to extend beyond 'enforceable legal rights' to 'expectations' of various sorts. (8) That possibility provided an important bridge by which the rules of natural justice could venture into new territory.

Despite the growing body of cases in which the legitimate expectation doctrine was invoked and an increasing acceptance of the doctrine's role in the evolution of the duty to observe the rules of natural justice, key questions about the doctrine remained. One difficulty arose from the frequently mentioned requirement that an expectation should be reasonable. (9) This requirement provided an apparently objective quality to the concept and, therefore, was thought to provide a useful limit by precluding the recognition of expectations that were somehow unrealistic or inappropriate. However, the logically related issue to any requirement of reasonableness, which has been a longstanding source of uncertainty, was whether an expectation ought to be assessed in subjective or objective terms. The requirement that an expectation be reasonable poses the question of 'reasonable according to whom?'

A second difficulty was whether a person who raised a legitimate expectation needed to also prove reliance upon it. (10) The point that...