ADEQUACY OF REASONS By Justice Emilios Kyrou, Supreme Court of Victoria Paper delivered at the Council of Australasian Tribunals Conference on 30 April 2010 Introduction 1. In the context of courts and tribunals, a discussion about adequacy of reasons cannot be divorced from a discussion about judgment writing. A well written judgment is likely to contain adequate reasons even if the outcome is wrong. A badly written judgment is unlikely to contain adequate reasons even if the outcome is correct. 2. It is therefore fitting that my paper will be followed by a paper by Justice Ross on judgment writing. 3. In a nutshell, adequate reasons are reasons that clearly set out the factual and legal issues for determination, the conclusions on those issues and the thought process that has been applied in reaching those conclusions. This simple proposition, however, has to be considered in light of the language that is used by the statutory provision that imposes an obligation to provide reasons. 4. This paper is specific to the Victorian Civil and Administrative Tribunal ( VCAT ). The topics I will cover are: (a) (b) (c) (d) (e) What obligation to provide reasons is set out in s 117 of the Victorian Civil and Administrative Tribunal Act 1998 ( VCAT Act )? How have the requirements of s 117 been interpreted? Is a breach of the obligation to provide reasons an error of law which can be the subject of an appeal to the Supreme Court? What approach will the Supreme Court adopt in determining whether s 117 has been breached? What can the Supreme Court do if s 117 is breached? VCAT s obligation to provide reasons under s 117 of the VCAT Act 5. Section 117(1) of the VCAT Act requires the VCAT to give reasons for its decision. Section 117(5) requires the VCAT to include in its written reasons for decision its findings on material questions of fact. 6. Section 117 is not as prescriptive as s 43(2B) of the Administrative Appeals Tribunal Act 1975 (Cth), which provides that, where the Administrative Appeals Tribunal ( AAT ) gives written reasons for its decision, those reasons shall include its findings on material questions of fact and a reference to the evidence or other material on which those findings were based. However, I do not think that anything turns on the absence in s 117 of the words a reference to the evidence or other material on which those findings were based, as a bald statement of findings without any reference to the evidence or other material on which the VCAT s findings were based would not provide adequate reasons for the VCAT s decision.
- 2 - What does s 117 of the VCAT Act require? 7. Section 117 refers to reasons, findings and material questions of fact. In order for a decision to comply with s 117, it must set out each of these matters. 8. A synonym for reasons is explanation or rationale. A synonym for findings is conclusions. Material questions of fact are factual matters that affected the findings or conclusions. 9. In simple terms, a statement of reasons must set out the VCAT s conclusions and findings on material questions of fact and explain how those findings affected the conclusion or outcome. Where the facts are in dispute, the findings must refer to the competing evidence and explain why certain evidence has been accepted and other evidence has been rejected. The VCAT must also set out the law that it has applied in arriving at the outcome. 10. First instance decisions of the Supreme Court use various formulations of what is required to comply with an obligation to provide reasons. They include that the statement of reasons must disclose the route that led to the answer, how or why the conclusion was reached and the process of reasoning. In my opinion, these formulations seek to convey the same things. The focus should be on what is required to satisfy s 117 rather than on the particular verbiage that is used to describe those requirements. 11. Some cases focus on whether the reasons are sufficient to enable an aggrieved party to understand why he or she has lost and to decide whether he or she should challenge the decision. Others focus on whether an appellate court is able to determine whether justice was done and whether the primary tribunal has made an error of law. 12. The question of the adequacy of reasons but not in the context of s 117 was considered by the Court of Appeal in Franklin v Ubaldi Foods Pty Ltd. 1 This case dealt with an appeal from the County Court. Ashley JA, with whom Warren CJ and Nettle JA agreed, said: Reasons must be such as reveal although in a particular case it may be by necessary inference the path of reasoning which leads to the ultimate conclusion. If reasons fail in that respect, they will not enable the losing party to know why the case was lost, they will tend to frustrate a right of appeal, and their inadequacy will in such circumstances constitute an error of law. 2 13. A more recent Court of Appeal decision that discussed the adequacy of reasons in the context of an appeal from the County Court is ACN 087 528 774 Pty Ltd (formerly Connex Trains Melbourne Pty Ltd) v Chetcuti. 3 Hargrave AJA, with whom Ashley and Dodds- Streeton JJA agreed, said: it is established that adequate reasons will provide an intelligible explanation of the process or path of reasoning which led the judge to the conclusion reached, and that a judge is required to consider and give adequate reasons in determining each of the substantial issues raised for determination. Where there is a conflict on the evidence, and one version is accepted and the other rejected, the judge must avert to and assign reasons for that rejection. [T]he trial judge s reasons in this case did not meet the standard expected and an error of law has thus been disclosed. In particular, the trial judge did not give 1 [2005] VSCA 317. 2 [2005] VSCA 317, [38] (citation omitted). 3 (2008) 21 VR 559.
- 3 - separate consideration to a substantial argument which was raised for determination 4 14. How the requirements for the provision of adequate reasons apply in a given case will depend on the issues to be determined in that case. So the first step is to identify the legal and factual issues that need to be determined in order to arrive at the outcome. I am in favour of the issues being listed at the beginning of a judgment so they can provide a structure or framework for the judgment. The reasons are less likely to be deficient if the issues are properly identified at the outset and relevant findings of fact and law are then made in relation to those issues along the way to reaching a conclusion. 15. Issues of law before the VCAT usually arise under particular statutory provisions. In my judgments, I usually set out any statutory provisions that are critical to my decision, together with any definitions that apply to those provisions. This shows that I am aware of the relevant provisions and that I am applying them. I have seen some Magistrates Court and VCAT decisions which are well written but which are wrong in law because they have overlooked special definitions either at the beginning of an Act or tucked away at the beginning of a particular Part or Division of an Act. 16. An example involving an appeal from the Magistrates Court on a question of law will illustrate my point. The Magistrate gave detailed reasons about whether a solicitor had delivered a cost disclosure statement to an organisation and whether the failure to do so prevented the solicitor from recovering his legal costs. All of this discussion was irrelevant because the obligation to deliver a cost disclosure statement applied only if the organisation was a client or a third party payer. The Magistrate did not consider the definitions of these terms. Had the Magistrate done so, it would have been readily apparent that the organisation was neither a client nor a third party payer. 17. If the key issue in a case is whether a statutory provision has been breached, then each requirement of the provision must be identified, the meaning of each requirement must be set out, and there must follow findings of fact as to whether each requirement has been satisfied. I have seen several VCAT decisions which have launched straight into findings of whether statutory requirements have been satisfied without explaining what those requirements mean. It often helps to break up a statutory provision into its logical components. This may often be done by reference to key words or phrases. Where the meaning of a word or phrase is not clear and the parties have urged diametrically opposed meanings, it will be necessary to explain why one party s interpretation has been rejected. 18. In order for reasons to be adequate, the VCAT does not need to set out every piece of evidence and then explain why each piece has been accepted or rejected. A commonsense approach based on an intimate knowledge of the issues in the case and how each piece of evidence bears on those issues is required. 19. In some situations, a failure to refer to the conflicting evidence will render the reasons inadequate. For example, if the only issue is whether an injury was caused by the defendant s negligence, and one group of experts say that it was so caused and another group say that it was not, it is clear that both versions must be set out and an explanation given as to why one version is accepted and the other is rejected. In this situation, a failure to refer to the losing side s evidence may lead to an argument on appeal that the VCAT failed to take into account a relevant consideration or made some other error of law. 4 (2008) 21 VR 559, 566 [20].
- 4-20. Where the meaning of a statutory provision is clear on its face or has been authoritatively determined, that meaning should be discussed only briefly. In this situation, the outcome of the case is likely to depend on the facts. 21. If the facts are not in dispute, say this and then set out the undisputed facts. If the facts are disputed, set out the conflicting versions and explain why one version has been accepted and the other version has been rejected. Reasons can include: (a) (b) one party s version is corroborated by reliable contemporaneous records whereas the other party s version is not; one party consistently demonstrated a clear and accurate recollection of events whereas the other party was confused and stubbornly refused to concede the obvious. 22. It is not good enough to make a sweeping statement such as I have considered all the evidence before me and have made the following findings of fact. The reasons must refer to the evidence which had a material bearing on the findings and discuss why the evidence was accepted and how it affected the outcome. 23. Some statements of reasons mechanically refer to all of the submissions that the parties have made and set out at length reasons for accepting or rejecting each of them. In my opinion, it is not necessary to discuss each submission that the parties have made on the factual and legal issues in the case. A sensible and selective approach should be adopted. Acceptance or rejection of many submissions will be evident from the findings you make. However, where an issue is central to a case, a discussion of the opposing submissions will be necessary and will often be very helpful. Apart from demonstrating that you have considered the opposing arguments, a reference to the successful party s submissions may add to the force of your reasons. 24. What must be done to comply with s 117 can be affected by the circumstances of a case and the way it was conducted before the VCAT. For example, if a case involves two key factual issues and the VCAT only discusses one of them, its reasons would ordinarily be inadequate. This would not be the case, however, if the parties had reached agreement on one of the issues and the reasons refer to the agreement. Where an agreement is reached or an important concession is made by a party, the reasons will invite arguments about their adequacy if they do not refer to the agreement or concession. 25. It is worth bearing in mind that, if there is an appeal against an order of the VCAT, the Supreme Court judge who reads the VCAT s reasons will not know what transpired before the VCAT unless the reasons disclose that information. So that the judge does not form an erroneous impression about the reasons even before the appeal hearing commences, I recommend that the VCAT s reasons set out briefly any key matters that are not in dispute by virtue of an agreement between the parties or a concession that is made by one of them. A good place to do this is at the beginning of the judgment where the issues for decision are set out. Is a breach of s 117 of the VCAT Act an appealable error of law? 26. In Secretary to the Department of Treasury and Finance v Dalla-Riva, 5 the Court of Appeal considered the question of whether non-compliance with s 117 of the VCAT Act constitutes 5 (2007) 26 VAR 96; [2007] VSCA 11 ( Dalla-Riva ).
- 5 - a separate error of law which enables the Court to set aside the VCAT s order. This case was an appeal from a decision of the VCAT under the Freedom of Information Act 1982 (Vic). Buchanan JA, with whom Ashley JA and Smith AJA agreed, said: It is necessary that a tribunal s reasons disclose the findings and reasoning upon which the tribunal s conclusion is based. Failure to provide such reasons, which frustrates the ability to review the tribunal s decision, constitutes an error of law. 6 27. While the Court did not refer to s 117 of the VCAT Act in Dalla-Riva, it is clear that its comments apply to that provision. 28. In my opinion, the VCAT commits an appealable error of law if it fails to give reasons or if it gives reasons which omit a finding on a material question of fact or otherwise fail to disclose its path of reasoning for reaching a decision. 7 What principles will the Supreme Court apply in assessing the VCAT s reasons? 29. The Supreme Court does not expect the VCAT s reasons to be as detailed and lengthy as judgments of the Court. In accordance with what was said by the High Court in Minister for Immigration & Ethnic Affairs v Liang, 8 the Court does not scrutinise the VCAT s reasons over-zealously with a view to finding error. 30. Nor does the Court expect the VCAT to address every issue raised in the proceeding. It is enough for the VCAT to make findings on the material facts on which its decision turns and to explain the logic of the decision. Its reasons must also be intelligible. Reasons are not intelligible if they leave the reader to wonder about the process of reasoning which has been followed. 9 31. In short, the Court looks at the VCAT s reasons as a whole and determines whether, in substance, rather than form, the VCAT has complied with the requirements of s 117 of the VCAT Act. What can the Supreme Court do if the VCAT s reasons are inadequate? 32. Section 148(7) of the VCAT Act empowers the Supreme Court to affirm, vary or set aside the VCAT s order, to make any order the VCAT could have made, to remit the proceeding to be reheard by the VCAT or to make any other order the court thinks appropriate. 33. Section 148(7) does not expressly empower the Court to order the VCAT to provide a statement of reasons where no reasons have been provided or to provide a further and better statement of reasons where reasons have been provided that do not comply with s 117. In my view, s 148(7) implicitly confers such a power. 10 This power is unlikely to be used, however, for two main reasons. 6 (2007) 26 VAR 96; [2007] VSCA 11, [23]. 7 Victoria v Turner [2009] VSC 66, [237]-[241]. 8 (1996) 185 CLR 259, 271-2. 9 Commissioner of State Revenue v Anderson [2004] VSC 152, [33]; Caruso v Kite [2008] VSC 207, [32]. 10 De Iacovo v Lacanale [1957] VR 553, 559; State Trustees v Transport Accident Commission (2002) 6 VR 359, 370 [39]. A statutory obligation to give reasons can be enforced by mandamus: Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme (2003) 216 CLR 212, 222 [33], 224 [41], 226 [48], 228 [57], 247 [120].
- 6-34. The first reason is that inadequate reasons are usually a symptom of fundamental underlying errors in legal analysis which vitiate the substantive decision. In such a case, the inadequacy of the reasons is a subsidiary issue. The Court will set aside the decision on the basis of the underlying legal error and may not refer at all to the inadequacy of the reasons. 35. The second reason is that the Court is reluctant to make orders for the provision of further reasons because of the risk that the decision-maker will not provide further reasons that genuinely informed the decision at the time it was made, but will instead provide reasons that are put together to patch up what has been shown to be defective. 11 This concern, however, may not apply where no reasons at all have been provided. Conclusion 36. As an inadequate judgment usually contains inadequate reasons, the skills needed to write a good judgment will overlap with the skills required to provide adequate reasons. 37. While obligations for the provision of reasons will vary from statute to statute, there are some universal features that should be evident in all statements of reasons. They are as follows: (a) (b) (c) (d) (e) (f) (g) The statement should, at the outset, identify the legal and factual issues to be resolved. If the legal issues arise from a statute, the relevant statutory provisions should be set out and the key words or phrases in those provisions should be highlighted and discussed. The discussion should include the meaning of the key words or phrases, either by reference to any definitions that are set out in the statute or applicable case law. The facts must be established after a discussion of the evidence. It will often be necessary to refer to the competing evidence and to explain why you have accepted one party s evidence and rejected the other party s evidence. It is usually not necessary to discuss in detail each submission that the parties have made. Where the parties reach agreement on a matter that would, in the absence of the agreement, require you to make a finding, the reasons should set out the agreement. The same applies to a concession by a party. Your conclusions on the factual and legal issues should be set out clearly and concisely, together with the overall outcome of the proceeding. An explanation should be provided as to how the facts as found by you and the law as determined by you justify the outcome. The explanation should provide logical linkages between the factual and legal issues, the findings on those issues and the overall conclusions and outcome of the proceeding. 11 Body Corporate Strata Plan No 4166 v Stirling Properties Ltd (No 2) [1984] VR 903, 912.