SZMDS – The Law Has Moved On


Often quoted by the Minister in cases where unreasonableness is in issue, is this passage from Minister for Immigration and Citizenship v SZMDS [2010] HCA 16, (2010) 240 CLR 611 from the judgment of Crennan and Bell JJ:


  1. In the context of the Tribunal’s decision here, “illogicality” or “irrationality” sufficient to give rise to jurisdictional error must mean the decision to which the Tribunal came, in relation to the state of satisfaction required under s 65, is one at which no rational or logical decision maker could arrive on the same evidence. In other words, accepting, for the sake of argument, that an allegation of illogicality or irrationality provides some distinct basis for seeking judicial review of a decision as to a jurisdictional fact, it is nevertheless an allegation of the same order as a complaint that a decision is “clearly unjust” or “arbitrary” or “capricious” or “unreasonable” in the sense that the state of satisfaction mandated by the statute imports a requirement that the opinion as to the state of satisfaction must be one that could be formed by a reasonable person.  The same applies in the case of an opinion that a mandated state of satisfaction has not been reached.  Not every lapse in logic will give rise to jurisdictional error. A court should be slow, although not unwilling, to interfere in an appropriate case.  [Emphasis added]


But this passage has been overtaken by the plurality judgment in Minister for Immigration and Citizenship v Li  [2013] HCA 18, (2013) 249 CLR 332 where Hayne, Kiefel and Bell JJ concluded:


  1. Lord Greene MR’s oft-quoted formulation of unreasonableness in Wednesbury has been criticised for “circularity and vagueness”, as have subsequent attempts to clarify it. However, as has been noted, Wednesbury is not the starting point for the standard of reasonableness, nor should it be considered the end point. The legal standard of unreasonableness should not be considered as limited to what is in effect an irrational, if not bizarre, decision − which is to say one that is so unreasonable that no reasonable person could have arrived at it – nor should Lord Greene MR be taken to have limited unreasonableness in this way in his judgment in Wednesbury. This aspect of his Lordship’s judgment may more sensibly be taken to recognise that an inference of unreasonableness may in some cases be objectively drawn even where a particular error in reasoning cannot be identified. This is recognised by the principles governing the review of a judicial discretion, which, it may be observed, were settled in Australia by House v The King, before Wednesbury was decided. And the same principles evidently informed what was said by Dixon J about review of an administrative decision in Avon Downs Pty Ltd v Federal Commissioner of Taxation, which was decided less than two years after Wednesbury, at a time when it was the practice of the High Court to follow decisions of the Court of Appeal in England which appeared to have settled the law in a particular area. [Emphasis added, footnotes omitted]


Then their honours summarised the law on unreasonableness as follows:


  1. Further, in Minister for Aboriginal Affairs v Peko-Wallsend Ltd, Mason J considered that the preferred ground for setting aside an administrative decision which has failed to give adequate weight to a relevant factor of great importance, or has given excessive weight to an irrelevant factor of no importance, is that the decision is “manifestly unreasonable”. Whether a decision-maker be regarded, by reference to the scope and purpose of the statute, as having committed a particular error in reasoning, given disproportionate weight to some factor or reasoned illogically or irrationally, the final conclusion will in each case be that the decision-maker has been unreasonable in a legal sense. [Emphasis added, footnotes omitted]


So it is no longer the law that the test for unreasonableness is “one at which no rational or logical decision maker could arrive on the same evidence”.

In this legal analysis it is necessary to look at the composition of the majority in each of these two decisions. There is no doubt the force of a proposition gains some strength from the arithmetics of the decision making. SZMDS was a majority decision split 3/2 with a very strong dissent by Gummow A-CJ and Kiefel J. Heydon J expressed his agreement with the joint judgment of Crennan and Bell JJ but he found that, in any event, there was no error of logic:


  1. The issue was one on which minds might differ. The Federal Court evidently operated on one assumption or conclusion about that issue. The Tribunal operated on another. The difference was one of degree, impression and empirical judgment. It did not stem from an error in logic by the Tribunal member. The difference could not be said to reveal an absence of any basis whatsoever for her conclusion.


So the comments in paragraph [130] of the judgment of Crennan and Bell JJ does form part of the ratio decidendi of the judgment of Heydon J.

In contrast the decision of the High Court in Li was unanimous, although French CJ and Gagler J gave individual judgments. Of course there was a difference of emphasis between the three separate judgments but the plurality judgment represents the majority thinking of the High Court. It is also relevant to note that Kiefel J as she then was, is now the chief justice, Bell J joined the plurality in the judgment in Li and Heydon J has retired. Crennan J was not part of the court in Li. The often quoted passage in SZMDS was not referred to in Li in any judgment although SZMDS was mentioned in passing on other points.

Therefore it can be confidently said that the law has moved on from SZMDS.

Yet the passage in paragraph [130] in SZMDS still has currency in some courts. For example in AAI Ltd trading as GIO as agent for the Nominal Defendant v McGiffen [2016] NSWCA 229 (25 August 2016), Meagher JA; Simpson JA; Payne JA in a unanimous joint judgment of the NSW Court of Appeal referred to the SZMDS without referring to the plurality judgment in Li. Their honours stated:


  1. Finally, Ground 4 complains that the primary judge erred in concluding that it was “irrational and illogical” for the review panel to base their conclusions on the absence of any evidence of an injury.


  1. The stringency of this ground of review in requiring a conclusion that no rational decision maker would have made the decision was emphasised in Minister for Immigration and Citizenship v  SZMDS especially per Crennan and Bell JJ at [130]-[131]. We would not be prepared to conclude that in the present case it was “irrational and illogical” for the review panel to conclude that there was no evidence of “injury”. [Footnote omitted]


The final word in this article is aptly left to Allsop J in Minister for Immigration and Border Protection v Stretton [2016] FCAFC 11 at [11]–[12].


Critical to remember, however, is that the task for the Court is not to assess what it thinks is reasonable and thereby conclude (as if in an appeal concerning breach of duty of care) that any other view displays error; rather, the task is to evaluate the quality of the decision, by reference to the statutory source of the power and thus, from its scope, purpose and objects to assess whether it is lawful. The undertaking of that task may see the decision characterised as legally unreasonable whether because of specific jurisdictional error, to the conclusion or outcome reached, on the reasoning process utilised.


The comments of Hayne, Kiefel and Bell JJ in Liat [68] and [72] do not lead to the proposition that judicial review is de facto merit review. Judicial review is never merit review. But it can be confidently stated that in order to establish illogicality or irrationality the test no longer is ‘one at which no rational or logical decision maker could arrive on the same evidence.’ 

Barbara Davidson