Jurisdictional error and materiality: recent cases

Judicial review is largely concerned with statutory implications; from implied conditions of procedural fairness, impartiality, relevance and reasonableness, to whether breach of a statutory condition is intended to invalidate the decision. As a decision-maker, these implications, with their uncertain scope and dependency on context, add additional hurdles to the making of a lawful decision. The most recent significant addition to these implied conditions, the inference that a decision is not intended to be invalidated where the legal error was immaterial, seemed to offer some relief for decision-makers as a way to avoid the most significant of the consequences of legal error.¹ However, recent cases suggest that any relief offered by materiality may be limited and highly uncertain. The legal rules concerning materiality may still be described as not yet in a ‘state of blinding lucidity’.²

The threshold of materiality in jurisdictional error

As initially described by the majority in Hossain³, a material error is one which affects the decision reached. If the decision-maker had avoided the material error the decision could have been different. As subsequent cases have emphasised, requiring that a decision could, as opposed to, would, have been different is important to avoid the court placing itself in the position of the decision-maker and remaking the now-corrected decision. The distinction between reviewing the legality as opposed to the merits of a decision continues to play a role in delineating the appropriate role of the court, as courts are limited to assessing the decision-maker’s compliance with statute and administrative law principles rather than substituting a new decision on the merits.⁴

As a necessary element of establishing entitlement to relief, the onus of establishing materiality lies on the applicant for relief.⁵ The applicant has to establish ‘on the balance of probabilities the historical facts necessary to enable the court to be satisfied of the realistic possibility that a different decision could have been made’.⁶

Nathanson: failure to afford procedural fairness will ordinarily be ‘material’

As we outlined in our recent presentation on Administrative law in 2022 and the year ahead in 2023, Nathanson v Minister for Home Affairs⁷ is the latest High Court case to consider the significance of this burden and what is needed to establish materiality. The case involved an application to revoke the mandatory cancellation of the applicant’s visa on character grounds. Allegations of domestic violence had been considered during the hearing in relation to a number of relevant considerations, but the requirement that the Tribunal view domestic violence in particular as a very serious issue was not raised before closing submissions in the hearing. The courts below had held that there had been a breach of procedural fairness but that breach was immaterial. The applicant had failed to establish what they could have said to the Tribunal which could realistically have changed the outcome.

The appeal to the High Court was allowed by each of the judges. The plurality of Kiefel CJ, Keane and Gleeson JJ (with whom Gageler J agreed in the result) held that establishing the materiality of a breach of procedural fairness does not require establishing how a further opportunity to be heard would have been used to change the outcome. In this case, even though evidence of domestic violence had been addressed in the hearing, the significance of the evidence on the decision had not been. That there had been a denied opportunity was enough in itself to suggest the possibility of a different result.

The nature of the error was an important factor in Nathanson. Procedural fairness proceeds on the assumption that denying the applicant a reasonable opportunity to present their case may have changed the outcome. For the plurality, as a breach of procedural fairness had been established, the reasonable conjecture involved in establishing a different decision could have been made was ‘undemanding’.⁸ For Gordon J, a serious denial of procedural fairness would give rise to jurisdictional error regardless of the effect the error may have had on the decision.⁹ For Edelman J, even if the breach of procedural fairness was not sufficiently serious so as to require materiality to be established, that onus required ‘almost nothing’.¹⁰

The judgments in Nathanson reinforce that, while distinct, the requirement for a breach of procedural fairness to involve ‘practical injustice’ may involve similar considerations to that involved in establishing a breach’s materiality. As an element of procedural fairness, practical injustice establishes the unfairness of the decision-making process. It requires showing how the procedures adopted effectively denied the applicant a reasonable opportunity to put their case. This usually, but not always, involves demonstrating that a further opportunity would have allowed submissions which may have been relevant to the decision. As Gageler J suggests, a breach of procedural fairness, almost by default, could reasonably affect the result unless there was something in the historical facts of how the decision was made to suggest otherwise.¹¹

Other forms of legal errors similarly contain some form of substantiality requirement similar to the question of materiality. Apprehended bias requires showing that the possibility of the decision-maker being diverted from their statutory function was realistic.¹² An otherwise relevant consideration might be so insignificant that the failure to take it into account could not have materially affected the decision.¹³ But whether a potential error is substantial in this context depends on its potential role in departing from the statutory requirements placed on the decision-maker. In contrast, once error is established, materiality involves consideration of the potential impact of the error on the actual decision. It is dependent on the historical facts which show “how the decision that was in fact made was in fact made”.¹⁴

How the Federal Court has dealt with materiality following Nathanson

As the cases considering materiality have demonstrated, there are few circumstances in which materiality may absolve a legal error. The need for an objective basis in the actual decision-making process to displace the potential impact of the error has so far restricted immateriality to where:

• an alternative, independent basis for the decision is included in the reasons for decision;¹⁵
• the error related to a consideration which was ultimately decided in favour of the applicant in any event; or
• the error did not affect the arguments put to the decision-maker and on which the decision was based.

We have seen these principles play out in the Federal Court of Australia following the decision of Nathanson. In Kwatra v Minister for Immigration, Citizenship and Multicultural Affairs¹⁶, for example, it was held that even if there had been a failure to accord procedural fairness in not considering certain components of the Applicant’s submissions on a relevant factor, that breach was immaterial. The Tribunal had accepted that the factor was established by other components of the submission and weighed substantially in the applicant’s favour as a primary consideration in the decision, even if that factor was ultimately outweighed by other considerations.

In Li v Determining Authority¹⁷, the Federal Court held that even if an irrelevant consideration had been taken account, the error was immaterial. The Court accepted that the reasons for the decision indicated that there had been little if any weight given to the material in question, and the extensive reasons focused on other detailed findings to justify the decision made.

The backward-looking conjecture engaged in by the court when considering materiality does not allow the benefit of hindsight in putting forward possible arguments that might have been made. In BCR20 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs¹⁸, the court considered whether relevant information not considered by the decision-maker could have made a difference to the reasoning adopted by the decision-maker. Materiality is not established by speculation as to how information might have been used as part of an argument that was not put to the decision-maker and not part of the decision-maker’s reasoning in reaching their conclusions. But similarly, a decision maker is not able to argue an error was immaterial on the basis of reasons that could have been, but were not, included in reaching their decision.

However, the requirements of materiality remain unsettled. In CCU21 v Minister for Home Affairs¹⁹ the Full Federal Court considered that the plurality’s approach in Nathanson was yet to receive majority support. The Court was not prepared to accept that, in procedural fairness cases, the applicant was entitled to an assumption that they would have taken advantage of any opportunity for a fair hearing and, by doing so, could have achieved a favourable outcome. However, the Court accepted that the applicant had established that a fair hearing could have made a difference to the outcome in the circumstances of that case.²⁰  

What do the recent cases on materiality mean for you?

As these cases demonstrate, the dependence on the actual decision makes materiality different to other elements of legal error and the role they can play in improving administrative decision-making. Decision-makers under a statutory scheme can, and should, use the requirements of lawful decision-making to inform their processes, considerations and reasoning. That should include being able to identify the evidence and arguments which are material to their decisions, and giving some consideration to what difference it would make to the decision if a different view of the evidence or arguments was taken. But there is little to be gained by trying to rely on materiality to avoid the consequences of legal error. As Nathanson and subsequent cases show, while the precise formulation of materiality continues to evolve, the requirement to show that a different outcome could have been reached is unlikely to be a difficult hurdle for most applicants to overcome.

This article was written by Will Sharpe, Partner, Daniel Stewart, Consultant and Neil Cuthbert, Special Counsel.

¹Materiality has also been found to be a requirement to establish a number of grounds under the Administrative Decisions (Judicial Review) Act 1977 (Cth), including paras 5(1)(e) (improper exercise of power involving taking into account relevant considerations) and (f) (error of law) (see Mohamed trading as Billan Family Day Care v Secretary, Department of Education, Skills & Employment (No 2) [2020] FCA 1749 at [38]). Note in Darnell v Stonehealth Pty Ltd [2022] FCAFC 76 it was not resolved whether materiality was a requirement for s 5(1)(b) (required procedures not followed) because, in any event, it was an element of the discretion to provide relief (at [148]).
²At least according to Edelman J, see Nathanson v Minister for Home Affairs [2022] HCA 26 at [121].
³Hossain v Minister for Immigration and Border Protection [2018] HCA 34 at [31].
⁴Note some commentators have argued that the effect of Minister for Immigration and Border Protection v SZMTA [2019] HCA 3 has been to ‘extend the limits of the Court’s supervisory jurisdiction to allow for judicial review of what has traditionally been viewed as the merits of a decision’: S May, ‘The Limits of Fairness and Fact-Finding in Judicial Review: MZAPC v Minister for Immigration and Border Protection’ (2021) 43(1) Sydney Law Review 107 at p 115.
⁵Minister for Immigration and Border Protection v SZMTA [2019] HCA 3 at [4].
⁶MZAPC v Minister for Immigration and Border Protection [2021] HCA 17 at [39] (‘MZAPC‘).
⁷[2022] HCA 26.
⁸At [33].
⁹At [76].
¹⁰Nathanson at [93].
¹¹At [55].
¹²CNY17 v Minister for Immigration and Border Protection [2019] HCA 50 at [47].
¹³Minister For Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; 162 CLR 24 at 40.
¹⁴MZAPC at [38].
¹⁵Eg the facts in Hossain.
¹⁶[2022] FCAFC 194. See also LPDT v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] FCAFC 64 at [158]-[162] on the effect of a mis-construction of a paragraph in a procedural direction.
¹⁷[2022] FCA 1448.
¹⁸[2022] FCA 1043.
¹⁹[2023] FCAFC 87 (‘CCU21‘).
²⁰CCU21 at [100].