BY KAI SINOR

This note provides an overview of orders under s 41(2) of the Administrative Appeals Tribunal Act 1975 (AAT Act) to “stay” or “affect” the implementation of the decision under review.

Details of the legislation and resources cited in this article are available in the full text guidance note here. Refer to our guidance ‘What will the AAT consider when making orders to stay or affect implementation of a decision?’ for more detailed analysis of the factors that the AAT examines.

What is a stay order?

An application to the AAT does not affect the operation of a decision under review or prevent it from being implemented. However, waiting for the AAT to complete its review can put a business at serious risk; a review by the AAT can take several months and by that time, it may be too late for the business to recover.

Subsection s 41(2) of the AAT Act allows the Tribunal to make orders to “stay” or “affect” the implementation of the decision that is under review.  A stay order preserves the position of the affected person until the review is completed.  If an order is made suspending the operation of the decision, a person may do anything that could lawfully have been done if the decision had not been made.

 

When is a stay order available?

Any person that is a party to a review proceeding that is before the Tribunal can apply to the AAT for an order under s 41(2) of the AAT Act.  A person that applies for such an order is referred to in this article as the “applicant”.

The grant of stay order does not require special or exceptional circumstances and the Tribunal may grant a stay order where review becomes pointless if the stay is not granted.  For example, if the applicant’s business goes insolvent. This is central question for the Tribunal: whether the order is necessary to secure the effectiveness of the review.  The onus is on the applicant to convince the Tribunal that, in the absence of a stay, the review would be rendered pointless.

 

Scope of stay order

The AAT may make the stay order for a limited period where immediate application of a decision might result in hardship but there are ways open to the applicant to avoid that problem.  The Tribunal may also make the stay conditional on the applicant taking steps to avoid conduct that prompted the regulator’s decision and to inform the decision maker of those steps.

See: Re Cape York Airlines Pty Ltd and Civil Aviation Authority (2004) 80 ALD 369; Gammadell Pty Ltd (trading as Midstate Airlines) and Civil Aviation Safety Authority (2004) 81 ALD 441.

 

Obtaining a stay order

An order is obtained by lodging an application to the Tribunal using the prescribed form. Notice of the request (or a variation of) a stay order must be given to the decision-maker and to any other party to the proceedings.

Unless there are reasons of urgency, before making a stay order, the person who made the decision must be given an opportunity to make a submission.  Once made, the order may be varied or revoked.  Before revoking or varying the order, both the decision maker and the person who obtained the order must be given an opportunity to make submissions.

In circumstances where it is not practicable to give an opportunity to make submissions “by reasons of urgency of the case or otherwise”, the Tribunal may make a stay order.  Orders made in these circumstances do not come into operation until notice is served on the person affected.  These are orders are made only where necessary and the onus is in the applicant to demonstrate to the Tribunal why the order should be made without the decision-maker having the opportunity to present its case.

There is no appeal to the Federal Court against orders made under s 41.  However, review may be sought under the Administrative Decisions (Judicial Review) Act 1977 or s 39B of the Judiciary Act 1903.

 

Stay order considerations

The test for making a stay order is whether it is “desirable to do so after taking into account the interests of any persons who may be affected by the review”. The central question for the Tribunal is whether the order is necessary to secure the effectiveness of the review. When assessing an application for a stay order, the AAT will consider:

  • prospects of success or merits of the application for review;
  • consequences for the applicant if the stay is refused (i.e. hardship);
  • whether it is in the public interest to grant the stay;
  • functions and responsibilities of the statutory decision maker, nature and purpose of the reviewable decision, and the public interest in relation to it; and,
  • whether the hearing on the decision under review, if successful, would be rendered pointless if the stay is not granted.

See: Scott and Australian Securities and Investments Commission [2009] AATA 798, [8]; Panganiban and Australian Securities & Investments Commission [2016] AATA 703[7]

The Tribunal and the Federal Court emphasise that the effect that the decision under review will have on the individual (person or business) is a principal factor in deciding whether to stay a decision.  The context for regulatory decisions necessarily requires the Tribunal to balance the hardship to the affected individual against the danger to the public if the applicant continues delivering services (that the decision affects) to the public.  What is relevant in a particular case will depend on the circumstance of each case and the legislation under which the original decision made.

See: Hana Group Pty Ltd and Australian Skills Quality Authority [2019] AATA 4146, [38]; Trades College Australia Pty Ltd v Australian Skills Quality Authority [2018] AATA 1703[38].

 

Necessary for securing effectiveness of the review

The purpose of a stay order is to preserve the status quo so that the rights or interests that were affected by the reviewable decision can be reinstated. Where the applicant is genuinely likely to become insolvent if the stay is not granted, the review will be rendered pointless.  Subject to consideration of other factors and interests (including the public interest), this weighs in favour of granting a stay order. See: Re Alexander and Migration Agents Registration Board [1995] 40 ALD 99, [102]; Australian College of Vocational Studies Pty Ltd v Australian Skills Quality Authority (General) [2018] AATA 1088 at [78].

As the purpose of a stay order is to preserve the status quo, the applicant needs to demonstrate that the order will restore the applicant to the position they were in before the decision was implemented.  If the applicant’s position cannot be restored, the Tribunal is unlikely to conclude that the order is “desirable” or necessary to secure the effectiveness of the review.

Refer to our guidance ‘What will the AAT consider when making orders to stay or affect implementation of a decision?’ for more detailed analysis of factors that are considered by the Tribunal.

For more information, contact Michael Pagsanjan (info@mpslaw.com.au).