The well-understood principles are discussed in Lee v Minister for Immigration and Citizenship [2007] FCAFC 62, [48]-[53]:
48 In my opinion, before a Court will exercise its discretion to refuse relief on the ground of futility, it must be quite clear that a rehearing or reconsideration is or will be futile.
49 I turn now to consider whether futility was made out in this case. A question arises as to the point in time at which the question of futility is to be assessed. As far as administrative decisions are concerned, there is little authority on the point. There is reference to a “backward-looking test” which requires futility to be assessed at the time the decision-maker made its decision. There is reference to a “forward-looking test” which requires futility to be assessed at a time in the future when the reconsideration or rehearing takes place. In many cases, it will not matter which test is applied because the same result will follow.
50 We were referred to a decision of this Court which has considered which test is appropriate, albeit in the context of a decision made by a Court in breach of the rules of procedural fairness. In Giretti v Commissioner of Taxation (1996) 70 FCR 151 Lindgren J (with whom Jenkinson J agreed) decided the case on the basis that there had been no failure to accord procedural fairness. As an alternative ground upon which the appeal should be dismissed, Lindgren J said that assuming a failure to accord procedural fairness, nevertheless, the appellant had not been deprived of even a possibility of a favourable result. Lindgren J favoured a backward-looking test. He said (at 165):
“No doubt in most cases, the application of the two tests will yield the same result. Perhaps the better view is that there is scope for the operation of both tests as alternatives in the sense that it is a ground for denying relief either that there was or that there is no possibility of a different result (cf the section heading in Woolf and Jowell, De Smith’s Judicial Review of Administrative Action (5th ed, 1995), p 498, ‘Where the defect of natural justice has made no difference to the result; where to require fairness or natural justice would be futile; where no prejudice has been caused to the applicant’ and discussion following). At least, it seems correct in principle that a backward-looking test should have scope to exclude relief. It is difficult to accept readily that a person who has been denied the benefit of procedural fairness should be entitled to be placed in a better position than if he or she had not been.”
51 Merkel J favoured a forward-looking test and, in my respectful opinion, his reasons for doing so are highly persuasive, as are the points made by Bingham LJ in R v Chief Constable of Thames Valley Police; Ex parte Cotton [1990] IRLR 344 at 352 (see also T Bingham “Should Public Law Remedies be Discretionary?” (1991) Public Law 64 at 72-73). In my opinion, it is appropriate to apply a forward-looking test at least in the particular statutory context under consideration in this case. Through no fault of their own, the appellants have been deprived of procedural fairness (as prescribed by the Act) and the requirement that the first appellant be nominated by an approved standard business sponsor is a requirement which must be satisfied at the time of decision.
52 I acknowledge that if a backward-looking test is applied it is appropriate to make a finding of futility and to refuse relief. At the time the Tribunal member made his decision on the appellants’ application for review, namely, 7 January 2004, there was no approved standard business sponsor. Konel’s sponsorship application had been refused by the same Tribunal member about two months before that date. Konel had not challenged that decision and, as at 7 January 2004, there was no suggestion that another applicant for approval as a standard business sponsor had or would come forward.
53 However, as I have said, I think it is appropriate to apply a forward-looking test and doing so results in the conclusion that, whilst a rehearing may prove futile, the Court cannot be certain that that will be the case. I put to one side for the moment the appellants’ challenge to the Tribunal’s decision in relation to Konel’s sponsorship application which, in any event, for reasons I will give, must be rejected. The Court cannot be certain that a rehearing will be futile because (and I understood the first respondent to concede this) nomination by an approved standard business sponsor is a requirement to be satisfied at the date of decision and it is a possibility that this criterion will be met on a rehearing of the appellants’ application for review. It may well be that it will not be met but, in my opinion, unless it is clear that it will not be met, relief should not be refused on the ground of futility. In other words, I do not think that relief should be refused unless it is clear that a rehearing will be futile and I do not think that it is clear in this case.
(emphasis added)