This is an appeal challenging a determination of the Commissioner of Banking approving the application of The Howard Savings Bank, Newark, Essex County (Howard), to establish and operate a branch office to be located at the southwest corner of Haddon Avenue and Ogden Avenue, Collingswood, Camden County, New Jersey. The objectors-appellants are Fidelity Mutual Savings and Loan Association and South Jersey Savings and Loan Association, whose standing to oppose the action taken by the Commissioner is not questioned.
Following written objections to the grant of the application, hearings were held before a Department of Banking hearing officer over an interval of four days. The hearing officer filed a report and recommendation that the application be granted. Appellants thereafter filed exceptions to the hearing officer's report and recommendation. Nevertheless, the Commissioner adopted in toto the findings of fact and conclusions of law of the hearing officer favorable to applicant.
The first two contentions of appellants are: (1) the hearing officer's report and recommendation was grounded on unsupported data contained in Application Form M-115, and (2) appellants were denied a full and fair hearing inasmuch as they were not provided the right to cross-examine the authors of the information contained in said form. These two contentions are essentially the same. M-115 is an application form which has been developed by the Department of Banking to facilitate branch-bank applications. These forms provide the Department with pertinent financial information. At the outset of the administrative hearing the application as completed by Howard was marked into evidence without objection as a departmental exhibit. Appellants assert that this form contains much hearsay evidence and that notwithstanding that Howard was told of the objectors'
refusal to accept the truth of the contents of the application, it failed to produce as witnesses the persons who supplied the information. These persons consisted of its own officers, employees or independent contractors.
However, at the commencement of the hearing counsel for appellants requested a list of the expert witnesses who would testify for Howard. He was told that only one witness would testify, namely, Allen M. Heaslip. Counsel then indicated he desired to cross-examine the party who prepared certain of the data contained in the application form. The hearing officer ruled that he would not direct Howard to produce these people as its own witnesses. He also ruled that if the objectors wanted to call said persons he would direct that their names be furnished to the objectors.
Subsequently, and after Heaslip was cross-examined in minute detail by the objectors, not only with respect to his testimony but also with respect to the data contained in the documentary submissions of Howard, counsel for the objectors again requested the opportunity to cross-examine the individuals who authored various parts of said form. The objectors declined to call said persons, although their names had been furnished to them. The hearing officer again refused to compel Howard to produce said witnesses for cross-examination. The only other witness called at the hearing was one Ian Liddell, on behalf of the objectors, the Director of Research of Stephen P. Radics & Co., a certified public accounting firm.
N.J.S.A. 52:14B-10 expressly adopts the universally recognized doctrine that in administrative agency hearings the parties shall not be bound by rules of evidence, whether statutory, common-law or adopted by rules of court. See Weston v. State , 60 N.J. 36 (1972); D'Amico v. Blanck , 85 N.J. Super. 297 (App. Div. 1964). Although common-law rules of evidence do not apply strictly to administrative tribunals, the fundamentals of fair and adequate procedure constituting due process must be observed, and cross-examination and rebuttal have been held to be basic elements of an
administrative hearing essential to due process. Application of Plainfield-Union Water Co. , 11 N.J. 382 (1953).
It plainly appears that the objectors not alone had advance notice of the documentary evidence that applicant was to submit but were, at the hearing, afforded the names of the individuals who prepared the application form. These facts demonstrate that objectors had ample opportunity to test the disclosed evidence for trustworthiness and accuracy, but failed to do so. Their voluntary failure to avail themselves of existing avenues of inquiry cannot serve as a ground for claiming a violation of procedural due process. Moreover, it cannot be said that Howard failed to disclose the requisite support for its application when the parties had been told in advance by the Department not to spend time on direct examination with matters contained in documentary form.
The hearing officer's report and recommendation properly notes that objectors merely wanted to go on a "fishing expedition" in insisting on cross-examining the parties who supplied the information in the application form, without substantively indicating in what respects said application might be deficient or inaccurate. It must be remembered that the objectors are banking institutions with peculiar knowledge of the esoteric data contained in branch-office applications, pro forma statements and economic feasibility studies such as those submitted by Howard. Had ...