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[2022] NSWSC 1176
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Malek Fahd Islamic School Limited v Minister for Education and Early Childhood Learning [2022] NSWSC 1176 (1 September 2022)
Last Updated: 24 October 2022
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Supreme Court
New South Wales
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Case Name:
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Malek Fahd Islamic School Limited v Minister for Education and Early
Childhood Learning
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Medium Neutral Citation:
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Hearing Date(s):
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21 April 2022
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Decision Date:
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1 September 2022
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Jurisdiction:
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Common Law
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Before:
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Rothman J
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Decision:
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(1) Judgment for the
defendant; (2) Summons and proceedings
dismissed; (3) The plaintiff shall pay the
defendant’s costs of and incidental to the proceedings.
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Catchwords:
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ADMINISTRATIVE LAW – orders in the nature of certiorari –
operation of s 69 of the Supreme Court Act on determination
of a Minister
– construction of the Education Act and discretion of a Minister as to
whether to recover financial assistance
and the amount of financial assistance
– engagement with clearly articulated argument – unreasonable or
disproportionate
response – mandatory considerations – operation of
Limitation Act – when cause of action accrues – no legal
error
– no jurisdictional error
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Legislation Cited:
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An Act for the better Government of Her Majesty’s Australian Colonies
1850, 13 & 14 Vic I, c 59 An Act to make provision for the better
Administration of Justice in the colony of Victoria 1852 (Vic) Australian
Education Act 2013 (Cth) Charter of Justice 1823 (UK) Civil and
Administrative Tribunal Act 2013 (NSW), s 83Commonwealth Constitution, ss
73, 75Corporations Act 2001 (Cth), s 9Education Act 1990 (NSW), ss 4, 5,
6, 20A, 21, Pt 5, Pt 5A, Pt 6, Pt 7, 37, 46, 47, 50, 52, 54A, 55, 57A, 59, Pt 7
Div 3, 83B, 83BA, 83C, 83D, 83E, 83F, 83G, 83H, 83I, 83J, 83K, 83L Limitation
Act 1969 (NSW), ss 14, 55, 63Supreme Court Act 1970 (NSW), 23, 63, 69,
91
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Cases Cited:
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Texts Cited:
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Mark Aronson, Matthew Groves and Greg Weeks, Judicial Review of
Administrative Action and Government Liability (6th Ed, Thomson Reuters) The
Rt Hon Lord Woolf et al, De SMITH’S JUDICIAL REVIEW (8th ed, 2018, Sweet
& Maxwell)
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Category:
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Principal judgment
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Parties:
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Malek Fahd Islamic School Limited (Plaintiff) Minister for Education and
Early Childhood Learning (Defendant)
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Representation:
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Counsel: L Livingston SC / A Bhasin (Plaintiff) H Younan SC / L
Coleman (Defendant)
Solicitors: Mitry Lawyers
(Plaintiff) McCullough Robertson (Defendant)
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File Number(s):
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2021/161161
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JUDGMENT
- HIS
HONOUR: By Summons, filed 4 June 2021, the plaintiff, Malek Fahd Islamic
School Limited (hereinafter “the School”), seeks judicial
review of
a decision of the Minister for Education and Early Childhood Learning, the Hon
Sarah Mitchell MLC (hereinafter “the
Minister”). The impugned
decision was that the Minister sought recovery from the plaintiff of all of the
financial assistance
provided by the Minister (or, more accurately, the
Government) to the School in 2014 and 2015.
- The
School seeks:
(1) Orders in the nature of certiorari quashing the aforesaid decision;
(2) A declaration that the decision was subject to jurisdictional error and/or
error of law and, as a consequence, is void and of
no effect;
(3) A declaration that the Minister has a discretion, under the terms of
s 83J of the Education Act 1990 (NSW), as to the amount of financial
assistance to be recovered, where financial assistance was provided to a School
in respect of
a period when the School operated for profit or was a
non-compliant School;
(4) A declaration that the Minister is precluded by ss 14(1)(d) and 63(1) of the
Limitation Act 1969 (NSW) from recovering payments of financial
assistance (including by way of reduction of future payments) made in excess of
6 years
prior to the recovery action being taken; and,
(5) Costs.
- The
“grounds” in the Summons include background and factual assertions.
It is fair to say that the substantive grounds
upon which it is said that the
Minister has erred, in a manner which would allow the Court to quash the
decision subject to these
proceedings, are the following:
(1) Ground 1: Error by the Minister in determining that there was an
absence of discretion as to the amount of the financial assistance that was
able
to be recovered;
(2) Ground 2: Failure of the Minister to engage with the central elements
of the School’s submissions;
(3) Ground 3: Failure of the Minister to consider mandatory relevant
considerations;
(4) Ground 4: The decision was disproportionate and legally unreasonable;
and,
(5) Ground 5: Recovery of the amounts is barred by the operation of the
Limitation Act.
Background Facts and Procedural History
- The
facts in these proceedings are relevantly uncontentious, many of them having
been the subject of previous decisions and judgments
to which reference will be
made. There is also an Agreed Chronology that details the events and
circumstances leading up to this
litigation but does not deal with the early
years prior to the commencement of an investigation to which reference will be
made later
in these reasons.[1]
- The
plaintiff, being the School, was established by the Australian Federation of
Islamic Councils Inc (“AFIC”) in 1989
and, from its establishment
until March 2016, AFIC had the right to appoint all or a majority of the members
of the Board of Directors
of the School. The School pleads that the Directors of
the School were accustomed to act in accordance with AFIC’s wishes.
As a
consequence, the role of AFIC rendered it a director of the School within the
meaning of s 9 of the Corporations Act 2001
(Cth).[2]
- The
defendant, as already noted, is the New South Wales Minister for Education and
Early Childhood Learning. In 2014 and 2015, the
New South Wales Government, on
the recommendation of the Minister, provided the School with financial
assistance totalling $11,065,584.69.
This funding was purportedly provided
pursuant to s 21 of the Education Act 1990 - 2014 and 83B of the
Education Act 1990 (NSW) (hereinafter “the
Act”).[3]
- In
January 2016, the Minister for Education commenced an investigation into the
School to determine, in particular, whether the School
was operating for-profit
or was non-compliant, within the meaning of the
Act.[4]
- On
1 June 2017, the Non-Government Schools Not-For-Profit Advisory Committee (in
these reasons called “the Advisory Committee”)
determined that the
School and/or its proprietor operated for-profit within the meaning of
s 21A,[5] and s 83C of the
Act for the years 2014 and 2015. In that Report, the Advisory Committee
recommended that the Minister make a “non-compliance”
declaration in
respect of the School for 2014 and 2015.
- On
13 July 2017, following an internal review, the recommendations of the Advisory
Committee were confirmed.
Supreme Court proceedings against
AFIC
- In
March 2016, the School finalised governance reforms, and asserts that it began
to operate through a Board of Directors independent
of AFIC. In the meantime,
the School commenced proceedings in the Court, suing AFIC for breach of
statutory and fiduciary duties
owed to the School in relation to payments in
2014 and 2015 by the School to AFIC.
- On
9 November 2017, the Court issued orders reflecting an Open Statement by AFIC
which offered, without admission: to repay to the
School an amount of $1.42
million, together with interest; to pay a further amount of just over $530,000,
with interest; to pay a
refund of the payment of an amount of $2.2 million, with
interest; to pay a refund of the payment of $2.7 million (or just over)
in
respect of arrears of rent; to pay to the School the difference between the rent
paid on properties and the rent at market value;
a variation to leases; and, the
transfer of property at Beaumont Hills.
- Those
proceedings concluded and judgment was delivered on 12 December
2017.[6] The orders issued by the
Court were ultimately settled but are otherwise described in [132]-[134] of the
aforesaid reasons for judgment.
Those orders concluded that: the School was not
entitled to any orders in its favour in addition to those made by the Court on 9
November 2017; and AFIC was entitled to recover rent on two properties for dates
specified, calculated at market rent determined
by an independent assessor,
which amounts, together with interest, may be set off against the amounts owed
pursuant to the orders
issued on 9 November 2017.
- Further,
over and above the reflection of the open offer, the Court ordered the School to
repay AFIC a loan of $814,778.64 plus
interest.[7] The orders earlier
recited and/or summarised dealt with the remaining issues to be determined
following the orders of 9 November
2017.[8]
Tribunal
proceedings
- Following
the internal review — which confirmed the finding of the Advisory
Committee — and following the judgment of
the Court to which reference has
just been made, the School applied to the NSW Civil and Administrative Tribunal
(hereinafter “NCAT”
or “the Tribunal”).
- The
application to NCAT was heard by a Senior Member on 29 and 30 July 2019. The
School challenged the finding by the Advisory Committee
that the School operated
“for-profit” and the recommendation made to the Minister that
declarations for “non-compliance”
be made pursuant to the provisions
of the Act. On 6 September 2019, the Senior Member confirmed the recommendation
of the Advisory
Committee and, to the extent necessary, the internal review.
[9]
- The
Senior Member quantified the “for-profit activity” that was
outstanding, being three payments that had not been remedied
by the
School’s restructure and proceedings against AFIC, together with other
matters. The payments identified were unrecovered
payments of $37,481.25 of GST
or $29,920 of leave entitlements (as a result of a finding that either could
have been paid, but not
both) to a former Director or someone involved in the
operation of the School and/or AFIC (the “G Payments”); $11,460
in
relation to payments to another person in a similar position (the “M
Payments”); and, $2,200 in “minor”
Board Member Payments,
which the Senior Member found should be
disregarded.[10]
- An
appeal against the decision of the Senior Member was taken to an Appeal Panel of
NCAT, which heard the matter on 3 December 2019.
The Appeal Panel, in its
decision of 6 February 2020, allowed the appeal in part, in that the Appeal
Panel took the view that it
was for the Minister alone to determine whether
there would be recovery of the amounts of assistance; it was not a matter for
the
Advisory Committee to
recommend.[11]
- As
a consequence, the Appeal Panel issued orders the effect of which was to replace
the order/decision made by the Senior Member and
made a recommendation and/or
finding that the School operated for-profit, and that all financial assistance
be suspended until reform
of its operation, which had been outlined in detail.
The Appeal Panel made no recommendation in relation to the recovery of amounts
provided for assistance in 2014 and 2015.
- Notwithstanding
that the appeal was allowed in part, the Appeal Panel agreed with the
conclusions of fact of the Senior Member, and
did not refer to, or overturn, the
Senior Member’s identification of the outstanding payments. The Appeal
Panel further confirmed
the findings that gave rise to the recommendations of
the Advisory Committee and the findings of the Senior Member and confirmed
orders relating to the future provision of assistance. The overturning of the
recommendation as to recovery was not determined on
its merits, but on the basis
of the jurisdiction of the Advisory Committee.
Communication
between the Minister and the School
- Following
the NCAT Appeal Panel decision, the Minister issued a “Non-Compliance
Declaration”, purportedly pursuant to
the terms of s 83F(1) of the
Act, by letter dated 28 May 2020. The Minister declared that the School was
non-compliant for its operations in 2014 and 2015;
suspended financial
assistance pending satisfaction of further conditions; and, sought submissions
from the School in relation to
the Minister’s possible exercise of power
(under s 83J of the Act) to recover the amount of financial assistance provided
in 2014 and 2015.[12] A time limit
was provided for the receipt of submissions.
- The
letter referred to the Notice of 7 August 2017, issued under s 83G of the
Act, addressed to the School, which set out the recommendations of the Advisory
Committee.
- Relevantly,
the 28 May 2020 letter includes the following passage:
“Recovery of Financial Assistance
Under section 83J(1), I may recover the amount of any financial assistance
provided by the Minister to or for the benefit of a school in respect of a
period when the school was a non-compliant school.
In 2014 and 2015, the School received the sum of $11,065,584.69 in financial
assistance from the NSW Government.
In making the decision regarding the recovery of financial assistance from the
School, and the amount which may be recovered, I will
have regard to the
following:
Show Cause
Before I make my decision regarding any possible future recovery, I am
providing you with an opportunity to make submissions as to whether recovery
should occur, the timing and amount of any financial
assistance to be
recovered.” (Emphasis added.)
- On
22 June 2020, the School lodged submissions with the Minister in relation to
those issues.[13] The School, in its
submissions, referred to the reform of the Board of the School, and the
abovementioned proceedings in the Supreme
Court and the Tribunal. The School
then referred to the $4,235,457.62 of “overpayments” made by the
School in 2014 and
2015 that the Advisory Committee had identified, which, it
said, determined the School was not a not-for-profit institution.
- The
School submitted that the findings were available to the Advisory Committee at
the time, but that “subsequent legal decisions
have shown the findings to
be either wholly or partly incorrect or have reversed the transactions and
properly resolved the findings”.
- As
a consequence of its analysis, which I do not repeat in these reasons, the
School submitted that the “total amount of money
that was not properly
spent on the operation of the school in 2014 and 2015 is, at most,
$51,141.52.” The School, it submitted,
had accounted for, and justified,
all other payments in those calendar years.
- The
submission of the School was that, in those circumstances, no amount of
financial assistance paid to the school in 2014 and 2015
should be recovered
from the School. In the alternative, if the Minister took the view that funds
should be repaid, the School submitted
that the amount should be the
$51,141.52.
- Over
and above the foregoing, the School submitted that the coverage, publicity, and
rumour that had occurred during the course of
the investigation and the dispute,
both with AFIC and the Minister, had damaged the reputation of the School in the
wider community
and created uncertainty as to the School’s future. Thus,
the Minister ought to take into account those aspects, and the damages
caused,
in exercising the Minister’s discretion favourably towards the School.
- On
7 September 2020, the Minister confirmed that the conditions that the Minister
had imposed on the future provision of assistance
by the Government to the
School had been satisfied and the Minister lifted the suspension of financial
assistance to the school for
the
future.[14]
- On
11 November 2020, the Minister, by letter, acknowledged the School’s
submissions, but sought further information from the
School regarding the
possible recovery of financial assistance under s 83J(1) of the
Act.[15] In the course of the
letter, the Minister made the following comments:
“The school’s submissions seek to question the Advisory
Committee’s for-profit findings and take issue with the
seriousness of the
activities occurring at the school in 2014 and 2015. The recommendation of the
Advisory Committee that the school
be declared a non-compliance school on the
basis that it operated for-profit in the years 2014 and 2015 was upheld by NCAT
and was
undisturbed on appeal. The findings supporting the recommendations were
largely affirmed. NCAT also found that the school’s
breaches in 2014 and
2015 were not of a ‘minor nature’. It is not now open to the school
to make submissions challenging
those findings.
I note that the decision of NCAT does not have anything to say about the
operation of section 83J of the Act.
The school’s submissions appear to be based on the idea that the amount of
recovery is discretionary, and, at its worst case,
should be based on the amount
of money the school says was spent on for-profit activities which has not been
recovered by the school.
However, the basis of that view is not apparent in
either s 83J or in Division 3 of Part 7 of the Act.
The provisions contained in s 83J are concerned with the repayment of financial
assistance provided during the period of for-profit activity.”
- The
School was then invited to provide any additional submissions relating to a
number of detailed aspects including reputational
damage and the amounts not
spent on students as a consequence of any recovery. In response to that
invitation, the School provided,
by letter of 27 November 2020, further
submissions seeking to deal with the further information that was
required.[16]
- The
further submissions do not need summarising, but it should be noted that they
took issue with the notion, suggested by the Minister,
that the School was
seeking to question the findings made by the Advisory Committee or NCAT.
Rather, according to the submission,
it sought to place those findings in the
context of the recovery of substantial amounts and the findings of the Court
relating to
market value.
- The
School’s supplementary submission of 27 November 2020 detailed the Court
and/or Tribunal decisions relating to any alleged
not-for-profit activities
identified by the Advisory Committee, as well as the governance reforms which
had already been acknowledged
by the Minister. Ultimately, the School submitted
the following:
“The School submits that, in light of the actions it has taken since 2017,
the Minister should be satisfied that, of the total
amount of $11,065,584.69 in
financial assistance paid to the School in the years 2014 and 2015, the School
has accounted for and/or
justified, all amounts spent in those years except for
the sum of $43,580 (comprised of $29,920 in payments to
[X],[17] $11,460 in payments to
[Y],[18] and $2,200 in payments
to board members).”
- Further,
the School expressed its concern at the Minister’s comments, in the letter
of 11 November 2020, which suggested that
the recovery under s 83J of the
Act is not discretionary, and that the amount of any such recovery is not
discretionary. The School maintained that its previous
submissions were based
upon the proposition that the Minister had a discretion as to whether there
would be recovery and, if there
were to be recovery, the amount that is required
to be repaid. The School made reference to the provisions of s 83J(1) of
the Act.
- Over
and above the foregoing, the supplementary submission expressed, in great
detail, the disadvantages to the current students of
the School, which would be
occasioned by a recovery of that size (or any recovery at all). In the
alternative, the School proposed
that any recovery, by reduction in future
financial assistance, should occur after the expiration of the current funding
agreement
with the Minister, which, the Court was made aware, was in
2024.
The Decision
- On
5 March 2021, the Minister wrote to the School. This letter is, or contains, the
decision that is challenged in these proceedings.
- In
the letter of 5 March 2021, the Minister communicated that she had decided
“to seek recovery of all the financial assistance
paid to the school in
2014 and 2015, which is clarified to mean the amount of $11,065,584.69”.
The Minister, purportedly for
the purpose of allowing the School to adjust its
operations to reduce any impact on current and future students, decided to
recover
that amount by reducing future amounts of financial assistance payable
over the next five years until the debt is fully recovered.
- There
are some important aspects of the letter that require extraction. The Minister
made the following comments:
“I accept that the power given to me under section 83J of the Act to
recover the amount of any financial assistance provided to the school in respect
of a period when the school was a
non-compliant school, is discretionary, in the
sense that I may decide not to recover that amount of financial assistance so
provided.
However, I also accept that, should I decide to exercise that power, the
question of the amount to be recovered is less clear. As
explained in my letter
dated 11 November 2020, in response to your submission regarding recovery
commensurate with the amount of
financial assistance spent on
‘for-profit’ activities, the provisions contained in section 83J of
the Act are concerned with the repayment of financial assistance provided in
respect of a period when the school operated for-profit
(or was a non-compliant
school). ...
...
I have based my decision regarding the amount of recovery on the relevant
legislative provisions (specifically, section 83J of the Act and more broadly
Division 3 of Part 7 of the Act), and by also carefully considering the
school’s submissions on this issue.
The School submits that the amount of recovery should be based on the amount of
money it says was spent on for-profit activities
which has not been recovered by
the School. Those submissions are, in my opinion, not supported by the Act.
Section 83J of the Act is based on an important principle. Where a School has
been found to be operating for-profit, it is reasonable that the
School should
repay the public funds it received while the school was in breach of the
pre-conditions to receiving funding. There
is a community expectation that
public funding provided during a period when a school was later found to be
ineligible for funding
will be recovered and returned to the people of NSW.
I am also mindful that the school is currently paying for a debt incurred as a
result of for-profit activity that occurred in 2010-2012.
That debt is due to be
settled in 2024. Having considered the annual rate of repayment, I do not
consider it appropriate that recovery
should only occur after that debt has been
repaid.
Having considered the school’s submissions on the potential impact of
recovery on students, and in order to reduce that impact,
I have decided to
recover the amount of financial assistance provided to the school in 2014-2015
when the school operated for-profit,
by reducing future amounts of financial
assistance payable to the school by $2,213,116 per annum for five (5)
years.”[19]
- On
4 June 2021, following the letter from the Minister, the School commenced the
current proceedings.
The Education Act Legislative
Scheme
- It
is necessary to deal first with the legislative scheme under which the decision
of the Minister issued, and upon which the grounds
of the appeal are based.
- As
no appeal is sought in relation to the decision of the Appeal Panel, it is
unnecessary to recite the provisions of the Civil and Administrative Tribunal
Act 2013 (NSW). It is sufficient for present purposes to note that an
appeal lies from a decision of the Tribunal to the Supreme Court, by
leave, on a
question of law, under s 83 of the Civil and Administrative Tribunal
Act.
- The
foregoing is not intended as a criticism or an indication that an appeal would
lie or be successful. Nevertheless, if facts were
otherwise available to be
challenged in these proceedings, in the circumstances, such a challenge has not
been pursued.
Preliminary provisions of the Education Act
- The
terms, and objects, of the Education Act need greater attention. First,
the Parliament’s promulgation of the Act is expressly stated to be based
on the following principles:
every child has a right to receive an education;
the education of a child is primarily the responsibility of the child’s
parents;
the State’s duty is to ensure that every child receives an
education of the highest quality; and, the principal responsibility
of the State
in the education of children is the provision of public
education.[20] It is of possible
relevance to the construction of the Act, in relation to the issues now before
the Court, that one of the principles
upon which the Act is based is the
State’s duty to ensure that every child receives an education of the
highest quality.
- The
principal objects of the Act are the establishment of a curriculum including a
minimum curriculum for school registration, including
that which must be
completed in order to complete schooling; providing for the establishment and
operation of government schools;
ensuring that the only schools that operate in
New South Wales are government schools or non-government schools registered
under
the Act; to allow children to be educated at home; and, to provide for
Records of School Achievement and Higher School Certificates
and for the
accreditation of non-government schools that are competent to present candidates
for them.[21]
- Interestingly,
in the foregoing, there is no reference to issues associated with the funding of
non-government schools.
- There
is a further provision dealing with the objects for the administration of the
Act or of education. It is unnecessary to recite
each of those objects, but the
Court notes that those objects include: assisting each child to achieve his or
her educational potential;
encouraging innovation and diversity within and among
schools; mitigating educational disadvantage, including disadvantage arising
from gender, geographic, economic, social, cultural, lingual or other causes;
the provision of education for children from non-English
speaking backgrounds;
and, the provision of an education for children promoting family and community
values.[22]
- The
Act is then divided into Parts dealing with the school curriculum, functions of
the Minister and the New South Wales Education
Standards Authority (hereinafter
“NESA”) in the education portfolio. The provisions of s 20A of
the Act prescribe the
functions of NESA to include advising on the registration
of non-government schools under Part 7; accreditation of registered
non-government
schools under Part 8; the monitoring of the application of
NESA’s policies in schools; and advising the Minister on any other
matter
which the Minister requests. The last-mentioned aspect, presumably, is limited
to matters associated with its authority and/or
expertise.
- The
Act also deals with attendance at school, health and safety risks at schools
— in particular, arising from student behaviour
— and the
establishment and functioning of government
schools.[23]
Provisions relating to non-government schools (Part 7)
- Part
7 of the Act deals with non-government schools and home-schooling. The Part
does not apply to government
schools.[24] Under this Part,
non-government schools may be registered either individually or as part of a
system of schools, which involves
slightly different procedures and
approvals.[25]
- The
approvals are granted by the Minister and, in the case of a system of less than
20 but more than 10 schools, the establishment
and registration of such a system
must be on the recommendation of NESA. By the operation of s 46 of the
Act, the Minister is required
to have regard to the advice of NESA in relation
to the exercise of any of the Minister’s functions regarding the
registration
of a system for non-government schools. There is also a delineated
process for the withdrawal of registration of either a school
or a system.
- Section
47 of the Act sets out the registration requirements for non-government schools,
which include that: the proprietor of the
school be a corporation; the school to
be financially viable; each officer of the school be a fit and proper person;
the school must
have policies and procedures for proper governance; requirements
as to the competence of teaching staff; the educational facilities
be adequate;
there be a safe and supportive environment for students; there be minimum
curriculum requirements; and that policies
and procedures ensure the
school’s participation in annual reporting to the Minister and/or NESA.
- The
foregoing is not intended to be exhaustive, and NESA may set out guidelines for
the assistance of a non-government school to comply
with the requirements for
registration.[26] It is NESA that
considers the initial registration of a non-government school and provides the
Minister with a written report about
the
application.[27] The report is
required to include a recommendation as to whether the school should be
registered. Assuming the Minister approves
the registration of the school, the
registration exists for an initial period of 12 months
only.[28]
- Thereafter,
the school applies for continuing registration and/or renewal of the
registration of the school, which must be filed prior
to the expiry of three
months of the initial registration and at least nine months prior to the expiry
of any other registration.[29] NESA
provides reports and recommendations to the Minister regarding the registration
and renewal of a non-government
school.[30]
- Renewal
of the registration may be for a maximum period of five years. Registration may
be cancelled, or the duration of registration
may be
reduced,[31] if the Minister is
satisfied that the requirements for, or the conditions of, registration have not
been complied with at the particular
school.[32] By the operation of
s 65 of the Act, no person is allowed to conduct, nor to permit the conduct
or to assist in the conduct of, a
school that has not been registered (or is not
a government school), and it is a criminal offence to do so.
- It
should be noted that there is no legislative provision that requires a school to
operate not-for-profit in order to be registered.
Nor is there any provision
that would allow the Minister to cancel the registration of the school on the
basis that it operates
“for-profit”.
Provisions
relating to financial assistance
- The
provisions of the Act contained in Div 3 of Pt 7 deal with financial assistance
for non-government schools. These provisions
are the most relevant to the
current issues between the parties.
- As
expected, the Advisory Committee is defined as the Non-Government Schools
Not-For-Profit Advisory Committee. Section 83B of the
Act authorises the
Minister to provide financial assistance (and other assistance) “in
respect of non-government school children”.
- By
operation of s 83B(2) of the Act, the determination of the amount of
financial assistance is subject to the obligations of New
South Wales under the
Commonwealth/State finance agreements relating to non-government schools. The
State may exceed the amount
it is obliged to contribute under the
Commonwealth/State agreement.
- Section
83BA(1) of the Act deems Commonwealth financial assistance — provided via
the State to a school under the Commonwealth/State
agreement (the National
Education Reform Agreement) — to be an arrangement between the school and
the State. Such an arrangement
determines that the State is entitled to recover
any debt owed by a school that relates to assistance provided by the
Commonwealth.[33] The State is
capable of assigning the debt to the
Commonwealth.[34]
- The
terms of s 83C of the Act are particularly relevant to these proceedings
and should be extracted. So too, the terms of ss 83D,
83E, 83F and 83J
need to be recited. Those provisions are in the following terms:
“83C Financial assistance not to be provided to
schools that operate for profit
(1) The Minister must not provide financial assistance
(whether under this Division or otherwise) to or for the benefit of a school
that operates for profit.
(2) A school operates for profit (without limiting the
circumstances in which it does so) if the Minister is satisfied that—
(a) any part of its proprietor’s assets (in so far as
they relate to the school) or its proprietor’s income (in so
far as it
arises from the operation of the school) is used for any purpose other than for
the operation of the school, or
(b) any payment is made by the school to a related entity or
other person or body—
(i) for property, goods or services at more than reasonable
market value, or
(ii) for property, goods or services that are not required for
the operation of the school, or
(iii) for property, goods or services that is in any other way
unreasonable in the circumstances having regard to the fact that
financial
assistance is provided to or for the benefit of the school by the Minister, or
(c) any payment is made by the school to a person in
connection with the person’s activities as a member of the governing
body
of the school unless it is in reimbursement for a payment made by the person in
connection with the operation of the school.
(3) The regulations may specify whether or not a school
operates for profit because of any particular use of assets or income,
any
particular payment in relation to the school or any other matter. Any such
regulation has effect despite anything to the contrary
in subsection (2).
(4) The Minister is not obliged to terminate the provision of
financial assistance because of this section if, following an investigation
under this Division, the Minister is satisfied that—
(a) termination of financial assistance is not justified
because of the minor nature of the relevant conduct, or
(b) more appropriate action can be taken under section 83E.
(5) In this section—
‘asset’ means an economic resource that may depreciate in
value over time.
‘income’ means money or other forms of consideration received
periodically from the provision of property, goods or services, investments,
gifts, donations, grants, financial assistance or any other gain obtained from
the use of a school’s assets or its proprietor’s
assets.
‘payment’ means a transaction involving consideration
(including non-monetary consideration) and includes a commitment to spend or a
liability
incurred (whether or not the time for payment has arisen).
83D Declaration that school operating for profit
(1) The Minister may declare that a school operates for profit
or has operated for profit during a specified previous period,
or both (a
‘for profit declaration’).
(2) The Minister may make a for profit declaration only if the
Advisory Committee recommends that the declaration be made because
the school
operates for profit or has so operated for profit (as the case requires).
(3) A for profit declaration in respect of a school is
conclusive evidence that the school operates for profit or has so operated
for
profit (as the case requires).
(4) The Minister may revoke a for profit declaration at any
time, and is to do so if the Advisory Committee advises the Minister,
or the
Minister is satisfied, that the school no longer operates for profit.
(5) A for profit declaration may specify a period to which it
applies that is wholly or partly before the declaration is made
(including
before the commencement of this section).
(6) The Minister’s obligation under this Division not to
provide financial assistance to or for the benefit of a school
that operates for
profit applies, whether or not a for profit declaration has been made.
83E Financial assistance to schools may be suspended,
reduced or made subject to conditions
(1) The Minister may suspend, reduce or impose conditions on
the provision of financial assistance (whether under this Division
or otherwise)
to or for the benefit of a school that is a non-compliant school.
(2) A school is a non-compliant school if the Minister is
satisfied that—
(a) the school or the proprietor of the school has failed to
provide reasonable assistance in relation to the conduct of any investigation
of
the school or proprietor under this Division, or
(b) the school or the proprietor of the school has failed to
comply with a direction of the Minister given under this Division
to the school
or proprietor, or
(c) it is a non-compliant school because of any other
circumstances set out in the regulations.
(3) A school is also a non-compliant school if the school
operates for profit, or has operated for profit, but following an investigation
under this Division, the Minister is satisfied that—
(a) termination of financial assistance to the school is not
justified because of the minor nature of the relevant conduct, or
(b) more appropriate action can be taken in respect of the
school under this section.
(4) If a school ceases to be a non-compliant school, the
school is not entitled to any payment that was not made because it was
a
non-compliant school.
83F Declaration that school non-compliant
(1) The Minister may declare that a school is a non-compliant
school (a ‘non-compliance declaration’).
(2) The Minister may make a non-compliance declaration only if
the Advisory Committee recommends that the declaration be made
because the
school is a non-compliant school.
(3) Any such recommendation of the Advisory Committee may
include a recommendation on any consequent suspension or reduction of,
or
imposition of conditions on, the provision of financial assistance.
(4) A non-compliance declaration in respect of a school is
conclusive evidence that it is a non-compliant school and that grounds
exist for
the Minister to suspend, reduce or impose conditions on the provision of
financial assistance in respect of the school.
(5) The Minister may revoke a non-compliance declaration at
any time, and is to do so if the Advisory Committee advises the Minister,
or the
Minister is satisfied, that the school is no longer a non-compliant school.
(6) The Minister’s power under this Division to suspend,
reduce or impose conditions on the provision of financial assistance
to or for
the benefit of a non-compliant school applies, whether or not a non-compliance
declaration has been made and whether or
not the suspension, reduction or
imposition is recommended by the Advisory Committee.
...
83J Recovery of amounts from schools
(1) The Minister may recover the amount of any financial
assistance provided by the Minister to or for the benefit of a school
(whether
under this Division or otherwise) if the financial assistance was provided in
respect of a period when the school operated
for profit or was a non-compliant
school.
(2) Any amount of costs under section 83I(3) that is not paid
by a school or the proprietor of a school may be recovered by the
Minister as if
it were financial assistance provided under this Division to the school when the
school was a non-compliant school.
(3) The Minister may recover an amount under this
section—
(a) as a debt in a court of competent jurisdiction, or
(b) by reducing future amounts of financial assistance payable
by the Minister to or for the benefit of the school concerned,
or both.
(4) A school, the proprietor of a school and any system,
authority, person or body referred to in section 83B(6)(b) to which an
amount
recoverable under this section (or part of the amount) was paid are jointly and
severally liable for repayment of the amount.”
- Even
though ss 83G, 83H, 83I, 83K and 83L of the Act have not been recited, it is
necessary to refer briefly to their content. The
provisions of s 83G
provide that the Minister is not to make a “for-profit declaration”
or a “non-compliant declaration”
in respect of a school unless the
Advisory Committee has so recommended; the school has been provided with the
relevant recommendation;
and, the School has been given 30 days in which to
appeal.
- The
provisions of s 83H of the Act allow the Minister to investigate a school,
after consultation with the Advisory Committee and
the Minister is required to
have regard to any advice of the Advisory Committee in relation to the
investigation.
- Section
83I of the Act sets out the directions that may be made to schools and/or
proprietors. Section 83K sets out the membership
of the Advisory Committee and
its functions, and s 83L permits the Minister to publish guidelines
relating to the determination of
questions of whether a school is not-for-profit
and/or non-compliant.
- As
can be seen from the provisions of the Act extracted above, financial assistance
to a non-government school may be suspended, reduced
or made subject to
conditions upon the determination that a school is “non-compliant”,
based upon the circumstance that
the school operates, or has operated,
for-profit,[35] which is to be
determined following an investigation by the Minister, in conjunction with the
Advisory Committee’s advice.
Submissions of the
School
- In
some respects, the recitation of the grounds of appeal renders self-explanatory
the submissions of the plaintiff School. The School
relies upon the grounds of
the Summons, filed 4 June 2021; written submissions dated 25 October 2021; and
submissions in reply dated
3 December 2021.
- As
a preliminary matter, it is relevant to note that the School submits that the
three outstanding payments calculated in the first
instance NCAT decision are
those which the School has not otherwise justified and/or recovered.
- It
is thus important to address the discrepancy that has arisen in relation to the
calculation of the three payments. In the letter
to the Minister of 22 June 2020
(referred to above), the School submitted that the relevant calculation was,
“at most”
$51,141.25.[36] In the further
submissions to the Minister of 27 November 2020, the School represented that all
funds had been “accounted
for and/or justified” except for the sum
of $43,580.[37] The Summons refers
to $48,941.25 as the amount which has not been satisfactorily reconciled by
proceedings bought by the School
(at [14]), as well as the $43,580 referred in
the 27 November 2020 letter (at [23]). In the written submissions, at [53], the
School
submits that “the only amount which has not been accounted for
and/or justified is in the order of some $50,000”, and
refers to the
$43,580 amount in the 27 November 2020 letter (at [40]) (and repeated in
submissions in reply at [15]). In the hearing
before this Court, counsel for
each party referred to, at different times, “some $50,000 figure”, a
$43,000 amount, and
a $45,000 amount.
- The
above discrepancy appears to arise as a result of alternative calculations of
the three unresolved “for profit” payment
findings of NCAT. The
lower figure of $43,580 is calculated as the sum of the lower leave-related G
Payments figure, the M Payments,
and excluding the Board Member Payments. The
higher figure of $51,141.25 is the sum of the higher GST-related G Payments, the
M Payments,
and including the Board Member Payments.
- The
exact figure is, in the context of these reasons, largely immaterial. There
appears to be no dispute between the parties that
a figure in the range of
$43,580 - $51,141.25 is the quantum of the “for profit” payments
which the School has not accounted
for, justified or recovered after 2015.
Relying on some calculation of the above amounts, the School made submissions in
respect
of each of the grounds of appeal.
Ground 1: Error re
absence of discretion as to amount
- The
plaintiff submits that, on its proper construction, s 83J(1) of the Act,
recited above, affords the Minister a discretion as to
whether to recover any
financial assistance provided to a school while operated
“for-profit” or “non-compliant”,
and also a
discretion as to the amount to be recovered. The dual discretion is referred to
by the School as the “flexible construction”.
- The
ordinary meaning of the text of s 83J(1) of the Act, and, in particular,
the use of the term “any”, is relied upon
to construe the section in
a manner that the recovery can be for some financial assistance other than all
of the financial assistance
provided during the period in question. Further,
the purpose and effect of the section, and the existence of a discretion as to
whether recovery will be sought, leads to the flexible construction being one
that accords with achieving harmonious goals. In that
respect, the School
submits that a rigid construction would lead to arbitrary, capricious and
unreasonable consequences.
- The
Minister, according to the submission of the School, proceeded on the
“primary basis” of a rigid construction of the
section, being that
the Minister did not have a discretion as to the amount to be recovered and her
discretion was limited to recovering
all or none of the financial assistance
(which the Minister considers to be the proper
construction).[38] The evidence, it
is submitted, does not support an assertion that the Minister considered an
alternative construction or discretion.
- In
the alternative, the School submitted that the Minister committed an error of
law on the face of the record, which the School maintains
includes the
Minister’s reasons, and, therefore, judicial review is available, and the
Minister’s decision may be set
aside for error of law that falls short of
jurisdictional error.
- In
that regard, it should be noted at this juncture that, in reply, the School
submitted that the Minister’s alternative contention
that a
“flexible construction” was contemplated is not supported by
admissible evidence. That submission refers to the
objection taken by the
plaintiff to the admissibility of the letter from the Minister of 25 June 2021
on the basis that the letter
amounts to reasons provided after the commencement
of this proceeding.
Ground 2: Failure to engage with
School’s submissions
- In
this respect, the School submits, first, that the Minister mischaracterised the
School’s submissions as cavilling with the
Advisory Committees findings
and failed to appreciate that the School’s reforms addressed the
conditions imposed upon it; a
matter going to the issue of recovery. Secondly,
the School submits that the Minister failed to engage with the submission
regarding
the relevance of the quantum of “for-profit” activity that
had not been remedied, as contrasted with the full “for-profit”
quantum.
- Thirdly,
the submission was to the effect that the Minister failed to consider the
relevance of the reforms and changes in the School
Board’s governance,
mischaracterising the liability being on the School as currently constituted,
rather than the actions attributable
to those previously in control of the
School. Lastly, in relation to Ground 2, the School submits that the Minister
failed to engage
with the remedy with respect to the property at Beaumont Hills.
- Having
regard to the entirety of the Minister’s reasons, the School submits that
the Minister failed to engage in an “active
intellectual process”
with respect to the School’s submissions, of 22 June and 27 November 2020,
and engaged in a peremptory
approach to those submissions.
Ground
3: Failure to consider mandatory relevant considerations
- The
School submits that a proper construction of s 83J of the Act implicitly
requires the Minister to take into account the nature,
context and severity of
“for-profit” activity, including: the extent of any for-profit or
non-compliant activity; any
remedial action taken by the School; the extent to
which financial assistance previously used for for-profit or non-compliant
activity
has been recovered by the School; and, the identity of those
responsible for the School’s for-profit or non-compliant activity
and
their current role (if any) in the governance of the School.
- I
note at this stage that the Minister, in her Response to
Summons,[39] admitted that the
foregoing matters are relevant. Notwithstanding that admission, it does not
appear that the Minister admits that
the considerations raised by the School
were mandatory considerations or considerations required to be taken into
account, as distinct
from matters that were relevant, in the sense that they
were not extraneous to the exercise of discretion reposed in the Minister.
Ground 4: The decision was disproportionate and legally
unreasonable
- In
considering all the relevant matters — including the former control of the
School by AFIC, the governance reforms and the
remaining quantum of
“for-profit” activity for which the School’s governing body,
as presently constituted, is
accountable — the School submits that the
request to repay the full quantum, being approximately $11 million, is grossly
disproportionate
and legally unreasonable. The only amount, according to the
School, justified by the foregoing circumstances is recovery of an amount
in the
order of between $43,580 and $51,141.25.
- Further,
in reply, the School submitted that the quantum of “for-profit”
activity, the circumstances in which it occurred,
and the remedial action taken
by the School, are factors relevant to the exercise of discretion under
s 83J of the Act. The School
clarified that it does not contend that
s 83J of the Act is limited to the recovery of amounts expended by a School
on non-compliant
or for-profit activity.
Ground 5: Recovery is
barred under Limitation Act
- The
School submits that financial assistance is recoverable under s 83J of the
Act and, as a consequence, is “money recoverable
by virtue of an
enactment” as described in s 14(1)(d) of the Limitation
Act.
- Therefore,
there is a limitation period on the recovery of monies, being six years from the
date on which the cause of action first
accrued to the Minister, which is, on
the School’s submissions, six years after the payment was made to the
School. As the
payments to the School were made in 2014 and 2015, the School
submits that the right to recover the amounts paid was extinguished
in 2020 and
2021, respectively.
- The
submission also depends upon the terms of s 63(1) of the Limitation
Act, which is in the following terms:
“63 Debt, damages etc
(1) Subject to subsection (2), on the expiration of a
limitation period fixed by or under this Act for a cause of action to recover
any debt damages or other money, the right and title of the person formerly
having the cause of action to the debt damages or other
money is, as against the
person against whom the cause of action formerly lay and as against the
person’s successors, extinguished.”
- Thus,
the School submits that, at the expiration of the limitation period of six years
from the date upon which payment was made to
the School, the right and title of
the Minister — being the person formerly having a cause of action to the
debt, damages or
other money — is extinguished, whether or not the
Minister chooses to recover the amount as a debt in a court of competent
jurisdiction. On the School’s submission, it matters not that recovery has
been sought by reducing future amounts of financial
assistance, as was the
circumstance in the matter currently before the
Court.
Submissions of the Minister
Ground 1: Discretion as to amount to recover
- The
Minister submitted the proper construction of s 83J of the Act is
determined by the language of the provision to recover “the
amount” (emphasis added). In the submission of the Minister, the use of
the definite article signifies that it should correspond
with the amount of
financial assistance provided. The Second Reading
Speech,[40] the Minister submits,
confirms a focus on the correlation between the provision of assistance and the
period, as distinct from the
quantum, of non-compliant/for-profit activity.
- In
the alternative, the Minister submits that the Minister did otherwise consider
the School’s submissions as to the amount
of financial assistance to be
recovered. A proper construction of the response of the Minister and her
reasons would include the
proposition that the Minister did not believe the Act
permitted her a discretion to recover part, but not all, of the financial
assistance.
However, the Minister submits that, even if her belief as to the
proper construction of the Act was wrong and there were a discretion
in that
respect, she considered that she would exercise her discretion to recover all of
the amount.
Ground 2: Failure to engage with School’s
submissions
- The
Minister submitted that, in making the decision, she addressed all elements to
which the School referred in submissions to her.
Further, the Minister
submitted that the elements that the plaintiff submits the Minister failed to
consider is an attempt by the
School impermissibly to have the Court undertake a
merits review of the Minister’s decision.
- A
proper reading of the exchange, the decision of the Minister and her reasons
discloses that the Minister, on her submission, engaged
in an “active
intellectual process”, in relation to the School’s submissions and
did consider, but ultimately rejected,
the reasons
advanced.
Ground 3: Failure to consider mandatory relevant
considerations
- The
Minister points to the fact that the Act does not identify any matter or thing
to which the Minister must have regard or even
should have regard. There are no
prescribed criteria in the exercise of the Minister’s discretion.
Further, there is nothing
in the subject matter, scope or purpose of the Act
which supports the implication that the Minister is bound, as a matter of
statutory
construction, to have regard to the matters alleged by the
plaintiff.
- The
Minister submits that s 83J of the Act is based on the “important
principle” that where an investigation finds that
a school is operating
for profit, then it is reasonable that the school should repay the public funds
received by it when in breach.
This is particularly so when read in the context
of Part 7, Division 3 of the Act as a whole.
- Alternatively,
in any event, the Minister did have regard to the considerations alleged by the
School. The Minister reached a conclusion
that those matters did not warrant a
different outcome. Such a conclusion cannot be equated with a failure to take
the considerations
into account.
Ground 4: Disproportionate and
legally unreasonable outcome
- The
Minister submits that the submission under this ground seeks to have the Court
embark impermissibly upon a merits review of the
Minister’s decision. The
decision cannot be said, having regard to the Minister’s reasons, to lack
an evident and intelligible
justification or to reflect a disproportionate
exercise of the power conferred by s 83J of the Act.
- The
Minister submits that the School’s premise that the Minister should
recover the difference between the amount of financial
assistance provided and
the amount expended on the non-compliant or for-profit activity is not supported
by the terms of the provision
or the extrinsic material. This is an underlying
premise to the submission of the School.
- The
Minister submits that the existence of the power of recovery to recoup finances
where a school is non-compliant provides a strong
basis for rejecting the
School’s suggestion that the relevant portion to be recouped is the amount
calculated by the School
(between $43,580 and $51,141.25).
Ground
5: Limitation Act
- First,
the Minister submits that the power reposed in the Minister to recover financial
assistance by s 83J of the Act is not an “action”
or
“cause of action” within the meaning of s 14 of the
Limitation Act and is not a “proceeding in a court” within
the meaning of s 11(1) of the Limitation Act. Therefore, the
recovery of financial assistance otherwise than by way of curial proceedings
falls outside the purview of the Limitation Act. The Court notes that
the definition of “action” in the Limitation Act is
inclusive, not exhaustive.[41]
- Alternatively,
if there were a limitation to a cause of action that may be commenced or
prosecuted by the Minister under s 83J of
the Act, the power of recovery is
only triggered by the making of a Declaration that the School is a for-profit or
non-compliant
School. Thus, the cause of action would not arise until 28 May
2020, when the Declaration by the Minister was made and the decision
of the
Minister falls within the applicable 6-year limitation period.
Statutory Construction: Principles
- The
principles of statutory construction have been stated by the highest authority
on many occasions. It is unnecessary to deal with
them at length. Nevertheless,
it is necessary to restate some basic principles.
- First,
it should be reiterated that the prima facie basis upon which a statute or other
instrument will be construed is that the provisions
of the statute or other
instrument are intended to give effect to harmonious goals. Secondly, the task
of a court in construing legislation
is to give effect to the legislative
purpose derived from the terms of the statute. In this way, it is the terms and
words utilised
in the statute from which the Court is to derive the purpose of
the statute, bearing in mind that the statute must be read as a
whole.[42]
- Thirdly,
where there are tensions between the different provisions of the statute that
are incapable of being reconciled by a purposive
construction, it may be
necessary to determine which of the provisions is the “leading
provision” and which is the “subordinate
provision”.[43]
- The
other aspect that deserves reiterating from the judgment on Project Blue
Sky, supra, is the issue associated with the distinction between
mandatory and directory provisions. Notwithstanding the comments of the High
Court deprecating the use of the terms, the terms continue to be utilised.
- Nevertheless,
the distinction needs to be understood as a conclusion based upon the proper
construction of the statutory provisions,
not a basis upon which the statutory
provision will be construed. In other words, the first step is the purposive
construction of
the statute as a whole, such that it is consistent with the
language and purpose of all of the provisions of the statute, which may
then
lead to a conclusion that a provision is mandatory or
directory.[44]
- It
is unnecessary, for the purposes of any issue in these proceedings, to deal with
whether, if a provision were “mandatory”,
an act done otherwise than
in accordance with the provision, or not done in accordance with a provision,
would be invalid.
Jurisdiction of the Court
- The
summons for relief seeks, as earlier stated, orders in the nature of
certiorari and/or a declaration of jurisdictional error, and that the
decision is void and of no effect. It also seeks further declarations
relating
to the proper interpretation of s 83J of the Act, namely, whether the
Minister has a discretion as to the amount to be recovered
under that provision,
and declarations as to the operation of the Limitation Act, to the effect
that the Minister was incapable of recovering payments on the basis that the
right so to do had been extinguished.
- Neither
party addressed the Court on the limitations applicable to the issuing of orders
in the nature of certiorari. Further, neither party dealt with the
capacity of the Court to base judicial review on the reasons of the Minister.
- The
declarations sought will not, if issued, have the effect of quashing the
decision. Prohibition, if available, affects the consequences
of the decision,
not the decision itself. Orders in the nature of prohibition have not been
sought, although the School submits that
there was jurisdictional error.
- The
first task of a court or tribunal, in dealing with a proceeding commenced before
it, is to ensure that it has the jurisdiction
to deal with the matter. Most
often, because of the number of times a matter of the type has been before the
Court, jurisdiction
is assumed. Nevertheless, there are times when it is
necessary to deal with the jurisdictional question. This is one of them.
Supreme Court jurisdiction to issue certiorari
- The
provisions of s 69 of the Supreme Court Act 1970 (NSW)
abolish the writs — previously referred to as prerogative writs and
federally referred to as Constitutional writs —
and require the Court, in
lieu of such writs, to make orders in the nature of the writs. Thus, the
provisions of s 69 of the Supreme Court Act abolish the writ of
certiorari (and prohibition and mandamus) and continue the Court’s
jurisdiction to grant the relief but, in so doing, require the Court
not to
issue writs.
- The
first prayer in the School’s Summons seeks an order of that nature. The
jurisdiction to issue such an order is continued
only where the relief, remedy
or writ might otherwise have
issued.[45] As a consequence, the
limitations on the issue of certiorari apply to orders in the nature of
certiorari.
- It
is next necessary to note, in passing, that an intermediate appellate court
should not depart from considered dicta of a majority
of the High Court, and
neither an intermediate appellate court nor a trial judge should depart from
decisions of another intermediate
appellate court, relevantly, on the common law
of Australia. This would, necessarily, include the limitations on the issue of
certiorari.
- There
is a qualification on the second of those principles, namely, that there can be
departure from an intermediate appellate court
of another jurisdiction in
circumstances where the interpretation is plainly wrong or there is a compelling
reason so to do.[46] The obvious
lacuna in the statement of principle in Hill v Zuda, supra, ought not be
understood to allow a trial judge to depart from seriously considered dicta of a
majority judgment of the High
Court.
- The
High Court in Kirk[47] was
required to deal with the efficaciousness of a privative clause preventing,
amongst others, orders in the nature of certiorari against the then
Industrial Court of New South Wales. In the course of its analysis, the High
Court determined that a state legislature
could not remove from the jurisdiction
of a State Supreme Court the capacity to issue certiorari, or orders in
the nature thereof, for jurisdictional error.
- The
High Court also remarked, as dicta which was strictly unnecessary for the
specific issue then before it, that a state legislature
could deny the
availability of relief for non-jurisdictional error of law appearing on the face
of the record.[48] The foregoing
dictum, binding on this Court, is a principle from which the Court may not
depart.
- The
High Court conclusion on the capacity of the state legislature to restrict or to
abolish the jurisdiction of the Supreme Court
to issue certiorari for
non-jurisdictional error of law was reached on the basis of what was said to be
the history of certiorari as an essential element of a supreme court,
which, at the time of Federation, was confined to jurisdictional error. In so
doing,
the High Court referred to the judgment of the Privy Council in
Willan.[49]
- The
finding, albeit obiter, of the High Court in Kirk — to the
effect that State legislation could deny the availability of relief for
non-jurisdictional error of law appearing on the face
of the record — is
binding, but not directly relevant to the issues in these proceedings. There is
no privative clause limiting
the power of the Court to issue an appropriate
remedy against the Minister for a decision under the Act. The question
nevertheless
arises as to whether certiorari is an “appropriate
remedy”.
- The
history upon which the High Court relied in coming to the dictum is more
relevant. Essentially, that history was not that the
superior courts, at the
time of Federation, did not grant certiorari for non-jurisdictional
error; it was that the UK Legislature, at the time of Federation, had the
capacity to limit the circumstances
in which certiorari would issue and
limit, in that respect, the jurisdiction of the Court. However, the UK
Legislature was a plenary legislature, and
could, if it so desired, abolish the
superior court in question or create another superior court of equal
status.
- In
other words, the reliance by the High Court on Willan, supra, was not to
the effect that certiorari was not an inherent jurisdiction of a superior
court of record at the time of Federation, but that a plenary legislature could
deprive
a superior court of the jurisdiction to issue the writ in cases of
non-jurisdictional error. Of course, in Australia, leaving aside
the particular
provisions of a State Constitution, the State legislature is not plenary because
of the existence of the Constitution and, in particular, s 73 of the
Constitution. A State legislature is incapable of depriving the High Court of
its position at the apex of the exercise of judicial power, both
State and
Federal.
- Turning
to more directly relevant aspects, the provisions of s 69 of the Supreme
Court Act, as earlier stated, did not grant to the Court the jurisdiction to
issue certiorari; instead, it prohibits the issue of a writ of
certiorari where the Court previously had jurisdiction to grant such
relief and, in lieu thereof, requires, where the Court otherwise would
grant the
writ, to issue an order in the nature of certiorari. Therefore, the
Court’s jurisdiction to issue certiorari is dependent upon its
inherent jurisdiction, recognised by s 23 of the Supreme Court Act,
and, to some extent at least, ss 63 and 91 of the Supreme Court
Act.
- In
Willan, the Privy Council dealt with an appeal based upon the proposition
that the Supreme Court of Victoria had no power to issue certiorari
against the Court of Mines. The argument was based upon two premises: first,
that the Court of Mines was not an “inferior court
in the then
Colony”; and, secondly, that the privative clause said to operate to
restrict appeals and/or the issue of prerogative
relief was effective.
- The
challenge in the Supreme Court of Victoria was that the Court of Mines acted
without jurisdiction and had been induced so to do
by the fraud of the
petitioning creditor. There were subsidiary arguments relating to whether the
process of bankruptcy was a “proceeding”.
- The
difficulty with relying upon comments of the House of Lords on the jurisdiction
of the superior courts in the United Kingdom and
the capacity of the UK
Legislature to abolish or to qualify a superior court’s jurisdiction is
that, first, it assumes that
such a jurisdiction exists; and, secondly, it
depends as much on the power of the legislature as it does on the inherent
nature of
the court’s jurisdiction.
- The
UK Legislature is a plenary legislature and can abolish (and since that time has
abolished and replaced) the superior courts in
the UK. For the same reasons, the
UK Legislature could deprive one or other of the superior courts of an aspect of
its jurisdiction.
- Similarly,
the Victorian Supreme Court, which was the subject of discussion in
Willan, was created by a statute of the Victorian
legislature,[50] under the authority
of Imperial Legislation.[51] As a
consequence, the Victorian legislature, at the time immediately prior to
Federation, could have enacted legislation of the
same kind.
- On
the other hand, the New South Wales Supreme Court was established by Royal
Charter pursuant to an Act of the Imperial
Parliament.[52] It is a nice
question whether, at the time immediately prior to Federation, the New South
Wales Parliament could legislate to abolish
the New South Wales Supreme Court or
qualify any of the jurisdiction granted to it by the Imperial Act and/or the
Royal Charter.
- As
stated, since Federation, the State Legislatures have been bound by the
provisions of Chapter III of the Australian Constitution, which requires the
existence of the Supreme Court in each
State.[53]
- While
the foregoing has been much longer and less relevant than might otherwise be
thought to be necessary, it is appropriate to summarise
the authorities thus far
considered to have the following effect. It is an aspect of the inherent
jurisdiction of a Supreme Court
that it has the ability to issue
certiorari. In NSW, orders in the nature of certiorari suffer the
same limitations as did the original writ in relation to the jurisdictional
requirements necessary for the issue of such
orders, subject to the terms of the
statute itself, being the Supreme Court Act.
- The
High Court in deciding Kirk was not determining that the Supreme Court
did not have inherent jurisdiction to issue certiorari. Nor was it
deciding the limits of the legislative power of a State, although such
limitations may have been an effect of its judgment.
- Rather,
the High Court determined that a Supreme Court still met the definition of such
a Court, where it had been denied the jurisdiction
to issue the writ of
certiorari for non-jurisdictional error. But it did not meet the
description of a Supreme Court, for the purpose of s 73 of the
Constitution, if it were denied the ability to issue certiorari, or
orders in the nature of certiorari, for jurisdictional error. In the
absence of some privative clause, the Court has the inherent jurisdiction to
issue certiorari for error of law.
Nature of the writ of
certiorari
- The
term “certiorari” derives from the opening word of the Latin
writ, the opening two words of which were “Certiorari
volumus”, meaning “we wish to be informed”, and the word
“certiorari” is the passive infinitive of the verb “to
inform”. This terminology derives from the circumstance that the superior
courts, historically, called up the entirety of a matter in order that it could
be heard and determined in accordance with law. The
writ developed such that the
“record” was removed for the purpose of determining whether, on the
face of the record,
there had been error of law or jurisdictional error.
- The
writ was used overwhelmingly in criminal matters, in which the most arcane
technical irregularity in an Indictment would give
rise to the issue of
certiorari. Nevertheless, because, in criminal matters, the record
consisted of the Indictment, the verdict and the sentence, and jurisdiction
was
conferred by arraignment on indictment, jurisdictional error was the
overwhelming basis upon which certiorari issued.
- In
civil proceedings, certiorari was used less often but still depended upon
the nature of the record, which included the pleadings and the judgment, and
very little
else. The term “judgment” should be distinguished from
the reasons for judgment.
- Leaving
aside some comments of Lord
Denning,[54] the accepted view is
that certiorari will lie for error on the face of the record, and the
record does not contain the reasons for judgment or the evidence upon which
the
judgment depends. It will usually comprise the documents initiating the
proceedings, the pleadings and the determination of the
inferior court or
tribunal.[55] In Craig,
supra, the High Court said:
“The determination of the precise documents which constitute ‘the
record’ of the inferior court for the purposes
of a particular application
for certiorari is ultimately a matter for the court hearing the application. The
effect of the foregoing
is that ‘(o)rdinarily, in the absence of statutory
prescription, the record will comprise no more than the documentation which
initiates the proceedings and thereby grounds the jurisdiction of the tribunal,
the pleadings (if any) and the adjudication’.
Where the inferior court or
tribunal has prepared a formal record, the court hearing the application may
amend it by discarding material
which should not have been included. Where the
inferior court or tribunal has not prepared a formal record or the formal record
prepared
is incomplete, the court hearing the application can, if the material
placed before it is adequate for the purpose, construct or
complete the
record.
In the present case where no formal order has been taken out and no complete
record had been prepared by the District Court, the
record included the
information, the transcript record of the appellant’s statement to the
effect that he made what he called
‘a Dietrich application’, the
orders made by the trial judge on 22 June 1993 and the challenged stay order
which the
trial judge finally made on 28 July 1993. It is fair to say that the
‘record’ is not exhaustively defined in authority,
but it is also
fair that it did not include the reasons for decision nor any other document,
unless it was ‘part of the record’.
In that sense, the document,
including the reasons, could not be introductory or supplementary to the orders
issued from the court,
which orders are part of the record, but was required to
be necessary for the understanding of the record.”
- Thus,
the mere fact that a court prefaced the orders by the phrase “for the
foregoing reasons, the Court makes the following
orders”, does not render
the reasons part of the record. On the other hand, were the Court to make orders
that, for example,
“discovery will be given on the categories to which
these reasons refer” then, at least to the extent that the reasons
refer
to the categories of discovery, those parts of the reasons would be part of the
record.
- To
summarise, an order in the nature of certiorari will issue only for error
on the face of the record, whether jurisdictional or non-jurisdictional
(assuming, in the latter case,
there is no privative clause). I should add, only
as a matter of caution, that I do not suggest that a privative clause does not
have an effect in determining whether error is jurisdictional and, in so doing,
a court, construing the jurisdiction of an inferior
court or tribunal, would
utilise the Hickman
principles.[56]
- The
foregoing analysis is necessary for the purpose of determining that which then
flows from the attempts to obtain certiorari in relation to the decision
of the Minister and, in so doing, relying on the reasons that the Minister
provided for the decision
she derived.
Decision against which
certiorari will issue
- The
history of the expansion of certiorari is relevant to the current
proceedings for the manner in which it impacts upon the purpose and construction
of the provisions of
s 69 of the Supreme Court Act. These provisions
are in the following terms:
“69 Proceedings in lieu of writs
(1) Where formerly--
(a) the Court had jurisdiction to grant any relief or remedy or do any other
thing by way of writ, whether of prohibition, mandamus,
certiorari or of any
other description, or
(b) in any proceedings in the Court for any relief or remedy any writ might have
issued out of the Court for the purpose of the commencement
or conduct of the
proceedings, or otherwise in relation to the proceedings, whether the writ might
have issued pursuant to any rule
or order of the Court or of course,
then, after the commencement of this Act--
(c) the Court shall continue to have jurisdiction to grant that relief or remedy
or to do that thing; but
(d) shall not issue any such writ, and
(e) shall grant that relief or remedy or do that thing by way of judgment or
order under this Act and the rules, and
(f) proceedings for that relief or remedy or for the doing of that thing shall
be in accordance with this Act and the rules.
(2) Subject to the rules, this section does not apply to--
(a) the writ of habeas corpus ad subjiciendum,
(b) any writ of execution for the enforcement of a judgment or
order of the Court, or
(c) any writ in aid of any such writ of execution.
(3) The jurisdiction of the Court to grant any relief or
remedy in the nature of a writ of certiorari includes, if the Court is
satisfied
that the ultimate determination of a court or tribunal in any proceedings has
been made on the basis of an error of law
that appears on the face of the record
of the proceedings--
(a) jurisdiction to quash the ultimate determination of the
court or tribunal, and
(b) if the Court determines that, as a matter of law, only one
particular determination should have been made by the court or
tribunal,
jurisdiction to make such judgment or orders as are required for the purpose of
finally determining the proceedings.
(4) For the purposes of subsection (3), the face of the record
includes the reasons expressed by the court or tribunal for its
ultimate
determination.
(5) Subsections (3) and (4) do not affect the operation of any
legislative provision to the extent to which the provision is,
according to
common law principles and disregarding those subsections, effective to prevent
the Court from exercising its powers
to quash or otherwise review a
decision.”
- The
obvious purpose of the promulgation of s 69 of the Supreme Court Act
is to abolish some of the technicalities and limitations otherwise associated
with the issue of a writ. As can be seen from the foregoing
extract, subsections
(1) and (2) refer generally to prerogative relief, without restriction.
- It
is relevant to address specifically the consequence of the provisions of
subsection (3) and (4) of s 69 of the Supreme Court Act which refer,
expressly or by reference, to the determination of “a court or
tribunal”. Neither party has addressed the
Court on whether the reference
to a “court or tribunal” is in the strict sense, or whether the term
utilises the term
“court or tribunal” to refer to any determinative
body to which certiorari would otherwise issue, assuming error of the
requisite kind.
- It
should be noted that, where a statute requires the application of a particular
principle or the publication of reasons as part
of the record, then the reasons
will necessarily form part of the record. Even if, where the statute requires
reasons, the reasons
are not, under the statute, to form part of the record, a
failure to publish reasons will be an error of
law.[57] Thus, where a statute
requires a determinative decision-maker to provide reasons for the decision, the
absence of reasons is an error
of law, being a breach of the statute conferring
the jurisdiction.
- Historically,
certiorari issued against inferior courts acting
“judicially”. However, the term “judicially” developed
so it was not
used in a confined manner. The historical use of
certiorari is summarised in the De Smith Judicial Review in
the following terms:
“From the 14th century until the middle of the 17th century, the following
seem to have been the main purposes served by certiorari:
(a) To supervise the proceedings of inferior courts of
specialised jurisdiction - for example, the Commissioners of Sewers, the
Courts
Merchant, the Court of Admiralty, the Courts of the Forests - by bringing up
cases to Westminster for trial or, if necessary,
retrial or review.
(b) To obtain information for administrative purposes; for
example, the sheriff is told to find out whether one who has been granted
the
King’s protection is tarrying in the city instead of journeying forth in
the King’s service; the escheator must certify
into the Chancery the value
of knight’s fees (quantity of land deemed sufficient to support a knight)
and advowsons (right
to nominate clergy to livings) which have escheated
(reverted for want of lawful successor) to the King.
(c) To bring into the Chancery or before the common law
courts, judicial records and other formal documents for a wide diversity
of
purposes. The Register of Writs gives many examples.
(d) To remove coroners’ inquisitions and indictments
into the King’s
Bench.”[58]
- The
origins of certiorari were described by the Ontario Supreme Court,
Appellate Division in the following comment:
“The word ‘certiorari’ is simply the present infinitive
passive of certioro ... used only in juridical Latin, meaning ‘I
inform, apprise, shew;’ and it is taken from the original form of the
writ.
The theory is that the Sovereign has been appealed to by some one of his
subjects who complains of an injustice done him in an inferior
Court; whereupon
the Sovereign, saying that the wishes to be
informed—certiorari—of the matter, orders that the record,
etc., be transmitted into a Court where he is sitting. This order is put in the
form
of a writ, which is the only and the conclusive evidence of such
order.”[59]
- The
burgeoning nature of government action and the determination of rights by
administrative officials led to the expansion of certiorari and the issue
of certiorari. Consequently, it may issue not simply against courts, or
even tribunals, but against any person or body of persons “having
legal
authority to determine questions affecting the rights of
subjects”.[60]
- The
foregoing statement of principle by Lord Atkin in the Electricity
Commissioners Case, supra, is seen as the classic statement of the
circumstances that will allow certiorari to issue against a
decision-maker. By reference to the judgment of the High Court in Craig,
supra, it has been said that the High Court left open for future consideration
the issue of the bodies that were amenable to
certiorari.[61] The passage
in Craig is as follows:
“It is common ground between the parties that the substantive content of
the Full Court’s jurisdiction under r 98 to
make an ‘order in the
nature of ... certiorari’ corresponds, for all relevant purposes, with
that of the Supreme Court’s
previous inherent jurisdiction to order the
issue of the prerogative writ of certiorari. That writ went only to an inferior
court
or to certain tribunals exercising governmental powers. That means that an
order in the nature of certiorari pursuant to r 98 is
properly made only if it
be directed to such a court or
tribunal.”[62]
- The
passage in Craig, to which the learned authors referred in their
statement about preserving for future consideration the bodies amenable to
certiorari, was directed to an argument that the District Court of South
Australia, when exercising its criminal jurisdiction, is not an
“inferior”
court. The District Court, ordinarily, is a court of
record, but not a superior court of record.
- The
authorities, to which the judgment of the High Court in Craig refer,
disclose that the Court was there concerned not with the bodies or persons
beyond a court or tribunal, in the strict sense,
amenable to certiorari,
but whether the District Court was amenable to certiorari on the basis
that it was not an “inferior court”. Superior courts of record of
general jurisdiction are not ordinarily
(leaving aside the provisions of
s 75(v) of the Constitution) amenable to any of these prerogative
writs.[63]
- The
issue before the High Court was whether the District Court, being the final
trial court in criminal prosecutions, was, in that
capacity, a superior court of
record and not, therefore, amenable to prerogative relief. The reference to
certiorari being directed only to an inferior court or certain tribunals
exercising governmental powers was used in contradistinction to a superior
court
of record, which is not amenable to such writs. As pointed out in Aronson,
Groves and Weeks, supra, certiorari has been assumed to run against
administrative officials and Ministers on innumerable
occasions.[64]
- In
my view, it is unnecessary to rely upon implication or the number of judgments
in which certiorari against a Minister has been assumed in order to
determine that the reach of certiorari will run to a Minister, at least
in the circumstances of the kind of exercise of discretion, determination and/or
adjudication undertaken
in the circumstances of these proceedings.
- In
the Northern Land Council[65]
Case, the High Court was dealing with a claim for the issue of certiorari
against the Commissioner and, in the alternative, mandamus with
certiorari as an adjunct or ancillary remedy. In the course of their
reasons for judgment, the majority of the High Court dealt with the availability
of certiorari against the Minister.
- In
his judgment, Gibbs CJ referred to the capacity of the Court to decide for
itself the question before it and made clear that Ministers
of the Government,
either in an adjudicative role or in advising the representative of the Crown,
were amenable to judicial review
in a range of circumstances, including an
exercise of power extraneous to the purpose for which it is to be utilised and
clarified
that if a statutory power is granted to the Crown for one purpose,
“it is clear that it is not lawfully exercised if it is
used for
another”.[66]
- While
the reasons for judgment of Mason J (as he then was) express, in his own words,
the reason for his judgment, his Honour also
agreed with the reasons of Stephen
J, who said:
“It is now well established that both the exercise and non-exercise by
Ministers of the Crown of discretionary powers vested
in them are subject to
judicial review, which extends to the examination of the reasons which led to
the Minister’s exercise
or non-exercise of his power - Padfield v.
Minister of Agriculture, Fisheries and Food (1968) AC 997 esp. per Lord Reid
(1968) AC,
at pp 1032-1034, Lord Morris (1968) AC, at p 1041, Lord Hodson (1968)
AC, at pp 1045-1046, 1049, Lord Pearce (1968) AC, at pp 1053-1054
and Lord
Upjohn (1968) AC, at pp 1060-1062. As Lord Pearce pointed out a Minister cannot
in his discretion ‘set aside for his
period as Minister the obvious
intention of Parliament’ (1968) AC, at p 1053; he must rather ‘use
his discretion to promote
Parliament’s intention’ (1968) AC, at p
1054.”[67]
- Apart
from agreeing to the comments and reasons of Stephen J, Mason J said:
“There is, as the commentators have noted, a contrast between the
readiness of the courts to review a statutory discretion
and their reluctance to
review the prerogative. The difference in approach is none the less soundly
based. The statutory discretion
is in so many instances readily susceptible to
judicial review for a variety of reasons. Its exercise very often affects the
right
of the citizen; there may be a duty to exercise the discretion one way or
another; the discretion may be precisely limited in scope;
it may be conferred
for a specific or an ascertainable purpose; and it will be exercisable by
reference to criteria or considerations
express or implied. The prerogative
powers lack some or all of these characteristics. Moreover, they are in some
instances by reason
of their very nature not susceptible of judicial
review.”[68]
- In
his reasons for judgment, Mason J referred to the purpose of preventing
unnecessary judicial intervention and the proposition that
it is better and more
fairly achieved by denying review in those cases where review is not available,
or the exercise of power is
not susceptible to the review. Referring to the
“old rule” — being that the acts of the Crown or its
representative
cannot be impugned — his Honour referred to the reasons for
judgment of Stephen J, who pointed out many recent decisions and
statements made
by the highest authorities in Australia, the United Kingdom, Canada and New
Zealand, in which the old rule was said
to have no application to the exercise
of statutory powers, or in which the old rule was ignored in determining and
remedying legal
error by judicial review. As to the exercise of a statutory
discretion or power, Mason J summarised the current principle in the
following
passage:
“It may now be taken as accepted that the courts will review the exercise
of a statutory discretion vested in a Minister of
the Crown. It has been
assumed, if not recognized, that the Crown representative rule has no
application to the exercise by a Minister
of such a discretion. But as we have
already seen, there is a controversy as to the application of the rule to
statutory powers vested
in the Governor-General or Governor in
Council.”[69]
- The
consequence of the foregoing history of certiorari, reveals that it was a
writ that originally issued only against “courts” and then
“courts and tribunals”. Eventually,
any person acting
“judicially”, which was to be understood to mean any persons or
group of persons having legal authority
to determine questions affecting the
rights of subjects,[70] were
amenable to certiorari or orders in the nature thereof.
- It
would seem that the effect of the foregoing statement of principles is that the
Minister’s exercise of discretion or exercise
of a statutory power is
amenable to judicial review and, in particular, to certiorari, when
appropriate. It may be that the recommendations of the Advisory Committee are
also amenable to certiorari, but that issue does not arise in these
proceedings.
- Further,
the task undertaken by the Minister and the determination issued is one which,
in the sense previously used, “adjudicate”
on the rights of the
School, the effect of which was to impact significantly and adversely on the
rights of the School to funding
to which it would otherwise be entitled.
- Ultimately,
the question that must be asked is when certiorari is sought against a
Minister or a person determining the question affecting the rights of others,
pursuant to a statute, is that person
acting as a “court or
tribunal” within the terms of s 69(3) and, therefore, within the
terms of s 69(4) of the Supreme Court Act.
- In
my view, the answer to the foregoing question is in the affirmative. The
provisions of s 69(3) of the Supreme Court Act purport to provide
the Court with jurisdiction to quash the ultimate determination of the court or
tribunal and to substitute a determination,
if only one lawful determination is
available. There is no purpose or object that would suggest that such
jurisdictional powers
should be confined to only some of the persons or bodies
amenable to the writ of certiorari.
- On
the contrary, given that the Court, when the writ of certiorari issued,
was capable of “quashing” the judgment of the body amenable to
certiorari, the provision would seem to be, in part, a clarification of
the jurisdiction and power — supplemented by the ancillary jurisdiction
to
substitute the Court’s determination, if only one other lawful decision is
available.
- Construing
the provisions of s 69(3) of the Supreme Court Act in the foregoing
manner is logical; it accords with the history of the provision, bearing in mind
the history of the development
of certiorari; it meets the purposes of
the promulgation of s 69 of the Supreme Court Act; and, it is a logical
and common sense approach to the provision.
- Such
a construction with respect to subsection (3) necessarily results in
s 69(4) of the Supreme Court Act having the effect that the face of
the record includes the reasons expressed by any person amenable to
certiorari for that person’s ultimate determination. In my view,
this is the appropriate and correct construction of the
provision.
“Record” upon which error may be
determined
- Strictly,
because of the foregoing interpretation of s 69 of the Supreme Court
Act, it is unnecessary to determine whether, absent the provisions of
s 69 of the Supreme Court Act, the reasons of the Minister, form
part of the record to which the Court is confined when addressing whether
grounds have been made
out for the grant of orders of the kind sought.
- Nevertheless,
because the foregoing interpretation of s 69 is contentious, the Court will
determine whether the reasons of the Minister would be part of the record, under
the common law, and
may be examined for the purpose of determining whether
grounds have been established for the issue of orders in the nature of
certiorari.
- These
reasons have previously extracted significant sections of the correspondence
between the parties, which correspondence includes
some of the reasons of the
Minister. There is also included the history of the proceedings.
- While
the correspondence between the parties is necessary for understanding the
history and the context in which this dispute arises,
much of it would not form
part of the “record”, even on the extended meaning of the face of
the record to which the Court
has earlier referred.
- As
earlier indicated, on 5 March 2021, the Minister wrote to the school
communicating her decision to exercise her discretion to recover
the amount of
financial assistance provided to the School in 2014 and 2015, by reducing future
amounts of financial assistance payable
to the School for five years until the
amount is fully recovered.
- That
decision was purportedly made under the provisions of s 83J of the Act. The
determination or decision is confined to the second
paragraph of that letter
and, in respect to the method of recovery, to the third paragraph of the letter.
The remainder of the letter
and all that has been previously extracted are part
of the reasons for the determination. The second and third paragraphs of the
letter are in the following terms:
“In response to those submissions and the previous submissions made on
behalf of the school in your letter dated 22 June 2020,
I have decided to seek
recovery of all the financial assistance paid to the school in 2014 and 2015. I
note that the total amount
of financial assistance paid to the school in those
years was $11,065,584.69.
Given the amount to be recovered and to allow the school to make appropriate
adjustments to its operations to reduce the impact on
current and future
students, recovery will be facilitated by reducing future amounts of financial
assistance payable to the school
over the next five (5) years until this debt is
fully extinguished. Recovery shall commence from the first payment of financial
assistance
payable to the school after the date of this
letter.”[71]
- Given
that the record includes the initiating documents and the pleadings, it seems
appropriate that, in these circumstances, the
letter inviting submissions and
the substance of the submissions form part of the record. The Court has already
extracted a significant
section of the letter from the Minister inviting
submissions, being the letter entitled Notice of Non-Compliance or
“Non-Compliance
Declaration” dated 28 May 2020. In the course of
that letter, as emphasised by the Court previously, the Minister informed
the
School that it was being provided with “an opportunity to make submissions
as to whether recovery should occur, the timing
and amount of any financial
assistance to be
recovered”.[72]
- In
the absence of an ability by the Court to take into account the reasons of the
Minister, the Minister, on the face of the record,
has requested submissions on,
not only the question of whether recovery should occur, but the timing and
amount to be recovered.
- While
the Act does not permit the Minister to exercise her discretion in the absence
of a recommendation from the Advisory Committee,
there is no express provision
in the Act requiring the Minister to provide reasons for the exercise of her
discretion. The Act provides
for a person aggrieved to appeal against the
recommendation of the Advisory Committee to NCAT. In the circumstances now
before the
Court, the School undertook such an appeal. As was pointed out by the
Appeal Panel at NCAT, there is no appeal to NCAT against the
exercise of the
discretion of the Minister to recover.
- The
common law imposes an obligation on courts or judicial officers, as part of the
judicial process, to provide reasons for judgment.
Subject to any statutory
exception, there is no general common law duty on an administrative officer,
even one whose decision or
determination may be subject to certiorari, to
provide reasons for the
determination.[73] The foregoing
statement of principle remains good law even though courts have often construed
legislation liberally so as to impose
such a
duty.[74]
- In
Vegan, Basten JA discussed the difficulties associated with the absence
of a duty to provide reasons and the diminishing importance of
the authorities
upon which the High Court relied in Osmond. The discussion is
persuasive.[75] I have previously
discussed the development of the law in this area and said:
“[108] The requirement to give reasons is a developing
aspect of administrative decision-making. As society has become more
complex and
sophisticated, there is a growing expectation that persons affected by
administrative conduct will know why it is they
have been so affected. This
growing expectation, in part, has informed many decisions of courts that more
readily impose upon administrative
decision makers the requirement to give
reasons. In all cases, whether there is a requirement to give reasons is derived
from the
statutory context in which the administrative decision making occurs
and the function of the administrative decision maker and the
purpose of giving
reasons: Campbelltown City Council v Vegan [2006] NSWCA 284; (2006) 67
NSWLR 372; Riverina Wines Pty Ltd v Registrar of The Workers Compensation
Commission of NSW & Ors [2007] NSWCA 149; Soulenezis v Dudley
(Holdings) Pty Ltd (1987) 10 NSWLR 247; Sydney Ferries v Morton
[2010] NSWCA 156.
[109] The requirement to issue reasons depends, as earlier
stated, on the characteristics of the power exercised and its circumstances.
The
general statement that there is no general law obligation for administrative
decision makers to give reasons (Public Service Board of NSW v Osmond
[1986] HCA 7; (1986) 159 CLR 656) has not been overruled, but has been honoured
more in the breach than in the observance. In each case, it depends upon the
statutory
context. Where, as here, the statutory context includes an
inquisitorial process in which the decision maker is both investigator,
contradictor and decision maker, all of the correspondence between the parties
(subject to its later modification) is available to
determine the reasons for
the decision. Nevertheless, in my view there is a desirability, where a decision
maker is determining matters
which potentially adversely affect a person
(including a corporation) and which decision can be the subject of review,
either by
appeal or by judicial review for jurisdictional error or error of law,
that there be a statement of the process undertaken in making
the determination
and why the conclusion has been reached. It is unnecessary to determine whether
such a statement of reasons is
necessary, or
obligatory.”[76]
- The
legislative scheme embodied in the Act, as it applies in this area, promotes
natural justice, at least during the process undertaken
by the Advisory
Committee. Other than the provision by the Minister of notice that a
recommendation has been made, and the requirement
to allow a time period during
which an appeal to NCAT may be lodged, there does not seem to be any express
requirement for natural
justice on the ultimate determination by the Minister of
the discretion to be exercised. Notwithstanding the lack of expression of
a
statutory requirement, it is commendable that the Minister has afforded the
School natural justice and invited and received, and
seemingly considered, the
School’s submissions.
- Nevertheless,
there is no express or implied requirement in the Act for the Minister to
provide reasons for the exercise of the ultimate
discretion to recover any
amount paid during the period when the School operated
“for-profit”.
- Given
the absence of a requirement in the Act on the Minister to provide reasons
— and the authority (binding on the Court as
presently constituted) to the
effect that there is no general duty to provide reasons in the absence of a
statutory provision or
implication — if the provisions of s 69(3) of
the Supreme Court Act do not apply to the Minister in the exercise
of her discretion (and, as a consequence, the provisions of s 69(4) of the
Supreme Court Act do not apply), there would be no duty to provide
reasons for the exercise of the discretion. In those circumstances, the absence
of
reasons would not be an error of law and would not, of itself, give rise to
the issue of orders in the nature of certiorari. On the other hand, if
s 69(4) of the Supreme Court Act applies, as I have held, then,
subject to any contrary, necessary intendment in a particular statue,
s 69(4) may be a factor in determining whether an administrative officer is
required to give reasons.
- I
will continue on the basis that I will apply the construction of s 69(4) of
the Supreme Court Act, namely, that the term “court or
tribunal” in s 69(3) is a reference to any person or body whose
decision would be amenable to the issue of orders in the nature of
certiorari. As a consequence, the Minister’s reasons for the
ultimate decision are part of the record upon which the School can rely to
establish error of law or jurisdiction.
- The
reason the foregoing issue is important is that the School relies upon the
reasons of the Minister, provided in the correspondence
referred to above, to
establish error. Further, while the Summons seeks declarations, a declaration
does not quash the decision already
provided; it declares a right. Prohibition
operates on the effect of a decision, not the decision itself. It is for this
reason that
a decision that has no continuing effect is incapable of being
subject to prohibition.
- Mandamus,
on the other hand, may be available if the decision is a constructive failure to
exercise the jurisdiction or authority
conferred by the Act on the Minister. If
the exercise of discretion by the Minister were vitiated or voided as a result
of an error,
then it may be possible for mandamus to issue to compel the
Minister to exercise the discretion in accordance with the law as propounded
by
the Court.
Construction of the Education Act
- There
are minor, and somewhat insignificant, tensions in the wording of the Act,
particularly in relation to non-government school
funding. The provisions of
s 83E of the Act permit the Minister to suspend, reduce or impose
conditions on the provision of “financial assistance... to or for
the
benefit of a school”. Section 83J of the Act permits the Minister to
recover “the amount of any financial assistance provided... for the
benefit of a school”.
The provisions of s 83C of the Act, as recited
above, make clear that the Minister must not provide “financial
assistance... to or for the benefit
of a school” if it operates for
profit.
- The
tension arises from the enabling provision granting the Minister the capacity to
provide financial assistance. According to the
provisions of s 83B(1), the
Minister provides “financial assistance or other assistance ... in respect
of non-government school children.” (Emphasis added.)
- The
financial assistance is subject to the obligations of the State under the
National Education Reform Agreement (or its replacement)
and may be provided
directly to the school that the children attend or, relevantly, a person or body
approved by the Minister for
that purpose. The material before the Court does
not suggest that the School is part of a system of non-government schools or an
otherwise approved system under the Commonwealth
Act.[77] Thus, the terms of the Act
provide for financial assistance in respect of non-government school children;
not financial assistance
for the school or its benefit.
- I
have referred to “minor” in relation to the tension, because it
seems that the tension in the wording is easily reconciled.
The assistance is
paid “in respect of non-government school children”, not to
non-government school children. The provisions
of s 83B(6) do not permit
the Minister to provide such assistance to the school children.
- Leaving
aside, for present purposes, the payment of monies to a system (of either kind),
the only assistance that may be provided
in respect of non-government school
children must be provided to the school itself. It is obvious that the
appropriate construction
of the Act is that, when the legislation utilises a
term referring to the provision of financial assistance to a school, it is
referring
to financial assistance “in respect of non-government school
children” which is paid to the school.
- There
is a further tension in the purpose expressed by the legislation in that the
fact, if it were the fact, that a school operated
for profit is not the product
of any conduct by any of the students attending the school. As already stated,
the legislation must
be read as a whole, and the construction given should be
purposive. If the purpose derived from the provisions of s 83B(1) of the
Act is to benefit “school children”, then depriving the school that
the children attend of funding may have the opposite
effect to the object
obviously embodied in the provisions of s 83B(1).
- Nevertheless,
the legislation is clear in some respects. From the provisions of s 83J(1)
of the Act, financial assistance may be provided
under the provisions in Pt 7,
Div 3 and under other powers. Thus, more than one kind of financial assistance
may be paid, or may
have been paid, to a school.
- During
the course of submissions of the parties, the Court enquired as to the manner in
which recurrent funding was paid. The Court
was informed by Senior Counsel for
the plaintiff that there was one annual payment of recurrent funding. There are
also categories
of financial assistance for capital works and/or loan
repayments.
- The
recurrent funding is, as earlier mentioned, paid as a result of the Commonwealth
Funding Agreement (the National Education Reform
Agreement) and is calculated on
the basis of averages of parental income (and possibly assets); parental
educational qualifications
and other such measures of economic status; together
with additional payments for above minimal numbers of students with a disability
or in defined vulnerable circumstances. The annual payment that is made, on the
information provided during submissions, in February
is reconciled in October
(or thereabouts) and, to the extent necessary, further payment is made.
- Nevertheless,
the recurrent funding to which the foregoing refers is one kind of financial
assistance. Other kinds of financial assistance
are provided to schools
differently and probably calculated on very different bases.
- Another
issue that requires comment is that which was raised by the Minister in the
course of her submissions in relation to the Limitation Act ground of
appeal. The Minister stated that, in order for the cause of action to be
complete, there needed to be a Declaration that
the school is either operating
on a “for-profit” basis or is otherwise “non-compliant”.
On its face, such
a submission seems to be a misreading of the Act. While the
Minister is empowered to declare a school
“non-compliant”[78] or
that a school “operates for
profit”,[79] each section
expressly provides that the Minister’s obligations and/or discretion is
not conditioned on the making of the
Declaration.[80]
- Thus,
the power of the Minister to recover monies under the provisions of s 83J
of the Act is not expressly conditioned on the issuing
of a Declaration that the
school is either non-compliant or operating for-profit. In the present
circumstance, however, where the
Minister has instituted an investigation under
s 83H of the Act, it is conditioned on the receipt by the Minister of a
recommendation
of or advice from the Advisory Committee to which reference has
already been made.
The Existence of the Minister’s
Discretion to Recover
- I
now come to the fundamental issue between the parties, being the existence of a
discretion in the Minister to seek to recover an
amount less than the full
amount of financial assistance provided during a period in which the school is
either for-profit or non-compliant.
This question is to be determined by the
construction of s 83J(1) of the Act within the context of the Act as a
whole.
- On
the view I take of the facts, it is probably unnecessary for the Court to deal
with the issue. Given the quantum of money involved,
however, and the
submissions put, together with the possibility of an appeal, it is appropriate
for the Court to express a view as
to the interpretation of the Act on this
issue.
- As
already stated, the legislation must be construed as a whole, with the aim of
ensuring harmonious goals. While most of the provisions
in Pt 7, Div 3 are
permissive, and provide the Minister with a discretion based upon the
Minister’s exercise of that discretion or
an evaluative process —
albeit with some restrictions — the provisions of s 83C(1) are not in
permissive terms.
- The
provisions of s 83C(1) of the Act prohibit the Minister from providing
“financial assistance (whether under this Division
or otherwise) to or for
the benefit of a school that operates for profit”. It is unnecessary to
determine whether the prohibition
in s 83C(1) is mandatory or directory, if
that be a relevant classification. The Act, by the provisions of s 83J,
provides the consequences
of the prohibition, being that, subject to the
discretion prescribed by s 83E(3) of the Act, assistance is not to be provided
and,
if provided, the Minister is empowered to recover the amount of any
financial assistance.
- Notwithstanding
the general prohibition, s83J(1) of the Act provides to the Minister a
discretion, and thus prescribes the basis upon
which any flexibility may be
effected, and the conditions of that flexibility. As a consequence, the Minister
is permitted not to
recover “the amount of any financial assistance”
provided.
- In
that regard, it is important to note the strict limitations on the exercise of
the discretion not to provide assistance. The Minister’s
discretion is
confined to circumstances involving that termination of assistance not being
justified because the non-compliance is
minor; and, more appropriate action can
be taken. [81]
- The
discretion not to recover, reposed in the Minister under s 83J of the Act, must,
in order to achieve harmonious goals and a harmonious
operation of the scheme,
involve the same limitations. However, the determination of that which is not
“justified” is
a broad evaluation based on the scope and purpose of
the statutory scheme.
- As
is made clear from the foregoing summary of the submissions of the parties, the
issue of construction that is most contentious
is the meaning of the phrase
“the amount of any financial assistance” in the context of the
legislation.
- The
plaintiff School submits that the word “any” is a word of wide
import and ought not to be construed in a manner that
limits its meaning. The
defendant Minister submits, in essence, that the term “any” must be
understood in the context
of the phrase prefacing it, being “the amount
of”, and its reference to the assistance provided under the Division or
otherwise.
- Statutory
construction is not simply a matter of providing words with a dictionary
definition. There can be little doubt that the
term “any” is a word
of very wide meaning which, generally, excludes limitation. Ordinarily, it
includes all persons
of the class, or all items of the class described. The
difficulty in this context is there needs to be some attention paid to providing
a meaning to all of the words in the provision.
- On
the plaintiff’s construction, the words “the amount of” are
otiose; they serve no purpose. Further, on the plaintiff’s
submission, the
term “any financial assistance” means any part of any financial
assistance, or “any amount”,
rather than “the amount”.
- Financial
assistance comes in a number of forms. Recurrent financial assistance, to which
these proceedings relate, is paid, as the
Court has been informed, on an annual
basis. Other financial assistance is paid in various forms. That which is
covered by the term
“any financial assistance”, particularly when
described as “the amount of any financial assistance” means
financial assistance of any kind.
- The
effect of the submission of the plaintiff is that the phrase “the amount
of any financial assistance” should be construed
in a manner which allowed
each dollar (or perhaps each cent) of financial assistance to be separately
considered or recovered. In
the context of the provision, it does not seem to
the Court as presently constituted that it should be construed in a manner which
allowed each dollar of every amount that was paid to be treated separately.
Rather, the provision is intended to allow the Minister
to recover “each
amount of financial assistance”, or all of the different amounts
provided.
- If
the Court is incorrect in the foregoing construction, the general prohibition,
nevertheless, makes the primary or prima facie position
to be that no school
that, in any particular period, operates on a basis that is for-profit or
non-compliant, is entitled to funding.
Thus, the discretion of the Minister to
determine which part of the financial assistance will be recovered starts from
that prima
facie position; allowing for the Minister to exercise a discretion
not to recover all of the amounts of financial assistance. This
position is, in
the view the Court has formed, the manner in which the Minister approached the
issues, whichever of the constructions
is ultimately determined to be
correct.
The Exercise of the Minister’s Discretion
- As
already stated, the Minister for Education directed that an investigation into
the School be undertaken in or about January 2016.
On 1 June 2017, the
Non-Government Schools Not-For-Profit Advisory Committee (“in these
reasons called “the Advisory
Committee”) determined that the School
and/or its proprietor operated for profit within the meaning of s 21A (as
it then was)
and s 83C of the Education Act. The impugned operation
was for the years 2014 and 2015. The Advisory Committee recommended that the
Minister make a “non-compliant”
Declaration in respect of the School
for those years.
- There
was an internal review of the recommendations of the Advisory Committee and, on
13 July 2017, the internal review confirmed
the findings.
- There
was an administrative appeal taken by the School to NCAT, which confirmed the
relevant findings in a decision of 6 September
2019. On 6 February 2020, the
decision of the Appeal Panel in the appeal taken by the School against the first
instance decision
of NCAT upheld the original decision insofar as it confirmed
or refused to interfere with the findings of the Advisory Committee
relating to
the for-profit activities of the School.
- On
28 May 2020, the Minister, by letter, made the Declaration of non-compliance and
suspended financial assistance to the School.
The letter sought submissions and
part of it has been extracted earlier in these reasons. The letter seeks for the
School to show
cause and, as earlier recited, contains the following
passage:
“Before I make my decision regarding any possible future recovery, I am
providing you with an opportunity to make submissions
as to whether recovery
should occur, the timing and amount of any financial assistance to be
recovered.”[82]
- The
plain and ordinary meaning of the invitation provided by the Minister was for
the School to have the opportunity to put submissions
to the Minister, inter
alia, on the amount of any financial assistance that the Minister would recover.
- This
letter and/or the invitation extracted above is, in my view, part of the record
relating to the Minister’s Decision and
would be part of the record,
regardless of whether s 69(4) of the Supreme Courts Act applies to the
record. The invitation is inconsistent with the proposition that the Minister
was operating on the basis that there
was no discretion as to the amount of
financial assistance to be recovered.
- Submissions
were sent by letter to the Minister and were taken into account. Following the
School’s initial submissions of 7
June 2020, the Minister, on 7 September
2020, confirmed that the conditions necessary for continued funding had been
satisfied and
lifted the suspension of financial
assistance.[83]
- On
11 November 2020, the Minister sought further submissions. In the course of the
letter, relevantly extracted at [29] above, the
Minister makes the following
comment:
“The school’s submissions appear to be based on the idea that the
amount of recovery is discretionary, and, at its worst
case, should be based on
the amount of money the school says was spent on for-profit activities which has
not been recovered by the
school. However, the basis of that view is not
apparent in ... the Act.
The provisions contained in section 83J are concerned with the repayment of
financial assistance provided during the period of for-profit
activity.”
- In
response, the School provided supplementary submissions on 27 November
2020.
- The
Decision of the Minister, already the subject of reference, was conveyed to the
School on 5 March 2021. The letter of 5 March
2021 is extracted in two parts
earlier in these reasons. The kernel of the reasons for the Decision that are
contained in the letter
of 5 March 2021 are extracted at [37] above. The
paragraphs of the letter that amount to the Decision are extracted at [165]
above.
- As
is made clear, the Minister decided to “seek recovery of all the financial
assistance” paid to the School in the years
in question. If the Minister
were of the view that such was the only available course of action, it would
have been wholly unnecessary
to use the words “of all” in the
foregoing passage.
- In
other words, if, as a matter of fact, the Minister were operating on the basis
that there was a discretion not to seek recovery
— but once a
determination had been made that recovery would be sought, it was necessary for
all of the amount of financial
assistance to be the subject of recovery —
it was unnecessary for the Minister to express the view that a decision had been
made to seek recovery “of all” of the financial assistance. This is
consistent with the invitation of the Minister for
the School to make submission
on the amount the Minister should recover.
- The
reasons for the Decision of the Minister expressed the view that the Minister
has a discretion not to recover the amount of financial
assistance. It also
expresses the view that, were that power to recover financial assistance
exercised, “the question of the
amount to be recovered is less
clear”. That description of the clarity of the Act is accurate.
- Moreover,
it is also accurate and correct for the Minister to express the view that the
exercise of the discretion as to whether to
recover — and, if recovery is
to be sought, the amount of the recovery — is concerned with the repayment
of financial
assistance provided in respect of a particular period when the
School was non-compliant (or operated for profit). The Minister’s
reasons
do not operate inconsistently with the Decision taken by the Minister to seek
recovery of “all the financial assistance”
paid in the two years in
question.
- No
complaint is made as to the exercise of the discretion by the Minister to
recover financial assistance. Rather, it is said there
was an error of law, and
the Minister should have turned her mind to the exercise of a discretion
as to the amount of financial assistance that should be recovered.
- The
Minister expresses the view, extracted at [37] above, that the provisions of
s 83J of the Act are based on two important principles.
First, it is a
condition precedent to the receipt of financial assistance that the School not
operate on a “for-profit”
basis. Secondly, where a school has been
found to be operating for-profit, “it is reasonable that the school should
repay the
public funds it received while the school was in breach of the
preconditions”.
- This
expression of reasons was in answer to the submissions made by the School, and
the Minister expressed the view that she had based
her decision on the
legislative provisions and “by also carefully considering the
School’s submissions on this issue”.
The issue to which the Minister
was referring was the amount and method of recovery.
- The
Minister’s reasons expressed the view that the amount to be recovered,
once the discretion was exercised to recover financial
assistance, should be
based upon the two principles that the Minister expressed.
- In
other words, the Minister took the view that, where the discretion had been
exercised to recover the financial assistance, the
primary or ordinary position
was that all of the financial assistance provided, during the period in which
the precondition for receiving
financial assistance had not been satisfied,
should be recovered. However, on the appropriate reading of the letter of 5
March 2021,
the Minister came to that decision, by two paths.
- First,
the Minister prefers the view that, once the Minister has exercised the
discretion to recover financial assistance, the legislation
requires all of the
financial assistance to be recovered. However, the Minister also turned her mind
to the submission of the School
that the Minister should exercise a discretion
to recover an amount less than all of the financial assistance provided which
was,
in the submission of the School, the amount of not-for-profit activities
that had not been recovered in subsequent years. In relation
to that latter
aspect, the Minister took the view that, if there were a discretion, it would be
exercised for the recovery of all
the financial
assistance.
Consideration of the Grounds of Review
- Before
dealing with the separate grounds of review, it is necessary to reiterate a
number of fundamental propositions that govern
judicial review.
- First,
the Court, on judicial review, is not concerned with “looseness of
language” nor “unhappy phrasing”.
Nor is the Court in
exercising its functions, examining the reasons of the decision-maker in a
manner such that they are “construed
minutely and finely with an eye
keenly attuned to the perception of
error”.[84]
- It
is also necessary to repeat the principles that underpin and confine judicial
review to issues of law rather than issues of “fairness”.
The
classic comment to that effect is that of Brennan J (as his Honour then was) in
Attorney-General (NSW) v
Quin,[85] in which his Honour
said:
“[17] Judicial review has undoubtedly been invoked, and
invoked beneficially, to set aside administrative acts and decisions
which are
unjust or otherwise inappropriate, but only when the purported exercise of power
is excessive or otherwise unlawful. ...
The essential warrant for judicial intervention is the declaration and enforcing
of the law affecting the extent and exercise of
power: that is the
characteristic duty of the judicature as the third branch of government. In
Victoria v The Commonwealth and Hayden, Gibbs J said that the duty of the
courts extends to pronouncing on the validity of executive action when
challenged on
the ground that it exceeds constitutional power, but the duty
extends to judicial review of administrative action alleged to go beyond
the
power conferred by statute or by the prerogative or alleged to be otherwise in
disconformity with the law. The duty and the jurisdiction
of the courts are
expressed in the memorable words of Marshall CJ in Marbury v. Madison:
‘It is, emphatically, the province and duty of the judicial department to
say what the law is.’
The duty and jurisdiction of the court to review administrative action do not go
beyond the declaration and enforcing of the law
which determines the limits and
governs the exercise of the repository’s power. If, in so doing, the court
avoids administrative
injustice or error, so be it; but the court has no
jurisdiction simply to cure administrative injustice or error. The merits of
administrative
action, to the extent that they can be distinguished from
legality, are for the repository of the relevant power and, subject to
political
control, for the repository alone.
[18] The consequence is that the scope of judicial review must
be defined not in terms of the protection of individual interests
but in terms
of the extent of power and the legality of its exercise. In Australia, the
modern development and expansion of the law
of judicial review of administrative
action have been achieved by an increasingly sophisticated exposition of implied
limitations
on the extent or the exercise of statutory power, but those
limitations are not calculated to secure judicial scrutiny of the merits
of a
particular case.
[19] ... [Even] Wednesbury unreasonableness leaves the merits
of a decision or action unaffected unless the decision or action
is such as to
amount to an abuse of power .... Acting on the implied intention of the
legislature that a power be exercised reasonably,
the court holds invalid a
purported exercise of the power which is so unreasonable that no reasonable
repository of the power could
have taken the impugned decision or
action.”[86]
- The
judgment of Brennan J commented on courts exercising judicial review being
requested to intervene and expand the scope and purpose
of that process in order
to provide a check on Executive Government. His Honour noted that if the Court
embarks upon the determination
of “unfairness” in its opinion of the
merits of an administrative decision that is to be made or was made, the courts
would be assuming the jurisdiction to the very thing which is to be done by the
repository of the administrative power, namely, “choosing
among the
courses of action upon which reasonable minds might
differ”.[87]
Ground 1: Determination there was an absence of discretion as to
the amount
- The
submissions of the parties have been summarised already. Further, the Court, as
presently constituted, has already construed
the legislation on the issue raised
by this ground of review.
- In
short, the Court takes the view that the term “the amount of any financial
assistance provided” permits the Minister
to recover each of the amounts
provided by way of financial assistance, under any legislative or regulatory
program or grant. Thus,
if there be one payment only of recurrent financial
assistance, the Minister is permitted to recover that amount.
- A
proper construction of the provisions does not permit the Minister, as an
extreme example, to recover $1 of an amount of $4 million
paid by way of
financial assistance, unless that $1 is in a separate category of financial
assistance. If financial assistance of
$1 million is paid, relating to one
category and in one payment, then it cannot be said that any lesser part of that
$1 million is
“the amount of any financial assistance
provided”.
- The
construction to which the Court has arrived is a construction that, in part,
accepts that there is a discretion as to “the
amount” to be
recovered, but the discretion is limited to “the amounts” that have
been provided. It does not permit
the Minister to recover one undefined part of
the amount provided.
- Notwithstanding
the view that the Court has taken of the proper construction of the Act and the
discretion of the Minister, the plaintiff
School has not established that the
Minister arrived at a definite view of the discretion available as to the sum
that may be recovered.
The Minister, in her reasons, noted that the existence
of such a discretion was not as clear-cut as the existence of the discretion
not
to recover at all. But it cannot be said that the Minister failed to have
regard to the availability of such a discretion and
determined the result of the
exercise on the basis that the Act provided no discretion as to the amount.
- In
those circumstances, this ground fails. Further, the plaintiff School has not
established that the financial assistance provided
in 2014 and 2015 was in more
than one category or consisted of more than one payment. Thirdly, the School
has not suggested that
the Minister did not consider that the discretion could
be exercised differently in relation to the amount received in 2014, from
the
amount received in 2015. The Minister could have exercised the discretion to
recover the amount paid in 2014, but not recover
the amount paid in 2015, and
vice versa. My conclusion is that this ground has not been established.
Ground 2: Minister’s failure to engage with central
elements of submissions
- The
issues raised before the Court and, ultimately, before the Minister do not
include the findings of fact that the School operated
for profit in 2014 and in
2015. Much material before the Court, and before the Minister, sought to
re-agitate a number of those
issues.
- For
example, the School continued to submit that, notwithstanding the for-profit
activities that were undertaken — because in
later years the money
expended in those for-profit activities was recovered either in Court or by
consent, or both — the Minister
should not have regard, in the exercise of
the Minister’s discretion, to the activities that resulted in payments
that were
ultimately recovered. Thus, on the submission of the School it is
said there were two aspects that required the Minister’s
consideration.
First, that there was a discretion as to whether any amount would be recovered;
and, secondly, the amount to be recovered.
- In
so doing, the School, as is set out earlier in these reasons, argued for the
Minister to recover only that amount which had not
otherwise been recovered by
the School. The Minister dealt with both arguments.
- As
recounted in relation to Ground 1, the Minister did not express a final view on
the existence of a discretion as to the amount
to be recovered. The Minister
reached her conclusion on the basis that such a discretion existed, but that the
primary or prima
facie basis in relation to the recovery of financial assistance
provided was that all of the financial assistance should be recovered.
There is
no error in that legal analysis. Nor is there a failure to engage with the
argument as to the existence of the discretion.
- In
dealing with this ground and Ground 4, it is important that the Court, on
judicial review, be astute to ensure that it does not
slip from the exercise of
judicial power and judicial review to a discussion on the merits of the issues.
The fact, if it were the
fact, that the Court might exercise the discretion
differently, or might express its reasons differently, is not a basis upon which
to hold that the grounds for judicial review have been established.
- As
should be clear from the foregoing extracts of the correspondence, the Minister
engaged fully with the submission of the School.
The Minister, correctly, noted
that the “for profit” activity related to a particular period during
which financial
assistance had been provided. The Act prohibits the provision
of financial assistance to a school that operates for-profit or that
is
non-compliant. The School relied upon the “recovery” of some of the
amounts that were said to be “for-profit
activities”, but that
recovery occurred in later years.
- The
Minister not only considered, but took into account, the recovery of the monies.
The Minister considered the reforms and change
in the Board’s governance.
Those reforms and that change in the Board’s governance informed the
decision of the Minister,
provided on 7 September 2020, to accept that the
conditions for the resumption of financial assistance had been satisfied and to
lift the suspension of funding that had hitherto applied to the
School.[88]
- In
my view, there is little or no merit in this argument, and little or no merit in
the submission to the Minister. That the recovery
should be limited to an
amount which is the result of the for-profit activity in the years in question,
less amounts later received
by the School, is inconsistent with the purpose of
the legislature in s 83C(1) of the Act.
- Assume
for hypothetical purposes that a school operates and that, say, 80% of its costs
are staff. Also, assume the school has 1000
students and receives from
government recurrent funding 25% of the recurrent cost of operating the school.
The school would receive
$5 million from the government in recurrent funding
- Assume
also that the cost of operating the school is $20,000 per annum per child. The
school would be entitled to charge students
(or their parents), $20,000 per
annum, and, presumably, would receive $20 million in fees (assuming no bad
debts, no bursaries or
fee-subsidies and that all students pay full fees), which
would result in a surplus of $5 million. I note that the amount of surplus
and
the amount of government funding is coincidentally equal but that is neither
expected nor probable.
- In
and of itself, the existence of a surplus does not render the School a
“for-profit” entity and, for example, any such
surplus may be
utilised for the repayment of debt or renovation of school buildings and
equipment (i.e. non-recurrent expenditure).
- If
the school, instead of utilising the surplus for the operation of the school,
distributed the surplus to members of the governing
body of the school —
otherwise than as a reimbursement for an expense in connection with the
operation of the school —
the school would become a school that operates
“for-profit”.[89]
- The
fact, if it were the fact, that the members of the governing body at some later
time after the period for which the financial
assistance was provided, donated
all of those payments back to the school, does not mean that, for the period in
which the school
operated and distributed its surplus, it is otherwise than a
school that operated for-profit.
- The
prohibition on providing financial assistance to schools that are operated
for-profit, or are otherwise non-compliant, is not
dependent upon the amount or
extent of the “profit” nor on the amount referable to
“for-profit activities”.
Thus, in the foregoing hypothetical, the
amount that was distributed to directors to render the school one that is
operating for
profit may have been significantly less than the $5 million
surplus. As long as the distribution, or for-profit activity or amount,
is not
such as to cause the Minister to exercise the discretion not to recover
financial assistance, the prohibition on the provision
of financial assistance
and the for-profit activities bear no relationship.
- Were
it otherwise, there would be no disincentive on schools to operate in accordance
with the prohibition, i.e. not-for-profit.
If all that is to be recovered is
the amount of “profit”, then schools utilising income for purposes
other than the operation
of the School would know that their only potential loss
is the monies so used.
- The
prohibition on the provision of financial assistance to schools that run
for-profit or are non-compliant is absolute. While the
Minister has a
discretion not to recover monies paid to such schools, that is a discretion to
ameliorate the effects of the absolute
prohibition in appropriate circumstances.
There is no basis for a complaint that the amount left unrecovered after some
years ought
not be accepted as the amount that the Minister utilised in
recovering financial assistance.
- During
the course of the correspondence between the Minister and the School, the
Minister took issue with some of the submissions
as seeking to cavil with the
Advisory Committee’s findings. The “mischaracterisation”, as
described by the School
in this Court, was addressed by the School in its
subsequent submissions and was not again the subject of reference by the
Minister.
I do not consider that the mischaracterisation, if it be one, was in
any way determinative. It was not a reason of the Minister
for her
“ultimate
determination”.[90]
- Otherwise,
the School’s submission on this ground deals with its
“recovery” of amounts, otherwise classified during
the years 2014
and 2015, as “for-profit” activities and included in the quantum.
The for-profit characterisation and
assessment of quantum is valid for the
period 2014 and 2015.
- The
School submits that the reforms and change in the Board’s governance was
not taken into account and, as a consequence, mischaracterises
the liability as
being on the School as currently constituted. The difficulty with that
proposition is that the School is a corporate
entity and is required to be a
corporate entity in order to receive
funding.[91] The fact, and it is
the fact, that previous directors were responsible for the for-profit activities
does not relieve the School
of the liability for its corporate conduct. Ground 2
must also fail.
Ground 3: Failure to consider mandatory relevant
considerations
- As
already stated, the School submits that the Minister admits that certain matters
are relevant that were raised by the School but
submits that the Minister failed
to take them into account. Obviously, if considerations are mandatory, they are
relevant. The
converse is not accurate.
- The
term “relevant” in the context of judicial review may be used in two
different ways. First, it is a requirement of
legal efficaciousness of a
decision that the decision maker take into account all relevant considerations.
A failure to take into
account a relevant consideration, in that context,
amounts to jurisdictional error. However, in that context, a “relevant
consideration” is a consideration that is required to be taken into
account, otherwise referred to as a “mandatory
consideration”.[92]
- A
consideration may be “relevant” in that it is not extraneous to the
formation of opinion that informs the exercise of
the discretion (i.e. it is not
irrelevant), but is not required to be taken into account. In those
circumstances, a failure to take
into account a probative consideration, which
is not mandatory, is neither an error of law nor jurisdictional error.
- The
School submits that a proper construction of s 83J of the Act requires the
Minister to take into account: the nature, context
and severity of
“for-profit” activity; the extent of any for-profit or non-compliant
activity; any remedial action taken
by the School; the extent to which financial
assistance previously used for for-profit or non-compliant activity has been
recovered
by the School; and, the identity of those responsible for the
School’s for-profit or non-compliant activity and their current
role (if
any) in the governance of the school.
- As
stated, the Minister admits that these matters are relevant, in the sense that
they are not irrelevant. The Minister maintains
that these matters were
considered before reaching the decision.
- No
discretion is “unfettered”. A legislative direction to decide does
not, unless express words were utilised for that
purpose, involve a discretion
to give effect to what the decision-maker considers desirable. Such a
discretion would be implied
only if the context necessitated it and where the
context provided no positive indication of the considerations informing the
discretion.
Ordinarily, every discretion must have regard to and be limited by
the scope and purposes of the
legislation.[93]
- Accepting,
as I do, that at least some of the correspondence from the Minister may be
utilised as part of the record — at least
in so far as it conveys the
decision taken and the reasons for that decision — it is clear from the
correspondence that the
Minister had cognizance of, and took into account, the
activity that was said to be for-profit; the extent of that activity; the
remedial action taken by the School; the extent of recovery in later years; and,
the change in the persons responsible for the governance
of the School from
those that engaged in the for-profit or non-compliant activity. It is, as a
matter of fact, not the case that
the Minister did not consider these aspects.
- As
a matter of law, nothing in s 83J of the Act or Part 7, Division 3 renders
the foregoing criteria mandatory considerations that,
were the Minister not to
have taken them into account, would amount to jurisdictional error or, for that
matter, error of law on
any question associated with the amount of any financial
assistance to be recovered.
Ground 4: The decision was
disproportionate and legally unreasonable.
- The
School presented a clearly articulated argument seeking to have the Minister
recover only that amount that was the result of for-profit
activity and which
had not subsequently been recovered. In terms of judicial review, the arguments
put were “clearly articulated”
and relied upon established facts.
- However,
the Minister responded to that argument and, in so doing, did not constructively
fail to exercise the jurisdiction conferred
upon her. I am not persuaded that
the Minister misunderstood the School’s case, or failed to address
it.[94]
- In
this ground of judicial review, the Court needs to be vigilant in ensuring that
the separation between the function of the Court
and the administrative decision
maker does not elide. In this area, the comments of Brennan J (as the Chief
Justice then was), in
Quin, supra, must be heeded.
- The
requirement that an administrative decision must be a reasonable exercise of the
discretion conferred is, surprisingly to some,
of long standing. It underpins
the doctrines established in
Wednesbury[95]
unreasonableness, and was the subject of comment by Mason J (as the Chief
Justice then was) in Peko-Wallsend, supra.
- As
part of a classic passage on judicial review and referring to
“unreasonableness”, Mason J said:
“The limited role of a court reviewing the exercise of an administrative
discretion must constantly be borne in mind. It is
not the function of the court
to substitute its own decision for that of the administrator by exercising a
discretion which the legislature
has vested in the administrator. Its role is to
set limits on the exercise of that discretion, and a decision made within those
boundaries
cannot be impugned (Wednesbury Corporation, at p.228). It follows
that, in the absence of any statutory indication of the weight
to be given to
various considerations, it is generally for the decision-maker and not the court
to determine the appropriate weight
to be given to the matters which are
required to be taken into account in exercising the statutory power (Sean
Investments Pty Ltd v. MacKellar, at p 375; Reg. v. Anderson; Ex parte
Ipec-Air Pty Ltd [1965] HCA 27; (1965) 113 CLR 177, at p 205; Elliott v. Southwark
London Borough Council (1976) 1 WLR 499, at p 507; (1976) 2 All ER 781, at p
788; Pickwell v. Camden London Borough Council (1983) QB 962, at p 990).
I say ‘generally’ because both principle and authority indicate that
in some circumstances a court may set
aside an administrative decision which has
failed to give adequate weight to a relevant factor of great importance, or has
given
excessive weight to a relevant factor of no great importance. The
preferred ground on which this is done, however, is not the failure
to take into
account relevant considerations or the taking into account of irrelevant
considerations, but that the decision is ‘manifestly
unreasonable’.
This ground of review was considered by Lord Greene M.R. in Wednesbury
Corporation, at pp.230, 233-234, in which
his Lordship said that it would only
be made out if it were shown that the decision was so unreasonable that no
reasonable person
could have come to it. This ground is now expressed in
ss.5(2)(g) and 6(2)(g) of the ADJR Act in these terms. The test has been
embraced
in both Australia and
England.”[96]
- The
foregoing approach was accepted and applied by the High Court in
Eshetu,[97] in which Gummow J
described the principle in the following terms:
“[126] Finally, it may be that the basis of
‘Wednesbury unreasonableness’ is found in the proposition
adopted by Brennan J in Kruger v The Commonwealth that ‘when a
discretionary power is statutorily conferred on a repository, the power must be
exercised reasonably, for the
legislature is taken to intend that the discretion
be so exercised’. The result, as identified by the late Professor de
Smith,
is that ‘an authority failing to comply with this obligation acts
unlawfully or ultra vires’. Further, the decision of
the authority in
question may be tantamount to a refusal to exercise its discretion. If the
matter be looked at in that way, then
there appears more readily a footing for
judicial review by way of prohibition or mandamus or injunctive relief under s
75(v) of the Constitution in an appropriate
case.”[98] (Footnotes
omitted.)
- The
foregoing approach was confirmed by the High Court in
Li.[99] During the course of
the plurality judgment, the Court made clear that the duty to act reasonably,
and the standard of reasonableness,
had been required by the law long before the
judgment in Wednesbury, and referred to a number of judgments of the High
Court adopting the approach.
- After
referring to the judgment of Mason J in Peko-Wallsend, supra, the
plurality referred to the diversity in the application of the test of
“manifest unreasonableness” and reiterated
that the approach taken
in such cases was similar to the approach taken by the High Court in dealing
with appeals from discretionary
judgments more generally. The plurality
said:
“[75] In Peko-Wallsend, Mason J, having observed
that there was considerable diversity in the application by the courts of the
test of manifest unreasonableness,
suggested that ‘guidance may be found
in the close analogy between judicial review of administrative action and
appellate review
of a judicial discretion’. House v The King holds
that it is not enough that an appellate court would have taken a different
course. What must be evident is that some error has
been made in exercising the
discretion, such as where a judge acts on a wrong principle or takes irrelevant
matters into consideration.
The analogy with the approach taken in an
administrative law context is
apparent.”[100] (Footnotes
omitted.)
- The
issue was addressed in the reasons for judgment of Gageler J in Li, in
which his Honour said:
“[105] It is, of course, true that, as a measure in fact
of time, space, quantity and conduct, reasonableness is a concept
deeply rooted
in the common law: and so, in such cases, is the power of a court to say whether
a particular decision of that fact
is or is not within the bounds of
reason’. Review by a court of the reasonableness of a decision made by
another repository
of power ‘is concerned mostly with the existence of
justification, transparency and intelligibility within the decision-making
process’ but also with ‘whether the decision falls within a range of
possible, acceptable outcomes which are defensible
in respect of the facts and
law’.
[106] The label ‘Wednesbury
unreasonableness’ indicates ‘the special standard of
unreasonableness which has become the criterion for judicial review
of
administrative discretion’. Expression of the Wednesbury
unreasonableness standard in terms of an action or decision that no reasonable
repository of power could have taken ‘attempts,
albeit imperfectly, to
convey the point that judges should not lightly interfere with official
decisions on this
ground’.[101] (Footnotes
omitted.)
- His
Honour, Gageler J, continued and expressed the view that there would be,
inevitably, legitimate disagreement in the judicial application
of the standard
of unreasonableness as there is in the application of any other judicial
standard. It is constrained, on the view
expressed by Gageler J, to two
principal considerations:
“[108] Judicial determination of Wednesbury
unreasonableness is constrained by two principal considerations. One is the
stringency of the test that a purported exercise of power
is so unreasonable
that no reasonable repository of the power could have so exercised the power.
The other is the practical difficulty
of a court being satisfied that the test
is met where the repository is an administrator and the exercise of the power is
legitimately
informed by considerations of
policy.”[102]
- The
foregoing is recited because it refers back to the admonition of Brennan J in
Quin. While judicial officers might, or some of them may, have exercised
a discretion differently from the administrative decision-maker
or even consider
the decision made “unfair”, it is not the unfairness, per se, that
excites the capacity of the Court
to intervene on judicial review.
- At
its heart, the disproportionality and unreasonableness of which the School
complains is the unreasonableness of the legislation.
There is an absolute bar
on the provision of funding to a school that has engaged in
“for-profit” activities. A legislative
purpose has been established
that a school that operates for-profit or is otherwise non-compliant is not to
receive financial assistance.
The absolute nature of that prohibition is sought
to be ameliorated by the legislature providing the Minister with a discretion
not
to recover the amount of any particular financial assistance, or not to
cease funding in limited, previously articulated,
circumstances.[103]
- The
“unreasonableness” must be weighed in the circumstances that, were
the Minister to have been aware of the for-profit
activities prior to the
financial assistance being provided, there would be no discretion reposed in the
Minister to provide lesser
amounts of financial assistance. Thus, the School
was not entitled to receive the financial assistance at the time it received it.
- The
“for-profit” activity, and the basis upon which a school is
“non-compliant”, must be deliberate and voluntary
in order for the
school to be so classified. Thus, for example, a Director who fraudulently
misappropriates the funding of the school
may be guilty of a criminal act, but
the school is not, as a consequence, engaged in a “for-profit
“activity.
- Consequently,
the absolute prohibition to the funding of a school that operates for-profit or
is otherwise non-compliant applies to
a school that engages in activities of
that kind voluntarily; deliberately; and, in circumstances where there are
guidelines published
by the Minister, and/or one or other of the Committees
under the Act, relating to the function of schools and the means by which
the
school ensures it is not operating for profit or is otherwise non-compliant with
the requirements for funding.
- The
exercise of the discretion by the Minister was not, upon the facts before her,
“unreasonable” or “plainly
unjust”.[104] Nor did the
Minister fail to give adequate weight to any relevant consideration and, if
there were such a failure, it did not amount
to a failure to exercise the
discretion actually entrusted to the
Minister.[105]
- Essentially,
the School argues that it is unreasonable for the School to be denied all of the
financial assistance in circumstances
where, were the Minister aware of the
for-profit activities prior to the financial assistance being provided, it would
not have received
that financial assistance. Thus, this School seeks, by virtue
of its non-disclosure of its for-profit activities and its representation
that
it acted “not-for-profit”, to be in a better position as a result of
concealing those aspects than it would have
been, were it to have disclosed the
activities and disclosed that it was operating for-profit (or not represented
that it was not
operating for-profit). Every other school that operated
for-profit in those years would not have received financial assistance,
subject
to the Minister’s discretion under s 83C(4) of the Act.
- The
Minister’s decision and exercise of discretion were reasonably open. In my
view, the Minister’s exercise of discretion
cannot be categorised as
legally unreasonable or manifestly unjust, nor even “legally
unfair”, if there be such a concept.
This ground also must fail.
Ground 5: The operation of the Limitation Act.
- The
Act permits the Minister to recover the amount of financial assistance that is
determined by the Minister to warrant recovery
as a debt in a court of competent
jurisdiction.[106]
- As
summarised above, the School submits that the provisions of the Limitation
Act bar any recovery. The submission, properly understood, is that the
limitation applies not only to any action in a court of competent
jurisdiction,
but also to recovery of the debt by other means, including, as is the situation
currently, by reduction of future financial
assistance for the purpose of
recovering the debt.
- The
submission that the Limitation Act applies to proceedings in a court of
competent jurisdiction and recovery of the debt by other means is correct.
- Financial
assistance that may be recovered under s 83J of the Act is, within the term
used in s 14(1)(d) the Limitation Act, “money recoverable by
virtue of an enactment”. As a consequence, pursuant to the terms of
s 14 of the Limitation Act, an action for a cause of action based on
money recoverable by virtue of an enactment is not maintainable after the
expiration period
of six years.
- Further,
by operation of s 63(1) of the Limitation Act, at the expiration of
the limitation period, being the expiration of six years, the right and title of
the person that would otherwise
have had the cause of action is extinguished.
The School submits that the combination of the operation of s 14(1)(d) and
s 63(1) of the Limitation Act has the effect that the Minister is not
entitled to recover the financial assistance, in the case of financial
assistance provided
in 2014, after 2020 and, in the case of financial assistance
provided in 2015, after 2021.
- It
is not clear when in 2015 the financial assistance was provided, but it is
unnecessary to explore, or determine, this date further.
The Minister’s
determination to recover the amount of financial assistance occurred in March
2021.
- It
is further unnecessary to explore whether the provisions of s 55 of the
Limitation Act operate in a manner that would extend the limitation
period otherwise fixed.
- The
limitation period operating on a cause of action to recover money recoverable by
virtue of enactment — which is any cause
of action to recover financial
assistance pursuant to Part 7 of Division 3 of the Act — is six years
“from the date on which the cause of action first accrued to the
plaintiff”.[107] Even
though the Minister, in reducing future financial assistance, is not instituting
an action, the limitation period operates,
by virtue of s 63, to extinguish
the debt that is sought to be recovered. Therefore, any action, including a
reduction in future financial assistance,
intended to recover the debt, would be
unfounded because, if the limitation period had expired, the debt would have
been extinguished.
- The
issue that arises, as a consequence, is when did the cause of action accrue.
The Minister submits that the cause of action does
not accrue until the Minister
exercises her discretion and decides to recover the amount in question (and
possibly decides the amount
to be recovered).
- Further,
the Minister submits that recovery of the financial assistance, paid contrary to
the provisions of s 83C(1) of the Act, is
dependent upon the issuing of a
Declaration that the School is “non-compliant” or operating
“for-profit”.
- During
the earlier part of these reasons, I have already noted that, as I read the Act,
the issuing of a Declaration is not a condition
precedent to the decision under
s 83J to recover financial assistance provided, nor in the determination of
the amount of any financial
assistance to be recovered.
- The
provisions of s 83D(6) and s 83F(6) of the Act make clear that the
lack of a Declaration does not deprive the Minister of the
capacity to take
action otherwise, as a result of the School’s non-compliance or the
circumstance that it operates for-profit.
- Further,
the Minister’s determination to recover the amount of financial assistance
for the period when a school was operating
for-profit, or was otherwise
non-compliant, is the equivalent of the determination of any party to recover a
debt. It would be inconsistent
with the purpose and aims of the Limitation
Act for the Court to treat the decision to recover as the completion of the
cause of action. The cause of action must be complete, and
the debt must be
owed, before the Minister exercises the discretion to recover.
- On
the other hand, there is, in the current circumstances, a clear and express
condition precedent to the recovery of the financial
assistance provided in any
relevant period. The precondition imposed by the legislature in the Act is that
there must be, once the
Minister undertakes an investigation, a recommendation
of the Advisory Committee to the effect that a school is operating for-profit
or
is otherwise non-compliant.[108]
Further, the exercise of the discretion not to cease funding or not to recover
requires an investigation by the Advisory
Committee.[109]
- The
provisions of section 83J do not, on their face, require a recommendation of the
Advisory Committee before recovery of the amount
of financial assistance occurs.
However, the requirements on the Minister to seek, and have regard to, advice
from the Advisory Committee,
and not to make relevant declarations without
advice from the Advisory Committee — together with the express provisions
requiring
a school to be given notice of the recommendations of the Advisory
Committee — make clear that the Minister is required to
have advice from
the Advisory Committee before recovering financial assistance provided in a
relevant period.
- Interestingly,
the provisions of ss 83E, and 83F(6) stand in contrast to the provisions of
s 83J of the Act, in that they expressly
permit the Minister to
“suspend, reduce or impose conditions on the provision of financial
assistance”, notwithstanding
the absence of a recommendation from the
Advisory Committee. Section 83F(4) further provides that a Declaration of
non-compliance
is “conclusive evidence” that the school is, or for
the relevant period has been, non-compliant.
- Construing
these provisions in their entirety — and in a manner which achieves the
purpose of the legislation as derived from
the terms of the statute and
achieving harmonious goals — requires an understanding that the Minister
could not recover the
debt without an investigation (even if limited); there
having been a finding by the Advisory Committee that the School was operating
for-profit or was otherwise non-compliant; and, giving the School notice of that
finding and providing the prescribed time to allow
for an appeal to NCAT.
- In
other words, while the cause of action is complete prior to the Minister issuing
a Declaration, it is not complete until a recommendation
for such a Declaration,
or advice from the Advisory Committee — which would include a finding as
to the operation of the School
in such a way that it was for-profit or
non-compliant — had been provided to the Minister.
- In
the current circumstances, as was required, the Minister undertook an
investigation. This required consultation with and advice
from the Advisory
Committee.[110]
- On
1 June 2017, the Advisory Committee determined that the School operated for
profit and recommended that the Minister make a “non-compliance”
Declaration. As the recommendation or advice from the Advisory Committee was
necessary before the Minister could recover the debt,
the cause of action was
not complete until such time as the recommendation and/or advice was provided.
As such, the cause of action
was complete on 1 June 2017 and the six-year
limitation period concludes — in relation to financial assistance received
in
each of 2014 and 2015 — six years from the date on which the cause of
action accrued, which will not be before 2023.
- The
Limitation Act applies to the recovery of the debt because it
extinguishes the debt at the conclusion of six years from the date on which a
cause
of action for the recovery of the debt accrued. The cause of action for
recovery of the debt cannot accrue until the Advisory Committee
determines the
necessary questions and advises as to, and/or recommends to, the Minister the
action to be taken. The limitation
of six years applying to recovery of the
debt under s 83J of the Act has not expired, and this ground of review
fails.
Conclusion
- For
the reasons expressed, I have determined that each of the grounds of review
fail. Although the Court has not considered whether
the amount sought to be
recovered comprises only one amount of financial assistance, or a number of
amounts in each year, the finding
of the Court does not depend upon the absence
of that evidence.
- The
Court makes the following orders:
(1) Judgment for the defendant;
(2) Summons and proceedings dismissed;
(3) The plaintiff shall pay the defendant’s costs of and incidental to the
proceedings.
**********
Amendments
01 September 2022 - Typographical error
24 October 2022 - Typographical errors
[1] Exhibit A, Court Book-Part D,
Tab 7, p 68.
[2] Malek Fahd Islamic
School Limited v The Australian Federation of Islamic Councils Inc [2017] NSWSC
1712 (Ball J), at [3].
[3] Section
21 of the Act is now repealed, but was, until October 2014, in substantially
similar terms to s 83B Act, as currently in
force.
[4] Education Act 1990
(NSW), Pt 7, Div 3.
[5] Section 21A
of the Act is now repealed, but was, until October 2014, relevantly identical
terms to s 83C of the Act.
[6]
Malek Fahd Islamic School Limited v The Australian Federation of Islamic
Councils Inc [2017] NSWSC 1712 (Ball
J).
[7] Ibid, at
[39]-[40].
[8] Ibid, at
[41].
[9] Malek Fahd Islamic School
Limited v Non-Government Schools Not-For-Profit Advisory Committee, NSW
Department of Education [2019] NSWCATAD
183.
[10] Ibid, at [67], [81],
[89], [90].
[11] Malek Fahd
Islamic School Limited v Non-Government Schools Not-For-Profit Advisory
Committee [2020] NSWCATAP
19.
[12] Exhibit A, Court Book,
Tab 8, p 155-156.
[13] Exhibit A,
Court Book-Part G, Tab 13, p
285ff.
[14] Exhibit A, Court
Book-Part G, Tab 16, pp
292-293.
[15] Exhibit A, Court
Book-Part G, Tab 17, p 294.
[16]
Exhibit A, Court Book-Part G, Tab 18, p
296.
[17] Identity anonymised by
the Court.
[18] Identity
anonymised by the Court.
[19]
Exhibit A, Court Book-Part C, Tab 6, p 62; Part G, Tab 19, p
306.
[20] Education Act, s
4.
[21] Education Act, s
5.
[22] Education Act, s
6.
[23] Education Act, Part 5, 5A
and 6.
[24] Education Act, s
37.
[25] Education Act, Part 7,
Div 2.
[26] Education Act, s
47.
[27] Education Act, s
50.
[28] Education Act, s
52.
[29] Education Act, s
54A.
[30] Education Act, s
55.
[31] Education Act, s
57A.
[32] Education Act, s
59.
[33] Education Act, s
83B(2).
[34] Education Act, s
83BA(5).
[35] Education Act, s
83E(3).
[36] Exhibit A, Court
Book-Part G, Tab 13, p 287.
[37]
Exhibit A, Court Book-Part G, Tab 18, p
301.
[38] Response to the
Summons, Exhibit A, Court Book-Part C, Tab 2, at [21(a)] and
[21(b)].
[39] Court Book, Part
A-Tab 2, at [26(a)].
[40] New
South Wales, Second Reading Speech, Education Amendment (Not-For-Profit
Non-Government School Funding) Bill 2014 (NSW), Legislative
Assembly, 15 October
2014, 1197 (Adrian Piccoli, Murrumbidgee-Minister for Education); Court Book,
Part E, Tab 13, p 86.
[41] R v
Gray; ex parte Marsh & Adamson (1985) 157 CLR 351; [1985] HCA
67.
[42] Project Blue Sky Inc v
Australian Broadcasting Authority (1994) 194 CLR 355; [1998] HCA 28
(“Project Blue
Sky”).
[43] Ibid, at CLR
381-382; [1998] HCA 28 at [70] and [78] (McHugh, Gummow, Kirby and Hayne
JJ).
[44] Ibid, at CLR 381, [69]
and CLR 389, [92]-[93].
[45]
Supreme Court Act 1970 (NSW), s
69(1)(b).
[46] Farah
Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 at CLR
151, [134], CLR 151-152, [135]; Hill v Zuda Pty Ltd (2022) 96 ALJR 540; [2022]
HCA 21 at [25]- [26].
[47] Kirk v
Industrial Court of New South Wales (2010) 239 CLR 531; [2010] HCA
1.
[48] Kirk, supra, at CLR 581,
[100].
[49] Colonial Bank of
Australasia v Willan [1874] UKLawRpPC 8; (1874) LR 5 PC
417.
[50] An Act to make
provision for the better Administration of Justice in the colony of Victoria
1852 (Vic).
[51] An Act for the
better Government of Her Majesty’s Australian Colonies 1850, 13 & 14
Vic I, c 59.
[52] The Third
Charter of Justice 1823 (UK); Letters Patent sealed on 13 October 1823, and
proclaimed in Sydney on 17 May
1824.
[53] Kirk,
supra.
[54] Baldwin & Francis
Ltd v Patents Appeal Tribunal [1959] AC 663; [1959] 2 All ER
433.
[55] Craig v South Australia
(1995) 184 CLR 163; [1995] HCA
58.
[56] R v Hickman; ex parte
Fox and Clinton [1945] HCA 53; (1945) 70 CLR 598 at 615, as qualified in R v Murray; ex parte
Proctor [1949] HCA 10; (1949) 77 CLR 387. The privative clause is then part of the process of
construction of the statute by which the jurisdiction and its limits are
construed.
[57] Wingfoot
Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA
43.
[58] The Rt Hon Lord Woolf et
al, De SMITH’S JUDICIAL REVIEW (8th ed, 2018, Sweet & Maxwell) Ch
15-016 at 882-883.
[59] Rex v
Titchmarsh (1915) 22 DLR 272 (Supreme Court of Ontario) at 277-278 (Mulock, CJ
Ex, Maclaren, Clute, Riddell and Sutherland
JJA).
[60] R v Electricity Comrs,
ex p London Electricity Joint Committee Co (1920) Ltd [1924] 1 KB 171 at
205.
[61] Mark Aronson, Matthew
Groves and Greg Weeks, Judicial Review of Administrative Action and Government
Liability (6th Ed, Thomson Reuters)
at 852
[12.90].
[62] Craig, supra, at
CLR 174-175 (Brennan, Deane, Toohey, Gaurdon and McHugh
JJ).
[63] R v Metal Trades
Employers’ Association; Ex parte Amalgamated Engineering Union, Australian
Section [1951] HCA 3; (1951) 82 CLR 208 at 241, [1951] HCA
3.
[64] Mark Aronson, Matthew
Groves and Greg Weeks, supra, 852 [12.90] and fnn 84-85 and the authorities
there cited.
[65] R v Toohey; ex
parte Northern Land Council (1981) 151 CLR 170; [1981] HCA
74.
[66] Ibid at CLR
193.
[67] Ibid at CLR 202
(Stephen J).
[68] Ibid at CLR 219
(Mason J).
[69] Ibid at CLR
224.
[70] Electricity
Commissioners case, supra, at
205.
[71] Exhibit A, Court
Book-Part G, p 306.
[72] Exhibit
A, Court Book-Part G, p 156.
[73]
Public Service Board of New South Wales v Osmond (1986) 159 CLR 656 at 666-670;
[1986] HCA 7.
[74] Campbelltown
City Council v Vegan (2006) 67 NSWLR 372; [2006] NSWCA 284 (Basten JA, with whom
Handley and McColl JJA generally
agreed).
[75] Ibid, at
[102]-[110].
[76] L&B Linings
Pty Ltd v WorkCover Authority of New South Wales [2011] NSWSC 474 at
[108]- [109].
[77] Australian
Education Act 2013 (Cth).
[78]
Education Act, s 83F.
[79]
Education Act, s 83D.
[80]
Education Act, ss 83D(6) and
83F(6).
[81] Education Act, s
83E(3).
[82] Exhibit A, Court
Book, Tab 8, p 156.
[83] Exhibit
A, Court Book, Tab 16, p 292 and
following.
[84] Minister for
Immigration and Ethnic Affairs v Wu Shan Liang (1986) 185 CLR 259 at 272
(Brennan CJ, Toohey, McHugh, Gummow and Kirby
JJ); [1996] HCA 6 at 30; citing
with approval Collector of Customs v Pozzolanic [1993] FCA 356; (1993) 43 FCR 280 at 287; [1993]
FCA 456.
[85] Attorney-General
(NSW) v Quin (1990) 170 CLR 1; [1990] HCA
21.
[86] Ibid at CLR 35-36,
[17]-[19] (Brennan J).
[87] Ibid
at CLR 37, [21] (Brennan J).
[88]
Exhibit A, Court Book-Part G, Tab 16, p
292.
[89] Education Act, s
83C(2)(c).
[90] Supreme Court
Act, s 69(4).
[91] Education Act,
s 47(1)(a).
[92] Minister For
Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24; [1986] HCA
40.
[93] Re Coldham; ex parte
Brideson [1989] HCA 2; (1989) 166 CLR 338 at CLR 347; [1989] HCA 2 at [16] (Wilson, Gaurdron
JJ); Water Conservation and Irrigation Commission (NSW) v Browning (1947) 74 CLR
492; [1947] HCA 21; R v Australian Broadcasting Tribunal; ex parte 2HD Pty Ltd
(1979) 144 CLR 45; [1979] HCA 602; Murphyores Incorporated Ltd v The
Commonwealth (1976) 136 CLR 1; [1976] HCA
20.
[94] Dranichnikov v Minister
for Immigration and Multicultural Affairs (2003), 77 ALJR 1088; [2003] HCA 26 at
[24] and [25] (Gummow and Callinan JJ, with whom Hayne J agreed, and, in
separately expressed reasons, Kirby
J).
[95] Associated Provincial
Picture Houses Ltd v Wednesbury Corporation [1947] EWCA Civ 1; [1948] 1 KB
223.
[96] Peko-Wallsend, supra,
at CLR 40-41.
[97] Minister for
Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611; [1999] HCA
21.
[98] Ibid at [126], CLR 650
(Gummow J).
[99] Minister for
Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA
18.
[100] Minister for
immigration v Li, supra, at CLR 366, [75] (Hayne, Kiefel and Bell
JJ).
[101] Minister for
immigration v Li, supra, at CLR 375, [105]-[106] (Gageler
J).
[102] Minister for
immigration v Li, supra, at CLR 376,[108] (Gageler
J).
[103] Education Act, s
83C(4).
[104] Minister for
immigration v Li, supra, at CLR 376 (Gageler J), referring to House v The King
(1936) 55 CLR 499 at 505; [1936] HCA
40.
[105] Ibid, also referring
to Lovell v Lovell [1950] HCA 52; (1950) 81 CLR 513 at 519; [1950] HCA 52 and Sharp v Wakefield
[1891] UKLawRpAC 8; [1891] A. C. 173 at 179.
[106]
Education Act 1990, s
83J(3)(a).
[107] Limitation
Act, s 14(1).
[108] Education
Act, s 83D(2), s 83F(2), s 83G, s 83H(2) and s
83I(4).
[109] Education Act, s
83C(4) and s 83H.
[110]
Education Act 1990, s 83H(2) and (5).
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