Administrative Law in a Changing State: Essays in Honour of Mark Aronson 9781472560346, 9781841137872

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Preface The idea for this festschrift arose during an intensive Advanced Administrative Law course arranged by Mark Aronson at the University of New South Wales in 2006. The plan originated with Michael Taggart, who was present as a contributor, and was rapidly taken up by Linda Pearson, who had been thinking along the same lines. With a view to drawing on Mark Aronson’s considerable reputation in England, where Aronson, Dyer and Groves, Judicial Review of Administrative Action, is very well regarded, Carol Harlow, also present at the course, was invited to join in. Two difficult choices face those who try to arrange a festschrift. The first concerns the theme. During a long career in teaching and practice, Mark’s range of interests has been diverse. We naturally chose to focus on administrative law, Mark’s main love and the subject of Judicial Review of Administrative Action, Mark’s major contribution to legal scholarship. Judicial review is the focus of that work, and of several of the contributions to this book. We wished at the same time to represent Mark’s enthusiasm for the territory which lies outside judicial review, represented in this collection by essays on tribunals, ombudsmen and ‘soft law’. We wanted the collection to reflect Mark’s keen interest in the changing world around us, and the range of influences on administrative law. Some years ago, Mark contributed a challenging piece on privatisation to a collection of essays edited by Michael Taggart. This theme is picked up here by two of our authors, and others have reflected more broadly on the connections between public and private law. Finally, Mark is no ‘Australian exceptionalist’ (to borrow Michael Taggart’s phrase), and we wished to pay tribute to his keen interest in the ‘unity of the common law’. Here the editorial team owes much to the expertise of Michael Taggart, without whose deep knowledge of legal scholarship and warm friendships with legal scholars throughout the English-speaking world this project would not have taken the shape it has. In the event, these three interests are, we feel, reflected not only in our title of Administrative Law in the Changing State, but also in the contributions. The second hard choice concerns contributors, the problem in this case being how to confine the contributions within the length acceptable to our publisher. At the time this project was developed, Mark was still (unsurprisingly) teaching the subject he loves, even though he had by then formally retired from UNSW. We naturally wanted to involve former colleagues and those with whom Mark has collaborated and shared ideas over many years. There were also those who had had the challenging, and always stimulating, experience of having been his students. Appreciation of

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vi Preface Mark’s contribution to the world of practice is denoted by contributions from three distinguished members of the judiciary. And contributions flowed in also from the US and Commonwealth, where Michael Taggart’s enthusiasm for the project met a warm welcome. Each of the contributors to this work has chosen a topic reflecting on, or responding to, Mark’s interests over his academic career. We are grateful to all the contributors for their work, and to some whose work is not represented here, who had regretfully to decline our invitation because of other commitments. We should also like to make mention of the generous response of Richard Hart, our publisher, who did not hesitate in accepting our proposal, and with whom it has been a pleasure to work. Our thanks too for the editorial work of Luke Taylor, made possible with financial support from the Faculty of Law, UNSW. We all join together with affection to wish Mark a long, happy and, above all, prolific and industrious retirement. May there be many more editions of ‘the book’, articles, lectures and seminars.

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List of Contributors Alfred C Aman, Jr, Roscoe C O’Byrne Professor of Law, Indiana University Law School at Bloomington The Hon Sir Jack Beatson, KBE, Justice of the High Court (Queen’s Bench Division), formerly Rouse Ball Professor of English Law, University of Cambridge Jack Beermann, Professor of Law & Harry Elwood Warren Scholar, Boston University School of Law Peter Cane, Professor, Australian National University College of Law Robin Creyke, Alumni Professor of Administrative Law, Australian National University Elizabeth Fisher, Reader in Environmental Law, Corpus Christi College, University of Oxford Matthew Groves, Senior Lecturer, Faculty of Law, Monash University Carol Harlow, Emeritus Professor of Law, London School of Economics The Hon Michael Kirby AC, CMG, Justice of the High Court of Australia. John McMillan, Commonwealth Ombudsman and Professor, Australian National University Janet McLean, Chair of Law & Governance, Law School, University of Dundee David Mullan, Professor Emeritus, Faculty of Law, Queen’s University, Kingston Linda Pearson, Senior Lecturer, Faculty of Law, University of New South Wales Thomas Poole, Senior Lecturer, Law Department, London School of Economics and Political Science Richard Rawlings, Professor of Public Law, University College London The Hon J J Spigelman AC, Chief Justice of New South Wales Anita Stuhmcke, Associate Professor, Faculty of Law, University of Technology, Sydney Michael Taggart, Alexander Turner Professor of Law, University of Auckland

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Introduction THE HON JUSTICE MICHAEL KIRBY AC CMG

THE HONORAND

M

ARK ARONSON was born in May 1946, just after the conclusion of the great and terrible war that caused so much suffering, including for his ancestral family in Europe. That war demonstrated for all time the imperative need to impose checks upon the state, its leaders and officials. Efficiency and even democratic popularity were not enough. New and further restraints, including legal restraints, were essential to safeguard freedom and justice. Out of the ashes of the war came the energy to create new international institutions. From those institutions emerged the global movement for peace and security, economic equality and respect for fundamental human rights. Even amongst the victors in the war, who had long been suspicious of checks other than electoral democracy and (in some cases) natural law notions of fundamental rights, it came to be recognised that new controls were essential and urgent if the human species were to survive, the biosphere to be protected and human dignity to be safeguarded. It was into this world, in Ballarat, Australia, that Mark Aronson was born. It was soon evident that the young Mark was blessed with large intellectual talents. He took his B Juris degree from Monash University in 1967 and two years later graduated LLB with First Class Honours. In 1970, he shared the prestigious Supreme Court Prize in Victoria for the top graduating law student in his university. His brilliant academic results won him a Commonwealth overseas postgraduate scholarship. He opted for Oxford University. There he took the D Phil degree, studying under the formidable Professor (later Sir) William Wade. Initially, Mark Aronson’s special interest was privative clauses. It was rumoured that he was one of only three persons who fully understood the mystery of the law about those parliamentary attempts to oust the jurisdiction of the courts from the review of administrative action. The others having died or stopped caring; now he alone survives to explain the riddle that is Justice Dixon’s opinion in Hickman’s Case.1

1 R v Hickman, ex p Fox and Clinton (1945) 70 CLR 598. See now Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 [54] ff.

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Returning to Australia from Oxford in 1973, Mark Aronson opted for Sydney and the new University of New South Wales. He applied to the Foundation Dean of Law, Professor Hal Wootten, and became one of a group of brilliant young academics recruited to establish Sydney’s second university law school. Others in that intake included John Basten (now a Judge of Appeal in New South Wales), Julian Disney, Susan Armstrong and many future leaders of the academic discipline of law in Australia. In 1973, Hal Wootten recognised Mark Aronson’s talents and offered him tenure as a lecturer in law. Once accepted, this post afforded him the chance, together with Professor Harry Whitmore, to build a centre of excellence in public and administrative law. He was fortunate in his choice of scholarly mentor. Whitmore was later to serve as Dean of the law school from 1973 to 1976.2 He exuded experience, maturity and wisdom. Mark Aronson supplemented these fine qualities with youthful energy, enthusiasm and brilliance. Two years later, in February 1975, I was busily establishing the Australian Law Reform Commission in Sydney. The Commission’s first project concerned reform of the procedures for the handling of complaints against police3 and reform of the rules governing federal officers engaged in criminal investigations.4 The Commissioner in charge of the latter project was Mr Gareth Evans, later to be Federal Attorney-General and Minister for Foreign Affairs. Another Commissioner working with us was Mr F G Brennan QC, later to be a Justice and Chief Justice of the High Court of Australia. It was a formidable team. It required researchers of great talent. Mark Aronson accepted part-time secondment to the Commission, where his work was invaluable. A feature of the project on Criminal Investigation was the Commission’s initiation of empirical research into what actually happened at police stations and in police vans. To take law reform beyond legal texts and judicial opinions was a step forward for Australia. Mark Aronson contributed to this step. In turn, it left its imprint on him. Within a few years Mark Aronson had published two major studies that were to become the foundations of his academic life. In 1976 he authored his text Litigation.5 In 1978 came Review of Administrative Action,6 which ultimately gave way to the magnificent work Judicial Review of

2 Marion Dixon, Thirty Up – The Story of the UNSW Law School 1971–2001 (Sydney, UNSW, 2001) 141. 3 Complaints Against Police (ALRC 1) (Canberra, AGPS, 1975). 4 Criminal Investigation: An Interim Report (ALRC 2) (Canberrra, AGPS, 1975). 5 Litigation: Evidence and Procedure, 1st edn (Sydney, LexisNexis, 1976), 2nd edn (Sydney, LexisNexis, 1979), 3rd edn (Sydney, LexisNexis, 1982), 4th edn (Sydney, LexisNexis, 1988), 5th edn (Sydney, LexisNexis, 1995), 6th edn (Sydney, LexisNexis, 1998). 6 (Sydney, LawBook Co, 1978).

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Administrative Action,7 for which he is justly famous. Each of these books was published with co-authors. It does not diminish their contributions to say that the idiosyncratic style of Mark Aronson’s writing is visible on most pages. Mark Aronson’s life as a scholar continued to flourish. He was a popular lecturer, devoted to his students. In 1975 he was promoted to senior lecturer. In 1979 he became an Associate Professor. In 1993 he was appointed Professor of Law. It was a golden path that was assured to him from the moment of his arrival. For almost three years after 1988, Mark Aronson worked as senior policy adviser to the then Attorney-General of New South Wales, the Hon John Dowd QC MP. During this time, on leave from the university, he devoted himself to several tasks in the field of law reform. These included a review of laws relating to transport accident compensation and criminal procedure. He also renewed his association with the Australian Law Reform Commission, working on the legislation that ultimately emerged as the Evidence Act 1995 (NSW). The adoption of that law in New South Wales stimulated its acceptance in other Australian State and Territory jurisdictions. The prospect of a truly national evidence law in Australia edged closer to reality. He also worked with the Commission as a consultant on its projects on the Trade Practices Act8 and on group proceedings in federal jurisdiction.9 In his chosen field of administrative law, Mark Aronson was to prove extremely lucky. His academic career coincided with astonishing changes in the Australian federal laws that resulted in the establishment of the Administrative Appeals Tribunal, the Administrative Review Council, the office of the Commonwealth Ombudsman and the passage of the Administrative Decisions (Judicial Review) Act 1977 (Cth), and the Freedom of Information Act 1982 (Cth). He could not have known that these developments would come to pass when he elected to study privative causes at Oxford in 1969. Yet come they did. Mark Aronson appeared with John Basten QC in an important High Court case concerned with the Hickman principle: Re Minister of Immigration and Multicultural Affairs, ex p Applicants S 134/2002.10 His published works have been cited in many decisions of the High Court in

7 1st edn (Sydney, LBC Information Services, 1996), 2nd edn (Sydney, LBC Information Services, 2000), 3rd edn (Sydney, LawBook Co, 2004), 4th edn (Sydney, LawBook Co, 2008, forthcoming). 8 Compliance with the Trade Practices Act 1974 (ALRC 68) (Canberra, AGPS, 1994). 9 Grouped Proceedings in the Federal Court (ALRC 46) (Canberra, AGPS, 1998). 10 (2002) 211 CLR 411.

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recent years. The list reads like a catalogue of modern Australian administrative law.11 He is much loved by his colleagues and those who have worked with him, as I have done. In one chapter of this volume Professors Robin Creyke and John McMillan describe him as the Prince Charming of Australia’s administrative law – a description I can confirm. It is an indication of his high reputation that this book in his honour has attracted so many distinguished contributors from three continents. THE CONTEXT

In his chapter,12 Professor J M Beermann likens Mark Aronson’s influence upon administrative law to that enjoyed in the United States, in an earlier generation, by Kenneth Culp Davis. There could be few more worthy, or accurate, accolades. This anthology celebrates Professor Aronson’s contributions and achievements. It acknowledges his influence in the discipline of administrative law that he has made his own. It points to the significance of his opinions not only in Australia but also in four other common law 11 Re Minister for Immigration and Multicultural Affairs, ex p Epeabaka (2001) 206 CLR 128 [58]. See also [37] fn 46; Ousley v The Queen (1997) 192 CLR 69, 131 fn 270 (Aronson and Dyer, Judicial Review of Administrative Action, (1996)); Abebe v Commonwealth (1999) 197 CLR 510 [223] fn 209 (Aronson and Dyer, Judicial Review of Administrative Action, 1st edn (Sydney, LBC Information Services, 1996)); Re Refugee Review Tribunal, ex p Aala (2000) 204 CLR 82 [126] fn 175 (Aronson and Dyer, Judicial Review of Administrative Action, 2nd edn (Sydney, LBC Information Services, 2000)); Minister for Immigration and Multicultural Affairs, ex p Miah (2001) 206 CLR 57 [191] fn 158, [192] fn 163, [194] fn 169, [195] fn 171, [211] fn 186 (Aronson and Dyer, Judicial Review of Administrative Action, 2nd edn (Sydney, LBC Information Services, 2000)); Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 [110] fn 110 (Aronson and Dyer, Judicial Review of Administrative Action, 2nd edn (Sydney, LBC Information Services, 2000)); Re Minister for Immigration and Multicultural Affairs, ex p PT (2001) 75 ALJR 808 [27] fn 15 (Aronson and Dyer, Judicial Review of Administrative Action, 2nd edn (Sydney, LBC Information Services, 2000)); Re Minister for Immigration and Multicultural Affairs, ex p Holland (2001) 185 ALR 504 [22] fn 8 (Aronson and Dyer, Judicial Review of Administrative Action, 2nd edn (Sydney, LBC Information Services, 2000)); Re McBain, ex p Australian Catholic Bishops Conference (2002) 209 CLR 372 [173] fn 221 (Aronson and Dyer, Judicial Review of Administrative Action, 2nd edn (Sydney, LBC Information Services, 2000)); Minister for Immigration and Multicultural Affairs v Rajamanikkam (2002) 210 CLR 222 [96] fn 60 (Aronson and Dyer, Judicial Review of Administrative Action, 2nd edn (Sydney, LBC Information Services, 2000)); Goldsmith v Sandilands (2002) 76 ALJR 1024 [56] fn 57 and 58; 190 ALR 370, 384–5 (Aronson and Hunter, Litigation: Evidence and Procedure, 6th edn (Sydney, LexisNexis, 1998)); (2003) 211 CLR 441 [90] fn 92 (Aronson and Dyer, Judicial Review of Administrative Action, 2nd edn (Sydney, LBC Information Services, 2000)); Griffith University v Tang (2005) 221 CLR 99 [100] fn 133 (Aronson and Franklin, Review of Administrative Action, (Sydney, LawBook Co, 1987)), 146 [142] fn [214]; Ruddock v Taylor (2005) 79 ALJR 1534 [160] fn 180; 221 ALR 32, 67 (Aronson, Dyer and Groves, Judicial Review of Administrative Action, 3rd edn (Sydney, LawBook Co, 2004)); NAIS v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 80 ALJR 367 [96] fn 106; 223 ALR 171, 194 (Aronson, Dyer and Groves, Judicial Review of Administrative Action, 3rd edn (Sydney, LawBook Co, 2004)). 12 J M Beermann, ch 2, p 47.

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jurisdictions that have impinged on our own progress (the United Kingdom, the United States of America, Canada and New Zealand). And it explores current controversies that point the way to the future. Isaac Newton once wrote that, ‘If I have seen further it is by standing on the shoulders of giants’.13 Such has been Mark Aronson’s gift to administrative law. He has seen further and deeper than most others. We are his beneficiaries. Fortunately, Mark Aronson’s research and teaching continue. Accordingly, this book describes a staging post in his life. The collection affords a suitable moment to pause and take stock, to reflect upon the honorand’s life, and to seek to draw together a few themes from the excellent essays that are collected here. Administrative law generally, and judicial review of administrative action in particular, are inherently fascinating topics. They are concerned with the control of public power. How we exercise and discipline the deployment of such power has been a constant theme in Mark Aronson’s life. It represents the golden thread, woven through all of these essays. Because of the commonalities of the five inter-connected jurisdictions represented in this work (and also their differences) the final product is a fascinating study of the unifying idea that has engaged Mark Aronson. As Anita Stuhmcke reminds the reader, that unifying idea has been concerned with the desire for ‘a legal system which addresses the ideals of good government according to law’.14 Sharpening the objective, Elizabeth Fisher suggests that a central concept that has attracted Mark Aronson’s attention from the start has been the establishment of administrative law as an ‘important institutional component in the attempt to achieve a just society’.15 Unsurprisingly, such a struggle has roots deep in the shared history of the English-speaking peoples. Peter Cane, with a typical flourish, starts his historical survey of that law with the Norman Conquest of England of 1066.16 Chief Justice James Spigelman detects several motive forces in early equitable principles that can be traced back to the more flexible approach of the English Chancery judges, freed from undue common law rigidities.17 From the perspective of constitutional developments in the United States, Jack Beermann reminds us of how profoundly the ideas of Montesquieu (especially his doctrine of separation of powers) affected the legal arrangements in that country. Peter

13

Letter to Robert Hooke, 5 February 1675/6, with allusions to Bernard of Chartres c

1130. 14 A Stuhmcke, ch 15, p 375, quoting Aronson et al, Judicial Review of Administrative Action, 3rd edn (Sydney, LawBook Co, 2004) 1. 15 E Fisher, ch 14, p 348, citing Aronson et al, Judicial Review of Administrative Action, 3rd edn (Sydney, LawBook Co, 2004) 8. 16 P Cane, ch 12, p 275. 17 J J Spigelman, ch 6, p 150.

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Cane suggests that this notion of power separation is probably the most potent constitutional idea ever conceived.18 Certainly, it has greatly affected administrative law in Australia and the United States. In Australia, federal administrative law can never wholly escape the ‘gravitational pull’ of constitutional arrangements – especially the great importance of the constitutional writs for which section 75(v) of the Australian Constitution provides.19 If anything, in recent years, the significance and pre-eminence of those writs has increased so that they are now seen as entrenched protections guarding the rule of law in the Australian Commonwealth.20 In the United States, the purer (but still only partial) separation of powers doctrine has led to different and distinctive developments. Professor Alfred Aman explains the constant American anxiety to avoid ‘democratic deficits’.21 Jack Beermann describes the Chevron22 doctrine of ‘deference’ to a governmental agency’s ‘permissible construction’23 of its powers. Thomas Poole, surveying the horizon from Britain, reminds us that Chevron has been rejected in Australia.24 Ultimately, that rejection can probably be explained by rule of law notions to be found in the way that the Australian Constitution has been interpreted as a consequence of the ready availability of the federal constitutional writs, with the immediate access that they potentially afford to a challenger in the highest court. These are fascinating, varied and important subjects. But there is more besides. Sir Jack Beatson describes the interpretative principle in section 3 of the Human Rights Act 1998 (UK). That innovative statute points the way to the future because two jurisdictions of the Australian Commonwealth (the Australian Capital Territory and the State of Victoria) have now adopted general human rights legislation that draws inspiration from the enactment of such a statute in the United Kingdom. David Mullan takes us through the way in which the general provisions for fundamental rights in Canada and in New Zealand drive the operation of judicial review of administrative action, given the new legitimacy of a ‘rights-oriented’ approach in each country.25 When the United Kingdom, so long resistant to natural and civil law notions of fundamental rights, took the step of enshrining such rights in its laws, it is unsurprising that

18

Cane, ch 12 p 279. Spigelman, above, p 149. 20 Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 [103]. 21 A Aman, ch 9, p 205. 22 After Chevron USA Inc v Natural Resources Defense Council Inc 467 US 837 (1984). 23 Beermann, above, p 62 24 T Poole, ch 1, p 29, citing City of Enfield v Development Assessment Commission (1999) 199 CLR 135 [41]–[42]. 25 D J Mullan, ch 5, p 138. 19

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derivative legal cultures, such as those of Canada, New Zealand and Australia, should start following suit. However, whereas New Zealand (like Canada and South Africa) embraced the move to legally protected fundamental rights some time back, the idea still remains controversial in Australia. To some extent this is because of concerns over a feared ‘democratic deficit’, about which Professor Aman has written so eloquently.26 But in Australia, federal constitutional questions have also been raised concerning the permissibility of copying the powers allocated to courts under the United Kingdom legislation.27 Could such legislation be enacted federally? Could it give rise to a constitutional ‘matter’, apt for disposition in a federal court such as the High Court? Whether the doubts expressed over these questions represent genuine legal doubts or just the latest instance of excessive Australian formalism over the judicial role28 are questions that have to be left to the future. There are ground-breaking studies here, as befits a collection of essays to honour a scholar lauded by Peter Cane for his oft-demonstrated capacity ‘to throw new light on familiar topics’.29 Thus, by standing back from the history of administrative law in Britain, the United States and Australia, Professor Cane surveys the largest themes and seeks to explain the different directions that administrative law has taken in each of those jurisdictions. Elizabeth Fisher, remembering Mark Aronson’s instruction that, in administrative law, the devil is nearly always in the detail, and the legislative detail in particular,30 tackles the much neglected topic of ‘merits review’ and the extent to which that topic is truly a study suitable for lawyers or just a wilderness of individual cases depending entirely on their own evidence. Carol Harlow, Mark Aronson’s close collaborator from the London School of Economics, explores the role of tort law as a means of affording effective sanctions for negligent, oppressive or unlawful conduct by persons in public office. She reminds us, as the late John Fleming often did, that tort law is not only about compensation but is also concerned to stimulate appropriate conduct out of a desire of potential tortfeasors to avoid liability for damages verdicts. If her thesis is right, that tort actions are commonly ‘the embodiment of public morality’,31 her chapter poses the question whether tort law has a future in reinforcing or complementing

26 A C Aman, Jr, The Democracy Deficit: Taming Globalisation Through Law Reform (NYU Press, NY, 2004). 27 A-G (Cth) v Alinta Ltd (2008) 82 ALJR 382 [22]–[33]; cf [65]–[68]. 28 Poole, above, p 27. 29 Cane, above, p 299. 30 Fisher, above, p 347. 31 C Harlow, ch 11, p 271, citing A Linden, ‘Reconsidering Tort Law as Ombudsman’ in F M Steel and S Rodgers-Magnet (eds) Issues in Tort Law (Toronto, Carswell, 1983) 477.

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administrative law.32 The High Court of Australia has expressly recognised that, in certain respects (for example, in the tort of misfeasance in public office), an affinity has long existed between tort law and public law.33 Linda Pearson’s essay on fact-finding in administrative tribunals explores a new, cutting edge issue. I have never been able to accept that a completely irrational exercise of fact-finding by a public decision-maker is immune from judicial correction, even where such correction is limited to errors of law. However that was the view that prevailed in the Court of Appeal of New South Wales in Azzoppardi v Tasman UEB Industries Pty Ltd.34 Later examinations of this topic have, I believe, justified my dissenting opinion in that case. Professor Enid Campbell’s proposed principle that official acts must reach ‘minimum standards of rationality’ expresses the point very well.35 In effect, such a principle amounts to nothing more than the application to administrative fact-finding of the equitable principle that persons possessed of relevant power (such as public officials) cannot lawfully exercise the power ‘for personal gain or motive, or irrationally, or for purposes which exceed the reasons for [its] conferral’.36 The mass of migration decisions that has descended upon officials, tribunals and courts in Australia in recent years has obliged us to recognise the critical importance for true administrative justice of factual determinations. As Elizabeth Fisher points out, this is what ultimately persuaded the Kerr Committee in Australia to move towards solutions involving merits review.37 There had been precedents for that type of review in previous Australian federal taxation tribunals. But when the Administrative Appeals Tribunal commenced operation,38 it became a model that, at once, inspired copies and precipitated alternatives, most especially in the contentious and politically sensitive area of refugee decisions. Several other themes run through these essays. They include contributions dealing with the impact of human rights law upon the principles

32 See also New South Wales v Fahy (2007) 81 ALJR 1021 [169]–[173]; Roads and Traffic Authority (NSW) v Dederer (2007) 81 ALJR 1773 [148]–[154]; Roads and Traffic Authority (NSW) v Royal [2008] HCA 19 [114]; cf Neindorf v Junkovic (2005) 80 ALJR 341 [84]–[85]. 33 Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501, 558; Re Refugee Review Tribunal, ex p Aala (2000) 204 CLR 82 [53]. 34 L Pearson, ch 13, p 308, citing Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 157 (Glass JA); John Fairfax Publications Pty Ltd v Gacic (2007) 230 CLR 291 at 327–328 [120]-[122]. 35 Cited Pearson, above, p 323, quoting E Campbell, ‘Principles of Evidence and Administrative Tribunals’ in E Campbell and L Waller (eds), Well and Truly Tried: Essays on Evidence (Sydney, LawBook Co, 1982) 36, 87. 36 Aronson et al, Judicial Review of Administrative Action, 3rd edn (Sydney, LawBook Co, 2004) 85 cited in Spigelman, above, p 147. 37 Fisher, above, p 327. 38 Administrative Appeals Tribunal Act 1976 (Cth).

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governing contemporary administrative decisions;39 the effect of privatisation and out-sourcing on administrative law remedies;40 the potential of other legal remedies and institutions to respond to administrative wrongdoing and to promote good administration;41 the role of political theory in underpinning what we do in this field of law;42 and the highly original chapter by Professors Robin Creyke and John McMillan on the difference between so-called ‘soft law’ and ‘hard law’ in Australian administrative law.43

THE QUESTIONS

Every chapter of this book inspires many more questions: — Thomas Poole’s sparkling chapter, having reviewed such recent Australian decisions as Al-Kateb v Godwin44 and Thomas v Mowbray,45 concludes that the present High Court of Australia is antagonistic both towards the language of human rights and the contents of international law on that subject. He predicts that, one day, Australia will ‘resume the path of juridical righteousness’.46 Yet how will this come about, given the entrenched culture of formalism in Australian law that he describes: a culture long preceding the current court and one that often begins in legal education? — Jack Beermann’s essay prompts the question whether the decision of the United States Supreme Court in the Vermont Yankee Case, that he describes,47 was anything more than a reminder (common in Mark Aronson’s writing and in countless recent decisions of the High Court of Australia) that the starting point for contemporary court decisions is usually a close analysis of governing legislation.48 — In the context of an examination of the entitlement of persons to claim a denial of natural justice for errors caused by that person’s agent,49 39

See Sir Jack Beatson, ch 4, Mullan, ch 5, and Poole, above. See chapters by Aman, Beermann, Rawlings, above, and M Taggart, ch 8. 41 See Harlow, above, p 271. 42 Aman, above, p 219, and Janet McLean, ch 7, p 162. 43 See R Creyke and J McMillan, ch 16. 44 Al-Kateb v Godwin (2004) 219 CLR 562. See Poole, above, pp 30−32. 45 Thomas v Mowbray (2007) 81 ALJR 1414. 46 Poole, above, p 43; see also M Taggart, ‘“Australian Exceptionalism” in Judicial Review’ (2008) 36 Federal Law Review 1. 47 Vermont Yankee Nuclear Power Corp v Natural Resources Defense Council Inc 435 US 519 (1978). 48 Central Bayside General Practice Association Ltd v Commissioner of State Revenue (Vic) (2006) 228 CLR 168 [84] fn 86, where the authorities are collected. 49 Referring to SZFDE v Minister for Immigration and Citizenship (2007) 81 ALJR 1401, contrasted with R v Home Secretary, ex p Al-Mehdawi [1990] 1 AC 876. 40

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Matthew Groves’ chapter on ‘The Surrogacy Principle and Motherhood Statements in Administrative Law’ asks how conflicts between written and unwritten constitutional principles may be solved. He ascribes Sir Owen Dixon’s adherence to strict literalism to his desire to insulate the Australian High Court from the abrasive conflict of politics. Yet is such isolation ever truly possible in a final national court interpreting a written constitution? And was Dixon being fully candid? Was there a gulf between what he said was his philosophy and what he actually did in greatest of conflicts – as in the Bank Nationalisation Case50 or the Communist Party Case?51 — Sir Jack Beatson’s essay on the provisions of the United Kingdom Human Rights Act and David Mullan’s chapter dealing with the Canadian Charter naturally present questions of whether similar statutory provisions would be constitutionally acceptable, or likely to be adopted, in an Australian context. Could the Parliament in Australia tell a court, in effect, to strain a natural interpretation of legislative language so as to produce an outcome ‘as far as possible’ conforming to international human rights law? Can the judicial power be deployed to enjoin courts to make declarations that particular laws are incompatible with fundamental human rights, inferentially so as to prompt legislative action? Will we ever reach the day, in Australia, where a legally enforceable charter of rights influences the ‘protection of the powerless against the (comparatively) powerful state’?52 — James Spigelman’s essay on the overlap between the core doctrines of administrative law and notions developed in equity courts for the fulfilment of fiduciary duties presents at least one large and controversial question. If, in the genius of our legal system, equity can offer beneficial principles to administrative law and to the common law, why is such borrowing confined to a one-way street? Why is it impermissible to import into equity, reciprocally, notions derived from the common law or, at least, from common law techniques of analogous reasoning?53 — Janet McLean’s scrutiny of the contemporary status of the Crown in the courts prompts a question, initiated in my mind by the analysis of that great Irish judge, Brian Walsh.54 At least in the Australian context, should we now drop the fiction that governmental action is that of the ‘Crown in right of’ the State or the Commonwealth (or most absurdly 50

Bank of NSW v Commonwealth (1948) 76 CLR 1. Australian Communist Party v Commonwealth (1951) 83 CLR 1. 52 Mullan, above, p 125, citing Professor Holloway’s chapter on ‘Legitimate Expectations, Human Rights and the Rule of Law’ in an earlier compilation. 53 See Pilmer v Duke Group Ltd (In Liq) (2001) 207 CLR 165; Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89. 54 Byrne v Ireland [1972] IR 241, 272–3. 51

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of the Territories)? Are each of these units of our government not themselves constitutional corporations or entities sui generis, deriving their authority ultimately from the Australian people and expected to tailor their conduct and liabilities accordingly?55 These questions do not appear to worry British, New Zealand and, still less, postrevolutionary American lawyers. But they are legitimate questions for the political and legal theory of contemporary Australian law. Fred Aman’s concern about the ‘democratic deficit’ presents us with a puzzle about the extent to which modern democratic governance is truly responsive to popular opinion. To what extent are elected officials really accountable to the people? Does the so-called ‘democratic deficit’ truly count at the level of review of individual decisions? Indeed, as in some immigration decisions, do ‘democratic responses’ actually get in the way of objectively just and principled outcomes? Richard Rawlings’s chapter on the privatisation of the London Tube plunges us into a detailed study of how, with great complexity and expense, the object of the underground take-over was achieved. Yet how can accountability to the needs of the travelling public continue to be assured? Where such an expensive infrastructure, originally funded from taxes raised from the public, is transferred to private concerns, does there remain a legitimate role for administrative law to protect the residual public interest? This is also one of the issues that the redoubtable Michael Taggart reviews in his chapter. Yet he is candid enough to acknowledge that, once privatisation has been attained, most courts seem loath to reimpose systems of public law redress.56 Carol Harlow’s chapter on tort law suggests a requirement for empirical research, in this and other areas of the law’s operation, to ascertain the actual impact of court decisions, whatever their category, upon the day-to-day conduct of administrative officials and tribunals. Peter Cane’s historical tour d’horizon reminds us of the practical importance for truly independent outcomes in controversial cases of the assured tenure of the service of decision-makers. It prompts in my mind a desire to see more empirical examination of the actual results of migration tribunals after ‘performance targets’ were imposed57 and when members, reputedly giving too many outcomes sympathetic to applicants, failed to secure reappointment to their tribunal positions;. Linda Pearson’s examination of fact-finding in administrative tribunals stimulates questions about to the extent, at least in federal courts in

55 The Commonwealth v Mewett (1997) 191 CLR 471, 542–4; Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 [99]; British American Tobacco Inc v Western Australia (2003) 217 CLR 30 [141]–[153]. 56 Taggart, above, p 203. 57 Cane, above, pp 298−299.

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Australia, to which the Parliament can tell such courts how to decide facts. A general statute on the law of evidence may seem innocuous and familiar enough. But what of statutory provisions that interpose between an individual and government factual presumptions and conclusive recitals?58 Given the importance of fact-finding for outcomes, is it permissible for legislators to stack the evidentiary cards? Could a legislature, for instance, instruct the courts not to take international or transnational law into account in performing their judicial responsibilities? Laugh not. This was recently attempted in the Congress of the United States.59 — Elizabeth Fisher’s invocation of closer study of merits review and her reminder that tribunals and officials cannot avoid interpreting and applying the law when reaching their decisions, prompt questions about the qualifications of, and training for, such officers. And about securing effective rights of access to the courts so that lawyers can, where necessary, correct repeated legal error when it is exposed. — Anita Stuhmcke’s chapter on the office of ombudsman reminds us that administrative tribunals and judicial review constitute part only of the legal revolution achieved in Australia in the 1970s and 1980s. So what of freedom of information laws after the decision of the High Court of Australia in McKinnon v Secretary, Department of Treasury?60 What of the penetration of the new ideas into State and Territory administrative law, the former dating back to colonial times and usually more traditional? Has the legal revolution in Freedom of Information actually made a noticeable contribution to better public administration? Has it helped to fill the ‘accountability deficit’ that may be even more pressing and urgent as a practical concern than the ‘democratic deficit’ that worries Professor Aman? Has the formalism that Thomas Poole detects in the Australian judiciary needlessly cut Australian judges and lawyers off – separating them from doctrinal developments in the law of judicial review happening elsewhere, especially in the United Kingdom and New Zealand? — Having so painstakingly built the edifice of legal controls over administrative actions of the traditional kind, the chapter by Professors Creyke and McMillan prompts the questions: how are appropriate checks to be introduced for the new ‘soft-law’? How is that law to be

58

See Chief Executive Officer of Customs v El Hajje (2005) 224 CLR 159 [59]–[73]. J Resnick, ‘Law on Affiliation: “Foreign” Law, Democratic Federalism and the Sovereigntism of the Nation-state’ [2007] International Journal of Constitutional Law (ICON) 1 discussing the Constitution Restoration Bill 2004 (US) purporting to instruct federal courts in that country not to have regard to foreign law with a few specified exceptions. 60 (2006) 228 CLR 423. See now Osland v Secretary, Department of Justice (Vic) [2008] HCA 37. 59

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rendered transparent and accountable? What, if anything, is the law of the future to say about ‘grey-letter law’, ‘quasi-regulation’ and ‘soft law policy’ as they play an ever greater role in the actual operations of the agencies of public administration?61 How do we go about responding to these questions? THE FUTURE

It will be apparent that there is more than enough left unsaid in the chapters of this book, and in the questions that these chapters provoke, to inspire a further book. Perhaps Mark Aronson may be stimulated by what his admirers have written of him to respond with new insights of his own. It would, for example, be timely if he were to undertake new empirical research together with administrators, federal and State, to describe how administrative law in Australia actually operates in government offices, at public counters and in tribunal deliberations. What actually happens when an administrative decision is quashed and the administrator is ordered to start again? To what extent are the assumptions of administrative law and judicial review vindicated in practice? How can we quantify the impact of the administrative law revolution in Australia? All of these would be topics worthy of enquiry by Mark Aronson, for he has an unrivalled grasp of the governing law and its principles.62 Alternatively, Mark Aronson could turn his attention more specifically to constitutional law. Recognising its ‘gravitational pull’ upon Australian administrative law, it could be a timely enterprise to pursue the political theories that, he suggests, underpin what we do in administrative law, specifically in judicial review. As the law of human rights expands in Australia, there will be many opportunities to examine, and describe, its impact on administrative law and on public administration. We also need explorers who will study the strengths and weaknesses of administrative law as it operates in civil law countries. We have now surely overcome Dicey’s negative attitudes towards continental administrative law that Peter Cane describes so vividly.63 Having belatedly faced the requirement for checks and balances of our own on the burgeoning public administration, are there no lessons for us to learn from the other great European legal tradition? After all, it has been embraced by more countries 61

Creyke and McMillan, above, ch 16, p 387. Trail-blazing work in this respect has been performed by two other leaders in Australian administrative law who are contributors to this book. See Robin Creyke and John McMillan, ‘Executive Perceptions of Administrative Law – An Empirical Study’ (2002) 9 Australian Journal of Administrative Law 163 and ‘Judicial Review – An Empirical Study’ (2004) 11 Australian Journal of Administrative Law 82. 63 Cane, above, p 294. 62

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than accept the common law tradition. A long sabbatical in France is what the doctor orders. Brimming with new ideas, Mark Aronson could return to enliven, instruct, cajole and stimulate us as never before. Administrative law is about the control of power. In the theory of the modern state, power derives ultimately from the people.64 The control of it is therefore, in the end, for the benefit of the people. There is no part of the law’s discipline that is a more worthy subject for devotion in life than this. Mark Aronson has repaid his good fortune handsomely. The contributors to this volume have sought to repay our debt to him with gratitude, affection and proper recognition. Michael Kirby High Court of Australia Canberra 1 October 2008

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See eg McGinty v Western Australia (1996) 186 CLR 140, 230 and cases there cited.

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1 Between the Devil and the Deep Blue Sea: Administrative Law in an Age of Rights THOMAS POOLE *

INTRODUCTION

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DMINISTRATIVE LAW SEEMS perpetually bedevilled by crises of legitimacy, a predicament no doubt reflecting its suspended position between politics and law, facts and norms. The subject faces a new crisis of identity in the current era, the main source of which is the post-Second World War growth of human rights, that new ‘lingua franca of global moral thought’.1 The new discourse of rights, itself rooted in notions of law and legality, has had profound effects on law and legal systems. Two dimensions of this new jurisprudence of rights are particularly pertinent. The first relates to the normativity of rights. Rights (and the laws designed to protect them) claim to have a direct moral content in a way that is not always true of other legal norms. Rights also claim superior status to other standards, values and interests. In particular, they are supposed to act as ‘trumps’ over countervailing considerations of ‘policy’.2 Indeed, they would be worthless if they never acted in this way, as Bentham

* My thanks are due to Martin Loughlin and George Williams for their helpful comments on an earlier draft. I would also like to thank Mark Aronson, both for his characteristically perceptive comments on the present chapter, but also and more generally for his intellectual exuberance, unflagging support and bonhomie. 1 M Ignatieff, Human Rights as Politics and Idolatory (New Jersey, Princeton University Press, 2001) 53. 2 R Dworkin, Taking Rights Seriously (London, Duckworth, 1977).

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was quick to point out.3 This attribute gives rights jurisprudence an imperial – opponents might say necrotising – tendency when situated within a legal order. The second dimension concerns the universal quality (or at least pretensions) of rights. Rights drive an international discourse the objective of which is to infiltrate and influence the national.4 The success of this project means that national orders can no longer be agnostic about rights. But the new jurisprudence of rights does not only operate ‘vertically’, cascading downwards, that is, from the international to the national. It also operates ‘horizontally’ – between and across nation states – and at this level courts are important actors.5 Legal material relating to rights is now often ‘traded’ between jurisdictions in which (similar) rights receptive structures operate, a process that has been mapped in terms of transnational juridical ‘conversations’ or ‘dialogues’.6 The interpenetration of national and international, and the ‘levelling up’ effect that this process often entails,7 is not unprecedented – the history of the common law, for instance, can be told at least in part through a story of transnational legal exchange.8 But the normativity of rights – and their potential to transform existing legal arrangements – means that the new pattern of intercourse is qualitatively (as well as quantitatively) different from earlier examples.9 This chapter reflects on the impact of this new jurisprudence of rights on administrative law (particularly judicial review) by examining two approaches: that adopted by the English courts since 1998 and that followed by the Australian courts over roughly the same period. It presents, then, a comparative study in which the jurisprudence of one system is set against that of another, with salient differences articulated and

3 J Bentham, ‘Anarchical Fallacies’ in J Waldron (ed), Nonsense Upon Stilts: Bentham, Burke, and Marx on the Rights of Man (London, Routledge, 1987). 4 AWB Simpson, Human Rights and the End of Empire: Britain and the Genesis of the European Convention (Oxford, OUP, 2001). 5 K Knop, ‘Here and There: International Law in Domestic Courts’ (2000) 32 New York University Journal of International Law and Politics 501. 6 C McCrudden, ‘A Common Law of Human Rights? Transnational Judicial Conversations on Constitutional Rights’ (2000) 20 Oxford Journal of Legal Studies 499. Cf the idea of judicial globalisation: AM Slaughter, ‘Judicial Globalization’ (2000) 40 Virginia Journal of International Law 1102; Justice L’Heureux-Dubé, ‘The Importance of Dialogue: Globalization and the International Impact of the Rehnquist Court’ (1998) 34 Tulsa Law Journal 15. 7 The recent series of cases (and judicial commentary) on anti-terrorism provides a good example of the ‘ratcheting up’ effect of this trade in rights jurisprudence: see, eg, T Poole, ‘Harnessing the Power of the Past? Lord Hoffmann and the Belmarsh Detainees Case’ (2005) 32 Journal of Law and Society 534. 8 See, eg, HP Glenn, On Common Laws (Oxford, OUP, 2005). See also L Benton, Law and Colonial Cultures: Legal Regimes in World History 1400–1900 (Cambridge, CUP, 2002). 9 See also the debate on ‘global administrative law’: B Kingsbury, N Krisch and R Stewart, ‘The Emergence of Global Administrative Law’ (2005) 68 Law and Contemporary Problems 15.

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explained. There are dangers in adopting this method, but I hope that the insights that can be derived from the analysis outweigh its flaws. To foreshadow the argument to come, one response – exemplified by Australia – has been to reject (or at best half-heartedly embrace) the international discourse of rights. In the period of our study, Australian courts have retreated, after the perceived excesses of the Mason court, to the apparent safe haven of old-fashioned Dixonian legalism. This approach sidelines human rights and foreign developments relating to them. Rules are preferred to principles and strict textual exegesis is prized above context-sensitive adjudication. The jurisprudence that ensues tends to be conservative, arid and soulless. A second response – typified by the English courts – presents a radically different picture of courts almost awash in a sea of principles. Pre-existing rules, which once acted as (far from perfect) constraints on judicial power, have been partially abandoned or at least downgraded. Principles have sprung up in their place; principles that are now clearly infused with moral content. Courts, by no means systematically supine in their decision-making, have opened themselves up to international law and the decisions of foreign courts. All this has resulted in a complicated stew in which the new principles have not been given anything close to coherent shape. In particular, the courts have not been able to find coherent limiting devices to replace those inherent in the old rules; this has raised the spectre of ‘judicial lawlessness’ long feared by critics of judicial review.10 I THE CONSTITUTIONALISATION OF ADMINISTRATIVE LAW

Before turning to the cases, we must take a closer look at the relationship between administrative law and the new international jurisprudence of rights. Dyzenhaus, Hunt and Taggart present this development in terms of the constitutionalisation and internationalisation of administrative law (by which they mean, largely, judicial review).11 Central to this process is the formation of a general ‘principle of legality’. The principle imposes ‘both a duty on administrative decision-makers to give reasons for their decisions and a duty on judges to defer to those reasons to the extent that they refrain from reviewing on a correctness standard’, and functions ‘as a constitutional principle, one that will in a sense constitutionalise administrative law’. Comparing cases in New Zealand, Australia, Canada and England, they argue that this new ‘constitutionalised’ judicial review calls 10 JAG Griffith, ‘Administrative Discretion and the Courts – the Better Part of Valour?’ (1955) 18 Modern Law Review 159, 163. 11 D Dyzenhaus, M Hunt and M Taggart, ‘The Principle of Legality in Administrative Law: Internationalisation and Constitutionalisation’ (2001) 1 Oxford University Commonwealth Law Journal 5.

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for a ‘different methodology’, the aim of which is to instil a ‘culture of justification’ within government and public administration: The notion of justification, as distinct from explanation, implies that the reasons supporting a decision be ‘good’ reasons, and this in turn requires norms or rules for determining what counts as a ‘good reason’.12

The substantive turn in judicial review undermines any pre-existing ‘hardand-fast distinction between process and substance’ and generates a process of ‘constitutional balancing’ in which rights are weighed against the reasons offered in defence of governmental action that might be said to infringe them. International law also has an increased role within this new administrative law, since international legal norms both offer a ‘good steer’ as to the nature of the values that underpin the culture of justification and provide a ‘powerful legitimating force’. The article, although an important contribution, is under-theorised in key respects. I will focus on the twin notions, central to the authors’ thesis, of ‘internationalisation’ and ‘constitutionalisation’. Take the latter notion first. The authors clearly intend the term ‘constitutionalisation’ to include the principle by which governmental powers ‘should be exercised in accordance with human rights norms’, a principle which generates, inter alia, a general duty to give reasons for decisions (as part of a broader ‘culture of justification’) and the methodology of ‘constitutional balancing’. But, beyond general remarks about the influence of international human rights law and references to a sprinkling of domestic cases, we are given little indication of the precise source or nature of the new ‘constitutionalised’ principles, or how these principles were inscribed into the systems of administrative law in question. (Indeed, it is questionable that the new principles have in all cases taken hold in the way the authors suggest. The inclusion of the Australian case of Minister for Immigration and Ethnic Affairs v Teoh,13 the only Australian case adduced in the article, seems decidedly shaky now, particularly in light of High Court dicta in Re Minister for Immigration and Multicultural Affairs, ex p Lam.14) Nor is there any real discussion of the relationship between the ‘old’ tests (legality, procedural fairness, unreasonableness and their like) and the ‘new’ principles of ‘harder edged legality’ and ‘constitutional balancing’. The misreading of Teoh, while unfortunate, is also revealing. In focusing exclusively on (certain) developments in the case law, the authors arguably overstate the influence of the courts. Recent experience indicates that it 12 See also D Dyzenhaus, ‘The Politics of Deference: Judicial Review and Democracy’ in M Taggart (ed), The Province of Administrative Law (Oxford, Hart Publishing, 1997); M Hunt, ‘Reshaping Constitutionalism’ in J Morison, K McEvoy and G Anthony (eds), Judges, Transition and Human Rights (Oxford, OUP, 2007). 13 (1995) 183 CLR 273 (‘Teoh’). 14 (2003) 214 CLR 1 (‘Lam’).

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usually takes more than a handful of court cases to effectuate a radical restructuring of a system of administrative law. Writing before the introduction of the Human Rights Act 1998 (UK) (‘HRA’), Freedland argued that the weakness of English judicial review stemmed not so much from the administrative law principles the courts applied, but from the paucity and flaccidity of the constitutional principles which surrounded them. ‘It is difficult’, he wrote, for a tight or rigorous body of administrative law to function effectively in the context of a loose, largely convention-based, system of constitutional law.15

At the time Freedland wrote this, the English courts had started to signal a new, more positive attitude to human rights in cases like R v Secretary of State for the Home Department, ex p Bugdaycay,16 R v Lord Chancellor, ex p Witham17 and R v Ministry of Defence, ex p Smith.18 But these developments, despite the bluster of some commentators,19 were hesitating and peripheral. Only the passing of the HRA engendered the kind of structural change proponents of rights were seeking.20 One main reason for this is that in passing the HRA, Parliament authoritatively signalled that significant constitutional and legal changes were both necessary and desirable. Counterfactuals are always problematic, but it seems highly unlikely that anything quite as systematic would have occurred but for the passing of the HRA.21 The common law thesis – the idea that courts have been the main drivers behind changes in judicial review and that they are creating new principles which operate in very similar ways – also descends into wishful thinking in its other key dimension: the notion of ‘internationalisation’. Dyzenhaus, Hunt and Taggart seem to imagine the existence (actual or predicted) of something like a unified system of public law principles that apply across the common law world. One of the authors, indeed, has conceptualised this development in terms of a move towards ‘unity’ in common law regimes of public law.22 Dyzenhaus argues that the new ‘common law of judicial review’ involves ‘a judicial updating of the common law’s stock of 15

M Freedland, ‘Government by Contract and Public Law’ [1994] Public Law 86, 95. [1987] 1 AC 514. [1998] QB 575. 18 [1996] QB 517. 19 For analysis and criticism of these ‘common law constitutionalists’ see T Poole, ‘Questioning Common Law Constitutionalism’ (2005) 25 Legal Studies 142. 20 See, eg, J Jowell, ‘Beyond the Rule of Law: Towards Constitutional Judicial Review’ [2000] Public Law 671. 21 I suspect that much the same might be said about developments in Canada and New Zealand. See, eg, G Cartier, ‘The Baker Effect: A New Interface Between the Canadian Charter of Rights and Freedoms and Administrative Law – The Case of Discretion’ in D Dyzenhaus (ed), The Unity of Public Law (Oxford, Hart Publishing, 2004). 22 D Dyzenhaus, ‘Baker: The Unity of Public Law?’ in D Dyzenhaus (ed), The Unity of Public Law (Oxford, Hart Publishing, 2004). 16 17

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values to include human rights’, the articulation of which is not confined to domestic legal instruments. The ‘human rights era’ has produced, he says, a system in which judges see themselves primarily as, guardians of the values that sustain the relationship between individual and state, in which the individual is understood as the bearer of human rights.23

This ‘tale of the evolution of the common law of judicial review’ is not just the result of changes in judicial outlook, but also a question of conceptual design. Dyzenhaus suggests, more specifically, that the separation of powers should be reconceived not as a formal principle of institutional separation but as ‘the realisation of, in Kantian terms, a republican ideal’, a process that entails in its application that, violations of the rule of law are to be determined by looking at the substantive values that the separation of powers are supposed to protect rather than to whether the particular arrangement of powers in a legal order has been disturbed.24

Dyzenhaus is right to draw attention to the growth of transnational legal regimes and the importance of human rights networks. And, without question, judges are significant players within these new regimes. (Indeed, Harlow refers to the rise of a ‘powerful transnational juristocracy’.25) It is (just) possible to imagine with Dyzenhaus a (common law) world – which certainly does not exist at present – in which similar general principles of administrative law have application. But would even this situation entail juridical ‘unity’? The nature of administrative law would seem to resist such an eventuality. Administrative law is a subject peculiarly sensitive to, even dependent on, political and administrative context. As Harlow observes, administrative law functions within the framework of an accepted political system and constitution, to both of which it is very closely linked.26

23 D Dyzenhaus, ‘The Rule of (Administrative) Law in International Law’ (2005) 68 Law and Contemporary Problems 127, 139. 24 Ibid 151–2. For a similar account see J McLean, ‘Problems of Translation – The State in Domestic and International Public Law and Beyond’ in H Charlesworth and others (eds), The Fluid State: International Law and National Legal Systems (Sydney, Federation Press, 2005) 216: ‘Developments in administrative law in the British Commonwealth have enhanced its permeability to international norms. Administrative law’s interest in maintaining the consistency and integrity of executive undertakings in whichever space they are made, combined with its search for unified fundamental values, makes it likely to be influenced by international law processes and norms. There is a coincidence of common law values and the permeability of administrative law to both.’ 25 C Harlow, ‘Global Administrative Law: The Quest for Principles and Values’ (2006) 17 European Journal of International Law 187, 209. 26 Ibid 208.

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This situation clearly does not preclude connections – even quite systematic connections – and interactions across systems. As common lawyers, we are long accustomed to seeing decisions and approaches in one country being discussed and applied, often in modified form, in another. And scholars have begun to focus on the more general phenomenon of ‘transplantation’ or ‘borrowing’ of public law principles.27 But, as Taggart (writing in a different context) recognises: One of the unavoidable hazards of comparative common law conversations on public law topics … is that the public law of each common law country can differ markedly because of different conditions and doctrinal development in each country.28

Even assuming that we see even more systematic ‘borrowing’ in future years, then, there is no reason to suppose that this will yield the sort of normatively coherent and unified jurisprudence that Dyzenhaus appears to envisage. Fischer-Lescano and Teubner, criticising similar calls for global unity among international lawyers, argue that the search for unified global laws is futile. Starting from Luhmann’s prediction that global law would experience a radical fragmentation not along territorial but social sectoral lines,29 the authors argue that we inhabit a world marked by ‘polycentric globalization’,30 the main driver behind which is ‘an accelerated differentiation of society into autonomous social systems, each of which springs territorial confines and constitutes itself globally’.31 The process results in the creation of ‘global villages’, relationships between which ‘are anything but harmonious’. The problems of global society arise in large measure from the clash of rationalities that ensues, which is, caused by the fragmented and operationally closed functional systems of a global society, which, in their expansionist fervor, create the real problems of global society, and who at the same time make use of global law in order normatively to secure their own highly refined sphere logics.32

27 For an exploration of this theme see S Choudhry (ed), The Migration of Constitutional Ideas (Cambridge, CUP, 2007). Processes of interaction are often complicated and can have significant effects on the ‘donor’ state as well as the recipient. Principles from one system, for instance, are sometimes applied in others and then ‘fed back with a difference’ to the donor state. See, eg, J Polakiewicz and V Jacob-Foltzer, ‘The ECHR in Domestic Law: The Impact of the Strasbourg Case-Law in States where Direct Effect is Given to the Convention’ (1991) 12 Human Rights Law Journal 125. 28 M Taggart, ‘The Tub of Public Law’, in The Unity of Public Law, above n 22, 461–2. 29 N Luhmann, ‘Die Weltgesellschaft’ (1971) 57 Archiv für Rechts und Sozialphilosophie 21. 30 D Held, Democracy and the Global Order: From the Modern State to Cosmopolitan Governance (1995) 62. 31 A Fischer-Lescano and G Teubner, ‘Regime Collisions: The Vain Search for Legal Unity in the Fragmentation of Global Law’ (2004) 25 Michigan Journal of International Law 999, 1006. 32 Ibid 1007.

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It is highly unlikely, given the complexity of the situation produced by these processes of legal evolution and social differentiation, that law can ever play a ‘strong’ coordinating role. We must give up the idea that the unity of global law should be ‘structure-based’ – that is, institutionally secured normative consistency – and proceed from the idea that it is process-based – that is, deriving simply from the modes of connection between legal operations, which transfer binding legality between even highly heterogeneous legal orders.33

The ‘solution’ (or response) to fragmentation, then, is not (normative) unity – which is probably impossible – but a functional pluralism within which the ‘best law can offer … is to act as a “gentle civilizer of social systems”’.34 The development of a ‘common law of judicial review’ grounded in human rights – if that is really what we are seeing – is not likely to produce anything like a normatively unified jurisprudence. We can expect more by way of transnational interaction between lawyers and courts, more crossborder judicial conversations, networking and the like. To be sure, this process may sometimes result in (perhaps partial) convergence, as principles (like proportionality?) and doctrines (like deference?) are taken up by one system and passed on to the next. Landmark decisions will resonate in far-flung places. (But, then again, when have they not?) But when this sort of thing does occur, we should not simply assume that the reception of such principles and doctrines will be the same everywhere. Administrative law is entwined with constitutional law, as Freedland noted, and everywhere dependent on local conditions, particularly the structure of politics and public administration. These characteristics militate against the realisation of a normatively unified common law of judicial review. Normative heterogeneity within a shared but relatively loose juridical framework in part produced by transnational dialogues is a more plausible scenario than homogeneity of administrative law principle. If this is the case, then we should reject the ‘common law of administrative law thesis’, at least in its stronger formulations, and start thinking instead of the genesis of a ‘quilt of legalities’35 in which functionally independent common law jurisdictions interact within a partly-shared language and normative framework.

33

Ibid 1007–8. Ibid 1045. 35 B de Sousa Santos, Toward a New Legal Common Sense (London, Butterworths, 2002) 163. 34

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II THE DEVIL: AUSTRALIA

A ‘devotion to legalism’, Goldsworthy says, is the default position of Australian courts. Rooted ‘in British legal traditions imbibed by Australian lawyers educated in the late 19th and early 20th centuries’, Australian judges have evinced a general ‘tendency to prefer formal, abstract, and conceptual analysis, to substantive factual or evaluative reasoning’.36 The early Engineers’ case affirmed that English-style literalist and formalist interpretation was the order of the day. The court’s duty is faithfully to expound and give effect to [the Constitution] according to its own terms, finding the intention from the words of the compact, and upholding it throughout precisely as framed.37

But the canonical statement of this orthodoxy was provided by Sir Owen Dixon – still a totemic figure among Australian lawyers – who argued that the only safe guide to judicial decision-making is ‘a strict and complete legalism’.38 While this approach no doubt reflected the political and legal conservatism of the judges, it is worth noting that formalism, while methodologically conservative, need not necessarily result in judicial inaction.39 The High Court has sometimes acted in an ‘active formalist’40 way – that is, deploying traditional legal categories, for instance, in the defence of minority or vulnerable groups – the classic illustration being Australian Communist Party v Commonwealth.41 The Mason court, ‘without doubt an agent of change’,42 broke from this Dixonian orthodoxy:43

36 J Goldsworthy, ‘Australia: Devotion to Legalism’ in J Goldsworthy (ed), Interpreting Constitutions: A Comparative Study (Oxford, OUP, 2006) 133, 155. 37 Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129, 142. See also A-G (NSW) v Brewery Employees Union of NSW (1908) 6 CLR 469, where it was held that the words of the Constitution, unless formally amended, continue to mean what they meant in 1900. 38 Sir O Dixon, ‘Two Constitutions Compared’ in SHZ Woinarski (ed), Dixon, Jesting Pilate (Sydney, LawBook Co, 1965) 247. 39 See generally J Shklar, Legalism (Cambridge, Mass, Harvard University Press, 1964). 40 C Harlow and R Rawlings, Law and Administration, 2nd edn (London, Butterworths, 1997) 516. 41 Australian Communist Party v Commonwealth (1951) 83 CLR 1 (‘Communist Party case’). In this case the High Court invalidated legislation that proscribed the Communist Party and affiliated organisations, confiscated their property without compensation and excluded persons deemed dangerous to national security from certain kinds of employment. 42 F Wheeler and J Williams, ‘“Restrained Activism” in the High Court of Australia’ in B Dickson (ed), Judicial Activism in Common Law Supreme Courts (Oxford, OUP, 2007). 43 See, eg, M Detmold, ‘The New Constitutional Law’ (1994) 16 Sydney Law Review 228.

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It is generally agreed that in the late 1980s, the Court took a new direction, adopting a more purposive and even creative approach in constitutional and other cases.44

This change in method produced (or coincided with) a series of innovative decisions in cases such as Mabo v Queensland (No 2),45 Dietrich v The Queen,46 Teoh,47 Wik Peoples v Queensland,48 Australian Capital Television Pty Ltd v Commonwealth49 and Leeth v Commonwealth.50 While it may be an overstatement to talk about these cases marking a rupture with the past, the decision-making at this time certainly constituted a move away from formalism and a greater degree of openness about the court’s law-making role.51 Sir Anthony Mason himself openly rejected Dixonian legalism, arguing that the traditional approach ‘conceals rather than reveals the reasoning process’ of the court.52 He adopted instead a ‘species of legal realism’ according to which judges in top courts must in appropriate cases make choices. These choices, he said, are inevitably influenced by ‘policy factors and values’ and should be discussed as such by the courts.53 The search to identify (and justify) the choice of factors and values on which these landmark cases were decided led the court to look more frequently to international law, and even on occasion to invoke the idea of an evolving ‘global’ common law. Australian judges were increasingly influenced in this era by the global trend of expanding judicial power to protect rights. As Brennan J observed in his judgment in Mabo, ‘international law is a legitimate and important influence on the development of the common law’.54

44

Goldsworthy, above n 36, at 144. (1992) 175 CLR 1 (‘Mabo’). In this case the High Court recognised the existence of native title. 46 (1992) 177 CLR 292. In this case the High Court directed trial courts to use their inherent powers to shield financially needy defendants from an unfair trial. 47 (1995) 183 CLR 273. 48 (1996) 187 CLR 1. In this case the High Court found that pastoral leases do not necessarily extinguish native title. This decision, however, postdates Sir Anthony Mason’s retirement from the court. 49 (1992) 177 CLR 106. This case recognised an implied freedom of communication about political matters. 50 (1992) 174 CLR 455. In this case a majority of the court entertained the idea that the Constitution requires legal equality in some form. 51 J Doyle, ‘Implications of Judicial Law-Making’ in C Saunders (ed), Courts of Final Jurisdiction: The Mason Court in Australia (Sydney, Federation Press, 1996) 84. 52 Sir A Mason, ‘The Centenary of the High Court of Australia’ (2003) 5 Constitutional Law and Policy Review 41, 45. 53 Sir A Mason, ‘Legislative and Judicial Law-Making: Can We Locate an Identifiable Boundary?’ (2003) 24 Adelaide Law Review 15, 21. 54 Mabo (1992) 175 CLR 1,42. 45

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The practice of the Gleeson court has seen a reversion to Dixonian method.55 Dyson Heydon, a member of that court, has argued extrajudicially that there has been a recalibration of doctrine in key areas suggestive of a desire to check the perceived activism of the Mason era.56

Comparing Mason era courts unfavourably with those of Dixon’s day, Heydon has criticised the role of judicial activism in damaging both the probity of the courts and … the capacity of the courts to retain a sound grip on the applicable law in particular cases.57

He is particularly scathing of the Mason court’s tendency to resort to international law, ‘international expectations’ and the ‘international community’.58 Justice McHugh is another strong advocate of a traditional judicial role: ‘[t]he function of the judiciary’, he wrote in his judgment in Re Wakim, ex p McNally, is to give effect to the intention of the makers of the Constitution as evinced by the terms in which they expressed that intention.59

But what characteristics might we expect cases decided by a formalist court to exhibit? I suspect that we might expect to see the following: — an emphasis on rules and the avoidance of principles; — a tendency to de-contextualise decisions under review; — adherence to traditional (‘strict’) canons of statutory construction and the deployment of narrow – often abstruse – legalist reasoning; — sidelining international law; and — conservatism. Does this model of formalist decision-making match the reality of decisionmaking in Australian administrative law? The authors of the leading textbook on the subject certainly think so. Describing the dominant current judicial methodology as ‘markedly incrementalist’, Aronson, Dyer and Groves observe that ‘most judicial review judgments are long on the specific rules, but short to a fault on the guiding principles’.60 And, turning

55 The intervening Brennan Court era was a period of retrenchment in which innovations from the Mason Court era were respected and protected but fewer progressive decisions were reached. 56 JD Heydon, ‘Judicial Activism and the Death of the Rule of Law’ (2003) 47 Quadrant 9. This address is also published in (2003) 23 Australian Bar Review 1. 57 Ibid 14. 58 Ibid 21. 59 Re Wakim, ex p McNally (1999) 198 CLR 511, 549–50. 60 M Aronson, B Dyer and M Groves, Judicial Review of Administrative Action, 3rd edn (Sydney, LawBook Co, 2004) 164.

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to the cases, it is easy to find evidence to support this assessment. NEAT Domestic Trading Pty Ltd v AWB Ltd61 involved a challenge to the respondent’s repeated refusal of applications for export consent, a policy pursued in order to protect its monopoly on wheat exports. The question arose whether the common law prohibited the adoption of a blanket policy in this context. A majority of the High Court rejected the application, holding that the profit-maximising behaviour of the respondent – a private corporation – was incompatible with the existence of public law obligation, at least in this instance.62 Not only does this decision present a formalist solution to what has been called the ‘Datafin problem’.63 (The court reserved for future consideration the general question of the suitability of the ‘sources’ test.) It also wraps the decision in a narrow, legalist conception of the role of the court. Although himself prepared to assume that the respondent was susceptible to judicial review (he dismissed the case on its ‘administrative law merits’) Gleeson CJ defended this general position with customary astringent elegance: It is to the provisions of the Act that one must look for some warrant for concluding that a particular consideration is obligatory, or available, or extraneous. Judicial review is not an invitation to judges to decide what they would consider fair or reasonable if they were given the function conferred upon AWBI. The appellant might genuinely believe that the system itself is unfair. A judge might share that opinion. Nothing follows from that. The question is what, if anything, the Act requires, or permits, or forbids, AWBI to take into account in giving effect to its role in the system.64

A more recent attempt to grapple with the public/private law divide arose in Griffith University v Tang.65 The case involved a challenge from a doctoral student who had been excluded from her programme for allegedly fabricating research results. She argued that she had been denied procedural fairness as a result of the University’s failure to follow its own disciplinary procedures. The case was brought under Queensland’s Judicial Review Act 1991 – the equivalent of the Commonwealth Administrative Decisions (Judicial Review) Act 1977 (‘ADJR Act’) – which provides (under section 4) for judicial review of ‘a decision of an administrative character made … under an enactment’. Her action failed. The majority – Gummow, Callinan and Heydon JJ – argued, first, that even if the decision 61

(2003) 216 CLR 277 (‘NEAT Domestic Trading’). Justice Kirby dissented on the ground that AWBI’s decisions were reviewable since the company was an integral part of the regulatory process and so exercised ‘public power’. 63 R v Panel on Take-Overs and Mergers, ex p Datafin plc [1987] 1 AB 815 (‘Datafin’). On which see, seminally, M Aronson, ‘A Public Lawyer’s Response to Privatisation and Outsourcing’ in Taggart (ed), above n 12. 64 NEAT Domestic Trading (2003) 216 CLR 277, 288. See also Aronson, Dyer and Groves, above n 59, 78. 65 (2005) 221 CLR 99. 62

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could be said to derive from contract or some other private law source it was not a decision made ‘under an enactment’ and so not susceptible to judicial review (Gleeson CJ joined them on this ground); and, second, that a reviewable decision must in any case ‘confer, alter or otherwise affect legal rights or obligations’ and that the applicant ‘had no relevant legal rights’ in this case.66 The decision has been criticised by commentators on a number of grounds.67 For present purposes, the following features of the decision are worth noting: a reiteration of the type of approach discarded in Datafin but followed in NEAT Domestic Trading; a narrow construction of the statute against the interests of the complainant; and the addition of requirement that a right sourced in ‘hard’ law (general law or statute) must be affected before judicial review may be sought – reminiscent, as Taggart points out,68 of the pre-Ridge v Baldwin requirement that a decision-maker had to be acting judicially or quasi-judicially before natural justice could lie.69 When we turn to examine the English cases, we will see that there has been a sharp increase in the scope of ‘substantive’ judicial review. Attention now falls on the proportionality principle and its (bastard?) offspring ‘deference’. But even before the decision to recognise the proportionality principle, English courts had been expanding the scope of the otherwise self-limiting Wednesbury test to allow for more intensive review in cases involving ‘fundamental’ rights.70 Australian courts, according to Stern, have, indicated a clear reluctance to follow the line of English cases which recognise a right to relief in judicial review proceedings based upon conspicuous unfairness amounting to an abuse of power.71

Such an approach, Australian judges reason, runs counter to the principle of separation of powers and the requirement that judicial review under section 75(v) of the Constitution should only be for jurisdictional error. As Gleeson CJ observed in Lam,

66

Ibid 130, 132. See, eg, M Aronson, ‘Private Bodies, Public Power and Soft Law in the High Court’ (2007) 35 Federal Law Review 2; D Stewart, ‘Griffith University v Tang, “Under an Enactment” and Limiting Judicial Review’ (2005) 33 Federal Law Review 526. 68 M Taggart, ‘“Australian Exceptionalism” in Judicial Review’ (2008) 36 Federal Law Review 1. 69 R v Electricity Commissioners, ex p London Electricity Joint Committee (1920) Ltd [1924] 1 KB 171; Ridge v Baldwin [1964] AC 40. 70 R v Ministry of Defence, ex p Smith [1996] QB 517. 71 K Stern, ‘Substantive Fairness in UK and Australian Law’ (2007) 29 Australian Bar Review 266, 266. 67

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[t]he constitutional jurisdiction does not exist for the purpose of enabling the judicial branch of government to impose upon the executive branch its ideas of good administration.72

Whereas English courts have encouraged the broadening and splintering of the unreasonableness test, Australian courts, after flirting briefly with this ‘variegated approach’, are now ‘retreat[ing] to the originally demanding standard’ and seeking ‘a reduction in the sorts of matters that can be tested by this ground’.73 Three developments may be adduced as representative of this trend. First, in Re Minister for Immigration and Multicultural Affairs, ex p Applicant S20/2002, the High Court held that irrationality (or illogicality) and unreasonableness are mutually exclusive categories and that Wednesbury unreasonableness is limited in scope – it could not be used, for instance, to challenge grossly unreasonable fact-finding.74 Second, the refusal by the Federal Court to countenance the Wednesbury test being tightened to allow for heightened scrutiny in cases involving human rights.75 Third, the rejection of proportionality as a ground or aspect of review in State courts,76 the Federal Court77 and (save for the support of Kirby J78) the High Court.79 We see in these examples the same tendency to favour ‘traditional’ understandings of ‘traditional’ legal categories, an approach animated by the desire to prevent any expansion of judicial review on the basis of arguments of justice or fairness. The High Court’s rejection of the doctrine of ‘deference’ offers another example of this traditionalist temperament. Deference is often seen as quid pro quo for more intensive review. In Corporation of the City of Enfield v Development Assessment Commission, the High Court addressed the question of whether Australian jurisprudence should recognise something like the Chevron test that operates in American administrative law.80

72

Re Minister for Immigration and Multicultural Affairs, ex p Lam (2003) 214 CLR 1,

11. 73

Aronson, Dyer and Groves, above n 60, at 334. (2003) 198 ALR 59. Cf the recent judgment of Mumby J in R (SK) v Secretary of State for the Home Dept [2008] EWHC 98 (Admin) [2]: ‘[T]he melancholy facts that have been exposed as a result of these proceedings are both shocking and scandalous. They are shocking even to those who still live in the shadow of the damning admission by a former Secretary of State that a great Department of State is ‘unfit for purpose’. They are scandalous for what they expose as the seeming inability of that Department to comply not merely with the law but with the very rule of law itself.’ 75 SZADC v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 1497 [24]. 76 See, eg, Bruce v Cole (1998) 45 NSWLR 163, 185, where Spigelman CJ held that proportionality was not a ground of review in its own right. 77 Andary v Minister for Immigration and Multicultural Affairs [2003] FCAFC 211 [12]. 78 Leask v Commonwealth (1996) 187 CLR 579, 634–6. 79 Aronson, Dyer and Groves, above n 60, at 347–8. 80 Corporation of the City of Enfield v Development Assessment Commission (2000) 199 CLR 135 (‘Enfield’). 74

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Chevron-style deference applies where the statute administered by a federal agency is susceptible to a number of constructions. If it is, then the reviewing court must defer to an agency’s reasonable interpretation of the statute in question.81 The High Court rejected the Chevron approach on two grounds: (a) it has undesirable consequences in that it might encourage an agency to mould an interpretation of a statute in order to avoid judicial scrutiny; and (b) it is inconsistent with the principle that it is for the judicial branch to declare and enforce the law which determines the power conferred by statute upon administrators.82 Now, on the face of it, the decision in Enfield bucks the quiescent, conservative pattern observed in the cases examined so far. But we should remember, first, that methodological formalism does not necessarily equate to conservative outcomes. (Plaintiff S157/2002 v Commonwealth,83 discussed next, provides a clearer example of this.) And, second, that the (re)assertion of an exclusive jurisdiction to interpret statutes is entirely at one with a traditional understanding of the nature of the judicial role. It is form, once again, that counts.84 Plaintiff S157/2002 involved a direct constitutional challenge to a federal privative clause purporting to exclude judicial review of certain kinds of migration decisions. The case concerned the right of the plaintiff to seek judicial review of a decision of the Refugee Review Tribunal affirming a refusal of his protection visa application. The relevant section of the statute defined a ‘privative clause decision’ as a ‘decision of an administrative character made … under this Act’.85 Although the court did not directly strike down the clause in question, it decided that judicial review still held for jurisdictional error, as a jurisdictionally flawed decision was not properly a decision ‘made under’ the Act. A jurisdictional error occurs where, reading the Act as a whole, it can be said to involve the

81 Chevron USA Inc v Natural Resources Defense Council Inc 467 US 837 (1984) (‘Chevron’). Cf US v Mead Corp 533 US 218 (2001) which narrowed the scope of the Chevron doctrine. For comparative analysis see MC Tolley, ‘Judicial Review of Agency Interpretation of Statutes: Deference Doctrines in Comparative Perspective’ (2003) 31 Policy Studies Journal 421. 82 Enfield (2000) 199 CLR 135, 152, 153. See also Gaudron J: ‘it is the function of the court, when its jurisdiction is invoked, to determine, for itself, whether the fact or the factual situation does or does not exist. To do less is to abdicate judicial responsibility’: at 158–9. The test was also not immediately applicable on the facts of the case. 83 (2003) 211 CLR 476 (‘Plaintiff S157/2002’). 84 Margaret Allars argues that the rejection of Chevron might in any case be ‘duplicitous’ because of the development of an ‘expertise test’ in cases like Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 and A-G (NSW) v Quin (1990) 170 CLR 1: ‘Chevron in Australia: A Duplicitous Rejection?’ (2002) 54 Administrative Law Review 569. 85 Migration Act 1958 (Cth) s 474, as amended by Migration Legislation Amendment Act (No 1) 2001 (Cth) and Migration Legislation Amendment (Judicial Review) Act 2001 (Cth).

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breach of an inviolable condition on the exercise of power under the Act.86 The decision must be set in the context of an ongoing struggle between the judiciary and government over the power to review executive decisions about migration (particularly concerning asylum seekers). In this particular engagement, the Government ‘aimed to abolish judicial review of migration decisions as far as is constitutionally possible’.87 Aronson, Dyer and Groves call the joint judgment in Plaintiff S157/2002 ‘uncompromising’,88 while Kerr and Williams argue that the decision, develops rule of law principles in finding that the Constitution provides for an entrenched minimum level of judicial review (based upon the concept of jurisdictional error) for actions by an officer of the Commonwealth.89

Yet this outcome was achieved through characteristically formalist means, presenting an ‘intriguing blend of pragmatism and principle’.90 The court managed to find a way of determining that judicial review remained open for the plaintiff while avoiding the sort of direct confrontation with the legislature and executive that would have resulted had the court struck down the relevant section in the statute. Like the related decision of the House of Lords in Anisminic Ltd v Foreign Compensation Commission,91 the High Court in Plaintiff S157/2002 reached its conclusion through a process of what seems like legalistic alchemy. And, like the older English case, one also wonders whether the decision may have been motivated, at least in part, by a sense of amour propre as much as a concern for the development of legal principle. Whereas Enfield and Plaintiff S157/2002 show the High Court, for whatever combination of reasons, in ‘active formalist’ mode, the last two decisions we address are conservative in every sense. Al-Kateb v Godwin92 concerned the lawfulness of the possible indefinite detention of a noncitizen who could not be removed from Australia under the Migration Act 1958 (Cth). The predicament in which the detainees found themselves parallels that of the claimants in A v Secretary of State for the Home Department,93 although the Australian case did not concern the operation of anti-terrorism laws. The result, however, was the opposite of that reached by the House of Lords, since the majority in Al-Kateb found that 86 This test has subsequently been applied liberally by the Federal Court in Lobo v Minister for Immigration and Multiculturalism [2003] FCA 144. 87 C Beaton-Wells, ‘Australian Administrative Law: The Asylum-Seeker Legacy’ [2005] Public Law 267. 88 Aronson, Dyer and Groves, above n 60, at 849. 89 D Kerr and G Williams, ‘Review of Executive Action and the Rule of Law under the Australian Constitution’ (2003) 14 Public Law Review 219, 232. 90 Ibid 222. 91 Anisminic Ltd v Foreign Compensation Commission [1969] AC 147. 92 (2004) 219 CLR 562 (‘Al-Kateb’). 93 A v Secretary of State for the Home Dept [2004] UKHL 56 (‘Belmarsh Detainees case’).

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the words of the statute, which required a person’s removal from Australia ‘as soon as reasonably practical’, were unambiguous and ‘too clear to read them as being subject to a purposive limitation or an intention not to affect fundamental rights’.94 By contrast, the dissenting judges (Gleeson CJ, Gummow and Kirby JJ) argued that more explicit language was required to signal an intention to interfere with personal liberty in so drastic a way.95 The majority approach exhibits many of the characteristics of the formalist model of decision-making described above.96 The case was decided as though stripped from its context (indefinite detention and its impact on personal liberty), through the application of (intolerably?) strict canons of statutory construction.97 The court focussed almost exclusively on Australian law, excluding from consideration both international law and the decisions of foreign courts. Justice McHugh called the suggestion that the court should seek conformity with international law to the extent permitted by the statute’s language ‘a fiction’ and described as ‘heretical’ the view that rights should be read into the Constitution by drawing upon international instruments.98 Indeed, it is the combination of what Curtin calls ‘ruthless literalism’ and ‘judicial introspection’,99 both vividly present in the majority decision in Al-Kateb, that is characteristic of the playing out of Dixonian legalism in the current era. The High Court deployed similar techniques to produce a judgment of almost baroque obscenity in Thomas v Mowbray.100 While not strictly speaking an administrative law case, the decision is important and worth examining in terms of the light it sheds on issues central to our analysis. The case concerned a challenge to the imposition of ‘interim control orders’ under Division 104 of the Criminal Code 1995 (Cth) (‘Code’). Thomas had been issued with a control order, after being acquitted of charges relating to terrorism offences, which restricted his movement and ability to communicate with others.101 The constitutionality of the control order provision was challenged on two grounds: first, whether the Commonwealth Government had the power to legislate in this way, either

94

Al-Kateb v Godwin (2004) 219 CLR 562, 581 (McHugh J). Ibid 578 (Gleeson CJ). For analysis of the case see, eg, B Saul, ‘Australian Administrative Law: The Human Rights Dimension’ in M Groves and HP Lee (eds), Australian Administrative Law (Cambridge, CUP, 2007). 97 See D Meagher, ‘The “Tragic” High Court Decisions in Al-Kateb and Al Khafaji: the Triumph of the “Plain Fact” Interpretive Approach and Constitutional Form over Substance’ (2005) 7 Constitutional Law and Policy Review 69. 98 Al-Kateb v Godwin (2004) 219 CLR 562, 598–90. 99 J Curtin, ‘“Never Say Never”: Al-Kateb v Godwin’ (2005) 27 Sydney Law Review 355. 100 [2007] HCA 33. 101 See A Lynch and A Reilly, ‘The Constitutional Validity of Terrorism Orders of Control and Preventative Detention’ (2007) 10 Flinders Journal of Law Reform 105. 95 96

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under its defence or external affairs powers; second, whether the Code confers judicial power in an unconstitutional manner. The court dismissed the plaintiff’s arguments on both these grounds. Justices Gummow and Crennan said, on the first point, that ‘[p]rotection from a “terrorist act” as defined necessarily engages the defence power’.102 This despite the fact that in the Communist Party case the same power was not considered sufficient, at a time when Australia was involved in the Korean War, to support laws disbanding the Communist Party.103 In rejecting the second argument, which focussed on the legality of a judicial power to restrict a person’s liberty on the basis of what the person might do in the future, the court observed that this is ‘in truth a power that has been, and is, exercised by courts in a variety of circumstances’ including bail and apprehended violence orders.104 There is no trace in Thomas v Mowbray of the trend in courts elsewhere towards more intensive scrutiny of new anti-terrorism powers.105 Justice Kirby, again in dissent, criticised what he saw as the majority’s denigration of the Communist Party case and its unfortunate surrender … to demands for more and more governmental powers … that exceed or offend the constitutional text and its abiding values.106

In yet another politically sensitive case, the legalist and de-contextual approach was used by the Gleeson court to produce a decision – itself perhaps at odds with actual Dixonian decisions – inimical to the interests of liberty but very much in accordance with the aggrandising instincts of the Howard Administration.107 The preceding analysis does not purport to offer a comprehensive survey of Australian administrative law during the period in question. But the cases surveyed do provide some evidence that the reversion to Dixonian legalism, invoked extra-judicially by some members of the present High Court, has been realised. There is certainly a close correlation between the model of formalism offered at the start of this section and the pattern of decision-making observed in the examined cases. The cases exhibit a tendency to emphasise established rules and a concomitant distrust of more

102

Thomas v Mowbray [2007] HCA 33 [146]. (1951) 83 CLR 1. 104 Thomas v Mowbray [2007] HCA 33 [15] (Gleeson CJ). 105 Cf Charkaoui v Canada (Citizenship and Immigration) 2007 SCC 9 or the recent control order decisions of the House of Lords: Secretary of State for the Home Dept v JJ [2007] UKHL 45; Secretary of State for the Home Dept v MB [2007] UKHL 46; Secretary of State for the Home Dept v E [2007] UKHL 47. See also the US Supreme Court cases: Rasul v Bush 542 US 466 (2004); Hamdi v Rusmfeld 542 US 507 (2004); Rumsfeld v Padilla 542 US 426 (2004); Hamdan v Rumsfeld 126 S Ct 2749 (2006). 106 Thomas v Mowbray [2007] HCA 33 [385], [386]. 107 On the character and impact of the John Howard era see, eg, P Kelly, ‘Re-thinking Australian Governance: The Howard Legacy’ (2006) 65 Australian Journal of Public Administration 7. 103

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wide-ranging principles (like proportionality). They also show the judges engaging in de-contextualised decision-making and applying traditional principles of statutory interpretation often in a manner inimical to liberty (and related) interests. This approach tends to be accompanied by a rejection of the influence of international law and, to a lesser extent, the decisions of foreign courts. The conservatism of method adopted in these cases is matched, more often than not, by the conservatism of their outcomes. And all this is wrapped up in a rhetorical approach that seems, to this outsider at least, to be maddeningly abstruse in its legalism. Indeed, after working through these arcane and endlessly self-referential judgments, one begins to wonder whether the current High Court is not engaged in a kind of juridical Glass Bead Game rather than the operation of a system of administrative justice. Certainly, the reversion to formalism after a period of anti-formalism at home and during an anti-formalist era abroad must amount to something more than a simple return to juridical form. Dixonian legalism today, that is to say, means something different from what it meant in Dixon’s time. For it is one thing to embrace legalism as a means of insulating the judges from stormy political weather in formalist times, but to do so at a time when courts elsewhere are moving in a quite different direction is deliberately to court isolation. It amounts, then, to a deliberate rejection both of the ‘activist’ traits – legal and political – of the Mason court and the international jurisprudence of rights previously embraced by that court.108 In this environment, the play of legalism becomes almost a parody of legalism. Since, as Taggart observes, the High Court practice of reciting legal ‘mantras – perhaps even shibboleths’ does not equate to impartial decision-making but simply ‘diverts attention from the manipulable nature of the doctrines as applied’.109 Judges revel in the opaque and obscurantist quality of their judgments. Law becomes ritual. And no-one is remotely convinced that any of it is apolitical. III THE DEEP BLUE SEA: THE UK

Turning our attention to the UK, we confront a situation very much in flux, the main cause of which is the introduction of the HRA. While it is true that ‘fundamental’ rights had become more established features of the legal landscape during the 1990s,110 these developments have been dwarfed by what has happened since. Indeed, it is not necessarily an 108 For a discussion of the latter see H Charlesworth and others, No Country is an Island: Australia and International Law (Sydney, UNSW Press, 2006). 109 Taggart, above n 68. 110 See, eg, M Hunt, Using Human Rights Law in English Courts (Oxford, Hart Publishing, 1998).

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overstatement to regard the HRA as the catalyst for what may amount to a reformation of English administrative law.111 The ongoing nature of these developments, however, makes it hard to distinguish with precision the trends that will prove long-lasting from those that will diminish. This being so, I approach the analytical task in a somewhat unorthodox manner in this section, running side-by-side two plausible readings of (or, perhaps, two cautionary tales relating to) current developments. Proportionality, now established as a principle of judicial review and carrying the potential perhaps to revolutionise the discipline, will provide the main focus of the inquiry. The proportionality test is said to have four stages.112 First, the legislative objective must be sufficiently important to justify limiting a fundamental right; second, the measure designed to meet the objective must be rationally connected to it; third, the means used to impair the right must go no further than is necessary to accomplish the objective; fourth, the balance struck between the rights of the individual and the interests of the community must be acceptable. Proportionality was not recognised by the English courts as a free-standing principle of review before the HRA,113 although there were occasional dicta to the effect that one day this situation might change.114 It became clear, however, that the introduction of the HRA would change this situation and, in R v Secretary of State for the Home Department, ex p Daly, the House of Lords applied a proportionality approach in holding that there had been a violation of the claimant’s right to the confidentiality of his correspondence with legal advisors.115 Lord Steyn stated that the proportionality principle, rather than the Wednesbury test or any sub-division of it, should be applied when European Convention on Human Rights (‘ECHR’) rights are at stake. Proportionality is, Lord Steyn said, a ‘more precise and more sophisticated’ test which allows for a ‘somewhat greater’ intensity of review than its predecessor. In particular, proportionality ‘may require the reviewing court to assess the balance which the decision maker struck’ and,

111 T Poole, ‘The Reformation of English Administrative Law’ (2009) 68 Cambridge Law Journal (forthcoming). 112 See, eg, Huang v Secretary of State for the Home Dept [2007] UKHL 11 [19]; R (Razgar) v Secretary of State for the Home Dept [2004] UKHL 27 [20]. See also R v Oakes [1986] 1 SCR 103. Cf de Freitas v Permanent Secretary of the Ministry of Agriculture [1999] 1 AC 69, in which the Privy Council outlined a three-stage test. 113 R v Secretary of State for the Home Dept, ex p Brind [1991] 1 AC 696. English courts were, however, obliged to apply proportionality in the context of EU law: see, eg, R v Minister of Agriculture, Fisheries and Food, ex p Roberts [1991] 1 CMLR 555. 114 Council for Civil Service Unions v Minister for the Civil Service [1985] AC 374, 410 (Lord Diplock). 115 R v Secretary of State for the Home Dept, ex p Daly [2001] UKHL 26.

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may go further than the traditional grounds of review as it may require attention to be directed to the relative weight to be accorded to interests and considerations.116

The decision to adopt proportionality was prompted by the criticism of the European Court of Human Rights which said in Smith and Grady v UK that the Wednesbury test, even in its ‘anxious scrutiny’ manifestation, was inadequate to protect ECHR rights.117 (The Strasbourg Court judgment, indeed, was referred to at various points in the House of Lords decision.118) A number of commentators (and judges) see proportionality as a way of reinvigorating judicial review. For these writers, proportionality provides not only a more structured way of negotiating the issue of substantive review than the existing Wednesbury test119 but also, being clearly infused with moral colour, it has the potential to ensure that the relationship between government and governed is effectively policed by the court.120 David Beatty’s The Ultimate Rule of Law is the most sustained and far-reaching elaboration of this position. Proportionality accounts, Beatty says, for ‘virtually every case in which courts have responded politically to protect people’s general welfare and well being’.121 Rejecting ‘prudential arguments’ that call for courts to defer to agency expertise, he argues for the full-blown and unencumbered application of the proportionality principle by the courts. That principle, he claims, provides the only conceptual apparatus judges have, and all that they need, to harmonize the autonomy of each person with the general will of the community.122

‘External’ – non rights-based – elements should be shut out from judicial consideration: Rather than evaluate the competing interests at stake against some external, objective standard or principle, judges try to assess the affected parties’ own understanding of how significant the law being tested is for them.123

116

R v Secretary of State for the Home Dept, ex p Daly [2001] UKHL 26 [27]. Smith and Grady v UK (1999) 29 EHRR 493; Lustig-Pream and Beckett v UK (1999) 29 EHRR 548. 118 R v Secretary of State for the Home Dept, ex p Daly [2001] UKHL 26 [27] (Lord Steyn) (‘Daly’). According to Lord Cooke: ‘the view that the standards [of proportionality and Wednesbury] are substantially the same appears to have reached its quietus in Smith and Grady’ [32]. 119 See, eg, J Jowell and A Lester, ‘Beyond Wednesbury: Substantive Principles of Administrative Law’ [1987] Public Law 368. 120 See, eg, Jowell, above n 20. 121 D Beatty, The Ultimate Rule of Law (Oxford, OUP, 2004) 144. 122 Ibid 116. 123 Ibid 93. 117

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While many of us might share Beatty’s verdict that proportionality marks a normative advance on Wednesbury and welcome, with Lord Steyn, the ability of that principle openly to allow for more intensive review in some instances, we should pause to consider the wider implications of its adoption, at least in the undiluted manner envisaged by Beatty. Even on Lord Steyn’s (naturally rather cautious) formulation, it is clear that we are talking about a test that is open-ended and potentially very intrusive indeed. In applying proportionality courts are required, we are told, ‘to assess the balance which the decision maker struck’ and to pay attention ‘to the relative weight to be accorded to interests and considerations’. This could mean that courts in effect remake – and to do so quite openly – agency decisions. (And to do so without consideration of the identity of the agency, since on Beatty’s formulation it seems not to matter for whether the thing in question is a decision of a low-level official or an Act of Parliament.) This development, in which authority and legitimacy questions other than those directly related to rights would be stripped from the process of review, amounts to a very radical reworking of judicial review, at least as it is currently understood by its participants. And unlike Wednesbury, which contains within it a self-limiting warning or reminder of the limits of the judicial role, nothing in the proportionality test indicates when intensive scrutiny might not be appropriate. The proportionality principle contains very little of substance, save for the general notion that decisions should not be disproportionate, and so gives no real indication of how it ought to be applied. As Adler observes, for all its rational pretensions, it is at least arguable that proportionality is primarily non-rational since it depends upon whether we believe that the sacrifice of the individual interest is too great a burden.124

One way of responding to the dangers of proportionality – its ill-defined scope and potentially limitless reach – has been to concentrate on the idea of deference as a limiting device. Indeed, Hunt sees the development of deference doctrines as the flip-side of the ‘unequivocal embrace’ of proportionality by the courts.125 Although he doubts the value of ‘spatial language of areas or margins of discretion’, Hunt argues that a ‘rich conception of legality and the rule of law’ should accord ‘a role for the democratic branches in the definition and furtherance of fundamental values’.126 Laws LJ has advanced the most systematic attempt in practice 124 J Adler, ‘The Sublime and the Beautiful: Incommensurability and Human Rights’ [2006] Public Law 697, 699. 125 M Hunt, ‘Sovereignty’s Blight: Why Contemporary Public Law Needs the Concept of “Due Deference”’ in N Bamforth and P Leyland (eds), Public Law in a Multi-Layered Constitution (Oxford, Hart Publishing, 2003) 340–41. 126 Ibid 339, 350. See also D Dyzenhaus, ‘The Politics of Deference: Judicial Review and Democracy’ in Taggart, above n 12.

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to fashion a framework for the calibration of deference. In International Transport Roth GmbH v Secretary of State for the Home Department,127 Laws LJ specified four principles for determining the level of deference owed by a court to a public authority. First, more deference should be shown an Act of Parliament than to a subordinate measure or executive decision. Second, there is more scope for deference ‘where the Convention itself requires a balance to be struck, much less so where the right is stated in terms which are unqualified.’ Third, greater deference is owed where the subject-matter is within the constitutional responsibility of the decisionmaker, and less when it lies within the constitutional responsibility of the courts. Fourth, the degree of deference also depends on whether the subject-matter lies within the expertise of the decision-maker or the court.128 But the attempt to find principles of deference that might provide some structure and limit to the application of the proportionality test has been criticised. Like Beatty, TRS Allan deplores the new doctrines of judicial deference which he regards as nothing more than ‘non-justiciability dressed in pastel colours’.129 Deference, for Allan, is either an empty or a pernicious doctrine. It is empty if it ‘purports to implement a separation of powers between the courts and other branches of government’, since such a separation is secured by ‘the proper application of legal principles defining he scope of individual rights’. It is pernicious if, ‘it permits the abdication of judicial responsibility in favour of reliance on the good faith or good sense or special expertise of public officials, whose judgments about the implications of rights in specific cases may well be wrong.’130 Considerations not directly related to the right in question – for instance, those that relate to ‘characteristics of the decision-maker or its procedures’ – are classified as ‘external considerations’ inappropriate for judicial consideration. The courts have yet to have worked out quite how the ‘tangled story’131 of deference is to be resolved. But one reading of (some of the) recent doctrinal developments would fit the position articulated by ‘hardliners’ like Beatty and Allan. Let us call this reading, since it is really a vision of the future of administrative law, the noble dream. On this reading, proportionality takes its rightful place at the centre of a newly minted ‘constitutionalised’ body of administrative law. (For, as Taggart puts it, why wander through the maze of administrative law when you can cruise

127

[2002] EWCA Civ 158; [2003] QB 728. [2002] EWCA Civ 158; [2003] QB 728 [81]–[87]. TRS Allan, ‘Human Rights and Judicial Review: A Critique of “Due Deference”’ (2006) 65 Cambridge Law Journal 671, 682. 130 Ibid 675. 131 L Steyn, ‘Deference: A Tangled Story’ [2005] Public Law 346. 128 129

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the motorway of constitutional law?) And, in this system, courts recognise that proportionality works in a different way and cuts deeper into agency discretion than any previous principle or rule. They apply it, then, without recourse to inappropriate doctrines, like deference, which serve to qualify the rights-centred quality of the new legal framework. And, since now, ‘the only proper question for the court to consider is simply whether or not the decision falls within the sphere of decision-making autonomy that the claimant’s right, on its correct interpretation, allows’,132 the court should now be unconcerned with the identity of the agency or its behaviour in the process of decision-forming – even, for instance, if the agency has come to its own conclusions about the rights-related dimensions of the issue in question. There is some support for this reading in the cases. Some of this support focuses on the terminology of ‘deference’, which is disliked by some members of the judiciary. Lord Hoffmann, in particular, while recognising the ‘current popularity of the word “deference” to describe the relationship between courts and other political bodies’, has said that he does not find ‘its overtones of servility, or perhaps gracious concession, are appropriate to describe what is happening’ in the cases.133 Likewise, in their recent Report in Huang v Home Secretary, the House of Lords opined that the weighing of competing factors was not ‘aptly described as deference’ but rather the, performance of the ordinary judicial task of weighing up the competing considerations on each side and according appropriate weight to the judgment of a person with responsibility for a given subject matter and access to special sources of knowledge and advice.134

There is also some support for the hardliners’ rejection of the relevance to the judicial consideration of an agency’s own understanding of the rights interests at stake. Lord Hoffmann recently argued in Belfast City Council v Miss Behavin’ Ltd that the court should disregard any ‘display of human rights learning’ on the agency’s part.135 But there are reasons to expect that the courts will stop themselves from sleepwalking, as it were, into the ‘noble dream’. Shorn of principles of deference, or for that matter any other limiting device, proportionality provides little more than a capacious – indeed, rapacious – tool (or rationalist mask?) for the ungoverned expansion of judicial review. As Taggart says, proportionality ‘has not been adequately normatively justified and inevitably will entail inadequately restrained or disciplined judicial

132 133 134 135

Allan, above n 129, at 671–2. R (ProLife Alliance) v BBC [2004] 1 AC 185 [75]. Huang v Home Secretary [2007] UKHL 11 [16]. Belfast City Council v Miss Behavin’ Ltd [2007] UKHL 19 [13].

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discretion’. At least as conceived by hardliners like Beatty and Allan, the application of the test ‘requires placing too much faith in the judges to do the right thing’.136 The enormous increase in judicial discretion that this position entails is the opposite of the rational, structured approach to review that Lord Steyn in Daly and earlier advocates of proportionality had in mind. What we encounter, instead, is the prospect of courts floundering on an apparently limitless ocean of principle. Thus, we find Laws LJ in Abdi v Secretary of State for the Home Department137 – himself no mean advocate of rights-based judicial review138 – engaged in a frankly ‘bizarre’139 process of casting around for a principle on which to ground a conclusion already reached by other (non-specified) means: I would so conclude on the simple ground that the merits of the Secretary of State’s case press harder than the appellant’s, given the way the points on either side were respectively developed by counsel … But I find it very unsatisfactory to leave the case there. The conclusion is not merely simple, but simplistic. It is little distance from a purely subjective adjudication … Accordingly a public body’s promise or practice as to future conduct may only be denied, and thus the standard I have expressed may only be departed from, in circumstances where to do so is the public body’s legal duty, or is otherwise, to use a now familiar vocabulary, a proportionate response (of which the court is the judge, or the last judge) having regard to a legitimate aim pursued by the public body in the public interest. The principle that good administration requires public authorities to be held to their promises would be undermined if the law did not insist that any failure or refusal to comply is objectively justified as a proportionate measure in the circumstances.140

We should be thankful to Laws LJ for making this full disclosure of his reasoning process for it reveals the reality of judging under the influence of

136 M Taggart, ‘Proportionality, Deference, Wednesbury’ [2008] New Zealand Law Review (forthcoming). 137 [2005] EWCA Civ 1363. 138 See, eg, Sir J Laws, ‘The Constitution: Morals and Rights’ [1996] Public Law 622. 139 T Hickman, ‘The Structure and Content of Proportionality’ [2008] Public Law (forthcoming). 140 Abdi v Secretary of State for the Home Dept [2005] EWCA Civ 1363, 67–8. Another excellent example is provided by the recent decision of the House of Lords in R (Animal Defenders International) v Secretary of State for Culture, Media and Sport [2008] UKHL 15. The case involved a challenge to a decision by the Broadcast Advertising Clearance Centre that ADI’s proposed advertisement (part of its ‘My mate’s a primate’ campaign) was a political advertisement and that therefore it could not be broadcast in the television or radio media. The application was dismissed, but not before their Lordships had waxed lyrical about freedom of expression being an essential condition of both ‘an intellectually healthy society’ and ‘truly democratic government’ [27] (Lord Bingham). Baroness Hale said that the case was ‘not just about permissible restrictions on freedom of expression’ but also ‘about striking the right balance between the two most important components of a democracy: freedom of expression and voter equality’ [49]. While studiously avoiding the language of deference, the case seemed finally to turn on the (rather old-fashioned?) notion that, in this context, the ‘judgment of Parliament … should not be lightly overridden’ [33] (Lord Bingham).

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the noble dream. A decision based upon an assessment of the arguments presented by counsel, and/or judicial instinct, propped up ex post – almost laughably – on the vague invocation of even vaguer principles. And, besides the fashionable rhetorical flourish – the same passage also includes references to ‘the call to arms of abuse of power’ and ‘the moral impetus of the rule of law’ – the principled approach contains nothing capable either of grounding or making sense of the ‘[o]bjective justification’ and means nothing without an articulation of the standards by which we may judge the justificatory reasons. ‘Proportionate’ means nothing since, as we have seen, the notion of proportionality has very little normative content. And the idea of ‘legitimate aim’ tells us nothing about what counts as legitimate decision-making. The principled patina is just as simple (or should that be simplistic?) as the original, unreasoned decision. The second reading – or cautionary tale – is rather more plausible than a scenario in which the judges allow judicial review to collapse into unstructured normativism. I will call this alternative account the formalist nightmare. Instead of the genesis of a new normative jurisprudence in which rights and proportionality have free rein, that is to say, courts may tend to react by introducing or reverting to formalist tests and concepts that feel either familiar or otherwise ‘safe’ in a new juridical world that is inherently difficult to navigate. One such attempt occurred in the Court of Appeal decision in R (SB) v Headteacher and Governors of Denbigh High School,141 the most important case on proportionality since Daly. There, Brooke LJ argued that since the school authorities had not applied a full-scale proportionality analysis to its decision to exclude a Muslim schoolgirl who wished to wear a jilbab in contravention of the school’s uniform policy,142 for that reason the application should succeed: The school did not approach the matter in this way at all. Nobody who considered the issues on its behalf started from the premise that the claimant had a right which is recognised by English law, and that the onus lay on the school to justify its interference with that right.143

141

[2005] EWCA Civ 199. R (SB) v Headteacher and Governors of Denbigh High School [2005] EWCA Civ 199. According to Brooke LJ, the structure of process of decision-making should have taken the following line: ‘Has the claimant established that she has a relevant Convention right which qualified for protection under Art. 9(1)? (2) Subject to any justification that is established under Art. 9(2), has that Convention right been violated? (3) Was the interference with her Convention right prescribed by law in the Convention sense of that expression? (4) Did the interference have a legitimate aim? (5) What are the considerations that need to be balanced against each other when determining whether the interference was necessary in a democratic society for the purpose of achieving that aim? (6) Was the interference justified under Art. 9(2)?’ [75]. 143 [2005] EWCA Civ 199 [76]. For critical analysis of this decision, see T Poole, ‘Of headscarves and heresies: the Denbigh High School case and public authority decision-making under the Human Rights Act’ [2005] Public Law 685. 142

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This approach was (rightly) scotched by the House of Lords, where Lord Bingham said that it ‘would introduce “a new formalism” and be “a recipe for judicialisation on an unprecedented scale”’.144 But other formalist solutions have been more favourably received. The House of Lords seem to have decided to tether their analysis of ECHR rights to the jurisprudence of the European Court of Human Rights.145 This manoeuvre, rather like tying the peso to the dollar, is attractive for a court seeking to shore up its legitimacy in turbulent times. But there is no requirement to do this in the HRA – section 2 speaks about the need to ‘take into account’ Strasbourg cases when interpreting ECHR rights. And it is normatively entirely unjustified. The Strasbourg Court recognises its special position as a supranational court – hence its ‘margin of appreciation’ doctrine. As well as assuming (wrongly146) that that court is normatively infallible, this approach entails that English judges do not have to consider for themselves the importance of the right at stake nor the legitimacy of certain types of interference, yet surely these matters are of the essence in rights-based adjudication. Similar stirrings of this ‘new formalism’ are present outside the immediate context of rights and proportionality. What we see operating currently, taking a broad perspective, is a bifurcated system in which ‘ordinary’ and ‘rights-based’ judicial review operate in different ways. In terms of substantive review, Wednesbury unreasonableness remains the test for the former; proportionality now governs the latter.147 The standing rules are different for both.148 ‘Sufficiency of interest’ (as interpreted, often generously, by the courts149) governs the ‘ordinary’ process, while those seeking to bring claims under the HRA must be ‘victims’ of the decision in question.150 The system that results is messy and (overly?) complicated. It also undercuts the claim that a principled framework of judicial review is now being created. This situation is at least partly a function of the partial abandonment of old formulae and pre-existing rules. A trend seems to be emerging in which new principles and ideas are embraced and older ideas denigrated or 144

R (Begum) v Headteacher and Governors of Denbigh High School [2006] UKHL 15

[31]. 145 Huang v Home Secretary [2007] UKHL 11; Secretary of State for Defence v Al-Skeini [2007] UKHL 58 [106]; R (Ullah) v Special Adjudicator [2004] UKHL 26 [20]; R (Animal Defenders International) v Secretary of State for Culture, Media and Sport [2008] UKHL 15 [53]. 146 See, eg, MB Dembour, Who Believes in Human Rights? Reflections on the European Convention (Cambridge, CUP, 2006). 147 R v Chief Constable of Sussex, ex p International Trader’s Ferry Ltd [1999] 2 AC 418 (where both proportionality and Wednesbury were applied). For analysis see M Elliott, ‘The Human Rights Act 1998 and the Standard of Substantive Review’ [2002] Judicial Review 97. 148 J Miles, ‘Standing under the Human Rights Act 1998: Theories of Rights Enforcement and the Nature of Public Law Adjudication’ (2000) Cambridge Law Journal 133. 149 C Harlow, ‘Public Law and Popular Justice’ (2002) 65 Modern Law Review 1. 150 Human Rights Act 1998 (UK) s 7.

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curtailed, but not entirely repudiated. The interplay of proportionality and Wednesbury again offers the best example. The comments of Dyson LJ in The Association of British Civilian Interests – Far Eastern Division v Secretary of State for Defence to the effect that it would not be long before someone stepped up to perform the burial rites for Wednesbury – but not us, not now – are typical.151 This pattern discloses a generalised uncertainty about how to articulate the new framework of judicial review. Unconvinced by the grandiose schemes of the ‘hardliners’ and worried about the far-reaching impact of the decision to adopt proportionality, the courts seem often unwilling to let go of older nostrums and incapable, it would appear, of establishing new ones – or at least ones in which they might fully believe. So the survey of developments in the English context also ends on a sour note. Two conflicting, but related, accounts (or cautionary tales) have been canvassed. The first – the ‘noble dream’ – which builds on the idea that the unfettered application of the proportionality principle should form the centrepiece of the ‘new’ administrative law, undoubtedly encourages and supports the normative turn in judicial review. But it raises the prospect of what might be called an ‘unprincipled principled’ approach, one which leaves the courts adrift on a sea of largely unstructured judicial discretion.152 The second – the ‘formalist nightmare’ – may occur where judges, in trying to escape the noble dream, or otherwise unsure of how to direct administrative law into the future, cling to both old and newly minted formalisms and, in so doing, create a messy and complicated system which undercuts the claims of principle. IV CONCLUSION

The survey of Australian and English developments contained within this chapter has shown two remarkably different approaches to the spread of the new ‘jurisprudence of rights’. While by no means comprehensive, the analysis of the decision-making of the Gleeson court reveals a position antagonistic towards both the language of human rights and the international and transnational discourse in which that language is most commonly located. The court, deliberately turning its back on the methodology of its predecessor, has ostensibly reverted to Dixonian ‘strict and complete legalism’. But this reversion has led to what amounts almost to a parody of legalism, in which members of the court seem almost to revel in an esoteric 151 The Association of British Civilian Interests – Far Eastern Division v Secretary of State for Defence [2003] EWCA Civ 473 [34], [35]. 152 Another excellent example is provided by the recent decision of the House of Lords in R (Animal Defenders International) v Secretary of State for Culture, Media and Sport [2008] UKHL 15, above n 140.

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and abstract formalism that produces, at least on occasion, judgments almost barbaric in their lack of concern for either context or moral outcomes. Developments in England during the same period present a sharply contrasting picture. The embrace of rights – particularly as a result of the passing of the HRA – and the adoption of the proportionality test have created a situation of great flux, within which some voices call for a much more thoroughgoing ‘righting’ of administrative law. This approach, advocated most strongly by Beatty and Allan, locates proportionality firmly at the centre of a reconstructed administrative law – Beatty apparently sees no need for any other principle – and would remove what is currently the courts’ principal limiting device, the idea of ‘deference’. But, rights being inherently indeterminate and the proportionality test being open-ended and without limit, buying into this ‘noble dream’ would leave courts adrift in an ocean of principle. There is a danger, however, that in seeking to avoid this particular danger, the courts may fall into another: the ‘formalist nightmare’. They may start – and this has already happened in some cases – to revert to older traditions of formalism, devising doctrines which may provide limits but do so without good cause. It might just be possible to present these findings in terms of an overarching linear narrative about rights and administrative law. On this account, English jurisprudence is currently in the process of ‘working itself pure’, on the verge of merging into the general pattern of a (relatively ‘thick’) transnational common law of judicial review. And the Australian position, while currently exceptional, might one day resume the path to juridical righteousness. But a more plausible account would be to understand these jurisdictions, historically both linked and independent, as two participants within a relatively ‘thin’ common juridical framework – two islands, if you prefer, within a broader juridical archipelago.153

153 Cf C Kukathas, The Liberal Archipelago: A Theory of Diversity and Freedom (Oxford, OUP, 2003).

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2 Common Law and Statute Law in US Federal Administrative Law JACK M BEERMANN

M

ARK ARONSON’S OUTSTANDING treatise, Judicial Review of Administrative Action, is an inspiring piece of work for US lawyers, who today tend to be much less systematic and comprehensive in our treatment of judicial review. The book’s focus on common law also serves to distinguish it from the American view. Although common law pops up explicitly on occasion in the odd quarter of US federal1 administrative law, by and large the law of judicial review in the United States appears now to be statutory and it is understood that way by most lawyers in the US. Note the word ‘appears’. Scratch below the surface and the federal courts in the US may not actually behave all that differently than court systems with an openly acknowledged common law tradition in administrative law. The largely statutory appearance of US administrative law should not be surprising in light of the existence of the federal Administrative Procedure Act 1946 (‘APA’). The APA, including its additions and amendments, is a relatively comprehensive guide to much of administrative law in the US. It contains the procedures agencies are supposed to follow in both rulemaking and adjudication, it contains provisions on the availability and scope of judicial review of agency action, and as amended it includes open meetings and open files requirements, as well as procedures for negotiated rule-making and legislative review of agency rules. Add in the generally held view in the US that federal courts should not make common law but should act only when and how they are statutorily authorised to act, and it 1 The focus of this chapter is on US federal administrative law. Each state in the United States has its own administrative agencies, its own body of administrative law and its own statutes governing administrative law and procedure and unless a federal issue arises, state administrative law functions independent of federal administrative law. Most administrative law scholarship and teaching in the US focuses on federal law. In the remainder of this chapter, all references to ‘US administrative law’ are to federal law.

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is understandable that administrative law takes on a strong statutory appearance. Although US federal courts have always been statutorily authorised to employ the writs that English courts used in the common law of judicial review,2 federal courts have, since the enactment of the APA, been reluctant to be open about their use of common law in the administrative law arena, especially when a statute contains an answer or even the germ of an answer. Even when the federal courts rely on pre-APA case law or principles, courts usually filter this law through the lens of the APA. My contribution to this Festschrift in honour of the remarkable career of Mark Aronson is to scratch beneath the statutory veneer of US administrative law and reveal ways in which US federal courts behave like common law courts, creating administrative law based on principles and policies that may or may not be consistent with the language, structure and history of the APA and other relevant provisions. I will also highlight areas in which the Supreme Court has required a more statutory focus as a matter of contrast with the common law aspects of administrative law and to illustrate that the court has not provided or even attempted to provide a principled justification for its continued use of administrative common law. Lastly, this essay shows that the courts have not provided a method for choosing between a statutory or common law method in any particular doctrinal area. A clarification of the term ‘common law’ is in order at this point. While originally ‘common law’ may have referred to a body of law thought to exist in common across jurisdictions under generally accepted standards of legal reasoning, I use the term here to distinguish statute law made by legislators from case law made by courts. In the US, it is understood that each state has its own common law, crafted by its courts under the supervision of the state supreme court, subject only to the supremacy of federal statutory and constitutional law.3 In many situations, including administrative law, courts in the US use statutes (and constitutional text) as jumping-off points for a degree of creativity beyond that expected of a court engaged in construction and application of an authoritative text. These courts apply a common law methodology in two separate but related senses. The first sense is that courts often make administrative law in areas ostensibly governed by the APA with little or no regard for the actual language or intent of the statute. Second, this law is then applied using the common law method of elaboration and development, so that

2

See The Judiciary Act 1789, § 14, current version codified at 28 USC § 651. Erie R Co v Tompkins 304 US 64 (1938). There are small pockets of federal common law, eg, the law governing matters such as federally issued negotiable instruments and the preclusive effects of federal court judgments, but this federal common law exists only in the tiniest fraction of subject areas. 3

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doctrinal systems governing important areas of administrative law become so well developed that it becomes virtually unnecessary even to refer to the text of the APA when deciding cases concerning APA provisions. This is not the first analysis of the relationship between the APA and the common law of judicial review in the United States. Kenneth Culp Davis, the one-time Mark Aronson of US administrative law, examined the issue in 1980 and concluded that most administrative law in the US is judgemade and that the law in the long run will reject efforts to transform administrative law into a statutory discipline.4 John Duffy concluded in 1998 that administrative law was following a trend away from federal common law toward a more statutory basis.5 With the benefit of another decade of developments, Davis appears to have the better of the argument, although Duffy may actually have been expressing not a conclusion but a hope, based on a particular case in which the court took a strongly statutory perspective, that the entire body of administrative law would move in the statutory direction. It is, however, more of a spectrum than a dichotomy with courts paying more or less attention to enacted law across the range of administrative law subjects. The most that one can confidently say today is that US administrative law contains elements that appear to be highly statutorily focused alongside elements in which courts exercise the discretion of a common law court. In this chapter, I analyse two of the many sets of administrative law issues that could be explored under this rubric, namely statute versus common law in the law of administrative procedure and statute versus common law regarding the availability and scope of judicial review of agency action. In the procedural area, I look at rule-making procedure, the timing and availability (including preclusion) of judicial review and standing to seek judicial review. In the more substantive area of the scope of review, I consider two issues: judicial review of agency statutory interpretation and the general standard governing judicial review of agency policy decisions. In both areas, the operative question is whether courts reviewing agency action for procedural or substantive regularity are following governing statutes or applying judicially created norms.

I ADMINISTRATIVE PROCEDURE

The APA prescribes detailed procedures for rule-making (formal and informal) and for formal adjudication. Unless a more specific statute 4 KC Davis, ‘Administrative Common Law and the Vermont Yankee Opinion’ (1980) Utah Law Review 3. 5 JF Duffy, ‘Administrative Common Law in Judicial Review’ (1998) 77 Texas Law Review 113.

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provides otherwise, federal agencies are required to follow the procedures specified in the APA. Given the concentrated attention Congress paid to administrative procedure in the APA,6 this area would seem to be a prime candidate for judicial modesty in the sense that a court reviewing administrative procedure would require agencies to follow the APA and other statutorily mandated procedures and nothing more. However, as we shall see, despite adherence by the Supreme Court to the principle that courts should not require agencies to employ procedures beyond those required by statute, that is not how the law regarding judicial review of administrative procedure has developed. A Administrative Procedure Generally Let us use informal rule-making as our main example. The APA establishes a bare-bones rule-making procedure which is used in the vast majority of agency rule-making proceedings. This procedure, referred to as ‘informal’ or ‘notice and comment rule-making’ requires notice of the proposed rule-making, opportunity for interested persons to comment on the proposed rules and a ‘concise general statement of the basis and purpose’ of any rules actually adopted.7 In the very earliest decisions applying the APA, the federal courts applied the requirements of the APA primarily with reference to the text, perhaps because of the recognition that Congress had paid a great deal of attention to the finer points of administrative procedure when it drafted the APA. At some point, this close adherence to text broke down so that by the late 1960s, federal courts adjusted procedural requirements based on their own sense of best practices in light of the importance and complexity of the particular rule-making proceeding. The courts treated the APA as setting a floor, but employed a common law methodology to determine the appropriate level of procedure in each particular proceeding. In 1978, the Supreme Court in Vermont Yankee Nuclear Power Corp. v Natural Resources Defense Council Inc8 firmly rejected this practice as inconsistent with the statutory scheme embodied in the APA, holding that courts may not require procedures other than those specified in the APA or another applicable statute, except in ‘extremely compelling circumstances’ 6 In Fahey v O’Melveny & Myers 200 F 2d 420, 480 (9th Cir 1952) the court stated: ‘We take judicial notice of the prolonged campaign to secure passage of the APA and the fact that few pieces of legislation passed in recent years received more attention at the hands of Congress. During its consideration the entire field of administration procedure and judicial review of administrative orders was subjected to searching scrutiny in order to develop a more orderly pattern in this area of law.’ 7 5 USC § 553. There is also a provision for formal rulemaking in the APA, but that procedure is rarely used. See 5 USC § 553(c). 8 435 US 519 (1978) (‘Vermont Yankee’).

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or when an agency makes ‘a totally unjustified departure from well-settled agency procedures of long standing’.9 In the Vermont Yankee decision itself, the court held that agencies could not be ordered to allow cross-examination or other trial-type procedures in proceedings governed by the APA’s notice and comment rule-making provisions. The court later extended the Vermont Yankee rule to less formal decisionmaking processes,10 and the black letter rule in US law is that courts generally may not require agencies to adopt procedures other than those required by statute, including the APA, unless such procedures are constitutionally deficient. While the court supported its decision with policy arguments concerning uniformity and predictability, it drew those arguments, and most of the support for its decision, from the statute and legislative history behind it. The court viewed the role of courts engaged in judicial review of administrative procedure as enforcing the standards imposed by Congress rather than as creating a system of agency best procedural practices. Despite this apparently clear directive, lower federal courts have persisted in applying a common law method to procedural questions arising under the APA’s rule-making provisions. Perhaps this should not be surprising. Kenneth Culp Davis attacked Vermont Yankee as inconsistent with the traditional common law powers of US courts and with the APA itself, which explicitly preserves ‘additional requirements imposed by statute or otherwise recognized by law’.11 Davis predicted that [t]he law in the long run will reject the Vermont Yankee opinion and is tending to do so in the short run.12

His prediction and characterization of the post-Vermont Yankee case law has been proven half right. Although Vermont Yankee itself has not been repudiated, and in fact has been reaffirmed, the lower federal courts continue in many areas to shape administrative procedure in a common law process without much reference to the text and history of the APA.

9 For a more complete review of the Vermont Yankee decision and its current application (or non-application) see JM Beermann and G Lawson, ‘Reprocessing Vermont Yankee’ (2007) 75 George Washington Law Review 856. 10 Pension Benefit Guaranty Corp v LTV Corp 496 US 633 (1990). 11 See Davis, above n 4, at 10, citing 5 USC § 559. Davis concluded that ‘otherwise recognized by law’ must refer to common law. 12 Ibid 12. John Duffy pointed out more recently that Vermont Yankee itself was a common law decision because it relied on pre-APA precedent for its central holding and because it allowed for exceptions to its rule (for extremely compelling circumstances and departures from long standing agency practices) that are not provided for in the APA or any other statute: Duffy, above n 5, 182. Duffy finds a statutory basis for Vermont Yankee in APA § 706(2)(D)’s requirement that courts set aside ‘agency action … found to be … without observance of procedure required by law’: at 186. He interprets ‘law’ as limited to the APA and other governing statutes.

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B Notice of Proposed Rule-Making The best example of continued federal court creativity despite Vermont Yankee is the application of the statutory requirement that agencies provide notice of the ‘terms or substance of … proposed rule[s] or a description of the subjects and issues involved’. In cases arising shortly after the APA was adopted, the federal courts stuck to the statutory language and rejected challenges to the adequacy of agency notices of proposed rule-making whenever the notice met the statutory minima by specifying the subjects and issues involved in the rule-making, as required by the APA.13 More recently, however, even after Vermont Yankee, lower federal courts have imposed non-statutory tests such as requirements that the final rule be a ‘logical outgrowth’ of the notice or that the final rule not materially alter the proposal.14 Courts have also required that agencies provide public notice of information or studies they consider when formulating the final rule.15 Courts support these decisions with arguments based on fairness to the parties interested in the rule-makings and arguments based on the quality of the rules likely to be produced with better notice. From one perspective, this is consistent with the traditional role of courts engaged in statutory construction, which is to apply the language and intent of the statute in a way that makes sense in light of the policies underlying the statutory scheme. However, the requirements entailed in these tests are elaborated and clarified in a case-law process largely detached from the language and intent behind the APA’s rule-making provisions, rendering the entire

13 See Colorado Interstate Gas Co v Federal Power Commission 209 F 2d 717, 723–4 (10th Cir 1953), reversed on other grounds, 348 US 492 (1955); Logansport Broadcasting Corp v US 210 F 2d 24, 28 (DC Cir 1954) (‘Logansport’); Owensboro on the Air Inc v US 262 F 2d 702, 706 (DC Cir 1959). In Logansport, for example, the court rejected the argument that the notice was insufficient because the agency’s final rule departed from the priorities announced in the notice and decided the matter based on a consideration not previously announced, ie, a determination that VHF television stations should be allocated to larger cities. It seems fairly clear that under current law in the federal courts of appeals the agency would be required to disclose its new decision rule in a (perhaps second) notice so that interested parties could comment on that potential basis for the decision. Cf American Medical Association v US, 887 F 2d 760 (7th Cir 1989) (rejecting challenge to notice based on significant change from proposal to final rule). 14 See Chocolate Manufacturers Assoc v Block, 755 F 2d 1098 (4th Cir 1985). The Supreme Court has cited the ‘logical outgrowth’ test without explicitly approving it, stating merely that ‘Courts of Appeals have generally interpreted [the APA’s notice requirement] to mean that the final rule the agency adopts must be ‘a “logical outgrowth’ of the rule proposed.”’ Long Island Care at Home, Ltd v Coke, 127 S.Ct. 2339, 2351 (2007), quoting National Black Media Coalition v. FCC, 791 F 2d 1016, 1022 (2nd Cir 1986). The court then concluded that ‘[t]he object, in short, is one of fair notice.’ 15 See US v Nova Scotia Food Products Corp, 568 F 2d 240 (2nd Cir 1977). This requirement had been rejected in the earlier and more statutorily-oriented decision in Logansport.

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enterprise inconsistent with the statutory method for applying the APA’s procedural provisions apparently required by the Supreme Court in Vermont Yankee.

C Ex Parte Comments There are other areas in which federal courts continue to impose procedural requirements and restrictions on agencies that are not supported by any statute. One such doctrine regulates agency receipt of ex parte communications during informal rule-making proceedings. The APA says nothing about these, and because they are explicitly prohibited by the APA in formal adjudicatory and rule-making proceedings, the best statutory argument is that they are allowed in informal rule-making.16 Some lower courts, however, have banned them, perhaps for good reason – they facilitate favouritism and fuel suspicion. However, a panel of the DC Circuit recently ruled against a ban on ex parte contacts outside the formal adjudication context based on the panel’s reading of Vermont Yankee.17 This is a small step in extending Vermont Yankee beyond what the Supreme Court has explicitly required.

D Availability and Timing of Judicial Review The APA regulates the availability and timing of judicial review. This includes a specification of what agency actions are reviewable (and unreviewable), who may seek judicial review and when review is available. In this area, the federal courts at times follow the statutory language fairly closely and insist on a statutory method, while other times they engage in a much freer, common law-like methodology. (i) Reviewable Agency Action The APA specifies that [a]gency action made reviewable by statute and final agency action for which there is no adequate remedy in a court are subject to judicial review.18

The first half of this provision is redundant; the second, according to the Supreme Court, creates a presumption that all final agency action is subject to judicial review of some sort. The vague language of the second half of 16 17 18

5 USC § 557(d). District No 1 v Maritime Admin 215 F 3d 37, 42–3 (DC Cir 2000). 5 USC § 704.

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this provision is intended to clarify that, when judicial review of a category of agency action is provided for in a statute other than the APA, that statute’s judicial review provisions take precedence over the APA’s and continue in force. This is sensible statutory reasoning: normally, a more specific statute takes precedence over a general statute. The APA basically admits that it is meant to provide review in those cases in which review is not otherwise available. This picture of specific statutes providing review with an APA backstop for other situations is incomplete. There is another category of review, denominated ‘non-statutory review’, under which agency action that is covered neither by a specific review provision nor the APA is reviewed. These challenges to agency action include petitions for mandamus, general federal question equity actions and actions for declaratory relief under the federal Declaratory Judgment Act. The term ‘non-statutory review’ is a misnomer, since these forms of non-statutory review depend at least to some extent on various statutes including a provision of the APA that provides that if the action for judicial review under the APA is inadequate or unavailable, the challenger may employ any applicable form of legal action, including actions for declaratory judgments or writs of prohibitory or mandatory injunction or habeas corpus, in a court of competent jurisdiction.19

This goes hand in hand with the APA provision relied upon by Davis for the proposition that Congress did not intend for the APA to displace the federal courts’ traditional common law powers in administrative law.20 In the absence of these non-exclusivity provisions in the APA, given the complex nature of the APA and the concentrated attention that was involved in its framing, there would have been strong arguments against preservation of review outside the APA. It might have been wise to presume that the APA constituted the exclusive means to challenge agency action, and if an action under the APA is not available, no review is available. As appealing as this reasoning might be in other contexts, it is inconsistent with the language and intent of the APA. The question then becomes what law determines the availability of these non-statutory remedies such as mandamus, certiorari and injunctions. The answer turns out to be federal common law. (It may seem odd to use the term ‘common law’ since these are technically considered equitable remedies. The term is used here to denote judicial action based on the traditional powers of courts in the absence of enacted substantive law.) There are some statutory aspects – from the very beginning, in the All Writs Act, Congress granted the federal courts the power to employ the 19 20

5 USC § 703. See Davis, above n 11 and accompanying text.

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traditional writs known to courts at that time. These remedies may also be entailed in the judicial power granted to the federal courts in Article III of the Constitution, which means that they would exist even without Congress’s permission. Further, various statutes grant federal courts jurisdiction over actions for mandamus, habeas corpus and suits in equity arising under federal law. But even if we view congressional permission as necessary for federal courts to grant the traditional remedies of non-APA judicial review, no federal statute specifies the conditions under which each remedy should be granted. Rather, the federal courts fashion appropriate actions and remedies where the APA and other specific regulatory statutes do not fulfill the task, applying the same common law methodology they employed before passage of the APA. Thus, as we have seen, the entitlement to judicial review comprises both statutory and non-statutory elements. Because most judicial review arises under the APA, little attention has been paid to the non-statutory aspects of judicial review in the US, but in light of the APA’s explicit provision for non-statutory methods of review, it remains an important aspect of US administrative law. (ii) Exceptions to the Availability of Judicial Review The APA creates two broad exceptions to the availability of judicial review. First, judicial review is not available when another statute precludes it. Second, judicial review is not available when ‘agency action is committed to agency discretion by law’.21 The former exception is highly statutory and the federal courts look to the language and intent of statutes to determine whether review is precluded. Statutes precluding review are relatively rare and are somewhat disfavoured, with the Supreme Court interpreting them relatively narrowly. The exception to review for when agency action is committed to agency discretion has statutory and common law elements. The statutory phrase ‘committed to agency discretion by law’ is ambiguous, because it cannot mean that every discretionary action by an agency is unreviewable. That would undercut a central purpose of judicial review, ensuring that agencies do not abuse the discretion they are granted, and it would be inconsistent with the APA’s specification that agency action is unlawful and should be set aside if it involves an abuse of discretion.22 As the Supreme Court recognised, this exception was meant to incorporate pre-APA common law. However, in its first discussion of this provision, the court ignored an important aspect of the pre-APA law of reviewability, stating that under this exception, agency action is unreviewable only if, in a particular matter, 21 22

5 USC § 701(a)(2). 5 USC § 706(2)(A).

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the standards governing agency action are so vague that there is, in effect, no law to apply.23 This inquiry is highly discretionary, calling on federal courts to engage in a common-law-like analysis of whether a particular agency statute meets some standard of vagueness as understood in the case law. More importantly, the court completely ignored the pre-APA understanding that judicial review is not available when a statute grants discretion in terms of the personal judgment of an official, using phrases such as ‘in his judgment’ to describe the conditions for executive action.24 The APA’s language was meant to incorporate this doctrine, and this oversight was remedied later when the court found no review of actions under a statute granting the Director of Central Intelligence the power to terminate the employment of any agency employee when ‘he shall deem such termination necessary or advisable in the interests of the United States’.25 The court noted that the inclusion of the word ‘deem’ indicates that Congress meant for this to be a personal decision of the agency director, not questionable in court or any other forum. Although the court formally stuck to the ‘no law to apply’ interpretation of the provision, it strained to include ‘deeming clause’ provisions in its understanding of when there is no law to apply. This remedied the court’s earlier neglect of this important aspect of the pre-APA common law of reviewability which Congress had intended to incorporate into the APA. Later, Justice Scalia convinced the court that the common law should have an even greater role in its reviewability jurisprudence than had existed before the passage of the APA. In his separate opinion in the CIA case, he argued that the phrase ‘by law’ in the APA’s judicial review exception refers generally to a common law of review under which certain categories of agency action were exempt from judicial review.26 He would include personnel decisions by the Director of Central Intelligence as one such category. Justice Scalia’s argument is interesting, and it may even be normatively persuasive, but it had absolutely no support in either the language and history of the APA or in pre-APA common law. Even the Supreme Court decision that most strongly supports the argument that some categories are exempt from judicial review, involving agency prosecutorial discretion, was careful to adhere to the ‘no law to apply’ understanding of the statutory exemption, and in line with that reasoning, it

23 24 25 26

Citizens to Preserve Overton Park Inc v Volpe 401 US 402 (1971). See US v George S Bush & Co Inc 310 US 371 (1940). Webster v Doe 486 US 592 (1988). Ibid 608–9 (1988) (Scalia J dissenting).

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recognised that agency action within the category is subject to judicial review if clear statutory standards govern the exercise of the otherwise unreviewable discretion.27 Despite the doubtful pedigree of Justice Scalia’s categorical approach to non-reviewability, in a decision just a few years following his separate opinion advocating the approach, a majority of the court, in an opinion by Justice Souter, adopted Justice Scalia’s reasoning and announced that [o]ver the years, we have read [APA] § 701(a)(2) to preclude judicial review of certain categories of administrative decisions that courts traditionally have regarded as ‘committed to agency discretion’.28

For this assertion, Justice Souter’s authority consisted of one concurring opinion and one dissenting opinion, raising the question of what he meant by ‘we’ in the statement. The next issue that arose under this development is what the court would find sufficient to establish a tradition of unreviewability of a category of administrative actions. The court’s first application of this doctrine allowed for such weak evidence of a tradition that it has opened up reviewability to the possibility of an unmoored common law process under which federal courts are free to exclude categories of agency actions from judicial review based on their own view of good policy without any real precedent. Our common law tradition assumes that judges act within a framework of accepted norms of judicial behaviour, such as adherence to precedent and fidelity to tradition, while maintaining the appropriate deferential judicial attitude toward statutes. In this particular example, we would assume that the court would rely on a well-established common law tradition of unreviewability before it exercised its common law power to deny review in the face of a statute that grants an entitlement to judicial review of agency action. However, in the single case in which the court has found non-reviewability under the categorical approach, the best support it could muster for the tradition of non-reviewability (of agency allocations of funds from lump-sum appropriations) was a citation to a 1975 opinion of the Comptroller General deciding a government contract protest.29 No judicial opinion supported the court’s conclusion that the category of allocation of funds from lump sum appropriations had been traditionally unreviewable. There were two more straightforward paths to the decision, both with a more statutory orientation. The court might have said that the very nature of a lump sum appropriation is that there is no law to apply to the

27 Heckler v Chaney 470 US 821 (1985). See also Dunlop v Bachowski 421 US 560 (1975). 28 Lincoln v Vigil 508 US 182, 192 (1993). 29 Ibid 192.

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allocation of funds among permissible agency objectives. It might have also said that the nature of a lump sum appropriation is to assign final discretion over allocation to responsible agency officials. Rather than take either of these more constrained paths, the court chose to adopt the reasoning that maximised its common law power to determine when judicial review is not available. Perhaps the intent was to let Congress and the agencies know who’s boss. (iii) Standing to Seek Judicial Review Both the APA and the Constitution play a role in determining whether a party has standing to seek judicial review of agency action in a federal court. Standing involves the requirement of a case or controversy for federal court jurisdiction under Article III of the US Constitution. Standing also involves a set of non-constitutional requirements, some deriving from the APA and some from general prudential concerns, for standing. In both areas, the Supreme Court has adopted unclear and malleable common law standards, allowing courts great freedom in making standing determinations. Contrary to the usual hope for increased clarity in common law reasoning over time, the criteria for standing have not been refined in a way that has led to clarity or predictability in the law of standing, either under the statute or the Constitution. The APA specifies that a person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute is entitled to judicial review thereof.30

Uncertainty exists over the meaning of ‘adversely affected or aggrieved … within the meaning of a relevant statute’. Does this language liberalise standing, allowing anyone injured by agency action to seek judicial review, or does it require that a person seeking judicial review identify a statutory source outside the APA for the right to review? Pre-APA law was very restrictive, rarely granting standing to third parties such as competitors.31 The Supreme Court has interpreted the APA to liberalise standing substantially, holding that, ‘within the meaning of a relevant statute’, in §702 requires that the adversely affected or aggrieved ‘complainant [be] arguably within the zone of interests to be protected by the statute’.32 While standing is generally not an impediment to the direct 30

5 USC § 702 (1976). See, eg, Alexander Sprunt & Son Inc v US 281 US 249 (1930) (denying shippers standing to challenge agency decision setting rates charged other shippers). 32 Association of Data Processing Serv Org v Camp 397 US 150, 153 (1970). It is not completely clear that the APA is the source of the zone of interests tests since, more recently, the court has characterised the zone of interests test as a generally applicable prudential 31

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subject of regulation seeking judicial review, this liberalisation is important for third parties who are affected by the regulation of others. These include business interests complaining about lenient regulation of competitors and environmentalists complaining about lenient environmental regulation. What does it mean for a third party to be ‘arguably within the zone of interests’ of a statute? The court has not been clear about what it actually requires, sometimes looking for affirmative indications that Congress intended to include the party seeking review within the zone of interests and other times looking mainly for evidence of whether Congress meant to exclude an affected party from the class of parties eligible to seek judicial review. In the most recent application in a statutory context, the court held that voters were within the zone of interests of a law requiring Political Action Committees to disclose certain information, concluding [w]e have found nothing in the Act that suggests Congress intended to exclude voters from the benefits of these provisions, or otherwise to restrict standing, say, to political parties, candidates, or their committees.33

This implies that adversely affected parties are within the zone of interests unless there is affirmative evidence that Congress meant to exclude them from standing. Although the court did go on to rely on the language of the statute and its purpose to conclude that Congress intended to include voters within its purview, in earlier cases, the court stated that ‘there need be no indication of congressional purpose to benefit the would-be plaintiff’ for the plaintiff to meet the zone of interests test.34 The court looks at multiple factors including the language, purpose and history of the statute to determine whether the plaintiff is within a category of those meeting the zone of interests test. In another decision, however, excluding postal workers’ unions from standing to challenge the Postal Service’s decision to surrender part of its statutory monopoly to competitors, the court denied standing because it could not find affirmative evidence in the relevant statute or legislative history that workers’ interests were meant to be relevant to the decision.35 The court is thus unclear on whether affirmative evidence of inclusion is required for standing, or whether it is sufficient that there is no evidence that Congress intended to exclude an adversely affected or aggrieved party. The court could have made this a statutory inquiry, focused on whether there is evidence in a statute or legislative history that Congress intended to benefit or at least was concerned about the plaintiff’s class. Instead, the standing requirement and stated that it applies even in cases that do not arise under the APA. See Elk Grove Unified School Dist v Newdow 542 US 1 (2004). 33 Federal Election Commission v Akins 524 US 11, 20 (1998). 34 Clarke v Securities Industry Ass’n 479 US 388 (1987). 35 Air Courier Conference of America v American Postal Workers Union AFL-CIO 498 US 517 (1991).

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court constructed a common-law like test with multiple and sometimes conflicting factors calling for the exercise of policy judgment for its application. In constitutional standing, the court has constructed a common-law-like jurisprudence that is even less clear in application than the statutory and prudential standing tests. There are three basic constitutional requirements for standing. The plaintiff must have suffered an injury, the injury must have been caused by the challenged conduct and the injury must be redressable by a favourable judgment. Although these criteria appear relatively clear, in practice they have been very pliable and have produced divided courts and wildly inconsistent results. The classic examples of the pliability of the constitutional standing requirements are the decisions in United States v Students Challenging Regulatory Agency Procedures36 and Simon v Eastern Kentucky Welfare Rights Organization.37 In each, an interest group challenged regulation of third parties that allegedly indirectly affected members of the group. In SCRAP, a group of law students concerned with the environment challenged the Interstate Commerce Commission’s decision to increase freight shipping rates, alleging that the increase would impede recycling by making it more expensive, which in turn would lead to more garbage in parks they used and more pollution generally. Remarkably, the Supreme Court held that this chain of argument was sufficient to establish standing. In EKWRO, welfare advocates challenged the IRS’s interpretation of the requirement that non-profit hospitals provide free care to patients unable to pay, alleging that lax enforcement made it difficult for members to receive free care. This set of allegations was held to be insufficient to establish standing, largely on the ground that there was no guarantee that even with stricter enforcement, the patients would be able to obtain free care. This may be so, but it is difficult to see how this is more speculative than the argument that lower freight rates would lead to more recycling, less litter and less pollution. The recently-appointed Chief Justice of the US Supreme Court complained that the court had returned to the excesses of SCRAP by allowing the State of Massachusetts standing to challenge the EPA’s refusal to regulate CO2 emissions based on the possibility that reducing CO2 emissions from cars would reduce global warming and thus reduce erosion of the Massachusetts coastline. One aspect of EKWRO helps explain both the appearance of inconsistency and why standing cases are so controversial on the court. Justice Stewart, concurring in the EKWRO decision, commented that

36 37

412 US 669 (1973) (‘SCRAP’). 426 US 26 (1975) (‘EKWRO’).

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I cannot now imagine a case, at least outside the First Amendment area, where a person whose own tax liability was not affected ever could have standing to litigate the federal tax liability of someone else.

Why not, and why the exception for the First Amendment? Because the injury–causation–redressability requirements for standing are proxies for broader considerations concerning the proper role of the courts in deciding on matters of government policy. While normally courts have no role to play when a third party complains about the tax treatment of someone else, the First Amendment’s restrictions on the establishment of religion are important enough to justify an exception. Some standing decisions of the 1960s stressed that standing is concerned primarily with ensuring the adverseness necessary to make out a constitutional case or controversy. However, when the court began to pull back on the most liberal standing doctrines of that period, it explained that standing is also concerned with separation of powers, with keeping courts within their proper role in government. It should therefore not be surprising that standing decisions can be divisive and inconsistent, given the diversity and strength of views on the basic issue of the proper judicial role. Any attempt to confine the doctrine in a rule-bound fashion will likely fail. What we have seen and are likely to continue to see in standing is a common law-like elaboration of the standards for injury, causation and redressability that appears to depend less on the content of the standards than the views of the justices on the appropriateness of standing in a particular case. (iv) The Timing of Judicial Review Case law on the timing of judicial review is a study in contrasts. On the one hand, the court has created a ripeness doctrine of dubious pedigree and highly uncertain standards while, on the other hand, the court has taken a statutory approach to the requirement that those seeking judicial review exhaust their administrative remedies before going to court. Let us look first at exhaustion and later at ripeness. The requirement that parties seeking judicial review of agency action exhaust their administrative remedies before going to court is one of the pillars of the common law of judicial review. In the United States, the leading case on exhaustion is the pre-APA decision in Myers v Bethlehem Shipbuilding Corp.38 In that case, the NLRB charged Bethlehem with unfair labour practices. Rather than seek a hearing on the complaint before the Board, Bethlehem went straight to federal court to enjoin further administrative proceedings on the ground that it was not engaged in interstate commerce and thus not within the Board’s jurisdiction. The 38

Myers v Bethlehem Shipbuilding Corp 303 US 41 (1938).

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Supreme Court held that Bethlehem should have sought relief first in the agency, based on a well-established common law requirement of exhaustion. In response to Bethehem’s arguments for immediate judicial intervention, the court stated: The contention is at war with the long-settled rule of judicial administration that no one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative remedy has been exhausted.39

Courts continued to apply the common law of exhaustion, with its exceptions, to a wide variety of challenges to administrative action.40 In APA cases, however, there was a factor that was lacking in many other contexts: the APA contains a provision governing the timing of judicial review, establishing that agency action is final when the petitioner has exhausted those administrative remedies expressly provided for by statute or agency rule.41 Because the APA provides that aggrieved parties are entitled to review of final agency action, the Supreme Court held that in cases arising under the APA, courts are not free to impose common law exhaustion requirements, but rather must follow the APA when determining whether the time is right for judicial review.42 In a sense, the APA’s statutory finality provisions have displaced the common law of exhaustion of administrative remedies.43 This statute-based exhaustion regime stands in marked contrast to the court’s ripeness jurisprudence. Early on in the life of the APA, the issue arose as to whether a regulated party may seek judicial review immediately upon the issuance of an unfavourable rule, or whether the party must await an enforcement action to challenge the rule. The APA’s statutory provisions, in fact the same ones relevant to the exhaustion inquiry, support immediate review – the issuance of a rule is a final agency action, and normally once a rule is issued, no statute or rule requires appeal to a higher agency authority before judicial review may be sought. The issuance of a rule is the end of the administrative line. Despite the strength of these statutory arguments, the Supreme Court has constructed a common law standard governing whether a regulated party may seek immediate review of a rule or must await enforcement before challenging it. Although the court acknowledged that the issuance

39

Ibid 50 (1938). See McCarthy v Madigan 503 US 140 (1992). 41 5 USC § 704. 42 Darby v Cisneros 509 US 137 (1993) (‘Darby’). 43 The statutory turn in exhaustion is the jumping-off point for John Duffy’s claim that administrative procedure generally is becoming more statutory in focus. See Duffy, above n 5. Davis cited the law of exhaustion of remedies as an example of administrative common law, but that was before Darby v Cisneros rejected the common law of exhaustion in cases governed by the APA: See Davis, above n 5 at 8. 40

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of a rule is final agency action within the meaning of the APA (and thus would be subject to immediate review under the court’s exhaustion case law),44 the court stated that a challenge to a rule pre-enforcement is not ripe unless the issues are fit for judicial review and the complainant would suffer serious hardship if review were delayed until after enforcement.45 The court characterised its ripeness doctrine as a matter of judicial discretion and it has continued to apply the doctrine even after recognising that exhaustion is governed by statute and rule rather than discretionary legal doctrines.46 Thus, in the related areas of ripeness and exhaustion of administrative remedies, we find radically different methods, with one area governed by statute and the other governed by common law standards.

II STANDARDS (SCOPE) OF JUDICIAL REVIEW

The APA contains an apparently comprehensive set of standards of judicial review that apply across the spectrum of administrative action unless they have been displaced by another statutorily applicable standard.47 Although these statutory provisions outline the standards that govern the scope of judicial review, the actual meaning of the standards has developed in a common law fashion, sometimes with little attention to the language of the governing statute. In the interests of space, the focus here is on three issues, the standard of review that is applied to agency decisions of statutory interpretation, the meaning of the ‘arbitrary and capricious’ standard, and the circumstances under which de novo review is available. .

A Review of Questions of Agency Statutory Interpretation Perhaps the greatest change in US administrative law, at least as a formal matter, over the past 25 years has been the creation and development of the doctrine derived from Chevron USA Inc v Natural Resources Defense Council Inc48 (‘Chevron doctrine’) for judicial review of questions of agency statutory interpretation. This doctrine is the quintessential common law creation, created with only a passing nod to the statutory standard that 44 See Abbott Laboratories v Gardner 387 US 136 (1967) (‘Abbott Laboratories’): ‘the regulations in issue we find to be ‘final agency action’ within the meaning of § 10 of the Administrative Procedure Act 5 USC § 704’: at 149. 45 Abbott Laboratories v Gardner 387 US 136 (1967). 46 See, eg, Whitman v American Trucking Associations 531 US 457 (2001) (concluding that challenge to final rules was ripe). 47 5 USC § 706. 48 467 US 837 (1984) (‘Chevron’).

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governs the matter and then developed without further reference to the statute.49 The reason for the qualifier, that the change may only be formal rather than substantive, is that it is not clear how much the change in the standard has affected judicial or agency behaviour. There is no question that Chevron has drastically affected the way cases are argued to the courts, and how the issue is discussed within the scholarly commentary, but what is unclear is whether, especially at the Supreme Court, Chevron has actually had much impact on how cases are ultimately decided. Chevron itself involved the EPA’s interpretation, in a rule issued after notice and comment, of the term ‘stationary source’ in a provision of the Clean Air Act. After the EPA’s interpretation was rejected by the US Court of Appeals, the Supreme Court heard the case and issued what appeared to be a revolutionary new standard for judicial review of agency statutory construction. The court created a two-step standard. The first step is to determine whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter.50

If, however, ‘Congress has not directly addressed the precise question at issue’, the reviewing court enters the second step in which it must defer to an agency’s ‘permissible construction’ of a statute that is either ambiguous or silent on the issue before the court.51 So far, the statute that governs the scope of judicial review has not made an appearance. The court’s opinion elaborates on step two’s deferential standard by separating congressional silence and ambiguity into two categories, one in which Congress has ‘explicitly left a gap for the agency to fill’ and another in which the gap is implicit.52 In the case of explicit gaps, the court almost mentions the governing statute when it states that regulations filling an explicit gap ‘are given controlling weight unless they are arbitrary, capricious, or manifestly contrary to the statute’.53 This quoted language is a paraphrase of APA § 706(2)(A)’s ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law’ standard. Notice that ‘otherwise not in accordance with law’ becomes, in the court’s words, the much more deferential sounding ‘manifestly contrary to the statute’.54 The court did not elaborate on what it meant by ‘manifestly’. Perhaps it meant ‘facially’ or ‘obviously’, as the term implies. In addition, the court

49 Justice Scalia, whose behavior indicates that he is not very happy with judicial deference to agency statutory interpretations, has stated that Chevron was not ‘observant of the APA’s text’. See US v Mead Corp 533 US 218, 242 n 2 (2001) (Scalia J dissenting). 50 Chevron 467 US 837, 842 (1984). 51 Ibid 843. 52 Ibid 843–4. 53 Ibid 844. 54 Ibid.

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completely ignored the APA’s admonition that ‘the reviewing court shall decide all relevant questions of law [and] interpret constitutional and statutory provisions’.55 The development of the Chevron standard continues the pre-APA tradition at the court of creating conflicting common law standards of review, especially regarding review of agency decisions on questions of law. The court has long oscillated between the view that statutory interpretation is a judicial function and highly deferential standards of review like Chevron, sometimes stopping temporarily at points in between the two extremes.56 This has continued even after Chevron. Soon after Chevron was decided, the court explained that in determining whether Congress has directly spoken to the precise question at issue, the court should employ traditional tools of statutory interpretation such as the canons of construction and other interpretive devices.57 The court no longer required that Congress actually had mentioned the issue in question in the statute or its legislative history to find that Congress had directly spoken to the precise question at issue. This makes it much more likely that the court will find clear congressional intent, which under Chevron ‘is the end of the matter’ and will be applied regardless of the agency’s views.58 The court has also constructed an elaborate jurisprudence of when Chevron applies and when it does not.59 While the court’s analysis purports to be based on Congress’s intent, the level of deference is influenced by congressional intent much less today than it was in the pre-APA period, when a clear convention that Congress could easily follow existed.60 Under current law, the court uses indirect evidence, mainly the level of procedure required by Congress, to determine whether Congress intended for courts to defer to agency statutory interpretations, on the supposition that the more procedure Congress required, the more it intended that judicial review of statutory decisions be deferential. Even

55

5 USC § 706. Compare US v American Trucking Ass’ns Inc 310 US 534 (1940) (judicial function) with NLRB v Hearst Publications 322 US 111 (1944) (judicial function coupled with deference to agency) and Skidmore v Swift & Co 323 US 134 (1944) (‘Skidmore’) (intermediate level of deference). 57 INS v Cardoza-Fonseca 480 US 421 (1987). 58 See United Food and Commercial Workers Union Local 751 v Brown Group Inc 517 US 544 (1996), and MCI Telecommunications Corp v American Tel & Tel Co 512 US 218 (1994), for examples of cases in which the court has found clear legislative intent despite the fact that Congress did not mention the precise issue in question. 59 See US v Mead Corp 533 US 218 (2001). 60 See T Merrill and K Tongue Watts, ‘Agency Rules with the Force of Law: The Original Convention’ (2002) 116 Harvard Law Review 467. 56

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within this framework, the court has maintained a great deal of discretion, refusing to set hard and fast standards for when Chevron applies and when it does not.61 Finally, when the court decides that Chevron does not apply, its analysis reverts to the pre-APA Skidmore doctrine, under which the reviewing court decides whether to defer to the agency’s interpretation based on all the factors that might be considered relevant to whether the court ought to defer to the agency’s interpretation.62 As Justice Scalia points out,63 this is no legal test at all, but rather simply tells the courts to decide based on whatever they find relevant. More to the point for the purposes of this essay, the standard has no connection to the APA or any other statute, and there is no reason to believe that a court applying the Skidmore standard is very likely to defer when and only when Congress wants it to. B Review Under the Arbitrary and Capricious Test The catch-all standard that governs judicial review of agency action, which applies to most cases not involving formal agency adjudication, is the arbitrary and capricious test, spelled out in the APA as whether the agency action is ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law’. In the court’s most comprehensive pronouncement on the meaning of this standard, it stated that in addition to making sure that the agency has acted within the scope of its authority, the reviewing court must consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment … Although this inquiry into the facts is to be searching and careful, the ultimate standard of review is a narrow one. The court is not empowered to substitute its judgment for that of the agency.64

While this standard is based on the statute, the court did not parse the APA’s language and elaborate on the meaning of ‘arbitrary’, ‘capricious’ or ‘an abuse of discretion’. Rather, it used the statute as a jumping off point for the creation of what appears to be a sensible standard for reviewing the substance of agency decisions. In subsequent decisions, the court has elaborated on this standard in a common law fashion, without any claim that the developments result from the language or intent of the APA. For example, in a decision invalidating the rescission of a rule requiring airbags in new automobiles, the court stated that the arbitrary and capricious standard requires that the agency 61 62 63 64

See US v Mead Corp 533 US 218, 231 (2001). Skidmore 323 US 134 (1944). US v Mead Corp 533 US 218, 241 (2001) (Scalia J dissenting). Citizens to Preserve Overton Park Inc v Volpe 401 US 402, 416 (1971).

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examine the relevant data and articulate a satisfactory explanation for its action including a ‘rational connection between the facts found and the choice made’.65

The ‘rational connection’ language is quoted from a Supreme Court opinion applying the substantial evidence standard of review to a formal agency adjudication,66 which is supposed to be a more stringent standard of review than the arbitrary and capricious test. In its most recent decision applying the standard, the court reversed the EPA’s decision not to take action against greenhouse gases on a similar basis – that the agency had not provided a ‘reasoned explanation for its refusal to decide whether greenhouse gases cause or contribute to climate change’.67 The meaning of the arbitrary and capricious test is thus derived from decisions applying an altogether different standard of review which is supposed to be less deferential to agency decisions. This illustrates how little regard the court has for the statutory standards it is applying as it develops its common law of judicial review.

C De Novo Review The APA provision on de novo review is an example of a situation in which the APA has been construed to create a wholly new doctrine, rejecting pre-APA common law standards. The APA states simply that agency action should be set aside when the agency decision ‘is unwarranted by the facts to the extent that the facts are subject to trial de novo by the reviewing court’.68 The APA says nothing about when this is true, that is, when facts are subject to trial de novo. The Supreme Court, relying on a legislative report from the House of Representatives which cites no case law, has stated that trial de novo is available in two circumstances: first, when agency fact-finding procedures are inadequate (in an adjudicatory matter); second, when new issues are raised in a proceeding to enforce an order issued as a result of a non-adjudicatory agency proceeding.69 The Attorney-General, in the well-known 1947 Attorney-General’s Manual on 65 Motor Vehicles Mfrs Ass’n of US Inc v State Farm Mut Auto Ins Co 463 US 29, 43 (1983), quoting Burlington Truck Lines Inc v US 371 US 156, 168 (1962). 66 Burlington Truck Lines Inc v US 371 US 156, 168 (1962). 67 Massachusetts v EPA 127 S. Ct. 1438, 1463 (US 2007). This was under the Clean Air Act’s own statutory standard of review which contains the exact same language as the APA’s arbitrary and capricious standard. See 42 USC § 7607(d)(9)(A). 68 5 USC § 706(2)(F). 69 Citizens to Preserve Overton Park v Volpe 401 US 402, 415 (1971), citing HR Rep No 1980, 79th Cong, 2d Sess. Interestingly, while the House Report explains what the APA provision means, it cites no authority for its explanation. The Attorney-General’s Manual on the Administrative Procedure Act, however, supports an alternative meaning with citations to pre-APA case-law. See Attorney-General’s Manual on the Administrative Procedure Act 109–10 (1947).

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the Administrative Procedure Act, vehemently disagreed with the House Report’s description of this provision, stating that: the language of clause (6), ‘to the extent that the facts are subject to trial de novo by the reviewing court’, obviously refers only to those existing situations in which judicial review has consisted of a trial de novo.70

According to the Manual, ‘existing situations’ refers to ‘situations where other statutes or the courts have prescribed such review.’71 The reference to previous action by courts implicates pre-APA common law. This disagreement between the executive branch on one side and the Congress and Supreme Court on the other occurs along two axes. The first is an unsurprising disagreement over the scope of review, with the executive branch arguing for narrower review than contended for by Congress and the court. The second is along the different axis of method. The House Report, as adopted by the court, explains the language and intent of the APA without drawing any connection to the pre-existing common law or any other precedent. The Attorney-General’s Manual, by contrast, urges a more common law focus, reading the de novo provision as incorporating the pre-APA understandings of when de novo review is available.

III CONCLUSION

The thesis of this chapter is that US administrative law is fashioned from a combination of statutory law and common law doctrines without any strong indication of which, if either, is more appropriate than the other in any particular context. There is another view, however, which also ought to be considered. Perhaps the dichotomy identified in this chapter is a false one, and that even in those situations I have placed furthest toward the common law end of the spectrum, the courts are merely engaged in statutory construction and gap filling that is well within the traditional role of judges in common law countries. In the area of rule-making procedure, for example, while the unmoored methodology employed by the preVermont Yankee courts may have involved too much judicial creativity, the decisions regarding the adequacy of the notice of proposed rule-making simply construe the language of the APA in light of the statute’s purposes, hardly a radical move away from fidelity to the proper judicial role. The rules regarding ex parte contacts in rule-making could be seen not as judicial usurpation but rather as an attempt to ensure that rule-making remains a fair and open procedure as intended by the authors of the APA. 70 71

Attorney-General’s Manual on the Administrative Procedure Act 109 (1947). Ibid 110.

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Without explicit statutory approval of ex parte contacts in rule-making, the courts are on solid ground in regulating them in light of the policies and principles underlying the APA. Similarly, with regard to the ripeness and availability of judicial review, the statutes are arguably vague and incomplete, and thus it is well within the traditions of the Anglo-American legal system for courts to construe such statutes and fill gaps as they become apparent.72 The same could be said for scope of review: the courts are merely construing statutes that do not have self-evident meanings, and doing so in the traditional way, with attention to the statutory language, the legislative intent and the statute’s underlying principles. While I appreciate this perhaps more traditional view of the judicial role as applied to administrative law, for the reasons largely expressed in the body of this chapter, in my view it obscures more than it reveals. Rather, this dichotomy (or spectrum) with common law methodology and adherence to authoritative statutes on opposite sides reveals important features of US administrative law. And there is no real indication of a trend in either direction. In 1980, Kenneth Culp Davis predicted that the Vermont Yankee decision requiring a statutory focus in judicial review of administrative procedure would ultimately be rejected in favour of a common law orientation for eight separate reasons. Two of them merit attention here. The first, his fifth, is that ‘[a]ny effort to stifle judicial creativity is profoundly incompatible with the nature of the judicial process’.73 The second, his last, is that ingrained pre-APA common law and the APA itself allow courts to set aside agency action that is either procedurally or substantively arbitrary and capricious, and Vermont Yankee goes against the grain by cutting off review of procedural decisions except when the allegation is that the agency did not follow applicable statutes and rules. In my view, Davis was both right and wrong at the same time. He was wrong in the sense that the law has not explicitly rejected Vermont Yankee and has in fact reaffirmed it every time the issue has arisen. He was correct, however, in his identification of the predominance of common law in administrative law despite the existence of the APA and the sometimes appearance that the federal courts were enforcing it rather than applying the common law of judicial review. His accurate characterisation of the inherently creative nature of the judicial process probably explains why in the more than 30 years since the Vermont Yankee decision, the doctrine has been confined to a relatively narrow space within administrative procedure, with only the smallest of steps toward a more comprehensive statutory focus.

72 On traditional views of statutory construction in the US, which allows for judicial creativity in filling gaps and construing vague terms, see B Cardozo, The Nature of the Judicial Process (New Haven, Yale University Press, 1921) 127–30. 73 Davis, above n 4, at 14.

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The more recent views of John Duffy on the role of common law in judicial review are similarly partially correct and partially incorrect. Duffy rightly points out that the turn toward a statutory focus concerning exhaustion of administrative remedies before judicial review throws the ripeness doctrine exemplified in Abbott Laboratories into question. If the APA’s finality requirements displace the common law of exhaustion, they ought also to displace non-statutory ripeness doctrines. However, Duffy is incorrect insofar as he predicts that statutory law, or as he phrases it, the ‘supremacy of legislation’ is ascendant in administrative law. In particular, Abbott Laboratories’ fitness and hardship test continues to be applied to determine whether statutorily final agency action is ripe for review;74 equally, the notice cases in the courts of appeals apply standards that are far removed from the statutory language. More generally, Darby did not set off a movement toward statutory administrative law any more than Vermont Yankee did. Rather, as before, pockets of administrative law are statutory and other pockets are common law and courts apparently do not feel the need to justify or even acknowledge the apparent methodological contradictions. The common law versus statutory law dichotomy is a useful lens for examining many areas of administrative law in addition to those analysed in this chapter. For only a couple of examples, consider preemption and administrative due process. Preemption arises out of the federalist structure of the US government and concerns the circumstances under which federal law displaces state law. An examination of the evolution of preemption doctrine would reveal a move away from statutory language and legislative intent and toward a common law standard under which the courts construct the relationship between state and federal law under principles of federal common law. The best illustration of this is in the fact that the existence of an inapplicable express preemption provision in a statute, once thought to be a strong indication that Congress did not intend preemption, no longer counsels at all against the application of implied preemption principles, which are based on a judicially constructed version of congressional intent.75 In the area of administrative due process, the Supreme Court has constructed a complex and nuanced jurisprudence far removed from the language and intent underlying the Due Process Clauses of the US Constitution. However, the law of due process is, in many cases, heavily influenced by the legislative judgment on proper procedure as revealed in statutory specifications. The courts do not begin their due process inquiry

74 See, eg, Whitman v American Trucking Associations 531 US 457 (2001) (concluding that challenge to final rules was ripe). 75 R Cass, C Diver and JM Beermann, Administrative Law: Cases and Materials, 5th edn (Aspen Law and Business, 2006) 698–9.

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from scratch, but rather ask whether the procedures provided by Congress and the agency are adequate, and if not, what is the minimum that must be added or changed in order to satisfy due process. Further, the inquiry is explicitly sensitive to the policies underlying the level of procedure that the legislature has provided.76 In conclusion, if past is prologue, which it usually is, then administrative law scholars and practitioners are likely to need to continue to feel comfortable working from both a statutory and a common law orientation. In this endeavour, we all benefit from attention to the excellent work of our esteemed colleague, Mark Aronson.

76

Mathews v Eldridge 424 US 319, 347–8 (1976)

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3 The Surrogacy Principle and Motherhood Statements in Administrative Law MATTHEW GROVES *

I

N R v Home Secretary, ex p Al-Mehdawi1 the House of Lords held that a person cannot claim a denial of natural justice for errors that are caused by his or her agent. The rule that underpins this finding is the surrogacy principle, which is the rule that people affected by administrative decisions are bound by the action of the agents they engage. The surrogacy rule has a cold logic. If the decision-maker has no role in or knowledge of the negligence or mistake, the resulting administrative process cannot be impeached. People cannot complain about the mistakes of their lawyers and other agents, no matter how disastrous the consequences might be. Those who choose to engage an agent must accept the consequences of that decision. A client may fail to attend a migration review hearing because a negligent or forgetful lawyer did not provide the correct address to the decision-maker or failed to pass notice of a hearing to the client.2 The lawyer may even deliberately advise a client not to attend a hearing.3 The non-appearance of the client may lead to an unfavourable decision and an order to deport the client. The common thread to these cases is third party fault. They contain some sort of fault – mistake, negligence or fraud – by someone other than the decision-maker or the person affected. According to the surrogacy principle, the person affected by the administrative

* Thanks are due to Enid Campbell and Colin Campbell for helpful comments. The usual disclaimers apply. 1 R v Home Secretary, ex p Al-Mehdawi [1990] 1 AC 876 (‘Al-Mehdawi’). 2 See, eg, R v Diggines, ex p Rahmani [1986] AC 475; FP (Iran) v Secretary of State for the Home Dept [2007] EWCA Civ 13. 3 See, eg, SZFDE v Minister for Immigration and Citizenship (2007) 232 CLR 189.

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decision is not directly responsible for the fault but will be bound by its consequences. The client may have a remedy in private law against the lawyer but there will be none in public law. Despite the clear support that the House of Lords gave for the surrogacy principle in Al-Mehdawi many later cases have clearly tried to evade or soften the principle. In FP (Iran) v Secretary of State for the Home Department4 the English Court of Appeal held that the surrogacy principle does not apply to refugee law and also appeared to doubt whether the rule applied in other areas. Around the same time the High Court of Australia reached exactly the opposite conclusion when it considered the effect of fraud by an agent in refugee decision-making.5 The High Court held that fraud by an agent might vitiate an administrative decision but negligence or mistake does not. According to this view, the surrogacy principle will apply in some instances but not others. This essay examines the recent judicial consideration of the surrogacy principle and the exception that appears to have arisen in refugee law in England. Although most of the cases concern negligence or mistakes by lawyers, the essay considers whether third party fraud ought to provide an exception to the surrogacy principle. The essay also examines the more general question of whether the mistakes and misconduct of third parties should be within or outside the scope of judicial review.

I THE MODERN RISE AND FALL OF THE SURROGACY PRINCIPLE

For a long time it was assumed that a breach of natural justice would only be found when there was fault on the part of the decision-maker.6 This proposition was doubted as the duty to observe the requirements of natural justice began to expand in modern times this proposition. During the 1980s a series of cases edged towards the view that applicants who suffered an adverse administrative decision could claim a denial of natural justice even though the breach was not caused by the decision-maker. Several of these cases concerned mistakes that had been made by the lawyer or agent of an applicant who then claimed a denial of natural justice. The acceptance of some such claims suggested that the surrogacy 4

FP (Iran) v Secretary of State for the Home Dept [2007] EWCA Civ 13 (‘FP (Iran)’). SZFDE v Minister for Immigration and Citizenship [2007] HCA 35; 81 ALJR 1401. 6 This proposition does not itself engage the surrogacy principle. It instead reinforced the related point that a breach of natural justice, which is usually the complaint made when the surrogacy principle is relevant, usually required the identification and attribution of fault to the decision-maker. This point can be described as related to surrogacy because the identification of fault and its attribution to a decision-maker are each recurring features of the surrogacy principle. The surrogacy cases contain fault but not on the part of the decisionmaker. 5

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principle might be overtaken by the expansion of the scope of the duty to observe the requirements of procedural fairness.7 A widely cited example was R v Diggines, ex p Rahmani,8 the facts of which foreshadowed many of the more recent refugee cases. The applicant and her children were denied leave to remain in Britain. The legal aid service that represented the applicant had received notice of her change of address but did not record this detail, so it was unable to contact her prior to the hearing of her case. The lawyers notified the decision-maker that they had no instructions and invited him to decide the case as he thought proper. The decision-maker decided the case in the applicant’s absence and, unsurprisingly, decided against her. The Court of Appeal held that the applicant had been denied natural justice, even though the flaw in the administrative process was due entirely to the applicant’s lawyers. The court appeared much more concerned with the effect of the breach of fairness rather than its source. The court reasoned that a hearing conducted without compliance with the rules of natural justice meant the resulting decision was one made without jurisdiction. The House of Lords upheld this decision on the narrow procedural point that the decision-maker had determined the case under the wrong rule and the resulting decision could be set aside on that basis alone.9 This reasoning enabled the Lords to sidestep the surrogacy principle but it was not long before they squarely confronted the issue. Al-Mehdawi10 involved a different error to Rahmani but the effect was identical. The applicant’s lawyers wrongly sent him several letters about a forthcoming immigration hearing to an old address even though they had notice of a newer address. Naturally there was no reply. The lawyers took no further steps and the applicant’s application for an extended student visa was rejected. By the time the applicant discovered the error of his lawyers the relevant appeal period had long since expired. He fared no better in an application for judicial review which reached the House of Lords. Lord Bridge, with whom the other Lords of Appeal agreed, accepted that the applicant had been deprived of a fair hearing refused but stressed that relief would not issue when the blame did not lie with the decision-maker. Lord Bridge endorsed the general proposition that a party who has lost the opportunity to have his case heard through the default of his own advisers to whom he has entrusted the conduct of the dispute on his

7 M Aronson and N Franklin, Judicial Review of Administrative Action (Sydney, LawBook Co, 1987) 191 concluded that the law during this time was ‘more difficult to plot than ever’. 8 R v Diggines, ex p Rahmani [1985] QB 1109 (‘Rahmani’). 9 R v Diggines, ex p Rahmani [1986] AC 475. 10 Al-Mehdawi [1990] 1 AC 876.

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behalf cannot complain that he has been the victim of a procedural impropriety or that natural justice has been denied.11

According to this view, if the fault lies entirely with the applicant’s lawyer or other agent, the decision-making process itself cannot be impeached. Lord Bridge disapproved the contrary view reached by the Court of Appeal,12 and by implication the identical position reached by the same court in Rahmani, on the basis that it presumed the very conclusion it reached, namely that fault by the applicant’s lawyer could amount to a breach of natural justice. Several aspects of Lord Bridge’s reasoning are relevant to the nature and scope of the surrogacy principle. First, he acknowledged that the principle is largely a creature of private law. He could not identify any principle to support a different approach in public law.13 In fact his Lordship concluded that the interests of finality provided a strong reason to extend the principle to public law.14 Secondly, Lord Bridge suggested that a victim of the surrogacy rule could use alternative remedies such as an action in negligence against the lawyer and perhaps also an exceptional appeal to the Home Secretary.15 Thirdly, he accepted that some cases had suggested that a tribunal which denied natural justice to a party might be held to have deprived itself of jurisdiction, but he pointedly refused to endorse a general rule to that effect.16 Finally, Lord Bridge rejected a submission that the ‘fundamental unfairness’ in the case at hand provided a reason to grant relief. He cautioned that the grant of relief on this basis would inevitably give rise to difficulties in distinguishing between cases of ‘“fundamental unfairness,” which would justify [relief] … and a less than fundamental unfairness’, which would not.17 It will be explained below that subsequent cases have doubted each of these points though none has directly questioned Al-Mehdawi. But these doubts took some time to emerge. In the meantime Al-Mehdawi was generally accepted to have made clear that the surrogacy principle would preclude a party complaining of a denial of natural justice where the fault lay with the party’s agent rather than the decision-maker.18 Whether the case could in fact support such a sweeping proposition is another matter.

11

Ibid 898. See also 901. Ibid 885–7. 13 Ibid 898. 14 Ibid 901. 15 Ibid. 16 Ibid. 17 Ibid 901. 18 PP Craig, Administrative Law, 5th edn (London, Sweet & Maxwell, 2003) 434; HWR Wade and CF Forsyth, Administrative Law, 9th edn (Oxford, OUP, 2004) 510; M Aronson, B Dyer and M Groves, Judicial Review of Administrative Action, 3rd edn (Sydney, LawBook Co, 2004) 460–3. 12

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Lord Bridge did not clearly endorse the idea that a breach of natural would always require fault on the part of the decision-maker.19 The House of Lords subsequently appeared to accept that a breach might be found in the absence of any fault on the part of the decision-maker in R v Criminal Injuries Compensation Board, ex p A.20 Although the Lords appeared hesitant about the basis upon which relief would be issued the reasoning of the case is clearly relevant to the surrogacy principle. The applicant in Ex p A21 was an unrepresented person who had applied for criminal injuries compensation. The Board did not believe her claim that she had been raped, largely because the submissions of a police advocate contained no supportive evidence. The police had in fact attended a medical examination of the applicant and were aware that it provided supportive evidence. In the absence of such key evidence it was unsurprising that the Board decided against the applicant. The decision of the Board may have been correct in view of the evidence before the Board but it was clearly wrong in light of the evidence that could easily have been led. In this case the House of Lords appeared sympathetic to the possibility that the decision could be set aside on the novel ground of ‘material mistake of fact’. Lord Slynn accepted that judicial review could extend to a material mistake of fact because ‘decisions based on wrong facts are a cause of injustice which the courts should be able to remedy’.22 Lord Slynn suggested that if this ground of a ‘wrong factual basis’ were to be adopted within judicial review it would ‘be a new branch of the ultra vires doctrine, analogous to finding facts based on no evidence or acting upon a misapprehension of law’.23 But Lord Slynn was reluctant to pursue this apparently new direction in judicial review and instead ‘preferred’ to categorise the case as a denial of natural justice. The role assumed by the police advocate proved crucial. He had gathered evidence, assured the applicant that this would be placed before the Board and then taken the leading role in the hearing before the Board. The first (and most crucial) medical report was not obtained by the police advocate, though the other evidence presented to the Board should have alerted all present to its likely existence. Lord Slynn reasoned that in these circumstances the advocate

19 The issue was confronted more directly in the Court of Appeal, which clearly accepted that fault on the part of a decision-maker was not required. Counsel for the Secretary of State had conceded that there was a general rule to the contrary which was subject to some exceptions: [1990] 1 AC 876, 885–7. 20 [1999] 2 AC 330 (‘Ex p A’). 21 [1999] 2 AC 330. 22 Ibid 344. 23 Ibid.

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should have sought an adjournment to obtain the favourable evidence that could so easily have been found.24 The failure to do so was a denial of natural justice.25 This aspect of Ex p A is relevant to the surrogacy principle even though the unrepresented applicant had no surrogate. She had relied on the police advocate to put her case to the Board and, perhaps for this reason, not engaged a lawyer or attended the hearing. Although the advocate was not her surrogate in any true sense he was, according to much of the reasoning of the House of Lords, expected to act in the interests of the applicant.26 The House of Lords accepted that the police occupied a ‘special position in these cases’ which was heightened by the ‘importance of the police in co-operating with the board in the obtaining of evidence’.27 This assessment of the role of the police advocate suggests that he was a surrogate in at least a loose sense of the word because he was expected to take account of and represent the interests of the applicant. The willingness of the Lords to correct the advocate’s failure to do so might be seen to offer some support for a loosening of the surrogacy principle. An equally important point about Ex p A with respect to the surrogacy principle is the clear shift of focus from the cause of unfairness to its effect. This shift naturally undermines the surrogacy principle because it directs attention from the source of the unfairness to its effect.28 The Court of Appeal took the reasoning of Ex p A a significant step further in the case of E and R v Secretary of State for the Home Department.29 That case involved two applicants for refugee status who wished to rely on evidence that became available after their application 24 This aspect of the decision is less than clear. The case is often cited for the proposition that a duty to inquire can sometimes arise in administrative proceedings. The reasoning of the Lords clearly assumes that some sort of duty to inquire arose but it was not clear whether that duty fell on the Board, the police advocate or both. The High Court appeared unenthusiastic about Ex p A when it considered the case in Re Minister for Immigration and Multicultural and Indigenous Affairs, ex p Applicants S134/2002 (2003) 211 CLR 441, discussed in Aronson, Dyer and Groves, above n 18, at 269–71. 25 Ex p A [1999] 2 AC 330, 345–8. 26 The House of Lords did not make an express finding to this effect. The Court of Appeal held that the applicant was required to prove her case: [1998] QB 659, 684–5. This finding presumes that the police advocate was not obliged to act in the interests of the applicant. The House of Lords was influenced to a contrary view by the receipt of evidence that there was ‘an informal understanding with the police that relevant documents will be brought to the hearing by the police officers concerned … and relevant material disclosed’: [1999] 2 AC 330, 335. There was also evidence that applicants gave their consent to the police to obtain evidence to give effect to this informal understanding. This evidence suggested that the process of discovering and presenting evidence lay clearly with the police advocates. 27 Ibid 346–7. 28 This is consistent with Lord Slynn’s acceptance that it did not seem ‘necessary to find that anyone was at fault in order’ to conclude that there had been a denial of natural justice: [1999] 2 AC 330, 345. 29 [2004] QB 1044 (‘E’).

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had been heard by the Immigration Appeals Tribunal (‘IAT’) but before that tribunal delivered its decision. Each applicant alleged that the decision of the IAT was infected by a mistake of fact that arose from the failure to take account of new evidence. The applicants did not seek to attribute blame for the failure to lodge or consider the new evidence but the issue of blame, or the lack of it, proved crucial.30 The applicants exercised a right to appeal to the Court of Appeal which was confined to a question of law material to the IAT’s decision. Each case alleged a mistake of fact but the Court of Appeal held that these errors fell within its appellate jurisdiction over questions of law. The Court of Appeal considered many public law cases in which an appellate jurisdiction limited to points of law had been invoked on the ground of fact.31 The court reasoned that these cases had enabled a right of appeal on questions of law to encompass situations where a decision-maker had proceeded ‘on the basis of a foundation of fact which was demonstrably wrong’.32 The Court of Appeal distilled the common features of these disparate cases into a general principle, which it explained in the following terms: the time has now come to accept that mistake of fact giving rise to unfairness is a separate head of challenge in an appeal on a point of law, at least in those statutory contexts where the parties share an interest in co-operating to achieve the correct result. Asylum law is undoubtedly such an area. Without seeking to lay down a precise code, the ordinary requirements for a finding of unfairness are … First, there must have been a mistake as to an existing fact, including a mistake as to the availability of evidence of a particular matter. Secondly, the fact or evidence must have been ‘established’, in the sense that it was uncontentious and objectively verifiable. Thirdly, the appellant (or his advisers) must not have been responsible for the mistake. Fourthly, the mistake must have played a material (not necessarily decisive) part on the tribunal’s reasoning.33

This four-fold test has often proved difficult to satisfy, but the principle that a mistake of fact giving rise to unfairness can, in some circumstances, be challenged during an appeal on a question of law has been widely applied and is now clearly part of English public law.34 The reasons

30 It was not entirely clear when or how the new evidence came to the attention of the applicants or their advisers or whether they had tried to lodge the evidence with the IAT. There seemed little purpose in any attempt to attribute blame in such circumstances. 31 E [2004] QB 1044, 1061–71. The court did not consider Adan v Newham [2002] 1 WLR 2120, in which a differently constituted Court of Appeal doubted the jurisdiction that was recognised in the E case. 32 This explanation of the E case was given in R (Iran) v Secretary of State for the Home Dept [2005] EWCA Civ 982 [29]. 33 E [2004] QB 1044, 1071 (emphasis added). 34 See R (Iran) v Secretary of State for the Home Dept [2005] EWCA Civ 982 (several co-joined claims, most of which failed to meet the four-fold test); Kaydanyuk v Secretary of State for the Home Dept [2006] EWCA Civ 368 [16]–[20] (claim failed because alleged evidence post-dated decision); OB (Iraq) v Secretary of State for the Home Dept [2007]

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invoked in the E case to encompass mistakes of fact within appeals on questions of law are logically difficult to confine to refugee cases. The Court of Appeal anticipated this possibility when it explained that asylum was an area in which the parties shared a common interest in achieving a just outcome in statutory decision-making. But the same principle must apply to all areas of administrative decision-making; it cannot be realistically suggested that there is an area of public administration that does not contain an interest in or reason for achieving correct results.35 That reasoning appears to have underpinned the spread of the E case beyond refugee law to other parts of migration law,36 beyond migration law to appeal rights in other areas of law37 and even beyond a statutory right of appeal.38 But the E case presented several significant obstacles to any softening of the surrogacy rule. One such obstacle was the third requirement of the four-fold test, namely that neither appellants nor their advisers could be responsible for the mistake. This restriction clearly reinforced the surrogacy principle. Another difficulty was the apparent collapsing in the E case of principles of judicial review and appeal. The Court of Appeal drew largely from judicial review cases to determine the nature and scope of an appeal provision. Outside observers might regard this apparent merging of principles of review and appeal as simply one more example of the relentless expansion of judicial review in England, perhaps even its

EWCA Civ 585 [46] (claim failed to meet the four-fold test); CN (Burundi) v Secretary of State for the Home Dept [2007] EWCA Civ 587 [20] (claim upheld). See also Verde v Secretary of State for the Home Dept [2004] 1726 EWCA Civ 176 (upholding a government appeal, based on evidence of serious non-political crimes committed by refugee applicant not placed before original decision-maker). 35 Ex p A [1999] 2 AC 330 is an example. It is clear that all parties to a criminal injuries compensation claim have an interest in achieving the best outcome. 36 The AIT has accepted that the E case can to other areas of migration law and should be used to correct errors prior to the exercise of any appeal to the courts. See, eg, EA (Ghana) [2005] UKAIT 108 [36]–[41]. 37 See, eg, Meyrick Estate Management Ltd v Secretary of State for the Environment, Food and Rural Affairs [2007] EWCA Civ [48]–[49] (appeal of a ‘material’ mistake of fact within a right to appeal on questions of law held to be ‘not in doubt’ but failed on the evidence). 38 See, eg, R (Clays Lane Housing Co-operative Ltd) v Housing Corp [2004] EWCA Civ 1658 [41] (the court accepted that the principles of the E case would extend beyond statutory appeals to regulatory cases). See also R (Boots the Chemist) v Family Health Services Appeal Authority and Lloyds Pharmacy [2005] EWHC 2025 (Admin) [47]–[48] (the court held that the principles of the E case were not met in a pharmacy relocation decision, but did not appear to doubt they could apply in an appropriate case); R (National Association of Health Stores) v Dept of Health [2005] EWCA Civ 154 [60] (a pharmaceutical approval case decided on other issues, but the court appeared to accept that the principle from the E case could, in different circumstances, have been applied). The House of Lords has yet not decisively approved the ‘wrong factual basis’ aspect of the E case, but it has cited other aspects of the case with approval: Secretary of State for the Home Dept v AH (Sudan) [2007] 3 WLR 832 [38].

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transformation into a more general right of challenge to government decision-making.39 The possible direction of judicial review in England raises questions beyond the scope of this paper. For present purposes it is sufficient to note that the apparent blurring in the E case between principles of review and appeal suggests that the surrogacy principle is one of general application in administrative law. There was, however, one reason why the apparent affirmation of the surrogacy principle in the E case might not be so strong as first appears. In a little cited passage of that decision Carnwath LJ frankly conceded that the mass of asylum cases were often difficult to reconcile and that many could only be understood within the context of their own particular facts. He explained that: [N]ot all (or even most) Court of Appeal Decisions in [refugee law] should be seen as laying down propositions of law; the decisions in this area are unusually fact-sensitive.40

This admission of the confused and confusing state of asylum law might be praised for its honesty, but the suggestion that many or even most decisions might have no precedent value does not promote certainty, particularly when it provides no indication how the cases can be assessed. Some cases have hinted that the admission of Carnwath LJ provided a licence to depart from the four-fold test adopted in the E case itself. In AM (Iran) v Secretary of State for the Home Department41 the Court of Appeal seemed to believe that the admission meant that the ‘flexibility’ of the E case would ‘not arise, at any rate normally’ when the mistake was due to an applicant or his or her advisers.42 Although the application in AM (Iran) failed for other reasons, the court appeared to have no doubt that the jurisdiction recognised in the E case could sometimes extend to a case of fault involving mistake on the part of an applicant’s lawyer. This possibility crystallised in FP (Iran).43 The case involved two co-joined appeals by applicants for refugee status, each of which had failed due to mistakes made by the appellant’s lawyer. In each instance the applicant had engaged a law firm but did not receive notices of a hearing sent to the firm. As with all such cases, the claim was determined in the 39 It is useful to note that the authors of the most recent edition of de Smith’s Judicial Review acknowledge several key changes to English judicial review including that: the grounds of review are increasingly open textured; the division between administrative and constitutional law is much less clear than it was in the past; and that fewer decisions are beyond the scope of review: H Woolf, J Jowell and A Le Sueur, de Smith’s Judicial Review, 6th edn (London, Sweet & Maxwell, 2007) [1–007], [1–023], [1–025]–[1–036]. Curiously, the authors pay no clear attention to the increasingly blurred line between review and appeal. 40 E [2004] QB 1044, citing Khan v Secretary of State for the Home Dept [2003] EWCA Civ 530. 41 [2006] EWCA Civ 1813 (‘AM (Iran)’). 42 Ibid [33] (Pill LJ, Arden LJ, Nourse J agreeing). 43 [2007] EWCA Civ 13.

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absence of the appellant and the result was unfavourable. The lawyers who had caused the mistake frankly conceded their error, which appeared to place each case outside the jurisdiction to correct a mistake of fact giving rise to unfairness that was recognised in the E case. The Court of Appeal cast aside these problems and any possible hurdle presented by Al-Mehdawi and concluded that there was ‘no general principle of law which fixes a party with the procedural errors of his or her representative’.44 The court reached this conclusion by way of several related steps. First it suggested that Al-Mehdawi does not apply to refugee cases. Sedley LJ accepted that Al-Mehdawi appeared to impose a general principle of general application governing the consequences of a mistake caused by an applicant’s solicitor. But in his view, the ‘life and death’ issues of many refugee cases placed them in a ‘different league’ that was far distant from Al-Mehdawi.45 Wall LJ offered the additional reason that any right that an applicant might have against his or her lawyers, presumably in negligence, would be ‘academic’ in refugee law and should not therefore dissuade the court from issuing relief as it had done in Al-Mehdawi.46 Neither reason provides a convincing ground upon which to narrow or distinguish Al-Mehdawi. Many migration and other administrative decisions contain issues of tremendous importance that cannot be quarantined from any exception based on ‘grave consequences’, which might attach to refugee cases.47 The same criticism can be made of the suggestion by Wall LJ that a right of action against lawyers was an illusory solution in refugee cases but a useful remedy for disappointed applicants in other administrative proceedings. The E case was distinguished on equally tenuous grounds. Wall LJ reasoned that the unfairness in the E case resulted from a mistake of fact on the part of the tribunal while the unfairness in FP (Iran) resulted from the mistakes of lawyers.48 This apparent difference does not bear scrutiny. In the E case the tribunal reached a mistaken view about crucial facts 44 FP (Iran) [2007] EWCA Civ 13 [46]. This remark was made by Sedley LJ. It is useful to note that his Lordship subsequently conceded that the surrogacy ‘was previously thought to be the law’ until he ruled otherwise in FP (Iran): SH (Afghanistan) v Secretary of State for the Home Dept [2007] EWCA Civ 1197 [8]. See also BR (Iran) v Secretary of State for the Home Dept [2007] EWCA Civ 198 [18] where FP (Iran) was interpreted as creating an exception to the surrogacy principle in refugee cases. 45 Ibid [43]. 46 Ibid [91]. 47 Many other areas of administrative decision-making can clearly also have grave consequences. See, eg, R (Rogers) v Swindon NHS Primary Care Trust [2006] EWCA Civ 392 (grant of public funding to subsidise potentially life saving medication); South Australia v O’Shea (1987) 163 CLR 378 (release on parole of prisoner held under indefinite sentence). 48 Ibid [92]. Arden LJ appeared to reach a similar view, though she also suggested that cases where the mistake could be explained would also fall outside the scope of the E case: [70].

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because it did not have correct or complete evidence. The court pointedly refused to attribute blame for the incomplete evidence and instead emphasised its effect rather than source.49 It hardly seems to matter that the tribunal in FP (Iran) was more clearly ignorant because of the mistakes the appellants’ lawyers. Sedley LJ also doubted that the remedy recognised in the E case was relevant but, and perhaps more importantly, he expressed grave doubts about the very basis of that case. He suggested that ‘the allocation of errors of material fact to fairness (a procedural matter) rather than jurisdiction (a substantive matter) was ‘novel and problematical’.50 This criticism is not new. The authors of de Smith’s Judicial Review of Administrative Action have previously argued that any new ground of judicial review involving mistake of fact could have been absorbed into existing grounds of review, most likely the ground of taking account of an irrelevant consideration.51 For present purposes there seems little reason to quibble about where the jurisdiction recognised in the E case might ultimately be located, though it is useful to note that the basis upon which a court might claim its broad ranging power to correct the mistakes of a surrogate remain unsettled. The reasoning in FP (Iran) displays a curious ambivalence towards the E case. Although Sedley LJ doubted one central element of the E case, namely whether error of fact should be treated as a procedural rather than substantive (jurisdictional) error, he clearly embraced another central element of the E case. This was the suggestion in the E case that there were some areas of public law such as refugee decision-making where the parties ‘share a common interest in co-operating to achieve the correct result’.52 In FP (Iran) the court also placed much weight on the common public interest in the proceedings at hand and how this interest shaped both the obligations of the parties to those proceedings and the shape of the law itself. Arden LJ emphasised the ‘responsibility of each of the parties, as well as the Tribunal, to play a role in securing the aims of fairness, expedition and efficiency’.53 A joint or co-operative obligation of this nature makes

49 This point seems confirmed by the emphasis of the Court of Appeal that Ex p A, by which it was greatly influenced, did not turn on ‘fault or lack of fault on either side’: [2004] QB 1044, 1070. 50 FP (Iran) [2007] EWCA Civ 13 [32]. Sedley LJ also questioned whether the E case was a necessary doctrinal consequence of Ex p A but concluded that these ‘practical as well as doctrinal implications’ should be left to a future case. 51 SA de Smith, H Woolf and J Jowell, Judicial Review of Administrative Action, 5th edn (London, Sweet & Maxwell, 1995) 288. A contrary view was taken in HWR Wade and CF Forsyth, Administrative Law, 7th edn (London, Sweet & Maxwell, 1994) 133. The authors of the subsequent edition of de Smith have conceded defeat on this issue: Woolf, Jowell and Le Sueur, above n 39, 566. 52 E v Secretary of State for the Home Dept [2004] QB 1044, 1071 [66]. 53 FP (Iran) v Secretary of State for the Home Dept [2007] EWCA Civ 13 [63] (Arden LJ).

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clear that the duties of those who act for the government are, in some areas of law, clearly not limited to the parties they represent. That obligation is important to the surrogacy principle. If government lawyers and advocates are subject to an obligation to assist the wider decision-making process this obligation may effectively require them to be alert for mistakes and misconduct by an agent for an applicant. That possibility suggests that responsibility for the mistakes and misconduct of an applicant’s lawyer is a shared one. If the failure of an applicant’s agent or lawyer may also be characterised as one on the part of a government lawyer, a claim for relief is difficult to resist. Sedley LJ made the point far more clearly in the subsequent case of SH (Afghanistan) v Secretary of State for the Home Department54 where both the representative of the applicant and the government advocate failed to draw the decision-maker’s attention to an important precedent. Sedley LJ held that the absence of any surrogacy principle was sufficient reason to cast aside the error of the former, but for the latter he imposed an important new obligation in public law. His Lordship explained: Where counsel appears for the Home Office (and I have no doubt that what I am saying applies to solicitors as well), an independent obligation to justice may very well call for the advocate to draw the tribunal’s attention to matters helpful to the appellant, to which by oversight or worse the appellant or the appellant’s advocate has failed to draw attention.55

The development of an obligation of ‘public service’ upon government advocates and lawyers represents an important step in English law because it signals a wider move towards a rights based conception of public law that will inevitably tend against existing principles to the contrary. The surrogacy principle is an example. The principle could have been modified or narrowed if the courts have held that a breach of natural justice or some other form of legal error could be found without fault on the part of an applicant. The Court of Appeal might also have just suggested that the surrogacy principle did not apply, either in refugee law or more generally, but it took the further step of suggesting that government advocates and lawyers bear a positive obligation to detect and correct errors made by other participants in administrative decision-making. The importance of this obligation is not simply that it confirms that responsibility for the mistakes and misconduct of a surrogate is not confined to an applicant but also that government advocates and lawyers may bear a wide responsibility for the integrity of administrative decision-making that may support

54 SH (Afghanistan) v Secretary of State for the Home Dept [2007] EWCA Civ 1197 (‘SH (Afghanistan)’). 55 Ibid [9].

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further obligations. At this point, it is useful to consider the quite different route by which the surrogacy principle recently came before the High Court of Australia. II IS FRAUD AN EXCEPTION TO SURROGACY?

Fraud on the part of a decision-maker is almost never pleaded in public law, at least not in the sense of fraud involving an attempt to cheat another party or gain a dishonest pecuniary advantage. The public law equivalent of fraud is the ground of bad faith which can encompass a corrupt purpose, dishonesty or the like.56 A decision procured by fraud on the part of an applicant can be set aside for that fraud, though the doctrinal basis upon which this is possible is often uncertain.57 In theory there seems no reason why a decision procured by the fraud of a surrogate could not also be set aside, although any such action would attract the same doctrinal uncertainties about the source and extent of the power of decision-makers to set aside such decisions.58 The connecting thread between the effect of fraud by a decision-maker, an applicant or perhaps even a surrogate is, as Lord Denning once explained, that ‘fraud unravels everything’.59 The extent to which the ‘unravelling’ effect of fraud might affect cases involving surrogacy came squarely before the High Court of Australia in SZFDE v Minister for Immigration and Citizenship.60 SZFDE was yet another refugee case in which the applicants failed to attend a tribunal hearing due to the fault of their adviser. The applicants, who were husband and wife, engaged the services of someone who had been disqualified as both a solicitor and a migration agent. The so-called agent concealed his 56 The Federal Court of Australia has accepted that an allegation of bad faith will normally involve a claim that the decision-making was tainted by a ‘lack of [an] honest or genuine attempt to undertake the task and involves a personal attack on the honesty of the decision-maker’: Minister for Immigration and Multicultural and Indigenous Affairs v SCAR (2003) 130 FCR 210 [18]. There are similar English cases which appear to suggest that bad faith should be confined to those cases involving an allegation of personal fault or wrongdoing on the part of a decision-maker. See, eg, Cannock Chase District Council [1978] 1 WLR 1, 6; Western Fish Products Ltd v Penrith District Council [1981] 2 All ER 204, 215–16. 57 See, eg, R v Secretary of State for the Home Dept, ex p Khawaja [1984] AC 74; Wati v Minister for Immigration and Ethnic Affairs (1996) 71 FCR 103. See also E Campbell, ‘Effect of Administrative Decisions Procured by Fraud or Misrepresentation’ (1998) 5 Australian Journal of Administrative Law 240. 58 Mark Aronson has pointed out that the judicial review cases on this point are ones in which a decision-maker has set aside an obviously defective decision. Quite different issues arise when a decision-maker seeks to set aside a decision that is for some reason subsequently deemed to be wrong or defective. Whether and why a decision-maker can do so is difficult and the issue is not limited to problems caused by fraud: M Aronson, ‘Nullity’ in M Groves (ed), Law and Government in Australia (Sydney, Federation Press, 2005) 149–50. 59 Lazarus Estates Ltd v Beasley [1956] 1 QB 702, 712. 60 (2007) 232 CLR 189 (’SZFDE’).

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disqualification but soon demonstrated why he had been disqualified. He advised the applicants not to attend a hearing before the Refugee Review Tribunal (‘RRT’) because it was ‘not accepting … applications at all at the moment’. The agent cautioned the applicants not to attend the RRT hearing, lest they provide evidence that would undermine the personal plea he intended to make to the Minister. The RRT hearing proceeded in the absence of the applicants and the RRT rejected both applications, largely because each applicant had failed to appear or to provide supporting testimony and other evidence. The applicants later discovered that their agent had never written to the Minister. Their only hope lay in judicial review. Argument in the High Court centred on the effect of the fraud committed by a third party but the issue was approached obliquely. The applicants argued that the fraud of their agent denied their right to a fair hearing and that the resulting decision should be set aside. The Minister conceded that the applicants were not party to the fraud which had prevented them from exercising the right to appear and put their case, but he stressed that the court could correct only the errors of the tribunal. The RRT had observed the required procedures by inviting the applicants to appear. The applicant’s failure to do so could not be attributed to the RRT. Accordingly, there was no basis upon which the conduct or decision of the RRT could be questioned. The difference was one of focus. The applicants emphasised the effect of the fraud while the Minister emphasised its source. The Minister’s argument was accepted by a majority of the Full Court of the Federal Court, which held that the behaviour of the agent could not vitiate the RRT’s decision because his fraud was not by, or on, the RRT. The fraud was between the applicants and their agent; its effect was confined in the same manner.61 A claim of denial of natural justice was similarly rejected because any unfairness had arisen entirely outside the proceedings or control of the RRT.62 The High Court unanimously ruled in favour of the applicants and accepted that third party fraud could vitiate a decision if there is sufficient proof the decision was actually induced or infected by the fraud.63 The High Court focussed on the procedural obligations governing the RRT and the extent to which the due administration of justice could require their observance. The statutory code governing the RRT stated that it was intended to provide ‘an exhaustive statement of the requirement of the natural justice hearing rule’.64 The code provided applicants with a

61 Minister for Immigration and Citizenship v SZFDE (2006) 154 FCR 364 [136]–[139], [205]–[209]. 62 Ibid [103], [139]. 63 SZFDE (2007) 232 CLR 189 [24]–[25]. 64 Migration Act 1958 (Cth) s 422B.

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right to appear before the RRT to put their case and specified that the RRT could only determine a case in the absence of an applicant if the determination was favourable or the applicant did not appear.65 The High Court reasoned that any subversion of these statutory requirements would subvert the obligation of the RRT to accord fairness to applicants who appeared before it. The important point was the effect that the fraud had on the decision-making processes of the RRT rather than the source of the fraud.66 The fraud of the agent could be characterised as a fraud ‘on’ the RRT because it had disabled it ‘from the due discharge of its imperative statutory functions’.67 According to this view, the fraud of the agent stymied the operation of the hearing procedures and, therefore, had corrupted the decision-making process. The emphasis of the High Court on the effect the fraud had on the RRT’s ability to discharge its statutory obligations meant that it did not have to consider the extent to which fraud might ‘unravel’ administrative decisions if an official was not subject to the comprehensive statutory obligations present in SZFDE, though its reasoning suggests that the precise effect of fraud would be difficult to predict. In my view, the problem with gauging the likely effect of fraud in administrative decisionmaking was due in part to uncertainty about the extent to which the public law conception of fraud ought to draw from private law. The High Court drew attention to the chameleon quality of fraud within private law, which had given rise to an enormous body of cases that explored ‘different shades of meaning and sometimes deeper distinctions’ that fraud might assume in different areas.68 A key quality of the private law cases was their concern with ‘the creation and protection of personal and proprietary rights in inter partes litigation, rather than with what might today be identified as public law’.69 The case at hand and public law more generally raised different issues, such as the performance of statutory duties and constitutional role of the courts in securing the administration of those duties. At the same time, however, the High Court acknowledged the longstanding influence that private law concepts of fraud had exerted over key concepts of judicial review, such as unreasonableness and abuse of power. The principles governing the exercise of the discretions and powers vested in trustees and other fiduciaries and the standards imposed on the repositories of those powers exerted a clear influence over the Wednesbury principles of unreasonableness.70 Is fraud one area where private law might 65

Migration Act 1958 (Cth) ss 425, 426A. SZFDE (2007) 232 CLR 189 [47]–[49]. 67 Ibid [51]. 68 Ibid [9]. 69 Ibid [11]. 70 Ibid [12], citing Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 [124]. This reference to the equitable heritage of some parts of public law 66

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still be able to offer useful doctrinal guidance to public law? The approach of the High Court in SZFDE leaves this question unclear.71 The court acknowledged that a judgment, order or advantage obtained by fraud would normally be ‘unravelled’ by the fraud.72 But the court conceded that the ‘vitiating effect of fraud is not universal throughout the law’.73 An obvious example is the protection given by equity to a bona fide purchaser for value who has no notice of a fraud. The High Court did not distil a common principle from the differing effects fraud might have in private law but instead noted that public law cases of fraud had emphasised that the supervisory judicial review jurisdiction of the courts ought to protect the due administration of justice.74 The court reasoned that the role of the courts in securing the due administration of justice was heightened in Australia by the constitutional separation of powers and the allocation of judicial functions to the exclusive jurisdiction of the courts, though it could hardly be suggested that the courts are less important in ensuring the proper administration of courts in the absence of a written constitution. The High Court noted that certiorari was long the chief remedy invoked to ensure the due administration of justice in cases of fraud. It issued to quash decisions of inferior courts of tribunals that were shown to be

might seem curious after the House of Lords decision in R v East Sussex CC, ex p Reprotech (Pebsham) Ltd [2003] 1 WLR 348 (‘Reprotech’). Estoppel was rejected much earlier in Australian law: Minister for Immigration, Local Government and Ethnic Affairs v Kurtovic (1990) 92 ALR 93. Though there was a time when estoppel seemed likely to take root in Australian public law: A Mason, ‘Estoppel in Administrative Law’ in M Groves (ed), Law and Government in Australia (Sydney, Federation Press, 2005). Reprotech emphatically severed any doctrinal connection between estoppel and the legitimate expectation but should not be viewed as the first part of a wall between public and private law. The House of Lords simply confirmed that the evolution of a substantive form of legitimate expectation had removed any need for recourse to the elements of estoppel such as representation and reliance which had been helpful in the early legitimate expectation cases. Cases which involve a substantive legitimate expectation are usually very fact-sensitive and require contextual analysis to which the principles of estoppel offer no significant assistance. That is no reason to deny the continued possible relevance of private law to other parts of public law. The Hon JJ Spigelman’s contribution to this volume demonstrates the contribution that equity has made to the ground of improper purpose. 71 On this note, the Hon JJ Spigelman’s paper (below) in this volume speculates about the value of cross-fertilisation between public and private law by reference to improper purpose. Although one can accept the argument that cross-fertilisation between disciplines such as equity and public law could both invigorate and guide the latter, his analysis does not necessarily provide guidance to the question of fraud, particularly third party fraud because it cannot be assumed that the influence of equity, if it were accepted a useful point of doctrinal reference, would be constant within the different grounds of judicial review. 72 Lazarus Estates Ltd v Beasley [1956] 1 QB 702, 212–13; Farley (Aust) Pty Ltd v JR Alexander & Sons (Qld) Pty Ltd (1946) 75 CLR 487, 493. 73 SZFDE v Minister for Immigration and Citizenship (2007) 232 CLR 189 [16]. 74 Ibid [11], citing Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476 [103]– [104], Bodruddaza v Minister for Immigration and Multicultural Affairs (2007) 228 CLR 651 [28], [46].

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obtained by fraud, collusion or perjury.75 If the fraud had been perpetrated on an inferior court or tribunal, supervisory review would operate to quash the consequences of the fraud.76 These cases accepted that there is no clear or rational ground to distinguish between fraud by a party and a third party. Each had the same effect and each should be corrected. In these cases the courts were concerned that no effective remedy might be available to correct a conviction secured with perjury if the court accepted that the fraud of a third party did not have the same vitiating effect as fraud by a party. The High Court was similarly mindful in SZFDE that supervisory relief might be the only effective relief for a victim of third-party fraud who wanted a decision set aside and to be given a new (and fair) hearing. Any private law right of action against the cause of the fraud such as negligence would, even if available, be an inadequate substitute. The inadequate nature of other remedies was obvious in SZFDE. A failed claimant for refugee status can hardly be assuaged by an illusory right for damages against a crooked agent. The focus of the High Court on the mandatory nature of the procedural code governing the RRT’s hearings removed the need to settle more general issues about the extent to which judicial review might extend to third party fraud in administrative decision-making. But the court was not so reticent about the possible effect of other forms of third-party conduct that might affect an administrative hearing. It explained that there are sound reasons of policy why a person whose conduct before an administrative tribunal has been affected … by bad or negligent advice or some other mishap should not be heard to complain that the detriment vitiates the decision made.77

Neither the High Court nor the lower court decisions drew upon or explained any ‘policy reason’ why third party negligence or other mishap should not vitiate a decision.78 If the High Court was not required to decide the wider implications of third party fraud, one might question why it felt obliged to make clear that third party negligence or the like should not vitiate a decision. The Australian approach asks whether there has been a fraud ‘on’ the tribunal in question, which requires an examination of the effect that the fraud had on the deliberative process of the tribunal. The unanswered

75 R v Gillyard (1848) 12 QB 527; R v Wolverhampton Crown Court, ex p Crofts [1983] 1 WLR 204, 207; Davern v Massel (1984) 155 CLR 21, 58–9. 76 R v Fulham, Hammersmith and Kensington Rent Tribunal, ex p Gormly [1951] 2 All ER 1030, 1034; R (Burns) v County Court Judge of Tyrone [1961] NI 167, 172. 77 SZFDE (2007) 232 CLR 189 [53], citing Minister for Immigration and Multicultural Affairs v SZFDE (2006) 154 FCR 365, 399. See also Minister for Immigration and Citizenship v SZLIX [2008] FCAFC 17. 78 The main reason which has been cited in other cases is finality.

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questions are why fraud can vitiate this process but negligence or mistake cannot, and why there should be a distinction between categories of fault when each can lead to exactly the same consequences such the failure of an applicant to appear. If there is a fatal flaw ‘on’ the tribunal caused by a third party, it is not clear why the motive attributed to that third party should matter. This approach places an unprincipled barrier around claims of fraud, to the exclusion of other forms of third-party fault. If, as the High Court of Australia has suggested, the concern of the courts is to protect the integrity of the administration of justice, one must ask how that integrity is fostered if the courts intervene only some of the time. Any concern for the proper administration of justice, if it is to be principled, is difficult to confine to some instances of third-party fault but not others.

III MOTHERHOOD STATEMENTS IN ADMINISTRATIVE LAW

The approach to the surrogacy principle in England and Australia in recent cases has led to almost opposite results. Such different outcomes might seem curious, particularly in light of the common heritage of the public law systems of each country, but it is less so in light of the quite domestic considerations that increasingly pull the public law of each nation in quite different directions.79 Whether the divergence of English and Australian law is a good thing cannot be answered easily, though it perhaps does lend support to the sceptics of the movement towards some sort of global administrative law.80 But this divergence should not cloud the value of comparative analysis between the jurisdictions, despite Poole’s warning about the inherent dangers of this approach.81 This section examines the 79 There is an increasing recognition in Australia that rising influence of European law on English public law has caused a corresponding decline in the influence of the law of England to Australia, particularly with the rising influence of the Constitution on judicial review in Australia. See, eg, J Spigelman, ‘The Integrity Branch of Government’ (2004) 78 Australian Law Journal 732–3. Justice W Gummow has similarly explained that ‘section 75(v) has always served to emphasise that Australian judicial review has its roots in the Constitution itself. This has not been realised by those who persist in teaching administrative law, not comparatively, but simply through English spectacles. The subject of [Australian] administrative law cannot be understood or taught without full attention to its constitutional foundation.’: WMC Gummow, ‘The Permanent Legacy’ (2000) 28 Federal Law Review 177, 180. 80 See C Harlow, ‘Global Administrative Law: The Quest for Principles and Values’ (2006) 17 European Journal of International Law 18. I do not take Harlow’s scepticism of the search for a global body of administrative law as necessarily a stand against the use of international law and norms in administrative law but instead a vindication of the famous quote of the former Speaker of the House of Representatives of the United States, Tipp O’Neill, that ‘All politics is local.’ Administrative law is no different. 81 T Poole, ‘Between the Devil and the Deep Blue Sea: Administrative Law in an Age of Rights’ in this volume at p 17.

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wider principles that have driven the public law of Australia and England in recent times and how they have each led to the different treatment of the surrogacy. Although each country has a quite different constitutional framework, each framework seems to provide ample territory for judicial motherhood statements. This section seeks to identify some of the more obvious fictions within those motherhood statements. A useful starting point is the now exhausted debate about the basis of judicial review. In the years before the commencement of the Human Rights Act 1998 (UK) (‘HRA’) English law experienced a vigorous debate about the theoretical foundations of judicial review.82 The debate was ostensibly between rival theories known as the ultra vires theory and the common law theory. The ultra vires theory argued that judicial review ultimately rests on parliamentary authority. The role of the courts under this theory was to police the limits of statutory powers that were impliedly intended by parliament. The ultra vires theory offered parliamentary authority (in the form of legislation) as the ultimate foundation for judicial review. The common law theory argued that much of the authority for and grounds of judicial review rested ultimately in the common law. According to the common law theory, the principles of judicial review possess a normative content and force that is separate from the will or intention of Parliament (as expressed in legislation), although legislative statements may affect the application of those principles.83 By the time most commentators arrived at one or other of the compromise theories that drew from each rival theory,84 the English judiciary had largely moved on. Judicial references to ultra vires were largely discarded in favour of the nomenclature of either ‘the rule of law’ or ‘abuse of power’, though each phrase is sometimes deployed at a different level. The rule of law is chiefly invoked in English cases where higher order questions concerning parliamentary sovereignty arise.85 It is frequently also invoked as a justification or organising principle for judicial review in England, particularly in light of the considerable expansion in the scope of

82 Many pieces on the debate are usefully collected in C Forsyth (ed), Judicial Review and the Constitution (Oxford, Hart Publishing, 2000). 83 M Walters, ‘David Mullan and the Unwritten Constitution’ in G Huscroft and M Taggart (eds), Inside and Outside Canadian Administrative Law (Toronto, University of Toronto Press, 2006) 430. 84 The most satisfactory is the ‘modified ultra vires theory’, by which Parliament is taken to have impliedly accepted the principles of judicial review. This approach strikes a balance between judicial innovation and parliamentary sovereignty by assuming the latter can (and has) been exercised to approve the former with legislation passed with knowledge of previous judicial decisions. See C Forsyth and M Elliott, ‘The Legitimacy of Judicial Review’ [2003] Public Law 286. 85 The most notable instance is Jackson v A-G [2006] 1 AC 262, discussed in J Jowell, ‘Parliamentary Sovereignty Under the New Constitutional Hypothesis’ [2006] Public Law 562.

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review since the commencement of the HRA.86 The rule of law is yet to provide any significant precision to the English judicial review, which is unsurprising given that the concept remains so deeply contested.87 Whatever disagreements may exist over the concept its protean nature tends against specificity and that problem is heightened by the current malleable state of English law which tends against settled principle.88 The label ‘abuse of power’ has proven far more useful in this uncertain climate to judges seeking an apparent doctrinal basis for new principles of judicial review. The phrase ‘abuse of power’ suggests that there has been a breach of a basic tenet of public law, but it is usually used in a conclusionary rather than explanatory manner. This approach enables abuse of power to be used as a motherhood statement that can be invoked as a wider principle or justification in English public law without any clear explanation of what might constitute an abuse of power or whether a new ground of review can be said to fall within the scope of that term. An example can be drawn from the mass of cases that followed the English recognition of a principle of substantive unfairness.89 That principle was received into English law with surprisingly little question even though the orthodox explanation of substantive unfairness gives no clear indication as to how or why a decision that frustrates a legitimate expectation can be so unfair that it amounts to an abuse of power.90 Subsequent cases struggled to devise a coherent explanation to this key question, though none questioned the merit of the judicial enforcement of legitimate expectations.91 Laws LJ tried to address these doubts in R

86 The best exponent of this view is Jowell, who argues that the Human Rights Act 1998 (UK) has effected a fundamental realignment in the relationship between Parliament and the courts. See, eg, J Jowell, ‘Judicial Deference and Human Rights: A Question of Competence’ in P.Craig and R.Rawlings, Law and Administration in Europe (Oxford, OUP, 2004) 67, 71–3. Jowell, and presumably his co-authors, affirmed this position in Woolf, Jowell and Le Sueur, above n 40, [1–005], where it is noted that English judicial review now extends well beyond its earlier boundaries of ‘administrative action’ to ‘high-level policy decisions and of legislation’. 87 J Waldron, ‘Is the Rule of Law an Essentially Contested Concept in Florida?’ (2002) 21 Law and Philosophy 137, 140–4. 88 Though public lawyers have long conceded that the rule of law can be given many different conceptions: P Craig, ‘Formal and Analytical Conceptions of the Rule of Law’ [1997] Public Law 467. 89 The key English case on substantive unfairness is R v North and East Devon Health Authority, ex p Coughlan [2001] QB 213. The case and its consequences are discussed in I Steele, ‘Substantive Legitimate Expectations’ (2005) 121 Law Quarterly Review 300; M Elliott, ‘Legitimate Expectations and the Search for Principle’ [2006] Judicial Review 281; Craig above n 18, at 642–80. 90 This is the formula given in Coughlan [2001] QB 213, 242. 91 Strictly speaking cases of substantive unfairness do not require judicial enforcement of the expectation because courts simply set aside a decision that disappoints an expectation. But the reality is that such orders have the effect of enforcing the expectation. Any suggestion to the contrary seems to cloak the principle in a formalism that supporters of substantive unfairness decry.

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(Nadarajah and Abdi) v Secretary of State for the Home Department.92 His immediate concern in that case was the uncritical use of precedent by applicants who claimed a legitimate expectation and their wider failure to identify the reasoning that might underpin such claims: Principle is not supplied by the call to arms of abuse of power. Abuse of power … is a useful name, for it catches the moral impetus of the rule of law … But it goes no distance to tell you, case by case, what is lawful and what is not.93

Laws LJ distilled the very principle he thought was lacking from what he identified to be the perennial theme of the legitimate expectation cases, which was that a public body that made a promise as to how it would act, or followed a practice which represented how it would act, was required to follow that promise or practice unless there was very good reason to do otherwise. Laws LJ reasoned that the legal obligation to honour such promises had its ultimate foundation in a deeper principle, which he explained is a requirement of good administration, by which public bodies ought to deal straightforwardly and consistently with the public. In my judgment this is a legal standard which, although not found in terms in the European Convention on Human Rights, takes its place alongside such rights as fair trial, and no punishment without law. That being so there is every reason to articulate the limits of this requirement – to describe what may count as good reason to depart from it – as we have come to articulate the limits of other constitutional principles overtly found in the European Convention.94

This statement invites several comments. First, English courts are clearly struggling to explain the principle of substantive unfairness but seem strangely unaware that the open quest for a coherent foundation to the principle calls into question its very legitimacy. How can the courts declare a decision to be an abuse of power if they are still unsure of the basis upon which such a principle ultimately rests? That irony is especially acute given that substantive unfairness is invoked by courts to set aside decisions that are not sufficiently justified by a clear overriding interest. One might ask why an administrative decision must be justified by clear and compelling reasons before it may be regarded as acceptable if the legal principle by which that process is conducted lacks any comparable qualities. Secondly, the lengthy debates about the basis of judicial review in England divert 92 R (Nadarajah & Abdi) v Secretary of State for the Home Dept [2005] EWCA Civ 1363 (‘Nadarajah & Abdi’). 93 Ibid [67] (Laws LJ, Thomas LJ and Nelson J agreeing). 94 Ibid [68] (Laws LJ, Thomas LJ and Nelson J agreeing). The immediate benefit of this principle of good administration was to enable Laws LJ to conclude in the case before him that ‘good administration requires public authorities to be held to their promises would be undermined if the law did not insist that any failure or refusal to comply is objectively justified as a proportionate measure in the circumstances.’: [68].

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attention from the fact that much of the current law can be explained as a ‘bottom up’ affair rather than a ‘top down’ one.95 Many of the cases seem to be result in search of a principle. Thirdly, the invocation of a principle of good administration as an organising principle of judicial review, or even a simple justification of some of the cases, opens as many questions as it can resolve, particularly if, as Laws LJ suggests, it is anchored beyond the written words of constitutional documents. What sources may a judge legitimately call upon? How may a conflict between written and unwritten constitutional principles be resolved? These questions reflect a longstanding debate about the judicial methodology that is used to discover silent or unwritten constitutional principles, which Laws LJ does not address.96 A good reply to the reasoning of Laws LJ was made a century in advance by Roscoe Pound. Pound likened judicial appeals to the common law to a circus act, in which judges carefully nurse a ventriloquist’s dummy on their knee and feign astonishment as the dummy voices careful answers to questions upon which the judges need guidance.97 One could simply ask whether this circus act involves one dummy or two but the better question is why judges still pointedly refuse to identify the voice of the common law as one that speaks their own personal words and values. If judges truly believe that public law should include normative values about administrative standards or relationships between citizens and their governments, why do they not simply say so? Laws LJ hinted at this when he stated that abuse of power went some way to catching the ‘moral impetus of the rule of law’,98 though he seemed unwilling to admit that the moral dimension of this conception of the rule of law might have a personal flavour.99 Jeremy Waldron has pointed out that the failure of judges to admit this issue leaves open a key question, which he explained as follows:

95 The original ‘bottom upper’ was Posner who drew the distinction in R Posner, ‘Legal Reasoning From the Top Down to the Bottom Up: The Question of Unenumerated Constitutional Rights’ (1992) 59 University of Chicago Law Review 433. Posner drew the distinction during an extended debate with Dworkin, whom he labelled a ‘top downer’. 96 The issue is well discussed in the context of American constitutional law in D Crump, ‘How Do the Courts Really Discover Unenumerated Fundamental Rights? Cataloguing the Methods of Judicial Alchemy’ (1996) 19 Harvard Journal of Law and Public Policy 795. 97 R Pound, ‘Spurious Interpretation’ (1907) 7 Columbia Law Review 379, 382. Thanks are due to Jeff Goldsworthy for the reference to Pound’s insightful article. 98 Nadarajah & Abdi [2005] EWCA Civ 1363. 99 The same omission attends some of the extraordinary extra-judicial statements Sir John Laws has made about the rule of law, including the suggestion that there might be some ‘higher order of law’ that might necessarily limit parliamentary sovereignty: J Laws, ‘Law and Democracy’ [1995] Public Law 72. The piece is remarkable for its apparent belief that the courts may be better equipped than elected bodies to enforce some democratic norms.

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how are we supposed to tell whether a given norm practised and prevalent among the powerful in a society governed by law is actually one of its laws, part of its legal system, as opposed to a moral principle that powerful people happen to accept?100

The stubborn refusal of judges to admit the personal choices they make and seek to enforce in judicial review highlights a major gap in the rights based approach that currently dominates English public law. When English judges speak of rights they often do so in terms that are usually imprecise and lacking in clear principle. The problem is worsened by the frequent judicial recourse to motherhood statements, which are not simply imprecise but provide generalised statements that are difficult to disagree with at a conceptual level. There is a two-fold problem with such statements. First, they are often used as a shield to divert attention and criticism from the highly contested concepts they seek to implement and the many practical problems that these concepts might introduce. Second, motherhood statements assume or imply the existence of what Loughlin described as an ‘imaginary consensus’ on important doctrinal principles.101 Loughlin made this comment during the emergence of the expansive modern conception of natural justice. He was concerned that many judges and scholars had begun to consider the procedural protections that might be required to satisfy the requirements of this expansive new sense of fairness without addressing the key questions that lay underneath this exercise, such as whether and how the adjudicative model of fairness should be extended into other areas, or whether the rebirth of natural justice was part of a wider shift towards a more substantive form of fairness.102 We consider later in this section whether the apparent consignment of the surrogacy principle to history is beset with similar problems but it is first useful to make some wider comparisons to Australian law. Thomas Poole’s chapter in this volume argues that the High Court of Australia has in recent times returned to the comfortable climes of ‘old-fashioned Dixonian legalism’ after a more adventurous period under

100 J Waldron, ‘Are Constitutional Norms Legal Norms?’ (2007) 75 Fordham Law Review 1697, 1697. According to the approach taken by Waldron in this article, Laws LJ would be a classic legal positivist. 101 M Loughlin, ‘Procedural Fairness: A Study of the Crisis in Administrative Law Theory’ (1978) University of Toronto Law Journal 215, 238. 102 Similar views were expressed around the same time by R McDonald, ‘Judicial Review and Procedural Fairness in Administrative Law’ (1979) 25 McGill Law Journal 520 and (1980) 26 McGill Law Journal 1. These views were a response to the arguments of Mullan, who sought to minimise concerns about the possible drawbacks of the imprecise nature of fairness: D Mullan, ‘Fairness: The New Natural Justice’ (1975) 25 University of Toronto Law Journal 281. The debate that Mullan touched off is reappraised in light of subsequent cases in G Cartier, ‘A “Mullanian” Approach to the Doctrine of Legitimate Expectations: Real Questions and Promising Answers’ in G Huscroft and M Taggart (eds), Inside and Outside Canadian Administrative Law (Toronto, University of Toronto Press, 2006).

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the leadership of Chief Justice Mason. Sir Anthony Mason implied that the legalism commonly associated with Sir Owen Dixon can only be fully understood within the particular confines of the Australian Constitution, when he suggested that instrument was designed ‘as a delineation of government powers rather than as a charter of citizen’s right’.103 The Constitution adopted a separation of powers that defined and confined judicial power in equal measure that was reflected in a key element of the Dixonian approach, namely ‘the limited Australian conception of content of judicial power.’ Mason explained that: This conception owes much to the influence of Sir Owen Dixon and his determination that the courts should be insulated from controversial issues which involve policy and would bring the courts into controversy.104

It would be superficial to view these and other comments as simply a rearguard defence by Chief Justice Mason of the direction taken by the High Court of Australia under his leadership.105 The relevant point for the purposes of judicial review is that the structure of the Australian Constitution may not necessarily lend itself to the apparent formalism of Sir Owen Dixon’s judicial method, but it does create a structure with an emphasis on institutions rather than individuals. The institutional focus of Australia’s constitutional arrangements, which creates legal structures that may not be as naturally receptive to rights, is amplified by the absence of a Bill or Charter of Rights. Many of these problems are exacerbated by the Administrative Decisions (Judicial Review) Act 1977 (Cth), which is the main vehicle for judicial review in the federal arena. Mark Aronson has argued that this Act unwittingly focussed on procedural reform of judicial review and thereby provided no real reform of substantive law. He drew support from the grounds of review in that Act, which, he noted

103 A Mason, ‘Procedural Fairness: Its Development and Continuing Role of the Legitimate Expectation’ (2005) 12 Australian Journal of Administrative Law 103, 109. 104 Ibid. Mason has elsewhere criticised Dixonian legalism as concealing far more than it reveals about the judicial method: A Mason, ‘The Centenary of the High Court of Australia’ (2003) 5 Constitutional Law and Policy Review 41. 105 I take no position on this issue and therefore do not describe this period of the High Court with adjectives such as ‘dynamic’ or ‘activist’ because these and other such labels reveal more about those who use them rather than the High Court itself. I note, however, that the landmark empirical study of judges and other legal officials about the Mason era found that the so-called activist judges and their supporters did not see the changes in the High Court during this period in such crude terms: J Pierce, Inside the Mason Court Revolution: The High Court of Australia Transformed (Durham, Carolina Academic Press, 2006). Chief Justice Gleeson, whom those who prefer easy labels would qualify as a ‘formalist’, has also made clear that simple labels are unsuitable to describe the work of High Court and its judges: M Gleeson, ‘Australia’s Contribution to the Common Law’ (2008) 20 Singapore Academy of Law Journal 1.

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say nothing about the rule of law, the separation of power, fundamental rights and freedoms, principles of good government or (if it be different) good administration, transparency of government, fairness, participation, accountability, consistency or administrative standards, rationality, impartiality, political neutrality or legitimate expectations. Nor does ADJR mention the Thatcher era’s over-arching goals of efficiency, effectiveness and economy … ADJR’s grounds are totally silent on the relatively recent discovery or universal human rights to autonomy, dignity, respect, status, and security. Nowhere does ADJR commit to liberal democratic principles, pluralism, or civic republicanism.106

It is much easier to understand and apparently formalist nature of Australian judicial review against this constitutional background and statutory procedural framework. That approach is exemplified in a widely cited passage from Attorney-General v Quin,107 in which Brennan J explained: 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 doing so, the court avoids administrative injustice or error, so be it; but the court has no jurisdiction simply to cure administrative injustice 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.108

The High Court affirmed the central points of Brennan J’s approach when it pointedly rejected the adoption of substantive unfairness in Australian law. Chief Justice Gleeson concluded that the jurisdiction vested in the High Court by section 75(v) of the Constitution ‘does not exist for the purpose of enabling the judicial branch of government to impose upon the executive branch its ideas of good administration’.109 Justices McHugh and Gummow arrived at a similar conclusion and even conceded that the normative values offered in recent English cases on abuse of power bore some similarity to the ‘values concerned in general terms with abuse of

106 M Aronson, ‘Is the ADJR Act Hampering the Development of Australian Administrative Law?’ (2005) 12 Australian Journal of Administrative Law 79, 94. 107 A-G (NSW) v Quin (1990) 170 CLR 1. 108 Ibid 35–6. Sir Gerard adopted a similar position extra-judicially in ‘The Purpose and Scope of Judicial Review’ in M Taggart (ed), Judicial Review of Administrative Action in the 1980s: Problems and Prospects (1986). 109 (2003) 214 CLR 1, 10. The President of the New South Wales Court of Appeal reached a similar conclusion in A-G (NSW) v World Best Holdings Ltd (2005) 223 ALR [153]. President Mason was ‘troubled’ by Chief Justice Spigelman’s use of considerations of ‘unfairness’ or a ‘scale of unfairness or injustice’ in a matter of statutory interpretation. President Mason suggested that the courts have ‘no mandate to construe legislation by reference to perceptions of morality that are not already firmly embedded in fundamental constitutional doctrines or the statute itself’.

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power by the executive and legislative branches of government’ in Australian constitutional law. ‘But’ they cautioned, ‘it would be going much further to give those values an immediate normative operation in applying the Constitution’.110 Outside observers might be surprised at the almost dismissive view this reasoning takes of the idea of administrative justice or a more substantive notion of fairness within public administration, or at least the role of the courts in securing such values. But it can be argued that the High Court of Australia has adhered to a relatively rigid conception of the separation of powers as part of a wider demarcation that has enabled it to secure some important territory and perhaps also, make necessary sacrifices in that battle. The best example can be drawn from the jurisprudence that the High Court has fashioned to strike the draconian privative clauses that are a recurring feature of Australia law. The High Court has relied on an increasingly formalist conception of the separation of powers to deprive successive privative clauses of their full potential effect. The court’s position has essentially been one based on Marbury v Madison,111 in which it has protected judicial functions with increasing ferocity and struck down a growing number of things that are thought to somehow intrude on the judicial domain.112 This growing strictness of the separation of powers doctrine now enables the court to now easily cast aside privative clauses on the basis that the Constitution does not permit legislation that impairs the central function of the courts to declare and apply the law.113 This area of law has been described as a titanic struggle between the courts and the Parliament,114 and as with all great wars there have been losses as well as gains. The court has conceded that the values of administration lie clearly beyond the judicial arm of government.

110

(2003) 214 CLR 1, 23. 1 Cranch 137; 5 US 87 (1803). One example is the principle that sitting federal judges cannot conduct royal commissions or inquiries because this requires the exercise of administrative functions that are incompatible with the judicial function. This principle was only discovered almost a century after the Constitution commenced: Wilson v Minister for Aboriginal Affairs (1996) 189 CLR 1. 113 The reasoning deployed in the case of Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476 seemed to turn a strongly drafted privative clause on its head, so much so that some commentators suggested that the days of such clauses are essentially over: C BeatonWells, ‘Judicial Review of Migration Decisions: Life After S157’ (2005) 33 Federal Law Review 141. 114 C Beaton-Wells, ‘Australian Administrative Law: The Asylum Seeker Legacy’ [2005] Public Law 267. 111 112

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IV CONCLUDING OBSERVATIONS

English and Australian administrative law are each headed down increasingly different paths. Although there are many apparent similarities in the judicial review law of each country, the constitutional instruments and the wider context of those principles each exert a strong influence. The rejection of the surrogacy principle in FP (Iran) and the quite different approach taken by the High Court of Australia in SZFDE can each be understood by reference to these wider considerations. FP (Iran) and its successors provide one more example of the piecemeal attempt by English courts to construct a principle or requirement of good administration in public law. The rejection of the surrogacy principle is, however, only one part of that puzzle. It can only be understood in light of the underlying suggestion of the E case which is that special rules may be applied to some areas of administration ‘where the parties share an interest in co-operating to achieve the correct result’.115 The Court of Appeal relied on that ‘co-operative’ approach in SH (Afghanistan) v Secretary of State for the Home Department116 when it made clear that an applicant whose lawyer or agent had failed to provide relevant authorities to a refugee tribunal could expect those appearing for the Home Office to take steps to address that problem. The surrogacy principle cannot survive in this environment. It assumes a level of responsibility by parties for the conduct of their case that is at odds with the ‘co-operative’ approach to some administrative decision-making that is arising in English law. This co-operative approach to administrative decision-making and the role that the courts may play in its enforcement are alien to Australian administrative law. The Australian conception of the separation of powers, at least as it is currently expounded, has placed the enforcement of normative values in administrative decision-making beyond the realm of the courts. According to this approach the separation of powers is also a separation of functions that is policed by the courts with an apparent formalism that places relatively little weight on the outcomes of the principles applied in judicial review. Within this context an acceptance of the surrogacy principle is almost inevitable, no matter how unfair the outcome of that principle might be.

115 116

E [2004] QB 1044, 1071. [2007] EWCA Civ 1197.

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4 Interpretative Obligations as Constitutional Tools JACK BEATSON *

I INTRODUCTION

M

ARK ARONSON AND I met when we were both graduate students in Oxford in 1970. He was skilfully grappling with jurisdictional error, a topic which required a deep understanding of rebarbative statutory provisions. For that reason (and because it fitted in with other work I was undertaking) I decided to offer a paper on statute law to this collection to celebrate his contribution to public law. An important feature of the constitutional legislation enacted in the United Kingdom in 1998 is its use of interpretative obligations. Section 3(1) of the Human Rights Act 1998 (‘HRA’) provides that all legislative provisions must be read and given effect to in a way which is compatible with the rights under the European Convention of Human Rights ‘so far as it is possible to do so’. This has been described as a ‘unique interpretative technique’.1 So long as it is possible to do so, the interpretative obligation enables the courts to give a meaning to legislation which is compatible [with the Convention rights] even if this appears to differ from what Parliament had in mind when enacting it.2

Acts of the Scottish Parliament and the Northern Ireland Assembly, and measures of the Welsh Assembly and the Assembly Government Executive, are also subject to interpretative obligations contained in section 101 of the Scotland Act 1998 (‘SA’), section 83 of the Northern Ireland Act 1998 (‘NIA’) and section 154 of the Government of Wales Act 2006 (‘GWA * This paper reflects part of my contribution to Beatson, Grosz, Hickman and Singh, with Palmer, Human Rights: Judicial Protection in the UK (2008). The arguments in it are more fully developed in chapters 5 and 8 of that book 1 R v J [2005] UKHL 42; [2005] 1 AC 562 [15] (Lord Bingham). 2 R (Jackson) v A-G [2006] 1 AC 262 [105] (Lord Hope).

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2006’). The scope of the obligations in those statutes is broadly similar to that in section 3 but, as we shall see, there are some differences. This paper is primarily concerned with the position where Conventioncompatibility cannot be achieved by the ordinary canons of statutory interpretation but is achieved by these interpretive obligations. How radical is the process? What are the implications for legal certainty and clarity? Does the application of these interpretive obligations in effect make the operation of statute law a form of common law because, where Convention rights are engaged, the courts are no longer restricted by linguistic considerations in ascribing meaning to statutory words? Before turning to our prime concern, it is important to note that the consequences of a finding that a provision cannot be read compatibly with Convention rights differ radically under the HRA and the devolution legislation. The HRA adopted the New Zealand approach of deterring Parliament from diverging from Convention rights but respecting the traditions of parliamentary sovereignty. Accordingly, where a court is unable to use section 3(1) to remove incompatibility with Convention rights from a provision of the sovereign UK legislature, a court does not have power to refuse to enforce the legislation. In such cases section 3(2) provides that the validity, continuing operation or enforcement of the incompatible legislation is not affected.3 A court is confined to making a declaration of incompatibility under section 4. But, both under the HRA and under the devolution legislation, the legislation of a devolved institution is of no effect if it cannot be read compatibly with Convention rights. Devolved legislation is treated as subordinate legislation under the HRA,4 and the devolution statutes limit the competence of the devolved institutions, including the Scottish Parliament and the Northern Irish and Welsh Assemblies. One of the limits is that they have no power to do anything incompatible with Convention rights. So, taking the SA as an example, section 29(1) provides that ‘an Act of the Scottish Parliament is not law so far as any provision of the Act is outside the legislative competence of the Parliament.’5 It is clear that these legislative bodies are subject to the jurisdiction of the courts and their legislation is subject to constitutional review and may be struck down.6

3 Re S (Care Order: Implementation of Care Plan) [2002] 2 AC 291 [39]; A (Belmarsh) v Secretary of State for the Home Dept [2005] 2 AC 68 [42], [142]–[145]. 4 Human Rights Act 1998 s 21(1). 5 See also Northern Ireland Act 1998 ss 6(2), 7(1); Government of Wales Act 2006 s 94(2). 6 Whaley v Lord Watson 2000 SC 340 (IH), 348. See also 557–8 (Lord Prosser); Anderson v Scottish Ministers [2003] 2 AC 602 [18]; Whaley v Lord Advocate 2004 SC 78 [36]–[38] (Lord Brodie); [2007] UKHL 53 [6] (Lord Hope).

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Most challenges to the competence of devolved legislation have, however, been unsuccessful.7 This is in part because of the extensive system of pre-enactment scrutiny of Bills, in part because scrutiny does not extend any further than the limits which the devolution legislation has expressly placed on the legislative competence of the devolved bodies,8 and in part because of ‘restraint’ by the courts. The effect is that the validity of devolved legislation cannot be challenged on the ground that it is irrational or on the other common law grounds of review.9 In the context of the review of Scottish legislation, Baroness Hale stated, ‘[i]t is a strong thing for any court to declare an enactment of a democratic legislature invalid’.10 There is consensus that respect (also referred to as ‘restraint’ or ‘deference’11) is due to the Scottish Parliament when assessing compatibility of its Acts with Convention rights. The degree of this respect and the way it applies in different contexts are still being worked out.12 The decision as to the compatibility with the Convention rights of any legislative provision does not depend on the anterior reasoning of the legislature, although the courts recognise that where a legislative decision had not been thought through properly the result might be that the provision operates arbitrarily.13 Moreover, where a court is deciding whether a Convention right is applicable, the duty of national courts to keep pace with the Strasbourg jurisprudence as it evolves has a particular significance in the context of a challenge to devolved legislation. It is only incompatible with the Convention rights as interpreted in Strasbourg, which gives the court a basis for invalidating such legislation, and the court must be satisfied that the Convention rights, as interpreted in Strasbourg, require it to do so.14

7 Anderson v Scottish Ministers [2003] 2 AC 602; Flynn v HM Advocate [2004] UKPC D1; Adams v Scottish Ministers 2004 SC 665 (IH); DS v HM Advocate 2007 SC (PC) 1; Whaley v Lord Advocate [2007] UKHL 53. 8 Whaley v Lord Advocate [2007] UKHL 53 [7] (Lord Hope). 9 Adams v Advocate General 2003 SC 171 (OH) 10 DS v HM Advocate [2007] UKPC 36 [89]. 11 See Adams v Scottish Ministers 2004 SC 665 [27] (the vocabulary of ‘deference’ is not appropriate in the assessment of the respective provinces of court and Parliament). 12 Whaley v Lord Advocate 2004 SC 78 [81]–[82]; aff’d [2007] UKHL 53; A v Scottish Ministers 2001 SC 1, 21. Adams v Advocate General 2003 SC 171 (OH) [81]–[92]; Adams v Scottish Ministers 2004 SC 665 (IH) [23]–[52]. See also B Winetrobe, ‘The Judge in the Scottish Parliament Chamber’ [2005] Public Law 3. 13 DS v HM Advocate [2007] UKPC 36 [82] applying Wilson v First County Trust Ltd (No 2) [2004] 1 AC 816 and R (SB) v Governors of Denbigh High School [2007] 1 AC 100. 14 DS v HM Advocate [2007] UKPC 36 [92] (Baroness Hale), applying R (Ullah) v Special Adjudicator [2004] 2 AC 323 [20] (Lord Bingham).

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Jack Beatson II THE APPLICATION OF INTERPRETATIVE OBLIGATIONS

I return to our prime concern. When faced with the argument that a statutory provision is incompatible with a Convention right it is helpful to adopt a structured three-stage approach. An interpreter of a legislative provision should only consider whether Convention-compatibility can be achieved by the application of one of the interpretive obligations after determining its meaning by the application of the ordinary principles of statutory interpretation and concluding that it is not compatible with the Convention. That should be the first stage. There are many examples of courts resolving a case without recourse to section 3 of the HRA because the meaning of a provision construed according to the ordinary principles involves no apparent incompatibility with the Convention.15 There are two reasons for not having recourse to section 3 or the other interpretative obligations unless it is necessary to do so. First, the separation of the first stage of the inquiry, which includes, inter alia, purposive and contextual constructions, assists in preserving the primacy of the legislature’s intention concerning the provision. In the case of UK legislation it is also consistent with the HRA’s aim to preserve the sovereignty of the UK Parliament because the use of section 3 (but not the ordinary principles of statutory interpretation) may result in a departure from the legislative intention of Parliament. Secondly, despite the difficulties that can arise because of the complexity of modern statutes, the ‘ordinary’ approach is more likely to promote clarity as to the meaning of the provision under examination and to preserve the integrity of our statute law.16 This is because, in principle an interpretation using the ‘ordinary’ approach does not alter the meaning of the statutory language whereas, as we shall see, if section 3 is applied the meaning of the statutory language is altered, for example by ‘reading in’ Convention rights to the provision. The second stage is only reached if the application of the ordinary principles of statutory interpretation results in an apparent incompatibility between the meaning of the provision and a Convention right. In such cases the court is obliged to turn to section 3 and to use it to aid the search for compatibility. The remainder of this paper is about this second stage, the application of the interpretative obligation to the provision. All that needs to be said about the third stage is that it is only reached if the court is satisfied that, despite the interpretative obligation, it is not possible to interpret the legislation compatibly with Convention rights. In the case of

15 A-G’s Reference No 3 of 1999 [2001] 2 AC 91, 119; R (Wardle) v Leeds Crown Court [2002] 1 AC 754 [37], [115]; R v Dimsley [2002] 1 AC 509; R v Shayler [2003] 1 AC 247 [53]; McCartan Turkington Breen v Times Newspapers Ltd [2001] 2 AC 227, 300–01. 16 R v Lambert [2002] 2 AC 545 [78]; Aston Cantlow and Wilmott with Billersley Parochial Church Council v Wallbank [2004] 1 AC 546 [19].

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UK legislation it is only then that it may consider the exercise of its power to make a declaration of incompatibility.17 In the case of devolved legislation it is only then that the court has to consider the consequences of finding that the Scottish Parliament or the Northern Ireland or Welsh Assembly has acted outside its competence. What then of the second stage? The provisions imposing an interpretative obligation require courts, tribunals and others (in particular public authorities) to exercise a new and far-reaching role in respect of legislation. Notwithstanding Lord Bingham’s description of interpretative obligations as a unique interpretative technique, they have similarities to the obligation on national courts, as far as possible, to interpret national legislation compatibly with EU/EC law. The wording of section 3 is very similar to the wording used by the ECJ in the Marleasing case .18 The question is how far beyond the ordinary principles of statutory interpretation do they authorise the courts and others to go? What is the scope of these interpretative obligations and what is their strength? The extent of the change desired by the promoters of the Bill that became the HRA is shown by the government’s defeat of an attempt by the Opposition to qualify section 3(1) so that, as in New Zealand, courts should interpret legislation in a manner compatible with Convention rights only so far as it is ‘reasonable’ to do so and in a manner which reflects the intentions of Parliament, rather than so far as is ‘possible’ to do so.19 It is clear, as Lord Nicholls has stated, that the obligation in section 3 of the HRA ‘is of an unusual and far-reaching character’20 and a ‘powerful tool’,21 and when it applies it obliges the court to give an ‘abnormal construction’ to the statutory language.22 Since it applies to legislation ‘whenever enacted’, it has required the reconsideration of the interpretation of a number of statutory provisions. It is also clear that section 3 is not only for the resolution of ambiguity in a provision. It may require a different meaning even where, on the conventional approach to interpretation, the meaning of the provision is clear. Moreover, it applies to other provisions in the HRA itself.

17 Wilson v First County Trust Ltd (No 2) [2004] 1 AC 816 [14]–[15]; Bellinger v Bellinger [2003] 2 AC 467 [67]. 18 Case C106/89 Marleasing SA v La Commercial Internacional de Alimentación SA [1990] ECR I-4135 [8]. 19 See Hansard HC vol 313 col 415 (3 June 1998). See also Ghaidan v Godin-Mendoza [2004] 2 AC 557 [44], [67]. A linked amendment, which was also rejected, sought to oblige the courts, when interpreting legislation, to have full regard to the margin of appreciation the Strasbourg jurisprudence allows to states. For an edited version of the debates organised by section and issue see J Cooper and A Marshall-Williams, Legislating for Human Rights: The Parliamentary Debates on the Human Rights Act (Oxford, Hart Publishing, 2000). 20 Ghaidan v Godin-Mendoza [2004] 2 AC 557 [30]. 21 Re S (Care Order: Implementation of Care Plan) [2002] 2 AC 291. 22 Ghaidan v Godin-Mendoza [2004] 2 AC 557 [60].

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It is, however, also clear from the use of the word ‘possible’ in HRA section 3, SA section 101, NIA section 83 and GWA 2006 section 154, and the provision for declarations of incompatibility in HRA section 4 in respect of UK legislation, that Parliament expressly envisaged that not all legislation would be capable of being made Convention-compliant by application of these provisions. Lord Nicholls has observed, in relation to section 3, that the limit of what is possible is not clear because the word ‘possible’ is open to more than one interpretation, that the identification of a comprehensive standard or criterion by which possibility is to be judged is ‘proving elusive’, and the courts ‘are still cautiously feeling their way forward as experience in the application of section 3 gradually accumulates’.23 At this stage it suffices to say that the role of the court is ‘interpretation not legislation’24 and that the question of how the line between the two is to be drawn is a difficult and delicate one. The courts are not entitled to draw a line through a statutory provision and start again. They are limited to some extent by the words used, the intention manifested by Parliament, the mischief sought to be rectified and the overall contextual setting. Determining where the line between ‘interpretation’ and ‘legislation’ lies in a given case also involves considering whether the Convention right involved is qualified (as articles 8 and 10 are) or unqualified (as article 3 is). It thus involves conceptual and functional issues as well as linguistic ones. The quest for certainty about the limits of what is possible under section 3 is thus bounded by the nature of the inquiry and by the fact that, as Laws LJ has stated, ‘[t]he construction of statutes is hardly ever a value-free exercise’.25 Notwithstanding the elusiveness referred to by Lord Nicholls, the decisions to date have in fact settled a number of important points. These were usefully summarised as follows by Lord Bingham in Sheldrake v DPP and Attorney-General’s Reference No 4 of 2002: First, the interpretative obligation under section 3 is a very strong and far reaching one, and may require the court to depart from the legislative intention of Parliament. Secondly, a Convention-compliant interpretation under section 3 is the primary remedial measure and a declaration of incompatibility under section 4 an exceptional course. Thirdly, it is to be noted that during the passage of the Bill through Parliament the promoters of the Bill told both Houses that it

23

Ibid [27]. Poplar Housing and Regeneration Community Assoc v Donoghue [2002] QB 48 (Lord Woolf); R v A (No 2) (Rape Shield) [2002] 1 AC 45 [109]; Re S (Care Order: Implementation of Care Plan) [2002] 2 AC 291 [39]; Ghaidan v Godin-Mendoza [2004] 2 AC 557. 25 A v Secretary of State for the Home Dept (No 2) [2005] 1 WLR 414 [233]. 24

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was envisaged that the need for a declaration of incompatibility would rarely arise. Fourthly, there is a limit beyond which a Convention-compliant interpretation is not possible.26

Two other matters are clear. First, within their limits section 3 and the other interpretative obligations enable the meaning of statutory provisions to be altered to make them conform to higher principle; that is, to the Convention rights. It is for this reason that the new role of the courts in respect of primary legislation is fundamentally different from their role in interpreting and applying legislation under the ‘ordinary’ principles of interpretation.27 It is also clear that interpretative obligations lead to Convention rights being read into enabling statutory provisions granting powers to governmental and other public officials and bodies. Since nearly all decisions by public officials are made directly or indirectly pursuant to statutory powers, this has a significant effect on the principles governing the impact of the HRA on the decisions of public officials. In particular, within the limits of section 3, the characteristic analysis of lawfulness, legitimate aim, necessity and non-discrimination establishes the limits of the statutory power afforded to public officials.

III DIFFERENCES BETWEEN THE INTERPRETATIVE OBLIGATION IN HRA SECTION 3 AND THOSE IN THE DEVOLUTION LEGISLATION

The scope of the obligations in the devolution statutes is broadly similar to that in HRA section 3, but there are differences. Before turning to the way the case law is developing, which will be discussed by reference to the decisions on section 3, we should note these differences. The first is that SA section 101, NIA section 83 and GWA 2006 section 154 apply to Bills as well as to Acts and Assembly Measures. They thus bind the Minister in charge of a Bill, the Presiding Officer, the Parliament or Assembly itself, and the Secretary of State when determining Convention compatibility on the introduction of a Bill and subsequently. They also bind the Judicial Committee in any reference made to that court prior to enactment. A second and less significant difference is that, whereas HRA section 3 applies to all legislation irrespective of how it can be read, the obligations in SA section 101 and GWA 2006 section 154 only apply where the provision in question ‘could be read in a way as to be outside competence’ (emphasis added), and the obligation in NIA section 83 only applies where a provision of the Northern Ireland Assembly 26 [2005] 1 AC 264 [28] (Lord Bingham, with whom Lord Steyn and Lord Phillips agreed). 27 Wilson v First County Trust Ltd (No 2) [2003] UKHL 40; [2004] 1 AC 816 [61].

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could be read either — (i) in such a way as to be within the legislative competence of the Assembly; or (ii) in such a way as to be outside that competence.

Notwithstanding the deliberate decision of the drafters to use different language, it is doubtful that the differences between section 3 and the obligations in the SA and GWA are significant. It has, however, been said that because NIA section 83 applies only to provisions that could be read in two conflicting ways, it only applies to provisions that are ambiguous and are ‘fairly capable of bearing’ two or more meanings.28 It is suggested that this is the wrong approach to the section because it would render it largely otiose. In any event, since section 3 of the HRA applies to the legislation of all the devolved institutions, any legislation of the Northern Ireland Assembly ‘could be read’ as compatible with Convention rights where it is possible so to read the provision by virtue of section 3. As to the strength of the interpretive obligation, SA section 101(2) and GWA 2006 section 154(2) state that the provision is to be read as narrowly as is required for it to be within competence, if such reading is possible, and is to have effect accordingly.

NIA section 83(2), however, states that the provision shall be read in the way which makes it within that competence or, as the case may be, does not make it invalid

and the obligation contains no reference to what is ‘possible’. However, since section 83 only applies where a provision could either be read as compatible or as non-compatible, it is unlikely that its effect is to require a court to interpret a provision in a way that would not be possible under section 3. What of the requirement in the SA and GWA that the provision is to be read ‘narrowly’? Does this preclude an interpretation that may widen the scope of a provision in order to achieve compatibility with Convention rights?29 If this is so, it is unlikely to have any practical implications save in the case of Bills, because all Scottish and Welsh public authorities and courts are also bound by the obligation in HRA section 3. Accordingly, as Lord Hope has stated, ‘the proper starting point is to construe the legislation as directed by section 3(1) of the [HRA]’.30

28 Cowan v Dept of Economic Development [2000] NI 122, 132 (Girvan J), applying R v Secretary of State for the Home Dept, ex p Brind [1991] 1 AC 696, 718. 29 See below for examples of the use of HRA s 3 to give words a broad meaning to achieve compatibility. 30 DS v HM Advocate [2007] UKPC 36 [24]. Cf Flynn v HM Advocate [2004] UKPC D1 [37] (Lord Hope), [85] (Lord Rodger). Cf [101] (Baroness Hale).

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IV RECONSIDERING THE INTERPRETATION OF A STATUTORY PROVISION

There are many examples of the application of section 3 resulting in the reinterpretation of a statutory provision. The notable examples include the cases in which reverse burdens of proof in criminal proceedings have been reinterpreted as only imposing an evidential burden,31 and that in which it was held that a same-sex partner is a ‘spouse’ within paragraph 2 of Schedule 1 to the Rent Act 1977 (‘Rent Act’).32 This might, in a suitable case, involve reinterpreting a statutory provision by giving it the meaning it was given by the authoritative cases at the time it was enacted and discarding the meaning given in more recent authority.33

V LINGUISTIC AND CONCEPTUAL COMPATIBILITY

Initially, when considering what is ‘possible’ within section 3, there was a tendency to concentrate on whether the words of a provision expressly or by necessary implication contradicted the meaning which the provision would have to be given to make it compatible. It was said that the exercise was one of translation, and that it was necessary to identify the precise word or phrase which, if given its ordinary meaning, would be incompatible and how that word or phrase was to be construed to make it compatible. Lord Hope stated that: it ought to be possible for any words that need to be substituted to be fitted into the statute as if they had been inserted there by amendment. If this cannot be done without doing such violence to the statute as to make it unintelligible or unworkable, the use of this technique will not be possible.34

This linguistic approach has been used in a number of cases.35 Sometimes as where the statute makes a distinction between ‘male’ and ‘female’,36 or 31 See, eg, R v Lambert [2002] AC 545; Sheldrake v Director of Public Prosecutions and A-G’s Reference No 4 of 2002 [2005] 1 AC 264; R v Carass [2002] 1 WLR 1714; R v Keogh [2007] 1 WLR 1500. 32 Ghaidan v Godin-Mendoza [2004] 2 AC 557 reversing Fitzpatrick v Sterling Housing Association Ltd [2001] AC 27. 33 See Beaulane Properties Ltd v Palmer [2006] Ch 59 [213], but the view there expressed about the incompatibility of the Land Registration Act 1925 s 75 was disapproved by the Court of Appeal in Ofulue v Bossert [2008] EWCA Civ 7 [49], and where there is no incompatibility there is no need to have recourse to s 3. 34 R v Lambert [2002] 2 AC 545 [80]. 35 Adan v Newham LBC [2002] 1 WLR 2120 [93]; H v London North & East Region Mental Health Review Tribunal [2002] QB 1; Re S (Care Order: Implementation of Care Plan) [2002] 2 AC 291 [41]; International Transport Roth GmbH v Secretary of State for the Home Dept [2003] QB 728 [156] 36 Bellinger v Bellinger [2003] 2 AC 467.

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‘men and ‘women’ and ‘husbands’ and ‘wives’,37 or where what is in issue is the compatibility of a complex and interlinked legislative scheme,38 it is difficult to get beyond the words used. Thus, it has been held that the provision in section 11(c) of the Matrimonial Causes Act 1973 that a marriage is void if ‘the parties are not respectively male and female’ could not be read as referring to a person’s gender after gender reassignment surgery. Lord Rodger stated that [b]oth the present tense and the omission of any reference to the time of the marriage indicate that, in relation to the validity of marriage, Parliament regards gender as fixed and immutable.39

It has, however, become clear that while, as Lord Millett has observed, the limits of section 3 may be in part linguistic,40 the ultimate concern of the court under section 3 is with what is conceptually possible, not with what is linguistically possible. In Ghaidan v Godin-Mendoza Lord Rodger stated: The key lies in a careful consideration of the essential principles and scope of the legislation being interpreted. If the insertion of one word contradicts those principles or goes beyond the scope of the legislation, it amounts to impermissible amendment. On the other hand, if the implication of a dozen words leaves the essential principles and scope of the legislation intact but allows it to be read in a way which is compatible with Convention rights, the implication is a legitimate exercise of the powers conferred by section 3(1).41

The increasing reluctance to concentrate on linguistic features of the particular statute has been explained in several ways. For Lord Steyn a literal approach is inappropriate in considering whether a breach of a Convention right may be removed by interpretation because section 3 requires a broad approach concentrating, amongst other things, in a purposive way on the importance of the fundamental right involved.42 In R v A (No 2) (Rape Shield) he stated that section 3 requires the court ‘to subordinate the niceties of the language of [the provision under consideration] to broader considerations’.43 For Lord Nicholls and Lord Rodger moving away from a linguistic approach avoids reducing the exercise envisaged by section 3 to a semantic lottery where the outcome would

37 R (Hooper) v Secretary of State for Work and Pensions [2005] 1 WLR 1681 [79], [86] and [122]. 38 International Transport Roth GmbH v Secretary of State for the Home Dept [2003] QB 728. 39 Bellinger v Bellinger [2003] 2 AC 467 [83]. 40 Ghaidan v Godin-Mendoza [2004] 2 AC 557 [72]. 41 Ibid [2004] 2 AC 557 [122] 42 Ibid [41], [49]. See also [47] where he stated that linguistic arguments had been rejected in favour of a broader approach in Re A (No 2) (Rape Shield) [2002] 1 AC 45. 43 [2001] UKHL 25; [2002] 1 AC 45 [45] (‘R v A (No 2)’).

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depend in part on the particular term or phrase chosen by the draftsman. Lord Nicholls stated this followed from the fact that section 3 may require legislation to bear a meaning which departs from the unambiguous meaning the legislation would otherwise bear.44 Lord Rodger stated: The statute book is the work of many different hands in different parliaments over hundreds of years and, even today, two different draftsmen might choose different language to express the same proposition. In enacting section 3 (1), it cannot have been the intention of Parliament to place those asserting their rights at the mercy of the linguistic choices of the individual who happened to draft the provision in question. What matters is not so much the particular phraseology chosen by the draftsman as the substance of the measure which Parliament has enacted in those words.45

It is, with respect, suggested that this is correct and that a linguistic preference that does not reflect a fundamental feature of the statutory scheme should not preclude the achievement of compatibility with a Convention right. While accepting that the operation of section 3 does not depend critically upon the words of the provision under consideration, Lord Nicholls has also said that when a court ascribes a meaning and effect to legislation pursuant to its obligation under section 3, ‘it is important the court should identify clearly the particular statutory provision or provisions whose interpretation leads to that result’.46 This should, he stated, ‘assist in ensuring the court does not stray outside its interpretation jurisdiction’.47 But, as we shall see when considering the technique of ‘reading in’ words to achieve compatibility, his concern is with substance and not with the precise form of words to be read in which are for this purpose ‘of no significance’.48

VI ‘READING DOWN’, ‘READING BROADLY’, AND ‘READING IN’

A Reading Down Reading down words by giving them a narrow meaning is a familiar common law technique. Section 3, however, takes this a stage further by permitting a narrower than ‘ordinary’ meaning. Most, but not all of the cases concern criminal law and proceedings or other issues of personal 44 Ghaidan [2004] 2 AC 557 [31]. Lord Millett’s dissent shows that different views exist as to what is conceptually possible in a given case. 45 Ibid [123]. 46 Re S (Care Order: Implementation of Care Plan) [2002] 2 AC 291 [41]. 47 Ibid. 48 Ibid [35].

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liberty. For example, statutory provisions requiring a defendant in criminal proceedings to ‘prove’ something had hitherto generally been construed as reversing the ordinary legal burden of proof from the prosecution to the defendant. A number of (but not all)49 such provisions have now been held to be incompatible with the presumption of innocence in article 6(2) and section 3 has been used to read some (but again not all)50 as imposing an evidential rather than a legal burden on the defendant.51 Section 3 has also been used to read down the terms of substantive offences in order to ensure that they do not penalise the exercise of Convention rights in a manner which is not justified in the terms of the Convention.52 For example, in Connolly v DPP,53 the Divisional Court rendered section 1 of the Malicious Communications Act 1988 compatible with article 10 by giving a restricted meaning to the terms ‘grossly offensive’ and ‘indecent’. The court considered that the same result might also be achieved by reading into the section a provision to the effect that it will not apply where to create an offence would be an interference with freedom of expression that is not justified by article 10(2). Again, conventionally construed, the requirement that the Parole Board direct that a prisoner be released ‘if satisfied that it is no longer necessary for the protection of the public that he be confined (but not otherwise)’ would require the Board to decline to so direct if it was in doubt, which would not be compatible with article 5(4), but section 3 enabled it to be read as requiring the Board to direct release unless it was positively satisfied that it was necessary for the protection of the public that the offender be confined.54 One of the most far-reaching examples of ‘reading down’ concerns the procedure for control order proceedings under CPR Part 76 made pursuant to power conferred by paragraph 4 of the Schedule to the Prevention of Terrorism Act 2005. Paragraph 4(3)(b) requires national security material not to be disclosed except to the court and to a special advocate appointed to represent the interests of a person in respect of whom a control order is made. The special advocate may not communicate with the controlled

49 Sheldrake v Director of Public Prosecutions and A-G’s Reference No 4 of 2002 [2005] 1 AC 264. 50 Ibid. 51 See I Dennis, ‘Reverse Onuses and the Presumption of Innocence: In Search of Principle’ [2005] Criminal Law Review 901. 52 Percy v Director of Public Prosecutions (2002) 166 JP 93; Norwood v DPP [2003] Crim LR 888; Hammond v Director of Public Prosecutions (2004) 168 JP 601 (Public Order Act 1986 s 5, and art 10); Connolly v Director of Public Prosecutions [2008] 1 WLR 276 (‘grossly offensive’ and ‘indecent’ in Malicious Communications Act 1988 s 1). But ‘reading down’ is not always possible: see Togher v Revenue and Customs Prosecution Office [2008] 2 WLR 82 [39] (Thomas LJ). 53 [2008] 1 WLR 276. 54 R (Sim) v Parole Board [2004] QB 1288.

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person and the rules provide for closed hearings in the absence of the controlled person and his legal representatives. In Secretary of State for the Home Department v MB,55 the House of Lords read down the provisions in paragraph 4 so they take effect only where it is consistent with the right of the controlled person to a fair trial for them to do so. Lord Bingham stated that he questioned whether section 3 should be relied on in respect of paragraph 4 inter alia because ‘any weakening of the mandatory language used by Parliament would very clearly fly in the face of Parliament’s intention’.56 The Joint Committee on Human Rights has also expressed its surprise at this use of section 3, stating that it would have been: more consistent with the scheme of the Human Rights Act for the House of Lords to have given a declaration of incompatibility, requiring Parliament to think again about the balance it struck in the control order legislation between the various competing interests.57

The effect of a wide-ranging use of section 3 is largely to neutralise this aspect of the scheme of the HRA.

B Reading Broadly Section 3 can alternatively be used to give words a broad meaning to make a provision compatible with a Convention right. For example, R v Offen58 considered the requirement that a mandatory life sentence be imposed on those convicted of a second ‘serious offence’ save where there are ‘exceptional circumstances’ relating either to the offences or to the offender. The court gave the phrase ‘exceptional circumstances’ a less restrictive interpretation than it had previously been given and stated that it included cases in which the court is satisfied that the offender does not constitute a significant risk to the public in order to remove incompatibility with articles 3 and 5 of the Convention. Another example is the reconsideration of the meaning of the word ‘how’ in the requirement in section 11(5)(ii) of the Coroners Act 1988 that a coroner’s inquisition set out, inter alia, ‘how … the deceased came by his death’. ‘How’ had previously been held to 55 [2007] 3 WLR 681 [71]–[74] (Lord Hoffmann); [82]–[84] (Lord Carswell); [91]–[92] (Lord Brown) (‘MB’). It was held that, a person’s right to be informed of the case against him is not absolute, and may in a given case be sufficiently counterbalanced by procedures, such as the special advocate procedure. Lord Hoffmann (at [54]) agreed with the Court of Appeal that the use of special advocates in principle complies with article 6. 56 Ibid [44]. He did not press his opinion to the point of dissent. 57 Ninth Report of Session 2007–08, HL 50, HC 199 [47]. 58 [2001] 1 WLR 253 (‘Offen’). See also R v Hertfordshire County Council, ex p Green Environmental Industries Ltd [2000] 2 AC 412 (Police and Criminal Evidence Act 1984 s 78).

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mean ‘by what means’, but since this did not meet the requirements of article 2, in R (Middleton) v HM Coroner for the Western District of Somerset it was held that the provision should be given a broader meaning to include ‘in what broad circumstances’.59

C Reading In Section 3 can also be used to achieve compatibility by reading words into the provision under consideration. So, for example, MB also dealt with the provision in section 3(10) of the Prevention of Terrorism Act 2005 that a court considering whether the Secretary of State’s decision that the requirements for making a control order were satisfied for the making of the order ‘was flawed’. On the conventional approach to construction the provision requires the court to consider whether the decision was flawed at the time the order was made but it was held that the provision is to be read so as to require the court also to consider whether it is flawed at the time of the court’s determination.60 The technique of ‘reading in’ words is also used in conventional interpretation but its use pursuant to the obligation in section 3 has proved the most powerful of the tools used to achieve compatibility with the Convention. The results are radical and sometimes controversial. Section 3 can require a court to read in words which change the meaning of the legislation.61 The width of the obligation is seen from the decisions of the House of Lords in R v A (No 2) (Rape Shield), the rape shield case, and Ghaidan v Godin-Mendoza, the decision of the Divisional Court in R (Hammond) v Home Secretary,62 and what was said in the House of Lords in that case and in Secretary of State for the Home Department v MB.63 R v A (No 2) concerned section 41 of the Youth Justice and Criminal Evidence Act 1999. This provision prohibited the admission of evidence about the sexual behaviour of the complainant in proceedings for sexual offences and severely restricted the discretion of the court to admit such 59 [2004] 2 AC 182. See also Goode v Martin [2002] 1 WLR 1828 (Civil Procedure Rule 17.4(2) read broadly); R (van Hoogstraten) v Governor of Belmarsh Prison [2003] 1 WLR 263 (‘his counsel or solicitor’ in the Prison Rules construed to include any lawyer chosen by a prisoner, including an Italian avvocato within the definition of ‘EEC lawyer’). 60 [2007] QB 415 [40], [46] (although Lord Phillips CJ described this as ‘reading down’ section 3(10), what was done read words in). See also [2007] 3 WLR 681 [75] (Baroness Hale) and [86] (Lord Carswell). 61 Ghaidan v Godin-Mendoza [2004] 2 AC 557 [32] (Lord Nicholls). 62 [2005] 4 All ER 1127 63 [2007] 3 WLR 681. See also X v Y (Employment: Sex Offender) [2004] ICR 1634; Copsey v WWB Devon Clays Ltd [2005] ICR 1789 (Employment Rights Act 1996 s 98); A-G’s Reference No 3 of 1999 [2001] 2 AC 91, 188 (Lord Steyn); R (Wright) v Secretary Of State For Health [2008] 2 WLR 536 (right to make representations implied into Care Standards Act 2000 s 82(4)(b)).

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evidence save for a narrow category of evidence about behaviour which met specified special ‘temporal’ or ‘similarity’ requirements. The statutory language was clear and unambiguous. Notwithstanding this, the prohibition was, by a process of reading words in to the section, held not to preclude the admission of such evidence where to exclude it would endanger the fairness of the trial under article 6.64 It has been suggested that this interpretation deprives section 41 of all effect in relation to evidence of sexual behaviour between complainant and defendant.65 The decision has, however, been defended on the ground that ‘[t]he qualification which it supplied glossed but did not contradict anything in the relevant statute’, and that, while the proviso could not have been implied in the absence of section 3, ‘if it had been expressed it would not have made the statute self-contradictory or produced a nonsense’.66 The reach of section 3 is also seen from Ghaidan, which concerned whether a statutory tenant’s homosexual partner was entitled to succeed to the tenancy on the death of the tenant. The provision under consideration was paragraph 2 of Schedule 1 to the Rent Act. As a result of a 1988 amendment, paragraph 2(2) provided that ‘a person who was living with the original tenant as his or her wife or husband shall be treated as the spouse of the original tenant’. The House of Lords held that the conventional construction of paragraph 2(2) treated survivors of homosexual partnerships less favourably than survivors of heterosexual partnerships and was incompatible with articles 8 and 14 of the Convention but that it was possible to read it as extending to homosexual partners. Lord Nicholls stated that the social policy underlying the 1988 extension of security of tenure was equally applicable to the survivor of homosexual couples living in a close and stable relationship and that the paragraph should be read and given effect to as though the survivor of such a homosexual couple were the surviving spouse of the original tenant.

His Lordship stated that the court is able to read in words which change the meaning of the enacted legislation so as to make it Conventioncompliant and that ‘the precise form of words read in for this purpose is of no significance. It is their substantive effect which matters’.67 Lord Millett 64

[2001] UKHL 25; [2002] 1 AC 45 [46] (Lord Steyn). Cf [108] (Lord Hope). Lord Phillips MR, ‘The Interpretation of Contracts and Statututes’ (Second Keating Lecture, delivered in the Great Hall of the Royal Courts of Justice London, 10 October 2001). 66 Ghaidan [2004] UKHL 30; [2004] 2 AC 557 [74] (Lord Millett). His Lordship agreed about the approach to be used under s 3, but dissented because he considered that in that case reading s 3 in the way the majority did went beyond ‘interpretation’ into the impermissible area of judicial legislation on a sensitive issue of social policy. 67 Ghaidan [2004] UKHL 30; [2004] 2 AC 557 [35]. There are minor variations in the formulations in the other majority speeches: see [51] (Lord Steyn), [129] (Lord Rodger), and [144] (Baroness Hale). The Court of Appeal had read words into paragraph 2(2) so that it read ‘as if he were his or her wife or husband’ (emphasis added). 65

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stated that the court ‘can do considerable violence to the statutory language and stretch it almost (but not quite) to breaking point’.68 The third and arguably most far-reaching example of the width of section 3 is R (Hammond) v Home Secretary. This case concerned the transitional provisions in the Criminal Justice Act 2003 (‘2003 Act’) providing that the minimum term of imprisonment for a person already serving a life sentence at the time the 2003 Act came into force was to be determined by a High Court Judge ‘without an oral hearing’. The Divisional Court held this provision could be rendered Convention compatible by reading into the provision a discretion enabling the judge to order an oral hearing in the ‘exceptional cases’ where such hearing is required to comply with a prisoner’s article 6 rights.69 The House of Lords did not have to decide whether this use of section 3 was permissible because neither the Secretary of State nor the prisoner challenged the Divisional Court’s approach. Lord Brown was inclined to agree with the Divisional Court,70 but Lord Bingham, Lord Hoffmann and Lord Rodger reserved their positions. Lord Bingham described what the Divisional Court did as an ‘interpolation’, and Lord Hoffmann as ‘a bold exercise in ‘interpretation’.71 These reservations reflect the fact that the qualification supplied by the Divisional Court appears to go beyond glossing the provision, which Lord Millett in Ghaidan stated was permissible, and to contradict the statutory words, which he said was not.72 It is also submitted that it goes beyond R v A (No 2) because the statutory language (‘without an oral hearing’) is more prescriptively exclusionary than the statutory language in R v A (No 2), where the application of section 3 has been said to ‘gloss’ but not ‘contradict’ anything in the Youth Justice and Criminal Evidence Act 1999.73 In the light of the fact that the House of Lords reserved its position as to the legitimacy of what the Divisional Court did, it was arguable that its authority might be somewhat fragile. However, in MB74 Baroness Hale and Lord Carswell relied on it. In MB the Secretary of State unsuccessfully argued that it was not possible to read down the provisions of paragraph 4 of the Schedule to the Prevention of Terrorism Act 2005 expressed in mandatory terms to permit closed hearings in the absence of a controlled person. We have referred to the fact that in MB the House of Lords applied

68 Ibid [67], although note that he considered that it was implicit in the statutory scheme that the partners were ‘of the opposite sex’: [77]. 69 Hammond (Divisional Court) [2005] 4 All ER 1127. 70 R (Hammond) v Secretary of State for the Home Dept [2006] 1 AC 603 [47] (‘Hammond’). 71 Ibid [17] (Lord Bingham), [29] (Lord Hoffmann), and [30] (Lord Rodger). 72 [2004] 2 AC 557 [74]. 73 Ghaidan [2004] 2 AC 557 [74] (Lord Millett). 74 [2007] 3 WLR 681.

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section 3 to the mandatory language of paragraph 4 so a closed hearing could only take place where it was consistent with the controlled person’s right to a fair trial,75 and to Lord Bingham’s reservation about the appropriateness of doing so in the light of the mandatory language used by Parliament. Baroness Hale stated that she considered reading down to be a ‘possible’ course and stated that, ‘if it is possible, then section 3(1) of the 1998 Act requires that it be done’. MB, however, was different from Hammond because there was no express contradiction between the words of the statute and the effect of the application of section 3. The approach in Hammond was thus not necessary for the decision in MB and it is suggested that it remains a somewhat fragile authority. The process described above has gone beyond the mere reading in of words to a more straightforward implication of Convention-compliance, supplying either no wording or wording of the most general kind. In MB, both in respect of the reading in and the more significant reading down (although wording was supplied), it was of a broad generic nature importing only that the statute had to be given effect in a manner which complied with relevant Convention rights. Beyond linguistic techniques of ‘reading’ a provision to be compatible, we are thus seeing a broader approach, propounded in Ghaidan, which simply ‘gives effect’ to a legislative provision in a way that avoids or removes the incompatibility. On this approach courts are bounded not by the constraints of linguistic possibility but only by the requirements of constitutional propriety. To these we now turn.

VII THE LIMIT OF THE COURTS’ POWERS UNDER SUCH OBLIGATIONS

We have seen that the powers are of considerable breadth and that the court is not critically concerned with the particular words adopted by the parliamentary draftsman or with a ‘translation exercise’ expressing the statutory words in different language to explain how they are to be read compatibly, or by reading specific words into the statute. The courts have often stated that what is done must fall within the concept of ‘interpretation’ and not amount to judicial legislation.76 It has, however, also been said that the power under section 3 goes beyond interpretation because it 75 Ibid [71]–[74] (Lord Hoffmann), [82]–[84] (Lord Carswell), and [91]–[92] (Lord Brown). It was held that a person’s right to be informed of the case against him is not absolute and may in a given case be sufficiently counterbalanced by procedures, such as the special advocate procedure. Lord Hoffmann (at [54]) agreed with the Court of Appeal that the use of special advocates in principle complies with article 6. 76 Poplar Housing and Regeneration Community Association Ltd v Donoghue [2002] QB 48 [75]; Re S (Care Order: Implementation of Care Plan [2002] 2 AC 29 [38] (Lord

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covers the way that legislation is given effect77 and that it is ‘quasilegislative’ because the court is not constrained by the language of the statute in question .78 However the power is characterised, in a particular case it is by no means easy to identify its limit, especially in the light of the generally broad and purposive approach to statutory interpretation. As Lord Nicholls has stated, ‘what one person regards as sensible, if robust, interpretation, another regards as impermissibly creative.’79 Ghaidan, in which Lord Millett differed from the majority, and MB, in which Lord Bingham differed from Lord Carswell and Baroness Hale, are examples of disagreements as to what is inconsistent with Parliament’s fundamental purpose. In explaining why a Convention-compliant interpretation may not be possible, judges have used differing expressions: such an interpretation would be incompatible with ‘a fundamental feature’ and ‘the underlying thrust of the legislation’,80 or would not ‘go with the grain of the legislation’,81 or would be ‘a matter for deliberation and decision by Parliament’,82 or would ‘change the substance of a provision completely’,83 or would ‘remove the very core and essence, the ‘pith and substance’ of the measure’,84 or would violate a ‘cardinal principle’ of the legislation,85 and interpretation ‘could not provide a substitute scheme’.86 In Sheldrake v DPP and Attorney-General’s Reference No 4 of 2002 Lord Bingham stated that while all these expressions yield valuable insights, none of them should be allowed to supplant the simple test enacted in the Act: ‘so far as it is possible to do so’.87 In the light of Lord Nicholls’ observation that the word ‘possible’ is open to more than one interpretation it is useful to bear in mind that the only limit on the operation of section 3 is that what is done must not be inconsistent with a fundamental feature of the legislation and must fall

Nicholls); R v Lambert [2002] 2 AC 545 [79]–[81] (Lord Hope); International Transport Roth GmbH v Secretary of State for the Home Dept [2003] QB 728 [66] (Simon Brown LJ) and [142]–[144] (Jonathan Parker LJ). 77 Ghaidan [2004] 2 AC 557 [107] (Lord Rodger). 78 Ibid [64] (Lord Millett) (albeit in a dissenting speech). 79 Re S (Care Order: Implementation of Care Plan) [2002] 2 AC 291 [40]. 80 Ibid. See also Ghaidan [2004] 2 AC 557 [33] (Lord Nicholls). 81 Ghaidan [2004] 2 AC 557 [121] (Lord Rodger). 82 Bellinger v Bellinger [2003] 2 AC 467 [49]. 83 Ghaidan [2004] 2 AC 557 [110] (Lord Rodger). 84 Ibid [111] (Lord Rodger). 85 Ibid [116] [128] (Lord Rodger referring to Lord Nicholls in Re S (Care Order: Implementation of Care Plan) [2002] 2 AC 291). 86 Ibid [49] (Lord Steyn). 87 [2005] 1 AC 264 [28] (Lord Bingham with whom Lord Steyn and Lord Phillips agreed).

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within the concept of ‘interpretation’ and not amount to judicial legislation. The various phrases set out above simply reflect this: for the courts to alter the fundamental features of a legislative scheme would be to usurp the legislature’s role. Thus, section 3 cannot be used to cure an inconsistency which, either expressly or by plain implication, is the intent of the legislature.88 So, in R (Anderson) v Secretary of State for the Home Department89 the power given to the Home Secretary by section 29 of the Crime (Sentences) Act 1997 to determine the release date of those serving life sentences was held to be fundamental to the scheme of the Act and it was not possible to read section 29 in such a way as to deprive the Home Secretary of the express power to release such prisoners. Again, in Bellinger v Bellinger90 the court considered the application of section 11(c) of the Matrimonial Causes Act 1973, which provided that ‘a marriage shall be void where the parties are not respectively male and female’, to a post-operative transsexual. It was held that the non-recognition of gender reassignment at that time breached articles 8 and 12 but that Parliament, in section 11(c) of the Matrimonial Causes Act 1973, regarded gender as fixed and immutable so that the section could not be made Convention-compliant by using section 3. In Anderson and Bellinger’s cases, the primary focus was on a particular provision. It is, however, clear that the courts will look at the legislation as a whole and will assess whether the overall contextual setting of a provision leaves scope for rendering it Convention-compliant by the use of the process of interpretation. Thus, in Re S (Care Order: Implementation of Care Plan) it was held not to be possible to use section 3 to read words into the Children Act 1989 giving the court power to impose obligations upon local authorities concerning the future care of a child when making a care order.91 This was said to be contrary to the Act’s cardinal principle that a court should not interfere in the way a local authority carried out its responsibility to a child in care. Again, in International Transport Roth Gmbh v Home Secretary the exclusive role of the SSHD in determining liability and the corresponding subordinate role of the courts were seen by Jonathan Parker LJ as ‘central and essential features of the scheme’ and to reverse those roles ‘would involve much more than linguistic changes to the statutory provisions’ but would:

88 R v A (No 2) [2002] 1 AC 45 [44] (Lord Steyn). This was qualified by Lord Nicholls in Re S (Care Order: Implementation of Care Plan) [2002] 2 AC 291 [40]. 89 R (Anderson) v Secretary of State for the Home Dept [2003] 1 AC 837. 90 [2003] 2 AC 467 [83] (‘Bellinger’). See Quilter v A-G [1998] 1 NZLR 523; A Butler, ‘Same-sex marriage and freedom from discrimination in New Zealand’ [1998] Public Law 396. 91 Re S (Care Order: Implementation of Care Plan) [2002] 2 AC 291 [40] (Lord Nicholls).

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produce a fundamental change in the nature and character of the scheme, such that the rewritten scheme would not be recognisable as the scheme which Parliament intended.92

Accordingly, it is not legitimate to read a specific provision compatibly if the result is to change the overall legislative scheme. The context of Ghaidan v Godin-Mendoza suggests that it may be legitimate not only to look at the statute as a whole but to consider its status. At the time that case was before the House of Lords in its judicial capacity, Parliament was considering a government Bill which addressed the precise issue before the court by removing the less favourable treatment accorded to the survivor of a homosexual couple. The knowledge that the legislature was doing this in what became the Civil Partnerships Act meant that the majority knew that the reading that would make the Rent Act Convention-compliant did not conflict with the current policy of the legislature. The courts seem more willing to use section 3 where the issue is one which lies in their particular expertise and less willing to do so where it is not, such as where it raises broad questions of social and economic policy. This may reflect the fact that certain contexts are classically ‘justiciable’. There is nothing novel in this as the courts have always been prepared to take a more robust approach to statutory construction to preserve access to courts and to maintain judicial independence and fairness of procedures. Thus, the use of section 3 that has been seen as particularly assertive has occurred where, for example, the issue concerns the requirements of a fair trial, as in Re A (No 2), the cases on reverse burdens of proof, MB on informing a person of the case against him, and those such as Offen on the width of judicial discretion in sentencing. The decision of the Divisional Court in R (Hammond) v Home Secretary,93 discussed above, is a particularly striking example because the words read in by the Divisional Court appear to have gone beyond glossing the provision considered and to have contradicted the statutory words. For the reasons we have given, it is suggested that its authority may be somewhat fragile. By contrast, in Re S (Care Order) the solution adopted by the Court of Appeal to remove the incompatibility was said to be beyond what was possible under section 3 in part because it had far-reaching practical ramifications for local authorities involving additional administrative work and a consequential effect on the allocation of scarce financial and other resources.94 In Bellinger v Bellinger95 their Lordships, and in particular

92

[2003] QB 728 [66] (Simon Brown LJ) and [156] (Jonathan Parker LJ). [2005] 4 All ER 1127. 94 [2002] 2 AC 291 [43] (Lord Nicholls). See also R v Stack [1986] NZLR 257, 261–2 (court not justified in amending Act by judicial legislation in a sensitive and controversial field). 93

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Lord Nicholls, considered that the use of section 3 to extend the state of ‘marriage’ to post-operative transsexuals would have given rise to very wide questions and raise issues calling for extensive enquiry and wide public consultation and discussion on issues of social policy and administrative feasibility which are ill-suited for determination by the courts and pre-eminently a matter for Parliament.96 R (Hooper) v Secretary of State for Work and Pensions97 concerned provisions in the Social Security Contributions and Benefits Act 1992 (now repealed) which provided for widow’s payment and widowed mother’s allowance but not for equivalent payments for widowers. By the time the case reached the House of Lords it was accepted that it was not possible to give those provisions a Convention-compliant meaning by using section 3. The fact that the issue was one of social welfare and the allocation of state benefits might have played some part, but as we have noted, the primary reason the lower courts considered it was not possible to use section 3 was the wording of the statute.

VIII THE EFFECT OF APPLYING THE INTERPRETATIVE OBLIGATIONS

The effect of the interpretative obligations in the HRA and the devolution legislation is, wherever possible, to place limitations on provisions which directly interfere, or permit interference, with Convention rights. The approach used permits the departure from the clear literal meaning of the provision by ‘reading down’, ‘reading broadly’ and ‘reading in’, provided that the process does not contradict the essential principles and scope of the legislation being interpreted or involve consideration of matters calling for legislative deliberation. The approach is not primarily linguistic or wholly conceptual; it is constitutional. Where compatible interpretation is not possible, in the case of UK legislation the court will have to consider making a declaration of incompatibility and in the case of devolved legislation it will have to consider declaring it to be invalid. Interpretative obligations enable courts to give a meaning to legislation which is compatible with the Convention rights ‘even if this appears to differ from what Parliament had in mind when enacting it’.98 Lord Steyn has stated that the question whether a judicial ‘reading down’ or reading 95

[2003] 2 AC 467. Ibid [18], [37], [42]. For criticism of Bellinger and Re S (Care Order) see T Hickman, ‘Constitutional Dialogue, Constitutional Theories and the Human Rights Act 1998’ [2005] Public Law 306, 330 ff. 97 R (Hooper) v Secretary of State for Work and Pensions [2005] UKHL 29; 1 WLR 1681. 98 R (Jackson) v A-G [2006] 1 AC 262 [105] (Lord Hope). 96

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material into the statute would flout the will of Parliament as expressed in the statute under examination ‘cannot sensibly be considered without giving full weight to the countervailing will of Parliament as expressed in the 1998 Act’.99 In the case of devolved legislation the countervailing will is that of the sovereign UK Parliament laying down the limits to the competence of the non-sovereign devolved legislatures. In such cases there are thus two valid and effective legislative provisions to be applied, one of which is to be seen as ‘an expression of fundamental principles rather than as a set of mere rules’.100 It is the court’s constitutional obligation to apply those fundamental principles. Where it does so but the application of section 3 or the other interpretative obligations produce a result which the relevant legislature considers undesirable or contrary to the will of the democratic branches of government, it is for that legislature to amend the provision in question. What, however, is the effect of the use of interpretative obligations to achieve compatibility or competence on legal certainty and clarity where there is no legislative response? What is the effect on our law of the fact that courts are no longer restricted by linguistic considerations in ascribing meaning to statutory words? In my 2005 lecture to the Statute Law Society101 I argued that because the UK does not have an up-to-date version of the statute book, statute law is presented in a fragmented way and has a significant similarity to the way common law is presented. I also argued that the application of interpretative obligations to render statutory provisions Convention-compliant significantly increased this similarity and the opacity and inaccessibility of the law. Developments since then have fortified this view. The wide approach to what is ‘possible’ under the interpretative obligations, means that the constitutional balance between court sand Parliament is tilted more towards the court than some envisaged when the HRA was enacted. The consequence of the application of section 3 and other interpretative obligations is that statutes are going to have meanings that differ from any literal or linguistic meaning and which no lay person could get to without an awareness of the decisions of the court. It will only be possible to do so by putting the statute together with the decisions interpreting it and rendering it compatible with the European Convention. This process differs from the ordinary process of interpretation because (admittedly sometimes only in theory) in those cases the interpretation of the court does not alter the meaning of the statutory language and the sophisticated

99

Ghaidan v Godin-Mendoza [2004] 2 AC 557 [40]. Wilson v First County Trust Ltd (No 2) [2003] UKHL 40; [2004] 1 AC 816 [181] (Lord Rodger). 101 (2006) 27 Statute Law Review 1. 100

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user of the English language ought to be able to work out what the statutory language means without recourse to other material. We have referred to Lord Rodger’s emphasis in Ghaidan v GodinMendoza that section 3 of the HRA is to be used by many others apart from courts and lawyers. This means there is a problem. Words that are read in, added or read down are not made part of the statute by section 3 but they have a stronger force than the product of ordinary statutory interpretation because it is accepted that those words can change the meaning of the words in the statute. It must be recognised that, quite apart from any complexity and difficulty of understanding caused by the nature of the subject matter or the drafting technique used, we are going to have statutory provisions which simply do not mean what the words say. Even a sophisticated user of the English language, a person familiar with Dr Johnson, Swift, Milton and Shakespeare (indeed even a lawyer) may not be able to understand the meaning of a statutory provision without considering the provision together with the decisions interpreting it and rendering it compatible with the European Convention. It is of course a fiction that intelligent laypeople can understand what the law is by reading the relevant statutes but it is unfortunate that the application of the interpretative obligations in the HRA (the style of which was described by Lord Rodger as ‘lean elegance’102) and the devolution statutes will exacerbate this. One solution to this is for textual amendments to be made to statutes to make transparent what the court has done by the application of an interpretative obligation. There is no indication that this is being considered as a way forward, whether as part of the United Kingdom government’s constitutional renewal programme, reflected in its Constitutional Renewal Bill, or otherwise.

102

Ghaidan v Godin-Mendoza [2004] 2 AC 557 [107].

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5 The Canadian Charter of Rights and Freedoms: A ‘Direct Driver’ of Judicial Review of Administrative Action in Canada? DAVID MULLAN

I PROLOGUE

B

ILLS OF RIGHTS affect Administrative Law in varying ways. Indeed, as Professor Paul Rishworth makes clear in his 2007 lecture, ‘Rights in the Constitution’,1 that may be so irrespective of whether a Bill of Rights is entrenched or operates as superior legislation. Parliamentary and executive commitment to the realisation of the rights and freedoms enumerated in a Bill of Rights will lead to anxious scrutiny of existing and proposed legislation, both primary and subordinate. That will have an impact on the substantive mandate and procedural obligations of administrative or regulatory regimes provided for in legislation. At the international level, governments will conduct themselves cognisant of the rights and freedoms laid out in their domestic Bills of Rights. Within government departments and agencies, policies and operations will be informed by the terms of Bills of Rights. And, the populace, when dealing with government and its various agencies, will assert Bill of Rights-based claims and entitlements. Of course, where a Bill of Rights is entrenched or has superior status, the courts will also have a role and, in some jurisdictions, a highly significant one. They will police the content of legislation in the name of the Bill of Rights and, where appropriate, strike it down or otherwise treat it as inoperative. Yet, even where this form of judicial review capacity does not 1

.

Paul Rishworth, ‘Rights in the Constitution’ (Speech delivered to mark his inauguration as a Professor in the Faculty of Law and, as yet, unpublished, (Auckland University, September 2007) (original text on file with the author).

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exist, as in New Zealand, a Bill of Rights can have a major impact on the methodology that courts employ in interpreting legislation and in developing the common law of judicial review of administrative action, be it on procedural or substantive grounds,2 as well as the right to damages against government for ‘unconstitutional’ behaviour that causes harm.3 This paper is about just one (and probably not the most significant) aspect of the impact of Bills of Rights on Administrative Law: the principles of the common law of judicial review of administrative action. It is prompted by the following statement in the third edition of the wonderfully rich and comprehensive text on Australian Administrative Law of which Mark Aronson was one of the original authors and continues to be a major contributor: It would be particularly hard for Australian courts to emulate some of the English developments in the absence of an Australian Bill of Rights. A large part of the English developments have been prompted by human rights law, which initially informed English doctrine from the sidelines of international law. But since its transformation onto the statute books with quasi-constitutional status, human rights law is now a direct driver of English judicial review’s expansion.4

The obvious implication of this is that English judicial review has changed dramatically as a consequence of the incorporation of the European human rights regime into English domestic law. This is juxtaposed with the situation in Australia. There, the absence of a federal or national Bill of Rights indicates that it is unlikely that Australian law governing judicial review of administrative action will expand in the way that it seemingly has in England. Putting it another way, the prediction is that Australian judicial review law will not move in the direction of treating human rights values as a core or central component of judicial review principles.5 In this paper, I do not intend to evaluate the merits of that sentiment, save in two quite different and very sketchy, though, I trust, appropriate respects. First, the Aronson assessment has the support of a more recent text on Australian Administrative Law. Writing in 2007,6 Lane and Young state:

2 See generally G Huscroft, ‘The Right to Justice’ in P Rishworth et al, The New Zealand Bill of Rights (Melbourne, OUP, 2003). 3 As in Simpson v A-G [1994] 3 NZLR 667 (‘Baigent’s Case’). 4 M Aronson, B Dyer and M Groves, Judicial Review of Administrative Action, 3rd edn (Sydney, LawBook Co, 2004) 3. 5 Indeed, Aronson and his co-authors of the third edition are seemingly critical of Australian courts for their rule-based, as opposed to principle-based, approach to judicial review of administrative action: Ibid 12. 6 WB Lane and S Young, Administrative Law in Australia (Sydney, LawBook Co, 2007) 24.

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The Australian constitution does not contain a comprehensive bill of rights, and the small handful of individual rights which are expressly included are cast in limited terms and have generally been of only marginal relevance to the field of administrative law.

Secondly, Holloway, then an Australian academic and now a Dean of Law in his native Canada, made the following observation about the possibly discredited or partially discredited7 judgment of the High Court of Australia in Minister for Immigration and Ethnic Affairs v Teoh:8 [R]egardless of whether one approves of the holding, Teoh represents a paradigm human rights judgment cast in the common law mould – a holding by the judicial branch that irrespective of Parliament’s intention, the law must act so as to protect the interests of the powerless against the (comparatively) powerful state. In this sense, I argue, the doctrine of legitimate expectation upon which Teoh was based, and the broader administrative law doctrine of natural justice of which legitimate expectation is a part, is an integral part of the rule of law as we understand it.9

I have no ambition to enter into the debate as to whether that continues to be an accurate statement today. However, what it does represent is an account of judicial review of administrative action as a component of Australian law that, at least from time to time, deploys human rights values in support of the evolution of the common law. From an external viewpoint, I would also venture that the High Court’s resurrection or reinforcement of its original judicial review jurisdiction in the face of ‘overreaching’ privative or preclusive clauses, coming as it did in the migration setting,10 provides yet another indicator of this same phenomenon. The relevance of this, I trust, will become evident later in the paper. However, my main ambition in this essay is to provide a preliminary assessment of the extent to which an entrenched Bill of Rights, the Canadian Charter of Rights and Freedoms (‘Charter’), has, if at all, led to a situation where, as in England, according to Aronson (and others), ‘human rights law is now a direct driver of English judicial review’s expansion’. Twenty-six years after the advent of the Charter, it is my contention that, for a variety of reasons, it has not become a ‘direct driver’ of any significant expansion in the scope of judicial review of administrative 7 Aronson, Dyer and Groves comment that, as a result of Re Minister for Immigration and Multicultural Affairs, ex p Lam (2003) 214 CLR 1, it is unlikely that the current High Court would endorse the Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 use of legitimate expectation: above n 4, at 397. 8 (1995) 183 CLR 273 (‘Teoh’). 9 I Holloway, ‘Legitimate Expectations, Human Rights and the Rule of Law’, in Kneebone (ed), Administrative Law and the Rule of Law: Still Part of the Same Package? (Canberra, Australian Institute of Administrative Law, 1999) 334, 335. 10 See especially Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476.

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action in Canada. Indeed, to the limited extent that judicial review of administrative action has undergone any expansion in Canadian law, the Charter is but a limited contributor to the phenomenon. How to account for that is not easy and I do not pretend in this essay to provide a full rendition of the contributing factors. However, I do hope that my reflections will provide some stimulation to comparative work by others on the impact of rights-stimulated approaches to the development of principles of judicial review of administrative action. Such work would be part of an appropriate tribute to a giant of Australian Administrative Law.

II THE EVOLUTION OF A RIGHTS-BASED CULTURE IN CANADIAN JUDICIAL REVIEW LAW

Let me start with a dogmatic point that I also happen to believe is trite. Judicial review of administrative action has never been simply about statutory interpretation, or, putting it another way, ensuring that Parliament’s delegates act within the scope of the power that the legislature has conferred on them. Aronson and his fellow authors debunk the legislative intention, ultra vires theory of judicial review comprehensively at least as the exclusive principle behind judicial review in commonwealth jurisdictions both today and historically.11 That will do for me, save that I wish to enter two hoary old exhibits. The popular history of judicial review of administrative action always features Dr Bentley’s Case12 and Cooper v Wandsworth Board of Works.13 In each of these foundational precedents there is strong evidence of an evolving common law of judicial review of administrative action based on implicit principles of English common, nay constitutional law. In Dr Bentley’s Case, it is the appeal to biblical analogy and underlying conceptions of natural law. Even God did not expel Adam and Eve from the Garden of Eden without a hearing – a proposition that may not find a factual basis in the Book of Genesis. In Cooper (also mirroring another dimension of Dr Bentley’s Case), the application of the rules of natural justice is presumed in the case of deprivations of property rights. Flash forward to John Willis and his famous 1939 article in the Harvard Law Review14 and one finds a convincing, though critical, identification of the extent to which then current English and Canadian law governing judicial review of administrative action was imbued with various conceptions of an unwritten or common law constitution. Among the more recent 11 12 13 14

Aronson, Dyer and Groves, above n 4, at 11. (1723) 1 Str 537; 93 ER 698 (KB). (1863) 143 ER 414 (CP). J Willis, ‘Administrative Law in Canada’ (1939) 53 Harvard Law Review 351.

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historical artifacts is the academic debate between now Kirby J of the High Court of Australia15 and ultimately Lord Cooke of Thorndon16 about the merits of an entrenched Bill of Rights; Kirby J advocating the utility of approaches to statutory interpretation that are imbued with human rights values as an often adequate basis for judicial protection of the rights and freedoms of citizens against an overreaching bureaucracy. More recently, this approach is also reflected in Aronson’s gloss on de Smith, Woolf and Jowell’s account of judicial review of administrative action as essentially a subset of constitutional law: de Smith bases judicial review on both the protection model, and the idea that: ‘[T]he standards applied by the courts in judicial review must ultimately be justified by constitutional principles, which govern the proper exercise of public power in any democracy.[17]’ Those principles include the rule of law, political participation, equality of treatment and freedom of expression.18

I am, of course, fully conscious that these snippets constitute a rather crude, unsophisticated rhetorical device and stand ready to acknowledge that the mainstream of common law judicial review has been much more prosaic in the terms and principles deployed to review the decisions of statutory and prerogative authorities. Nonetheless, they do represent elements that recur today. In the evolution of procedural fairness law, the nature of the interest at stake has always been a critical element and, in most instances, the ranking of interests for those purposes has tended to come from what are a priori assumptions about society’s valuing of certain interests above others. Thus, in more recent Canadian judgments such as Kane v Board of Governors of University of British Columbia,19 the Supreme Court added the applicant’s interest in the continuation of his university professorship and employment interests generally to Cooper’s attribution of special status to property rights. Certainly, inclusion at the apex or towards the apex of the hierarchy can be seen as emerging at least in part from reviewing courts’ overall sense of general legislative policy derived from the totality of statute law. However, it is much more than that and certainly not the outcome of any conventional form of statutory interpretation. 15 See especially M Kirby, ‘Lord Cooke and Fundamental Rights’ in P Rishworth (ed), The Struggle for Simplicity in Law: Essays for Lord Cooke of Thorndon (Wellington, Butterworths, 1997) 334. 16 See R Cooke, ‘Fundamentals’ [1988] New Zealand Law Journal 158; Rishworth, above n 15, at 295. 17 de Smith, Woolf and Jowell, Judicial Review of Administrative Action, 5th edn (London, Sweet & Maxwell, 1995) 14. 18 Aronson, Dyer and Groves, above n 4, at 2–3. 19 [1980] 1 SCR 1105.

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A common law rights-based conception of the premises of judicial review is not confined to procedural review. In a recent blog on Osgoode Hall Law School’s Supreme Court commentary website,20 Gus van Harten rails against the majority decision of the Supreme Court of Canada in ATCO Gas & Pipelines Ltd v Alberta (Energy and Utilities Board)21 in which the court placed great store on the fact that ‘property rights’ were at stake in the Board’s decision that consumers were entitled to a share in the disposal of the property of a regulated utility. This characterisation and emphasis was central not only in the court’s decision to review that decision by the non-deferential standard of correctness but, also thereafter, to set it aside on the basis that it was indeed incorrect. Prior to the advent of the Charter and even its unentrenched lesser cousin, the 1960 Canadian Bill of Rights (‘Bill of Rights’), the Canadian Supreme Court sporadically or, perhaps more accurately, for a short time, identified a formal constitutional foundation for rights-based judicial review: the underlying principles of the British North America [now Constitution] Act 1867 (‘British North America Act’). Even today, one of the great judgments of Canadian Administrative Law is that of Rand J in 1959 in Roncarelli v Duplessis,22 one of a series of cases23 involving the plight of Jehovah’s Witnesses in the province of Quebec. At the behest of Maurice Duplessis, the Premier and AttorneyGeneral of the province, the Chair of the Liquor Commission, in the context of a police display of force, withdrew Roncarelli’s liquor licence because he had posted bail for a great number of Jehovah’s Witnesses charged with various offences as part of the Provincial Government’s sustained attack on their status. In these so-called ‘implied Bill of Rights’ judgments, the court (or, more accurately, segments of it), invoked the Preamble and what it regarded as some of the underlying premises of the British North America Act to review administrative action by reference to conceptions of freedom of expression in a parliamentary democracy and freedom of religion. In Roncarelli, there was an added ‘common law’ dimension – the withdrawal of the entitlement to engage in an activity requiring a licence: ‘In public regulation of this sort, there is no such thing as absolute and untrammeled discretion’.24 While it is fair to say that a majority of the court never really endorsed a fully-fledged theory of entitlements to protection against administrative action based on the ‘implied Bill of Rights’, its invocation in the name of

20 G van Harten, ‘Dunsmuir and the quixotic quest for certainty’, The Court accessed 16 May 2008. 21 [2006] 1 SCR 140. 22 [1959] SCR 121 (‘Roncarelli’). 23 See, eg, Smith and Rhuland Ltd v The Queen [1953] 2 SCR 95. 24 [1959] SCR 121, 140.

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civil liberties and religious freedom did provide added support to the availability in some settings of human rights values as a transcendent principle in the policing of the limits of statutory and prerogative power. It was then just over a year after Roncarelli that the Parliament of Canada enacted the Bill of Rights, or ‘Diefenbaker Bill of Rights’, in recognition of the Prime Minister of the day and the Bill’s ardent supporter. In its protection of property rights which were not to be taken away without ‘due process of law’ and an entitlement to the ‘principles of fundamental justice’ whenever a decision-maker was making a determination with respect to ‘rights and obligations’, sections 1(a) and 2(e) of the Bill of Rights appeared to promise much for a rights-based approach to judicial review of administrative action at least at the federal level. That did not, however, prove to be the case. The Bill of Rights was ordinary legislation save that it was expressed to apply absent an express legislative override.25 Judges were cautious. Lawyers were not adventurous. At that time, there was no Federal Court.26 Sporadic judicial review of federal statutory decision-making by and large took place in the superior courts of the provinces. All of this contributed to a situation where the Bill of Rights seldom rose above the level of a guide to the interpretation of federal legislation.27 However, at the legislative level, the post-War commitment to the protection of individual rights was finding strong support. Human rights legislation proliferated across the country not only providing substantive guarantees against discrimination but also establishing institutions and procedures for the adjudication and enforcement of those guarantees. Within a strong collectively organised workforce, labour relations legislation offered grievance arbitration for the resolution of employees’ complaints against their employers, a process that over time came to also incorporate human rights values and anti-discrimination norms into collective agreements and the rights and entitlements they bestowed on employees. The anti-climax of the Bill of Rights notwithstanding, the Canadian courts were also expanding the range of situations that attracted an obligation of procedural fairness. Thus, prison inmates28 and nonCanadians seeking status in Canada29 (previously thought of as having lost all civic entitlements, in the former case, and as mere privilege seekers, in

25

S 2. Until the creation of the Federal Court in 1970, judicial review of federal statutory authorities was the almost exclusive preserve of the provincial superior courts, save to the very limited extent that the Federal Court’s predecessor, the Exchequer Court of Canada, had limited appellate jurisdiction with respect to a few federal decision-makers. 27 The one notable exception is R v Drybones [1970] SCR 282. 28 See Martineau v Matsqui Inmate Disciplinary Board [1980] 1 SCR 602. 29 Lazarov v Canada [1973] FC 927 (CA). 26

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the latter) managed to assert procedural claims in the courts. In the language of Le Dain J of the Supreme Court of Canada, the range of those who could assert an entitlement to procedural protection expanded from a restricted sense of only those who were rights holders to anyone whose rights, privileges and interests were affected by a decision, provided that it was not primarily of a legislative or policy-making variety.30 This also manifested itself in the Supreme Court’s endorsement in Nicholson v Haldimand-Norfolk Regional Board of Commissioners of Police31 of the expansive duty of procedural fairness developed by the English courts. And, barely weeks after this occurred, the Ontario Court of Appeal used the precedent to justify the extension of common law procedural rights to those who were threatened with eviction from Ontario government subsidised housing.32 In no sense is this meant to convey the idea that Canadian judicial review was always attentive (albeit in a variety of guises) to rights-based claims before the advent of the Charter. Indeed, Roncarelli and the implied Bill of Rights cases notwithstanding, the courts remained very parsimonious in their recognition of rights-based claims in the context of attempts to secure review on substantive grounds of the exercise of discretionary powers.33 However, I do want to suggest that prior to the Charter, there were a number of pockets of rights-based approaches to judicial review of administrative action particularly on procedural grounds. As well, legislatures were providing responses to rights-based lobbying with the creation of regimes that had as their objective or included in their arsenal processes for the adjudication of rights-based disputes. This was further evident in statutes such as the Ontario Statutory Powers Procedure Act 197134 that mandated a wide spectrum of procedural fairness entitlements across a similarly wide range of statutory decision-making in the province. Indeed, it may not be an overstatement to assert that the Charter was in some ways the result of the existence of this increasingly rights-based culture as opposed to simply an enterprise that was driven by glaring gaps in Canadian law’s response to rights-based claims.

30

Cardinal v Director of Kent Institution [1985] 2 SCR 643 [14]. [1979] 1 SCR 311. Re Webb and Ontario Housing Corp (1978) 93 DLR (3d) 187 (Ont CA). 33 See, eg, Re Sheehan and Criminal Injuries Compensation Board (1975) 52 DLR (3d) 728 (Ont CA). 34 SO 1971, c 47 (now see RSO 1990, c S 22 (as amended)). 31 32

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III THE PROMISE OF THE CHARTER?

Unlike the Constitution of the Republic of South Africa 1996 or, indeed, the potential product of a more generous reading of the Bill of Rights than the Canadian courts were prepared to give it, the Charter does not deliver a general entitlement to administrative justice or a fair administrative process. When the Charter trades in procedural rights, it generally does so in the context of the criminal law. Indeed, for some time, there were concerns whether section 7, the provision creating a right to the principles of fundamental justice when a person’s right to life, liberty and security of the person was in jeopardy was restricted to the criminal or quasi-criminal spheres. These doubts were fuelled by the fact that it comes immediately before the criminal process provisions of the Charter and a sense that it should perhaps be read as no more than a prologue to or general statement of principle animating the more specific provisions that followed. In contrast, however, the main corpus of rights and freedoms created by the Charter bind government. As such, it seems inevitable that, in exercising statutory and prerogative powers and discretions, government officials (including the tribunals and agencies of government) must be attuned to those constitutional entitlements of citizens and be guided in the exercise of their powers accordingly. If not, an application for judicial review would seem to be an almost inevitable result. Indeed, in early writing on the New Zealand Bill of Rights,35 Taggart, McLean and Rishworth make the prediction that in both Canada and New Zealand the richest terrain for the operation of these Bills of Rights in Administrative Law will be the enhanced ability they provide for review for abuse of discretion. What do 26 years of experience with the Charter tell us about its impact on judicial review of administrative action?

A Procedural Fairness and Fundamental Justice First, the initial scepticism as to whether section 7 extended beyond the criminal law domain has disappeared. The Supreme Court has held that it is not so confined.36 Threats to ‘life, liberty and security of the person’ can come from government actions beyond the realm of criminal law enforcement. 35 M Taggart, J McLean and P Rishworth, ‘The Impact of the New Zealand Bill of Rights Act 1990 on Administrative Law’ in The Bill of Rights Act 1990 (Auckland, Legal Research Foundation, 1992) 62. 36 See, eg, Blencoe v British Columbia (Human Rights Commission) [2000] 2 SCR 307.

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This became apparent in the first major Administrative Law Charter case to reach the Supreme Court of Canada: Singh v Canada (Minister of Employment and Immigration).37 There, three judges of the six judge panel38 held that section 7 was applicable in the context of convention refugee applicants physically present in Canada. By treaty and statutory definition, a legitimate convention refugee is someone subject to a wellfounded fear of persecution. As a consequence, it was incumbent on Canada to provide applicants for that status with a proper hearing for, without an appropriate verifier of the legitimacy of claims, Canada would be implicated in a potential deprivation of wrongfully denied claimants’ ‘life, liberty and security of the person’ albeit directly at the hands of a foreign government. Critical to this judgment of Wilson J was the very real possibility of torture, imprisonment and even death that convention refugees might face if returned to their country of origin. Obviously, this almost of necessity brings within the reach of section 7 of the Charter domestic regimes outside the criminal law that have the ability to incarcerate or otherwise detain individuals, such as child welfare and mental health authorities and, indeed, any situation which may involve mandatory treatment. Thus, in both the regular penitentiary setting and also compulsory mental health detentions, the court has accepted the claims of those who challenge decisions imposing a more secure form of detention such as transfer to a higher level security institution or movement within an institution to solitary confinement.39 In fact, this is not all that large an extension from the world of the criminal law process to which section 7 also applies. However, the much more interesting question was the extent to which concepts of life, liberty and security of the person extended beyond threats to the person on the part of the state that did not have a custodial dimension. Did it include inferentially some form of property rights protection? More generally, was it ample to embrace an overarching concept of economic liberty? And what about the ability to practise a profession or carry on an avocation? (In various guises, as seen already, aspects of each of these had attracted the attention of the courts in their hierarchy of what interests counted when assessing claims for access to common law procedural fairness.)

37

[1985] 1 SCR 177 (‘Singh’). The other three judges, in a judgment delivered by Beetz J, decided the case in the applicants’ favour by reference to a resurrected (or, perhaps, more accurately, newly discovered) section 2(e) in the Bill of Rights. The seventh judge who presided at the hearing of the appeal, Ritchie J, took no part in the decision. As a consequence, the precise precedential status of both judgments in Singh remained in limbo. 39 See, eg, Pinet v St Thomas Psychiatric Hospital [2004] 1 SCR 528; R v Miller [1985] 2 SCR 613. 38

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On property rights, the courts had the evidence of what was a seemingly clear-cut legislative history that the intention of the drafters was not to go there.40 Not surprisingly, the spectre of Lochner v United States41 and the history of the United States Supreme Court’s interpretation of the reach of the ‘due process’ clauses in Fifth and Fourteenth Amendments to the United States’ Constitution loomed large in this determination. This also carried over to defeat arguments based on a more general conception of economic liberty42 and, while there may still be a whiff of hope for protection under section 7 for some professional and occupational interests,43 it is now abundantly clear that it is not a vehicle for the assertion of a generalised claim for fundamental justice protection for professional and occupational interests.44 The common law (and a possibly resuscitated Bill of Rights) continues to be the avenue for the assertion of this entire range of claims. The Supreme Court did, however, hold out hope for a rather different conception of an expanded reach for section 7 in the notion that liberty was engaged in the domain of state action affecting ‘fundamental life choices’ and that security of the person could extend to personal or psychological integrity. This dimension of the reach of section 7 emerged in the abortion rights case of R v Morgentaler,45 in the context of an administrative process found in the Criminal Code RSC 1985, c C-46 (‘Criminal Code’) of Canada – the requirement for permission from a hospital therapeutic abortion committee if the Criminal Code’s criminalisation of abortion procedures was to be avoided. Thereafter, in two cases of more direct relevance to the mainstream of Administrative Law, this articulation of the reach of section 7 appeared to gain additional purchase on the law. In Godbout v Longueuil (City),46 it was deployed to condemn a municipal requirement for employees of the municipality to reside within the City limits. This was seen as an inappropriate interference with a fundamental life choice. Subsequently, a mother’s interest in resisting an application for an order continuing child welfare authority custody of her child was held to engage her ‘security of the person’ in the sense of her psychological integrity.47 Here perhaps was a basis on which compulsory subjection to the processes of a whole range of

40 See the legislative history as outlined in the judgment of Lamer J in Reference re BC Motor Vehicles Act [1985] 2 SCR 486, 504–5. 41 198 US 45 (1905). 42 See, eg, Wilson v British Columbia (Medical Services Commission) (1985) 53 DLR (4th) 171 (BCCA). 43 Ibid. 44 Walker v Prince Edward Island [1995] 2 SCR 407. 45 [1988] 1 SCR 30. 46 [1997] 3 SCR 844. 47 New Brunswick (Minister of Health and Community Services) v G(J) [1999] 3 SCR 46.

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coercive administrative tribunals and other forms of state agency could be brought within the reach of section 7. However, that possibility was given short shrift in Blencoe v British Columbia (Human Rights Commission).48 There, the argument was that a respondent to a sexual harassment complaint had a section 7 claim in the face of a very lengthy delay in processing the complaint. This claim was based on the extent to which the processes of the Human Rights Commission and Human Rights Tribunal impinged on his liberty (the ability to make fundamental personal choices) and security of the person (state-imposed psychological stress).49 The court rejected any notion that this was an automatic feature of any subjection to the Human Rights complaint process. Moreover, while prepared to accept that, in an even more extreme case, the conduct of proceedings might involve an unacceptable level of state-imposed psychological stress, the court held that that limit had not been reached in this instance. According to Bastarache J, delivering the judgment of the majority of the court: While notions of dignity and reputation underlie many Charter rights, they are not stand-alone rights that trigger s 7 in and of themselves. Freedom from the anxiety, stress and stigma suffered by the respondent in this case should not be elevated to the stature of a constitutionally protected s 7 right.50

While section 7 was to subsequently play a significant role in framing the procedural entitlements attending the operation of various elements of Canada’s treatment of those suspected of being threats to national security,51 in each instance, the operation of section 7 was within the limited bounds that had been accepted at least since Singh – physical detention and the prospect of returning or sending someone to another jurisdiction where torture and the possibility of death at state hands were strong possibilities.52 There are three other factors at least that account for the limited penetration of section 7 and other provisions of the Charter into the domain of judicial review of administrative action for procedural unfairness: — First, even in a case such as Singh, the only reason that the court reached section 7 of the Charter was because the three judges were of

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[2000] 2 SCR 307 [45] (‘Blencoe’). The judgment does not, however, mean that the Charter cannot be invoked with respect to the exercise of powers conferred by discrete parts of human rights legislation or codes, such as compelled testimony or search and seizure. 50 [2000] 2 SCR 307 [97]. 51 See Suresh v Canada (Minister of Citizenship and Immigration) [2002] 1 SCR 3 and Charkauoi v Canada (Citizenship and Immigration) [2007] 1 SCR 350. 52 Account must also be taken of Chaoulli v Quebec (A-G) [2005] 1 SCR 791 and its finding that serious delays in securing health care engaged s 7 of the Charter and rendered a prohibition on access to private coverage unconstitutional. 49

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the view that they could not impose procedural obligations at common law without coming into collision with the existing statutory scheme.53 They needed a constitutional foundation on which to avoid the restrictions of the immigration legislation. In so ruling, Wilson J did, however, make it abundantly clear that the operating rule was that the courts should not have recourse to constitutional arguments unless the common law was not up to the task. While it is not at all clear that the Supreme Court has always adhered to that position, it nonetheless does act as a brake on the making of Charter claims both generally and in a section 7 context. Indeed, in Blencoe,54 four of the nine judges castigated the majority for evaluating the delay argument within the framework of section 7 when it could easily have been dealt with on the basis of the common law principles of procedural fairness relating to prejudicial delay in the conduct of administrative proceedings. — Secondly, while there remains considerable doubt about the circumstances under which the State can deploy section 1 of the Charter in trying to establish that derogation from section 7 is ‘demonstrably justifiable in a free and democratic society’,55 it is clearly accepted that the principles of fundamental justice in a procedural sense are contextsensitive.56 Even in Singh, where the court insisted on the importance of an oral or in-person hearing before someone with decision-making authority, the triumvirate made it clear that an oral or in-person hearing is not always an essential component of fundamental justice. Of course, it may well be the case that, if a Charter right is implicated, there is a greater entitlement to procedural fairness than in the situation of other non-Charter procedural claims.57 Nonetheless, the mere fact that section 7 does not provide an unvarying standard of trial-type natural justice processes also lessens its capacity for impact greater than the common law. — Thirdly, the court’s limited conception of the reach of section 7 has also carried over to its reaction to attempts to appropriate other provisions of the Charter for administrative process procedural fairness arguments. For example, section 11(d) provides for a ‘fair and public hearing by an independent and impartial tribunal’. However, that provision is couched in the language of determinations of guilt and occurs in a part of the Charter headed ‘Proceedings in criminal and penal matters’. Not surprisingly, the court has confined the 53

[1985] 1 SCR 177 [32]–[33]. [2000] 2 SCR 307 [138]. 55 See, eg, New Brunswick (Minister of Health and Community Services) v G(J) [1999] 3 SCR 46. 56 See, eg, Idziak v Canada (Minister of Justice) [1992] 3 SCR 631, 659. 57 Indeed, this may provide a justification for making a Charter-based claim in a case not involving a challenge to legislation: the Charter may give more than the common law does. 54

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None of this is meant to assert that the Charter is not an important instrument from time to time in the vindication of procedural rights in the context of judicial review of administrative action. Singh,59 Suresh v Canada (Minister of Citizenship and Immigration),60 and Charkaoui v Canada (Citizenship and Immigration)61 are now part of a strong Canadian record of the vindication of the procedural rights of those resisting removal from Canada and seeking Canada’s aid against the possibilities of persecution, torture and even death in other countries. Even though section 11(d) does not apply directly to the general run of administrative tribunals, its recognition of the importance of independent adjudication in the criminal law context has acted as a catalyst to an increasing emphasis in common law judicial review proceedings on independent decision-making and status as an important component of procedural fairness.62 Indeed, starting with Singh, it might also be claimed that section 7 of the Charter has not only led to a resurrection of sections 1(a) and 2(e) of the Bill of Rights as sources of procedural protection,63 but that it has also contributed to a heightened recognition of underlying constitutional norms that have both a substantive and procedural component, a 21st century version of the implied Bill of Rights.64 But, more of that later! What is clearly the case is that the Charter (and section 7 in particular) has not become the ‘direct driver’ of Canadian judicial review of administrative action on procedural grounds. The evolution of that branch of judicial review law is far more multi-faceted than that and contingent on a broad range of concepts and principles. Now is not the place to engage in any lengthy analysis of the continuing evolution of the common law of procedural fairness in Canada. However, in the age of the Charter, the common law has thrived as a source of procedural protections. The prime example has to be Baker v Canada (Minister of Citizenship and Immigration)65 in 58

See, eg, R. v Wigglesworth [1987] 2 SCR 541. [1985] 1 SCR 177. 60 [2002] 1 SCR 3 (‘Suresh’). 61 [2007] 1 SCR 350 (‘Charkaoui’). 62 See, eg, Canadian Pacific Ltd v Matsqui Indian Band [1995] 1 SCR 3. 63 For an early post-Singh example see MacBain v Canadian Human Rights Commission (1985) 22 DLR (4th) 119 (FCA). 64 In a sense, the judgment of Lamer CJ in the Provincial Court of Prince Edward Island Reference [1998] 1 SCR 3 can be seen as a latter day reaffirmation of the existence of an implied Bill of Rights, in this case in aid of constitutional guarantees of independence for provincially appointed judges. This receives further affirmation in Charkaoui [2007] 1 SCR 350, where the court refers to the ‘unwritten constitutional principle of independence’: [32]. 65 [1999] 2 SCR 817 (‘Baker’). 59

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which the court recognised for the first time a common law obligation on the part of a wide range of statutory authorities to provide reasons for their decisions. More generally, it was a case that vindicated the procedural rights of over-stayers and elaborated on existing common law conceptions of disqualifying bias. In more recent years, the Supreme Court has been very active in imposing a duty of consultation on administrative processes that affect the historical treaty and other rights and interests of First Nations people.66 There has also been some movement in expanding the duty of fairness to those especially affected by legislative or broad policy decision-making.67 Indeed, even in domains where the Charter could be invoked (deportation, convention refugee determinations and penitentiaries), the court has chosen to develop the common law by reference to conceptions of procedural fairness not directly derived from the Charter. Thus, for example, in May v Ferndale Institution,68 the court recognised extensive disclosure obligations in the context of reclassifying the status of a penitentiary inmate leading to a more severe form of incarceration. In short, the common law of procedural fairness is alive and well and still provides the framework for important evolutions in the procedural obligations of statutory and prerogative decision-makers.

B Substantive Review One of the characteristics of modern Canadian judicial review law is the extent to which the courts have been prepared to defer to the judgment of statutory authorities. Historically, that was commonly true of powers that were clearly discretionary in nature. In general, the position of the courts was, in the face of statutory language that confers broad choices on administrative agencies, that courts should not lightly interfere with such decisions, and should give considerable respect to decision-makers in reviewing the manner in which discretion was exercised.69

From the late 1970s onwards, that same approach characterised much of judicial review of tribunal decision-making for error of law.70 Particularly in the face of a privative clause but frequently even where there was a 66 Haida Nation v British Columbia (Minister of Forests) [2004] 3 SCR 511; Taku River Tlingit First Nation v British Columbia (Project Assessment Director) [2004] 3 SCR 550; and Mikisew Cree First Nation v Canada (Minister of Canadian Heritage) [2005] 2 SCR 100. 67 See Canadian Pacific Railway Co v Vancouver (City) [2006] 1 SCR 227. 68 [2005] 3 SCR 809. 69 Baker [1999] 2 SCR 817 [53] (L’Heureux-Dubé J). 70 Starting with Canadian Union of Public Employees, Local 963 v New Brunswick Liquor Corp [1979] 2 SCR 227.

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statutory right of appeal to the courts,71 the posture of the courts towards the determinations of questions of law was one of deference. Until very recently,72 that was most manifest on those occasions on which the courts refused to intervene unless the determination under review was patently unreasonable. However, it was also reflected in the Supreme Court’s unwillingness to accept legitimate expectation as generating substantive claims or anything other than a very restricted version of public law estoppel, let alone proportionality as a ground of judicial review.73 To do so would open up the possibility of undue judicial interference in the determinations of statutory delegates and expert administrative tribunals. Nonetheless, as noted already, on rare occasions such as Roncarelli,74 the Supreme Court invoked higher norms as providing a basis for more intrusive intervention even in the face of broad discretionary power. In the catalogue of irrelevant factors or improper purposes (to use the traditional coinage of abuse of discretion review), decision-making that had as its objective the suppression of freedom of expression, the profession of religious beliefs or the practices of democracy qualified for judicial condemnation. Many of these same underlying constitutional values then found explicit and detailed recognition along with the principle of equality in the Charter. It was therefore to be expected that when the exercise of statutory or prerogative power (either as a matter of law or discretion) engaged rights and freedoms protected by the Charter, the courts would have an expanded warrant for intervention and a mandate for denying deference to the relevant authority. The trajectory of rights-based review of substantive determinations gained further impetus with the 1998 judgment of the Supreme Court in Reference re Secession of Quebec.75 There, the court identified four organising principles or underlying fundamental premises of Canada’s Constitution: federalism, democracy, constitutionalism and the rule of law, and the protection of minorities. According to the court, these underlying principles had an independent existence in the sense that they could impose

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See, eg, Pezim v British Columbia (Superintendent of Brokers) [1994] 2 SCR 557. In Dunsmuir v New Brunswick [2008] 1 SCR 190, the Supreme Court of Canada decided that, henceforth, there would be only two standards of review: correctness and unreasonableness. Patent unreasonableness disappears from the lexicon. In this context, Bastarache and LeBel JJ stated that ‘constitutional issues are necessarily subject to correctness review because of the unique role of s 96 courts as interpreters of the Constitution’: [58]. 73 The most striking manifestation of this is the concurring judgment of Binnie J (McLachlin CJ concurring) in Mount Sinai Hospital Center v Quebec (Minister of Health and Social Services) [2001] 2 SCR 281 [22]–[51], in which he evaluates and rejects the application in a Canadian setting of English acceptance of a doctrine of substantive legitimate expectations and an expansive version of public law estoppel. 74 [1959] SCR 121. 75 [1998] 2 SCR 217. 72

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‘substantive limitations upon government action’ without necessary reference to any explicit or textual constitutional guarantees.76 Very shortly thereafter L’Heureux-Dubé J in Baker,77 moving from review for procedural unfairness to review for abuse of discretion, confidently asserted the following principles as providing the overarching framework for substantive review: [statutory authority] must be exercised in accordance with the boundaries imposed in the statute, the principles of the rule of law, the principles of administrative law, the fundamental values of Canadian society, and the principles of the Charter.78

While L’Heureux-Dubé J articulated this within the framework of review for abuse of discretion, she also took pains in her judgment to emphasise that there was no clear or bright-line distinction at the margins between review for error of law and review for abuse of discretion.79 The sense is therefore one in which the framework applies across the entire spectrum of substantive review. What was also significant in Baker was the majority’s willingness to insinuate international human rights values or norms into the process of assessing the exercise of discretionary power. In this instance, the international norms were found in the Convention on the Rights of the Child, a treaty that Canada was a party to and had ratified but which had not in fact implemented in domestic legislation. To the extent that the Charter figures prominently in the list of controlling principles or norms, this statement certainly creates the impression that, at least at the theoretical level, the Charter is indeed one of the direct drivers of judicial review of substantive decision-making, albeit a distinction that it shares with other overarching principles or norms.80 Indeed, in contrast to the instruction in Singh that the courts should avoid where possible moving to the constitutional terrain in procedural fairness cases, the Supreme Court, in Slaight Communications Inc v Davidson81 (and even more dogmatically in Ross v New Brunswick School District No

76 Ibid [54]. In fact, this has not given rise to a great groundswell of judicial review jurisprudence based on fundamental or underlying constitutional principles, the most notable exception being Lalonde v Ontario (Commission de restructuration des services de santé) (2001) 56 OR (3d) 505 (CA), a judgment granting relief from a hospital restructuring decision, the specific underlying principle being the protection of minorities, in that instance, the Francophone population of Ottawa. 77 [1999] 2 SCR 817. 78 Ibid [56]. 79 Ibid [54]. 80 See G Cartier, ‘The Baker Effect: A New Interface Between the Canadian Charter of Rights and Freedoms and Administrative Law – The Case of Discretion’ in D Dyzenhaus (ed), The Unity of Public Law (Oxford, Hart Publishing, 2004) 61. 81 [1989] 1 SCR 1038 (‘Slaight’).

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1582) stated that when a discretionary exercise of power raised a possible infringement of Charter rights and freedoms, the appropriate methodology is not for the courts to first test the decision by reference to normal common law principles including the appropriate standard of review. Rather, the reviewing court should move directly to the Charter and assess whether the decision involved a violation of a protected right or freedom. If it did, the next step was to evaluate any State argument that the violation could be justified by reference to section 1 given the values of a free and democratic society. Chief Justice Dickson went on to suggest, not too surprisingly, that if a decision passed muster by reference to section 1, it would be a very rare instance indeed where there was any residual basis for holding that it nonetheless amounted to a reviewable error at common law.83 Outside of the arena of criminal law, many of the significant Charter challenges, particularly in the context of section 15, the equality rights provision, have been to primary legislation. However, to the extent that the challenge is not to primary legislation but to programmes adopted either by way of subordinate legislation or by the exercise of another form of discretionary power, the proceeding will in a formal sense constitute judicial review of administrative action. In that context, the methodology for assessing whether there has been a Charter violation does not generally differ irrespective of whether the targeted programme is the result of primary or subordinate legislation, or of another form of exercise of discretionary or decision-making power. The Supreme Court makes this point explicitly in Eldridge v British Columbia.84 Indeed, the only reason to make any form of differentiation is that, if the Charter violation arises directly from primary or subordinate legislation, the legislation itself is invalid. If it arises out of the exercise of a statutory power under that legislation, the empowering section survives but the exercise of power (be it in the form of a programme or an individualised decision) is invalid. However, at least in the context of a programme or policy, the methodology of review does not involve any sense of judicial deference save in the limited extent that some elements of respect for legislative or delegate choice figure in the standard test for evaluating whether any violation is, in terms of section 1, saved because it is demonstrably justifiable in a free and democratic society. To this extent, Charter review of programmes or policies resulting from the exercise of statutory power for either error of law or abuse of discretion presents itself in rather stark contrast to the normal and generally deferential Canadian approach to judicial review on substantive grounds. 82 83 84

[1996] 1 SCR 825 (‘Ross’). [1989] 1 SCR 1038, 1049. [1997] 3 SCR 624.

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Once, however, the challenge is to an individualised exercise of statutory authority in the sense of a decision made about a particular person or group, problems emerge in any close examination of the jurisprudence. This is particularly so in situations where the existence of a Charter violation turns at least in part on facts pertaining to the particular individual or group. The dilemma is well illustrated by the division of opinion in the Supreme Court in Multani v Marguerite-Bourgeoys (Commission scolaire).85 At stake here was in effect an attack in the name of the Charter’s guarantee of freedom of religion on an individualised decision that was the product of a school board policy. It involved a decision by a school board’s governing board and council of commissioners overturning, by reference to a ‘no weapons’ policy, the decision of administrative officials to allow a Sikh pupil to wear a kirpan to school. While all members of the court agreed that this constituted a reviewable abuse of discretion, the route by which they reached that conclusion differed. For two of the judges, in effect revisiting Slaight Communications Inc v Davidson, the proper approach was to evaluate the section 2(a) claim within the standard judicial review of administrative action framework. Establish a standard of review and apply that standard to the evaluation of the ultimate decision. In this particular context, the fact that Charter rights were at stake led Abella and Deschamps JJ to test the decision by reference to the deferential standard of unreasonableness rather than the even less intrusive test of patent unreasonableness which was at that point commonly applied in the case of the exercise of broadly based discretions when Charter rights and freedoms were not at stake. They then found the decision wanting by reference to that standard. The majority, however, rejected this approach under which the two judges wanted to draw a distinction between attacks on rules and policies and attacks on individualised decisions under rules and policies. Irrespective of the context, there was no room in assessing the validity of administrative action by reference to the rights and freedoms enshrined in the Charter for standard judicial review of administrative action methodology. Rather, all such exercises of power were to be adjudicated by reference to a correctness standard with correctness assessed on the basis of whether there had been a violation of a Charter right or freedom and, thereafter, whether that violation could be

85 [2006] 1 SCR 256 (‘Multani’). I have analysed this decision in greater detail in ‘Administrative Tribunals and Judicial Review of Charter Issues After Multani’ (2007) 21 National Journal of Constitutional Law 128. See also L Jacobs, ‘Developments in Administrative Law: The 2005–2006 and 2006–2007 Terms’ (2007) 37 Supreme Court Law Review (2d) 55, 57–70.

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justified by reference to the standard section 1 analysis.86 In justification of the majority’s approach, Charron J asserted that any attempt to deal with constitutional challenges by reference to the standard methodology of common law judicial review (and thereby admitting the possibility of deference to the judgment of state actors) would run the risk of [r]educing the fundamental rights and freedoms guaranteed by the Canadian Charter to mere administrative law principles or, at the very least, caus[ing] confusion between the two.87

There is no doubting the proposition that the chances of success on an application for judicial review of administrative action affecting Charter rights and freedoms will be enhanced if the reviewing court applies a correctness standard rather than a deferential standard of review. Indeed (and this in itself should signal the need for caution) to allow for correctness review in all such matters in effect insinuates a right of appeal on the merits from all statutory decision-making in which Charter rights and freedoms are engaged. What is problematic is that the majority judgment in Multani does not account for other recent Supreme Court of Canada Charter jurisprudence in which the court clearly did accept the need for deference in settings where a statutory authority was making assessments that involved the Charter rights and freedoms of individuals. Thus, for example, in both Suresh88 and Ahani v Canada (Minister of Citizenship and Immigration),89 decided on the same day in 2002 and not mentioned in Multani, the court made it clear, notwithstanding that the decision engaged the applicants’ section 7 rights, that State authorities were entitled to a considerable measure of deference in their assessment whether individuals were dangers to the security of Canada; indeed, the court held in those cases that a positive finding in this respect outweighs the risk to applicants’ lives, liberty and security of person, thereby engendering removal from Canada and return to the countries from which they came. This, of course, is far from correctness review. It is also fair to say, however, that Multani is not entirely to blame for the apparent disarray that currently characterises the court’s approach to judicial review of decision-making that engages Charter rights and

86 In a separate concurring judgment, LeBel J expressed concern that such a categorical approach is insufficiently flexible and does not represent an appropriate accommodation of the worlds of Administrative and Constitutional Law. 87 [2006] 1 SCR 256 [16]. 88 [2002] 1 SCR 3. 89 [2002] 1 SCR 72. See also Lake v Canada (Minister of Justice) 2008 SCC 23 where the court again applied a reasonableness standard in its assessment of a deportation decision by reference to s 7. This time, there was no mention of Multani!

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freedoms. In many senses, the roots of the problem extend at least as far back as Baker and, indeed, as the minority argued in Multani,90 to Slaight.91 As noted above, in Baker L’Heureux-Dubé J provided a framework within which discretion must be exercised, a framework that includes the rule of law, the values of Canadian society and the rights and freedoms protected by the Charter. While there might be nothing objectionable about this as a general statement of principle, what is never made clear (in a judgment in which the court never reached the applicant’s Charter arguments) is how those general principles are to be applied in the actual conduct of judicial review. This is particularly acute given that in Baker and other judgments, the court states that it is imperative to establish a standard of review and consider the need for deference with respect to all forms of substantive review irrespective of whether the issues at stake involve pure questions of law or the broadest discretions. As long as these methodological questions remain outstanding the role of the Charter in the review of administrative action on substantive grounds will continue to be problematic. Other factors also affect the Charter’s role as a ‘direct driver’ of judicial review on substantive grounds. Notwithstanding Slaight, Ross and Multani, the court does not always go immediately to the Charter whenever it reviews an exercise of discretion or the determination of a question of law that possibly affects Charter rights and freedoms. This was evident in Baker where the court simply did not respond to the arguments that deporting over-stayers with Canadian born children affected their section 7 rights. It is also apparent in a case such as Chamberlain v Surrey School District No 36,92 cited by the minority in Multani. That case involved a school district ban on literature that portrayed in a non-critical light same sex parented families. At stake in any evaluation of this decision were issues involving a potential collision between freedom of religion on the one hand and section 15 equality rights on the other. Notwithstanding, the majority of the court simply treated the case as a standard exercise in judicial review of administrative action, albeit one conducted in the shadow of the values of the Charter. More specifically, the majority conducted a standard of review analysis, determined that the standard of review should be that of unreasonableness, and then found the ban wanting by reference to that standard. It is also the case, as suggested earlier, that, on many occasions, state actions, which impinge on Charter rights and freedoms and particularly section 15 equality rights are dealt with not in the context of judicial 90 91 92

[2006] 1 SCR 256 [104]–[108]. [1989] 1 SCR 1038. [2002] 4 SCR 710.

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review of administrative action in the regular courts but by way of discrimination complaints to human rights commissions or tribunals. This too contributes significantly to a situation where the Charter’s role as a direct driver of Canadian judicial review of administrative action on substantive grounds remains relatively insignificant, at least in quantitative terms.

IV CONCLUSION

There is no gainsaying the fact that Canadian judicial review of administrative action on both procedural and substantive grounds is now much more rights-oriented in its approach than was the case before the Charter. Undoubtedly, the Charter has contributed to that environment simply by virtue of the extent to which it has high public visibility and has achieved acceptance, thereby enhancing the aspirations of the Canadian polity. On occasion, the impact on the conduct of judicial review of administrative action has been much more visible and explicit. In challenges both procedural and substantive, the Charter has been the primary basis on which the reviewing court conducts its assessment of the statutory decision under scrutiny. Even when the Charter is not the principal focus of a court’s inquiry, its provisions and values will affect significantly the conduct of common law review. It is, however, my contention that, at least to this stage, the Charter has not become the dominating influence on Canadian judicial review of administrative action that is implicit in any description of a Bill of Rights as the ‘direct driver’ of judicial review of administrative action. The Charter did not come upon a system of judicial review that was in any sense rights neutral in its approach to judicial review. There was a strong, if not consistent commitment to a rights-based approach to judicial review of administrative action based on the common law and other conceptions of underlying constitutional principles. That tradition continues today and explains many of the recent accretions to the principles of Canadian of judicial review of administrative action, particularly in the procedural domain. Indeed, in both procedural and substantive review, though once again not consistently, the Supreme Court is perfectly content to let this enhanced common law do its work even when Charter rights and freedoms are implicated in the decision under attack. It is also evident that the Supreme Court continues to have difficulty integrating the protections that the Charter provides to the rights and freedoms of Canadians into a coherent methodology of judicial review. This leads me to the tentative conclusion that the Charter may not have led to as significant a widening of the gap between Australian and Canadian principles of judicial review of administrative action as perhaps

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might have been expected or predicted. Whether that conclusion is ultimately justified requires detailed and sophisticated comparative work. Anyone of a mind to conduct that analysis will benefit immeasurably from a study of the meticulous and multi-dimensional approach to Administrative Law scholarship that characterises Mark Aronson’s legacy.

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6 The Equitable Origins of the Improper Purpose Ground THE HONOURABLE JJ SPIGELMAN AC

I INTRODUCTION

I

N THE THIRD edition of Judicial Review of Administrative Action Mark Aronson and his co-authors observe:

The overall ground of judicial review is that the repository of public power has breached the limits placed upon the grant of that power.1

The authors note that the basic assumption underlying this proposition is that all powers have limits. In this context the authors state: The powers of public officials are regarded as being held on trust for the public who granted them. They cannot lawfully be exercised for personal gain or motive, or irrationally, or for purposes which exceed the reasons for their conferral. There are obvious parallels with equity’s doctrines governing fiduciaries, although one must not press that analogy too far.2

The first reference given for this passage is an observation by Sir Anthony Mason, writing extra-judicially, that: In the field of public law, equitable relief in the form of the declaration and the injunction have played a critical part in shaping modern administrative law which, from its earliest days, has mirrored the way in which equity has regulated the exercise of fiduciary powers.3

The link between equitable relief and administrative law has also been identified, with regard to Wednesbury unreasonableness, by Gummow J, 1 M Aronson, B Dyer and M Groves, Judicial Review of Administrative Action, 3rd edn (Sydney, LawBook Co, 2004) 85. 2 Ibid 86. 3 A. Mason, ‘The Place of Equity and Equitable Remedies in the Contemporary Common Law World’ (1994) 110 Law Quarterly Review 238, 238.

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who has often referred to this extract by Sir Anthony Mason, both as a judge of the Federal Court4 and of the High Court.5 The infusion of equitable principles occurred, his Honour suggests, by a process of analogy, applying to a new field principles developed in another.6 The result is what French J has felicitously called ‘the equitable spirit of administrative justice’.7 In the mid-19th century, when this process commenced, the caste of mind of a Chancery judge was quite different to that of a common law judge. The proposition that there existed legal principles that could readily be adapted to new situations, which came naturally to a Chancery judge, permitted more flexibility than did the technicalities of the common law. The metaphor, sometimes deployed, that public power is held on trust, is generally a political rather than a legal proposition. Some public powers may well be subject to requirements as strict as those applicable to fiduciaries. Not all can be so described. A closer, and often more useful, analogy is with the control exercised by courts of equity over powers, which encompasses, but extends beyond, fiduciary powers.

II THE LAW OF POWERS

In the law of property a ‘power’ is a term of art referring to any authority that one person has to deal with property that she or he does not own. This was a natural source of analogy for equity judges when, as I will show below, they were first faced on a systematic basis with statutory powers that impinged upon the property rights of citizens. The author of Thomas on Powers explains the distinction between trust and powers: A trust imposes an obligation, or creates a duty: a power confers an option. A trust is imperative, whereas a power is discretionary.8

4 Fares Rural Meat & Livestock Co Pty Ltd v Australian Meat & Livestock Corp (1990) 96 ALR 153, 167; Bienke v Minister for Primary Industries and Energy (1994) 125 ALR 151, 163. 5 Bateman’s Bay Local Aboriginal Land Council v Aboriginal Community Benefit Fund Pty Ltd (1998) 194 CLR 247, 257–59; Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611, 649. 6 See Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611, 618 ff. 7 RS French, ‘The Equitable Geist in the Machinery of Administrative Justice’ (2003) 39 Australian Institute of Administrative Law Forum 1. 8 G. Thomas, Thomas on Powers (London, Sweet & Maxwell, 1998) 20–21; see also JD Heydon and MJ Leeming, Jacobs’ Law of Trusts in Australia, 7th edn (Sydney, LexisNexis Butterworths, 2006) 36–37.

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Some powers are accurately described as ‘trust’ or ‘fiduciary’ powers, so that the donee is a fiduciary of the authority to deal with another’s property. They are to be distinguished from ‘bare’ or ‘mere’ powers. To the same effect as the observations of Sir Anthony Mason, quoted above, the author of Thomas on Powers states: there has always been a close interdependence between the traditional principles and doctrines of the law of powers and those of judicial review in public law (a common history which remains largely untold). This has continued over recent decades and, indeed, as both the scope and grounds of judicial review have expanded considerably, the process of cross fertilisation has become more marked. … [T]hroughout this century, and especially in recent years, there have been substantial changes in many areas of the law in which the principles and doctrines of the law of powers operate and apply, or might be expected to operate and apply, and that, as a result, those principles and doctrines have themselves had to be developed and adapted to meet new demands and changed circumstances.9 III EQUITABLE ORIGINS

It cannot be suggested that the principles developed for controlling the exercise of statutory powers, on the one hand, and the exercise of powers over property, on the other hand, have a historically shared doctrinal origin. The linkage did, however, arise, as so often in the development of the common law, in the law of remedies. It is in the pragmatic development of common law principle from the bottom up, by means of decisionmaking in individual cases, that common themes emerge in the course of determining what is fair and just, leading to the grant of the appropriate remedy, on the basis of analogical reasoning. The mechanism by which the principles applicable to fraud on a power were adopted for administrative law purposes was litigation brought in the Court of Chancery for equitable relief. At the relevant time, the relief sought was by way of injunction. The jurisprudence on declarations developed later. The significance of the injunction as a remedy in administrative law is emphasised by its inclusion, in express terms, in section 75(v) of the Commonwealth Constitution as one of the constitutional writs (although injunctions have been granted by order rather than writ long before that happened for the prerogative writs). This provision is one of the fundamental underpinnings of the rule of law in Australia. Although not directly applicable to the common law basis of review in State jurisdiction, inevitably the High Court’s jurisprudence on the constitutional writs will exercise a gravitational pull on the whole of administrative law. 9

Thomas, above n 8, at vii.

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No doubt part of the attraction of litigation in Chancery in the mid-19th century was the proclivity of Chancery judges to protect individual property rights against statutory expropriation, particularly by the newfangled institutional form of railway companies. As early as 1839 Lord Chancellor Cottenham said, in one of the earliest cases of compulsory acquisition by a railway company: it is extremely important to watch over the interests of those whose property is affected by these companies, to take care that the company shall not … be permitted to exercise powers beyond those which the Act of Parliament gives them, and to keep them most strictly within the powers of the Act of Parliament. The powers are so large – it may be necessary for the benefit of the public – but they are so large, and so injurious to the interests of individuals, that I think it is the duty of every Court to keep them most strictly within those powers; and if there be any reasonable doubt as to the extent of their powers, they must go elsewhere and get enlarged powers; but they will get none from me, by way of construction of their Act of Parliament.10

The authors of de Smith, Woolf and Jowell, the foundational text on British administrative law, identify the origin of contemporary doctrine on extraneous purposes in cases concerning the exercise of powers of compulsory acquisition in the mid-19th century by railway companies.11 The key authority to which the authors refer is the 1866 House of Lords judgment, Galloway v The Mayor of London.12 It was preceded by a number of similar cases in Chancery.13 Compulsory powers of acquisition by railway companies, and later by public authorities, were the cases in which the basic principles were most frequently applied. However, it was not only railway companies who sought to exercise statutory powers in a manner which led persons affected to seek injunctions from the Court of Chancery. For example, neighbouring residents objected to a proposal to construct a urinal in Grosvenor Place adjacent to the wall of Buckingham Palace.14 In Galloway, Lord Chancellor Cranworth said:

10 See Webb v Manchester & Leeds Railway Co (1839) 4 My & Cr 116, 120; 41 ER 46, 47–48. 11 See Woolf, Jowell and Le Sueur, De Smith’s Judicial Review, 6th edn (London, Sweet & Maxwell, 2007) 265. 12 (1866) LR 1 HL 34 (‘Galloway’). 13 See, eg, Eversfield v Mid-Sussex Railway Co (1859) 1 Giff 153; 65 ER 865; Dodd v Salisbury & Yeovil Railway Co (1859) 1 Giff 158; 65 ER 867. In the latter case the Vice Chancellor, Sir John Stuart, said: ‘in constructing works under the authority of Acts of Parliament for the purposes of the railway, the company are not at liberty to make use of their compulsory powers to attain a subsidiary object. Those powers, which are great powers, are given to the company solely to enable them to construct their works in a convenient and proper way, and for no other purpose whatsoever.’ 14 See Biddulph v The Vestry of St George, Hanover Square (1864) 33 LJ Ch 411.

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The case of the Appellant … rested on a principle well recognized, and founded on the soundest principles of justice. The principle is this, that when persons embarking in great undertakings, for the accomplishment of which those engaged in them have received authority from the Legislature to take compulsorily lands of others, making to the latter proper compensation, the persons so authorized cannot be allowed to exercise the powers conferred on them for any collateral object; that is, for any purposes except those for which the Legislature has invested them with extraordinary powers. The necessity for strictly enforcing this principle became apparent, when it became an ordinary occurrence that associations should be formed of large numbers of persons possessing enormous pecuniary resources, and to whom are given powers of interfering for certain persons with the rights of private property. In such a state of things it was very important that means should be devised, whereby the Courts, consistently with the ordinary principles on which they act, should be able to keep such associations or companies strictly within their powers, and should prevent them, when the legislature has given them power to interfere with private property for one purpose, from using that power for another. … It has become a well-settled head of equity, that any company authorized by the Legislature to take compulsorily the land of another for a definite object, will, if attempting to take it for any other object, be restrained by the injunction of the Court of Chancery from so doing.15

In Australia, the principle emerged from litigation over the proposal by the Council of the City of Sydney to acquire land by compulsion, in order to extend Martin Place from Castlereagh Street to Macquarie Street, Galloway was the basic authority cited.16 The approval of the judgment in equity in New South Wales by the Privy Council in Municipal Council of Sydney v Campbell is cited as the foundational Australian authority on improper purpose. The reasoning in the Privy Council’s decision, however, is unremarkable and borders on the glib – quite typical of the Privy Council of the era when determining how much attention was good enough for an appeal from the colonies.17 The extract from Galloway quoted above indicates that the court was reacting to the emergence of a new form of institution, namely corporations which were given extraordinary powers to interfere with the property of others, particularly railway corporations. Traditionally, there had been other such statutory bodies with similar powers, notably sewer commissions, whose activities had long been regulated by the common law courts

15

(1866) LR 1 HL 34, 43. See Campbell v Municipal Council of Sydney (1923) 24 SR (NSW) 179, 187 ff; and Campbell v Municipal Council of Sydney (No2) (1923) 24 SR (NSW) 193, 205. 17 See Municipal Council of Sydney v Campbell [1925] AC 338, 343. 16

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through the writ of certiorari or by actions in trespass. The historical origin of judicial review by the common law courts has been traced to this body of case law.18 The scope of Chancery’s jurisdiction, extending beyond proceedings for an injunction, was manifest in the first case in which Lord Cranworth formulated his proposition that a compulsory taking of lands by railway companies must be bona fide with the object of using them for the purposes authorised by the legislature, and not for any sinister or collateral purpose.

This principle was first enunciated by his Lordship in 1860 in proceedings in the Court of Chancery in lunacy, because one of the persons whose land was to be acquired was a lunatic.19 In 1864, two years before the decision in Galloway, Lord Cranworth, who had two periods as a Lord Chancellor (1852–1858 and 1865–1866), had agreed with reasons of the then Lord Chancellor, Lord Westbury, in Duke of Portland v Topham. His Lordship had there expounded what has become the classic formulation of the test for a fraud on a power. Lord Westbury had said: inasmuch as your Lordships concur in opinion, I think we must all feel that the settled principles of the law upon this subject must be upheld, namely, that the donee, the appointor under the power, shall, at the time of the exercise of that power, and for any purpose for which it is used, act with good faith and sincerity, and with an entire and single view to the real purpose and object of the power, and not for the purpose of accomplishing or carrying into effect any bye or sinister object (I mean sinister in the sense of its being beyond the purpose and intent of the power) which he may desire to effect in the exercise of the power.20

The language of these two judgments is in substance the same. It appears that Chancery judges had identified what they regarded as a principle of general application. As quoted above, the judgments in Galloway and Duke of Portland each state that a high principle of the law has been invoked. From that perspective, common law powers over property did not differ from powers conferred by statute. Nothing has changed in this respect. Such analogical reasoning is also reflected in other closely related areas of the law. It was Lord Cranworth in 1854 who delivered the definitive

18 See LL Jaffe and EG Henderson, ‘Judicial Review and the Rule of Law’ (1956) 72 Law Quarterly Review 345. 19 See Stockton & Darlington Railway Co v Brown (1860) 9 HL Cas 246, 256; 11 ER 724, 728. 20 Duke of Portland v Topham (1864) 11 HL Cas 32, 54; 11 ER 1242, 1251 (‘Duke of Portland’).

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judgment that established the principle that a director of a corporation was subject to the conflict of interest principles established by fiduciary law,21 relying on Keech v Sanford.22

IV WHY CHANCERY?

In the middle decades of the 19th century, parties chose to proceed in equity with respect to decisions that might otherwise have been regulated by the common law courts through the exercise of the prerogative writs. It was this choice by litigants that allowed the penetration of equitable principles into the development of administrative law including, relevantly, the emergence of the improper purposes ground. Chancery judges could draw on a significant body of precedent in the regulation of matters of public interest. Of particular significance was the role of the Crown as parens patriae. That role had been exercised by the Attorney-General by instituting proceedings in Chancery with respect to charitable and ecclesiastical corporations which lacked a visitor. Such a jurisdiction was readily adaptable, by analogy, to other corporations which had no visitors, first municipal corporations and then other statutory corporations.23 In such proceedings, the court would, at the suit of the Attorney, directly or on relation, injunct a corporation from imposing a rate for an unauthorised purpose,24 or from expending public funds for an unauthorised purpose, eventually extending beyond trust funds.25 Injunctions came to be issued against water and sewerage instrumentalities26 on matters which had in the past been litigated in the common law courts. This reflected a dramatic improvement in Chancery practice. In the years immediately preceding the Duke of Portland and Galloway cases, important reforms were made to procedure, in both common law courts and Chancery, culminating in the 1870s in the broad based reform of the Judicature Acts. However, in mid-century, litigants had a real choice of jurisdiction and many chose Chancery. The horrors of Chancery procedure, depicted by Dickens in Bleak House, a novel set in about 1827, were addressed by statute. A number of Acts, especially in 1852, radically reformed Chancery: replacing fee-based 21

See Aberdeen Railway Co v Blaikie Bros [1843–60] All ER Rep 249, 252. (1726) Cas temp King 61; 25 ER 223. See Woolf, Jowell and Le Sueur, above n 11, at 803−4. 24 A-G v Corporation of Lichfield (1848) 11 Beav 120, 128–31; 50 ER 762, 765–67; A-G v Andrews (1850) 2 Mac & G 225, 229–30; 42 ER 87, 88–89. 25 A-G v The Mayor of Norwich (1837) 2 My & Cr 406, 424–25, 429; 40 ER 695, 701–03; A-G v Guardians of the Poor of Southampton (1849) 17 Sim 6, 13; 60 ER 1028, 1031. 26 See Gard v Commissioners of Sewers of the City of London (1885) 28 Ch D 486; Lynch v Commissioners of Sewers of the City of London (1886) 32 Ch D 72. 22 23

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remuneration of judges and clerks with salaries; abolishing the corrupt sinecures of Masters; simplifying proceedings and facilitating evidence; and formulating a comprehensive set of consolidated orders.27 The ability to bring proceedings in Chancery was extended by the Chancery Procedure Act 1852 (‘1852 Act’), which empowered the court to determine rights at law, without prior proceedings in a common law court.28 Furthermore, a new power to make declarations without consequential relief was first conferred in 1850 and affirmed in the 1852 Act. However, for some time there was resistance to making such declarations.29 A similar resistance to exercising the jurisdiction at law led to the Chancery Regulation Act 1862, which required the court to determine any question of law on which the relief sought depended. Lord Westbury had long been the most prominent advocate of fusion. Indeed, he was called the ‘Galileo of fusion’ by a journal which had earlier characterised fusion as suicidal and Chartist, which in that era carried the connotation of ‘Bolshevik’ in the 20th century. Lord Cranworth was regarded as a moderate reformer, but was still a reformer.30 Perhaps the most significant development for present purposes was the 1852 Act which established, for the first time, that procedure in Chancery would be the same whether the court was asked to restrain breach of a legal or equitable right. Although the distinction between the exclusive and auxiliary jurisdiction of the court remained, procedural impediments were substantially removed, even before the Judiciary Acts.

V THE PROPER PURPOSE PRINCIPLE

The relevant principle identified by Chancery judges in the mid-19th century can be articulated at different levels of generality. At a comprehensive level it can be expressed as follows: Any kind of authority to affect the rights of others can only be exercised bona fide and for the purposes for which it was conferred. This appears to me to be the principle referred to by both Lord Westbury and Lord Cranworth. A principle expressed at this level of generality could have the standing of a maxim, applicable to any legal context in which it is relevant. However, so far as I am aware, such a principle was never articulated in 27 See H Potter, An Introduction to the History of Equity and its Courts (London, Sweet & Maxwell, 1931) 21; M Lobban, ‘Preparing for Fusion: Reforming the Nineteenth Century Court of Chancery’ (2004) Law & History Review 389, 565, 579–84. 28 See F Jordan, ‘Chapters on Equity in New South Wales’ in FC Stephen (ed), Sir Frederick Jordan: Select Legal Papers, 6th edn (Sydney, Legal Books, 1983) 5–6. 29 See PW Young, Declaratory Orders, 2nd edn (Sydney, LexisNexis Butterworths, 1984) 24–26. 30 See Lobban, above n 27, at 584–86.

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Latin and, accordingly, was not included in the various lists of maxims that have been collated from time to time which, because of the origins of maxims in Roman Law, were always set out in Latin. The usual formulation is that a power must be exercised ‘bona fide for the purposes for which it was conferred’. It is a form of words that has been applied in a number of different legal contexts. The common law cases indicated that there was no distinction between ‘bona fides’ and ‘purposes’. The formulation conveyed one idea, not two. It was only when the principle was incorporated in the comparative rigidity of a statutory formulation – as in the Administrative Decisions (Judicial Review) Act 1977 (Cth) and its progeny – that it became appropriate to separate the element of bona fides from the element of purpose.31 The usual formulation is a principle of general application in any institutional context in which persons have an authority to act conferred upon them. Accordingly, when interpreting one of the foundational documents of the Church of Scotland, Lord Lindley said: there is a condition implied in this as well as in other instruments which create powers, namely, that the powers shall be used bona fide for the purposes for which they are conferred.32

In Australia the principle has been applied in numerous statutory contexts.33 It is the same principle as has emerged in the law of corporations, in which context the overlay of fiduciary powers is frequently referred to. Both lines of authority involve the application in an organisational or institutional context of ideas first articulated in the control by courts of equity of powers in the law of property.34 VI CROSS-FERTILISATION

One of the strengths of the common law has been its capacity to adapt to changing circumstances by the cross-fertilisation of principles and doctrine between different areas of the law. The requirements of teaching in discrete subject areas, with concomitant specialisation on the part of academics, 31

See the cases discussed in Aronson, Dyer and Groves, above n 1, at 292–94. See General Assembly of Free Church of Scotland v Overtoun [1904] AC 515, 695 (Lord Lindley). 33 See, eg, Arthur Yates & Co Pty Ltd v Vegetable Seeds Committee (1945) 72 CLR 37, 67–68, 82–83; Municipal Council of Sydney v Campbell [1925] AC 338, 343; Brownells Ltd v Ironmongers’ Wages Board (1950) 81 CLR 108, 119–20; The Queen v Toohey, ex p Northern Land Council (1981) 151 CLR 170, 186–87. 34 In corporations law, see DMJ Bennett, ‘The Ascertainment of Purpose when Bona Fides are in Issue – Some Logical Problems’ (1989) 12 Sydney Law Review 5; RC Nolan, ‘The Proper Purpose Doctrine and Company Directors’ in BAK Rider (ed), The Realm of Company Law (London, Kluwer Law International, 1998); S. Fridman, ‘An Analysis of the Proper Purpose Rule’ (1998) 10 Bond Law Review 164. 32

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can result in spheres of legal discourse being divided into undesirably rigid categories that become self-referential, to the point of being self-absorbed. This tendency has been reinforced by a similar trend towards specialisation in the profession. One purpose of this essay is to indicate the utility of cross-fertilisation between different spheres of legal discourse, by taking as an example the improper purposes basis of judicial review. Recognition of the common origins of doctrines applicable in different areas of the law is a manifestation of that cross-fertilisation which has been so important in the capacity of the common law to grow and adapt to changed circumstances. There are a number of common, and some contrasting, features in the disparate fields in which questions of improper purpose arise. Two examples of common issues indicate the benefits of crossfertilisation: — The utility of a two-fold division between fiduciary and mere powers; — The identification of the nature of a purpose that may be improper. The distinction between fiduciary and mere powers is well established in the law of powers. A similar categorisation can be discerned in other areas of the law, albeit not always acknowledged in those precise terms. In one of the early texts on corporations law a distinction was drawn between the powers and privileges of the corporation itself, for example, to compulsorily acquire property, and powers vested in the directors who have fiduciary duties. The author characterised the former test as ‘[p]owers and other privileges … [that] must be exercised for the purposes intended’, whereas, ‘[t]he powers of directors can be used only strictly for the purposes for which they are created’.35 The reference to ‘strictness’ in the case of powers of directors, as distinct from powers of the corporation itself, suggests that a fiduciary power is involved. Statutory powers may, with advantage, be categorised by means of a similar distinction. An ubiquitous difficulty with the proper purpose principle is the fact that it is rare for any decision-maker to only have one purpose for the exercise of a power or authority. In the context of administrative law, the authors of de Smith identify six different tests that have been applied for determining what impact the presence of an impermissible purpose has upon the validity of the decision.36 Aronson and his co-authors provide a 35 See S Brice, A Treatise on the Doctrine of Ultra Vires, 2nd edn (London, Stevens & Haynes, 1877) 511, 610. See also the 3rd edn, (1893) at 408, 570. 36 Woolf, Jowell and Le Sueur, above n 11, at 276−80. These tests are respectively to ascertain the ‘true’ purpose, or the ‘dominant’ purpose; whether the decision would have been the same in the absence of the unauthorised purpose; whether any of the purposes was an unauthorised purpose; whether an unauthorised purpose has “materially influenced” the conduct; and whether the decision would have been the same.

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critical assessment of these tests, commenting that there may be no difference between the second, third and fifth tests, and noting that the fifth test’s concern with ‘material’ influence is consistent with the Australian relevant considerations doctrine.37 Craig has, for similar reasons, reduced the number of tests to four, noting that the search for the ‘true’ or ‘dominant’ purpose has more support in the case law than asking whether any of the purposes was unauthorised.38 The various formulations found in the authorities turn on the degree of significance which the impermissible purpose had upon the ultimate result. Similar considerations have arisen in other spheres of legal discourse such as choosing between a sole purpose, dominant purpose or substantial purpose test with respect to the law of legal professional privilege,39 or choosing between a sole purpose and dominant purpose test in the law of abuse of process.40 The case law on common law powers does not suggest that there is a single test applicable in all contexts. Dicta in some cases indicate that the presence of any improper purpose invalidates the exercise of the power. However, the wide range of different tests found in this case law appears to be very similar to the range originally set out in de Smith.41 The distinction between fiduciary powers and mere powers may be of assistance in this regard. With respect to a power analogous to a fiduciary power, the mere presence of an improper purpose may vitiate the exercise of the power. A more substantial consequence, however, is required in the case of a mere power. Such a twofold distinction between different kinds of powers may also be useful when categorising statutory powers. There may be powers which, like a fiduciary power, can only be exercised for a particular purpose, so that any intrusion of another purpose leads to invalidity. It may well be that many of the difficulties that have attended the proper purpose rule in corporations law arise from a failure to distinguish fiduciary powers from mere powers. Not all conduct of officers of corporations deserves to be subject to the fiduciary standard.42 A good faith standing may be all that is required.43

37

Aronson, Dyer and Groves, above n 1, at 298. P Craig, Administrative Law, 6th edn (London, Sweet & Maxwell, 2008) 541−42. Cf Grant v Downs (1976) 135 CLR 674; Esso Australia Resources Ltd v Federal Commissioner of Taxation (1999) 201 CLR 49. 40 Williams v Spautz (1992) 174 CLR 509, 529. 41 See, eg, DM Maclean, Trusts and Powers (Sydney, LawBook Co, 1989) 118–20; Thomas, above n 8, at 482–83. 42 See, eg, Fridman, above n 34, at 164. 43 See PD Finn, ‘The Fiduciary Principle’ in TG Youdan (ed), Equity Fiduciaries and Trusts (Toronto, Carswell, 1989) 3–26; Nolan, above n 34. 38 39

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In a statutory context, the issue will be determined on the basis of the interpretation of the particular power to determine what, in the specific context of that statute, Parliament intended a defect of that character to have. The approach of the High Court in Project Blue Sky Inc v Australian Broadcasting Authority, to identifying whether or not Parliament intended a particular defect to lead to invalidity of the decision, may explain the various tests which appear in the authorities and which are discussed in the administrative law texts to which I have referred.44 It is not a matter of multiple ‘tests’ but a matter of varying interpretations of Parliamentary intention. The results will necessarily be more varied than the bifurcation suggested by distinguishing fiduciary from mere powers. The analysis involves a spectrum rather than a bifurcation, but it may be assisted by identifying the two extremities and drawing upon analogous case law. With respect to the second matter identified above – the nature of an improper purpose – there appears to be a more consistent approach. In each of the legal spheres in which improper purpose is a vitiating factor the test is subjective not objective. The question is whether the impermissible purpose was an actuating purpose in the sense of an intention to bring about a result. Accordingly, in the context of administrative law, as Dixon CJ put it with reference to a statutory discretionary power conferred without any legislative identification of the grounds on which it is to be exercised: wherever the legislature has given a discretion of that kind you must look at the scope and purpose of the provision and what is its real object. If it appears that the dominating, actuating reason for the decision is outside the scope of the purpose of the enactment, that vitiates the supposed exercise of the discretion.45

Similarly in the context of corporations law, the focus is on the actuating purpose which caused directors to exercise a power conferred upon them by the articles of association. The question is, what was the substantial object the accomplishment of which formed the real ground of the board’s action?46 Or, what was ‘“the moving cause” of the action of the directors’?47

44 See Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 (‘Project Blue Sky’); see also A-G (NSW) v World Best Holdings Ltd (2005) 63 NSWLR 557; HP Lee, ‘Improper Purpose’ in M Groves and HP Lee (eds), Australian Administrative Law: Fundamentals, Principles and Doctrines (Melbourne, CUP, 2007) 201–02. In Project Blue Sky McHugh, Gummow, Kirby and Hayne JJ said that the existence of the purpose has to be ascertained ‘by reference to the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the conditions’: at 389. 45 Klein v Domus Pty Ltd (1963) 109 CLR 467, 473. 46 Mills v Mills (1938) 60 CLR 150, 186 (Dixon J). 47 Ibid 165 (Latham CJ).

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In the area of powers, including powers of appointment, the emphasis is similarly on the actual ‘intention or purpose’ of the person exercising the power.48 In this context a distinction has sometimes been made between intention and motive which is not always useful and has been criticised.49 However, as Brennan J put it with respect to the issue then before the court: Intention relates to the result which the plaintiff desires to obtain by commencing or maintaining the proceeding; motive relates to all the considerations which move that party to commence or maintain the proceeding. The desired result is no doubt an element of the moving considerations, but it does not exhaust those considerations.50

The Australian case law appears to have resolved upon a substantial, actuating purpose test for the improper purpose ground in administrative law.51 The authorities establish that a vitiating purpose must be a substantial purpose, in the sense that but for the unauthorised purpose the power would not have been exercised the way in which it was. In the analysis of the law of powers there is a clear distinction drawn between intervention on the basis of excessive execution of a power, on the one hand, and intervention on the basis of fraud on a power, on the other.52 Many of the matters identified as constituting an excessive execution of a power are analogous to aspects of ultra vires in the narrow sense and extend to a number of grounds for judicial review. The improper purpose ground has a close analogy, in terms of the applicable principles, with the law of fraud on a power. The concept of improper purpose, in the context of fraud on a power, does not involve an idea of dishonest or immoral conduct, and the references to good faith in this case law should be so understood. In a case involving fraud on a power, the Privy Council said that fraud: merely means that the power has been exercised for a purpose, or with an intention, beyond the scope of or not justified by the instrument creating the power.53

48

See, eg, Re Crawshay, decd; Hore-Ruthven v Public Trustee [1948] 1 Ch 123, 134–35. See Maclean, above n 41, at 93–96. 50 Williams v Spautz (1992) 174 CLR 509, 535. 51 See Thompson v Council of the Municipality of Randwick (1950) 81 CLR 87, 106; Samrein Pty Ltd v Metropolitan Water, Sewerage & Drainage Board (1982) 41 ALR 467, 468–69. 52 See, eg, Halsbury’s Laws of England, 4th edn (London, Butterworths, 1999) vol 36(2), 194–96 on excessive execution and at 200–05 on fraud on a power; to similar effect are the separate chapters in G Farwell, A Concise Treatise on Powers, 3rd edn (London, Stephens & Sons, 1916) cf chs VI, X; Thomas, above n 8, cf chs 8, 9. 53 Vatcher v Paull [1915] AC 372, 378. 49

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The same is true of a finding of improper purpose in administrative law. In a recent joint judgment, the High Court expressly adopted the equitable concept of ‘fraud’, ‘bad faith’ and ‘abuse of power’ for purposes of public law.54

VI CONCLUSION

The proper purpose principle appears in a number of different contexts with regard to the conduct of artificial legal personalities. The central role played by organisations in contemporary society has led to a focus on institutionalism in the social sciences, notably, over recent decades, in economics and political science.55 The proper purpose principle is only one of a number of legal principles that arise in much the same way in different institutional contexts, including trade unions, corporations and public administration. In each sphere, there is a requirement that a power be exercised rationally by reference to relevant considerations and without reference to irrelevant considerations which arise in the same contexts. This principle of rationality is similar to the proper purpose principle in this respect. I have long been of the view that the proper focus is on principles of institutional law, rather than upon the academically defined disciplines of corporations, trade union, and administrative law.56 In any event, the benefits of cross-fertilisation and the common historical origins of principles in equity are such that scholars in one field should be conversant with scholarship in each other field.

54

See SZFDE v Minister for Immigration and Citizenship (2007) 237 ALR 64, 67–68. See, eg, PA Hale and RCR Taylor, ‘Political Science and the Three New Institutionalisms’ (1996) 44 Political Studies 936. 56 See, eg, JJ Spigelman, ‘Foundations of Administrative Law: Toward General Principles of Institutional Law’ (1999) 58 Australian Journal of Public Administration 3. 55

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7 The Crown in the Courts: Can Political Theory Help? JANET M C LEAN *

I INTRODUCTION

H

OW IMPORTANT IS a theory of the state to administrative law? In the first chapter of the third edition of Judicial Review of Administrative Action the authors revisit comments they made in previous editions about the intersection between administrative law and political theory. In this version Mark Aronson and his co-authors appear to be slightly chastened – acknowledging that political theories are ‘interesting and important’ and accepting that they might have overreacted in previous editions to what they took to be a suggestion that one needs ‘a single, all-encompassing theory of the state’ in order to ‘do’ administrative law.1 While they allow that there is undoubtedly a political dimension to public law, they reject the argument that public law is ‘simply a sophisticated form of political discourse’.2 Indeed, they suggest, political theory is but one perspective among many that is capable of contributing to an understanding and critique of administrative law. In what may have been an attempt at pre-emptive self defence, the authors allude to another common and unhelpful feature of contemporary constitutional debate – the tendency to use the epithet ‘positivist’ to refer to a wide range of views with which one disagrees. * I would like to take this opportunity to thank Mark Aronson for his contribution to administrative law, his commitment to engagement and his encouragement of me as a young academic. Thanks to Carol Harlow, Mike Taggart and Mark Hickford for helpful comments on an earlier draft and to James Harris for help with references. All errors are of course my responsibility. 1 M Aronson, B Dyer and M Groves, Judicial Review of Administrative Action, 3rd edn (Sydney, LawBook Co, 2004) 7. 2 Ibid 7, quoting M Loughlin, Public Law and Political Theory (Oxford, Clarendon Press, 1992) 4.

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If [our view about the relationship between the state and public law] makes us positivists we suggest that the insult is used much too freely.3

In this essay I attempt to tease out what we might mean by political theory, and what relation it may or may not bear to public law. I use as the focus of my analysis the controversies arising out of M v Home Office.4 M v Home Office is a rare example in recent experience of UK Judges identifying the legal personality of the Crown for the purpose of determining whether an order for contempt of court is available against a minister acting in his official capacity. It was presumed, for the purpose of the case, that prerogative orders do not lie against the Crown itself:5 rather, the case questioned whether the Crown’s immunity extends to its servants. The Majority of the Court of Appeal (Donaldson MR and Nolan LJ) found that the Crown and Home Office did not have sufficient legal personality to be held in contempt of court, but that the natural person of a minister [Kenneth Baker] could in a proper case be subject to contempt of court proceedings in his personal capacity: [i]t is no defence that what would otherwise constitute a contempt of court was committed in the discharge or purported discharge of [his] official duties.6

The House of Lords adopted a different analysis. In his leading judgment, Lord Woolf confirmed that the Crown indeed has legal personality – at least for the purposes of holding property and entering into contracts. He described the Crown as ‘a corporation sole or corporation aggregate’7 citing the authority of Lords Diplock and Simon in Town Investments Ltd v Department of the Environment.8 He acknowledged, however, that even after the Crown Proceedings Act 1947 (‘Crown Proceedings Act’), litigation has to be brought in the name of the department or, in judicial review proceedings, in the name of the minister. Reasoning by analogy from judicial review methodology, he held that it is appropriate to bring proceedings against the minister in his official capacity for contempt of court.9

3

Aronson, Dyer and Groves, above n 1, at 7. [1994] 1 AC 377 (HL) (‘M v Home Office’). The common law position in respect of prerogative orders was left unchanged by the Crown Proceedings Act 1947. 6 M v Home Office [1992] QB 270 (CA) 304 (Donaldson MR). McCowan LJ dissented on the second point saying that the Minister was performing a function of the Crown and that the order was in fact directed not to ‘Mr Baker personally, but rather to the Crown’: at 311. 7 [1994] 1 AC 377, 424 (HL). 8 [1978] AC 359 (HL) (‘Town Investments’). 9 M v Home Office [1994] 1 AC 377, 426 (HL). For a perceptive analysis of the doctrinal choices made in M v Home Office see C Harlow, ‘Accidental Loss of an Asylum Seeker’ (1994) 57 Modern Law Review 620. Harlow’s note appears to have been prophetic: the thread of earlier arguments expressed in R v Home Secretary, ex p Herbage [1987] QB 4 5

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I choose M v Home Office as my starting point, not only because it is a rare case in which the nature of the Crown’s legal personality has been explicitly explored but also because it is an example that has given rise to an exchange between Martin Loughlin (an important contemporary adherent of the view that political theory is indispensable to public law) and the late Sir William Wade (regarded as representing the ‘positivist’ tradition).10 The exchange is doubly valuable because it proffers an example of Loughlin critiquing public law doctrine in light of political theory and may therefore give us insight into the implications of his later more abstract account of the pure theory of public law in The Idea of Public Law.11

II WHERE DO THEY STAND ON THE RESULT?

Both Wade and Loughlin seem to agree with the result in M v Home Office, though for very different reasons. Wade approves of M v Home Office in so far as its reasoning accepts and maintains a distinction between the Crown and ministers: the Crown is immune from legal process at common law; its ministers and officers are subject to legal scrutiny. The only exception for Wade is where a power is vested explicitly in the Crown itself. In that case, in order to maintain the Crown’s immunity, the Crown’s servant must share in that immunity. Wade suggests that M v Home Office clears away some of the confusion created by the House of Lords in Town Investments;12 though he is wary of some of the dicta in Lord Woolf’s opinion that appears to approve of that case and of its possible implications for judicial review. Lord Diplock said in Town Investments that ‘executive acts of government’ performed under the direction of ministers individually or collectively are all acts ‘done by the Crown’.13 In the same case Lord Simon added that a minister is ‘an aspect or member of the Crown’14 and that ministers are ‘members 606 to the effect that Crown Proceedings Act 1947 s 21 was only intended to cover ‘civil proceedings’ and not ‘public law’ proceedings has been exploited by Lord Rodger in recent Scottish cases such as Davidson v Scottish Ministers (No 1) [2005] UKHL 74 [75]–[79]. See also S Sedley, ‘The Crown in its Own Courts’ in C Forsyth and I Hare, The Golden Metwand and the Crooked Cord (Oxford, Clarendon Press, 1998) 253. 10 Sir William Wade, ‘The Crown Ministers and Officials: Legal Status and Liability’ in M Sunkin and S Payne (eds), The Nature of the Crown (Oxford, OUP, 1999) 23; M Loughlin, ‘The State, the Crown and the Law’ in M Sunkin and S Payne (eds), The Nature of the Crown (Oxford, OUP, 1999) 33. 11 M Loughlin, The Idea of Public Law (Oxford, OUP, 2003). Only 12 cases are referred to in the monograph, usually only in notes and often to illustrate the lack of connection between the case law and the proper bases of public law. 12 [1978] AC 359 (HL). 13 Ibid 381. 14 Ibid 400.

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of the corporation aggregate of the Crown’.15 For Wade, this is heresy. According to Wade, the Crown simply means the Queen and she has ‘plenty of legal personality, both as a natural person and, according to a long line of authority, as a corporation sole’.16 He disagrees with Lord Woolf’s dicta that the Crown could also be a corporation aggregate17 and insists that the legal personalities of the Crown and ministers need to be kept distinct. The immunity of the Crown sits alongside the non-immunity of ministers: The distinction between the Crown’s immunity and the servants’ non-immunity was of course highly artificial … but in the system of remedies, evolved as it was from feudal origins, it was indispensable for reconciling the immunity of the Crown with the rule of law.18

According to this view, the existence of liability does not depend on whether ministers are acting in an official or a private capacity. M v Home Office is, for Wade, an example of the ‘rule of law’ really working. If (as he agrees with Loughlin to be the case) the law ‘has failed to produce a coherent theory of the state’ then only this distinction makes the situation ‘tolerable’.19 He adds: Personally I prefer to uphold the rules legitimised by history, unsatisfying as they may be to political theorists. The immunity of the Crown and the non-immunity of its servants represent a compromise, which is well suited to a state, which is both a monarchy and a democracy.20

We should pause to note that Wade’s view is an interpretation of that history rather than merely historical reporting.21 Loughlin also agrees with the result in M v Home Office insofar as it demonstrates a preparedness to hold a minister to account in his official capacity rather than as a private person. For Loughlin this was a correct step but the decision ought to have gone further along the lines of Town Investments. Loughlin regards M v Home Office as a lost opportunity ‘to

15

Ibid. Wade, above n 10, at 24. 17 Ibid 26. 18 Ibid. 19 Ibid 31. 20 Ibid 32. 21 One of the devices of the common law was to treat an official acting ultra vires as therefore acting in his private capacity and subject to the ordinary law of the land. There were also exceptions where officials (such as court and judicial officials) enjoyed immunities in their official capacities. Importantly, Wade is suggesting here that personal and official responsibility are capable of overlapping: see further Harlow, above n 9, at 623; RJ Gray, ‘Private Wrongs of Public Servants’ (1959) 47 California Law Review 303 quoting Blackstone to the effect that ‘[h]is judges are the mirror by which the King’s image is reflected’: at n 39. 16

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reconceptualise the idea of the Crown as a symbol of government’.22 He sees such a re-conceptualisation as part of a ‘continuing project of developing a body of public law and setting in place a more realistic conception of the nature of State power and the conditions under which it may legitimately be exercised’.23 This, he says, was an opportunity to ‘correct the distortions generated by our history’.24 Loughlin contends that the Queen (standing for the state) is unable to satisfy the need for a general expression of an institution of rule.25 He argues that: (1) the Queen should remain immune but the Crown ought to be detached from her person; (2) the Crown should be conceived as both ‘a corporation aggregate standing for the community and as an executive body otherwise known as the government’;26 and (3) ‘a framework of official liability for acts of the Crown’27 should be devised. Together these reforms would modernise the law: There having been no critical reconstruction in recent times, the ancient legal concepts have lingered on and this means that these politico-legal ideas have, within the British system of government, had to be worked out almost entirely through political processes.28

It could be supposed that Professor Wade would be likely to have responded with partial agreement on (1) (subject to his exception); with strenuous objection to (2); and to (3) with the retort that there is already an historically devised system for holding government responsible. If Professor Wade were as truly Diceyan as Loughlin alleges him to have been, then he might even have agreed that it would be best to leave any realignment of the legal position with the political position to politics and

22 Loughlin, above n 10, at 33. See more recently Lord Scott’s dissenting judgment in R (BAPIO Action Ltd) v Secretary of State for the Home Dept [2008] UKHL 27 [28] approving of Town Investments and critiquing as fictional the constitutional theory of the indivisibility of the Crown. Lord Scott is not prepared to treat the representations of one department of the state as capable of fettering the statutory powers of another; this would, he thinks, unnecessarily regulate executive government. It is not at all apparent to me that the differences in approach of the Lords in this case are triggered by the corporation aggregate, corporation sole distinction alone. 23 Ibid 33. 24 Ibid 75. 25 Ibid 36. 26 Ibid 75. 27 Ibid. 28 Ibid 48. Notice how he distinguishes here between ‘political processes’ inside and outside of courts – a distinction he does not make in the later work.

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public opinion rather than to favour a judge led response. Both protagonists use history but in very different ways. To what extent are these differences attributable to their theories or the lack of a theory about the state?

III A DISTINCTIVE PUBLIC LAW?

Several features of Loughlin’s critique merit closer examination. He argues for the primacy of the political over the legal and also wants the courts to have a role in critically reconstructing the state and the nature of its power. The way he reconciles these two apparently contradictory tasks is to suggest that public law ought to be distinctive in its methodology and substance from the rest of the law. He is critical of reasoning by analogy to private law and of claims about the autonomy of law. These ideas are more fully explored later in The Idea of Public Law, where he elaborates that private law is a separate discipline that relies on moral reasoning while public law belongs to the autonomous realm of ‘the political’ which relies on ‘prudential reasoning’. For Loughlin there is an a priori distinction between public and private law. Public law requires a distinctive public law methodology and should eschew ‘juridified’ readings of the Constitution.29 Loughlin’s commentary on M v Home Office is useful because it illustrates more fully than he does in the later theoretical work just what he might mean by a distinctive public law methodology. One of his principal objections to Wade’s analysis is that, in his view, Wade reduces the Crown to the status of an ordinary person. In particular he dislikes Wade’s narrow definition of the prerogative as only those powers that the King has over and above those powers enjoyed by ordinary persons in the ordinary course of the common law. In Wade’s view (which Loughlin concedes is at least to some degree supported by the legal history30) powers to make contracts, to appoint and dismiss ministers and even to issue passports are not prerogative powers properly so-called but rather are powers enjoyed under ordinary law:31 [W]hence [Wade] deviates into error [ ] is to give a strict juristic reading to the law of the constitution. In so far as he reasons analogically, he draws his authority from private law … What he appears unprepared to concede is to the fact that, notwithstanding the lip-service to which the judiciary may have made to traditional (Diceyan) rule of law values, the emergence of public law has given 29

Loughlin, above n 10; See also Loughlin, above n 11, at ch 8. Loughlin, above n 10, at fn 171. Wade, above n 10, at 29–31. Loughlin, above n 10, at 69. See also BV Harris, ‘The “Third Source” of Authority for Government Action’ (1992) 108 Law Quarterly Review 626; BV Harris, ‘The “Third Source” of Authority for Government Action Revisited’ (2007) 123 Law Quarterly Review 225. 30 31

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rise to a distinctive mode of reasoning … Traditionally, however, this distinctiveness was mainly acknowledged by the judiciary’s silence and accommodation.

It is sometimes difficult to disentangle the normative from the descriptive here.32 Is it that public law should have a distinctive mode of reasoning or that it already does so? Loughlin does, however, offer an example of the judiciary ‘getting its methodology right’ in Carltona v Commissioners of Works.33 In that case Lord Greene held that a minister does not have to personally exercise the powers or discretions conferred on him but is able to authorise officials to exercise those powers on his behalf. In such circumstances officials are able to act as the minister’s alter ego. The reasoning in Carltona does not rely on the private law of agency, or on analogies from employment relationships. It is driven by functionalist concerns to allow the work of government to be carried out efficiently and without the risk of technical challenges about vires. Lord Greene is effectively creating a common law default rule which empowers the bureaucratic machine. Loughlin applauds the doctrine as providing ‘a good illustration of the transition from silence [a reference to Sir Stephen Sedley’s work34] through accommodation, and ultimately towards explicit recognition’35 of a distinct methodology of a public law kind. The Carltona example appears to support Loughlin’s preferred methodology. Not only does Lord Greene avoid reasoning by analogy to private law but the effect of his judgment is to realign the legal with the political ‘reality’ in the sense of legally empowering the people who actually do the work. He also indirectly privileges political responsibility over legal responsibility thereby giving primacy to the political. In The Idea of Public Law Loughlin calls this a ‘prudential’ methodology that is based not on moral reasoning but rather on casuistic argument. For myself, I doubt that Carltona is robust enough to become emblematic of even a nascent public law methodology. It leaves too many unanswered questions about the substance of casuistic concerns. Is the result driven by concepts of necessity? Is it driven by a principle that

32 A similar difficulty arises in The Idea of Public Law in relation to whether he is describing a ‘political practice’ and something he calls ‘reality’ or rather presenting an ahistorical and ajurisdictional pure theory. For a thoughtful critique of The Idea of Public Law see P Cane, ‘Imagining Public Law’ (2006) 31 Australian Journal of Legal Philosophy 153, 158–9. 33 Carltona v Commissioners of Works [1943] 2 All ER 560, 563 (‘Carltona’). 34 S Sedley, ‘The Sound of Silence: Constitutional Law Without a Constitution’ (1994) 110 Law Quarterly Review 270. In The Idea of Public Law Loughlin elaborates on this. He suggests that silences may be desirable as the deliberate product of a ‘truce between opposing defined positions’: at 50. However, he also notes that ‘this conception of public law as a form of political discourse demands elaboration’: at 157. The earliest reference I can find to constitutional silence is E Freeman, The Growth of the English Constitution From the Earliest Times (Leipzig, Bernhard Tauchnitz, 1872) 147. 35 Loughlin, above n 10, at 69–70.

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political responsibility is superior to legal responsibility? Or is it driven by an interest in administrative convenience? Rather, I would describe the case (with Aronson et al36) as creating a common law background presumption. One way of reading Loughlin is to understand him to be suggesting that a judge-led reconstruction of the state requires common law presumptions or background norms to be adjusted or critically re-examined. Shorter term political discourse will take place against that frame. This may be what he means in some of the later work when he refers to the courts engaging with public law as an extension of political discourse.37 Otherwise it is unclear what exactly should be the relationship between the parliamentary, executive and judicial branches of government all doing their respective (and together ‘autonomous’) ‘political discourse’. Let me give another example that may better illustrate this point. It is not always true that engaging with public law as an extension of political discourse will also always preserve public law as a distinctive body of law. Loughlin accuses the judiciary in M v Home Office of failing to develop the common law in a systematic fashion, thus leaving the work [of conceptualising the Crown] to Parliament and the government (though the latter has no incentive to undertake the task).38

One could take the view (and maybe it is a positivist one) that Parliament and the executive have had ample incentives to undertake the task of re-conceiving the Crown or state – indeed, that many Western governments with common law systems have been vigorously engaged in re-conceptualising themselves over the past two decades. The New Zealand experience is instructive.39 Wade’s view that the residual non-prerogative powers of the Crown are akin to those of an ordinary person was consciously embraced at the time when the Government was most actively restructuring government departments, contracting out service provision, disposing of state assets and deregulating government-owned utilities.40 The UK ‘Ram doctrine’, according to which the Crown enjoys the same powers as an ordinary person, was adopted to enable government to pursue certain privatisation policies without the need

36

Aronson, Dyer and Groves, above n 1, at 312–13. In The Idea of Public Law, Loughlin argues that law generally is not an autonomous discipline but that public law is an autonomous discipline with its own distinctive method: at 153. In addition, it ought to be regarded as a form of political reasoning: at 163. Politics constitutes an autonomous domain of which public law is a part: at 163. 38 Loughlin, above n 10, at 37. 39 See J McLean, ‘The New Public Management New Zealand Style’ in P Craig and A Tomkins (eds) The Executive and Public Law (Oxford, OUP, 2005). 40 Ibid 138–40. 37

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for legislative authority.41 Moreover, the regulation of the use of such ordinary law powers would not be by public law means such as judicial review but would be via the ordinary common law – particularly contract law. Common law concepts have, in practice, been used to undermine any supposed a priori distinction between public and private spheres and to establish instead a ‘private law model of public law’. Privatisation and deregulation policies were not only concerned about changing how government did things but also about changing how government was itself conceived. They tended to exploit the underlying background norm of the common law that appears to allow states to contract and use their property as if they were ordinary persons. That does not so much depend on whether states have legal personality or whether they are corporations sole or aggregate but on the rights and privileges that attach to their status. Moreover, taking a longer time frame, Loughlin himself concedes that one of the major threats to the distinctiveness of public law has been the gradual removal of the Crown’s immunities by legislation, once more led by political rather than judicial branches of government.42 The courts have merely ‘followed’ those developments. He criticises the fact that the consequence of Wade’s analysis of M v Home Office would be to allow the Crown to continue to enjoy immunity so long as it ensured that legislation conferred power on the Crown itself rather than on its ministers. Is not the use of legislative techniques of that kind itself a variety of political discourse? Are the common law judges independently to decide which of these different discourses should prevail and on what basis? How can they take the lead here? If public law ought to operate as an extension of political discourse, does that suggest that judges need always follow the prevailing political discourse (of politicians) to align public law with ‘political power’? On these questions depends just how normative the public law project is to become.43 In The Idea of Public Law Loughlin states as the prevailing prudential principle that judges should choose what best serves to strengthen the state. That proposition only leads us to a range of new conundrums about what we mean by the state and how much the common law should maintain the freedom of different governments to change their policies. In

41 See the Memorandum of Glanville Ram, First Parliamentary Counsel (2 November 1945) referred to in A Lester and M Weitt, ‘The Use of Ministerial Powers without Parliamentary Authority’ (2003) Public Law 415 and publicly revived in New Zealand in 1989: see Ibid fn 52. 42 Loughlin, above n 10, especially at 60–61, 64–5. At 65 he suggests that the immunities and privileges enjoyed by the Crown (which Dicey did not acknowledge) meant that ‘the idea of the State, had, in essence, escaped the categories of the law.’ That initially singled out the Crown for a special kind of discourse. 43 See J McLean, ‘Government to State: Globalisation, Regulation, and Governments as Legal Persons’ (2003) 10 Indiana Journal of Global Legal Studies 173.

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particular it raises the question whether judges should be engaged in strengthening the state, meaning the government of the day, or strengthening a version of statehood that transcends the particular officers and members of the state. It is also the case (as Loughlin acknowledges elsewhere) that limits on the state may effectively increase the legitimacy of the state and therefore its power. It is unclear how Loughlin’s public law methodology relates to his a priori distinction between public and private law. Indeed, one wonders if it is really Wade’s ‘private law methodology’ to which he objects (it is at least arguable, for example, that it is quite ‘prudential’ to treat the state as an ordinary person for property owning purposes) as opposed to his substantial ideological commitments.

IV WHAT COUNTS AS POLITICAL THEORY?

Even accepting that the role of the courts may be to revisit their background common law presumptions in a public law mode, puzzling questions still remain surrounding just what counts as ‘political discourse’ and ‘political theory’. For Wade, ‘political theory’ is something that other people do. For Loughlin political theory is indispensable to public law – indeed public law ought to be an extension of political theory. In a sense, they are both wrong. In my view public law and political discourse do not together form an autonomous system – either methodologically or substantively. Instead I regard the common law as sometimes susceptible and sometimes resistant to particular strands of political thought. That being the case, the common law contains certain pre-commitments, or a political theory of its own. As Pocock’s work has shown, public law has been better able to absorb some ideas (many of which originate from outside sources) than others that may struggle to find juristic expression.44 Often older legal conceptions and forms are revived when they suit the instrumental needs generated by the political policies of the government of the day.45 Understanding this can provide a deeper explanation of why our public law is like it is and even a diagnosis of where it is lacking. That is at least descriptively true if not necessarily normatively desirable. Any normative project is unlikely to succeed unless we are prepared to take the common law seriously as itself a source of political morality and a species of political thought. Starting from this framework clarifies the nature of the disagreement between Wade and Loughlin. Wade says he prefers to rely on legal history 44

See JAG Pocock, The Varieties of British Political Thought (Cambridge, CUP, 1993). See, eg, J McLean, ‘Crown Him with Many Crowns: The Crown and the Treaty of Waitangi’ New Zealand Journal of Public and International Law (forthcoming). 45

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rather than on political theory. Loughlin suggests that, historically, legal and political theory used to be better aligned. They are talking past each other. Both are ‘doing’ political theory but they disagree about which theory ought to prevail. Let us begin with what is undoubtedly ‘high theory’. Thomas Hobbes features prominently as a theorist whom Loughlin considers to have particular relevance for public law. He relies on Hobbes’s concept of office as the basis for the distinction between the public and private spheres.46 He regards Hobbes’s account about how the modern state is established as providing ‘us with a fundamental framework for conceptualising public law’.47 According to Hobbes, the multitude are brought out of the state of nature by contracting together to form a state. Importantly, in terms of the relationship between law and political theory, Hobbes himself drew on the Roman Digests and private law rules in developing his ideas about authorship, agency, representation and attribution.48 It is a sophisticated framework, the subtleties of which are often misrepresented. I quote from Quentin Skinner here in order to avoid error: We are told [by Hobbes] that the ‘civil person’ brought into existence by the union of the multitude is the sovereign … The name of the person engendered by the transformation of the multitude into one person through their agreement to appoint a representative is not the sovereign but the state. The sovereign is the name of the representative of the multitude united in one person, and is the name of the representative of the state.49

The state and the sovereign are separate concepts. Being the sovereign then is to hold representative office – the sovereign is not the proprietor of sovereignty. Gone is divine right. What Hobbes does is to unite the will of the multitude with the will of the sovereign through rules of attribution and representation. The multitude, or people, remain the author of the state’s actions and actions are validly attributed to the state through its representative (the sovereign). Skinner again: The will of the sovereign, we are told, comes to be identical with that of the commonwealth because Hobbes presents us with a vision ‘of an organic community, whose will is the sovereign’s will’.50

46

Loughlin, above n 11, at 157. Ibid 158. 48 See Q Skinner, ‘Hobbes and the Purely Artificial Person of the State’ (1999) 7 The Journal of Political Philosophy 1, 4. See also A Brett, Rights and Nature: Individual Rights in Later Scholastic Thought (Cambridge, CUP, 1997). 49 Skinner, above n 48, at 20. 50 Ibid 21. 47

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That is not because of any mystical unity between the people and the state, but rather because, ‘all public actions must be attributed to the person whom they represent, namely the person of the state’.51 Consequently, the people must own those actions of which they are the author. This social covenant authorises the sovereign: the people cannot withdraw their consent. They do not retain a residual sovereignty. To oppose one’s sovereign is to oppose oneself. It may be difficult to accept that the sovereign representative can exercise such a collective will on behalf of the people given the pervasive nature of political conflict and modern ideas of political pluralism. But that was always so. Hobbes was himself writing at a time of civil war. This is not a ‘real’ identification of the people’s will with the sovereign’s will but rather a ‘constructed’ one using rather legalistic devices. Political theory, like legal theory, is artifice – yet both are ways of giving meaning to practice. It is important to recognise for these purposes that Hobbes was a nominalist: for Hobbes general ideas are mere names without any corresponding reality.52 The ‘state’ is little more than a fictional entity.53 That leaves a great deal of work still to be done in giving legal meaning to the concept of the state and its sovereign representative. Indeed, Austin’s reading or misreading54 of Hobbes indirectly led to his proposition that parts of the determinate body that constituted the sovereign power could be subject to and defined by law but not the whole – a conception perhaps more closely aligned with Wade’s view of the Crown’s legal personality than Loughlin’s. Hobbes’ work has been the subject of much recent scholarly re-evaluation that seeks to challenge the 19th century interpretation of his theories and even his place in the positivist tradition.55 This critique focuses on Hobbes’ discussion of the validating conditions that must be fulfilled before an expression of sovereign will counts as law and thereby

51

Ibid. JAW Gunn, ‘Eighteenth Century Britain: In Search of the State and Finding the Quarter Sessions’ in J Brewer and E Hellmuth (eds), Rethinking Leviathan (Oxford, OUP, 1999) 99, 108. It is difficult, therefore, to reconcile Hobbes’ views with Loughlin’s claims to be realigning law with ‘reality’. 53 See D Runciman, ‘The Concept of the State: the Sovereignty of a Fiction’ in Q Skinner and B Strath (eds), States and Citizens (Cambridge, CUP, 2003) 28–38, where he likens the state to money. 54 Austin deliberately used the terms ‘state’ and ‘sovereign’ as if they were synonymous: J Austin (Rumble ed), The Province of Jurisprudence Determined (Cambridge, CUP, 1995) 226: ‘“the state” is usually synonymous with “the sovereign”. This is the meaning which I annex to the term, unless I employ it expressly with a different import’. 55 This work seeks to establish that there remains a large and complex role for natural law in Hobbesian theory. Moral laws ‘are conceptually and empirically constitutive of sovereign authority’: see D Dyzenhaus, ‘Hobbes and the Legitimacy of Law’ (2001) 20 Law and Philosophy 470; S Coyle ‘Thomas Hobbes and the Intellectual Origins of Legal Positivism (2003) 16 Canadian Journal of Law and Jurisprudence 243. 52

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limits the obligations on a citizen to obey.56 It also explores the importance of the role of ‘justification’ in Hobbes’ work: valid claims of governmental authority may still have limitations and exceptions.57 Despite this, we encounter in Hobbes a significant obstacle to constructing the third plank of Loughlin’s project – ‘a framework of official liability for acts of the Crown’. There are a broad range of state powers that we would agree, in the abstract at least, to be both valid and justified and yet we might wish to hold the state responsible for the consequences to individuals of the use of such powers in certain circumstances. Uniting the wills of the people and the sovereign, as Hobbes’ scheme does, must have an effect on how official liability is conceived: Because every subject is by this Institution Author of all the actions, and Judgments of the Sovereaigne Instituted; it followes, that whatsoever he doth, it can be no injury to any of his Subjects; nor ought he to be by any of them accused of Injustice. For he that doth any thing by authority from another, doth therein no injury to him by whose authority he acteth: But by this Institution of a Common-wealth every particular man is Author of all the Sovereaigne doth; and consequently he that complaineth of injury from his Soveraigne, complaineth of what whereof he himselfe is Author; and therefore ought not to accuse any man but himselfe.58

One of the reasons the common law developed as it did was as a response to what contemporary and later critics read as absolutist claims about the state contained in such statements. The initial response sprung out of political theory rather than law. Many of the 17th and 18th century political theorists focused their energies on checking the powers of the sovereign. These political theories may, indeed, have been the original source of the common law’s ‘unrobust’59 conception of the state. Such views dominated those centuries. Hobbes was scarcely read in the 18th century and was ‘a forgotten man’ until the utilitarians rediscovered him for their own purposes in the 19th century.60 Part of the explanation for why the idea of state remained underdeveloped in the common law was that there was a political decision not to give the state too much power at home (though a different story might be told about the nature of British

56 See, eg, H Warrender, The Political Theory of Hobbes: His Theory of Obligation (Oxford, OUP, 1957) 257–65. 57 R Ladenson, ‘In Defense of a Hobbesian Conception of Law’ (1980) 9 Philosophy and Public Affairs 134, 141. See also M Taggart and D Dyzenhaus, ‘Reasoned Decisions and Legal Theory’ in D Edlin (ed), Common Law Theory (Cambridge, CUP, 2007). 58 T Hobbes, Leviathan (Tuck ed, Cambridge, CUP, 1996) 124. 59 Gunn, above n 52, at 99, 110. 60 M Francis, ‘Nineteenth Century Theories of Sovereignty and Thomas Hobbes’ (1980) 1 History of Political Thought 517, 519.

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power abroad).61 That is, the lack of interest in the theoretical contemplation of the state was borne out of a conscious desire to keep the state relatively weak.62 Discussing the great case of Entick v Carrington,63 in which relatively humble servants of the Crown were held liable for trespass, as if they were ordinary people, rather than the Secretary of State who ordered the trespass or the Crown itself which was protected by immunity, JAW Gunn suggests: Too much concern for the seventeenth-century cause of checking absolutism had led to the inconvenient outcome that there were inadequate resources for summoning up the state when one found a use for it.64

The ‘use’ to which Gunn refers, is in seeking legal redress from the public treasury – the state rather than from its more lowly servants. Like Loughlin, he lays some (though not all) of the blame on the common law (referring to its ‘dogged literalness’65) and on a more general English dislike for abstraction. The important connection that Gunn makes, however, is to suggest that some of the silences of the common law were and are motivated out of particular political commitments. It enables us to make the point that the Diceyan version of the rule of law, to which Wade ascribes, is itself a form of political discourse – albeit motivated originally out of 18th century concerns which found resonance in certain quarters and for different reasons in the 19th century and still finds resonance in the present day. So too Wade’s narrow conception of the prerogative, in so far as he conceives of it as extra-legal power and allows all other powers of the Crown to be subject to law, owes much to Locke (and in the cause of maintaining the distinctiveness of the public sphere).66 Wade and Loughlin are both ‘doing political theory’ then, but out of different traditions. They are also both simultaneously making juristic choices. This is where Wade and Loughlin really part company.

V CONSTRUCTING A FRAMEWORK FOR OFFICIAL LIABILITY

The controversies about the nature of the Crown per se, including whether it is a corporation sole or aggregate, may in the end distract us from the 61 See Pocock, above n 44: ‘When the colonies had begun challenging the omnicompetence of the king-in-parliament, they had been sternly told that the latter’s sovereignty was absolute, irresponsible and indivisible; a reply as Tory in their ears as it was Whig in the mouths that uttered it’: at 295. 62 Skinner, above n 48, at 100–01. 63 (1765) 2 Wils 275. 64 Skinner, above n 48, at 110. 65 Ibid. 66 See further P Pasquino, ‘Locke on King’s Prerogative’ (1998) 26 Political Theory 198–208.

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real questions raised by the project of ‘constructing a framework of official liability for acts of the Crown’. Moreover, the more closely the people’s will is politically aligned with or represented by the state’s will, the more difficult it may become to hold the state qua state responsible for actions towards individuals. For example, having thrown off monarchy by revolution, the former American colony too embraced the doctrine of sovereign immunity. As in the UK, in order to provide a remedy in the face of the immunity, individual officials rather than the federal government per se could be held liable in tort. The US Supreme Court in the 1971 case of Bivens v Six Unknown Agents of the Fed Bureau of Narcotics,67 extended this method of analysis so that damages claims could be brought even against federal agents in their personal capacities for constitutional torts (whether or not these had been committed in the ordinary course of their employment).68 These developments occurred despite the explicit founding of the Republic on the basis that the sovereign could and should be limited by law. Lawyers of the French Republic too struggled with these questions. Duguit states a classical version of the dilemma (which, though it owes its notion of the general will to Rousseau rather than Hobbes, is an analysis that will be familiar to most common lawyers of my generation): The sovereign state cannot be responsible because of statutes, because statutes are the expression of sovereignty. Nor can it be responsible for executive, judicial or administrative acts. If they conform to the statute there is no question of responsibility at all. If they are contrary to it the question does not relate to the state which has willed that the statute should be executed. The violation is that of the official who substitutes his own will for the will of the sovereign state. It is the official, therefore, who is alone responsible.69

The idea of citizens bearing rights against the state (rather than merely enjoying privileges from the state)70 is extremely modern.71 In order to

67

(1971) 403 US 388 (‘Bivens’). Bivens v Six Unknown Agents of the Fed Bureau of Narcotics (1971) 403 US 388. See further L Jaffe, ‘Suits Against Governments and Officers: Sovereign Immunity’ (1963) 77 Harvard Law Review 1; D Engdahl, ‘Immunity and Accountability for Positive Government Wrongs’ (1972–73) 44 University of Colorado Law Review 1; C Pillard, ‘Taking Fiction Seriously: The Strange Case of Public Officials’ Individual Liability Under Bivens’ (1999) 88 Georgetown Law Journal 65. 69 L Duguit (H Laski trans), Law In the Modern State (New York, BW Huebsch, 1919) 200. He also discusses Gierke’s ingenious and fictitious solution: ‘It is urged that the state is a person and the governors are its organs; as such they have no personality distinct from that of the state any more than the organs of an individual have a personality distinct from it. The state wills and acts by its organs; when they will and act it is the state which wills and acts. When they are at fault the fault is committed by and imputed to the state. The state is therefore directly and personally responsible for it’: at 204. 70 See Q Skinner, ‘States and the Freedom of Citizens’ in Q Skinner and B Strath (eds), States and Citizens (Cambridge, CUP, 2003) 11. 71 As Loughlin acknowledges in The Idea of Public Law: Loughlin, above n 11, at 162–63. 68

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construct a framework for official liability we need to explain the link between the peoples’ will and the enabling and disabling parts of the constitution. Dicey saw this. His solution was to enable the sovereign by giving it (Parliament) ultimate legal power but not ultimate political power. He withheld from acknowledging the state qua state as far as legal liability was concerned but not where political responsibility was concerned. The dual spheres of public opinion72 and constitutional convention incorporate the peoples’ will and moderate the legal position. Ultimately it would be political responsibility that mattered. In this way he too is attempting to give primacy to the political nature of ‘public law broadly conceived’. At the same time he effectively links the peoples’ will with both the enabling and disabling parts of the constitution. In this respect his is a more politically sophisticated framework than is often credited. This connection between the enabling and disabling parts of the constitutions is missing in Hobbes, at least in the way that Loughlin reads him. Hobbes joins the sovereign’s will with the people’s will in a way that creates a potential barrier against the people bringing an action against the sovereign whom they have authorised. In order to construct a distinctly public law system of responsibility and liability that allows a place for the state as an abstract entity within a Hobbesian framework we have to either explore some of the ideas in Hobbes about justification, already mentioned, or to reject an important part of Hobbes’ theory. Loughlin himself appears in his later work to have taken the later course. Hobbes would deny the people any residual sovereignty. On this particular point, in The Idea of Public Law he adopts the work of Abbé Sieyes to the opposite effect in order to acknowledge the power of the people to ‘renew its governing arrangements’.73 The issue of official liability does not appear to have been advanced very far by any particular political theory or political theory generally. Indeed, so far as the legal responsibility of the state is concerned, contemporary political theory appears to be struggling as much as legal theory to give meaning to political practice. We face new challenges that arise out of: the expansion of political notions of state responsibility at both domestic and international law and the reduction (or not)74 of respective immunities;

72 ‘Public opinion’ or the ‘sense of the people’ were expressions used at least since 1731: Gunn, above n 52, at 122. 73 Loughlin, above n 11, at 158. Loughlin acknowledges the tension between the enabling and disabling parts of the Constitution and draws upon Oakeshott’s conceptual framework to explain the problem: at 154. He suggests there is a tension between the idea of state as universitas and the state as societas: between conceiving the state’s relationship with the citizen as that of a paternalistic superior striving to maximise community well-being; and the state as societas – where the autonomy of the citizen is emphasised. 74 This was partly the problem in R v Bow Street Metropolitan Stipendiary Magistrate, ex p Pinochet Ugarte (no 3) [2000] 1 AC 147.

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questions about how to redress historic wrongs; and an emerging new human rights jurisprudence that purports to re-conceive the nature of an individual’s claims against the state. Political theory is sometimes very helpful in diagnosing the nature of these problems: As Loughlin puts it: The constitutionalization of rights not only perforates the boundary between the legal and the political but also elevates law into a framework for reviewing all government action.75

Where should we look in terms of political theory or more broadly ‘political discourse’ in order to find resources through which to construct a proper response? Take, for example, the question ‘who should enjoy rights against the state?’ Schmitt may have a lot to say about the friend/enemy distinction. Kant and the cosmopolitans may argue to the contrary that we bear rights as humans rather than citizens.76 But it was the Convention relating to the Status of Refugees77 that gave M, the subject of the illegality in the M v Home Office case, rights against the organs of the UK state. His was not a case of a citizen claiming rights against his own state but a more complicated scenario than any that certainly Hobbes or Schmitt could have contemplated. Moving from the question of who may enjoy rights against the state to which entities owe such rights we also find that political theory is not necessarily helpful in constructing abstract entities which owe responsibilities to citizens. Indeed, some elements of modern practice too – in seeking to hold heads of state personally and criminally liable – tend in the opposite direction. In terms of what responsibilities states qua states ought to owe to their citizens, many of the modern theorists (like the legal theorists) have tended to argue about collective responsibility by analogy to individual responsibility and themselves tend to disregard the distinctiveness of ‘the public’ or collective. Peter Cane refers to this as the dominance of the ‘individual responsibility paradigm’.78 This may also partly be due to other modern disciplinary divisions between political and moral philosophy. There are, indeed, other areas of intellectual endeavour bogged down in categorical distinctions and with an instinctive dislike of abstract entities.

75

Loughlin, above n 11, at 162. See further the different strands of cosmopolitanism in MD Walters, ‘The Common Law Constitution and Legal Cosmopolitanism’ in D Dyzenhaus (ed), The Unity of Public Law (Oxford, Hart Publishing, 2004) 431. 77 Opened for signature 28 July 1951, 189 UNTS 137 (entered into force 22 April 1954). 78 P Cane, Responsibility in Law and Morality (Oxford, Hart Publishing, 2002) fn 143. Cane singles out Philip Pettit as a modern exception. Pettit explicitly engages in arguments about the rationality and responsibility of collectivities: at 165–68. 76

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In short, political theory is not a monolith. There is no single political theory which can inform our public law.79 In choosing to hold officials personally liable and not extending Crown immunity to them (as was sometimes historically the case) Wade, like Loughlin, is making political choices too. It would be wrong to claim that what we have traditionally regarded as public law (however imperfect it may be) is not itself the product of political theory. And, as often as not, practice precedes a fully articulated theory. Political theory does not always help us to respond to the new doctrinal problems: that, indeed, may be one of the great challenges for contemporary public law.

VI THE CROWN AS DISTRACTION? OTHER HELPFUL RESOURCES FOR PUBLIC LAW

Aronson and his co-authors suggest that other disciplines may also be helpful in understanding public law. I agree. In these new uncharted waters it may be that we need all the help that we can get. Another place to seek answers to questions about responsibility and liability would be to begin where the common law has traditionally always begun – with remedies. What incentives do they create both in political and in organisational terms? Lord Woolf begins to do this, although not in an altogether convincing way, in M v Home Office when he considers whether contempt of court is capable of operating as anything other than a ‘personal and punitive’ remedy.80 He suggests that contempt proceedings against a government department or minister acting in an official capacity would ‘not be either personal or punitive’.81 The fact of a finding ‘would vindicate the requirements of justice’.82 There would be no need to punish. He seems to envisage that this sort of remedy is appropriate to apply to an abstract entity. He stops short of asking crucial questions – how personal does the order need to be in order to stop the illegality from happening again? At which level of the organisation ought the remedial order to be levelled?

79 Indeed, Loughlin explicitly acknowledges this in Public Law and Political Theory (Oxford, Clarendon Press, 1992) where he provides us with a theoretical taxonomy of public law. 80 M v Home Office [1994] 1 AC 377, 424–5. Carol Harlow criticises Lord Woolf’s admission that ‘the Crown’s relationship with the courts does not depend on coercion and in the exceptional situation, when a government department’s conduct justifies this, a finding of contempt should suffice’ as undercutting his fundamental premise and resulting in a ‘mandatory model of judicial review that cannot be enforced’: see Harlow, above n 10, at 623. 81 M v Home Office [1994] 1 AC 377, 424–5. 82 Ibid.

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These issues were raised sharply in the Scottish case of Beggs v Scottish Ministers.83 Beggs arose out of obligations contained in articles 6 and 8 of the European Convention on Human Rights (‘ECHR’) entered into by the Crown in right of Her Majesty’s Government in the United Kingdom. Section 57(2) of the Scotland Act 1998 (‘Scotland Act’) restricts the powers of the ‘Scottish Ministers’ to do any act that is incompatible with ECHR rights. These obligations were found to have been breached by the repeated opening of a prisoner’s legal correspondence at Her Majesty’s Prison at Peterhead. After a series of infringements, the ‘Scottish Ministers’, via officials, gave certain undertakings to court to ensure that the prisoner’s privacy would be respected. The Court of Session found that the breach of undertakings was the result of systemic problems.84 It heard that after the undertakings had been given, the Governor of the HM Prison Peterhead briefed his management team but did not disseminate its terms. He commissioned a full review of procedures for handling mail, but without informing the person who carried out the review of the terms of the undertaking. He approved and instituted the consequent revised process when ‘it did not properly reflect the terms of the undertaking’85 or the relevant Scottish Prison Service circular relating to prisoner correspondence. It was ‘therefore liable to give rise to confusion and error on the part of prison officers who were to operate it’.86 The Court of Session heard that on the day of the breach the usual mail administrator was on annual leave and two others of the administration team were on sick leave. The relevant mail was not identified as privileged mail nor was it stamped ‘legal correspondence’. The court found that neither the residential officer [who opened the mail] nor the residential manager was aware of the undertaking or properly understood the procedure applicable to correspondence from the [Complaints Commissioner].87

It was not any of these parties whom the minuter (claimant) named in the contempt of court pleading but rather the ‘Scottish Ministers’ in whose name the undertakings had been made. More than that, the minuter requested that the Scottish Ministers personally attend the formal making of the order for contempt. Effectively it was an attempt to force the Scottish Ministers collectively and personally to take legal responsibility for breaches committed by civil servants. The aim was presumably to maximise political embarrassment. The Court of Session had found (almost as an afterthought): 83

[2007] UKHL 3 (‘Beggs’). Beggs v Scottish Ministers (2005) SC 342 (Court of Session Inner House First Division). 85 Ibid [48]. 86 Ibid. 87 Ibid [14]. 84

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[t]here was nothing to show that the respondents themselves had taken any action or interest in the matter, which had been left to local management.88

What kind of remedy ought to be available and against whom? The case appears to squarely raise issues about the corporate nature of the Crown. In particular it raises the question of whether the ‘Scottish Ministers’ are the equivalent of the Crown in Scotland in matters of devolved competence. If so, Wade’s dichotomy between the Crown represented by the natural person of the Queen on the one hand, and ministers and other officials on the other, breaks down. Moreover, if the ‘Scottish Ministers’ do represent the Crown as a corporation aggregate, then the arguments in M v Home Office need to be revisited and expanded to consider whether prerogative orders can lie against the Crown itself, as well as its servants. ‘[T]he Scottish Ministers’ is defined in the Scotland Act as the ‘members of the Scottish Executive … referred to collectively’.89 On the face of it, it appears to break the constitutional silence by naming the Scottish version of Bagehot’s ‘efficient secret of the constitution’ and giving it a collective recognition distinct from other servants and individual officers of Her Majesty. The Scotland Act transfers functions to the Scottish Ministers collectively in areas of devolved competence, whether they have been conferred on Ministers of the Crown by statute or the prerogative and including those ‘exercisable on behalf of Her Majesty by a Minister of the Crown’. The Scotland Act, then, is capable of being read as going some way towards updating conceptions of the Crown to represent ‘political reality’.90 The courts, insofar as they have been prepared to discuss it, have rejected such a reading. The issue was initially raised by counsel in Davidson v Scottish Ministers91 (heard around the same time as Beggs). The minuter in that case was seeking an order for specific performance, namely a transfer to another prison with better (ECHR-compliant) conditions. The legal issue was whether such a coercive order was available against the Scottish Ministers given section 21(2) of the Crown Proceeding Act which prevents orders for specific performance being made against the Crown or against officers of the Crown. Officers of the Crown are defined in section 38(2) to include ‘a member of the Scottish executive’; the Crown Proceedings Act, however, does not use the term ‘the Scottish Ministers’. 88

Ibid [48]. Scotland Act 1998 s 44(2). 90 When the Scotland Act 1998 means to refer to the Queen it tends to refer to ‘Her Majesty’. See, eg, ss 45(1), 45(2) and 47(1). When it wishes to distinguish as separate entities the Scottish Government and the UK Government it refers to ‘the Crown in right of the Scottish Administration’ and to ‘the Crown in right of Her Majesty’s Government’ in the United Kingdom respectively: s 99. 91 2006 SC 41 (HL) (‘Davidson’). 89

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The House of Lords in Davidson overturned the Scottish case of McDonald v Secretary of State for Scotland92 in order to extend to Scotland the approach adopted in M v Home Office93, namely that section 21 of the Crown Proceedings Act does not apply to judicial review causes of action at all. Judicial review proceedings are not ‘civil proceedings’ for the purposes of the Crown Proceedings Act now in either jurisdiction.94 In so doing, it avoided squarely confronting the issue of whether the term ‘Scottish Ministers’ is the equivalent of the Crown for matters in devolved competence or whether ‘Scottish Ministers’ refers to an abstract entity rather than a collection of individuals. The Court of Session, hearing Beggs before Davidson had been decided in the House of Lords, had formed the view that proceedings against the Ministers collectively were not proceedings against the Crown, whether or not M v Home Office applied to Scotland or McDonald had been correctly decided.95 The question was expected to be argued fully in the House of Lords in Beggs in light of the House of Lords’ judgment in Davidson. But by the time the case reached the House of Lords the Ministers were no longer pursuing their appeal on the question of whether the ministers could be held in contempt and, though they requested an opportunity for clarification on the point of law, counsel for the respondent objected that his client no longer had an interest in the matter.96 Without the benefit of oral argument from both sides, and strictly in obiter, Lord Rodger suggested that ‘Scottish Ministers’ are to be in the same position as UK ministers of the Crown and that, in respect of matters within devolved competence, the Scottish Ministers are in the same position as the Secretary of State for Scotland before devolution.97 In side-stepping these issues, the House of Lords provides us with another example of the persistence of constitutional silence. That is not only the product of the accidents of litigation – though these should not be underestimated when considering the distinctive nature of public law discourse. Neither should that silence be taken to indicate the absence of politics. Lord Rodger’s obiter statements could also be seen as part of a more general approach (especially on the part of the Scottish Law Lords, Lords Hope and Rodger) that tends to limit the political and legal 92

1994 SC 234. [1994] 1 AC 377. 94 The Scottish Court of Session had declined to follow M v Home Office in McDonald v Secretary of State for Scotland (1994) SC 236, 239. See further A Tomkins, ‘The Crown in Scots Law’ in A McHarg and T Mullen (ed), Public Law in Scotland (Edinburgh, Avizandum, 2006). 95 [2007] UKHL 3 [24]. The court said ‘it is erroneous to regard proceedings against them in respect of any of those functions as proceedings against the Crown itself’. 96 Ibid [28]–[30]. 97 Ibid [32]. He suggests something similar later in Somerville v Scottish Ministers [2007] UKHL 44 [96]. 93

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significance of Scottish devolution and emphasise the ‘non-sovereign’ nature of the Scottish Parliament and Government. A distinctive Scottish ‘Crown’ located in the Scottish Ministers collectively would potentially threaten this limited view. Leaving aside the Scottish question, however, acceptance of the view that the availability of judicial review remedies are not affected by section 21 of the Crown Proceedings Act does achieve something of significance to the wider public law endeavour. It asserts the independence of public law and its remedies from private law causes of action. If that is the fundamental a priori distinction that needs to be maintained, then focusing on the nature of the Crown may prove to be a distraction.98 This approach assists the view that public law is distinct and need not develop by analogy to private law causes of action. To return to the point that was left in contention in Beggs itself, given that a contempt order is available, how should it be fashioned? The practical issue was who should personally attend the formal finding of contempt in open court. An obvious point is that if Lord Woolf is correct to say in M v Home Office that contempt of court is neither a personal nor punitive remedy then there is no reason why the Scottish Ministers should necessarily attend personally at all whether or not they represent a collection of individuals or an abstract entity. If not them, who? The Court of Session found the Scottish Ministers in contempt of court but did not accede to the minuter’s request that the Scottish Ministers should attend personally at the formal finding in open court. Instead, it ordered the attendance of the Chief Executive of the Scottish Prison Service and the Governor in charge of HMP Prison Peterhead as representing the alter ego of the respondents. The Scottish Ministers appealed. Lord Rodger wrote the leading opinion in the House of Lords. Relying on the Carltona doctrine, he agreed that it was competent for a court to order a senior civil servant to attend court to represent the Ministers in a proceeding for contempt of court: civil servants could be the Ministers’ alter ego for these purposes.99 Nevertheless, proper notification to the Governor of Peterhead and the Chief Executive of the Scottish Prison Service had not been given in this case.

(Given that the civil servants had been closely involved throughout the case it seems, perhaps, that they were considered to be alter egos for some purposes but not for others.)

98 A point of contention in Davidson and McDonald was of course that in Scots law public law proceedings are not separate from civil proceedings. See Tomkins, above n 94. 99 Note the elision here: the Carltona doctrine was about the delegation of a single minister’s powers, not of the powers of ministers held collectively.

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Lord Hope accepts, moreover, that civil servants may sometimes be held in contempt of court ‘for their own actions’. The Lords enlarged on this point in Somerville v Scottish Ministers (yet another prisoners’ case, this time concerned with whether segregation practices were in breach of the ECHR and the Human Rights Act 1998).100 They unanimously agreed that a prison governor (however loosely defined) may sometimes be acting in his own independent capacity in discharging a function given to him as governor. In such cases the governor is ‘not a mere servant or alter ego’ of the Scottish Ministers but rather an officer performing statutory duties and not subject to the direction and control of or answerable to ministers.101 These issues were argued in the absence of established facts but one can imagine a number of instances especially in the prison context in which the dispute may depend on just the question of whether the impugned actions are those to which Carltona principles apply. A decision to characterise the Crown as a corporation aggregate rather than sole does not bring us much closer to resolving the difficult doctrinal issues raised when seeking to hold government responsible in the Beggs or Somerville kind of case. Controversies surrounding the Crown may, indeed, distract us from other very real aspects of the problem – for which public law also needs help from other sources to resolve. If one were to regard Scottish Ministers as a fictional collective entity and the finding of contempt of court as neither necessarily punitive or personal then it is a relatively open question who it is that is able to represent the Scottish Ministers in a court proceeding. Ministerial responsibility (such as it is) applies regardless of who personally attends the court. The real question is, who should be required to attend the hearing in order to maximise both the normative (or justice vindicating) and the practical and deterrent impacts of the finding. The answer is not at all obvious. Despite the assumptions in Lord Hope’s judgment, there is no real prospect that the civil servants in Somerville were working under the direction or control of the Scottish Ministers in anything but the most general and least meaningful sense. There was no suggestion either that the Ministers’ closer involvement would have improved things or that they were in any way to ‘blame’. Answering the questions I have posed involves not only working out as a descriptive matter what actually happens in complex political organisations (how do they internalise human rights norms? which cost and benefits do they internalise?), it may also be 100

[2007] UKHL 44 (‘Somerville’). Ibid [140] (Lord Rodger). The case had a rather bizarre result. Lords Hope, Rodger and Scott reasoned that actions of the Scottish Ministers in breach of the ECHR are outside competence and can give rise to a damages claim under the Scotland Act 1998 that is not subject to the one year time bar under Human Rights Act 1998 s 7(5) (Lord Mance disagreed on this point). However, challenges to the acts of a prisoner governor performed as part of his independent functions would be subject to the time bar. 101

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assisted by understanding the psychological factors that influence behaviour of political and bureaucratic actors respectively. In order to do that we need to know a lot more than the courts currently do about the theory and practice of public management. We may also want to draw (with appropriate caution102) on insights from companies and other forms of enterprise organisation. What are the incentives on politicians and managers to ensure that they comply with the law? How do they, and should they, react to legal risks?

VII CONCLUSION

In this article I have argued that political theory is indeed important to public law. Rather than treating public law as constituting an extension of political discourse, however, I characterise it as containing its own political pre-commitments – as itself representing a political theory of its own. That is not to say that public law is an autonomous discipline, but rather that it is sometimes open to external political discourses and at others is quite resistant. The dispute between Wade and Loughlin over M v Home Office is not so much a methodological dispute about whether lawyers ought to have regard to political theory but a substantive dispute about which theory or theories they ought to embrace. Issues about how to hold the state responsible as an abstract entity raise difficult and sometimes new issues. Political theory only takes us so far. We need the help of a range of disciplines to construct a system of state liability. To paraphrase Aronson et al, ‘if this makes me a positivist I suggest that the insult is used much too freely’.103

102 There is a vast US literature on this, often informed by the insights of law and economics: see, eg, DJ Levinson, ‘Making Government Pay: Markets, Politics, and the Allocation of Constitutional Costs’ (2000) 67 University of Chicago Law Review 345. 103 Aronson, Dyer and Groves, above n 1, at 7.

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8 Common Law Price Control, State-Owned Enterprises and The Level Playing Field MICHAEL TAGGART * I INTRODUCTION

T

HE IDEA FOR this Festschrift matured at one of the innovative and stimulating Advanced Administrative Law courses Mark Aronson and Carol Harlow have run at the University of New South Wales in recent years, and to which I have been privileged to contribute. On the last occasion, Mark asked me – with that mischievous twinkle in his eye – to speak on the topic of common law romanticism. I took as my texts a difference of view he and I have had for some time, and a series of cases where ancient common law doctrines were invoked to deal with issues as diverse as combating racial discrimination, unreasonable pricing of public utility services and access to entertainment venues.1 This seems a good topic to offer up in tribute to a fine scholar and good friend.2 One of the hallmarks of Mark Aronson’s scholarship is the analytical rigour and realism he brings to bear on administrative law issues. His starting point is a degree of scepticism as to what judges on judicial review can actually, and desirably, achieve. This can be seen in the important and oft-cited paper he wrote for a conference I organised on The Province of Administrative Law.3 He made two related points in that paper, and it is the second one that I want to take up here. * Thanks, with the usual disclaimer, to Barry Barton, Peter Cane, Janet McLean and Peter Watts for helpful comments. 1 M Aronson, ‘A Public Lawyer’s Response to Privatisation and Outsourcing’ in M Taggart (ed), The Province of Administrative Law (Oxford, Hart Publishing, 1997) 40, 48–50, disputing an aspect of M Taggart, ‘Public Utilities and Public Law’ in PA Joseph (ed), Essays on the Constitution (Wellington, Brooker’s, 1995) 214. 2 See further M Taggart, ‘Mark Aronson: An Appreciation’ (2006) 50 Australian Institute of Administrative Law Forum 10. 3 Aronson, above n 1.

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The first point was that administrative lawyers (like me, amongst others) who wished to look to the courts as conservators of public law values in the era of privatisation ‘were looking for love in all the wrong places’.4 The extension of judicial review to the privatised, corporatised and contracted out world – via Datafin5 – was a doomed enterprise.6 He pronounced ‘the Datafin project’ a failure. It was not viable, it presented too many problems for too little reward, was unpredictable, and even if successful on occasion the protection given would be minimal.7 The second point took me specifically to task for advocating that the courts invoke ancient common law doctrine to control unreasonable monopoly pricing by corporatised and privatised public utilities. Mark’s view was that these disputes were not justiciable and that the courts would avoid them ‘like the plague’.8 And, as we will see, initially he was proved right. But there is more to this story than is generally known. In a subsequent line of cases New Zealand courts were prepared to determine a reasonable price by way of quantum meruit and so did not dodge these difficult issues after all. This tells us something important about the public/private law divide. It is necessary to enter the caveat that I am not discussing the contemporary law relating to price control or regulation of State-Owned Enterprises (SOEs) or public utilities in New Zealand. The regulatory scene has changed considerably since the cases discussed here were litigated. From the mid 1980s to the late 1990s – when the cases I discuss arose – New Zealand had one of the least regulated public utilities sectors in the world. Since then the political worm has turned and re-regulation and quite heavy-handed enforcement are the order of the day in New Zealand. That is not my concern here.

II COMMON LAW PRICE CONTROL

Common law price regulation or control antedates the development of the modern public/private law divide and modern categories of legal liability. It

4

From the song ‘Lookin’ for Love’ by Waylon Jennings. R v Panel on Take-overs & Mergers, ex p Datafin plc [1987] 1 QB 815 (CA). 6 In this he has the support of, amongst others, Gunther Teubner, who describes the strategy of imposing public law values on private law as ‘the new compensatory political justice’, which he rejects in favour of a strategy of polycontexturality. See G Teubner, ‘After Privatization? The Many Autonomies of Private Law’ (1998) 51 Current Legal Problems 393, 394. 7 Aronson, above n 1, at 45–8. Recently, he seems to have had a change of heart: see M. Aronson, B Dyer and M Groves, Judicial Review of Administrative Action, 3rd edn (Sydney, LawBook Co, 2004) 127–32. 8 Aronson, above n 1, at 48. 5

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can be traced to the ‘just price’ doctrine in the Middle Ages9 and has come down to modern times in two, possibly three, forms: (1) the doctrine of businesses affected with a public interest which, according to the great antiquarian lawyer Sir Matthew Hale, meant that such businesses could no longer charge what prices they liked; (2) those ‘common callings’ prohibited by both civil and criminal law from charging unreasonable prices; and (3) those prime necessities which if supplied had to be paid for at a reasonable price. By modern lights, (1) can be seen as arising either from private law or public law,10 (2) is seen as an exceptional case within private law,11 and (3) is seen as arising either sui generis or from private law as an aspect of quasi-contract or restitution. All three have interesting relationships with contract: (1) applies irrespective of whether there is a contract between the parties;12 (2) is ex contractu: money paid beyond what is adjudged reasonable is recoverable as money had and received13 and quantum meruit is available for reasonable charges unpaid;14 as regards (3), quasi-contract has now come out of contract’s shadow and is recognised today as an independent basis of legal liability known as restitution.15 In my 1995 essay on ‘Public Utilities and Public Law’ – that our honorand reacted to – I traced the historical development of these clearly intertwined doctrines, and proposed: (i) that the common law of New Zealand recognised a doctrine that imposes duties of supply without discrimination and at a reasonable price on public utility service providers whatever their legal form or ownership; and (ii) that as long as these public utility providers exercised a practical monopoly the courts should apply 9 See JW Baldwin, ‘The Medieval Theories of the Just Price: Romanists, Canonists, and Theologians in the Twelfth and Thirteenth Centuries’ (1959) 49(4) Transactions of the American Philosophical Society, new series 5; SA Epstein, ‘The theory and practice of the just price’ (1991) 17 Journal of Medieval History 53; D Gerber, ‘Prometheus Born: The High Middle Ages and the Relationship between Law and Economic Policy’ (1994) 38 Saint Louis University Law Journal 673. 10 It was treated by counsel and court alike as a private law cause of action in Sky City Auckland Ltd v Wu [2002] 3 NZLR 621 [4] (CA, Blanchard and Anderson JJ). See also Jones v Sky City Auckland Ltd [2004] 1 NZLR 192 [9] (CA, Keith J). In his day (circa 1670), Sir Matthew Hale saw the doctrine as part of jus publicium. The passage can be found in the collection of Hale’s manuscripts published by Francis Hargrave as A Collection of Tracts relative to the Law of England from Manuscripts (Dublin, 1786) 77–8. 11 T Weir, ‘Discrimination in Private Law’ [1966] Cambridge Law Journal 165, 167. 12 Chastain v British Columbia Hydro & Power Authority (1972) 32 DLR (3d) 443 (BC Supreme Court) 458 (McIntyre J). 13 HG Beale (gen ed), Chitty on Contracts: Specific Contracts, 29th edn (London, Sweet & Maxwell, 2004) [36–016]; citing Baxendale v London & South Western Railway Co (1866) LR 1 Ex 137; The Directors of the Great Western Railway Co v Sutton (1869) LR 4 HL 226, 237 (Blackburn J). See generally RW Kostal, Law and English Railway Capitalism 1825–1875 (Oxford, Clarendon Press, 1994) ch 5. 14 Lovett v Hobbs (1681) 2 Show KB 127, 129; 89 ER 836, 837. 15 See Lipkin Gorman (a firm) v Karpnale Ltd [1991] 2 AC 548 (HL); Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 (HL).

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this doctrine to control unreasonable pricing or discriminatory treatment notwithstanding the light-handed regulatory framework then in place.16 Both of these propositions were contested in long-running litigation between the biggest players in the electricity sector in the 1990s. Barry Barton has usefully summarised the prevailing conditions in the electricity sector as follows: After the reforms of the late 1980s and early 1990s, say in 1996, the electricity sector was characterised by: a competitive market, no licensing and therefore no barriers to entry, no regulatory agency, no price controls for lines or wholesale or retail sales, Electricity Corporation of New Zealand and Contact Energy as state-owned enterprises, the New Zealand Electricity Market, and, in spite of the reforms, a lack of real competition.17

So the conditions were congenial to arguments about common law price control constraining the otherwise unregulated pricing behaviour of monopolistic SOE generators and transmitters of electricity. The upshot was that the New Zealand Court of Appeal in Vector Ltd v Transpower Ltd18 accepted my first proposition but rejected the second. The court held that this doctrine (which it treated as one doctrine and called prime necessity)19 had been received into New Zealand law upon colonisation in 1840, and that it had been applied numerous times since then and had been affirmed by the Privy Council in a 1919 Canadian decision.20 It was undoubtedly a well-established part of New Zealand common law. But the court went on to hold that this common law doctrine could not sit with the light-handed regulatory environment created by the SOE reforms and particularly the express power of the executive to impose price control in Part IV of the Commerce Act 1996.21 Although the 16

Taggart, above n 1. B Barton, ‘Law, Government, and State: Trends in Energy Law’ (2004) 7 Waikato Law Review 1, 1. 18 [1999] 3 NZLR 646 (‘Vector’). 19 Ibid [51] (Richardson P, Gault, Blanchard and Tipping JJ). For further appellate consideration of the terminology see Sky City Auckland Ltd v Wu [2002] 3 NZLR 621. 20 Minister of Justice for the Dominion of Canada v City of Lévis [1919] AC 505. This is really a quantum meruit case. The government was immune from the local rates that included a water charge, but nevertheless was required to pay a reasonable sum for the water it received from the local authority. The case in the Quebec courts was decided on this basis: Doherty v La Cité de Lévis (1917) 51 Rapports Judiciaires de Québec 267 (Quebec CA). The absence of case law cited by counsel or the Privy Council makes it difficult to trace the origin of the phrase ‘prime necessity’ used in the judgment. It may be relevant to note that before he became a Law Lord (as Lord Parmoor) Sir Charles Cripps specialised in compulsory acquisition, injurious affectation by public works and resultant compensation claims, and he wrote the standard text on these subjects. See Lord Parmoor, A Retrospect: Looking back over a life of more than eighty years (London, William Heinemann Ltd, 1936) 44–50. 21 Vector [1999] 3 NZLR 646, 665–7 (Richardson P, Gault, Blanchard and Tipping JJ). At High Court level, it counted against the continued existence of the doctrine that ‘[n]othing in the Commerce Act 1986 or the State-Owned Enterprises Act 1986 expressly preserves the doctrine’: Mercury Energy Ltd v Transpower New Zealand Ltd (1999) 8 TCLR 554, 583 17

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doctrine was not expressly ousted by any of this legislation, the court held, at least as regards its price control function, that the doctrine was implicitly incompatible with the legislative scheme, and struck out the cause of action relying on the doctrine.22 The majority of the Court of Appeal judges seemed relieved to reach this result. The doctrine was described as ‘a somewhat blunt instrument’ speaking of ‘a bygone age where legislation had a limited role’ and giving no guidance as to how the doctrine is to operate to fix prices in the complex environment of a modern economy and extensive legislative landscape.23

In a separate judgment, Thomas J thought the doctrine could and should be refashioned as a weapon against abuse of monopoly power, but ultimately concurred that it was unsuited to industry-wide price setting. The Court of Appeal treated the doctrine of prime necessity as distinct from an application to judicially review the reasonableness of the pricing; seemingly thereby treating it as a private law doctrine. Indeed, the court criticised Vector’s pleadings for ‘smacking’ of back door judicial review24 in circumstances which would not have satisfied the ‘fraud, corruption or bad faith’ categories imposed by the Privy Council in earlier proceedings between the same parties (albeit with different names).25 In that important case the Privy Council had overruled the New Zealand Court of Appeal holding that SOEs were in principle subject to judicial review but then narrowed the grounds of review to the triplet quoted above. This was not the end of the litigation, however. There remained a second cause of action arising under the Commerce Act 1986 challenging the allegedly unreasonable pricing as an abuse of dominant market position.

(Williams J and Prof Maureen Brunt). This is, of course, a perversion of the common law method of interpreting legislation that affects long-established common law rights. 22 This decision was applied in relation to water supply in Galdwin v Metrowater Ltd (unreported, Court of Appeal, 11/00, 4 July 2000) affirming Metrowater Ltd v Gladwin (2000) 6 NZBLC 102, 966 (HC) (Salmon J), and was used to rebuff an attempt to force a lessor to accept a reasonable rental by a lessee of port-related facilities in Pacifica Shipping (1985) Ltd v Centre Port Ltd [2003] 1 NZLR 433 (CA). 23 Vector [1999] 3 NZLR 646 [51] (Richardson P, Gault, Blanchard and Tipping JJ). For a convincing critique see J Doolan, ‘Sharpening a Blunt Instrument: Is there a role for the doctrine of prime necessities after Vector v Transpower?’ (unpublished LLB (Hons) dissertation, University of Auckland, 1999); J McLean, ‘The Ordinary Law of Tort and Contract and the New Public Management’ (2001) 30 Common Law World Law Review 387, 404–9. Cf J Kirby, ‘“Prime Necessity” Not Necessary’ [2000] New Zealand Law Journal 11. 24 Ibid [65] (Richardson P, Gault, Blanchard and Tipping JJ). Contrast the concurring judgment of Thomas J at [85]. 25 Mercury Energy Ltd v Electricity Corp of New Zealand Ltd [1994] 2 NZLR 385, 389 (Lord Templeman). For discussion of this litigation at its various stages see M Taggart, ‘State-Owned Enterprises and Social Responsibility: A Contradiction in Terms?’ [1993] New Zealand Recent Law Review 343; M Taggart, ‘Corporatisation, Contracting and the Courts’ [1994] Public Law 351; J McLean,’Contracting in the Corporatised and Privatised Environment’ (1996) 7 Public Law Review 223.

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Transpower had sought to strike out this cause of action as well, but the High Court had directed that it was to be re-pleaded by Vector, before the strike out application could be determined, and this had not been done before the Court of Appeal had determined Vector’s appeal from the striking out of the first, common law price control, cause of action. Surprisingly in light of what the Court of Appeal had to say about the common law doctrine pleadings smacking of back door judicial review, Vector took advantage of this opportunity to re-plead to introduce a cause of action seeking judicial review of the transmission pricing on the administrative law grounds of illegality, unfairness, breach of legitimate expectation and unreasonableness. Transpower moved to strike out this judicial review proceeding and the High Court obliged, striking out also the now re-pleaded Commerce Act claim.26 The High Court said judicial review of pricing would involve lengthy, complicated price-fixing proceedings more appropriately addressed in other fora. There is a heavy emphasis in these decisions on the idea that judicial intervention in either public law or private law would frustrate Parliament’s desire evident in the SOE and Commerce Acts for a ‘light-handed regulatory’ regime. Price control through the courts was said to be a form of State intervention.27 The point, unfortunately lost on the judges, is that light-handed regulation described the expected role of politicians, not that of the courts. The intentional absence of a formal regulatory structure for public utilities and other corporatised entities (during the period I am concerned with) inevitably directed contested issues to the courts,28 an inevitable consequence of the ‘light-handed’ regulatory model adopted.29 26 Vector Ltd v Transpower New Zealand Ltd, High Court Auckland, CL 1/98, 17 August 2000, (Williams J and Prof Maureen Brunt). At the outset Vector (then called Mercury Energy) objected to Transpower’s application for appointment of a lay member to the High Court to consider the latter’s strike out application, but this was overruled: Mercury Energy Ltd v Transpower New Zealand Ltd, High Court, Auckland, CL 1/98, 24 July 1998 (Fisher J). Vector’s instincts were right. The mixture of a strong-minded (and distinguished) Australian economist and a conservative judge on judicial review was a potent one. On Professor Brunt, see M Richardson and P Williams (eds), The Law and the Market (Annandale, Federation Press, 1995) (a hidden Festschrift); on Justice Williams’ conservatism in judicial review see, eg, Pacific Towing Ltd v Ports of Auckland Ltd (High Court, Auckland, CL 13/97, 7 August 1997). It is worth noting that Australian law effectively repudiated the common law doctrine in Bennett & Fisher Ltd v The Electricity Trust of South Australia (1961–62) 106 CLR 492, 500–01 (Dixon CJ); criticised in Taggart, above n 1, at 250–54. 27 Vector [1999] 3 NZLR 646 [62]. 28 T Arnold summarised the ‘light-handed’ approach as a preference for ‘[n]egotiated solutions … to solutions imposed by the regulatory process’: ‘The Courts and the Pricing of Access to Essential Facilities – The “Old” Law and Economics at Work?’ (1995) 1 New Zealand Business Law Quarterly 123, 124. Of course, if push came to shove in that process the courts are there. 29 For insight into the intellectual history of the neo-liberal economic reforms introduced by the Fourth Labour Government (1984–90) see B Easton, ‘From Reaganomonics to Rogernomics’ in A Bollard (ed), The Influence of US Economics on New Zealand: The Fulbright Anniversary Seminars (Wellington, NZIER Research Monograph 42, 1989) 69; B

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It is important also to note the trend in this litigation. The circle of implicit exclusion of the courts is ever widening. First, the Court of Appeal in Vector deprived the customers of monopolists of the benefit of the well-established common law rule against unreasonable pricing on the basis of implied legislative intent. In the subsequent continued litigation the High Court took away the well-established right to challenge pricing and pricing methodology by way of judicial review;30 once again this was said to be implicit in the SOE scheme of things. As we will see, these pricing disputes did not end there. They continued in private law garb when doubts were raised about the validity of the take-it-or-leave-it contracts with the consequent possibility of price setting pursuant to quantum meruit/restitution. Having run ‘like the plague’31 from common law price control by way of judicial review or the common law doctrine of prime necessity in Vector – as our honorand had predicted – what would the courts do when confronted by price fixing in the private law context? However, before examining these cases it is important to set the scene both historically and in relation to the SOE reforms.

III FROM STATUTE TO CONTRACT?

The courts have been markedly reluctant over a long period to view public services provided under a statutory duty as supplied under an enforceable contract. There is a line of English cases dating from the late 19th century concerning unsuccessful attempts by dissatisfied customers to establish a contract where the public utility was under a statutory duty to supply gas, water or electricity and failed to do so adequately.32 In the early cases, Easton, ‘Economic and other ideas behind the New Zealand reforms’ (1994) 10(3) Oxford Review of Economic Policy 78; J Boston and others, Public Management: The New Zealand Model (Auckland, OUP, 1996) ch 2. 30 Surprisingly absent is any consideration of the hitherto leading cases on judicial review of price setting or asset valuation, which is a well-established feature of administrative law in New Zealand. For further discussion and reference to case law see M Taggart, ‘Administrative Law’ [2000] New Zealand Law Review 439, 450–5. 31 Aronson, above n 8, at 48. 32 Clegg, Parkinson & Co v Earby Gas Co [1896] 1 QB 592 (QB) (‘Clegg’); Stevens v Aldershot Gas, Water & District Lightening Co (now Mid-Southern District Utility Co) (1933) 102 LJKB 12 (KB); Read v Croydon Corp [1938] 4 All ER 631 (DC) (‘Read’); Willmore & Willmore (trading as Lissenden Poultry) v South Eastern Electricity Board [1957] 2 Lloyd’s List LR 375, 380 (QB); Scottish Gas Board v Fisher, 1960 Scots Law Times 51 (Sheriff Court); Pfizer Corp v Ministry of Health [1965] AC 512, 535–6 (Lord Reid); 544–5 (Lord Evershed); 548 (Lord Pearce); 552–3 (Lord Upjohn); and 571 (Lord Wilberforce). See Halsbury’s Laws of England, 4th edn (London, Butterworths, 1999) vol 19(1), [618]. The position is the same in Canada: St Lawrence Rendering Co Ltd v Cornwall [1951] 4 DLR 790, 804 (Ontario HC); Clarkson Co Ltd v Greater Winnipeg Gas Co (1987) 37 DLR (4th) 344, 353 (Manitoba CA).

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policy lay close to the surface. ‘When large numbers of people are supplied with gas’, Wills J said in 1896, ‘the undertakers might speedily be ruined if any one could bring an action of this kind against them’.33 Later cases put more stress on the absence of the ordinary indicia of contract. In 1938, Stable J pointed out the statutory duty to supply and the obligation to pay a fixed water rate, and continued: In my judgment, such a relationship, although the rights and obligations may be created thereunder similar to, or identical with, rights which may be created by contract, is not a contractual relationship, but a relationship between two persons under which one is bound to supply water, and the other, provided he has paid the equivalent rate, is entitled to receive it, these obligations being throughout the creation of statute.34

A little later, Stable J spoke of ‘a relationship forced on two persons by Act of Parliament’.35 In the United Kingdom, when most public utilities were privatised, statutory duties to supply remained in place and the above-discussed law still applies.36 It was otherwise in New Zealand, where the demise of statutorily created territorial monopolies in various public utility sectors spelt the end of statutory duties to supply. In New Zealand, the new relationships between SOE utility providers and customers were to be contractual, rather than (in the words of Stable J in Read) ‘forced’ on the parties by statute. This shift from ‘statute to contract’ (with apologies to Sir Henry Maine) was an almost invariable feature of corporatisation in New Zealand.37 In the private law model, the paradigm is that parties freely enter into contracts on mutually acceptable terms. For decades, if not centuries, this has not always or even often represented reality. Many customers buy goods and services on standard terms that will not be altered at the behest of the customer. These are, effectively, take-it-or-leave-it contracts. Most contract law theorists do not see this reality undermining the liberal conception of contracting.38 The customer does not have a gun to her head – the act of contracting or assenting is conceived of as voluntary. The 33

Clegg [1896] 1 QB 592, 594. Read (1938) 4 All ER 631 (DC) 648. 35 Ibid 649. 36 See I Harden, The Contracting State (Buckingham, Open University Press, 1992) 38–41; P McAuslan and J McEldowney, ‘Towards a Legal Framework for a Privatized Electricity Supply Industry: The Input from Public Utilities Law’ (1988) 9 Urban Law & Policy 165, 195–6. 37 See M Taggart, ‘Corporatisation, Privatisation and Public Law’ (1991) 2 Public Law Review 77, 95–6, 106; P Cane, ‘Accountability and the Public/Private Distinction’ in N Bamforth and P Leyland (eds), Public Law in the Multi-Layered Constitution (Oxford, Hart Publishing, 2003) 247, 257. 38 See, eg, B Coote, ‘Common Forms, Consideration and Contract Doctrine’ (1999) 14 Journal of Contract Law 116. 34

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general rule is that there is no duty on either side to deal or contract.39 The freedom to contract entails both the freedom not to contract and the unfreedom not to be contracted with.40 In the private sector when a customer steadfastly refuses to agree to pay for the service at a price or on other terms acceptable to the supplier41 there is a parting of the ways. Some of the ‘new’ customers of the newly corporatised SOEs were extremely unhappy with the terms proffered by the SOEs in the ‘new’ contracts, especially the price terms, and resolutely refused to consent to those terms. Some of these customers were so situated that it was not politically possible for the SOE to withdraw the service or supply in the face of the customer’s refusal to accede to the proffered (often described as ‘posted’) terms. This is what happened in the two cases examined below, one involving corporatised airport control services and the other electricity transmission charges.

IV AIRPORTS, USER PAYS AND PROTESTS

Prior to 1987, a central government department provided airport control services and aircraft operators paid charges for those services set out in delegated legislation. The provider of these services within the Ministry of Transport was ‘corporatised’ in 1986 and emerged as the Airways Corporation of New Zealand (‘Airways Corporation’). Airways Corporation was expected to operate on a commercial basis and to set user fees in contracts to be paid by the aircraft operators.42 It had a monopoly over the supply of airport control services at any controlled airport in New Zealand. By law, no aircraft can land at or take off from any controlled airport without obtaining clearance from air traffic control. The pilot is legally required to get clearance on pain of breach of the law. From 1 July 1988, the regulations that had authorised and set the airport control charges were repealed and Airways Corporation was left solely to its own contractual devices to recover the fees. There was a good deal of unhappiness over terms for a period before most of the aircraft operators accepted the new contracts. Some small aircraft operators at Rotorua airport and other controlled airports, however, continued to hold out: rejecting Airways Corporation’s proffered standard form contract and bills 39 Leyland DAF Ltd v Automotive Products Ltd plc [1994] 1 Butterworths Company Law Cases 245 (CA). 40 See generally WH Holmes, ‘The Freedom Not to Contract’ (1986) 60 Tulane Law Review 751; Runyon v McCrary (1976) 427 US 160, 194 (White J, joined by Rehnquist J). 41 Disagreements as to other terms one way or another will almost certainly come back to price: T Sharpe, ‘Refusal to Supply’ (1983) 99 Law Quarterly Review 36, 43. 42 See Federated Farmers of New Zealand (Inc) v New Zealand Post Ltd [1990–92] 3 NZBORR 339 (HC) 366–8 (McGechan J).

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for the services provided, and refused to pay anything at all for Airways Corporation’s airport control services. Airways Corporation eventually lost patience and sued for all the charges that were due under the standard form contract that the operators refused to accept. The small aircraft operators treated this as a test case. Airways Corporation commenced action in debt to recover the unpaid charges in the District Court.43 The trial judge found that the operators had flatly refused to accept the proffered standard form contracts. The only action by which acceptance could be inferred was the requests for clearance for take off and landing required by law. Although the source of the duty was opaque, the District Court Judge held that Airways Corporation was under a legal duty to provide those services.44 It was not necessary on the facts to go on to enquire whether this duty extended to those who refused to pay. Certainly there was no explicit power to refuse clearance on any ground unrelated to safety, such as debt enforcement, or to induce the operator to enter into a contract. Given the degree of hostility on the part of the small aircraft operators perhaps Airways Corporation feared civil disobedience. Civil aviation is a field where international law and treaty law requirements form an influential backdrop, and the District Court Judge commented in passing that it would be surprising if those obligations allowed withdrawal of services for non-payment.45 It was unnecessary to get to the bottom of whether it was a case of unwillingness or legal inability to withdraw the services, because in fact Airways Corporation did not try to do so.46 District Court Judge PJ Evans found in favour of the small aircraft operators on all points, holding that there was no contract and refused Airways Corporation’s ‘invitation to create a new category of contract law’ which would allow it to ‘force’ its standard term agreement on the operators in the teeth of their refusal to acquiesce.47 Airways Corporation’s action for recovery of unpaid charges in contract was dismissed.48 Airways Corporation appealed to the High Court without success. Thorp J upheld the judgment below on the ground that there was no

43 Recovery in debt is a common law form of specific performance and has the advantage of enforcement by summary procedure. See generally AV Levontin, ‘Debt and Contract in the Common Law’ (1966) 1 Israel Law Review 60, 97. 44 Airways Corp of New Zealand Ltd v Geyserland Airways Ltd [1994] DCR 1037, 1056–7. 45 Ibid 1057. 46 Ibid. 47 Ibid 1050. 48 In a thoughtful conclusion, Evans J said the law of contract appeared an awkward vehicle to ensure both safety and the recovery of the costs of providing that safe service, but if contract was to be used as such a regulatory tool – in preference to taxation or other regulatory instruments – then the civil aviation legislation should be amended to give clear powers to charge and recover unpaid charges.

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contract. He was no more prepared than the trial judge to make new law by creating a special category of contract law to fit this case.49 There was no pressing need to do so, according to Thorp J, because in his view Airways Corporation was not bound to provide the service50 and, if it chose to do so, it was able to claim reasonable recompense under quantum meruit. Senior counsel for the corporation, however, relied exclusively and steadfastly on the contractual debt ground and refused to entertain the judge’s suggestion that the pleadings be amended to include a quantum meruit claim.51 It is clear from the judgment that Thorp J thought this was a solution to Airways Corporation’s predicament, and so did not see the need to develop contract law when restitution provided a perfectly adequate remedy.52 The result of Airways Corporation’s refusal to pursue alternative avenues to contract was that the more than $21,000 said to be owed by the two aircraft operators was not recoverable and it was liable in costs as well. It is a reasonable inference, I think, that Airways Corporation was prepared to forego the money rather than prove in court the reasonableness of its charges under a quantum meruit claim. In some respects this is a strange case. The issues of the reasonableness of the fees and ‘user pays’ lurk just under the surface but seldom protrude. It appears the small aircraft operators were paying a fee (set in delegated legislation) for this service before corporatisation. It seems clear enough that after the transition to SOE status the price went up, but we are not told by how much. On the face of it, it seems opportunistic and unreasonable for the small aircraft operators now to pay nothing at all. But the reasonableness of the charge is not directly challenged in this case. It is indirectly raised, however, as the operators strenuously argued that they received no benefit whatsoever from the clearance to take off and land provided by Airways Corporation. All they did was comply with a legal requirement. They argued – with what validity was never determined – that air traffic control was a service to benefit the two big airlines and was unnecessary for small operators.

49

Airways Corp of New Zealand Ltd v Geyserland Airways Ltd [1996] 1 NZLR 116

(HC). 50 Although the judge said ‘as the preceding judgment indicates, I am not persuaded … that the corporation is bound to supply a service’ (at 127) there is no clear earlier statement to that effect. 51 Ibid 123–4. 52 Moreover, Thorp J seemed to think that the doctrine of prime necessity could also fit the bill as it was not dependent on the existence of a contract and would allow recovery of a reasonable price: at 123.

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Michael Taggart V ELECTRICITY TRANSMISSION CHARGES

A similar scenario developed in relation to payment of electricity transmission charges, but in contrast millions of dollars were at stake. Transpower New Zealand Ltd v Meridian Energy Ltd53 dealt with the validity of ‘posted terms’ in contracts proffered by one SOE (Transpower Ltd) to another SOE (Meridian Energy Ltd). Transpower sued for $70.6 million in unpaid transmission charges said to be owed under a contract that Meridian Energy denied existed.54 On the evidence, Fisher J was left in no doubt that no contract was ever formed. There was clear, continued and express ‘disagreement’ over the terms of transmission.55 Whether one took the parties’ (subjective) understandings or the objective understanding of reasonable people standing in the parties’ shoes, in this case the result was the same: there was no contract at all.56 As Transpower had sued only in contract that was the end of the matter. Only out of deference to the elaborate arguments of senior counsel over eight days and the sums involved57 did the judge go on to deal with every other argument proffered by Transpower’s lawyers for imposing the ‘posted terms’ agreement on Meridian Energy, despite its objectively manifested and subjective absence of consent. Although he was easily persuaded as to the reasons why a contract was important to Transpower and the electricity industry as a whole, Fisher J said [i]t is not for the Court to impose upon the parties a fictional contract which they ought to have agreed upon but in fact did not.58

Put in several different ways, essentially Transpower’s stance was that when the neo-liberal presuppositions of contract law are not present and ‘political firms’59 practically could not withdraw public utility services, contract law should be adapted to impose ‘posted’ contractual terms on

53

[2001] 3 NZLR 700 (HC) (‘Transpower’). Going by the account of the protracted pricing dispute in the judgment the maximum disputed sum was in the order of $6–8m, because Meridian Energy had always accepted it would pay a reasonable price for the electricity transmission. 55 Transpower [2001] 3 NZLR 700 (HC) [43]. 56 Ibid [44], [49]–[50]. 57 Ibid [44]. 58 Ibid [57]. 59 The term ‘political firm’ is not used in these cases but was used by Hammond J at first instance in NZFP Pulp & Paper Ltd & Another v Thames Valley Electric Board (High Court, Hamilton, CP 35/93, 1 November 1993) 3 to distinguish ‘private firms’ from ‘political (Government owned) firms’. The decision was overturned on appeal: Thames Valley Electric Power Board v NZFP Pulp & Paper Ltd [1994] 2 NZLR 641 (CA). 54

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the customers. This did not tug at the judge’s heartstrings. In good old-fashioned Diceyan terms, the SOE Transpower was treated like any other contracting party. Fisher J said [w]hatever may be the commercial, political and practical difficulties if Transpower withheld its services, it is to be treated here in the same way as other persons who are free to offer or withhold goods or services.60

Nor was the irony of Transpower’s special pleading lost on Fisher J:61 Conventional contract lies at the heart of trading relationships. There is nothing in the State-Owned Enterprises Act, the Commerce Act, or the Electricity (Information Disclosure) Regulations, to the contrary. Transpower has already established in prior legislation that it is free to make such offers to its customers as it thinks fit: see in particular Vector v Transpower. It is to be treated in the same way as any other trader in that respect. It is ironic that having sought and secured recognition of its ordinary trading status Transpower should now seek distinctive legal treatment.

The court’s refusal to create special rules for Transpower did not cause any injustice as it had a tailor-made remedy ready to hand, if only it would reach for it. Transpower, Fisher J observed, ‘could have sued in quantum meruit but elected not to do so’.62 Transpower’s very experienced counsel (Dr Jim Farmer QC) submitted repeatedly that no such claim was legally open to Transpower, but the judge was unimpressed and clearly thought otherwise.63 Dr Farmer, who had also been counsel for Transpower in Vector, submitted that the Court of Appeal decision in that case ousted the court’s jurisdiction to set a reasonable price under quantum meruit. So the ‘circle of exclusion’ that I described earlier when discussing that case – first, ousting common law price control and then judicial review of pricing – was to be extended to exclude private law methods of settling a reasonable price. But what about the much vaunted ‘level playing field’ of private law that SOEs were placed on by virtue of corporatisation? When the logic of the level playing field becomes inconvenient it seems some SOEs plead for special rules of contract. In other words, they want something that looks like separate rules for ‘political firms’ or a category of government contracts overlaid by public law.64 Fisher J rejected this submission holding that what was said in Vector about the price control mechanism in the Commerce Act ousting price control via the doctrine of prime necessity had no application to recovery

60 61 62 63 64

Above n 53, at [73]. Ibid [68]. Ibid [2]. Ibid [73]. Ibid [64] quoting directly from Transpower’s written submissions.

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of reasonable price under quantum meruit. The price control mechanism in Part IV of the Commerce Act is ‘prospective’ whereas quantum meruit is ‘the radically different exercise of retrospectively valuing services that have already been provided’.65 Accordingly, the quantum meruit inquiry will not be ‘freighted with the multidimensional and policy aspects of setting prices for the future’; an aspect that weighed on the judges’ minds in Vector.66 This usefully leads on to two points. First, there was really no more (or less) authorisation by way of statutory interpretation or reliance on legislative intent to find quantum meruit excluded than there was to exclude the common law doctrine of prime necessity or judicial review. Obviously bound to follow the Court of Appeal, Fisher J did not look at the statute but distinguished the situations as best he could in terms of the policy reasons the Court of Appeal gave for ousting common law price control via the doctrine of prime necessity: hence the retrospective/ prospective distinction he employed. But the trouble with this is that the various doctrines that the court in Vector held had evolved into the doctrine of prime necessity were all capable of retrospective application when services had been supplied but not paid for, and quantum meruit was the accepted means to recover.67 If Fisher J is right (and I think he is) then the policy rationale for the Court of Appeal’s holding in Vector (even if otherwise correct68) is too sweeping. It should only oust use of the doctrine when used prospectively to settle the reasonableness of charges upon which services will be supplied. Fisher J says this about the feasibility of retrospective price fixing by way of quantum meruit:69 I do not doubt that valuing the transmission services already provided to Meridian would have been prolonged and complicated but in kind the exercise would not differ from many of the more difficult valuation and damages inquiries routinely undertaken by the courts. The fact that the assessment of damages may be difficult has never relieved a Court of making an assessment. Quantum meruit is no different.

I said as much in my 1995 essay.70 Notwithstanding the earlier statement by Fisher J that retrospective price-setting was a ‘radically different’

65

Ibid [62]. Ibid [62] (referring back to a quotation at [60] from Vector [1999] 3 NZLR 646, 667). Still waters may run deep here. There is relatively little case law addressing the valuing of quantum meruit and at least one restitution lawyer would resist the court simply setting a reasonable price. See generally P Watts, ‘Restitution – A Property Principle and a Services Principle’ (1995) Restitution Law Review 49, 80. 68 For a convincing critique see Doolan, above n 23. 69 Transpower [2001] 3 NZLR 700 (HC) [62]. 70 Taggart, above n 1, at 249. This view was criticised and rejected by Aronson, above n 1, at 49. 66 67

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exercise to doing so prospectively,71 I suggest that in many cases this is a difference in degree rather than kind. In Transpower what divided the parties was how much (if any at all) of the costs of maintaining the ‘high voltage alternating current’ inter-island transmission link should be recovered from some or all electricity generators: an issue that is hardly any less difficult looking backwards or forwards.72 Our honorand has said that ‘[l]itigation must be the least effective method, and the worst place imaginable, for determining [price]’.73 That may be so but that is what the designers of the SOE regime intended. The court was ultimately the dispute resolver of last resort. Corporatisation (and privatisation) created ‘a new conflictuality’ which resulted in increasing resort to private litigation as a means of conflict resolution.74 One thing is clear from this small ‘sample’ of cases: when the SOEs concerned were finally forced to submit on the level playing field to judicial price-setting via quantum meruit/restitution they ran a mile from the courts. They baulked at being put to proof of their prices under the glare of the judicial searchlight. They may well have thought, along with Aronson, that a court was the worst place imaginable for this to be decided. They were probably quite happy in this respect about the movement back from ‘contract to administration’75 that was signalled by re-regulation in the late 1990s. These cases show also that the level playing field of private law was a mirage. Products or services that are genuinely public utilities or necessities cannot easily be refused or withdrawn whatever the form of ownership. Their provision requires regulation in the interests of consumers and the public interest.76 Because of that interest in their supply the political nature of the disputes cannot be ignored. As Gunther Teubner observed: Explosive political conflicts that were formerly absorbed within the diverse regimes of public law do not vanish after privatization, as if by a gracious

71

Above n 53, at [62]. Later attempts to settle this issue by the newly established regulatory body – the Electricity Commission – ended up in the High Court on judicial review, with Contact Energy and Meridian Energy winning on lack of consultation: Contact Energy Ltd v Electricity Commission, High Court, Wellington, CIV-2005–485–600624, 29 August 2005 (Mackenzie J). See generally B Barton, ‘Electricity Regulation in New Zealand: the Early Stages of a New Regime’ (2008) 26 Journal of Energy & Natural Resources Law 207; B Barton, ‘SelfRegulation, State Regulation, and Co-Regulation in Energy Law in New Zealand’ in B Barton et al (eds), Regulating Energy and Natural Resources (Oxford, OUP, 2006) 137. 73 Aronson, above n 1, at 50. 74 See Teubner, above n 6, at 423. 75 See PS Atiyah, The Rise and Fall of Freedom of Contract (Oxford, Clarendon Press, 1979) 726. 76 See WA Robson, ‘The Public Utility Services’ in HJ Laski, WI Jennings and WA Robson (eds), A Century of Municipal Progress – The Last Hundred Years (London, Allen & Unwin, 1935) 297, 300. 72

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gesture of the invisible hand. After the take-over by the market these conflictual energies re-emerge in new forms, and the new private regimes of governance have to cope with them. They will not be resolved by market mechanisms alone. In their turn, the privatised services will be driven by a new politicisation. And this repoliticisation is not necessarily limited to the establishment of public law regulatory agencies, but entails in addition the politicization of private governance itself, its different modes, and conflict resolution via private litigation.77

This was brought home in New Zealand when a SOE electricity supplier disconnected power supply to a residence for non-payment with the result that oxygen supply was cut off to Mrs Folole Muliaga, who died within three hours.78 This tragedy created a public uproar and in short order administrative changes were made to the disconnection policy and legislation was enacted to deal with disconnection of the poor and vulnerable persons on low incomes.79 This brings to mind a point made by Mark Aronson that focusing on old common law doctrines concerning price control is inadequate to deal with the pressing problem of disconnection of poor people from essential facilities.80 I acknowledged at the time that the primary focus should be on legislative and administrative processes, as Aronson had said, but went on to say: If I was arguing before a parliamentary select committee for the type of finely calibrated disconnection policies in relation to the poor advocated by Aronson, it would help to be able to refer to case-law invalidating discriminatory utility policies relating to the poor.81

That proved to be so in the aftermath of Mrs Muliaga’s disconnection and death. The common law doctrine was at the centre of much of the discussion in the media and political circles.

VI RATES: LEVEL OR LUMPY PLAYING FIELD?

One of the intended consequences of corporatisation was to strip away erstwhile governmental privileges and immunities from State-owned businesses; two of which were the immunity from national taxation and local authority rates. This created difficulties, as well as incentives for opportunistic behaviour. The cases are mentioned briefly here because they exhibit somewhat similar schizophrenia about the public/private divide. 77 Teubner, above n 6, at 423. See also T Prosser, ‘Marketisation, Public Service and Universal Service’ in D Nelken and T Feest (eds), Adapting Legal Culture (Oxford, Hart Publishing, 2001) 223, 225–6. 78 The tragedy is reported on the front page of The New Zealand Herald (Auckland 31 May 2007). 79 Electricity (Disconnection and Low Fixed Charges) Amendment Act 2008. 80 Aronson, above n 1, at 50. 81 Taggart, above n 1, at 17.

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The loss of immunity from rates caused difficulties for Electricorp, an SOE that owned or leased considerable areas of land in the South Island that became rateable for the first time. However, the courts assisted by quashing as unreasonable and unfair opportunistic rate-setting by one local authority that attempted to off-load almost the entire rates burden on to this new ratepayer.82 A less audacious move was made by Auckland City in relation to the Ports of Auckland, just one of a number of disputes between them over land issues in and around the Port. Port companies were not part of the SOE reform package as they were then owned by local and regional government rather than central government. Port companies, however, shared the objective with SOEs of operating ‘as a successful business’83 and, in common with several of the SOE public utilities, ports also have significant natural monopolistic features.84 The common law recognised this centuries ago and regulated abuse of that situational monopoly. Indeed, wharves and ports were the original source of the doctrine of businesses affected with a public interest or prime necessity.85 The continuing public importance of ports is reflected in the fact that the land upon which ‘wharf’ activity takes place is immune from rates.86 This is of a piece with the treatment of other transportation infrastructure such as roads, access or service lanes, and land used by airport authorities for landing and moving aircraft and passengers; the legislative intent being to exempt from rates ‘transport facilities of national importance’.87 Auckland City resorted to law to clarify the extent of the ‘wharf’ exemption in the 1988 rating legislation that in one form or another went back to the 19th century. The High Court and Court of Appeal adopted a purposive interpretation of the exemption thereby providing ample ratefree land for the loading and unloading of passengers and freight at the wharves, rather than the narrow strip of quay argued for by the City Council.

82

Mackenzie District Council v Electricity Corp of New Zealand [1992] 3 NZLR 41

(CA). 83 Port Companies Act 1988 s 5; Auckland City Council v Minister of Transport [1990] 1 NZLR 264, 289 (CA) (Cooke P); Manukau City Council v Ports of Auckland Ltd [2000] 1 NZLR 1, 3 (PC) (Lord Cooke of Thorndon). 84 See Union Shipping New Zealand Ltd v Port Nelson Ltd [1990] 2 NZLR 662 (HC) (McGechan J and RG Brunt); L Stevens, ‘Ports’ Market Power’ [2002] New Zealand Law Journal 298, 300. 85 See generally Taggart, above n 1; P Craig, ‘Constitutions, Property and Regulation’ [1991] Public Law 538; T Prosser, ‘Privatisation, Regulation and Public Services’ [1994] Juridical Review 10. 86 Rating Powers Act 1988 Sch 1, Pt II, cl 22(1). 87 Ports of Auckland Ltd v Auckland City Council, High Court, Auckland, M 2020/97, 31 August 1999, 9 (Williams J); upheld in Auckland City Council v Ports of Auckland Ltd [2000] 3 NZLR 614 (CA).

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In contrast, other formerly corporatised and then privatised bodies aggressively claimed the continued benefit of immunity from rates. When Telecom was asked to pay rates on the telephone lines either under or above the streets of Auckland it demurred and went to court. The High Court and the Court of Appeal held that the lines were interests in land and hence rateable, and furthermore that this part of the telecommunications network was not within the rates exemption for ‘machines’.88 On the surface the case was about a rather technical issue – the lines were installed under the Telecommunications Act and the issue was whether or not this statutory right gave Telecom a tenement or corporeal/ incorporeal hereditament or other interest in the land that was rateable. The law in New Zealand had been settled against Telecom for at least 50 years, and the courts rejected Telecom’s argument.89 In the High Court, Fisher J stressed there was no fundamental difference between Telecom and other landowners either in the type of property it held, its regulation or the difficulties of valuing it.90 He upheld ‘rateability’91 rather than exceptionalism, as did the Court of Appeal. On the meaning of ‘machine’ for the purpose of rate exemption, the Court of Appeal simply agreed with Fisher J that the lines did not come within the ordinary meaning of that word.92 Fisher J had stressed that rating legislation ‘has direct application to the affairs of private citizens’ and so popular meanings should be preferred to abstract or unusual ones. In other words, there was no good reason to strain the language to exempt the (now) privatised telecommunications company from paying rates like everyone else. Telecom had sought to escape the level playing field but the courts saw through this, and refused to create exceptional rules or unusual interpretations that would allow Telecom to have its cake and eat it too. VII CONCLUSION

SOEs are hybrid institutions straddling the public/private law divide:93 governmental in ownership, in private sector corporate garb, discharging functions that have long been associated with the state, and sometimes competing in deregulated and real markets, and sometimes exercising de facto monopolistic power. It was clear from the outset that the SOE model 88 Telecom Auckland Ltd v Auckland City Council [1999] 1 NZLR 426 (CA), affirming Telecom Auckland Ltd v Auckland City Council [1995] 3 NZLR 489 (HC). 89 Ibid 439, applying Hutt-Valley Electric Power Board v Lower Hutt City Corp [1949] NZLR 611 (CA). Telecom relied on dicta in Newcastle-Under-Lyme Corp v Wolstanton [1947] Ch 92, that had not found favour two years later in the Hutt-Valley case. 90 Telecom Auckland Ltd v Auckland City Council [1995] 3 NZLR 489, 497–9. 91 Ibid 499. 92 Above n 88, at 442 (Blanchard J). 93 McLean, above n 23, at 404.

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did not work well in relation to businesses that exhibited natural monopolistic features or exercised a significant degree of monopoly power.94 Predictably, as the case law illuminates, on occasions SOEs were unwilling or unable to withdraw services or supplies in the face of non-payment by customers. Like it or not, they were enmeshed in an ‘administered’ supply relationship95 and realistically neither side could walk away. The level playing field, in this respect, was a mirage. Moreover, it is a little noticed aspect of the ‘New Zealand experiment’96 that some of those that hankered for the contractual freedom of the level playing field were not above seeking special privileges and showed no enthusiasm whatsoever for the courts as referee in their pricing disputes on that playing field. These SOEs and, less understandably, the courts failed to appreciate that light-handed regulation was constructed on the premise of the courts as the default dispute resolver. It was never intended to keep the courts out, and ultimately they did not stay out. In his essay in The Province of Administrative Law, Mark Aronson made the point that if judges were dragged into judicially reviewing corporatised or privatised entities or controlling their pricing they would be likely to imbibe the economic rationalism that underpins the reforms and thereby pervert legal or judicial values.97 The litigation in Vector, in my view, shows exactly the opposite. Almost all the judges who rejected price control and judicial review in that litigation explicitly adopted economic rationalism and, indeed, advanced it at the expense of legal values long recognised in the common law,98 namely, equality of service, non-discrimination and control of monopolistic power.99 But despite their efforts to retreat from price setting the political character of SOEs meant that the courts were faced with much the same job of price control via quantum meruit. The attempts by some SOEs to argue for special treatment were seen both as ironic (given the ideological underpinnings of corporatisation and the stance of the SOEs in the earlier litigation) and as

94 Taggart, above n 37, at 80; P McKinlay, ‘The New Zealand Reforms: They Worked in Theory; What About the Practice?’ (2000) 22 Asian Journal of Public Administration 182, 198. 95 See V Goldberg, ‘Regulation and administered contracts’ (1976) 7 The Bell Journal of Economics 426, 436–41 on price-setting and the duty to serve the customer. 96 The title of a book by my colleague J Kelsey, highly critical of the neo-liberal reforms of the Fourth Labour Government: The New Zealand Experiment: A World Model for Structural Adjustment? (Auckland, Auckland University Press and Bridget Williams Books, 1995). 97 Aronson, above n 1, at 50–51. 98 See my critique of the Court of Appeal’s reasoning and the decision in Auckland Electric Power Board v Electricity Corp of New Zealand Ltd [1994] 1 NZLR 551, above n 25, at 364. 99 See C Haar and D Fessler, The Wrong Side of the Tracks: A Revolutionary Rediscovery of the Common Law Tradition of Fairness in the Struggle Against Equality (New York, Simon & Schuster, 1986).

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falling foul of Diceyan equality of treatment.100 But Dicey’s persistent denial of any useful distinction between public and private law is, itself, no complete answer.101 As our honorand said so well, the phenomena of ‘mixed administrations’102 calls for a mixture of the best that public law and private law has to offer.

100

See above n 61 and the quotation from Fisher J in the text See M Taggart, ‘“The Peculiarities of the English”: Resisting the Public/Private Law Divide’ in P Craig and R Rawlings (eds), Law and Administration in Europe: Essays in Honour of Carol Harlow (Oxford, OUP, 2003) 107. 102 Aronson, above n 1, at 51. 101

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9 Politics, Policy and Outsourcing in the United States: The Role of Administrative Law ALFRED C AMAN, JR

I

N MARK ARONSON’S classic article, ‘A Public Lawyer’s Response to Privatization and Outsourcing’,1 he examines the dichotomies of public and private, public law and private law, and policy making and service delivery2. He notes that such dichotomies may have a somewhat analytical role to play, as well as ‘some … darker roles they may sometimes perform’3. He questions the relevance of the binary approach inherent in such distinctions, particularly when it is now so common to conceptualise regulation and public law generally in almost exclusively economic terms. Professor Aronson argues that it may be more useful to think of such distinctions as trichotomies. ‘Economists’, he notes, have long described our economy as mixed, in the sense that government and private capital play shared productive roles. If we are comfortable in talking of mixed economies, we should become equally comfortable in talking of mixed administrations, being administrations in which government and private actors play shared regulatory roles.4

Privatisation, outsourcing and the use of contracts in the United States to achieve these various mixed administrations of public and private power that Professor Aronson discusses in his article is the focus of this essay. I will examine one of the darker aspects of these mixed administrations distinctions – specifically, their ability to contribute to an ever growing democracy deficit, in large part due to what Professor Aronson describes,

1 M Aronson, ‘A Public Lawyer’s Response to Privatization and Outsourcing’ in M Taggart (ed), The Province of Administrative Law, (Oxford, Hart Publishing, 1997) 40. 2 Ibid 51–57. 3 Ibid 51. 4 Ibid 52.

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in another context, as ‘the view that contracting belongs entirely to the private sector’. This, in turn, is a predictable result of ‘a binary approach which insists on seeing power as being either public or private’.5 This essay looks at similar issues in the US. It argues that public and private cannot be understood in binary terms, particularly given the ways in which states are now reconfiguring themselves, relying on markets and the private sector to carry out public responsibilities.6 The main argument of this essay is twofold. First, the binary distinction between ‘public’ and ‘private’ fails to capture important actualities of privatisation and, therefore, tends to understate the scope for political participation and compromise. Second, administrative law remains an important democratic counterweight to technocratic decision-making, especially in privatisation contexts. My primary interest is in exploring how administrative law can mitigate the democracy deficit that results if privatisation shifts political debate into relatively private arenas.7 I develop a procedural approach that is relevant to privatisation in general, although my main concerns are particularly with contexts where delegations of fundamental state responsibilities to private actors affect marginal groups such as prisoners and the poor. Expanding the use of administrative law in privatised settings would offer important resources for remedying at least some democracy deficit concerns, furthering regulatory efficiency as well as social justice. It would also constructively expand the political process by which the public/private divide is negotiated in practice by including actors beyond the contracting parties. Part I begins with a discussion of traditional conceptions of administrative law, especially the traditional roles that substance and procedure have played in US administrative law. Utilising the concepts of red light and green light approaches to administrative law developed by Professors Harlow and Rawlings,8 I show in Part I that thinking of public and private in binary terms is potentially unduly restrictive on debate, and, particularly in the context of privatisation, misleading as a guide to the interests of the contracting parties and stakeholders. A mechanical application of the public/private distinction can easily exclude voices and viewpoints that are

5

Ibid 46. I am using these terms somewhat interchangeably. Unlike Professor Aronson’s use of privatisation as a reference to the sale of public assets to the private sector (see Ibid 41), privatisation in the US frequently encompasses an administrative agency’s decision to outsource by contract some of the services it previously performed itself, to a private provider of those services. 7 For an analysis of privatisation and various forms of the democracy deficit in the context of globalisation see AC Aman, Jr, The Democracy Deficit: Taming Globalization through Law Reform (New York, New York University Press, 2004). 8 See below, n 12. 6

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relevant and necessary if these public/private hybrids are to reach legitimate and practicable substantive outcomes. Part II develops more fully the limitations of representing the public/ private distinction as a simple binary by analysing the complexities of a single, extended example of privatisation – private prisons. The goal of this section is to show that the public/private distinction is not a spectrum with some actions more or less public or private than others; rather, it marks multiple differences in the configuration of power in relation to the institutions of government. The relevance of a public/private distinction (in other words) is not structural but political. The conclusion assesses the democratic possibilities inherent in a nonbinary approach to public private partnerships. My main argument is that legitimating government by contract should take into account a wide variety of public/private configurations and their implications for democracy. Functions once performed by government and now outsourced to the private sector require democratic input, no less than their previously public agents. Administrative law has an important role to play if we are to achieve this goal. I RECONCEPTUALISING SUBSTANCE AND PROCEDURE

Procedure has always been used as a bargaining chip by legislators, operating as a surrogate idiom for substantive debate. Legislators focus on how a governmental agency might use its regulatory power to create, implement and enforce its legislative mandates. In that context, procedure often becomes subject to a bargaining process among various participants who have divergent substantive interests and goals. Under these circumstances, procedure can become coded as a surrogate for substance, with the result that procedure often slows or blocks the implementation and enforcement of the legislation in question.9 More procedure at this stage of the process is usually aimed at making regulatory action more difficult if not impossible to achieve, as I will show more fully below. One could argue that ‘it has always been thus’. Privatised and deregulated contexts, however, introduce additional bargaining currencies beyond traditional adjudicatory or legislative policy making procedures. These include the use of private providers to carry out government responsibilities as well as market incentives to achieve certain regulatory outcomes. These market approaches are not substitutes for regulation, but offer 9 For a case study of the use of procedure and administrative structure as a substitute for substantive legislative compromises involving the deregulation of energy prices see AC Aman, Jr, ‘Institutionalizing the Energy Crisis: Some Structural and Procedural Lessons’ (1980) 65 Cornell Law Review 493. See generally, P Verkuil, ‘The Emerging Concept of Administrative Procedure’ (1978) 78 Columbia Law Review 258.

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alternative means of accomplishing regulatory ends. In other words, they are not merely substantive outcomes of regulation disguised as procedure, but an integral part of the regulatory process itself. Yet they are often couched in either/or terms as a way of avoiding red tape or the bureaucracy of ‘big government’. As the argument goes, privatise and we can become efficient by distancing ourselves from the inefficiencies of the state. Such zero-sum approaches to substance and procedure and the public/ private distinction tend to obscure or obviate a broad zone where such market approaches may and are intended to enhance policy implementation. Private actors, private incentive structures and markets in general are not necessarily categorically opposed to state based approaches; they are simply using new tools to accomplish their public goals. Realising this opens additional resources for the political process. Public/private hybrid arrangements designed to carry out the public’s business should be subject to administrative law. The initial legal medium by which these hybrids are operationalised is the contract, entered into between a governmental entity (such as an administrative agency) at the national, state or local level, and a private company. As we will see below, the range of positions and possible compromises that can be taken in determining whether and how a contract should be entered into, what the contract should say, and how it should be implemented and monitored is far wider than that which can be captured by a binary approach to the public/private distinction. Yet, traditional binary approaches to administrative law make this transformation far more difficult than it should be.

A Rethinking Administrative Law For US administrative law to play a creative, democracy-enhancing role in privatised contexts, some adjustments of perspective are in order. American administrative law is traditionally state-centric in its focus, its procedures designed to control the exercise of state power by governmental agencies. By contrast, in privatisation contexts, the primary actors are private contractors. For the most part, both administrative law and constitutional law attempt to draw a bright-line between public and private actors. Under the state action doctrine, courts might consider some private entities to be ‘state actors’ for constitutional purposes;10 however, the constitutionallybased procedures that this designation might trigger are limited in comparison to the statutory procedures required of governmental entities under statutes such as the Administrative Procedure Act or the Freedom of 10 See, eg, G Metzger, ‘Privatization as Delegation’ (2003) 103 Columbia Law Review 1367, 1437–39.

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Information Act. The binary distinction between public and private actors is unnecessarily restrictive in this regard, particularly given the new configurations of power in which most states are now engaged. The relationship of individuals to the state plays out most clearly in analyses of the procedures used by administrative agencies to carry out their statutory duties. Various theories of procedure abound, but a fundamental question is the appropriateness of the processes used. Do they adequately protect the rights of the regulated while still making it possible for the agency to act without unnecessary delays or procedural costs? Are they fair, transparent and do they allow for appropriate levels of citizen participation? If the same kinds of questions are to be asked in various private contexts, as they must, administrative law can no longer remain state-centric. The relationship of states to markets is defined by the legitimating rationales for the state’s intervention in the market to correct a particular problem. These rationales usually identify certain kinds of market failure, such as natural monopoly, which in turn trigger certain regulatory responses. The substance of the regulation that ultimately emerges at the agency level and its perceived legitimacy has much to do with the way various actors in the regulatory process view the procedures used to formulate the rules or orders by which the agency exercises its powers. When the legislation authorising the regulations involves ideological disagreements, continuing conflicts involving the legitimacy of such laws are often expressed procedurally at the agency level. Procedures and sometimes elaborate administrative structures often are substituted for substantive political compromises. Those who see the legitimacy of the substantive law as marginal, but who can no longer challenge it on substantive grounds, are likely to opt for procedures designed to make the exercise of such governmental power difficult, and perhaps impossible. At the extreme, those who favour markets over law may use procedure in a way that has been described as a kind of procedural laissez faire.11 Those who agree with the underlying substantive goals of the legislation and the agency’s implementation of it will likely see procedure in more pragmatic terms, as a relatively efficient means of carrying out agreed upon policies. Procedure should facilitate the execution of the government’s policies. While the binary distinction between markets and regulation reflects the discourse of the procedural debates in administrative law, most recently during the Reagan Revolution of the 1980s, it masks both the history of regulation and, more importantly, the substantive and political complexities that today are important resources for creativity and compromise.

11

See Paul Verkuil, above n 9, at 264.

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B Red Light and Green Light Approaches to Administrative Law Carol Harlow and Richard Rawlings give us the metaphor of red lights and green lights to capture these different positions.12 What Harlow and Rawlings call red light and green light approaches to administrative law have long resonated with administrative lawyers. Classically, that is, during the New Deal and Environmental eras of regulation in the United States, when there was broad support for direct federal intervention in the economy, advocates of green light approaches were those who saw administrative procedure as the appropriate extension, or implementation, of legislative outcomes. Advocates of red light approaches were those whose goal was to constrain or block those outcomes through administrative procedure. Classic red light approaches represented a form of procedural laissez faire. While the classic red and green light approaches described by Harlow and Rawlings referred primarily to the United Kingdom, they apply relatively well to the US during the post-New Deal period of federal regulation as well as the early years of intense reaction to regulation under Presidents Reagan and Bush I. In those years, advocates of market approaches advanced their views in deregulatory or anti-regulatory terms. But something was now changing: they were willing to advocate streamlined or green procedural approaches to effectuate market based change. That reaction was highly successful in its own terms and it was pursued as if these new market reforms were not in the end simply new forms of state intervention. Fast forwarding to the present, the rhetoric of public/private opposition is now thoroughly entrenched in these new terms. This shift of perspective changes the application of red and green light approaches. In the contemporary contracting out or privatisation context, red light and green light roles are reversed from the classic positions described above. Today, the green lighters are those who favour the prevailing trend toward privatisation and the procedures that advance that trend. Red lighters are those who are more sceptical with regard to privatisation, and who would use

12 The red light /green light metaphor was used to great effect by Carol Harlow and Richard Rawlings in Law and Administration, chs 1 and 2 (London, Weidenfeld & Nicolson, 1984). In those chapters the authors, among other things, analyse various theories of administrative law in terms of the theory of the state that underlies it. Minimalist theories of the state translated into red light theories of administrative law, designed to maximally protect the individual from the intrusion of the state. Green light theories are more interested in facilitating state action, not limiting it. In the most recent edition of this book, Harlow and Rawlings add discussions of amber light theories of administrative law: C Harlow and R Rawlings, Law and Administration, 2nd edn (London, Butterworths, 1997).

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procedure to protect individuals from unfettered markets and as a way of holding privatisation to public values.13 When it comes to contracting out government functions, today’s red lighters might contend that before privatisation occurs, the projected cost savings should be demonstrated, as well as its likely impact on employees and labour more generally. Also among their prime concerns is the substance of the contract. After the fact, they are concerned with compliance. They advocate monitoring and independent checks on performance. The market in these contractual situations is not an end in itself, but only a means to carry out governmental responsibilities. For today’s red light advocates, public values such as transparency, accountability and participation are necessary if the delegation of state powers to private entities is to be legitimate. These new red lighters are not substituting the market for government; they are using it as a policy tool, though it is a tool they employ with some scepticism.14 Yet, the predominance of privatisation does not erase the earlier history from political memory or from the institutions those processes created. Thus, today’s red lighters (who are dubious about privatisation) might well be akin to the green lighters of the previous political generation to the extent that their priority remains the government as the legitimate provider of public service. Modern green lighters might also be akin to classic red lighters, in that a strong preference for market values might underlie their advocacy of privatisation. But modern green lighters might also be the counterparts to classic green lighters – and this is key – since their preference for public service might be entirely consistent with their efforts to streamline the contracting process and encourage private actors to take on particular functions formerly reserved to government. Contracting out, for them, is a means to an end – a set of regulatory tools that will enable the state to deliver services (even core governmental services) more efficiently and effectively. There may also be a category of red–reds, though those in this group may not be open to any useful political compromises because they are winners in the current system and thus favour the status quo. Classic reds distrust and oppose most government regulation on philosophical grounds and modern reds may now distrust privatisation too, especially if it would change a status quo from which they benefit. Thus, they wish to ensure that their firm succeeds by opposing all government imposed change whether it is regulatory or market oriented in nature.

13 See, eg, Massachusetts’ Privatisation statute ( Mass Gen Laws Ann Ch 7, s 52 (West 2003). This statute states that the legislature ‘hereby finds…that using private contractors to provide public services formerly provided by public employees does not always promote the public interest). 14 Id.

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These categories of combinations are, of course, themselves internally diverse. It is important to recognise that these ‘hybrids’ are not merely differences of degree along the same spectrum. The connection between the classic and modern reds and greens involve historical, political and pragmatic specificities. They are varied means of addressing concrete problems, reflecting the different histories of particular social sectors (including the state, the market, various industries, and various social sectors such as the poor). They represent different democratic challenges and arenas of political experience, as well as political memories of differing lengths. In short, the most potent combinations of red and green – that is, their most promising contributions to debate over democracy challenges in privatisation – are lost to a simple binary approach or a single continuum. Red–greens, green–reds and green–greens have plenty to say to each other, and they share broad zones of potential agreement. Distinguishing among these modern positions cannot depend on their advocates’ motivations or tactics; rather, they depend on the specifics of context and their availability to particular lines of compromise. Thinking about the issue this way gives us a chance to approach privatisation as an intersection of administrative, economic, and social practices – that is, reconnecting what purely economic approaches tend to treat as separate spheres. The next section will explore these ideas more fully develop a conception of contracting out in these terms.

II DEMOCRACY CHALLENGES AT THE PUBLIC/PRIVATE DIVIDE

A Reds, Greens, and Prisons: An Extended Example Let us explore more fully a conception of contracting out that is based on democracy challenges and the specificity of public/private engagements by considering one example – private prisons – across various combinations of red and green light approaches. The exercise is intended to clarify the limits of the binary in relation to the history and current actualities of regulation.

(i) Privatisation as Economic Efficiency Prison populations have grown astronomically over the last 20 years. New crimes, especially drug laws and the ‘three strikes and you’re out’ doctrine, combined with a general toughening of criminal law penalties, have pushed

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these numbers upward.15 The need for prisons coincides with low tax policies in most jurisdictions, thus creating difficult political issues when it comes to financing this necessary construction.16 One approach is to outsource the problem to a company with the capital to build the new facility and even manage it at a cost less than the municipality or state could. If a major capital outlay by the state entity in charge is unnecessary, the need to raise taxes or cut the budgets of other programs may be mitigated. If, on top of this financial incentive, the construction company might even be able to manage the prison for less than if it were managed publicly, this is even a greater incentive to go private. There may be many reasons why the private provider can manage the institution more efficiently, but one common difference between public and private prison costs is labour. Private prisons often are able to hire non union guards and save money in ways not open to unionised public facilities. This drive is an example of a red–green approach: red because its proponents prefer market based approaches, green because they now see only positive incentives to proceeding with privatisation. (ii) A Desire to Reform Still another set of motivations may stem from the desire of a community to try something dramatically new and different. Public prisons have had enormous problems over the years and some may very well be mired in conflict and unimaginative thinking. Recourse to a private provider may very well break up some of the vested interests that have limited progress to date as well as create some healthy competition between public and private providers. Moreover, the community may have some very specific and measurable goals it seeks to achieve, such as reducing recidivism rates by increasing high school equivalency degrees and providing practical training with real world applicability.17 Contracts can be written to include these goals and private providers chosen on the basis of their past records in meeting such criteria. Competition for the contract is thus based not only on cost but also the ability to attain certain goals and reforms as well. This is a green–green scenario: green because its proponents value governmental functions and responsibilities, and green because they see privatisation as a very promising means of creatively accomplishing these governmental reform goals. 15 See RW Harding, Private Prisons and Public Accountability (New Brunswick, Transaction Publishers, 1997) 17–18. See generally, J Simon, ‘Refugees in a Carceral Age: The Rebirth of Immigration Prisons in the United States 1976–1992’ (1998) 10 Public Culture 1, 1–3. 16 For a discussion of various cost and political factors affecting privatisation see Harding, above n 15, at 16–31. 17 Ibid 19.

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(iii) Attracting Investment, Increasing Employment and Enlarging the Tax Base Another motivation behind building a prison may be enlarging the local tax base and increasing employment by attracting new investment to a locality.18 Some prisons are, in fact, built not to accommodate an overflow of local prisoners but to attract prisoners from other jurisdictions that would rather farm their prisoners out than build new facilities in their own jurisdictions. Those states or municipalities who build these facilities hope to profit from providing this service, but also by providing additional jobs in their respective communities and enlarging their own tax base. This is primarily market driven and prisoners truly are seen as commodities. Red–greens would pursue this because they believe, first and foremost in letting markets work and using government to facilitate this process. Red–reds may also be involved because they too believe in markets; however, they may be sceptical of this kind of privatisation if, for example, they already manage a private prison in the area and do not want any further competition. They have, in other words, a vested interest in the status quo. All of the motivations described above can, of course, overlap in various ways. The state may wish to lower its costs and reform in effective ways. It may wish to compete for prisoners from other jurisdictions by advertising itself as an institution with a good education record. Or the facility involved may simply be an attempt to house as many prisoners as possible in as cost efficient a way as possible. How these motivations play out and the extent to which individuals, groups, NGOs and the like can influence the outcomes of the providers chosen and the contract provisions adopted depend on information flows, the openness of the process, the ability to express one’s views and ideas in a timely fashion and, of course, the resources the governmental entities are willing to devote to the enterprise. In the end, it may be fundamentally a resource question that limits the imagination of the end goals sought, but this, of course, is, fundamentally, a political issue. The process of privatisation as well as its ongoing implementation requires inclusive, multi-dimensional procedural approaches. In these scenarios, multiple and overlapping motivations are more than matched by the variety and complexity of the goals that constituents may have when it comes to opting for private providers. Consider some of the various combinations of red and green attitudes toward regulation and procedure that are possible in privatised settings. The combinations of red and green in these scenarios are just the beginnings of thinking beyond the 18 See generally, RW Harding, ‘Private Prisons’ (2002) 28 Crime and Justice 265, 269, See also Harding, above n 15, at 150–51.

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constraints of the red–green binary. As the next section shows, the combinations open up new paths to co-operation and compromise.

B Co-operating with Red and Green (i) Efficient Reform Let us assume a combination of governmental interests in the privatisation of prisons that combine a desire to save money through privatisation, as well as a way of responding to public pressure to reform aspects of the system. Accordingly, a contract involving private prisons is sought to satisfy voters’ demands for new approaches to prisoner rehabilitation and education. The state does not wish to replace all of its prisons with private providers; it wants to experiment with new approaches and, if possible, create competition between public and private providers over positive goals such as lowering the recidivism rate and increasing educational attainments of prisoners while they are in prison. In this scenario, public and private guards are paid essentially the same and the physical facilities are not dissimilar. Thinking outside the binary in this case demonstrates the extent to which efficiency and reform are not necessarily incompatible values. Efficiency may be one goal of governmental operations but it is not the only goal. Green–green co-operation underscores the scope for combining efficiency with other social values. (ii) Experimenting with Privatisation Now, let us assume that the community in which the prison is housed wants to use its tax dollars wisely, and also knows that recidivism and low educational abilities and skills only add to a community’s burdens in the not-so-long run. Community members tell their public officials that warehousing human beings is both costly and inhumane. In this scenario, contracting out – under conditions similar to those in the previous example – is aimed at achieving the same value, prison reform, but the red nature of their concern is due to the fact that they need to be sure that privatisation is indeed the way to achieve this goal. Thus, they may be interested in more procedure at the very outset, designed to convince them not of the goals involved but of the fact that this approach will work. Similarly, red–greens may be more eager to try market approaches to achieve these goals, and may be less sceptical as to the outcomes they expect. Escaping the binary in this case opens up a zone of compromise between privatisation sceptics and advocates; their compromise can take form in a process that sustains their dialogue.

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The underlying green element of both of these scenarios is the goal of prison reform for the sake of the prisoners’ well-being inside the prison, and their chances for improved opportunities after their release. The red–green distinction in these two examples reflects their respective emphases on experimentation and efficiency. In both cases, a dominant green aspect derives from the appeal of privatisation in the way it provides for an improvement or an extension of state function over what would be possible through the government on its own. The red aspect in the second scenario reflects scepticism as to the ability of the private sector to achieve these green goals. In addition to the procedures discussed above, this red group might seek opportunities for judicial review of the contracts under consideration, as well as a formalised independent system of monitors. In the next two examples, the underlying red aspect works the other way, as an affirmative preference for market-based public services because of a belief in the market as an end in itself. (iii) Red–Green Co-operation Let us imagine that the issue under public discussion is prison overcrowding. Addressing overcrowding requires up-front capital that may not be easy to come by, especially in a low-tax state. Let us further imagine strong political pressures to get tougher on crime. Perhaps – though it is never voiced publicly – there is even a sense that using private prisons to administer the state’s punishment may be consistent with the community idea of punishment by shielding discipline from public checks. The primary force driving these private prisons is cost. A company that can provide the up-front capital and manage the prison looks awfully good to beleaguered public officials. Moreover, though there is talk of competition, there are few companies competing for these contracts, giving the ‘winner’ considerable bargaining power over terms. Unlike the public employee union guards in the public sector, a private prison can also save a good deal of money by hiring non-union guards. Some guards might be well trained but this is not usually the case. The medical care for prisoners merges with prison discipline, but there is no political cost attached to fatalities. In developing contracts, there is reference to education and recidivism rates, but great flexibility in monitoring compliance with these terms. These same market attitudes might support the construction of a prison as a way of adding to a local tax base as well as other commoditised approaches to prisons and prisoners. This co-operation scenario involves advocates of privatisation and others whose basic preference is for a strong public service sector. Their zone of compromise is in the area of taxation, specifically in growing the tax base. The red aspect of this constituency is reflected in their faith that the market will carry out these functions efficiently. The green aspect reflects their

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desire to achieve these outcomes with little or no procedural interference from citizens once the decision to go private has been made. Greens would prefer all citizen input before the privatisation decision is made to come through elected representatives or members of the relevant commission. After the decision is made, it is the contractors who carry out their duties with future input occurring only when the contract comes up for renewal. (iv) Protecting Special Interest Reds do not always overlap with greens. When reds limit their consensus only to other reds, the result is an impasse. Red–reds are those who originally were avid free market advocates, but who now wish to apply as much procedure as possible to a determination of how one privatises. They do so not because they are opposed to the market approaches that privatisation emphasises, but because they wish to increase the entry and participation costs of their competitors. While procedures are inevitably manipulated by large interests to further their own private ends, red–reds are tacticians who use procedure to block their competitors’ fields of manoeuvre. In this sense, the red–red dialogue is different from all the other conversations among greens and reds, and can even masquerade under other colours, so to speak; however, the other combinations remain relevant as distinctive political arrangements in response to the democracy challenges posed by tensions between efficiency and social values. As these examples show, thinking past the binary illuminates considerably the contextual possibilities for backing or opposing a proposal to privatise prisons. Thinking in terms of democracy challenges transcends simple pro- or anti-market debates, as well as simplistic notions of interests (both public and private). No matter what the initial rationale for privatising a prison might be, there will be various points of view on how best to shape these goals. Red–green combinations are relevant at the first stage of the process (that is, in deciding whether to privatise) but they are even more relevant at the contract negotiation stage, where discussion of goals and rationales is likely to be more open-ended. Restricting discussion to a red–green continuum – that is, a public/private binary – errs in conflating these zones of co-operation and the diversity of accommodation they enable. The richness of the debate that might take place thus goes well beyond the stereotypes inherent in more ideological debates over the efficacy of markets as opposed to regulation. It makes explicit the terms of the competition that might take place among prospective bidders. The goals of the institution itself – not just the cost of managing prisons – should be debated. What can we, as citizens, buy with our taxpayer dollars? What do we want? More punishment or lower recidivism rates through emphasis on training and high school equivalency degrees? Lower taxes in the short run

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or incarcerating increasingly disproportionate numbers of the poor in the longer term? Answers to these and other questions can be incorporated into the assessment process as criteria of efficiency and efficacy (for example, with regard to rehabilitation and education). Even if a less ambitious contract is entered into – that is, one based primarily on cost savings – this does not preclude proposals for additional goals. Similarly, broad based reform oriented contracts should not foreclose hard headed cost benefit analyses of outcomes.

C Multiple Modalities Conceived as a binary, the public/private distinction tends to conceal both the complexity of its political history and important potential areas of overlap and compromise in the future. It flattens all distinctions into differences of degree, and therefore makes it more difficult to grasp the context-specific aspects of public/private arrangements in procedural terms. As we have seen, the public/private distinction does not establish just one spectrum of difference of which ‘public’ and ‘private’ are the endpoints. The public/private divide is not a zero-sum distinction – except for those who are ideologically committed to privatisation or state action as ends in themselves. The binary, conceived as such, is an ideological construct that takes for granted the fixity of the public or private ‘positions’ (as if public = ‘not private’ and private = ‘not public’). Such categorical conceptualisations (as well as the zero-sum problem) make the binary problematic as an analytical tool or heuristic concept for purposes of planning, compromise or reform in the current milieu. Thinking of the public/private distinction in terms of multiple political processes and substantive goals helps neutralise the categorical bias built into the conventional binary opposition. Administrative law provides a framework through which these various combinations broaden or narrow particular arenas of democratic participation in relation to particular democracy challenges. For example, some governmental functions (such as the postal service or the census) might be contracted out with relatively little call for public input, whereas others (for example, welfare, prisons or the military) might face far higher demand. The lines between these cannot be categorical and administrative procedures can provide the framework for negotiating those distinctions. No single model can cover all needs for combination and compromise. Moreover, the decision to contract out is not the only one involved. What is the content of this contract and what processes are available to assure the kind of information necessary to support meaningful and timely citizen participation? By presenting these combinations this way, my aim is to show how they might emerge as responses to different understandings of democracy and

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priorities on public participation. Administrative law provides a framework for navigating such differences in an open and democratic way. Such differences cannot be resolved technocratically. Administrative law requires basic democratic procedures: publicity, opportunities for participation, including by dissenting community groups. In the privatisation context, administrative law could be extended to provide for the terms of the proposed contract to be made public prior to negotiations with potential service providers, and the general public should have a role in those negotiations at least by being able to comment on the draft contract. To leave such matters to the market would only eliminate important issues from meaningful public consideration. Markets often take the place of procedures as a way of masking or avoiding hard political choices. For example, market approaches can cut costs in ways that politically accountable officials might not wish to advertise. Privatisation of some governmental services may make it easier to cut budgets, eliminate public employee unions, or export prisoners to institutions outside their communities. A preference for markets by politicians can signal not only a fiscally sound preference for cost effective approaches to governing, but a kind of no-nonsense toughness as well. Markets can imply a degree of blindness masquerading as neutrality or, as in each of these examples, precisely the opposite: the most democratic means available for experimentation, negotiating and expressing collective preference and exercising accountability. Modern red and green lighters find their differences and common ground in relation to the democratic challenges of privatisation. Administrative law can and should be a principal resource in their on-going dialogue, affirming both the relevance of public values and the urgency of public participation whenever the state seeks reform or efficiency through privatisation.

III CONCLUSION: ADMINISTRATIVE LAW AND DEMOCRACY

Administrative law can potentially ameliorate the democracy deficit by providing arenas within which the delegation of power to private providers is made subject to a further, continuing political process. For administrative law to play a more effective role in privatised settings, procedures appropriate to privatised contexts should be reconceptualised without the limitations of a binary public/private distinction and with the help of new legislation. A multidimensional approach to process is necessary, one that transcends the ideological debates so common in the political arena that make ‘markets versus regulation’ into a zero-sum formula. Accommodating the democracy needs of various groups and interests need not require massive amounts of procedure. In order to maximise red–green co-operation, the policy decision-makers involved should not

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assume that public providers are inherently better than private or vice versa. They should be neutral in this regard, and accordingly require an agency that wishes to privatise to give notice of its intentions as well as reasons for its conclusion that private actors will be superior to public actors. The contracts should be of relatively short duration and information should be provided to the public on the performance of the contractor, as well as on any proposed changes to the contract. An important role for procedure is to accommodate most, if not all, of these interests with a process that allows them to speak to one another as well as the ultimate decision-maker. Once a contract is entered into, it is also important that these discussions occur with some frequency. The nature of the enterprise – in our extended example, managing a prison – requires ongoing monitoring of the contract terms, as well as opportunities to comment on its administration, and suggest amendments regarding the duties of the private actor. Procedurally speaking, the privatising agency should be willing to treat the proposed contract more like a rule than a contract negotiated between two parties. It can be put up on the prison authority’s web site, calling for public comments, suggestions, alternative language and ways to achieve its substantive reform goals from whoever wishes to comment. In our extended example, this would include prisoners and their representatives as well. Moreover, there should be extensive information provided on the track records of firms competing for the contract. There should be fair competition among the bidders. All of them should agree that if they are chosen, they will be subject to regular reporting requirements and a modified Freedom of Information Act allowing interested members of the public to make relevant inquiries about their operation while the contract is in place. That contract should be no more than three years subject to renewal but only after another round of competitive bidding occurs. The simplicity of notice and comment procedures makes such transparency reasonably efficient, and transparency need not impose undue impediments to the bargaining process. Indeed, the purpose of these citizenoriented procedures is to ensure that the many views and voices involved in such public-regarding private arrangements are heard. It is not just that there is a public dimension involved; it is that there are genuine public values at stake that necessitate debate and contest. The various positions of individuals and groups that we have been able to represent as red or green and various combinations thereof are not points along a spectrum, suggesting either more or less procedure. They are political views that can and often do overlap with the goals and preferences of seemingly very different groups. The role of administrative law procedure is not to settle the question of privatisation but to accomplish two fundamental goals: the creation of a forum in which a politics can develop around the complex public/private

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combinations that typify privatisation today, as well as the enhancement of opportunities for these groups to communicate with one another (and decision-makers). Binary approaches to the democracy needs of society cannot possibly capture the complexity of democracy in practice. Something as simple as basic notice and comment will add much to the legitimacy and, I believe, the success of the new public/private world in the making. Like Professor Aronson, I too believe that much is at stake. If we do not act, we risk creating a world in which the economy stretches forward to the farthest horizon, offering a joyless landscape of merely commercial interests. It would promise a life of allocative and productive efficiency, with no precincts sacred to the spirit of community.19

19

Aronson, above n 1, at 70.

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10 Poetic Justice: Public Contracting and the Case of the London Tube RICHARD RAWLINGS * When will you pay me? Ring the bells at the Old Bailey. When I am rich, Ring the bells at Fleetditch. When will that be? Ring the bells of Stepney. When I am old, Ring the great bell at Paul’s.1

A

S EVERY ADMINISTRATIVE LAWYER should know, the history of the subject2 is in large measure the history of the railway. Take the United Kingdom: from Trevithick and Stephenson to a gleaming St Pancras, via Mallard and the derelict great workshops of Swindon and Crewe, the spiritual home of the industry.3 In mid-Victorian times it was classically a case of statute against common law, or of public benefit versus private loss of amenity, as the coming of the railway changed forever the map of Britain.4 From the late 1880s onwards the work of such august bodies as the Railway Commissioners and the Railway Rates Tribunal anticipated much in the 20th century flowering of administrative

* I am grateful to my colleague Ioannis Lianos for comments on a draft. The usual disclaimer applies. 1 From ‘London Bells’, Anon (Early 18th Century). Reprinted in G Benson, J Chernaik and C Herbert (eds), Poems on the Underground (London, Cassell, 1991) 76. 2 In the suitably broad sense of the law relating to administration, not least the provision of public services and infrastructures. 3 See, for a marvellous evocation, C Wolmar, Fire and Steam: A New History of the Railways in Britain (London, Atlantic Books, 2007). 4 See the leading authority of Hammersmith and City Rly v Brand (1869) LR 4 HL 171.

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law, so demonstrating a potent mix of regulatory and adjudicative power.5 As well as being commandeered for the great national effort in two world wars, the railway would later come to epitomise law and administration in a period of nationalisation, according to the then standard British model of a state-owned corporation.6 Commonly starved of investment through the 1960s and after, Britain’s railway is also a symbol of relative decline in the corporatist heyday of the ‘mixed economy’.7 Nor, as a subsidy-ridden, highly unionised, natural monopoly, could the national rail network escape Conservative policies of privatisation.8 Reflecting and reinforcing the contemporary move in law and administration to the private legal form, a fundamental restructuring of the industry characterised by a high degree of functional separation as well as interdependency spelt a contractual matrix of hitherto unseen proportions.9 Once again however the industry shows the pendulum swinging. So, in the guise of redone agencification,10 it could not be immune from the New Labour Government’s quest for ‘a third way’ beyond, in Tony Blair’s words, ‘the sterile debate between wholesale privatisation and old-style state control’.11 A few years on and we find Ministers muddling through a crisis in the UK network centred on poor maintenance, huge demands for investment and lack of strategic direction. Partial retrenchment – elements of re-nationalisation and direct ministerial responsibility – was now the order of the day.12 As to the future, the talk in Britain is of a new Golden Age of rail.13 Hyperbole perhaps, but with environmental concerns high on the agenda a ‘greening’ of administrative law is clearly signalled.

5 As highlighted in the classic ‘greenlighter’s’ handbook: WA Robson, Justice and Administrative Law, 3rd edn (London, Stevens, 1951) 89–98. For a modern interpretation, see C Stebbings, Legal Foundations of Tribunals in Nineteenth Century England (Cambridge, CUP, 2006). 6 By virtue of the Transport Act 1947, which nationalised most of Britain’s public transport system. 7 A Shonfield, Modern Capitalism: The Changing Balance of Public and Private Power (Oxford, OUP, 1969). For a closer legal perspective, see T Prosser, Nationalised Industries and Public Control (Oxford, Blackwell, 1986). 8 Railways Act 1993. See T Gourvish, British Rail 1974 to 1997, from integration to privatisation (Oxford, OUP, 2002). 9 Chiefly involving ‘Railtrack’; a publicly listed company set up to own and manage most of the operational infrastructure. 10 Transport Act 2000 setting up the (short-lived) Strategic Rail Authority. 11 Quoted in R Jupe, ‘Public (Interest) or Private (Gain)? The Curious Case of Network Rail’s Status’ 34 Journal of Law and Society (2007) 244, 252. The great guru is A Giddens, The Third Way: Renewal of Social Democracy (Oxford, Blackwell, 1998). 12 Financial collapse and replacement of Railtrack with the not-for-dividend company Network Rail; Railways Act 2005. See P Leyland, ‘Back to Government? Re-regulating British Railways’ (2005) 12 Indiana Journal of Global Legal Studies 435. 13 Underlined by the cross-Europe potentials of St Pancras and the Channel Tunnel: see Department of Transport, Delivering a Sustainable Railway, Cm 7176, 2007.

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The current modernisation of the London Tube has a place in this history. Reflecting the fact of an ageing (commonly Victorian) infrastructure, this is a vast undertaking, scheduled to last some 30 years. As we shall see, contract technique has here been pushed to extraordinary lengths, not least in terms of flexibility for the future (all those ‘known and unknown unknowns’). A novel variation on the theme of ‘Public Private Partnerships’ (‘PPP’) and ‘Private Finance Initiatives’ (‘PFI’), defining features of New Labour’s approach to delivering services and infrastructures, the design is of wide comparative interest. The resulting governance machinery embodies the contemporary mixing in administrative law of public with private powers. And, in a blaze of contractual fireworks, arrangements have very quickly imploded.

I CONTRACTUAL ORDERING IN ISSUE

No book entitled Administrative Law in a Changing State could be complete today without a chapter focused on the challenges and opportunities presented by contract and contractualisation. The policy of outsourcing stretches across, and so blurs, the public/private sector ‘divide’. Private sector notions of contract are infused into public administration, the discipline of markets or market mimicking, the individualist ethos of freedom of choice. Contractual ideas of mutual obligation infuse government policies concerning the rights and responsibilities of the citizen. In this respect contemporary developments in the UK, which is indisputably a leader in the field, are part of a broader convergence;14 one that is most obviously driven by the rise in so many countries of NPM-type approaches and by growing internationalisation of public procurement practice and procedure.15 Fundamental to the development is the ‘double-handed’ role of contract in the public sphere. So what is identified as a chief building block of systems of governance is also an essential agent of the fragmentation of the traditional framework of government, it being through a contractual model that the bureaucratic hierarchies and organisational forms previously associated with ‘public administration’ have been challenged or subverted. A recurring theme is the close interplay or overlap of contractual with regulatory forms of governance.16 Take the idea of elaborate ‘contracting 14 See J-B Auby, ‘Comparative Approaches to the Rise of Contract in the Public Sphere’ (2007) Public Law 40. 15 For discussion in the multi-level context of the UK, the EU and the WTO, see S Arrowsmith, The Law of Public and Utilities Procurement, 2nd edn (London, Sweet and Maxwell, 2005). 16 See in the UK context P Vincent-Jones, The New Public Contracting (Oxford, OUP, 2006); and, across the ocean, J Freeman and M Minow (eds), Outsourcing the US (Boston, Harvard University Press, 2006).

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regimes’.17 Shown in the case of the London Tube by an extraordinarily bold attempt to order a whole generation of infrastructure development, in this scenario the machinery of contract takes centre-stage flanked or supported by individual regulatory mechanisms. We see too how contractualism begets contractualism. One description is cascades of contracts18 as when there are agreements of various kinds19 between the Treasury and another central government department, the department and the executive or statutory agency, the agency and local units, the local units and private suppliers of services, the private suppliers of services and sub-contractors. Alternatively, highlighting the way in which the forms of hierarchy can be reinvented, British commentators speak of a ‘pyramid’ of contract.20 Premised on a high degree of central coordination through detailed output specification and the setting of standards, contractual governance is thus seen as determinedly systemic in character, comprising both macro- and micro- levels of operation. Is this so different from old-style ‘transmission-belt’ theory21 in administrative law? Shifting gear, supply chain co-ordination by means of contract is the very stuff of commercial legal practice.22 Yet it takes on a whole new meaning when the delivery of essential public services is involved, as again in the case of the London Tube. It was Mark Aronson who observed that the use by government of private legal forms strengthens rather than weakens the case for arrangement protective of the public interest.23 As a generation of administrative lawyers has come to understand, reconciling desiderata of value for money and of process values like fairness, consistency and transparency with precepts traditionally associated with private autonomy, such as commercial confidentiality, is not easy.24 Whereas contract has the potential to

17 M Considine, ‘Contract Regimes and Reflexive Governance: Comparing Employment Service Reforms in the United Kingdom, the Netherlands, New Zealand and Australia’ (2000) 78 Public Administration 613. 18 J Boston, ‘The Use of Contracting in the Public Sector – Recent New Zealand Experience’ (1996) 55 Australian Journal of Public Administration 105. 19 Including what I elsewhere call ‘pseudo-contract’, agreements not directly legally enforceable in the courts. See C Harlow and R Rawlings, Law and Administration, 3rd edn (Cambridge, CUP, forthcoming). 20 M Freedland and D King, ‘Contractual Governance and Illiberal Contracts: Some Problems of Contractualism as an Instrument of Behaviour Management by Agencies of Government’ (2003) 27 Cambridge Journal of Economics 465. 21 As famously discussed by R Stewart, ‘The Reformation of American Administrative Law’ (1975) 88 Harvard Law Review 1667. 22 A De Kok and S Grave (eds), Supply Chain Management: Design, Coordination and Operation (Amsterdam, Elsevier, 2003). 23 M Aronson, ‘A Public Lawyer’s Responses to Privatisation and Outsourcing’ in M Taggart (ed), The Province of Administrative Law (Oxford, Hart Publishing, 1997). 24 Cf D Oliver, ‘Common Values in Public and Private Law and the Public/Private Divide’ [1997] Public Law 630.

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enhance managerial and administrative forms of accountability through specification,25 the fact of its propensity to squeeze out political accountability should never be forgotten.26 Paradoxical it may seem, but contract theorists have done much in recent times to enrich our understanding of the limitations of the private legal form.27 At the root of this is insistence on the need to understand the social matrix of norms, understandings and expectations in which a contract is embedded.28 A very necessary corrective to the simplistic assumption that contracts produce predictable outcomes based on rational responses to formal norms, the argument has special resonance in administrative law – the more so obviously in an age of governance. Take the familiar view of the long-term economic interests of both parties binding them together regardless of any potential legal sanction. This is underscored by the fact of public bodies as repeat players. Reading across from business contracts,29 it would be strange indeed if, in the case of essential public services, the relation was never given priority over the deal.30 Again, turning to the basic qualities of contract as a social institution, the concept of ‘presentiation’ commands attention.31 Nowhere is the self-conscious attempt, through planning, ‘to bring the future into the present’ better illustrated than with the private finance initiative. As discussed below, some of these arrangements for the supply of public services and infrastructures are not only highly complex but also very long-term; a shaping of the landscape that marks out the UK experiment in contractual governance. Conversely, however, there is a pervasive sense of contractual ‘incompleteness’.32 ‘Presentiating’ 30 years of modernisation of the London Tube is not so easy.

25 The seminal account in Britain is I Harden, The Contracting State (Buckingham, Open University Press, 1992). See also A Davies, Accountability: A Public Law Analysis of Government by Contract (Oxford, OUP, 2001). 26 The many debates over extending legal accountability in the form of judicial review bear no repetition here. See in relation to the so-called ‘Datafin project’, M Aronson, B Dyer and M Groves, Judicial Review of Administrative Action, 3rd edn (Sydney, LawBook Co, 2004) 115–32. 27 See, on the contemporary flowering of the discipline, R Hillman, The Richness of Contract Law: An analysis and critique of contemporary theories of contract law (Dordrecht, Kluwer, 1997); and S Smith, Contract Theory (Oxford, Clarendon, 2004). 28 The classic study in the English context is PS Atiyah, The Rise and Fall of Freedom of Contract (Oxford, Clarendon, 1990). 29 As illuminated in the pioneering empirical work of S Macaulay, ‘Non-Contractual Relations in Business: A Preliminary Study (1963) 28 American Sociological Review 55; and, in the UK, H Beale and T Dugdale, ‘Contracts between Businessmen; Planning and the Use of Contractual Remedies’ (1975) British Journal of Law and Society 45. 30 H Collins, Regulating Contracts (Oxford, OUP, 1999) ch 6. 31 As elaborated by the leading contract theorist of his generation I R Macneil, The New Social Contract (New Haven, Yale University Press, 1980). 32 O Hart, Firms, Contracts and Financial Structure (Oxford, OUP, 1995).

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The modern focus in contract theory on ‘relationality’33 as a quality of social exchange highlights the importance to smooth and effective workings of core elements of voluntarism and reciprocity, fairness and trust. Conversely, an underlying tension is here exposed in the use by government of contract in a highly instrumental – one is tempted to say, ‘green light’ – fashion.34 Giving this a further public law twist, it is appropriate today to speak of ‘a politics of contract’. As against the dry and technical in the ‘standard’ contract textbooks, we find much in contractual governance impregnated with public controversy, not only in the broad ideological sense (‘the role of the state’), but also on the frontline (as when an authority would prefer not to be contracting). In the case of the London Tube we will find the contract theorist’s desiderata of trust and planning, and co-operation and solidarity, tested to destruction. II WORLD LEADER

A key component of the UK Government’s strategy for the delivery of modern, high quality public services, and for advancing national competitiveness, PPP epitomises the idea of contractual governance. While PPPs cover a broad range of business structures and partnership arrangements, from outsourcing to joint ventures, and to the sale of equity shares in state-owned business, the principal vehicle in the UK has been the Private Finance Initiative. As a way of delivering major capital investment, PFI represents both an alternative to and, since the public sector is not generally the owner and operator of the assets, a transformation beyond, the traditional paradigm of government contract. As the name suggests, it differs from other forms of PPP in that the private contractor not only carries out the project but also arranges finance.35 New Labour ministers have not been afraid to experiment.36 An initial policy document in 1997 spoke of new models emerging ‘as the Government looks to encourage PPPs, accelerate the flow of good projects and encourage investment’.37 A major policy review of PFI in 2003 confirmed that ministers 33 As pioneered by I R Macneil, ‘The Many Futures of Contracts’ (1974) 47 Southern California Law Review 691. But see for a valuable critique D Campbell, ‘Ian Macneil and the Relational Theory of Contract’ in D Campbell (ed), Selected Papers of Ian Macneil (London, Sweet and Maxwell, 2001). 34 A chief theme developed by Vincent-Jones, above n 16, drawing in turn on D Campbell and D. Harris, ‘Flexibility in Long Term Contracts: The Role of Co-operation’ (1993) 20 Journal of Law and Society 166. 35 HM Treasury, Public Private Partnerships: The Government’s Approach (2000). For consideration of the various sub-species, see S Arrowsmith, above n 15. 36 For critical analysis of the earlier policy development see M Freedland, ‘Public Law and Private Finance – Placing the Private Finance Initiative in a Public Law Frame’ [1998] Public Law 288. 37 HM Treasury, Partnerships for Prosperity: Private Finance Initiative (1997) 2.

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would ‘investigate potential new areas … such as … prisons estate, urban regeneration, waste management … and social housing’.38 Another review in 2006 saw the Government highlight its commitment ‘to developing procurement vehicles … through PFI in alternative ways’.39 Underscoring the theme, a further review in 2008 signposts a chief role for ‘innovative procurement approaches … in addressing the complex infrastructure investment challenges ahead’.40 This extends to the so-called ‘integrator model’, which sees the public body appointing a private partner to manage the whole PFI process, as well as public and private sector ‘alliancing’ or joint project teams to develop briefs for and construct complex projects. Under Chancellor of the Exchequer (and latterly Prime Minister) Gordon Brown, the general policy has been pursued with an almost religious fervour.41 The standard rationale is value for money (‘VFM’); achieved through private sector innovation and management skills delivering significant performance improvement and efficiency savings.42 To this end, the UK Treasury Department aims to specify the appropriate conditions for PFI (as against a public sector scheme or traditional procurement process):43 — There is a major capital investment programme, requiring effective management of risks associated with construction and delivery. — The private sector has the expertise to deliver. — The structure of the service is appropriate, allowing the public sector to define its needs as service outputs that can be adequately contracted for in a way that ensures effective, equitable and accountable delivery of public services in the long term, and where risk allocation between public and private sectors can be clearly made and enforced. — The nature of the assets and services identified as part of the PFI scheme are capable of being costed on a whole-life, long-term basis. — The value of the project is sufficiently large to ensure that procurement costs are not disproportionate. 38

HM Treasury, PFI: meeting the investment challenge (2003) 11. HM Treasury, PFI: Strengthening Long-term Partnerships (2006) 27 (‘PFI: Strengthening Long-term Partnerships’). Recent changes to the EU public procurement law framework, most notably the introduction of a more flexible process for dealing with highly complex contracts (‘competitive dialogue procedure’) also ease the way: see generally S Arrowsmith, ‘The Past and Future Evolution of EC Procurement Law: from Framework to Common Code?’ (2006) 35 Public Contracts Law Journal 337 for an excellent overview. 40 HM Treasury, Infrastructure procurement: delivering long-term value (March 2008) 11 (‘Infrastructure procurement’). 41 The devolved governments in Scotland, Wales and Northern Ireland have been more reticent. An informative study is M Hellowell and A Pollock, The Impact of PFI on Scotland’s NHS (Edinburgh, Centre for International Public Health Policy, 2006). 42 As for the attraction of foreign capital (via a role for the State in creating markets for private investment) see Infrastructure procurement, above n 40, at ch 3. 43 PFI: Strengthening Long-term Partnerships, above n 39, at 32. Traditional public procurement processes in the UK are littered with examples of delay and cost overrun at great expense to the public purse. 39

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— The technology and other aspects of the sector are stable, and not susceptible to fast-paced change. — Planning horizons are long-term, with assets intended to be used over long periods into the future. — Robust incentives on the private sector to perform can be set up. Appropriate sharing of risk is the key to ensuring that the VFM benefits are realised. Transferred risks will typically include meeting required standards of delivery, cost overrun risk during construction, timely completion of the facility (no payments until available), latent defects, and industrial action. Certain market risks associated with the scheme may also be included; for example, in some transport schemes, those associated with volume and type of traffic. Conversely, as well as general inflation, the Treasury anticipates the retention of risks directly associated with public law values of flexibility and responsiveness. ‘Whether the service specified in the contract is required and adequate to meet the public demand and expectations’ may admit of no easy assessment; likewise, ‘the possibility of a change in public sector requirements in the future’ is hardly remote in elongated PFI-type arrangements.44 This is only half the story. With most PFIs the risks transferred to the private sector will be reallocated, using a central consortium company and sub-contracts; highly intricate forms of debt financing and re-financing are commonly involved.45 From the standpoint of the administrative lawyer there are significant issues here of openness and accountability. And foolish is the public authority which, engaging in such intricate forms of partnership, does not look to the robustness of the private framework (corporate governance). For a Labour Chancellor concerned, on the one hand, to make good years of under-investment in public service infrastructure, and, on the other hand, to (be seen to) maintain a tough fiscal stance, PFI-type arrangements have also proved highly convenient in terms of Government accounting. A form of ‘off balance sheet’ financing, the capital expenditure or resultant debt may not score as public expenditure. Since today’s large-scale investment programme becomes tomorrow’s current spending-associated tax increases can be postponed. Meanwhile, other capital projects not suitable for PFI can be prioritised, using the Government’s own resources. Of course, like all mortgages, this comes at a cost, to be borne by future taxpayers and service users. It should also be recalled that direct Government borrowing, backed by tax revenues, and so virtually risk-free, is a cheap way of raising funds. So PFI-type arrangements do not provide

44

Ibid 39–40. See House of Commons Public Accounts Committee, ‘Update on PFI debt refinancing and the PFI equity market’ HC (2006–2007) 158. 45

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public authorities with a cheaper source of finance, but rather with another potential source of funding, generally at a higher capital cost than traditional procurement. No wonder the UK Treasury has been concerned to stress the VFM benefits derived from risk transfers. That these arrangements have proved controversial is an understatement.46 As well as ‘disguised form of privatisation’, the litany of complaint includes: — Government becomes overly vulnerable to the vagaries of the market; some PFI contracts produce ‘mega-profits’ at the taxpayers’ expense. — Many PFI contracts fail to provide ‘real’ risk transfer from the public to the private sectors; whatever the contract may say, with essential services the public sector remains the guarantor of last resort. — Limited pool of willing and able PFI contractors undermines competitive discipline. — Elongated, multi-faceted, and large-scale, PFI arrangements are peculiarly susceptible to contractor failure, a source both of service disruption and further public expense. — Increasingly, huge revenue commitments limit the spending options of future administrations. — Lack of transparency; blurred lines of accountability. There has been some fine-tuning, with lessons learned from mistakes.47 PFI and complex IT, for example, is not a clever mix. A bitter experience of burgeoning cost and interminable delay48 underscores the need of public authorities for more short-term flexibility due to fast changing service requirements. In this context, the independent and authoritative work of the UK National Audit Office takes on added value: the more so, since freedom of information exceptions of commercial confidence and interests are much in evidence. Since 1997 the agency has published over 50 reports of investigations into PPP/PFI deals: nearly 1000 recommendations have resulted from subsequent hearings by the House of Commons Public Accounts Committee49 – a truly extraordinary effort. Ministers have not been deflected, as the figures graphically illustrate. Since 1997, following a slow start under the Conservatives, at least 50 PFI 46 See for different perspectives M Flinders, ‘The Politics of Public-Private Partnerships’ (2005) 7 British Journal of Politics and International Relations 215; P Gosling, PFI: Against the public interest (London, UNISON, 2005); A Pollock, D Price and S Player, The Private Finance Initiative: A Policy Built on Sand (London, UCL, 2005); C Donnelly, Delegation of Governmental Power to Private Portier (Oxford, OUP, 2007). 47 Government sources are naturally upbeat about the improvement (being) made: see especially Infrastructure procurement, above n 40, at ch 5. 48 See House of Commons Public Accounts Committee, ‘Department of Health: The National Programme for IT in the NHS’ HC (2006–2007) 390. 49 Available with a text search facility on the NAO website: accessed 17 July 2008. See for an especially illuminating case-study, NAO, Termination of the PFI Contract for the National Physical Laboratory, HC (2005–2006) 1044.

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deals have been signed each year. By the end of 2007, the total capital value of PFI contracts was some £59bn. Estimated to 2031–32, future revenue payments arising under them amounted to £180bn. Meanwhile, projects valued at £23bn were in the pipeline. Overall, PFI-type arrangements have accounted for 10–15 per cent of public sector capital investment in the UK under New Labour.50 Although other countries especially in Europe have been turning to PPP,51 there is little on the scale of British practice.52 The following table also shows how London Tube modernisation dwarfs other such endeavours. Largest UK PPP/PFI contracts 1987–2006 Project

Government Department

Year Signed

£m*

London Underground

Transport

2002

16,179

Channel Tunnel Rail Link

Transport

1996

4,178

Aldershot Garrison (rebuild)

Defence

2006

1,800

Barts and London NHS (hospital redevelopment)

Health

2006

1,100

National Air Traffic Control

Transport

2001

800

Skynet 5 (satellite communications)

Defence

2003

750

Future C Vehicles (construction/mechanical equipment)

Defence

2005

600

Birmingham NHS (hospital)

Health

2006

560

Colchester Garrison

Defence

2006

539

Highways Agency (integrated digital services)

Transport

2005

490

M6 toll road

Transport

2000

485

* Capital value of signed deals

50 Public Private Finance Yearbook (London, Centaur Media, 2007); Infrastructure procurement, above n 40, at 6–7. 51 Macroeconomic constraints on the amount of authorised public deficit, following the criteria of the Stability and Growth Pact, represent an important driver for the expansion of PPP-type arrangements in the European Union. 52 D McKenzie, PFI in the UK and PP in Europe (London, International Financial Services, 2007).

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III CONTRACTUAL EMPIRE

The earlier model of the Tube53 under local government control was famously on show in the Bromley case.54 The subsequent abolition by the Conservatives of the Greater London Council saw the establishment of London Underground Ltd (‘LUL’) as a wholly-owned subsidiary of London Regional Transport (‘LRT’), a statutory agency firmly under the thumb of central government.55 There followed years of fluctuating Treasury subsidy, inevitably resulting in disruption to long-term maintenance and renewal programmes, coupled in the 1990s with worst-case examples of conventional procurement (cost overruns on the Central Line upgrade and the Jubilee Line extension project of over 30 per cent). Against this backdrop, and on the basis of a satisfactory train operating performance, the incoming Labour Government opted for a partial privatisation along the lines of the horizontal business structure previously devised for the national railway.56 While LUL would still be running (and ticketing) the trains, responsibility for maintenance, replacement and upgrade of the network (including the trains) would pass to three private sector infrastructure companies. These ‘Infracos’ were to bring in project management expertise and innovation, while being suitably rewarded PFI-style through the infrastructure service charge (‘ISC’) payable by LUL under their contracts. Greasing the wheels, the Treasury agreed a regime of stable funding, whereby, subject to monitoring and review, the Department would make annual grants to cover the ISC.57 The arrangements must also be read in the light of New Labour’s commitment to restore London-wide local democracy in the form of an Assembly and ‘a powerful directly elected Mayor with hands-on responsibility for transport, economic development, strategic planning and the environment’.58 The legislative framework for the PPP was made part of the subsequent devolution statute, the Greater London Authority Act 1999 (‘1999 Act’). Implementation would see LUL become part of Transport for London (‘TfL’), a functional body of the GLA, the primary role of which is to 53 The system (most of which is in the open air) has a long and chequered history. Mostly built by separate, for-profit, companies, the lines were brought under the auspices of a public corporation, the London Passenger Transport Board, in 1933. At nationalisation in 1948 the system was combined with the rest of the nation’s railways. Control of the Tube passed to the Greater London Council in 1969. 54 Bromley London Borough Council v Greater London Council [1983] 1 AC 768. 55 London Regional Transport Act 1984. 56 Hansard HC vol 308 cols 1539–42 (20 March 1998) (the Deputy Prime Minister); and see S Glaister, ‘UK Transport Policy 1997–2001’ (2002) 18 Oxford Review of Economic Policy 154. 57 See NAO, ‘London Underground: Are the Public Private Partnerships likely to work successfully?’ HC (2003–04) 644: NAO, ‘London Underground PPP: Were they good deals?’ HC (2003–04) 645 (‘London Underground PPP’). 58 ‘A Mayor and Assembly for London’ (Cm 3897, 1998) foreword.

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implement the Mayor’s transport strategy and to manage transport services across the Capital. Notably however, whereas Whitehall expected the PPP deals to be done and dusted prior to the Mayor taking office, the process became bogged down in all the technical detail. To ministerial dismay, enter former leader of the GLC Ken Livingstone, implacably opposed to the PPP and elected Mayor of London in May 2000 as an Independent. So could the PPP be stopped? The attempt was made in the High Court in July 200159 on the basis of the transport strategy listed in the Act as one of the Mayor’s responsibilities. Produced in record time, the policy was one of unified management control of the Tube system by TfL ‘in order for it to ensure a safe, efficient and reliable system’. Counsel’s argument was that LRT and LUL had no power to enter into the proposed arrangements because to do so would place TfL in the ‘impossible position’ of inheriting the contracts while also being under a statutory duty to facilitate implementation of the mayoral strategy. Understandably the court was not about to unpick the legislation. Devolution notwithstanding, the 1999 Act had given Ministers, through LRT, the last word: Presented by Parliament with such a detailed statutory framework, it is simply not open to the court to draw the implication that Parliament must have intended that a further restriction should be imposed upon the exercise of powers expressly conferred by the 1999 Act. Parliament has said what it wishes LRT to do during the transitional period. It is to facilitate the carrying into effect of PPP agreements whilst at the same time having regard to the Mayor’s Transport Strategy. If, having regard to the Strategy, LRT nevertheless concludes that it would be appropriate to enter into the proposed PPP agreements, the 1999 Act enables it to do so … Entering into [these] agreements may be wise, as asserted by the Government, LUL and LRT, or it may be foolish, as claimed by the Mayor and … TfL. The electorate will, in due course, have an opportunity to express its views in the ballot box about that issue. That may be small comfort for those who oppose the Government’s proposals, but it is as it should be, because judgments about the merits, as opposed to the legality of entering into the proposed PPP agreements, must be made by elected politicians and not by judges.

The roles and relations of the different players at the start of the PPP agreements are illustrated in the following diagram. Ownership of LUL was finally transferred to that reluctant contractual partner, TfL, in July 2003. In the meantime, two of the three contracts had been placed with the same consortium, Metronet. With a total equity of £350 million, this featured subsidiaries of leading civil engineering firms such as WS Atkins and Balfour Beatty. Tube Lines, a smaller consortium, bid successfully for the ‘JNP Infraco’. 59 R (Transport for London) v London Regional Transport (30 July 2001 unreported). A second judicial review challenge by the Mayor collapsed at the permission stage.

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Responsibilities and funding flows under the London Tube PPPs60

Informed by the burgeoning experience of PFI, the transfer (or otherwise) of risk was much bargained about. So-called political risk featured prominently. To deal with the banks’ concerns, especially over the continued disagreement between TfL and the Government about the PPPs, lenders of £3.8 billion (‘the senior debt’) were given 95 per cent protection in the event of termination. Again: There are caps, caveats and exclusions to project risks borne by the Infracos. The risk of cost overruns in repairing assets of unknown condition, such as tunnel

60 ‘London Underground PPP’, above n 57. See also European Commission, London Underground Public Private Partnership (October 2002) (decision on compatibility with State aid control).

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walls, is excluded because knowledge of their residual life and associated costs is incomplete. In the case of assets whose condition has been fully identified against specific engineering standards, the cost overruns that the Infracos have to bear are capped, so long as the Infracos can demonstrate that they are acting economically and efficiently. In the case of Metronet the limit in each 71⁄2 year period [see below] is £50 million … Exclusions to the risks borne by the Infracos include passenger demand, lower income with fewer users and capacity constraints in the face of increased use. These are borne by London Underground.61

The complexity of the legal arrangements is mind-boggling. The original contractual documentation ran to 28,000 pages, over two million words.62 Determining the precise amounts of money paid to the Infracos on a monthly basis, a chief feature has been the use of hundreds of intricate mathematical formulae to calculate both bonuses and penalties or abatements. Take the following – transparent to whom? Service Consistency for a Line Grouping (Y *) shall be calculated in the relevant Capability Model by the following formula: Y * = (vis x wis) + (vmn x wmn) + (vdb x wdb) + (vtm x wtm) + (vcd x wcd) + (vms x wms) + (vfyr x wfyr) + (vfyt x wfyt) + (vfa x wfa ) + (vfb x wfb) + (vfta x wfta) + (vftb x wftb). Whereas: wis, wmn, wdb, wtm, wcd, wms, wfyr, wfyt, wfa, wfb, wfta, and wftb are Fixed Parameters defined in the relevant Capability Model Data; and vis, vmn, vdb, vtm, vcd, vms, vfyr, vfyt, vfa, vfb, vfta, & vftb are Infraco Measures set out in the relevant Capability Model Data and the relevant Capability Model where applicable.63

The transaction costs of the deals were some £500m, or three per cent of the net present value. With legal fees for advice to LUL amounting to £30m, City of London solicitors were big gainers.64 And yet, notwithstanding all the detail, the London Tube PPPs are the chief example in UK procurement law and practice of what contract theorists term ‘incompleteness by design’.65 The need for flexibility, or the exercise of discretion on a rolling basis, was a central element of the

61 Public Accounts Committee, ‘London Underground Public Private Partnerships’ HC (2004–05) 446, 11. 62 See generally C Wolmar, Down the Tube: the Battle for London’s Underground (London, Aurum Press, 2002). 63 London Underground PPP Contracts, Common Documents, Performance Measurement Code (Capability Matrix) sch 1, para 1. 64 House of Commons Transport Committee, ‘The London Underground and the Public-Private Partnership Agreement’ HC (2007–08) 45, 15; ‘London Underground PPP’, above n 57, at 14. 65 H Collins, Regulating Contracts, above n 30, at 161.

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bargain. While they enabled a vast and intensive programme of work, the agreements very deliberately did not specify the work to be undertaken. Instead, deliverables have been set in terms of the service provided to passengers, using three main measures (into which the individual mathematical formulae would feed): — Availability: a measure of day-to-day reliability based on whether assets are available for service. — Capability: a measure of what the assets are capable of delivering in terms of capacity and reduced journey time. — Ambience: a measure of the quality of the travelling environment.66 Fixed prices for the whole 30 years were not thought to represent good value for money: LUL could not confidently predict its service requirements for the distant future.67 So, while establishing a long-term relationship between LUL and each Infraco, the agreements have provided for LUL to restate its requirements at periodic reviews every 71⁄2 years and for the ISC to be reset to reflect changes in costs. Importantly, provision was also made for ‘extraordinary reviews’, so allowing charges to be modified within a review period should Infracos experience cost shocks beyond their control.68 How then, from a governance perspective, might all this indeterminacy be managed? Given the flammable mix of public and private interests, trusting to a co-operative ethos represented a leap of faith (for investors). An important role in the PPPs for dispute procedures like arbitration familiar from commercial contract might be anticipated. Equally however, being more reactive or ‘fire-fighting’ in nature, such machinery can only do so much in the crafting of future responsibilities. A special – and specialised – statutory personage was born: ‘the Public-Private Partnership Agreement Arbiter’.69

IV HAIL TO THE ARBITER

The arrangement has taken the contemporary juggling of public interest and private autonomy in the contractual sphere to new heights. The statute

66

See Mayor of London, London Underground and the PPP (Annual Report, 2006) ch

3. 67 See for analysis by a regulatory economist, S Glaister, ‘The London Underground Arbiter: Effective Public Utility Regulation?’, CRI Regulatory Review 2002–03. 68 PPP Agreements, sch 1.9, pts 2 and 3 (made available on the Public-Private Partnership Agreement Arbiter’s website. 69 As constituted under Greater London Authority Act 1999 ss 225–7.

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assigns the Arbiter two main functions: to give directions on matters specified in the PPP agreements, when referred to him by one of the parties; and to give guidance on any matter relating to a PPP agreement, when so requested by either or both of the parties.70 Conversely, the Arbiter has no unilateral power to change provisions in the PPP agreements; a direction made on a disputed matter within his remit may also be set aside by agreement of the parties. The Arbiter is both armed with information gathering powers and, in giving directions or guidance, required to take account of any factors notified by the parties or duly specified in the contract. The Arbiter must also ‘act in the way he considers best calculated to achieve’ four different objectives: — to ensure that LUL has the opportunity to revise its requirements under the PPP Agreements if the proper price exceeds the resources available; — to promote efficiency and economy in the provision, construction, renewal, or improvement and maintenance of the railway infrastructure; — to ensure that if a rate of return is incorporated in a PPP Agreement, a company which is efficient and economic in its performance of the requirements in that PPP Agreement would earn that return; and — to enable the Infracos to plan the future performance of the PPP Agreements with reasonable certainty.71 Duly functioning as a source of administrative rules, the agreements have detailed the kinds of financial and technical issues the Arbiter might be asked to address. Chief among these is a task naturally touching on many different interests: the determination – via directions – of the key financial terms of the PPP agreements at the periodic (and extraordinary) reviews.72 How might all this be conceptualised? As the name suggests the Arbiter is more than an arbitrator, less than a regulator.73 On the one hand, ranging beyond the standard institutional limitations of adjudication/ arbitration, the Arbiter was clearly conceived as an authoritative and constructive repeat player, so exercising a close and continuing – and on occasion, at the heart of the financial deal, decisive – influence. On the

70

Greater London Authority Act 1999 ss 229–30. Greater London Authority Act 1999 s 231. 72 See for the associated – detailed – process, PPP Arbiter, Procedural Framework for Use in the Giving of Directions and Guidance (June 2007). 73 C Bolt, Regulating London Underground (London, City University, 2003). See also C Bolt, Regulating by Contract and Licence – The Relationship between Regulatory Form and its Effectiveness (Bath, Centre for the Study of Regulated Industries, 2007). Mr Bolt has been serving both as PPP Arbiter and (covering the national network) as chair of the Office of Rail Regulation. 71

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other hand, the remit is restricted (notably excluding enforcement); the role is reactive (in the sense of being party-driven); and the periodic review function is potentially limited (by narrow terms of reference). The Arbiter, in other words, cannot provide the ‘sustained and focused control’74 familiarly associated with a regulatory agency. As we shall see, he is successively main actor and bit-part player in the drama. The Arbiter is essentially a small-scale, highly personalised, arm’s-length agency,75 with notable strengths in law, accountancy and economics. With a view to the legitimacy of agency action in such a contested and technically difficult policy domain, close attention has been paid to accountability and process: The [Arbiter’s] aim … is to give sound and timely guidance and directions on relevant aspects of the PPP Agreements when … requested, and to work constructively with the Parties in support of their key objective of providing … a modern and reliable metro service in a safe, efficient and economic manner. We seek to achieve this by: —

working within a clear, transparent and consistent framework;

—

giving reasoned guidance and directions which are based on well developed analysis shared with the Parties and procedures which achieve predictability in process and outcome;

—

establishing effective dialogue with the PPP Parties and other stakeholders to facilitate timely response to requests for guidance or direction, while maintaining our independence; and

—

operating to high standards of accountability in all our actions.76

At the heart however of this challenging essay in administrative law is a decidedly contestable analytical concept, that of the ‘Notional Infraco’: In the PPP Agreements, adjustments to costs are made by reference to those that would be incurred by a ‘Notional Infraco’. [This] is defined as being ‘an assumed entity … that carries out its activities in an overall efficient and economic manner and in accordance with Good Industry Practice, that has specified characteristics including the same contractual commitments as Infraco and also has Infraco’s responsibilities for future performance of the Contract.’ Good

74 P Selznick, ‘Focusing Organisational Research on Regulation’ in R Noll (ed), Regulatory Policy and the Social Sciences (Berkeley, University of California Press, 1985). 75 Organisationally speaking, the Arbiter thus represents a throwback to the ‘Ofdog’ model of regulatory agency favoured in the UK under the Conservatives. See T Prosser, ‘The Powers and Accountability of Agencies and Regulators’ in D Feldman (ed), English Public Law (Oxford, OUP, 2004). 76 PPP Arbiter, Reference from Metronet BCV Ltd: Interim Level of ISC pending a direction on ISC at Extraordinary Review – Draft directions (16 July 2007) 1. See generally PPP Arbiter, Role, approach and procedures (2003). There are clear echoes here of the UK Government’s ongoing ‘better regulation’ agenda: see generally S Weatherill, Better Regulation (Oxford, OUP, 2007).

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Industry Practice is in turn defined as meaning ‘the exercise of the degree of skill, diligence, prudence and foresight and practice which could reasonably and ordinarily be expected from a skilled and experienced person’. The guidance from the Parties to the Arbiter expands on these definitions. It says that ‘what should be expected of an Infraco working to Good Industry Practice’ includes: —

establishing and maintaining whole life asset planning and maintenance regimes;

—

ensuring the right competence is available, including appropriate external advice when needed;

—

recognising that systems and assets must be useable in practice and taking appropriate steps to ensure this, looking at comparable industries where relevant and taking account of practical constraints;

—

recognising the time and resources needed for systems integration and taking appropriate steps to make it possible. The guidance also emphasises the distinction between good and ‘best’ practice. It indicates for example that the Arbiter should not base his determination on ‘an assumption that all the Infracos could reasonably be expected to achieve the financial performance previously demonstrated by the best Infraco, unless there is a clear reason for this assumption’.77

For the British public lawyer this doppelganger-type reasoning has echoes of the famous Wednesbury test.78 However, far from a ‘deferential’ approach, the methodology has seen the Arbiter and his team of experts playing a strong creative role. ‘The Agreements recognise that it is impossible to provide a cookbook recipe that will produce the right answer if followed properly, not least given that the assessment is dynamic and needs to be relative to changes in the market’.79

V BLOOD ON THE TRACKS

The Infracos made some bold plans: — 336 new trains by 2014 and an additional 42 trains by 2019; — all rolling stock currently more than 10 years old replaced by 2019; — all lines to have modern signal and control systems by 2016, providing automatic train operation and automatic train protection; — a total of 80 per cent of the Underground’s 400-plus kilometres of track replaced over the life of the contract; 77 78 79

Bolt, Regulating London Underground, above n 73, at 15–16. Associated Provincial Picture Houses Ltd v Wednesbury Corp [1948] 1 KB 223. Bolt, Regulating London Underground, above n 73, at 21.

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— capacity increased within 10 years by 22 per cent on the Jubilee line; 14 per cent on the Victoria line; and by 18 per cent on the Northern line, with increases on other lines over the period of the agreements; — ten of London’s busiest stations modernised or refurbished within 10 years; — a programme of modernisation and refurbishment at other stations, including a network of ‘step-free’ stations, with ongoing refurbishments every 71⁄2 years; and — all infrastructure fully maintained and renewed to achieve a networkwide state of good repair by the end of the third review period. The service requirements generated a front-loaded expenditure profile, whereby the Infracos would experience negative cash flow in the first period. In this respect, the arrangements are similar to PFI, with the Infracos raising project finance to cover the shortfall, and the public paying more, later. The very long length of the contracts is explained by the need to have sufficient time, not only completely to revamp the network, but also, through fares, etc, to remunerate the private sector financial input. Conversely, the profile reveals the particular vulnerability of this form of public contracting in the early years. Performance soon confirmed both the potentials and pitfalls of the PPP arrangements.80 On the one hand, Tube Lines was commonly delivering plans to time and to budget while generating substantial dividends for its shareholders, much as ministers intended. Attention is drawn to the nature of the consortium’s supply chain. Major supply contracts had been awarded by open tender, so engendering a healthy competitive discipline inside the private sector part of the PPP. Metronet, on the other hand, became a byword for inefficiency and service disruption.81 This was not entirely surprising since the consortium had a tied supply chain, the big sub-contracts being parcelled out among the sponsors in cosy corporatist fashion.82 By early 2007, TfL was estimating delays totalling 27 years in Metronet’s station upgrades programme; cost overruns were perhaps as much as £1.2 bn.83 An important clue, the Arbiter had in a monitoring report remarked on the consortium delivering ‘significantly less than was expected in its bid’.84

80

See London Assembly Transport Committee, A Tale of Two Infracos (January 2007). Much like the unlamented ‘Railtrack’ at national level: see Leyland, above n 12. 82 See for detailed analysis, PPP Arbiter, Annual Metronet Report 2006, ch 3 (‘Annual Metronet Report’). At the time of writing, the Metropolitan Police are investigating associated claims of corruption. 83 See for chapter and verse, TfL, London Underground and the PPP: the fourth year 2006/07 (2007); also, London Underground Ltd v Metronet Rail BCV Ltd and Metronet Rail SSL Ltd [2008] EWHC 502 (TCC). 84 Annual Metronet Report, above n 82, at 8. 81

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The idea of ‘a politics of contract’ is brought sharply into focus. This kind of economic contractual ordering creates ample space for blame shifting not only between, but also across, the public and private sectors. While conceding deficiencies, it was Metronet management’s contention that much of the difficulty arose from additional works required by LUL or changes to standard. ‘Events’, most obviously the terrorist bombings of the London Tube in July 2005, should not be discounted. Conversely, with Metronet already in receipt of £3 billion in contractual payments, TfL’s very public line was not a penny extra. Vindication of Mayor Livingstone’s determined struggle against the PPP was the not so subliminal message. Nothing less than ‘a briefing war’ now informed the relationship of the parties. By June 2007 Metronet was on its knees. Confronted with weekly cash flow deficits of £10–15m and by forecast losses for the coming year in excess of £1bn,85 the banks and the shareholders not unnaturally called time on further credit. Metronet executives were thus driven to seek an ‘extraordinary review’ of the BCV Infraco agreement, so triggering the independent assessment of efficiency and economy. Such was Metronet’s plight that, as part of the reference for a direction increasing the ISC, it requested an interim award of some £550m. Ready and waiting, the Arbiter issued his draft interim directions86 within a matter of weeks. Applying the methodology of the ‘Notional Infraco’, it was not at all, however, what Metronet wanted to hear. Efficient costs for the year assessed at £243m above the existing baseline were discounted to £121m in extra ISC for the company’s failure to match ‘Good Industry Practice’. Evidently concerned that this might be throwing good money after bad, the Arbiter also provisionally determined no payments for six months, conditions that Metronet executives regularly certify the Infraco as a going concern and funding for any shortfalls, and the appointment of an independent monitoring trustee. A very striking example of administrative law powers in an age of public/private partnership, this was nothing less than a death sentence.87 Enter the Administrators,88 the product of an immediate High Court application by the Mayor ‘in order to maintain the efficient running of the London Tube’.89 Aiming to transfer each Infraco ‘as a going concern, so

85 As painstakingly revealed in the subsequent legal documentation: Metronet – Statement of Administrators’ Proposals, 27 November 2007. 86 PPP Arbiter, Reference from Metronet BCV Ltd: Interim Level of ISC pending a direction on ISC at Extraordinary Review – Draft directions (16 July 2007). 87 Evidently Metronet discounted the possibility of waiting on the actual interim award, let alone judicial review. 88 So also following the example of Railtrack: see Leyland, above n 12. 89 In the matter of Metronet Rail BCV Ltd and in the matter of Metronet Rail SSL Ltd (HC 18 July 2007). The Administration Orders were not contested.

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fulfilling the statutory purpose of the PPPs’,90 was all very well, but how were they to achieve this? LUL naturally played hardball.91 With a view to offering the PPP agreements to the market, would LUL ‘change the price payable or de-scope the works to be provided or waive any past breaches or agree to any material variation’? ‘No’. And would TfL maintain the 95 per cent guarantee of Metronet’s borrowings? ‘Certainly not’. Interest from the private sector evaporated. By November 2007, the Administrators were working solely on a deal with TfL. As for that very special personage the PPP Arbiter, this classical bipolar form of negotiation highlights the limits of the role. TfL made withdrawing the earlier request for ‘extraordinary review’ a condition of offer.92 Although the big company shareholders in the consortium had lost their original equity stake of £350m, they were now not only free of accrued liabilities but also in profit from the valuable sub-contracts. Nor did they appear to suffer much damage to reputation.93 As regards the impact on the travelling public, subsequent Parliamentary investigation has further highlighted the extent of Metronet’s service delivery failure: only 40 per cent of station upgrades and 65 per cent of track renewal completed as scheduled.94 As for the public purse, ministers were soon paying out an additional £2bn, mostly by reason of the 95 per cent guarantee to lenders.95 In the face of continuing heavy losses, TfL also had to make available some £900m in emergency loan funding to the Administrators in order to underpin the works programme. The costs of administration have been estimated at a further £600m. Re-engaged to sort out the legal and financial mess, beneficiaries include City firms which advised on the design of the PPPs.96

90 Metronet – Statement of Administrators’ Proposals, above n 85. For the special statutory provisions on PPP administration orders and subsequent transfer see Greater London Authority Act 1999 ss 220–24 and Schs 14–15. 91 London Underground, Metronet – Buyer’s Guidelines (August 2007). 92 See PPP Arbiter, ‘Metronet Rail BCV withdraws its reference for Extraordinary Review’ (Press release, 31 October 2007); as also a technical and procedural summation, Reference for Directions from Metronet BCV Rail Ltd for Extraordinary Review – Issues Arising (December 2007). In Directions on Form and Structure of Extraordinary Review and Net Adverse Effects – Initial Thoughts (September 2007) the Arbiter had indicated a less unfavourable approach to Metronet. 93 Balfour Beatty was soon happily tendering for track renewal business on the Tube: Guardian (London 6 March 2008). 94 House of Commons Transport Committee, above n 64, at 31. 95 Under the usual ‘letter of comfort’ arrangement and via grants to TfL: Hansard HC vol 471 cols WS 74–6 (6 February 2008). 96 As for the associated political fall-out, see Hansard HC vol 473 cols 85–116 (10 March 2008). The full additional cost of the debacle, including that of work inefficiently undertaken, remains to be assessed at the time of writing.

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At the time of writing, Metronet’s business has just been transferred97 to two TfL nominee companies, to be managed on a stand-alone basis until a long-term structure is agreed with the Treasury. Possible options include bringing the maintenance element of the contracts back into the public sector and letting individual contracts for upgrades and major investment work.98 Whatever new arrangements emerge however,99 the rebuff to UK Treasury policy on public contracting has been very real. According to the all-party Transport Committee of MPs, ‘the failure of Metronet fatally damages the Government’s assumption that the involvement of the private sector will always result in efficient and innovative approaches to contracts’.100

VI LESSONS

In our age of mixed administrations, of heavy reliance on the creative interaction of public and private power, contract is – with regulation – at the heart of administrative law. Study of it as a state activity in Britain highlights not only the importance of the private legal form to the earlier Thatcherite ‘revolution’ in government but also how contractual technique has underwritten so much in New Labour’s ‘third way’ approach to public provision. Across a broad swathe of public services today’s administrative law is designed as that of tomorrow. Such is the long shadow of PFI-type arrangements. In assiduously promoting PPP and PFI, the UK Treasury has highlighted the potentials in terms of VFM. As such, the policy development is clearly intended to work at various levels: stimulus to efficiency and economy, instrument for cultural change, tool of central influence. Experimentation and ‘learning by doing’ are recurring themes, as befits a world leader. In the case of the London Tube the argument for major private sector involvement was compelling, not least because of the massive engineering challenge. For ministers, the essential question was how best to combine with commercial enterprise. Examination reveals major design faults. Take the tied supply chain (a common feature of PFI-type projects). As the intended beneficiaries, 97 In the matter of Metronet Rail BCV Ltd and in the matter of Metronet Rail SSL Ltd (High Court, 23 May 2008). 98 As advocated by Mayor Livingstone: House of Commons Transport Committee, above n 64, at 14. 99 Matters have been further complicated by the fact of the four-yearly round of London Mayoral elections occurring in May 2008; in the event, the Conservative candidate Boris Johnson defeated Ken Livingstone. 100 House of Commons Transport Committee, above n 64, at 12.

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Metronet’s shareholders could not be relied upon to address the inefficiencies. Competitive bidding for the Infracos was no substitute for healthy market disciplines through the whole lifecycle of the modernisation programme. Government in other words was insufficiently alive to the dangers for the public interest of this blurring of supplier and shareholder functions. There was also insufficient transfer of risk properly to grease the wheels of corporate governance. With few assets of its own, Metronet was little more than a buffer between the consortium and the contractual obligations under the PPP. Rather than be pressured to improve performance, the parent companies could down tools with very limited liability. Likewise, with the risk to lenders being so heavily offset, the financial institutions had less incentive to hold Metronet to account for escalating costs. Meanwhile, the sharp £50m cap on the cost overruns absorbed by the Metronet Infracos did little to encourage innovation.101 Looking forward, the House of Commons Transport Committee emphasises the need for detailed assessment … of the suitability of the proposed structure of delivery organisations, of bidders’ specific expertise and of the strength of the incentives to efficiency.102

So much it may be said for the (costly) endeavours of the Government’s City advisers. Too contractual, insufficiently regulatory, the independent supervisory mechanism was under-powered. While respect for commercial judgement is an essential ingredient of the relationship, the PPP Arbiter should have been able to self-start the reporting function under the banner of affordability and VFM. In the event, his intervention via the ‘Extraordinary Review’ was both resolute and too late. The lack of an early warning system, whereby the fact of rapidly spiralling costs could have been authoritatively established, was a serious omission. Both sides were too eager to ‘pass the buck’. An autonomous ‘firewatching’ role in this type of project could usefully encompass the performance not only of providers but also, as regards (changes to) specification, the client.103 The affair vividly illustrates how public and private discretions alike may otherwise go untracked in a veritable jungle of contractual specification and technical detail. The high degree of uncertainty concerning the investment the Infracos had to make should have been a warning.104 Important transaction costs 101

In contrast to Tube Lines, which had a materiality threshold of £200m. House of Commons Transport Committee, above n 64, at 12. MPs have made similar observations: Ibid 17–21. 104 In this regard, as conveniently outlined by C Menard, ‘A New Institutional Approach to Organisation’ in C Menard and M Shirley (eds) Handbook of New Institutional Economics (Amsterdam, Springer, 2005), economic theory speaks volumes. 102 103

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were bound up in the central design feature of less presentiation, more incompleteness. The sheer scale of the enterprise maximised the scope for disagreement. More and more detailed contractual provision formed part of the problem. Armies of officials, advisers and consultants were deployed in the cause of the so-called ‘contracting state’. The contract theorist might ask, ‘trusting and co-operative relationship – what trusting and co-operative relationship?’ Imposing the PPP on a powerful and recalcitrant elected authority was itself a recipe for failure. Protecting lenders against political risk was one thing, ensuring the parties would constructively address contractual stresses and strains to their mutual benefit quite another. Transferring risk in public services and infrastructures is more easily said than done. To keep the Tube trains running means the taxpayer is inevitably forced to play the role of ‘safety-net’. Subject to proper scrutiny, there is much to be said for a public sector management model coupled with conventional government procurement in this situation. To conclude, enterprising forms of contractual technique have an important role to play in the administrative law of ‘the Changing State’. The whole PPP/PFI model cannot sensibly be condemned on the basis of one (spectacular) failure. Equally however, giving very tangible expression to a litany of complaint, the demise of the UK’s flagship scheme cannot be glossed over. As well as practical improvements involving risk transfer and corporate governance, let us hope that lessons are learned about the functional limitations of contractual ordering and the importance of vindicating public law values like transparency and accountability. The Ancients had a word for the design of London Tube modernisation: hubris.

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11 A Punitive Role for Tort Law? CAROL HARLOW *

I INTRODUCTION

T

HE STORY OF modern tort law is largely a history of the tort of negligence, the main vehicle for accident compensation. Negligence is a tort in which proof of damage is necessary and with its rise a view of tort law as purely compensatory began to prevail. The late John Fleming, for example, called the adjustment of losses caused by accidents ‘the principal, nay paramount, task of the law of torts’,1 while, in the High Court of Australia, compensation has also been called ‘the dominant remedy if not the purpose of the law of torts today’.2 Street cited Lords Simonds and Diplock to the effect that compensation is ‘the one judicial function in the law of torts’3 and similar views have been expressed by the contemporary British judiciary, including Lord Bingham, who quite recently asserted that ‘the overall object of tort law is to define cases in which the law may justly hold one party liable to compensate another’.4 More extensively, Lord Reid once said of awards of exemplary damages that they confuse ‘the function of the civil law which is to compensate with the function of the criminal law which is to inflict deterrent and punitive penalties’.5 He thought the word ‘fine’ an ‘entirely accurate description of that part of any award which goes beyond anything justly due to the plaintiff and is purely punitive’. Yet there is not total unanimity. In the same case, Lord Wilberforce took a more pragmatic and open-minded line: * This chapter originated as a paper given at a UNSW conference on Government Liability organised by Mark Aronson in September 2007. I am grateful to Mark, with whom I have very much enjoyed exchanging ideas on state liability and administrative law generally over the years, for his constructive help. Thanks also to Peter Cane, who critiqued an earlier version. 1 J Fleming, An Introduction to the Law of Torts (Oxford, Clarendon Press, 1967) 1. 2 Uren v John Fairfax & Sons Pty Ltd (1966) 117 CLR 118, 149 (Windeyer J). 3 Street on Torts, 7th edn (London, Butterworths, 1983) 3 (the last edition edited by the author). 4 Fairchild v Newhaven Funeral Services Ltd [2002] UKHL 22 [9]. 5 Cassell v Broome [1972] 1 ALL ER 801, 837.

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It cannot lightly be taken for granted, even as a matter of theory, that the purpose of the law of tort is compensation, still less that it ought to be, an issue of large social import, or that there is something inappropriate or illogical or anomalous (a question-begging word) in including a punitive element in civil damages, or conversely, that the criminal law, rather than the civil law is in these cases the better instrument for conveying social disapproval, or for redressing a wrong to the social fabric … As a matter of practice English law has not committed itself to either of these theories; it may have been wiser than it knew.6

Tort law has in fact an ancient lineage as a remedy for abuse of power. Punitive and deterrent functions are inherent in the tort of trespass, which lay at the heart of the early writ system at a time when, as Fleming reminds us, the law of torts was ‘little more than a shadow in the wake of the criminal law’.7 The strict liability of trespass, actionable without proof of damage (per se), increased its potency in actions against the executive. So did the fact that trespass casts on the defendant the burden of proving justification or lawful excuse. Dicey, writing at the end of the 19th century, tells us that the Reports abound with cases in which officials have been brought before the courts, and made, in their personal capacity, liable to punishment, or to the payment of damages, for acts done in their official character but in excess of their lawful authority.8

This personal responsibility of officials for their official actions was a central feature of Dicey’s foundational doctrine of the rule of law. Even today, when judicial review has emerged as the primary means for challenge of illegal government action, there is ‘nothing in the slightest bit peculiar’ about an individual bringing a private law claim for damages against an executive official who had unlawfully infringed his private rights, as Brooke LJ, claiming Dicey for his sole authority, recently confirmed.9 That trespass is actionable without proof of damage does not of course mean that damages could not be awarded; very large awards were and still may be10 made in cases where a jury suspects spite, malevolence or other aggravating conduct. But whether their awards were compensatory or punitive the jury did not have to say. It was indeed probably not until the

6

Ibid 860. Fleming, above n 1,at 3. 8 AV Dicey, Introduction to the Study of the Law of the Constitution, 10th edn (London, Macmillan, 1959) 193–94. The vicarious liability of Crown and central government (not discussed here) was set back by 19th -century applications of the maxim ‘The King can do no wrong’: see Tobin v R (1864) 143 ER 1148; Feather v R (1865) 122 ER 1191. 9 ID v Home Office [2005] EWCA Civ 38; [2006] 1 WLR 1003 [56]. 10 In England, awards are now subject to guidance from the Court of Appeal and trial judge: see Thompson and Hsiu v Metropolitan Police Commissioner [1998] QB 498. 7

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celebrated case of Wilkes v Wood11 (where the roguish John Wilkes challenged the legality of a ‘general search warrant’) that the concept of exemplary damages emerged. Robustly, Pratt CJ instructed the jury that damages were designed not only as a satisfaction to the injured person, but likewise as a punishment to the guilty, to deter from any such proceeding for the future, and as a proof of the detestation of the jury to the action itself.

In this chapter I want to question the twin assumptions that negligence is the principal, if not quite the sole, vehicle for tortious liability and that tort law’s sole concern is compensation. With special consideration of torts of strict liability, I want to invite reconsideration of tort law’s punitive and deterrent role. I shall argue that, in cases where no physical or pecuniary damage can be shown it may still be proper to use tort law for the vindication of rights. Finally, I shall ask whether the bright-line currently drawn by the judges between tort and human rights law is justified and how far pecuniary remedies should be available as a sanction for violation of human rights.

II TORT LAW AND DETERRENCE

Arguments around the deterrent use of tort law fall broadly into three categories. The first is theoretical and empirical, covering justifications for the practice and evidence as to its utility. The second concerns awards of exemplary or punitive damages. The third concerns appropriate causes of action.

A Theory Deterrent theories of tort law are today hard to come by; indeed, tort law’s powers of general deterrence, in the sense of preventing or inhibiting dangerous activities or conduct disapproved by society, are questioned, except perhaps by the builders of economic models, who work with ‘rational man’ rather than humankind with all its imperfections.12 On the one hand, tort law’s deterrent properties are generally assumed; on the other, little empirical evidence has been produced to support the assumption and such evidence as is available is limited and ambiguous. Amongst suggested reasons are that tort law’s operation is too uncertain; that its content and structure is inappropriate; and that carrots may be better than 11 12

Wilkes v Wood (1763) Lofft 1, 18. Notably G Calabresi, The Cost of Accidents (New Haven, Yale University Press, 1970).

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sticks.13 A study designed to test the efficacy of the tort system and its alternatives against the goals of deterrence, compensation and corrective justice concluded that deterrent effects were strong only in the case of traffic accidents; in environmental cases, deterrence was negligible while, in the workplace, workers’ compensation levies had stronger deterrent effects.14 In default of evidence covering a wide span of activities that lends conclusive support to one or the other side of the argument, Bishop reasonably concludes that we are justified ‘in ignoring both’.15 As for the impact of tort law on bureaucratic behaviour, this is still more obscure. Such empirical research as does exist tends to focus on the impact of judicial review, the main alternative to tort law, and is again mostly inconclusive.16 One side bases an argument against liability on ‘overdeterrence’ and the ‘chill factor’; the other side claims that public bodies are indifferent to liability findings. Two of the major theorists of government liability show concern over defensive administration. Cohen argues for a ‘no liability’ rule on the ground that government, like private employers, undercuts the effectiveness of deterrence by failing to enforce liability against its employees: full enforcement of individual liability to damages would ‘induce the employee to adopt behaviour that is suboptimal from the standpoint of the employer’.17 No evidence is produced. On grounds of uncertainty and inappropriate structure, Schuck concludes that tort law’s deterrent functions are marginal: Most tort law standards are radically indeterminate; they define legal duties in terms of reasonableness, foreseeability and other similarly ambiguous concepts. Few brightline rules exist; even when they are available, the courts often reject them … Deterrence also founders on the reality that people’s knowledge about tort law is very limited. If they think about risk at all, their own self-regard and desire to avoid pain and loss already supply an incentive to be careful.18

Although Schuck concedes that

13 P Cane, The Anatomy of Tort Law (Oxford, Hart Publishing, 1997) 217–25; S Sugarman, ‘Doing Away with Tort Law’ (1985) 73 California Law Review 555. 14 D Dewes, D Duff and M Trebilcock, Exploring the Domain of Accident Law, Taking the Facts Seriously (New York, OUP, 1996); D Dewes and M Trebilcock, ‘The Efficacy of the Tort System and its Alternatives: A Review of the Empirical Evidence’ (1992) 30 Osgoode Hall Law Journal 57. See also P Cane, ‘Using Tort Law to Enforce Environmental Regulation’ (2002) 41 Washburn Law Journal 427. 15 B Bishop, ‘The Private Law Model’ (1990) 40 University of Toronto Law Journal 663. 16 S Halliday, Judicial Review and Compliance with Administrative Law (Oxford, Hart Publishing, 2004). See also P Cane, ‘Understanding Judicial Review and its Impact’ in S Halliday and M Hertogh, Judicial Review and Bureaucratic Impact: International and Interdisciplinary Perspectives (Cambridge, CUP, 2004). 17 D Cohen, ‘Regulating Regulators: The Legal Environment of the State’ (1990) 40 University of Toronto Law Journal 213, 258. 18 P Schuck, Suing Government: Citizen Remedies for Official Wrongs (New Haven, Yale University Press, 1983) 484.

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which remedies deter particular behaviour … is ultimately an empirical question, but one that is so elusive that the inquiry must be informed largely by theoretical speculation,19

he believes damages to be a useful tool for preventing or inhibiting conduct viewed as wrongful or undesirable because they ‘prohibit the choice ex ante and punish it ex post’.20 Schuck supports public preference: tort law allows private litigants through their lawyers directly to ‘animate and shape legal and policy change’. Tort actions are ‘the embodiment of public morality’.21 (Much the same argument could be advanced for judicial review.)

B Punitive Damages Whether or not deterrent effects can be proved, the imposition of liability on public officials is a constitutional principle of symbolic importance. The idea of tort law as sanction for unconscionable administrative conduct conforms, like Dicey’s rule of law theory, to ‘a widely-held political ideal’.22 Liability marks public disapproval of executive action that, whether deliberate or grossly incompetent, exceeds what is acceptable.23 The sanction element is important, as evidenced by the persistence of exemplary damages in a system understood by the modern judiciary to be compensation-based. In Rookes v Barnard,24 Lord Devlin speaking for the House thought exemplary damages appropriate in cases of ‘oppressive, arbitrary or unconstitutional action by servants of the government’. Officials needed the reminder that they were ‘also the servants of the people and the use of their power must always be subordinate to their duty of service’. A period of doubt and uncertainty followed Rookes, a case widely seen as changing and diminishing traditional common law torts. In its restrictive judgment in AB v South West Water Services,25 however, the English Court of Appeal resisted an extension of exemplary damages to the tort of negligence. The defendant was a water authority which had, over a long period, dealt deceitfully with the plaintiffs, failing to admit, although they 19

Ibid 16. Ibid 16–22. Ibid 477. 22 P Hogg, Liability of the Crown, 2nd edn (Toronto, Carswell, 1989) 1–2. 23 ID v Home Office [2005] EWCA Civ 38 [2006] 1 WLR 1003. 24 Rookes v Barnard [1964] AC 1129 (‘Rookes’). 25 AB v South West Water Services [1993] 1 All ER 609, where the Court of Appeal introduced the troublesome ‘cause of action test’, according to which the category of exemplary damages was restricted to torts where they had been awarded at the date of Rookes v Barnard. 20 21

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knew of it, to a spillage of ammonium sulphate and dismissing their complaints of symptoms as neurosis The opposing view of damages as purely compensatory had prevailed. A change of heart is visible in A v Bottrill,26 which posed the difficult question whether an action for exemplary damages could surmount an ouster clause in New Zealand’s accident compensation legislation.27 A government pathologist had consistently failed correctly to examine PAP smears. A victim of his negligence successfully claimed accident compensation, and disciplinary proceedings against the pathologist had been successful. A majority of the Privy Council thought that a further action for exemplary damages was allowable on the ground that, exceptionally a defendant’s conduct in committing a civil wrong is so outrageous that an order for payment of compensation is not an adequate response. Something more is needed from the court, to demonstrate that such conduct is altogether unacceptable to society. Then the wrongdoer may be ordered to make a further payment, by way of condemnation and punishment.28

These exceptional cases would usually involve intentional wrongdoing with, in addition, ‘an element of flagrancy or cynicism or oppression or the like: something additional, rendering the wrongdoing or the manner or circumstances in which it was committed particularly appalling’. In negligence cases, at the very least, there must be subjective reckless indifference, approaching very closely to intentional wrongdoing, such as to evoke a sense of outrage. Admitting the case for exemplary damages, a minority dissented on the ground that awards should be restricted to cases of intentional wrongdoing:29 The rationale of exemplary damages is not to mark the court’s disapproval of outrageous conduct by the defendant; rather, the award is made to punish the defendant for his outrageous behaviour. The rationale does not apply where the defendant has not had the intent to harm or has not been subjectively reckless. In such a case, although the opinion of the court may be that the defendant’s conduct has been outrageous because, for

26

A v Bottrill [2003] 1 AC 449. Introduced by the Accident Compensation Act 1972, now the Accident Rehabilitation and Compensation Act 1992. For a discussion of the role of deterrence in administrative accident compensation see L Klar, ‘New Zealand’s Accident Compensation Scheme: A Tort Lawyer’s Perspective’ in FM Steel and S Rodgers-Magnet (eds), Issues in Tort Law (Toronto, Carswell, 1983). 28 A v Bottrill [2003] 1 AC 449 [20], [23] (Lord Nicholls, speaking for Lords Hope and Rodger). 29 Ibid [77] (Lords Millett and Hutton) reflecting the strong majority ruling of the New Zealand Court of Appeal in Bottrill v A [2001] 3 NZLR 622. See also W v W [1999] 2 NZLR 1, 2 (Lord Hoffmann). 27

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example, his gross negligence has caused very grave harm to the plaintiff, it would not be right to punish him in the absence of a guilty mind by an award of exemplary damages. Categorisation of exemplary damages as punitive mirrors the recommendations of the English Law Commission in a study forming part of a wider survey of the law of damages, badly in need of reform.30 The exemplary principle survived the Commission’s hard look, due largely to the fact that responses to an earlier consultation paper had shown around 72 per cent of respondents favouring retention. Making specific mention of the need to provide sanctions against police abuse of power, the Commission recommended limited expansion of exemplary awards to cover ‘gaps’ left by the criminal and civil law. A change in terminology to mark the true function of exemplary damages as ‘punitive’ was also recommended. A judge (but not a jury) should be able to award punitive damages in addition to any other appropriate remedy where the defendant’s conduct showed ‘a deliberate and outrageous disregard of the plaintiff’s rights’. This was subject to the proviso that punitive damages should be restricted to cases where the judge considered other remedies inadequate to ‘punish’ the defendant’s outrageous conduct. To sum up, punitive damages may be available but only in exceptional cases. The conduct sanctioned must be contumelious, deliberate and outrageous, high-handed, insolent and vindictive or a deliberate and outrageous disregard of the plaintiff’s rights. Recklessness or wilful blindness closely approaching intentional wrongdoing is also covered. C Causes of Action That wrongful motive by itself is insufficient for tortious liability is a truism. Yet faced with the sort of conduct we have been discussing, courts will strive to find a remedy. The classic case is Roncarelli v Duplessis,31 where the Quebec Premier, who doubled as Attorney-General, ‘advised’ the Quebec liquor licensing commission to revoke the plaintiff’s licence in perpetuity, with the sole object of preventing him from standing surety for Jehovah’s Witnesses charged with disseminating offensive literature. Rand J held the defendant liable for ‘a gross abuse of legal power’ in terms of 30 Law Commission, Aggravated, Exemplary and Restitutionary Damages, Law Com No 247, 1997 and the previous consultation paper, Law Com No 132, 1993 noted by P Jaffey, ‘The Law Commission Report on Aggravated, Exemplary and Restitutionary Damages’ (1998) 61 Modern Law Review 860. See generally M Tilbury, ‘Reconstructing Damages’ (2003) Melbourne University Law Review 27. The Report has not so far been implemented. Much attention has been lavished on the distinction between aggravated damages (compensatory) and exemplary or punitive damages. As this distinction is not relevant to my argument, the copious discussion will not be repeated here. 31 (1959) 16 DLR (3d) 689 (‘Roncarelli’).

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Article 1053 of the Quebec Civil Code, which bases extra-contractual liability on fault. The judgment of Rand J, which has become the standard test of liability in cases of malicious wrongdoing by public officials, lends itself to two slightly different interpretations. On the one hand, his view of that discretion as necessarily implying good faith suggests a subjective liability test. This would align with the preference of modern legislators, with whom ‘good faith protection clauses’ are a favourite device. On the other hand, Rand J defined malice in a way capable of an objective interpretation: Malice in the proper sense is simply acting for a reason and purpose knowingly foreign to the administration, to which was added here the element of intentional punishment by what was virtually vocation outlawry.32

Despite the rider, this definition opens the way to equating malice with the objective test of wrongful or improper motive in ultra vires. To put this differently, under this test, the Wednesbury unreasonableness test might provide the bright-line for liability. Two torts in particular deal with the liability of public officials for malicious or deliberate wrongdoing: malicious prosecution and misfeasance in public office. Fleming has called the first ‘more carefully guarded that any other in the law of torts’ because of the need to balance the competing interests of the individual with the public interest in law enforcement.33 A series of hurdles has been erected, making success well-nigh impossible. Thus the plaintiff (on whom the burden of proof rests) has to show not only that the defendant acted maliciously but also without reasonable and probable cause and for an improper purpose.34 A recent decision of the High Court of Australia could, however, make the tort more serviceable. In A v New South Wales35 a prosecution for child abuse had been brought by a specialist child protection unit against a serving police officer, who was acquitted. In an action against the agency, A alleged that the decision-maker had no ‘reasonable or probable cause’ to prosecute but had succumbed to pressure from senior officers to implement a policy always to take action against Police Service employees. By a 4:1 majority the High Court ruled in A’s favour. To constitute malice, the court thought, the prosecutor’s sole or dominant purpose must be an ‘illegitimate or oblique motive’; in other words, something other than the proper invocation of the criminal law. This test was subjective. The issue of reasonable and

32

Ibid 706. Fleming, above n 1, at 534. 34 Glinski v McIver [1962] AC 726. 35 A v New South Wales [2007] HCA 10 (‘A’). The High Court restored the findings of the District Judge and an award of $31,250. 33

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probable cause, on the other hand, had two aspects, objective and subjective, both of which must be carefully considered:36 To ask only whether there was material available to the prosecutor which, assessed objectively, would have warranted commencement or maintenance of the prosecution would deny relief to the person acquitted of a crime prosecuted by a person who not only acted maliciously, but who is shown to have acted without forming the view that the material warranted prosecution of the offences. Conversely, to ask only what the prosecutor made of the material that he or she had available when deciding to commence or maintain the prosecution would favour the incompetent or careless prosecutor over the competent and careful.

Much of the interest of the case lies, however, in the way that the court dealt with the functions of professional prosecutors and prosecution services. Historically, individuals had prosecuted in person; in modern times, this was ordinarily the function of a police officer or official of the Crown Prosecution Service, likely to have no personal knowledge of the circumstances. In this situation, where the prosecutor acted on material provided by third parties, a relevant question in an action for malicious prosecution will be whether the prosecutor is shown not to have honestly concluded that the material was such as to warrant setting the processes of the criminal law in motion. (There may also be a real and lively question about the objective sufficiency of the material, but that may be left to one side for the moment.) In deciding the subjective question, the various checks and balances for which the processes of the criminal law provide are important. In particular, if the prosecutor was shown to be of the view that the charge would likely fail at committal, or would likely be abandoned by the Director of Public Prosecutions, if or when that officer became involved in the prosecution, absence of reasonable and probable cause would be demonstrated. But unless the prosecutor is shown either not to have honestly formed the view that there was a proper case for prosecution, or to have formed that view on an insufficient basis, the element of absence of reasonable and probable cause is not established.37

In the light of A, unsuccessful prosecutions may be actionable if either actual malice on the part of someone handling the file and in charge of the case can be shown; or, in the context of a prosecution service, if policy or decisions are set or made at senior level and bind or ‘fetter the discretion’ of subordinates so that a purpose that is unreservedly improper has dictated the conduct of the prosecuting officer. This softens the requisite mental element, in some ways bringing it nearer to modern ideas of systemic or institutional negligence.

36 37

Ibid [58]. Ibid [80].

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The law in respect of misfeasance in public office, a moribund tort, once said by the late Stanley de Smith to be ‘insecurely anchored in the case law’,38 has taken a somewhat different course. It experienced a miraculous resurrection in the Three Rivers District Council v Bank of England ,39 a ‘supercase’ asking for recovery of economic losses brought against the Bank of England in its capacity as regulator after the BCCI had been closed down owing £10 billion to its creditors. Misfeasance owed its resurrection essentially to the existence of a good faith protection clause40 that would have barred liability in negligence. Three Rivers is relevant here for two reasons. First, (at great cost) it established the parameters of the modern tort, which were said to be that: — — — —

the the the the

defendant must be a public official; act complained of must be an exercise of public power; claimant must have suffered damage; and official must have acted intentionally, maliciously or recklessly

Secondly, the high profile of the case drew the attention of litigation lawyers to its possibilities. In Kuddus v Chief Constable of Leicestershire,41 a police officer forged the complainant’s signature and secretly struck out his complaint of burglary. The House of Lords focused mainly on exemplary damages but it did not rule out the possibility of an action in misfeasance in a case that was evidently based more on deterrent than compensatory damages. Deterrent uses for misfeasance arose more directly in Watkins v Home Office.42 Prison officers in the course of cell searches had deliberately 38 SA de Smith, Judicial Review of Administrative Action, 3rd edn (London, Stevens, 1973) 297. 39 Three Rivers District Council v Bank of England [2000] 2 WLR 1220 (‘Three Rivers’) noted in M Andenas and D Fairgrieve, ‘Misfeasance in Public Office, Governmental Liability, and European influences’ (2002) 51 International and Comparative Law Quarterly 757. The ‘supercase’ concept comes from Sir Anthony Clarke, who had originally struck out the pleadings as doomed to failure: see ‘The Supercase – Problems and Solutions: Reflections on BCCI and Equitable Life’ (KPMG Forensic’s Annual Law Lecture 2007). Perhaps unfortunately, the case was reinstated by a majority in the House of Lords: Three Rivers v Bank of England (No 3) [1996] 2 AC 1. The case collapsed at trial after 12 years of fruitless litigation, when the trial judge asserted that further proceedings were not in the interests of the creditors, who were claiming £850m in damages. 40 Repeated in Financial Services and Markets Act 2000 (UK) Sch 1, paras 19(1), (3), which exempt the Financial Services Authority and any member, officer or member of staff of the Authority from liability in damages for anything done or omitted in the discharge, or purported discharge of the Authority’s functions unless (a) the act or omission is shown to have been in bad faith, or (b) the act or omission is unlawful as a result of Human Rights Act 1988 s 6(1). 41 Kuddus v Chief Constable of Leicestershire Constabulary [2001] UKHL 29, (‘Kuddus’). The case was decided on a ‘strike out’. Racz v Home Office [1994] 2 AC 45 is authority for the proposition that the Home Office may be vicariously liable for acts of police officers amounting to misfeasance in public office. 42 Watkins v Home Office [2006] UKHL 16 (‘Watkins’).

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flouted Rule 39 of the Prison Rules 1999, which protects the confidentiality of a prisoner’s legal correspondence. In some of the incidents malice and recklessness could be shown; in others not. This raised two questions: (i) whether damage was necessary to found liability in misfeasance; and (ii) what degree of intention was necessary. The House of Lords ruled that: (i) damage was an element of the tort of misfeasance; and (ii) a degree of intention more than the purely nominal degree sufficient for trespass would be required. Thus, taken together with the case of Wainwright v Home Office43 (discussed below), Watkins tends to close the door to the use of tort law purely for deterrent or punitive purposes in cases involving abuse of public power.

III

VINDICATING RIGHTS

A Trespass As a tort of strict liability actionable without proof of damage, trespass is strongly associated with the vindication of rights. The catalogue of trespass torts contains many wrongs – assault, battery, wrongful arrest and detention, false imprisonment, search of person or premises, seizure or destruction of goods – that can be used to combat abuse or misuse of public power and which justify the modern label of ‘police torts’. This traditional use was powerfully reinstated in R v Governor of Brockhill Prison, ex p Evans,44 where prison governors under the guidance of the Home Office had ‘wrongly’ interpreted statutory provisions in reliance on High Court rulings later successfully attacked by E in an application for habeas corpus. E, who had consequently served an additional period of imprisonment, then sued for damages for wrongful imprisonment. In defence the governor argued that he had had no choice in the matter; as he was bound to do, he had complied with the law ‘as expounded by the court not just once but several times’. By a majority, the Court of Appeal found in E’s favour, awarding £5,000 for 59 ‘extra’ days in prison; on further appeal, the Law Lords unanimously ruled for E, construing the defence of ‘lawful excuse’ very narrowly and refusing to introduce into English law ‘good faith’ defences that they claimed were novel. As Lord Hope explained: It is no answer to a claim based on a tort of strict liability to say that the governor took reasonable care or that he acted in good faith when he made the 43

[2003] 3 WLR 1137 (‘Wainwright’). R v Governor of Brockhill Prison, ex p Evans (No 2) [2001] 2 AC 19; R v Governor of Brockhill Prison, ex p Evans [1997] QB 443 (habeas corpus). The House cited with approval the NSW Court of Appeal in Colwell (1988) 13 NSWLR 714. See also M Fordham, ‘False Imprisonment in Good Faith’ (2000) Tort Law Review 53. 44

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calculation … [F]or the governor to escape liability for any extended period of detention on the basis that he was acting honestly or on reasonable grounds analogous to those which apply to arresting police officers would reduce the protection currently provided by the tort of false imprisonment. I can see no justification for limiting the application of the tort in this way. The authorities are at one in treating it as a tort of strict liability. That strikes the right balance between the liberty of the subject and the public interest in the detection and punishment of crime. The defence of justification must be based upon a rigorous application of the principle that the liberty of the subject can be interfered with only upon grounds which a court will uphold as lawful. The Solicitor-General was unable to demonstrate that the respondent’s detention was authorised or permitted by law after the date which was held by the Divisional Court to be her release date. I would hold that she is entitled to damages.45

In other cases, English courts, apparently concerned about opening the door to supposedly ‘trivial’ claims against police and prison officers, have taken a rather different line. Bold assertions about civil liberties are coupled with a propensity to whittle strict liability down. The amount of force required for a trespass to the person may be increased, the degree of intention enlarged,46 or the concept of detention narrowed, as in R (Gillan) v Metropolitan Police Commissioner,47 where peaceful demonstrators outside an exhibition of armaments were stopped and searched by the police using anti-terrorism legislation. This clear misuse of power, with undertones of racial discrimination and affront to personal dignity, was characterised by Lord Bingham as a ‘whistle-stop and search’, hence not to amount to detention. In ID v Home Office,48 the claimants were Roma asylum seekers who had spent several months in immigration detention centres while awaiting deportation as illegal immigrants. They challenged their detention as ‘unlawful, unreasonable and disproportionate’, claiming damages, including exemplary damages, for false imprisonment, unlawful discrimination under the Race Relations Acts 1997 and 2001 (UK) (the latter extending the earlier legislation to public authorities) and for violation of their human rights. The Home Office applied to strike out the claims. Making bold statements about protection of liberty and claiming that that the court would ‘scrutinise with care the legality of any executive act that deprives [the plaintiffs] of that liberty’, the Court of Appeal found against the 45

[2001] 2 AC 19, 35. In trespass to the person, the act and the damage may be minimal, while intention is intention to trespass and not intention to injure. A ‘mere touching’, provided it is done with hostile intent, or in the current terminology of the English courts, is ‘not generally acceptable in the ordinary conduct of everyday life’ and constitutes an assault: see Collins v Willcock [1984] 1 WLR 1172; Wilson v Pringle [1987] QB 237. Significantly, both cases were cited by Lord Hoffmann in Wainright. 47 R (Gillan) v Metropolitan Police Commissioner [2006] UKHL 12. 48 ID v Home Office [2005] EWCA Civ 38; [2006] 1 WLR 1003 (‘ID’). 46

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asylum-seekers. Applying precedents in which a ‘good faith’ defence has been allowed to develop in respect of discretionary official decisionmaking,49 the court ruled that, so long as there appeared to be a valid notice of intention to deport not vitiated by administrative illegality, no challenge could be made to the legality of the consequential detention. Wednesbury principles or – by no means the same thing – the ECtHR test of proportionality must be applied in deciding whether an official’s discretionary decision to arrest or detain someone in custody gives rise to liability. This ruling had the effect of softening the strict liability of trespass in precisely the way the House of Lords had refused to do in Evans – which was, incidentally, approved and applauded, if not wholeheartedly applied, in ID! The unfortunate tendency to blow ‘now hot, now cold’ is stronger still when the court is asked to move outside the strict requirements of trespass. The occasional successes are based on the residual common law category of an innominate tort or action on the case. In the famous 19th century case of Wilkinson v Downton,50 Wright J held a practical joker liable for causing nervous shock to the plaintiff by telling her that her husband had broken both legs in an accident. He had wilfully done an act calculated to cause physical harm to the plaintiff – that is to say, to infringe her legal right to personal safety, and has in fact thereby caused physical harm to her. That proposition without more appears to me to state a good cause of action, there being no justification alleged for the act.51

Wilkinson established that an act in the nature of a trespass that (i) violates an established right – in this case the right of physical integrity – is actionable (ii) if done wilfully or with recklessness as to the consequences of the wrongful action; in short, if it is ‘malicious’. How much further would the courts be prepared to go?52 In Wainwright53 a mother and son visiting a relative detained in prison under suspicion of being a drug dealer were subjected to an intrusive and undignified strip search. They later sued for assault and battery and violation of their right to privacy under Article 8 of the European 49 In Everett v Griffiths [1921] AC 631 the defence was statutory but Holgate-Mohammed v Duke [1984] AC 437 involved the common law test of ‘reasonable suspicion’. See also Paul v Chief Constable of Humberside [2004] EWCA Civ 308; Cumming v Chief Constable of Northumbria Police [2003] EWCA Civ 1844. 50 Wilkinson v Downton [1897] 2 QB 57 (‘Wilkinson’). 51 Ibid 58–9. 52 In Beaudesert Shire Council v Smith (1966) 120 CLR 145, council workers quarrying gravel in a river bed in the belief that they were entitled to do so damaged the plaintiff’s artesian well and were held liable without proof of malice or further intention. The width of the novel action on the case, seen as capable of burdening the state with the risk of all loss caused by all invalid or illegal administration, led to its dispatch by the High Court of Australia in Northern Territory of Australia v Mengel (1995) 129 ALR 1. 53 [2003] 3 WLR 1137 (‘Wainwright’).

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Convention on Human Rights (‘ECHR’). It was argued for the Home Office that the prison officers had not realised they were acting unlawfully; they honestly believed the rules authorised a strip search, although the terms of the Prison Rules had technically been breached. In the son’s case, the House of Lords ruled in favour of liability because the search had involved touching his genitals; this was an improper physical contact of a kind not ‘generally acceptable in the ordinary conduct of daily life’. The mother’s case was more difficult. Because there had been no physical contact, the search fell just outside the boundaries of trespass. The House of Lords was therefore obliged to consider whether the protection of the common law extended to infliction of humiliation and distress by conduct calculated to humiliate and distress. In terms of the present argument, the House was asked: (i) whether non-physical integrity was a ‘right’ that the common law would vindicate; and if so (ii) what degree of intention was necessary? Lord Hoffmann (a judge notably averse to extending the ambit of tort law) gave the leading judgment. He questioned the concept of intention used in Wilkinson, calling it an ‘imputed intention which sailed as close to negligence as [Wright J] felt he could go’. A principled distinction to justify abandoning the rule that damages for mere distress are not recoverable required the defendant to have actually acted in a way which he knew to be unjustifiable. He must either have intended to cause harm or at least acted without caring whether or not he caused harm. Even on the basis of a genuine intention to cause distress, Lord Hoffmann preferred to reserve his opinion on whether compensation should be recoverable. Nor did the idea that dignity might be an interest worthy of protection (point (ii) above) recommend itself to Lord Hoffmann. Proffering the usual ‘floodgates’ justification, he remarked: In institutions and workplaces all over the country, people constantly do and say things with the intention of causing distress and humiliation to others. This shows lack of consideration and appalling manners but I am not sure that the right way to deal with it is always by litigation. The Protection from Harassment Act 1997 defines harassment in section 1(1) as a ‘course of conduct’ amounting to harassment and provides by section 7(3) that a course of conduct must involve conduct on at least two occasions. If these requirements are satisfied, the claimant may pursue a civil remedy for damages for anxiety: section 3(2). The requirement of a course of conduct shows that Parliament was conscious that it might not be in the public interest to allow the law to be set in motion for one boorish incident. It may be that any development of the common law should show similar caution.54

54

Ibid [44].

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The unsatisfactory case of Wainwright overlooks the possibility that tort law may have objectives of general deterrence. In contrast to the mildly modernising decision of the High Court of Australia in A, it shows the courts sticking (almost) to the letter of the common law of trespass but discouraging expansion in line with its spirit – except perhaps in the exceptional case where malice or recklessness can be shown. B Constitutional Torts? Watkins, discussed above in the context of misfeasance, is also remarkable for Lord Bingham’s attack on Ashby v White.55 This was an action brought against returning officers who, in a parliamentary election, had deliberately turned away voters. Asked whether the common law courts could provide a remedy for this ‘excessive and insolent use of power’, the judges opined that they could not. Admittedly, what was decided in the puzzling and badly reported case, primarily concerned with the scope of parliamentary privilege and the jurisdiction of the common law courts, is not entirely clear; it was, however, the striking dissent of Holt CJ that ultimately prevailed. Citing the maxim ‘No right without remedy’, Lord Holt affirmed the law’s traditional punitive and exemplary role: if public officers will infringe men’s rights, they ought to pay greater damages than other men to deter and hinder others from the like offences.56

The case retains its importance because it gave birth to two important ideas: (i) that intangible rights can classified as an ‘interest in property’, which the common law will protect; (ii) and in a modern formulation, that some rights may be ‘constitutional in character’, hence of such importance as to warrant protection by an action in damages.57 The assumption had always been that, because it was an action on the case rather than a conventional trespass action, an ‘Ashby v White action’ would require proof of special damage. Given the indeterminate nature of the right of suffrage, however, it would seem that infringement of the right carried an implication of damage. This was effectively what the Court of Appeal assumed in Watkins. Lord Bingham was at pains to repudiate both the assumption and the concept on which it was founded. Treating Ashby v White as an ‘impure’ and misleading source for the ‘constitutional tort’ doctrine’, he sceptically dismissed the relevance of modern cases where rights had been described as ‘constitutional’, ‘basic’ or ‘fundamental’: 55

Ashby v White (1703) 2 Ld Raym 938. Ibid 956. 57 James v Commonwealth (1939) 62 CLR 339 and Kruger v Commonwealth (1997) 190 CLR 1 seem to preclude the development of a ‘constitutional tort’ as such in Australia, though a common law action is not necessarily precluded if appropriate. 56

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The feature on which the Court of Appeal fastened was the breach in this case of the respondent’s constitutional right to protection of the confidentiality of his legal correspondence. That was seen as providing an analogy with the breach of the plaintiff’s constitutional right to vote in Ashby v White.[58] In all these cases the importance of the right was directly relevant to the lawfulness of what had been done to interfere with its enjoyment … I see scant warrant for importing this jurisprudence into the definition of the tort of misfeasance in public office. We would now, of course, regard the right to vote as basic, fundamental or constitutional. None of these expressions was used by Holt CJ in Ashby v White, and scarcely could have been given the very small number of adult citizens by whom the right was enjoyed at the time. There is thus an element of anachronism in relying on Ashby v White (itself a highly politicised decision) to support a proposition it would scarcely (despite the right to vote being ‘a thing of the highest importance, and so great a privilege’) have been thought to support at the time. It is, I think, entirely novel to treat the character of the right invaded as determinative, in the present context, of whether material damage need be proved.59

After Watkins we know: (i) that damage is an element of the tort of misfeasance; and (ii) that a degree of intention more than the largely nominal intent sufficient for trespass is required. We should also assume (iii) that, at least in England, neither the tort of misfeasance nor an anomalous action on the case can be used purely for the vindication of constitutional rights. (Whether a constitutional right can survive Lord Bingham’s lacerations is a wider question on which it would be unwise to embark.) In other Commonwealth jurisdictions there is a little tenuous support for the idea: in the Privy Council case of Maharaj v AttorneyGeneral of Trinidad and Tobago (No 2),60 for example, Lord Diplock spoke of a ‘public law tort’ but this was in the context of a written Constitution to which the concept could be pinned. And as we shall see in the following section, in Simpson v Attorney-General61 the New Zealand Court of Appeal effectively created a constitutional tort.

58 These were: R v Secretary of State for the Home Dept, ex p Leech [1994] QB 198 (access to the court coupled with right to obtain confidential legal advice); R v Secretary of State for the Home Dept, ex p Pierson [1998] AC 539 (right to liberty); R v Secretary of State for the Home Dept, ex p Simms [2000] 2 AC 115; R (Daly) v Secretary of State for the Home Dept [2001] 2 AC 532 (access to the court, free speech); and R v Lord Chancellor, ex p Witham [1998] QB 575 (access to the court). Thus it is access to the court that is most often called a constitutional right. 59 Watkins [24]. 60 Maharaj v A-G of Trinidad and Tobago (No 2) [1978] 2 WLR 902 (PC) (‘Maharaj’), a case involving imprisonment for a supposed contempt of court. 61 Simpson v A-G [1994] 3 NZLR 667 (‘Baigent’s Case’).

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C Human Rights and Tort Law In view of the growing trend in human rights litigation to ask for individual reparation for human rights violations, it is perhaps surprising that legislators take so little care to make their own provision for pecuniary remedies in domestic human rights texts. Typically, however, provisions are vestigial. The Canadian Charter of Rights and Freedoms (‘Canadian Charter’) leaves everything to the judiciary, providing merely that application may be made to a court of competent jurisdiction to obtain such remedy as the court considers ‘appropriate and just in the circumstances’. The basic principle adopted has been to assess damages under the Canadian Charter in similar fashion to the damages usually awarded in tort cases, taking into account the nature of the right infringed. Punitive damages may be – and have been – awarded where appropriate. In practice, however, the provisions of section 24(1) seem to have been restrictively interpreted.62 Absence of positive provision for compensation in New Zealand’s Bill of Rights Act (‘BORA’) created the opportunity for Baigent’s Case. Parliament’s intention had been to leave damages to the common law, an appropriate solution given the character of many of the protected rights, which closely mirror the common law of civil liberties. At Second Reading the Prime Minister asserted that BORA ‘creates no new legal remedies for courts to grant. The judges will continue to have the same legal remedies as they have now, irrespective of whether the Bill of Rights is an issue.’ In line with this assurance, section 27(2) and (3) provide a ‘right to apply, in accordance with law, for judicial review’ coupled with a ‘right to bring civil proceedings against, and to defend civil proceedings brought by, the Crown, and to have those proceedings heard, according to law, in the same way as civil proceedings between individuals’. Baigent’s Case63 involved deliberate and wrongful search: a strongly protected common law right. The only issue was whether the court could, by means of BORA, circumvent the existing ‘good faith protection clause’ for court officers engaged in the execution of judicial warrants.64 By a majority, the Court of Appeal ruled that BORA created a ‘public law action for compensation’. Taggart is not alone in thinking that the Court of Appeal ‘rose above the

62 See R v McGillivray (1990) 56 CCC (3d) 304, 306 (Rice JA); Augustus v Gosset [1996] 3 SCR 268. In Crossman v R [1984] 1 FC 681 (TD) a self-standing award of $500 punitive damages was made. See further M Pilkington, ‘Damages as a Remedy for Infringement of the Canadian Charter of Rights and Freedoms’ (1984) 62 Canadian Bar Review 517; K Cooper-Stephenson, Charter Damages Claims (Toronto, Caswell, 1990); D Mullan, ‘Damages for Violation of Constitutional Rights – A False Spring?’ (1995) 6 National Journal of Constitutional Law 105. 63 [1994] 3 NZLR 667. 64 In issue were Crown Proceedings Act 1950 s 6(5)C and Police Act 1958 s 39.

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legislative history’ with this solution, which leaves the way open for a general constitutional tort doctrine (though this has not so far materialised).65 In a dissenting judgment that better reflects the court’s punitive and deterrent mood, Gault J ‘read down’ the statutory immunity so as to permit recovery in case of malicious or unreasonable searches. This outcome, thought by the majority to be more radical than their own approach, would have the virtue of drawing a bright-line by confining the cause of action to cases in which exemplary damages were in issue. Australian legislation, which has not yet been tested, is generally ambiguous. A single mention is made of compensation in section 23(2) of the Human Rights Act 2004 (ACT) (‘HRA’), which provides that, in case of wrongful conviction as defined in the section, ‘the person has the right to be compensated according to law’. The declaration of incompatibility provided by 32 is said by section 32(3)(b) not to affect the rights or obligations of anyone. This would seem to leave damages to the common law. Drafters of the Charter of Human Rights Act 2006 (Vic) (‘Victorian Charter’) have chosen a negative formula: section 23 (3) of the Victorian Charter provides simply that a ‘person is not entitled to be awarded any damages because of a breach of this Charter’. How this formula will be interpreted by the judiciary remains to be seen. On the face of things, it seems to bar all awards of damages based on a Charter violation but, given the overlap with common law, that cannot be correct. Seemingly, if the Charter negates a justification or defence, including a statutory immunity, which would otherwise have been available to the official, the way is open to sue successfully for a common law tort. This would arguably not be in contradiction of section 23(3); the claim would not be ‘because of’ a Victorian Charter violation but ‘because of’ a tort. These formulations are all preferable to that of the (UK) Human Rights Act1998 (‘UK HRA’), of which the English and Scottish Law Commissions in a specially commissioned study remark that ‘in the majority of cases under the HRA, the domestic courts will be able to apply the rules by which damages are normally assessed’.66 This is presumably spelled out in the absence of any actual prohibition coupled with the restriction in section 8(2)) on the award of damages other than by a court which has power to award damages or order the payment of compensation in civil proceedings. Section 8(3) provides on the other hand that no award of damages can be made unless the court is satisfied (taking into account all the circumstances, including any other relief or remedy granted and the likely effects of any judicial ruling) that the award is ‘necessary to afford just satisfaction’ to the person in whose favour it is made. This Convention 65 M Taggart, ‘Tugging on Superman’s Cape: Lessons from Experience with the New Zealand Bill of Rights Act 1990’ [1998] Public Law 266, 269. 66 Law Commission, Damages under the Human Rights Act 1998, Law Com 266 [4.2].

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terminology leads on to section 8(4), which provides that the court must also ‘take into account’ the principles used by the European Court of Human Rights (‘ECtHR’) in respect of the ECHR Article 41. ECHR Article 13 requires states to provide an ‘effective remedy’ for violations of the ECHR, while Article 41 authorises the ECtHR to provide ‘just satisfaction to the injured party’ where ‘the internal law of the High Contracting Party concerned allows only partial reparation to be made’. The underlying principle used by the ECtHR is that of restitutio in integrum. Without following the application of this principle further, it is fair to say that, in line with constitutional courts in general, the ECtHR has not shown itself, unduly generous in its approach to awarding compensation under any of the heads. The emphasis is not on providing a mechanism for enriching successful applicants but rather its role in making public and binding findings of applicable human rights standards.67

As seen by the Law Commissions, the ECHR provides both a floor and a ceiling: it would not normally seem appropriate for a domestic Court under the HRA to award damages of a kind not awarded in Strasbourg, nor to deny damages for a loss for which the Strasbourg Court would award damages.68

At first sight, this would seem to preclude punitive and exemplary damages in human rights cases, since in common with other civilian jurisdictions the ECtHR does not acknowledge a principle of punitive awards.69 Nonetheless, the Law Commissions preferred to hedge their bets, adding that claimants would not be precluded from recovering punitive or exemplary damages where the HRA claim overlaps with a common law tort.70 They ruled out the possibility of creating a new right to punitive damages, believing this to be barred (as it was at the time) by the ‘prior cause of action test’; and passed over the question of a self-standing cause of action with the remark that punitive damages are ‘usually awarded in addition to compensatory damages’71 This leaves British courts with two main options: either (i) they can try to deal with human rights damages within the framework of the common law, where necessary creating new torts; or (ii) they can hive off human rights cases, dealing with them separately,

67 K Reid, A Practitioner’s Guide to the ECHR, 2nd edn (London, Sweet & Maxwell, 1998) 398. 68 Law Commission, above n 64, at [4.5]. 69 See Selçuk and Askor v Turkey (1998) 26 EHRR 477; Smith and Grady v UK (1999) 29 EHRR 493. 70 Law Commission, above n 64, at [4.73]. 71 Ibid [4.71] and [4.72]. For the ‘cause of action test’ see AB v South West Water Services [1993] 1 All ER 609.

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except where human rights law overlaps with a traditional tort law remedy as it would for example on the facts of Baigent’s Case. After initial hesitation, the second course has been adopted. According to Lord Woolf, speaking extra-judicially before the HRA came into effect, human rights awards differ significantly from tort damages. No greater sum should be awarded than necessary to achieve ‘just satisfaction’, with a bar on both exemplary and aggravated damages. Awards should be ‘on the low side with regard to awards in tort cases’72 Perhaps not surprisingly, this was the line taken by a strong Court of Appeal with Lord Woolf presiding in Anufrijeva v Southwark LBC,73 which involved allegations of negligence in handling asylum applications and claims for damages under ECHR Article 8 (right to private and family life). The Court of Appeal felt that no general Art. 8 obligation to provide financial assistance existed; for liability to accrue, there must be ‘an element of culpability; at the very least, knowledge that the claimant’s private and family life were at risk’. I suggest that this emphasis on culpability and recklessness or wilful blindness could properly be used to draw an appropriate bright-line. In R (Greenfield) v Home Secretary,74 (a case that fits more squarely within the framework of this chapter) Lord Bingham’s approach was less generous. G was a prisoner ordered to serve additional days of imprisonment after being charged with drugs offences. He claimed damages for a violation of his due process rights under ECHR Article 6(1). Concluding from his survey of ECtHR practice that no award would be justified, Lord Bingham turned his attention to the HRA. This, he emphasised, was ‘not a tort statute’, adding: Even in a case where a finding of violation is not judged to afford the applicant just satisfaction, such a finding will be an important part of his remedy and an important vindication of the right he has asserted. Damages need not ordinarily be awarded to encourage high standards of compliance by member states, since they are already bound in international law to perform their duties under the Convention in good faith, although it may be different if there is felt to be a need to encourage compliance by individual officials or classes of official. Secondly, the purpose of incorporating the Convention in domestic law through the 1998 Act was not to give victims better remedies at home than they could recover in Strasbourg but to give them the same remedies without the delay and expense of resort to Strasbourg … Thirdly, section 8(4) requires a domestic court to take 72 Lord Woolf, ‘The Human Rights Act and Remedies’, in M Andenas and D Fairgrieve (eds), Judicial Review in an International Perspective (London, Kluwer Law International, 2000). See also T Hickman, ‘Tort Law, Public Authorities and the Human Rights Act 1998’ in D Fairgrieve, M Andenas and J Bell (eds), Tort Liability of Public Authorities in Comparative Perspective (London, BIICL, 2002). 73 Anufrijeva v Southwark LBC [2004] 2 QB 1124 [41.7] and [45] (Lord Woolf LCJ, Lord Phillips MR and Auld LJ). 74 R (Greenfield) v Home Secretary [2005] 1 WLR 673. Lord Bingham gave the only reasoned judgment.

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into account the principles applied by the European Court under article 41 not only in determining whether to award damages but also in determining the amount of an award … The Court routinely describes its awards as equitable, which I take to mean that they are not precisely calculated but are judged by the Court to be fair in the individual case. Judges in England and Wales must also make a similar judgment in the case before them. They are not inflexibly bound by Strasbourg awards in what may be different cases. But they should not aim to be significantly more or less generous than the court might be expected to be, in a case where it was willing to make an award at all.75

This paragraph rules out a deterrent role for human rights law, except perhaps with the hint that things might be different ‘if there is felt to be a need to encourage compliance by individual officials or classes of officials’.76 Yet, although the Strasbourg Court may need to screen what it is doing behind a diverse and confusing terminology of ‘physical and mental suffering’, ‘prolonged uncertainty and anxiety’, ‘frustration and helplessness’, ‘a certain sense of isolation and confusion’77 and other such euphemisms, it does in appropriate cases stray from the principle of restitutio in integrum. In the shocking case of Osman v UK,78 where the police service failed lamentably, after several warnings from the school authorities, to provide protection for a schoolboy and his family from the unwanted attentions of a mentally disturbed teacher, ultimately resulting in the father’s death, an action in negligence against the police was struck out.79 The ECtHR found a violation of the state’s duty under ECHR Article 6(1) to provide a judicial hearing and awarded damages of £10,000, ostensibly for loss of a chance to present their case. In Z v UK,80 where a public authority failed to take children into care, resulting in years

75

Ibid [19]. Compare the different attitude of the European Court of Justice in developing its doctrine of member state liability in Joined Cases 6, 9/90 Francovich and Bonafaci v Italy [1991] ECR I–5357 and Joined Cases C-46/93 and C-48/93 Brasserie du Pêcheur SA v Germany, R v Transport Secretary, ex p Factortame (No 4) [1996] ECR I–1029. See C Harlow, ‘Francovich and the Problem of the Disobedient State’ (1996) 2 European Law Journal 199. 77 Phrases culled from the ECtHR jurisprudence by Lord Bingham in Greenfield, citing as the locus classicus Kingsley v UK (2002) 35 EHRR 177 [40] and [43]. 78 Osman v UK (2000) 29 EHRR 245. 79 Hill v Chief Constable of West Yorkshire [1988] 2 All ER 238, which holds that no duty of care is owed by the police to victims of crime, was applied. See also Osman v Ferguson [1993] 4 All ER 344 and, arguing the case for a deterrent approach, L Hoyano, ‘Policing Flawed Police Investigations: Unravelling the Blanket’ (1999) 62 Modern LawReview 912. 80 Z and others v UK (2001) 34 EHRR 97. The case was the Strasbourg limb of X v Bedfordshire CC [1995] 2 AC 633 where the House of Lords had refused to impose a duty of care on social workers making a care order: see J Wright, ‘Local Authorities, the Duty of Care and the European Convention on Human Rights’ (1998) 18 Oxford Journal of Legal Studies 1. 76

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of abuse at the hands of their parents, the ECtHR awarded £32,000 per applicant in respect of non-pecuniary damage, an award redolent of the common law principle of aggravated damages. Again, in Wainwright, Lord Hoffmann scoffed at counsel’s warning that, unless the law were extended to cover the facts of the case, the ECtHR would inevitably find the UK in breach of its obligation to provide an effective domestic remedy (ECHR Article 13) arguing that the courts were not required to provide a new remedy ‘which distorts the principles of the common law.’ In Strasbourg, the ECtHR, which takes dignity rather more seriously, held that the strip search had been carried out in a disproportionately intrusive and public manner and thus violated the privacy right secured by ECHR Article 8. No effective remedy had been provided and a sum of €6,000 (around £4,000) was awarded for non-pecuniary damage.81 All this suggests that the failure of common law systems to take intangible rights under their protection urgently requires reconsideration. Failure to award damages under the UK HRA is a constant temptation to victims of violation to try for common law damages. The danger of leaving outrageous acts un-redressed by tort law is that the ECtHR will act under ECHR Articles 41 or 13 and impose its own awards. Ashby v White and Wilkinson may bear resuscitation.

IV CONCLUSION

Opening his article on damages as a public law remedy, Cane recalls the ‘fundamental tenet’ of the common law that pecuniary remedies are not available for ‘public law wrongs’.82 The best that a victim of abuse of power can hope for is a judicial review and a specific public law remedy (declaration, injunction or a prerogative order). This prejudice is not purely local but obtains throughout common law jurisdictions and, as I have suggested in this chapter, it has spilled over into the area of human rights. With rare exceptions, the best that a victim of a human rights violation can hope for is a declaration of incompatibility. This, according to the English judiciary, is as it should be. The case law quoted in this chapter suggests two further judicial preferences: (i) that the function of tort law is purely compensatory; and (ii) that negligence is the ‘principal, nay paramount’83 vehicle for recovery. The development of a law of torts outside the general principle of negligence is being reined in. 81

Wainwright v UK (Application no 12350/04). P Cane, ‘Damages in Public Law’ (1999) 9 Otago Law Rev 489, citing Brennan J in Kruger v Commonwealth (1997) 146 ALR 126, 142. 83 J Fleming, above n 1 , at 1. 82

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These recent trends are at odds with an older and more traditional use of the tort action as a powerful remedy for abuse of public power and vindication of a few powerfully protected common law rights. Protection was admittedly limited, in general to freedom of person and property. In exceptional circumstances, the common law would sometimes rise to the occasion and grant a remedy for a blatant abuse of power. In exceptional cases also, it would allow the common law to be used in vindication of an incorporeal right. Recently, however, due to the inherent tension between the two underlying principles of compensation and deterrence, the case law is becoming contradictory and confused. No clear bright-lines are being drawn. No clear message is being conveyed. Sir Anthony Mason’s pessimistic view of the ‘judicial will to be creative’ has been amply justified. Faced with the many inconsistencies, Lord Nicholls has demanded a more principled approach to exemplary damages: The arguments for and against exemplary damages need no rehearsing. They are familiar enough, and they are set out clearly in the Law Commission’s report. In the end, and in respectful agreement with the views expressed by Lord Wilberforce in Broome v Cassell [1972] AC 1027, 1114, the feature which I find most striking is the extent to which the principle of exemplary damages continues to have vitality. The availability of exemplary damages has played a significant role in buttressing civil liberties, in claims for false imprisonment and wrongful arrest. From time to time cases do arise where awards of compensatory damages are perceived as inadequate to achieve a just result between the parties. The nature of the defendant’s conduct calls for a further response from the courts. On occasion conscious wrongdoing by a defendant is so outrageous, his disregard of the plaintiff’s rights so contumelious, that something more is needed to show that the law will not tolerate such behaviour. Without an award of exemplary damages, justice will not have been done. Exemplary damages, as a remedy of last resort, fill what otherwise would be a regrettable lacuna.84

If exemplary damages are to continue as a remedial tool, as recommended by the Law Commission after extensive consultation, the difficult question which arises concerns the circumstances in which this tool should be available for use. Stated in its broadest form, the relevant principle is tolerably clear: the availability of exemplary damages should be co-extensive with its rationale. As already indicated, the underlying rationale lies in the sense of outrage which a defendant’s conduct sometimes evokes, a sense which is not always assuaged fully by a compensatory award of damages, even when the damages are increased to reflect emotional distress. I would take this argument outside the law of exemplary damages to cover the closely related question of cause of action. A sensible bright-line 84

Kuddus v Chief Constable of Leicestershire Constabulary [2001] UKHL 29 [60] and

[65].

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would be the test used for awards of exemplary damages: for liability to accrue, conduct must be contumelious, deliberate and outrageous, highhanded, insolent and vindictive, deliberate and outrageous, reckless or wilfully blind. It may, as the High Court of Australia has indicated, contain both subjective and objective elements but there must be a conscious or reckless or disregard of the claimant’s rights. This is broadly in accordance with the test suggested by Rand J in his acclaimed judgment in Roncarelli or by Wright J in Wilkinson, the difference being that my proposed action would not need proof of damage. There can be no definitive answer to the question of what rights merit protection. It will from time to time need reconsideration, especially perhaps in a culture of human rights. Arguably, however, the judges have been unduly parsimonious. Left to deal with the question of privacy, they have failed rather spectacularly, leaving it to the Australian Law Reform Commission to make suggestions.85 With harassment again, it was the legislator rather than the judges (as Lord Hoffmann noted in Wainwright) that took action. Nor is dignity (as suggested in the same case) simply a matter of ‘lack of consideration and appalling manners’. Dignity is a value taken extremely seriously in human rights texts; indeed, by many it is seen as the single foundational value.86 Do we really want prison or immigration services in which officers use their legal powers to humiliate and degrade their fellow citizens? In Kuddus, Lord Hutton made the case for exemplary damages in terms of his personal experience. He cited cases of terrorist violence in Northern Ireland and a case where prison officers, angered by the death of a colleague and the wounding of other colleagues in the course of an attempted prison break out, had kicked and punched a prisoner and had not restrained their dogs from nipping and biting him. These were cases where it was not fanciful to believe that awards could have a deterrent effect and where the awarding of exemplary damages ‘served a valuable purpose in restraining the arbitrary and outrageous use of executive power and in vindicating the strength of the law’. There are, I would argue, exceptional cases which, for constitutional reasons, the law ought to punish. It is unacceptable that office holders should use their power solely to advance their own interests or try to cover up serious accidents; it is equally unacceptable for police officers to use the colour of office to commit rape on powerless asylum seekers, to abuse 85 Australian Law Reform Commission, Review of Australian Privacy Law, Discussion Paper 72 (2007). On the specific question of extending the law of privacy to cover violations of ECHR Art 8, see J Morgan, ‘Privacy Torts: Out with the Old, Out with the New’ (2004) 120 Law Quarterly Review 395. 86 D Feldman, ‘Human Dignity as a Legal Value’ (1999) Public Law 682 and ‘Secrecy, Dignity or Autonomy? Views of Privacy as a Civil Liberty’ (1994) 47 Current Legal Problems 41.

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helpless children or knowingly set loose dangerous criminals to murder potential witnesses. This is not the realm of incidental or even of systemic negligence; it is outrageous behaviour that falls far below the standards of conduct expected of public servants and outside the parameters of public service. Whether or not the police should owe a general duty of care to the potential victims of crime is debatable; arguably, it is better that they should not. But this is conduct for which the term ‘malfeasance in public office’ is appropriate, where the use of the specialised tort of misfeasance for purposes of punishment, sanction or specific deterrence is eminently justified. Drawing again on personal experience, Sullivan J observed in a human rights case where a local authority allowed a disabled woman and her family to live for several years in accommodation little better than a pigsty, most citizens who have suffered as a result of some bureaucratic error are not motivated, or at least not primarily motivated, by a desire for monetary compensation. They institute proceedings because they feel outraged by what they see as an injustice and want ‘them’, the faceless persons in an apparently insensitive, unresponsive and impenetrable bureaucratic labyrinth, to acknowledge that something has gone wrong, to provide them with an explanation, an apology and an assurance that steps have been taken to ensure (so far as possible in an imperfect world) that the same mistake will not happen again. This assurance will at least give them the satisfaction of knowing that they have not suffered in vain.87

The majority of the claimants in the cases I have cited had come to the end of the road; there was no other remedy. As Ripstein once observed, ‘when injured people clamour for recourse against their injurers, their concern is not just with compensation, but with justice’.88 In failing to provide redress, I would argue, the courts are overlooking what Linden calls tort law’s ‘ombudsman function’.89 This is a risky strategy. Tort actions are ‘the embodiment of public morality’90 and, if the judges are unwilling to assist, respect for the law may be lessened.

87

R (Bernard) v Enfield LBC[2002] EWHC Admin 2282 [17]. A Ripstein, ‘Some Recent Obituaries of Tort Law’ (1998) 48 University of Toronto Law Journal 561. 89 A Linden, ‘Tort Law as Ombudsman’ (1973) 51 Canadian Bar Review 155 and A Linden, ‘Reconsidering Tort Law as Ombudsman’ in Steel and Rodgers-Magnet, above n 28. 90 Ibid 477. 88

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12 Understanding Administrative Adjudication PETER CANE *

I INTRODUCTION

A

MONG THE MANY constitutional developments of the past century or so, one of the most significant has been the creation and proliferation of institutions that perform functions similar to those traditionally performed by courts, but which are considered to be, and in some ways are, different and distinct from courts as traditionally conceived. This essay will focus on three jurisdictions – the UK, the US and Australia. In the UK and Australia such institutions are generically called ‘tribunals’. In the US, the relevant institutions are exemplified by the offices of administrative law judge (‘ALJ’) and administrative judge (‘AJ’). Purely for convenience, I will sometimes use the term ‘tribunal’ to refer to these as well.1 Australia was chosen for the obvious reason that both our honorand and the author are Australian. Once Australia is in the frame, the UK and the US are natural comparators because the Australian federal constitutional and governmental system is a complex amalgam of these other two systems. Obviously, without space constraints, the analysis could be enriched by the addition – for instance – of France as a comparator, in part because of the distinctive understanding of separation of powers adopted in that system.2 * I am very grateful to Carol Harlow, Genevra Richardson and Mike Taggart for perceptive and helpful comments on earlier drafts. 1 J Landis used the term ‘administrative tribunal’ in his famous book The Administrative Process (New Haven and London, Yale University Press, 1938) to refer to multi-functional regulatory agencies. Earlier, W Pillsbury used it in a sense closer to that adopted in this essay: ‘Administrative Tribunals’ (1922–23) 36 Harvard Law Review 405, 583. 2 See generally N Brown and J Bell, French Administrative Law, 5th edn (Oxford, Clarendon Press, 1998) chs 2, 3. There are also lessons to be learned from Canada. See, eg, J Evans, ‘Principle and Pragmatism: Administrative Agencies’ Jurisdiction over Constitutional Issues’ in G Huscroft and M Taggart (eds), Inside and Outside Canadian Administrative Law: Essays in Honour of David Mullan (Toronto, University of Toronto Press, 2006).

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The core (but not the only) function of both courts and tribunals is adjudication of disputes. Like courts, tribunals may adjudicate disputes between citizen and citizen; tribunals that do so may be called ‘civil justice institutions’. However, the focus of this essay is on adjudication of disputes between citizen and government3 by tribunals which review government decisions that adversely affect the citizen. This function, which may be described as ‘administrative adjudication’, is performed by both courts (typically under the rubric ‘judicial review’) and ‘administrative’ tribunals (in some contexts under the rubric ‘merits review’);4 quantitatively, though, tribunals are much more important than courts as dispensers of ‘administrative justice’.5 The main aim of this essay is to explore how we might account for the continued existence of two sets of institutions that perform similar administrative-justice functions. The account I will offer has two parts, one historical and the other theoretical. The historical section of the paper (Part 2) will trace the antecedents and early development of what is often called ‘the modern tribunal’ and attempt to explain how it came about that, by the early 20th century in England, tribunals were viewed as problematic because, although they performed an adjudicatory function similar to that of courts, they were not courts and were not understood as being part of the judicial branch of government. The theoretical section of the paper (Part 3) will examine three different explanations for the initial creation and continued existence and proliferation of tribunals alongside courts performing similar adjudicatory functions. The first explanation draws on ideas of comparative institutional competence by arguing that in certain significant respects tribunals perform a better job of administrative adjudication than courts. This explanation is particularly salient to governmental systems (such as the British) that lack entrenched separation of powers. The second explanation rests on the argument that although both courts and tribunals adjudicate disputes between citizen and government, tribunals do so in a significantly different way than courts. This explanation is particularly salient to the federal level of the Australian system of government. The third explanation is based on ideas of institutional balance concerned with the relationship between tribunals and the agencies whose decisions they review. This explanation is particularly salient to the US legal system. However, although each explanation is particularly salient

3 I must bracket the tricky question of the meaning of ‘government’ and the relevance to the subject matter of this paper of late 20th century changes in patterns of governance and the relationship between the public and private sectors. 4 Concerning the distinction between judicial review and merits review see III.B below. 5 Criminal justice is a third modality of justice. In most systems there is great resistance to allowing non-courts to exercise criminal justice functions, even where – as in England – many criminal courts are staffed by lay judges.

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to one system, they all raise issues of more general relevance to constructing an account of administrative adjudication by tribunals.

II THE HISTORICAL STORY

We may begin the historical story in England in 1066.6 William the Conqueror inherited from his predecessors a relatively unified and centralised kingdom. In any state, one of the main roles of government and one of the most important techniques for maintaining peace and order (as well as power) is to provide facilities for handling citizens’ grievances and resolving disputes between citizens and government. At first, the royal officers responsible for this function – the judges – were members of the King’s inner circle of advisers and counsellors – the Royal Court. When the King went on progress around the country, so did the judges. Gradually, however, the judicial function was separated off from the other activities of the king’s council (‘curia Regis’). The Courts of King’s Bench and Common Pleas – the ‘common law courts’ – were established and assumed a fixed abode in London. A similar story of institutional separation of the judicial function from the general flow of government business can be told about the Chancery Court. Despite this institutional separation, the central courts7 remained associated with the Monarch. They administered royal justice on behalf and in the name of the Monarch. The King hired and fired the judges. Some courts – the so-called ‘conciliar courts’ (the best known of which was the Star Chamber) – were more closely identified with the Monarch and the Council than either the common law courts or the Chancery Court.8 They played an important part in dealing with disputes in which the Monarch was involved or had a particular interest.9 In this early period (roughly from the Norman Conquest to the English Revolution) it is fair to say that the distinction between ‘administering justice’ and governing the country was less sharply drawn than it is now. The relationship between the central courts and the executive at this time

6 It is common in the literature on tribunals to refer to events as early as the 17th century. Starting at the very beginnings of the English legal system is instructive because it reveals patterns of institutional development for which analogies can be found in much more recent events. 7 There were also, of course, many local courts associated, for instance, with boroughs and manors. 8 In the 19th century, ‘star chamber’ was applied to some tribunals as a term of abuse: C Stebbings, Legal Foundations of Tribunals in Nineteenth Century England (Cambridge, CUP, 2006) 317. 9 An accessible discussion of the early institutional history can be found in J Baker, An Introduction to English Legal History, 4th edn (London, Butterworths LexisNexis, 2002) chs 2, 3, 6, 7.

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can perhaps be captured by saying that ‘doing justice’ was understood as a mode or task of governance, and courts were understood as instruments of governance. By contrast, today we think of courts, vis-à-vis the executive, primarily as instruments of accountability, for the supervision of government activity rather than performance of a government task. This association at the central level between the executive (that is, the Monarch and Council) and the courts had its counterpart at the local level in the role of Justices of the Peace (‘JPs’).10 JPs, or ‘magistrates’, were the representatives of the Monarch in the shires, and by the 18th century (which is sometimes described as the heyday of the JP), they had many, diverse administrative responsibilities, both regulatory and welfarerelated.11 The typical mode of exercising their administrative powers was judicial.12 It was through proceedings initiated by grievances and prosecutions and conducted in Petty Sessions and Quarter Sessions that the JPs typically performed their formal administrative tasks. The 17th century witnessed a major change in the relationship between the monarchical executive and the central courts. The conciliar courts were abolished and, as a result of the triumph of Parliament over the Monarch, the central courts came to be understood no longer as participants in the royal project of governance but as instruments of Parliamentary will, expressed in statutes.13 This new relationship, in its mature form, was most famously expounded by AV Dicey14 in terms of the principle of Parliamentary sovereignty (or ‘supremacy’). The new role of the courts vis-à-vis the executive was to ensure its conformity to the will of Parliament. The independence of the judges from royal control was reinforced in the Act of Settlement 1701, which transferred the power to fire judges from the Monarch to Parliament, limited the grounds on which a judge could be

10 See generally C Beard, The Office of Justice of the Peace in England in its Origin and Development (New York, Burt Franklin, 1904). For a brief account of local government before 1832, see K Smellie, A History of Local Government, rev edn (London, Unwin University Books, 1968) ch 1. 11 ‘By 1833 the JPs were the true rulers of the country’: D Roberts, Victorian Origins of the British Welfare State (Hamden, CT, Archon Books, 1969) 9. 12 Theoretical complexities underlie this statement, which rests on a distinction between functions and procedures. Vile’s view is that the distinction between different government functions (legislative, executive, judicial) is based on a distinction between different decisionmaking procedures: M Vile, Constitutionalism and the Separation of Powers (Oxford, Clarendon Press, 1967) 346–48. This helps to explain why the judicial function is often defined in terms of a particular procedural paradigm. 13 R Wraith and P Hutchesson, Administrative Tribunals (London, George Allen & Unwin, 1973) 22–23. 14 In An Introduction to the Study of the Law of the Constitution first published in 1885. The standard edition is the 10th, with an Introduction by ECS Wade (London, Macmillan, 1959). In this edition, the text is as it was in the 8th edition (1914), the last prepared by Dicey himself.

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removed from office, and guaranteed judicial remuneration.15 As a result of these developments, Dicey was eventually able to paint the relationship between the courts and the executive in terms of the rule of law – the idea that the government is answerable in the courts in the same way as its citizens – thus completing the transformation of courts from instruments of governance into instruments for holding the government accountable to the citizenry. The English governmental system as it existed in the first half of the 18th century provided the inspiration for the famous proposal of Charles de Secondat, the Baron Montesquieu – contained in Book XI, Chapter 6 of L’Esprit des Lois, first published in 1748 – that the nature of government can be understood in terms of a tripartite division of institutions – the legislature, the executive and the judiciary; and a three-fold, corresponding division of functions – legislative, executive and judicial. Although it is often said that Montesquieu was not a very acute observer,16 his proposal did neatly encapsulate the results of the major constitutional re-alignments of the 17th century, which saw the Monarch stripped of the power to legislate and adjudicate in favour respectively of Parliament and the common law courts (in the latter case, at the expense of the conciliar courts, the abolition of which ended the close association of the Monarch and the executive with adjudication of disputes). But at the time Montesquieu was writing, executive power still resided formally and, to a significant extent, practically in the Monarch. Later in the 18th century royal influence over the affairs of Parliament and the running of the country waned as more and more of the Monarch’s personal powers were effectively transferred to ministers of state, and control over those ministers shifted from the Monarch to Parliament. Finally, in the 19th century, extension of the franchise and reform of the electoral system further weakened the position of the Monarch vis-à-vis the executive, thus creating the so-called ‘constitutional monarchy’ that Britain now possesses. These developments also ushered in the era of ‘responsible government’ under which members of the political executive belong and are directly answerable to the legislature in accordance with the principle of ministerial

15 ‘[B]e it hereby enacted that … judges commissions be made quamdiu se bene gesserint [so long as they are of good behaviour], and their salaries ascertained and established; but upon the address of both Houses of Parliament it may be lawful to remove them’. However, in England the power to hire judges remained with the Monarch acting on the advice of the government until the recent creation of the independent Judicial Appointments Commission. It is still an executive function in Australia but without the oversight exercised by the legislature in the US. 16 Most famously by Dicey, above n 14, at 337–8. It has been argued that the criticism is based on a misreading of Montesquieu who (it is suggested) understood the British system not in terms of separation of powers but as a balanced constitution: I Stewart, ‘Men of Class: Aristotle, Montesquieu and Dicey on “Separation of Powers” and “The Rule of Law”‘ (2004) 4 Macquarie Law Journal 187.

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responsibility. With the development of modern political parties from the late 19th century onwards, the separation of executive and legislature, which had been so hard-won in the upheavals of the 17th century, was more or less completely reversed. At the time Montesquieu was writing (and for at least half a century afterwards) the tasks of central government were effectively limited to the administration of justice (through the central courts), waging war – either for defence of the realm or for territorial aggrandisement – and the associated activities of diplomacy (that is, conducting foreign affairs) and taxation. The two other major activities of government – regulation and welfare – were organised locally, not centrally; indeed, this local governmental activity was subject to relatively little central control, especially after the abolition of the conciliar courts.17 In the 17th century the Court of King’s Bench developed techniques (utilising the prerogative writs of certiorari, prohibition and mandamus) for exercising some control over local administration,18 but such control (like judicial review today) was necessarily piecemeal, sporadic and unsystematic.19 Nor did Parliament or the executive exercise significant oversight of local administration. Two other points should be made about Montesquieu’s account. The first is that Montesquieu20 conceived of the judicial function primarily, if not solely, in terms of investigation and finding of facts and the mechanical application of pre-existing rules to facts. Apparently, he did not appreciate either the dynamic, law-generating nature of the common law method or the complexities of statutory interpretation and the creativity it allows and requires. Before the dramatic growth in the volume of legislation in the 19th century, judge-made common law was the most important source of legal rules. In modern terms, the dominant mode of rule-making was adjudicatory, not legislative. The transformation of courts after the Revolution involved not only their distancing from the executive but also their decline as a source of law. This decline continued apace in the 20th century and has been only partially reversed by the increasing role of courts in 17 J Allison, A Continental Distinction in the Common Law: A Historical and Comparative Perspective on English Public Law (Oxford, Clarendon Press, 1996) 153; Beard, above n 10, at 118–24. 18 E Henderson, Foundations of English Administrative Law: Certiorari and Mandamus in the Seventeenth Century (Cambridge, Mass, Harvard University Press, 1963); S de Smith, Judicial Review of Administrative Action, 3rd edn (London, Stevens, 1973) app 1; Baker, above n 9, ch 9. 19 According to Roberts, in 1833 the central courts gave judgment in only 60 cases ‘concerning the duties of magistrates and parishes’: above n 11, at 17. 20 As Lawrence Claus has convincingly argued in ‘Montesquieu’s Mistakes and the True Meaning of Separation’ (2005) 25 Oxford Journal of Legal Studies 419. See also Vile, above n 12, at 89–90; Stewart, above n 16, at 198; L Heuschling, ‘Why Should Judges be Independent? Reflections on Coke, Montesquieu and the French Tradition of Judicial Dependence’ in K Ziegler, D Baranger and A Bradley (eds), Constitutionalism and the Role of Parliaments (Oxford, Hart Publishing, 2007).

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enforcing constitutionally entrenched bills of rights. As instruments of governance, courts were for centuries important not only as administrators but also as legislators. In the modern period, both of these functions are subsidiary to the main adjudicatory role of courts. The second point to note is that Montesquieu apparently did not appreciate the role of judicial processes in local administration. He effectively ignored what Stebbings calls the ‘pragmatic and amorphous mass of inferior dispute-resolution bodies of limited jurisdiction’ some of which can be seen as early species of administrative adjudicator.21 In his account the judicial branch is identified with the central courts; and ever since, in discussions of separation of powers, the judiciary has been understood as consisting not of all bodies the prime function of which is adjudication but only of institutions that occupy a position in the constitutional structure analogous to that of the English central courts of the mid-18th century. Whatever Montesquieu’s efforts lacked in analytical rigour they more than made up for in impact. Montesquieu’s ideas were highly influential both in North America and in France in the late 18th century;22 and not only on thinking about the nature of government, but also on the drafting of constitutional documents. In practical terms, separation of powers proved and continues to be probably the most powerful constitutional idea ever conceived. One version – sometimes called ‘pure’ – is embodied in French constitutional arrangements. Under this version, for instance, the ‘ordinary courts’ may not review government activity or declare legislation invalid. A different, ‘flexible’ (or ‘partial’) checks-and-balances version underpins US constitutional arrangements and the architecture of the first three Articles of the Constitution itself. In important ways, the US Constitution influenced the drafting of the Australian Constitution, the first three Chapters of which have a design similar to that of the first three Articles of the US document. Independence of the judiciary is universally accepted to be a necessary condition of good government and freedom of the individual regardless of the details of other constitutional arrangements.23 This is particularly true in Westminster systems, where the main significance of separation of powers lies in the independence of the

21 Stebbings, above n 8, at 295. See also H Arthurs, Without the Law: Administrative Justice and Legal Pluralism in Nineteenth-Century England (Toronto, University of Toronto Press, 1985). 22 Vile, above n 12, at 77–78, 85–86, 122, 129–31, ch VII. Concerning France see Allison, above n 17, at 16–18, 137–52. 23 Although in practice, it is not always honoured as such: witness events in Pakistan in 2007.

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judiciary.24 Indeed, when Blackstone ‘domesticated’25 Montesquieu for an English audience, it was separation of judicial power that he emphasised. And yet the heyday of Montesquieu’s double tripartite model of government and governance was brief. This was not only – or even so much26 – because of defects in Montesquieu’s account. Rather it was the result of two major changes in the nature of government and governance that began in Britain early in the 19th century. The first change involved centralisation of governmental power and responsibility.27 Many of the administrative functions of justices of the peace were transferred to and consolidated in central agencies. The 19th century also witnessed the creation of multifunctional local authorities over which central government exercised increasing control.28 The second change involved assumption by governments of new regulatory and welfare responsibilities in addition to the more traditional concerns of national security and taxation. These two developments went hand-in-hand in Britain in the 19th century, which saw the creation of central institutions to perform functions previously performed locally (such as relief of poverty) and to administer new regulatory regimes (concerned, for instance, with occupational health and safety). The apparatus of state welfare grew rapidly from the early 20th century. A common vehicle of increased central government activity from the 1830s onwards was the non-departmental ‘board’ or ‘commission’ charged with implementing a statutory scheme by exercising a mixture of legislative, executive and judicial functions. Judicial functions were ‘embedded’ within multi-functional agencies for several reasons:29 adjudication of disputes arising out of implementation of statutory schemes was seen as part of and integral (or at least incidental) to a larger administrative activity; combining functions was thought to be the most efficient way of addressing major social and economic problems generated by the Industrial 24 Judicial independence and the separation of judicial power is the dominant strand in English thinking about institutional design: J Allison, ‘The Separation of Powers in the Modern Period on England: Constitutional Principle or Customary Practice?’ in H van Goethem (ed), Iuris Scripta Historica XVI: Gewoonte en Recht (Brussels, Koninklijke Vlaamse Academie van België voor Wetenschappen en Kunsten, 2002). According to this approach, separation of judicial power promotes the rule of law. It is interestingly reflected in the Constitutional Reform Act 2005, which, in s 1, delphically reasserts ‘the rule of law’ and, in s 3, ‘independence of the judiciary’. 25 Allison, above n 17, at 156. 26 Separation of powers had, after all, taken on multiple lives of its own independent of its source. 27 See generally Roberts, above n 11, chs 3, 10. See also M Thomas, ‘The Origins of Administrative Centralisation’ (1950) 3 Current Legal Problems 214. The main concern here is with centralisation of administrative functions. However, the 19th century also witnessed a process of rationalisation of the judicial system designed to reduce the number of local and specialised courts. This process provides important context for understanding the development of adjudicatory institutions distinct from courts (see also below, n 40). 28 Smellie, above n 10, chs 2 and 3. 29 Stebbings, above n 8, at 37–72.

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Revolution; and courts were considered – and were sometimes found through experience – to be ill-equipped to adjudicate the sorts of disputes to which new programmes gave rise. In the course of the 19th century, however, as central government departments grew in size and resources, the principle of ministerial responsibility developed, and the central executive sought more continuity in and control over policy-making, the multi-functional, non-departmental agency fell out of favour. The legislative and executive functions of boards and commissions were progressively transferred to central government departments, leaving them with only judicial functions.30 By the early 20th century the free-standing, mono-functional adjudicatory tribunal had emerged from the demise of the 19th century multifunctional agency. This development revealed what had hitherto been concealed, namely that the adjudicatory functions of these new tribunals – and, indeed, those of the multi-functional agencies from which they grew – were essentially similar to the core function of courts. However, tribunals were not courts, they were not staffed by judges and they were not part of the judicial branch of government which, following Montesquieu, was identified with superior central courts. The problem of tribunals had emerged,31 a product of the institutional aspect of separation of powers and the idea that government is composed of three branches.32 If that doctrine had been understood as being concerned only with avoidance of undue concentrations of power and conflicts of interest resulting from admixture of functions, and with promotion of independent scrutiny of the exercise of power, the creation of non-court adjudicatory bodies would not, in itself, have been problematic. However, separation of powers was also understood to stand for the proposition that each of the three functions of government identified by Montesquieu should be allocated to a different institution or set of institutions. The idea that the judicial function should be allocated to judicial institutions, coupled with the narrow understanding of judicial institutions in terms of the superior central courts, generated the problem of tribunals.

30

Ibid 104–9, 327–29. Ibid 105–9. 32 N Barber, ‘Prelude to the Separation of Powers’ (2001) 60 Cambridge Law Journal 59; E Rubin, Beyond Camelot: Rethinking Politics and Law for the Modern State (Princeton, Princeton University Press, 2005) ch 2. 31

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Similar processes of growth and centralisation of governmental activity occurred in the US and Australia. In the US, multi-functional, nondepartmental agencies can be found as early as the late 18th century,33 but the beginnings of administrative adjudication as it is understood today are usually traced to the creation in 1887 of the Interstate Commerce Commission (‘ICC’) which, like similar agencies in England, was established to address problems caused by rapid economic development. In contrast to what happened in England, the multi-functional agency remains an extremely important vehicle of public administration in the US. Roosevelt’s New Deal witnessed the creation of many new regulatory agencies in the 1930s and federal welfare activity increased greatly with the creation of the disability program in 1956. Reflecting what was happening in England, non-departmental agencies played an important part in public administration in the Australian colonies in the 19th century.34 However, local conditions – large country, small population, harsh climatic conditions, penal origins – also favoured centralism, which has always been a feature of Australian governmental arrangements, first in the various colonies and then in the Federation. Local government was weak in the colonial period, and this weakness continues.35 Since federation in 1901, which formed the six States into the Commonwealth of Australia, the Commonwealth has progressively assumed more and more control over taxation, regulation and welfare in addition to its competence in areas such as defence, national security and foreign relations. As in the UK, adjudicatory functions are performed either by courts or free-standing tribunals. Indeed, as we shall see, the Australian Constitution has been interpreted as forbidding the creation of multi-functional agencies that perform both judicial and non-judicial functions.

33 Final Report of the Attorney-General’s Committee on Administrative Procedure (Washington, 1941) 8; J Mashaw, ‘Recovering American Administrative Law: Federalist Foundations 1787–1801’ (2006) 115 Yale Law Journal 1256; J Mashaw, ‘Reluctant Nationalists: Federal Administration and Administrative Law in the Republican Era 1801–1829’ (2007) 116 Yale Law Journal 1636. 34 See generally P Finn, Law and Government in Colonial Australia (Melbourne, OUP, 1987). 35 J McNeill, ‘Local Government in the Australian Federal System’ in B Dollery and N Marshall, Australian Local Government: Reform and Renewal (Melbourne, Macmillan, 1997) 18–20; L Pearson, Local Government Law in New South Wales (Sydney, Federation Press, 1994) 1–3; P May, ‘Amalgamation and Virtual Local Government’ in B Dollery, N Marshall and A Worthington (eds), Reshaping Australian Local Government: Finance, Governance and Reform (Sydney, University of NSW Press, 2003) 80–82. Local government is not mentioned in the Australian Constitution: C Aulich and R Pietsch, ‘Left on the Shelf: Local Government and the Australian Constitution (2002) 61 Australian Journal of Public Administration 14.

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By the early 20th century, then, the problem of tribunals could be articulated: how to explain and justify the existence of institutions performing adjudicatory functions similar to those of courts which are not part of the judicial branch of government and are staffed by officials who are not guaranteed the tenure and salary protections enjoyed by judges? This problem is particularly acute in the US and Australia, where separation of institutions and powers is constitutionally entrenched. In both systems, however, the doctrine of separation of powers has been interpreted to accommodate tribunals because, it is said, they are an essential feature of the regulatory and welfare state. In what sense can we say that non-judicial adjudicatory institutions are an essential feature of modern government? In the next section of the essay, I will discuss three explanations of the tribunal phenomenon. III THREE EXPLANATIONS FOR THE CREATION AND CONTINUED EXISTENCE OF TRIBUNALS

A Comparative Institutional Competence Probably the most common explanation for the initial creation and continued existence of tribunals is that they are considered to be better suited than courts to adjudicating disputes between citizen and government. In modern jargon, tribunals were originally conceived as a form of alternative dispute resolution – alternative, that is, to courts. In the judgment of governments in the 19th and early 20th centuries seeking to make adequate provision for administrative adjudication, courts seemed less suitable than tribunals for three main reasons. First, their procedures were considered too formal and elaborate, and their operations too slow and costly. As a result, courts were unattractive and inaccessible to all but the most wealthy, educated and self-confident citizens. Another concern was that because of the nature of judicial procedures, litigation in the courts could be unduly disruptive of the conduct of government business. Secondly, courts, and the common law they applied and had created, were widely considered to be imbued with an individualist ideology that was out of kilter with the social orientation of the new regulatory and welfare functions of government. Thirdly, courts were perceived as lacking relevant and necessary expertise to resolve disputes about the operation of complex regulatory and welfare programmes.36 Leaving aside the empirical questions of whether and to what extent (if any) courts were (and are) deficient in these various respects, and of 36 For the opposing view that tribunals are in a significant sense less desirable than courts see HWR Wade, Towards Administrative Justice (Ann Arbor, University of Michigan Press,

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whether and to what extent (if any) tribunals make good those deficiencies, the major puzzle raised by the comparative institutional competence explanation of tribunals is that, although it undoubtedly helps to explain the development of tribunals in the 19th and early 20th centuries, it is less successful in helping us to understand why the distinction between courts and tribunals has become so deeply entrenched in the constitutional arrangements of the US, the UK, Australia and other major common law jurisdictions. After all, it is not intrinsic to the concept of a court that its procedures must be formal and elaborate, its operations slow, costly and disruptive and its facilities unattractive and inaccessible to the majority of citizens. Indeed, part of the history of adjudication from the earliest centuries of the common law has been constant pressure to make existing courts less formal and expensive, and more speedy and accessible, and to create new courts with these theoretically desirable characteristics.37 Nor is an anti-regulatory, anti-welfare ideology intrinsic to the common law method. Even if judges are conservative by nature, there is no shortage of evidence that before too long the courts fall into line with large shifts in social and political ideology. Finally, there is no reason why ‘specialist’ courts cannot be created38 that enable generalists to specialise and in that way to realise the advantages of combining the two perspectives.39 A related puzzle is why the typical reaction to the perceived deficiencies of courts has been, and continues to be, creation of alternative institutions rather than reform of the court system.40 Two possible explanations suggest themselves. One is that policy-makers generally tend to favour starting afresh over tinkering with existing arrangements, perhaps because creation is seen as being politically and technically simpler and more

1963) 88: ‘The whole object of the tribunals was to provide a cheaper and speedier source of justice … You cannot reduce the price of an article and speed up production without lowering quality.’ 37 The Chancery Court may be understood as an illustration of this phenomenon, as may the conciliar courts: Wraith and Hutchesson, above n 13, at 18–21. 38 Specialist courts have a very long history: Stebbings, above n 8, at 47–48. 39 The value of generalism is its focus on the legal system as a whole as opposed to one corner of it. The issue of specialisation is closely related to rules of evidence. Drawing a crude distinction between legal and non-legal inputs into judicial decision-making, (domestic) law is never a matter for evidence. The more judges know about the relevant law the less reliant they are on third parties (such as advocates). Arguments for specialisation also typically assume that specialists will be subject to less stringent limitations on ‘judicial notice’ than traditional courts, enabling them to utilise their own knowledge of relevant non-legal matters. 40 In 19th century England, the need to provide for resolution of disputes arising from implementation of new government programmes coincided with moves to rationalise the court system and eliminate specialised jurisdictions, which militated against the creation of new courts: Stebbings, above n 8, at 48; Arthurs, above n 21, ch 2.

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efficient than re-creation.41 A second possible explanation is that governments have resisted significant growth of the corps of life-tenured, salary protected (‘traditional’) judicial officers, not merely because of expense but also out of a principled objection to proliferation of tenured public offices and a desire to maintain a judicial élite.42 In the US, for instance, it has been estimated that for every traditional judicial officer there are another four non-traditional judicial officers whose terms and conditions of service are not guaranteed in the same way as those of traditional judicial officers.43 The comparative institutional competence approach leaves much to be desired as an explanation of the continued existence of tribunals alongside courts. This helps to account for the fact that in the UK – where separation of powers is not constitutionally entrenched – the trend, since the Franks Committee Report of 1957,44 has been to stress the similarities between courts and tribunals and to integrate the two types of adjudicatory body into a single branch of government.45 In England, administrative adjudication first received official attention as a discrete phenomenon in the 1932 Report of the Committee on Ministers’ Powers (‘the Donoughmore Committee’).46 The Donoughmore Committee rejected a proposal of William Robson for the creation of a system of administrative courts that would adjudicate disputes between citizen and government largely to the exclusion of the ‘ordinary courts’. Instead, it attempted to lay down principles for the allocation of ‘judicial’ and ‘quasi-judicial’ functions between courts, administrative tribunals and ministers. The underlying principles were that matters of ‘law’ should normally be decided by courts and that ‘policy’ should primarily be the province of ministers. Tribunals were to provide an exceptional alternative when, for some reason, it would be inappropriate to follow these principles. However, the Committee also concluded that 41 ‘[I]n any given case the line of least legislative resistance is to improvise a new tribunal rather than reorganise an old one’: B Schwartz and HWR Wade, Legal Control of Government: Administrative Law in Britain and the US (Oxford, Clarendon Press, 1972), 150 (concerning the proliferation of tribunals), 42 ‘The desire to keep the superior courts for such … matters [as the more serious criminal offences and civil cases], buttressed by the underlying assumption that the number of High Court judges should be kept small, has been one important reason for the steady proliferation of other judicial bodies and other methods for solving disputes’: B Abel-Smith and R Stevens, In Search of Justice: Society and the Legal System (London, Allen Lane, 1968) 64–65. This statement is strongly supported by evidence, given by the Permanent Secretary to the Lord Chancellor, to the Franks Committee: Report of the Committee on Administrative Tribunals and Enquiries, 1957 (Cmnd 218) [39]. 43 J Resnik, ‘Civil Processes’ in P Cane and M Tushnet, The Oxford Handbook of Legal Studies (Oxford, OUP, 2003) 755. 44 Report of the Committee on Administrative Tribunals and Enquiries, above n 42. 45 Indeed, in a complete reversal of the 19th century approach, the Committee recommended that unless a special case could be made, administrative adjudication should be allocated to courts: Ibid [406]. 46 1932 (Cmd 4060).

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there was ‘nothing radically wrong’ with the way various functions were at that time allocated to Ministers and tribunals.47 Whereas the focus of the Donoughmore Committee (reflecting its terms of reference) was on functions (judicial and quasi-judicial), the focus of the Franks Committee (once again, reflecting its terms of reference) was on institutions – tribunals and public inquiries. Ironically, however, the Donoughmore Committee’s recommendations focused on institutional design, while the recommendations of the Franks Committee were predominantly concerned with securing ‘openness, fairness and impartiality’ in decision-making. Although Franks followed Donoughmore in placing courts at the centre and tribunals on the periphery of the administrative adjudication universe, it also stressed that tribunals should be understood as ‘machinery for adjudication’ not as ‘part of the machinery of administration’.48 Robson and others argued for significant amalgamation of tribunals so as to inject some order into the diverse and unruly collection of individual bodies, but the Committee responded with only one minor recommendation along these lines. Donoughmore entrenched the distinction between courts and tribunals by rejecting the idea of a separate and largely self-contained system of administrative courts. Franks, by contrast, aligned tribunals with courts. The task of integrating the two types of adjudicatory institutions remained,49 and this was committed to the Review of Tribunals, chaired by Sir Andrew Leggatt, the report of which – Tribunals for Users: One System, One Service – was published in 2001. Whereas Franks had focused on procedural judicialisation of tribunals, Leggatt focused on their institutional judicialisation. Under the provisions of the Tribunals, Courts and Enforcement Act 2007, legally qualified members of tribunals are called ‘judges’ even if they do not hold judicial office in the traditional sense; in addition, the ‘guarantee of judicial independence’, contained in section 3 of the Constitutional Reform Act 2005, applies to them as well as to the traditional judiciary.50 Many of the tribunals that adjudicate disputes between citizen and government are organised in a two-tier trial (‘First-tier Tribunal’) and appellate (‘Upper Tribunal’) structure, with appeals from

47

Ibid 115. Report of the Committee on Administrative Tribunals and Enquiries, above n 42 [40]. 49 Indeed, the Franks Committee expressly rejected a proposal by William Robson for the establishment of a general administrative appeals tribunal: Ibid [120]–[123], [407]. 50 Tribunals, Courts and Enforcement Act 2007 s 1. Judges and Members of the First-tier Tribunal and Members of the Upper Tribunal are appointed by the Lord Chancellor. Judges of the Upper Tribunal are appointed by the Queen on the advice of the Lord Chancellor. The role of the independent Judicial Appointments Commission in relation to non-judicial members of tribunals is regulated by Constitutional Reform Act 2005 Sch 14. Judges and Members may be removed from office, but only on the ground of inability or misbehaviour, by the Lord Chancellor with the concurrence of the Lord Chief Justice. 48

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the Upper Tribunal to the Court of Appeal.51 The Upper Tribunal has limited judicial review jurisdiction – a jurisdiction formerly exercisable in England only by the High Court. In England, High Court Judges sit in the Upper Tribunal, and the Senior President of the Tribunal Service is a judge of the Court of Appeal. The Council on Tribunals – established to give effect to a recommendation of the Franks Committee – has been replaced by the Administrative Justice and Tribunals Council, the remit of which, like that of the Australian Administrative Review Council, covers the whole ‘administrative justice system’, including courts. Despite these developments it is unlikely, in the foreseeable future, that the distinction between courts and tribunals will be abolished in the UK. The more likely result is effective recognition of a branch of government, the prime function of which is adjudication (the adjudicatory branch as opposed to the judicial branch), consisting of two separate adjudicatory hierarchies (of courts and tribunals), differentiated primarily in terms of their respective areas of jurisdiction, running in parallel but converging at the appellate level and sharing the two highest appellate bodies: the Court of Appeal and the House of Lords (from 2009 the UK Supreme Court). In this dispensation, it will be possible to describe tribunals as a type of court and courts as a type of tribunal; or, more accurately, courts and tribunals as species of adjudicative institution.

B Functional Differentiation According to the comparative institutional competence explanation, tribunals are a desirable alternative to courts. By contrast, according to the functional differentiation explanation, tribunals are a constitutionally necessary supplement to courts because although courts and tribunals both adjudicate disputes between citizen and government, tribunals can perform this function in a way that courts cannot. This explanation is most salient to Australian federal law,52 although to explain the position clearly it is helpful to draw some comparisons between Australian and US law. The architecture of the first three Chapters of the Australian Constitution is similar to that of the first three Articles of the US Constitution. However, the Australian High Court has approached the separation of judicial power rather differently from the US Supreme Court. Judges of (Australian) 51 The Review, we are told (Tribunals for Users One System, One Service Report of the Review of Tribunals by Sir Andrew Leggatt (London, The Stationery Office, 2001) 207–10), was informed by the Australian system, and in particular the Administrative Appeals Tribunal. Ironically, however, the English structure bears more similarity to highly controversial proposals for an Administrative Review Tribunal, which were defeated in the Australian Senate in 2001 and have not been revived. 52 The position in the Australian States is too complex to be explored in this essay.

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Chapter III courts enjoy constitutionally guaranteed security of tenure (appointment till the age of 70)53 and salary protection. The High Court stresses the importance of the institutional independence thus secured for the impartial resolution of disputes concerning the distribution of governmental power between the Commonwealth and the States, and for promoting ‘the rule of law’ especially in the contexts of civil disputes between citizen and government, and criminal prosecutions. Very soon after the creation of the Commonwealth in 1901, the High Court established the proposition that the Parliament may not confer ‘the judicial power of the Commonwealth’54 on bodies that are not Chapter III courts.55 It is possible to identify at least five different juridical approaches to the allocation of functions between judicial and non-judicial bodies. According to an historical approach, judicial functions are those traditionally performed by courts. Under this approach (in the Australian context, anyway), the relevant period for determining the historical functions of courts is the heyday of the common law, before the growth in legislative activity and the decline of the courts from the 19th century onwards. ‘Courts’, as in Montesquieu’s model, are the English central courts. A second, related approach rests on a public/private distinction. The private is associated with disputes between citizens, with common law and, in the US particularly, with state law; the public is associated with disputes between citizen and government, with statute and, in the US particularly, with federal law. Matters that fall on the private side of the line may not be allocated to non-judicial bodies.56 A third, essentialist approach, defines judicial power in terms of what courts do:57 they find facts, ‘ascertain’58 law, and apply law to facts in order to make a final and enforceable decision about (theoretically) pre-existing rights and duties. These three approaches we might loosely describe as ‘formalist’. A fourth, functionalist, approach identifies the exclusive province of courts by reference to the values protected by separation of judicial power. The question whether conferral of a particular function on a non-judicial body is impermissible depends on whether conferral unacceptably infringes the

53 Or such lower age as Parliament may fix with prospective effect only; and subject to removal ‘on an address from both Houses of Parliament in the same session, praying for such removal on the ground of misbehaviour or incapacity’: Australian Constitution s 72(ii). 54 That is, the power conferred on courts by Chapter III of the Constitution. 55 Huddart Parker & Co Pty Ltd v Moorhead (1909) 8 CLR 330. I will loosely refer to Chapter III courts as ‘judicial bodies’ and bodies that are not Chapter III courts as ‘non-judicial bodies‘. 56 This approach is extremely odd because it allows non-judicial bodies, whose members may not enjoy the same protections as judges, to adjudicate only disputes between citizens and government. It has hindered the creation of federal tribunals to adjudicate disputes between citizens. 57 That is, it defines a function in terms of a procedure: above n 12. 58 This may involve identifying, interpreting or making rules.

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protected values. According to a fifth, ‘reviewability’ approach the separation principle does not require that judicial functions should not be allocated to non-judicial bodies but only that if they are, the work of the non-judicial body should be subject to review by a judicial body. There are traces of all five approaches in the jurisprudence of both the US Supreme Court and the Australian High Court. However, whereas the latter two approaches are now dominant in the US,59 the former three (formalist) approaches are dominant in Australia. The result of the High Court’s formalist approach is a large, complex and internally inconsistent body of case law.60 In 1956 the High Court (by majority) controversially decided, in R v Kirby, ex p Boilermakers’ Society of Australia,61 that separation of judicial power required not only that judicial functions could not validly be conferred on non-judicial bodies, but also that non-judicial functions could not validly be conferred on judicial bodies (unless incidental to judicial functions). The case involved a challenge to the constitutionality of conferring on the Commonwealth Court of Conciliation and Arbitration (‘CCCA’) (which dealt with industrial relations) the power to issue orders of compliance with its awards and to punish as contempt of court disobedience of such orders. A majority of the High Court held that the primary functions of the CCCA were arbitral and non-judicial, and consequently that conferring on it the judicial power of making enforceable orders was unlawful because the Constitution prevents the conferring of both judicial and non-judicial powers on the same institution. It followed from this reasoning not only that judicial powers could not be conferred on non-judicial bodies but also that non-judicial powers could not be conferred on judicial bodies. The court rejected an alternative approach (espoused by the minority) under which non-judicial power (such as the arbitral power) could validly be conferred on a body properly

59 See further P Bator, ‘The Constitution as Architecture: Legislative and Administrative Courts under Article III’ (1989–90) 65 Indiana Law Review 233; R Fallon Jr, ‘Of Legislative Courts, Administrative Agencies, and Article III’ (1987–8) 101 Harvard Law Review 915; M Redish, ‘Legislative Courts, Administrative Agencies and the Northern Pipeline Decision’ [1983] Duke Law Journal 197; R Saphire and M Solimine, ‘Shoring up Article III: Legislative Court Doctrine in the Post CTFC v Schor Era’ (1988) 68 Boston University Law Review 85; P Strauss, ‘The Place of Agencies in Government: Separation of Powers and the Fourth Branch’ (1984) 84 Columbia Law Review 573; P Strauss, ‘Formal and Functional Approaches to Separation of Powers Questions – A Foolish Inconsistency?’ (1986–87) 72 Cornell Law Review 488. 60 See generally L Zines, The High Court and the Constitution, 5th edn (Sydney, Federation Press, 1997) ch 10. 61 (1956) 94 CLR 254 (‘Boilermakers’ case’); affirmed on appeal by the Privy Council: A-G (Commonwealth) v R, ex p Boilermakers’ Society of Australia (1957) 95 CLR 529.

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constituted as a court (such as the CCCA) provided the non-judicial power was not inconsistent with the proper constitutional role of courts.62 The relevance of all this to our present topic became clear in 1971, when the Kerr Committee,63 appointed to report on the federal system of external review of government decisions, reasoned, in effect, as follows: — As a technique for controlling government, judicial review is in need of supplementation because it focuses on the legality of decisions and does not allow the ‘merits’ of the decision to be reviewed; — moreover, no provision is currently made for reviewing the merits of the bulk of federal government decisions; — reviewing the merits of government decisions is a non-judicial function because it typically involves the resolution of ‘non-justiciable’ issues;64 and — it is desirable, therefore, to create a non-judicial body with wide jurisdiction to undertake ‘merits review’ of government decisionmaking. The Administrative Appeals Tribunal (‘AAT’) was created to give effect to this recommendation.65 In the Australian federal system, it is the peak ‘merits review tribunal’ (as this type of body is commonly called). As might be expected, the distinction between judicial review and merits review is

62 However, this alternative approach is used to determine when individual Chapter III judges may perform non-judicial functions: Zines, above n 60, at 214–17; K Walker, ‘Persona Designata, Incompatibility and the Separation of Powers’ (1997) 8 Public Law Review 153; F Wheeler, ‘Federal Judges as Holders of Non-Judicial Office’ in B Opeskin and F Wheeler (eds), The Australian Federal System (Melbourne, Melbourne University Press, 2000). It is the basis on which the appointment of a Chapter III judge as President of the Administrative Appeals Tribunal was held valid in Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577. 63 Report of the Commonwealth Administrative Review Committee (Parliamentary Paper No 144 of 1971). 64 This pivotal argument is difficult and weak: P Cane, ‘Merits Review and Judicial Review: The AAT as Trojan Horse’ (2000) 28 Federal Law Review 213, 215–17. It seems to rest on foundations similar to those of the distinction between judicial and quasi-judicial functions associated with the Donoughmore Committee on Ministers’ Powers. 65 The AAT has jurisdiction to review decisions made under more than 400 statutes covering a very diverse set of governmental tasks. It is, in other words, a ‘generalist’ as opposed to a ‘specialist’ tribunal. In this respect, it broke the existing tribunal mould of the task-specific adjudicatory institution. Although the AAT was expressly established as a non-court, it has always been seen as an essentially judicial institution, at least in the sense that its procedures are basically judicial and its members understand their task in judicial terms (as being to ‘act judicially’). This despite the fact that a committee chaired by Sir Henry Bland – appointed to advise which administrative decisions should be subject to merits review as recommended by the Kerr Committee – expressed the opinion that it was ‘desirable that the community should recognise the Tribunals for what they are – not courts but tribunals whose major activities are the review of decisions under administrative discretions, sometimes with mere recommendatory functions, and, themselves, in much of their jurisdiction, an extension of the total administrative process’: Final Report of the Committee on Administrative Discretions (1973) [171].

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complex;66 but in crude terms, merits review is functionally equivalent to a de novo appeal. This is expressed by saying that the merits review tribunal ‘stands in the shoes of the decision-maker’ whose decision is challenged – although this is misleading because the tribunal, for instance, will typically have greater fact-gathering powers than the decision-maker (and, as we will see later, will be performing an adjudicatory, not an administrative, function). The AAT was not the first merits review tribunal in Australia. In the 1920s the federal system of taxation tribunals was held to be unconstitutional on the ground that it involved the exercise of judicial power by a taxation review tribunal, which was not a Chapter III court.67 The problem was overcome by providing that, in reviewing decisions, the tribunal ‘shall have all the powers and functions of’ the original, nonjudicial, decision-maker and that the decision of the tribunal was to be deemed to be that of the original decision-maker.68 The High Court upheld this formulation,69 being motivated to do so, it would seem, at least partly by the sorts of considerations that drive the comparative institutional competence explanation: namely, that in important ways, tribunals are better than courts. It was this wording that provided the model for the statutory specification of the function of the AAT. The significance of the High Court’s pro-tribunal stance in the taxation cases was changed by the decision in the Boilermakers’ case. In the taxation cases, classifying merits review as a task that could constitutionally be allocated to non-judicial bodies was seen as necessary in order to provide much-needed additional adjudicatory resources in the federal system. By contrast, as a result of the court’s approach in the Boilermakers’ case, tribunals became not only pragmatically desirable but also constitutionally necessary. For the sake of contrast with the Australian position, it is worth noting that aspects of the principle that judicial functions may not be conferred on non-judicial bodies, and that non-judicial functions may not be conferred

66 See further P Cane and L McDonald, Principles of Administrative Law: Legal Regulation of Governance (Melbourne, OUP, 2008) 235–45. An important source of complexity resides in the fact that ‘merits review’ is used in at least two different senses. In one sense, the ‘merits’ of a decision are contrasted with its ‘legality’, judicial review being limited to the latter. In another sense, judicial review is about identifying errors in decisions whereas merits review is about making the ‘correct or preferable decision’. The former sense relates to the intensity of review whereas the latter relates primarily to the powers of the reviewer. The distinction between ‘merits’ and ‘legality’ is notoriously unstable: Cane, above n 64. In Huang v Secretary of State for the Home Dept [2007] 2 AC 167 the House of Lords described the role of appellate immigration authorities in terms analogous to merits review in the second sense. 67 British Imperial Oil Co Ltd v Federal Commissioner of Taxation (1925) 35 CLR 422. 68 Income Tax Assessment Act 1922–25 (Cth) s 44(1). 69 Federal Commissioner of Taxation v Munro (1926) 38 CLR 153; affirmed by the Privy Council in Shell Co of Australia Ltd v Federal Commissioner of Taxation (1930) 44 CLR 530.

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on judicial bodies, is also (as one would expect) part of US law. However, because the US Supreme Court has mainly followed the functional and reviewability approaches in developing the idea of separation of powers (and, in this sense, has taken a less rigid approach to allocation of functions between courts and other organs of government than the High Court70) US lawyers seem happy to accept that administrative tribunals perform essentially judicial functions (although sometimes betraying unease by adding the prefix ‘quasi’),71 that administrative adjudicators are ‘judges’ (as opposed to ‘members’, as in Australia, reflecting the fact that ALJs are legally trained whereas many members of Australian tribunals are not), and that they perform no function that could not alternatively be allocated to courts established in accordance with Article III of the US Constitution. The main problem, as they see it, is how to prevent excessive or inappropriate Congressional allocation of judicial functions to judicial officers that are not Article III judges and to institutions that are not Article III courts. The rigidity of the Australian approach to separation of powers makes it impossible for the federal Parliament to establish multi-functional agencies in the US mould, which exercise rule-making, enforcement and adjudicative functions ‘under the one roof’.72 The Australian emphasis on separation of judicial power reflects the British heritage of the Australian legal system. As we saw earlier, judicial independence was central to the constitutional developments of the 17th century culminating in the Act of Settlement 1701. In the US, by contrast, separation of judicial power is just one element of the larger landscape of institutional checks and balances. In Westminster systems, the judicial branch provides a counterbalance to the combined weight of the legislature and the executive, thus putting a premium on its separation and independence from those branches. In the US the separation of legislature and executive takes some of the burden off the judiciary.

70 Ironically, Australian judges and lawyers tend to think of the US version of separation of powers as more rigid than the Australian version, which it may be in respect of the relationship between the executive and the legislature but certainly not in relation to separation of judicial power. 71 B Schwartz, ‘Administrative Justice and its Place in the Legal Order’ (1955) 30 New York University Law Review 1390, 1398. 72 The Australian equivalent of the US Interstate Commerce Commission was the Inter-State Commission. This latter body is provided for in s 101 of the Australian Constitution, which confers on it ‘powers of adjudication and administration’. Nevertheless, in New South Wales v Commonwealth (1915) 20 CLR 54 (‘Wheat Case’), the High Court held that the Commission could not exercise the powers of a court: M Coper, ‘The Second Coming of the Fourth Arm: The Role and Functions of the Inter-State Commission’ (1989) 63 Australian Law Journal 731. The underlying reasoning is that all institutions of the Commonwealth government are subject to the separation of powers enunciated in the first three Chapters of the Constitution: J Finnis, ‘Separation of Powers in the Australian Constitution’ (1967–70) 3 Adelaide Law Review 159.

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One thing that can be said for the Australian approach is that it solves our central puzzle (about the continued existence of the distinction between tribunals and courts) in a clear way by making the distinction between courts and tribunals a constitutional requirement. Ironically, however, despite the bright-line constitutional distinction between courts and tribunals, and despite the theory that a merits review tribunal ‘stands in the shoes of the decision-maker’, in reality the AAT inhabits an uncomfortable limbo somewhere between the judicial and executive branches. It is an independent body not associated with any of the agencies whose decisions it reviews and its President must be a Federal Court (Chapter III) judge. It is not surprising, therefore, that in the early days of its existence, there was much debate about whether the AAT should act more like an administrator than a court, or vice versa.73 Under the strong influence of its first President, Sir Gerard Brennan (later a Justice and then Chief Justice of the High Court), the debate was resolved in favour of the judicial model. At the same time, the assimilationist logic implicit in this situation cannot be carried through to a conclusion because of the constitutionally mandated distinction between judicial and non-judicial functions.

C Institutional Balance The US-inspired separation of powers embodied in the Australian Constitution is superimposed on a British, ‘Westminster’ system of government. In the British way of understanding the world, the centre of gravity of public law is the vertical relationship between governor and governed. This 73 This debate was conducted in terms of whether the AAT should apply government ‘policy’ or could depart from it. This is a very complex issue that cannot be explored here. See further P Bayne, ‘Tribunals and Government: How Some Aspects of Review of Discretion May Affect a Sometimes Difficult Relationship’ in M Harris and V Waye (eds), Administrative Law (Sydney, Federation Press, 1991); D Gardiner, ‘Policy Review Reviewed: The Pubescent State of the “New” Administrative Law’ (1988) 4 Queensland University of Technology Law Journal 125; J Goldring, ‘The Foundations of the “New Administrative Law” in Australia’ (1981) XL Australian Journal of Public Administration 79; M Kirby, ‘Administrative Review: Beyond the Frontier Marked Policy – Lawyers Keep Out’ (1981) 12 Federal Law Review 121; F McKenzie, ‘The Immigration Review Tribunal and Government Policy: To Follow or not to Follow?’ (1997) 4 Australian Journal of Administrative Law 117; J McMillan, ‘Review of Government Policy by Administrative Tribunals’ in Commonwealth Tribunals: The Ambit of Review, Law and Policy Paper No 9 (Canberra, Centre for International and Public Law, Australian National University, 1998); D O’Brien, ‘Tribunals and Public Policy: What Decisions are Suitable for Review?’ (1989) 58 Canberra Bulletin of Public Administration 86; D Pearce, ‘Courts, Tribunals and Public Policy’ (1980) 11 Federal Law Review 203; J Sharpe, The Administrative Appeals Tribunal and Policy Review (Sydney, LawBook Co, 1986); I Thompson and M Paterson, ‘The Federal Administrative Appeals Tribunal and Policy Review: A Re-assessment of a Controversy’ (1991) 2 Public Law Review 243.

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explains why Dicey’s still-influential interpretation of the English constitution revolves around Parliamentary sovereignty and the rule of law (equality of governors and governed before the law). Dicey says very little explicitly about separation of powers;74 indeed, his implicit judgment (based on his understanding of the French version, in which separation means isolation) is negative.75 The Australian version of separation of powers is British in the sense that its focus is on protecting the citizen against the government (and the States against the Commonwealth). By contrast, in the American way of thinking (or so it seems), the centre of gravity of public law lies in the horizontal relationships between the various organs of government. Central to the US version of separation of powers is the idea of checks and balances, whereas the foundation of the Australian version is the (Diceyan) rule of law: not only does it subject the executive to judicial control, it limits that control to enforcement of ‘the law’.76 The story of tribunals in the US supports this analysis. At least implicit in this story is a pivotal distinction between administration (the implementation of government programmes) and adjudication. As I am defining them, these two governmental activities are similar in that both involve finding facts, ‘ascertaining’77 law and applying law to facts. In this tripartite formula, law is to be understood as a means of promoting social purposes (objectives/goals), while facts describe the position of individual members of society. Both administration and adjudication are concerned with mediating between social goals and individual interests. The two functions differ, however, in their orientation. Administration, like politics, is primarily oriented towards the promotion of social goals whereas adjudication is primarily oriented towards the protection of the interests of individual members of society. Administration is primarily collective and distributive; adjudication is primarily individualistic and corrective.78 In adjudication the individual is put in the spotlight (this is what the basic procedural features of adjudication are designed to achieve), whereas in 74

Dicey, above n 14, at 155–56, 337–39, 472. ‘[T]he séparation des pouvoirs means, as construed by Frenchmen, the right of the government to control the judges’: Ibid 472. 76 A good illustration of this point is that whereas US courts ‘defer’ to interpretations of statutes by agencies, the High Court of Australia insists that the main job of courts is to enforce their own understanding of the law in the face of differing interpretations by agencies: Corporation of the City of Enfield v Development Assessment Commission (1999) 199 CLR 135, 152–53; R Sackville, ‘The Limits of Judicial Review of Executive Action: Some Comparisons between Australia and the United States’ (2000) 28 Federal Law Review 315; M Allars, ‘Chevron in Australia: A Duplicitous Rejection?’ (2002) 54 Administrative Law Review 569. See also the discussion of merits and legality, above n 66. 77 See above, n 58. 78 Or ‘commutative’, to use Thomas Aquinas’ rather than Aristotle’s term. For an explanation of the distinction between these two ideas see J Finnis, Natural Law and Natural Rights (Oxford, Clarendon Press, 1980) 177–79. 75

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administration individuals figure more anonymously as members of social groups or of society as a whole (and so adjudicatory procedures are more-or-less out of place in this context). Put crudely, in the political world and the administrative process, individuals are statistics. In the court or tribunal, the individual is a person. I suggested earlier that providing facilities for adjudication of disputes between citizens and government is an important role of government, a way of establishing and maintaining power and a source of legitimacy. But now we can see that potentially, at least, it may also present government with a serious problem. Administrators and adjudicators perform essentially the same function – that is, managing the relationship between social goals and individual interests – but with different and potentially conflicting emphases. Potentially, at least, adjudicators are in a position to sabotage, or at least hinder, promotion of social goals in favour of protecting the interests of affected individuals. Thus administrators have an incentive to want to control adjudication of disputes that arise between them and the citizens affected by their decisions. One of the most basic purposes of judicial independence and the separation of judicial power is to make it harder for administrators to control adjudicators and adjudication, and in that way to pursue social goals at unacceptable expense to the interests of adversely affected individuals. To the non-US common lawyer, perhaps the most striking thing about tribunals in the US (that is, ALJs and AJs79) is that they are embedded within the agencies whose decisions they review at the behest of aggrieved individuals. The earliest predecessors of ALJs were ‘hearing examiners’ in the ICC, which was given statutory power to appoint such officials in 1906. The ICC was80 a multi-functional railway regulator with policymaking, enforcement and adjudicatory powers. The initial function of examiners was to conduct ‘evidentiary’ hearings to provide the factual basis for decisions of the agency. As a result, ‘adjudication’ by hearing

79 ALJs are, but AJs are not, appointed under the provisions of the Administrative Procedure Act 1946 (see also below, n 88). See further M Asimow, ‘The Administrative Judiciary: ALJs in Historical Perspective’ (2000) 20 Journal of the National Association of Administrative Law Judges 157; JH Frye III, ‘Survey of Non-ALJ Hearing Programs in the Federal Government’ (1992) 44 Administrative Law Review 261; D Gifford, ‘Federal Administrative Law Judges: The Relevance of Past Choices to Future Directions’ (1997) 49 Administrative Law Review 1; C Koch Jr, ‘Administrative Presiding Officials Today’ (1994) Administrative Law Review 271; JS Lubbers, ‘Federal Administrative Law Judges: A Focus on Our Invisible Judiciary’ (1981) 33 Administrative Law Review 109; L Musolf, ‘Administrative Law Judges: A 1948 Snapshot’ (1994) 46 Administrative Law Review 257; G Pops, ‘The Judicialization of Federal Administrative Law Judges: Implications for Policymaking (1978– 79) 81 West Virginia Law Review 169; P Strauss et al (eds), Gellhorn and Byse’s Administrative Law: Cases and Comments, 9th edn (Westbury, NY, Foundation Press, 1995) ch VIII; P Verkuil, ‘Reflections Upon the Federal Administrative Law Judiciary’ (1991–92) 39 UCLA Law Review 1341. 80 It was abolished in 1995.

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examiners came to be identified with fact-finding and decision-making by the agency with ‘policy-making’. Administrative adjudication was seen as part of a process of policy-making – policy-making on a case-by-case basis; and it was contrasted with policy-making through the formulation of general rules. Gradually, hearing examiners became more involved in the making of agency decisions, at first offering recommendations but later, in some agencies, making initial decisions subject to appeal to or review by the agency itself. The role of hearing examiners in regulatory agencies was roughly analogous to that of inspectors who conduct public inquiries in the British land-use planning system. In the 1930s, when the number of regulatory agencies multiplied under Roosevelt’s New Deal, this system of decision-making generated great controversy. At first, objections were based primarily on notions of separation of powers. Exception was taken in particular to the combination of the power to investigate and prosecute regulatory infractions with the power to adjudicate such cases. Various proposals were made for the establishment of a free-standing administrative court that would take over the functions of embedded hearing examiners. However, enthusiasm for this solution waned when the Supreme Court’s opposition to the New Deal in the early part of the decade turned to support at the end. Reformers started promoting procedural and internal structural reform within agencies. In 1941 the Attorney-General’s Committee on Administrative Procedure published its final report, and the draft bill included in the Report formed the basis for the Administrative Procedure Act 1946 (‘APA’). The paradigm of administrative adjudication implicit in both the Committee’s Report and the APA was regulatory policy-making by consideration of individual cases. Adjudication was contrasted with ‘rule-making’. Although hearing examiners were to remain within agencies, their independence from the agency was to be protected in various ways; adjudication was to be performed in isolation from investigation and prosecution, and was to follow court-like procedures. Hearing examiners were to make initial decisions, subject to appeal to or review by the agency. These provisions represented a compromise between supporters and opponents of the New Deal and its regulatory agencies, and between social interests – protected by the power of the agency to review initial decisions of hearing examiners, and individual interests – protected by judicialised evidentiary hearings. Although many proposals have since been made to create a separate administrative court or a cross-agency ‘corps’ of ALJs (including one in 1955 by the Second Hoover Commission on Organization of the Executive Branch, appointed by President Eisenhower), the basic scheme established by the APA, which holds administration and adjudication in tension, is still operative. However, although the legal framework of administrative adjudication has remained more-or-less as it was established in 1946, there have been

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significant changes in the environment in which adjudication takes place. Two deserve mention. First, at the time of the APA, most ALJs worked for regulatory agencies and most administrative adjudication was related to regulation.81 Several federal welfare programs were established in the 1930s, but they were small. Most government welfare was provided by the States. It was not until the creation of the federal disability program in 1956 that things began to change. By the late 20th century, the majority of ALJs worked for welfare agencies – the Social Security Administration in particular – and most administrative adjudication was welfare-related. Secondly, at the time of the APA, policy was predominantly made by regulatory agencies in the context of consideration of individual cases. In the 1960s and 1970s, however, there was a major shift to policy-making by rules in both the areas of both regulation and welfare. The role of hearings is very different in a system in which policy is made by rules than in a system in which policy is made case-by-case. Instead of being an element of a process of policy-making and initial decision-making, adjudication becomes a method of reviewing initial decisions made by agency officials applying policies embodied in rules made by the agency. Since the 1970s US administrative law and administrative law scholarship have focused on rule-making rather than adjudication; and the paradigm of adjudication has changed from one of policy-making on a case-by-case basis to one of reviewing decisions of front-line decision-makers. Despite these changes, however, the structural balance between administrators and adjudicators established by the APA has remained in place: agencies retain the power to supervise and influence the work of ALJs through appeals and reviews of individual decisions. In the 1970s the US Social Security Administration observed that claimants had a much higher chance of receiving certain benefits if they appealed than if they did not. Because the SSA lacked the resources to review large numbers of individual decisions, and because of the relative inefficiency of review of individual cases as a way of establishing coherent policy in areas of high-volume decision-making, it employed various management techniques in an attempt to control the work output of ALJs compatibly both with the agency’s policy objectives and the provisions of the APA protecting the independence of ALJs. The ensuing tussle between the SSA and the association representing ALJs ended up in the courts on more than one occasion, resulting in an uneasy stalemate.82 81 The Final Report of the Attorney-General’s Committee on Administrative Procedure (1941) assumes that the context of administrative adjudication is regulatory. 82 V Rosenblum, ‘Contexts and Contents of “Good Cause” as Criterion for Removal of Administrative Law Judges: Legal and Policy Factors’ (1983–84) 6 Western New England Law 593; H Bruff, ‘Specialized Courts in Administrative Law’ (1991) 43 Administrative Law Review 329, 345–52; D Gifford, ‘Adjudication in Independent Tribunals: The Role of an Alternative Agency Structure’ (1990–91) 66 Notre Dame Law Review 965, 1005–19; P

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From this account we can see how the American checks-and-balances understanding of separation of powers helps to explain the position and role of administrative adjudication in the US system. Embedded tribunals enable the demand for adjudication of disputes between citizens and government to be met without relinquishing too much control of the programs out of which the disputes arise; they facilitate maintenance of the integrity of government policy objectives while at the same time providing an outlet for individual grievances.83 In this light, it is not surprising that numerous proposals to create an administrative court (or a central corps of ALJs) have come to nothing:84 this would significantly alter the relationship between administrators and adjudicators, even if only symbolically. There are Australian parallels to the US story. When the AAT was first established, in most areas of its jurisdiction it had power to make final decisions; but in the immigration (deportation) area it could only make recommendations to the Minister.85 Government dissatisfaction with the patterns of immigration decision-making by the AAT in the 1980s86 was one of the factors that led to the establishment of specialist refugee and migration tribunals with no right of appeal to the AAT.87 These specialist tribunals are more closely integrated into the bureaucracy whose decisions they review (the department of immigration) than the AAT, which is a free-standing independent agency that reviews decisions of many government agencies; a greater proportion of their members lack legal training than is the case in the AAT, a significant proportion of the members of which are actually Chapter III judges;88 and their work is actively managed

Strauss et al (eds), above n 79, at 958–78; JS Wolfe, ‘Are You Willing to Make the Commitment in Writing? The APA, ALJs, and SSA’ (2002) 55 Oklahoma Law Review 204. 83 A rather different argument, which has become part of the received wisdom in England, is that tribunals may be established ‘to provide a convenient legal buffer between the responsible government department and the implementation of an unpopular policy’: G Richardson, ‘Tribunals’ in D Feldman (ed), English Public Law (Oxford, OUP, 2004) 994. See also C Harlow and R Rawlings, Law and Administration (London, Weidenfeld and Nicolson, 1984) 74–75, 517–18. Of the 19th century, Stebbings says, ‘[I]t was recognised that the opportunity of raising grievances and having them properly addressed was central to pacifying hostile public opinion and achieving popular support or, at least, acquiescence’: above n 8, at 38. 84 See especially R Marquardt and E Wheat, ‘The Developing Concept of an Administrative Court’ (1981) 33 Administrative Law Review 301; N Nathanson, ‘Proposals for an Administrative Appellate Court’ (1973) 25 Administrative Law Review 85; P Verkuil and J Lubbers, ‘Alternative Approaches to Judicial Review of Social Security Disability Cases’ (2003) 55 Administrative Law Review 731; R Weaver, ‘Appellate Review in Executive Departments and Agencies’ (1996) 48 Administrative Law Review 251. 85 D Pearce, Administrative Appeals Tribunal, 2nd edn (Australia, LexisNexis Butterworths, 2007) 262–63. 86 See Sharpe, above n 73, ch IX. 87 These are now the Migration Review Tribunal (‘MRT’) and the Refugee Review Tribunal (‘RRT’). 88 In this context, it is worthy of note that in the US the largest group of AJs, whose independence is not as strongly protected as that of ALJs, review decisions made by the

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(by the imposition of performance targets, for instance) in a way that the work of members of the AAT is not.89

IV CONCLUSION

This essay has attempted to explain tribunals, administrative adjudication and the relationship between tribunals and courts in historical, comparative and constitutional terms. Although the various explanations have turned out to be complex and, in significant respects, specific to time and place, they rest on themes that are of wide and continuing relevance: separation of powers, the rule of law, access to justice, the tension between social goals and individual interests and so on. Despite local particularities, each explanation resonates more widely across jurisdictions. In contemporary public law scholarship, tribunals are often treated as being of great practical significance in terms of public administration and government accountability but of little theoretical interest in constitutional terms. Whether or not readers agree with the admittedly speculative analysis in this essay, the hope is that they will be encouraged to look at tribunals with a fresh eye. The ability to throw new light on familiar topics has always been one of Mark Aronson’s greatest strengths as a public law scholar. It is with such an aspiration that this essay is offered to him in thanks for and celebration of his many contributions to the discipline.

Immigration and Naturalization Service (‘INS’). It may also be observed that the UK Asylum and Immigration Tribunal will not be integrated into the new two-tier (First-tier and Upper) tribunal structure described in III.A. 89 During the 1980s, too, the Commonwealth Government became dissatisfied with the pro-immigrant stance of the Federal Court (a Chapter III court) and various legislative provisions have been passed in the last 20 years to limit the power of federal courts to review immigration decision-making: J McMillan, ‘Federal Court v Minister for Immigration’ (1999) 22 Australian Institute of Administrative Law Forum 1. Because, in the Westminster-style Australian system, the executive controls the legislature, such legislation can be understood, like the creation of specialist immigration tribunals, as an attempt by administrators of immigration law to control adjudicators of immigration disputes. Here we have rich historical irony. In extricating the courts from royal control in the late 17th century, Parliament was also asserting its own independence from the executive. For more than a century afterwards, the relationship between the Monarch and Parliament resembled that between the US President and Congress (which was modelled on an understanding of the 18th century British constitution). It was not until the development of responsible government in the 19th century, which resulted in the detaching of the executive from the Monarchy and its integration with the legislature, that the courts once again came within the orbit of the executive which, through Parliament, acquired the power to fire as well as hire the judges and to control their activities by legislation.

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13 Fact-Finding in Administrative Tribunals LINDA PEARSON *

O

VER SEVERAL DECADES in many common law jurisdictions legislatures have transferred much of the work that once was, or could be, done by courts to administrative tribunals. Legislatures have also allocated to them the task of adjudicating disputes arising in contexts not previously subject to judicial scrutiny. The constitution, functions and powers of such bodies vary across jurisdictions and reflect legislative perceptions of the appropriate role of such bodies, whether they be specialist or general, and the resources which are available to them. Governments create tribunals for a range of reasons, including cost, expertise, and perceived flexibility. The historical background, and explanations for the creation and continued existence of tribunals, is discussed in Peter Cane’s contribution to this volume. The vigorous debate over the proposed reorganisation of the Australian federal tribunals in the late 1990s, and the more recent comprehensive restructuring of the tribunal system in the United Kingdom, is evidence that tribunals are, and will continue to be, an essential part of administrative justice system. This paper examines how tribunals go about the task of fact-finding in an environment where the rules of evidence are not binding, and how courts evaluate how well they have done it. In the third edition of Judicial Review of Administrative Action Aronson, Dyer and Groves comment that while the ‘common law’s antipathy to fact review’ has softened, ‘as a general rule, fact review will be truly exceptional’.1 However, in the

* My debt to Mark Aronson extends over many years, from my time as a student in his Litigation and Advanced Administrative Law classes; as a colleague; and through his many helpful discussions during the course of writing this paper. My thanks to Peter Cane, Arthur Glass and Matthew Groves for helpful comments. Any errors are of course my own. 1 M Aronson, B Dyer and M Groves, Judicial Review of Administrative Action, 3rd edn (Sydney, LawBook Co, 2004) 227.

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forthcoming, fourth edition of Judicial Review of Administrative Action, they argue that while the Australian common law has not gone so far as England in recognising a factual error as a review ground in its own right, it is easier now than ever before to get around that by deploying other review grounds.2 Factual error can arise where a tribunal’s decision has failed to take into account evidence later argued to be crucial to the decision. More broadly, there can be a problem with how the tribunal has used the evidence before it, for example, by placing too much or too little weight on particular evidence. Three potential alternatives to direct fact review are considered here: procedural fairness, relevant considerations and serious irrationality or illogicality. In this paper I argue that there are problems with direct fact review and with each of these alternatives, and I suggest that the central concern of the courts ought to be with the rationality of the fact-finding process and tribunal reasoning. The comparators used are those which could be seen to represent the extremes, namely the Australian approach and the UK approach. It is no surprise that most of the cases discussed here are migration cases, in particular asylum cases, as this jurisdiction has in recent years dominated judicial review case law and jurisprudence; in so doing it has drawn attention to some of the most difficult factual issues. The term ‘tribunal’ first needs some explanation. There is considerable debate as to how to define the term in a way that distinguishes a tribunal from a court or from the range of other dispute resolution mechanisms.3 This paper adopts the definition used by Cane and McDonald, that a tribunal is a body with two defining characteristics, positive and negative: a body which resolves disputes, primarily by adjudication, and which is not a court.4 This definition has the advantage that it is broad enough to include both tribunals exercising a merits review function, that is, determining disputes between individuals and government agencies, and those adjudicating disputes between individuals, and includes a broad range of procedural diversity.5 The diversity of tribunals is illustrated by the

2 M Aronson, B Dyer and M Groves, Judicial Review of Administrative Action, 4th edn (2008, forthcoming) ch 4, [4.275]. 3 See R Creyke, ‘Where Do Tribunals Fit into the Australian System of Administration and Adjudication?’ in G Huscroft and M Taggart (eds), Inside and Outside Canadian Administrative Law: Essays in Honour of David Mullan (Toronto, University of Toronto Press, 2006) 81, 81–3. 4 P Cane and L McDonald, Principles of Administrative Law: Legal Regulation of Governance (Melbourne, OUP, 2008) 218. See also R Creyke, ‘Where Do Tribunals Fit into the Australian System of Administration and Adjudication?’ in Huscroft and Taggart, above n 4, at 83: ‘an individual or body that provides a dispute resolution process as an alternative to traditional court proceedings’. 5 I am using the term ‘individual’ rather than ‘citizen’ in defining the merits review function, since the migration tribunals which review decisions on residency and asylum are a significant, and some would say driving, part of the tribunal landscape.

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existence in Australia of the generalist Administrative Appeals Tribunal (‘AAT’), specialist tribunals and State specialist and ‘super’ tribunals. As discussed in Peter Cane’s paper in this volume, the AAT and the other federal tribunals are not a court for the purposes of Chapter III of the Constitution and thus are limited to the exercise of executive power. Their function is to review administrative decisions afresh on the material available at the time of review and to affirm, vary or set aside a decision and substitute a new decision.6 Tribunals constituted under State legislation are not subject to the constitutional restrictions on the combination of judicial and non-judicial power and some States have established tribunals which exercise both the function of reviewing executive decision-making and more general dispute resolution powers in commercial or tenancy disputes.7 A recurring feature in the Australian case law, particularly in the context of migration decision-making, is a concern about the extent to which it is necessary to identify a tribunal as being ‘adversarial’ or ‘inquisitorial’ and whether this matters in terms of how the tribunal goes about the fact-finding process, or how the courts scrutinise its efforts. As discussed further below, the answer appears to be ‘not much’. While adopting a broad definition of ‘tribunal’, the focus of this paper is on those tribunals whose function differs from traditional judicial party/party dispute resolution, that is, to review decisions of government agencies, usually with the power to substitute a decision. That includes tribunals whose procedures bear some resemblance to those of the ordinary courts, and those which operate in a non-adversarial mode. The statutes establishing tribunals, whether or not they operate in an adversarial mode, commonly include ‘provisions which: declare that procedure is within the discretion of the tribunal; confirm that the tribunal is not bound by the rules of evidence; and endorse the desirability of appropriate expedition and minimal formality and technicality’.8 Many tribunals are also subject to legislative direction that their processes be ‘fair, just, economical, informal and quick’.9 6 Administrative Appeals Tribunal Act 1975 (Cth) s 43; see Creyke, above n 4, at 85; Cane and McDonald, above n 4, at 219–20. Specialist tribunals at the Commonwealth level include the Social Security Appeals Tribunal, the Veterans Review Board, the Migration Review Tribunal and the Refugee Review Tribunal. 7 The Administrative Decisions Tribunal in New South Wales, the Victorian Civil and Administrative Decisions Tribunal and, in Western Australia, the State Administrative Tribunal. While these bodies to some extent are exercising judicial power, there are limitations on their capacity to determine issues of federal law: Trust Co of Australia Limited (trading as Stockland Property Management) v Skiwing Pty Ltd (trading as Café Tiffany’s) (2006) 66 NSWLR 77; A-G v 2UE Sydney Pty Ltd [2006] NSWCA 349. See discussion in G Hill, ‘State Administrative Tribunals and the Constitutional Definition of “Court”’ (2006) 13 Australian Journal of Administrative Law 103. 8 Aronson, Dyer and Groves, above n 1, at 524. 9 This is the now standard formula applicable to Australian federal tribunals: see, eg, Administrative Appeals Tribunal Act 1975 (Cth) s 2A.

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Enid Campbell has described the kinds of legal rules that lawyers accept as pertaining to the law of evidence as a ‘lengthy catalogue’ which includes rules concerning the admissibility of evidence; rules about presumptions that parties may rely upon; rules defining classes of facts not required to be proved by evidence; rules about burdens of proof and degrees of proof, the roles of judge and jury, the manner of proving the content of documents, corroboration of evidence, and competence and compellability of witnesses.10 The functions served by the rules of evidence have been summarised by Odgers: [T]hey regulate what material a court may consider in determining factual issues; how that material is to be presented in the court; and how the court actually goes about the task of deciding the factual issues on the basis of the evidence.11

Courts can for the most part rely on adherence to the rules of evidence and procedure to meet their obligation to accord the parties a fair hearing for the purposes of compliance with procedural fairness.12 Tribunals and other bodies not bound by the formal rules of evidence must deal separately with the issues identified by Odgers and with the demands of procedural fairness: that is, what they may consider and what the courts (with the benefit of hindsight) say they should have considered. Tribunals may be at a disadvantage by the removal of rules designed to exclude the unreliable and evaluate the reliable, for example in avoiding being overwhelmed by material of limited relevance or reliability.13 The people who appear before them may or may not benefit, for example, when a tribunal is able to take into account material, such as documents which cannot be authenticated, that would be inadmissible in court proceedings. Procedural fairness can go some of the way in ensuring that an administrative tribunal has before it reliable material on which to base its findings of fact; it can thus do some of the work performed by the rules of evidence in a court. The requirement to provide an opportunity to address adverse material that is credible, relevant and significant to the decision to be made assumes that material that is not credible or that is irrelevant can (and will) be disregarded.14 Where the principles of procedural fairness fail 10 E Campbell, ‘Principles of Evidence and Administrative Tribunals’ in E Campbell and L Waller (eds), Well and Truly Tried: Essays on Evidence (Sydney, LawBook Co, 1982) 39–40. 11 S Odgers, Uniform Evidence Law, 6th edn (Sydney, LawBook Co, 2004) 1. 12 N Rees, ‘Procedure and Evidence in “Court Substitute” Tribunals’ (2006) 28 Australian Bar Review 41, 55. 13 K MacKinnon, ‘Redefining the facts; changing the process’, AIJA Tribunals Conference accessed 9 January 2008. 14 Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 225 CLR 88.

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to provide answers, administrative tribunals must look elsewhere; it is not surprising that tribunals sometimes turn to the principles which govern the rules of evidence.15 One justification for that comes in the comment of Evatt J in R v War Pensions Entitlement Appeal Tribunal, ex p Bott: Some stress has been laid by the present respondents upon the provision that the tribunal is not … ‘bound by any rules of evidence’. Neither it is. But this does not mean that all the rules of evidence may be ignored as of no account. After all, they represent the attempt made, through many generations, to evolve a method of inquiry best calculated to prevent error and elicit truth.16

The development of the rules of evidence in order to ‘prevent error and elicit truth’ took place in the context of the needs of the criminal justice system (in particular, in working out what evidence is not safe to put before a jury) and in the common law adversarial process; it should not readily be assumed that they meet that purpose in other contexts.17 This perspective also assumes that tribunal members will have some legal background and therefore an understanding of what the rules of evidence are and their rationale. Of course, not all do: it is one of the strengths of administrative tribunals that expertise in fields other than law can be represented and it may be routine in some tribunals for members with qualifications other than in law to sit alone.18 One difficulty arising from the standard statutory formulation that a tribunal is not bound by the rules of evidence is in separating those principles applied in the ordinary courts which can properly be characterised as being ‘rules of evidence’ from other principles. As Justice Keith Mason, President of the Court of Appeal of NSW, has observed, there are ‘some fundamental principles of law which masquerade as rules of judicial evidence but which cannot be overreached by a tribunal in the absence of the clearest statutory authority’.19 Justice Mason included in that category client-legal privilege, public interest immunity and the privilege against self-incrimination. The High Court has accepted that client legal privilege is a rule of substantive law and not merely a rule of evidence.20 Those 15 F Houle, ‘Pitfalls in relying on Common Law Rules of Evidence for Administrative Tribunals’, 9th Annual Australian Institute of Judicial Administration Tribunals Conference, 6–7 April 2006 accessed 9 January 2008) 25–26. 16 (1933) 50 CLR 228, 256. 17 Houle, above n 15, at 16. 18 Much depends on selection and training of tribunal members. Non-lawyer tribunal members do not necessarily generate more appeals: F Meredith ‘“How Would You Know, You’re Not a Lawyer”: Decision Making in a Merit Review Tribunal’ (2001) 10 Journal of Judicial Administration 149. 19 Justice K Mason AC, ‘The Bounds of Flexibility in Tribunals’ (2003) 39 Australian Institute of Administrative Law Forum 18, 21. See also Campbell, above n 10, at 45–46; Rees, above n 12, at 72. 20 Daniels Corp International Ltd v ACCC (2002) 213 CLR 543. In another instance, a tribunal member asked an applicant seeking a protection visa a series of what the court

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principles which can clearly be characterised as ‘rules of evidence’ and which have the most to say about how tribunals should conduct their proceedings, generally relate to what evidence is accepted, how it is presented and how it is used. It is well accepted that a tribunal can have regard to material which would be excluded under rules relating to, for example, hearsay or opinion evidence. Even where hearsay exclusions do not apply, however, procedural fairness may require the rejection of material where there is no opportunity to test its reliability.21 While tribunals are not subject to the same restrictions as the courts in their ability to have regard to opinion evidence, the function performed by questions of admissibility in the courts is performed in tribunals by consideration of the relevance and weight of particular evidence. It makes sense for a tribunal to go to the core of the formal rules of evidence and to evaluate the opinions of experts by reference to the expertise of the person giving the evidence and an understanding of the basis on which the opinion is being given.22 The ultimate test is whether the tribunal, as fact-finder, is able to weigh the facts and reach a conclusion. No decision-maker, whether court or tribunal, should simply accept an opinion without being properly informed of the expert’s reasoning process.23

II FACT-FINDING BY TRIBUNALS

A Facts Tribunals (in common with all legal decision-makers) must make findings of fact.24 Tribunals required to provide written reasons for their decision will usually be explicitly required to include a statement of the facts as

described as ‘impertinent’ questions which led to the disclosure of legal advice given to him. This was held by the Federal Court to constitute a jurisdictional error: SZHWY v Minister for Immigration and Citizenship [2007] FCAFC 64. 21 Rees gives as an example Chan v Kostakis [2003] VCAT 951, where the tribunal refused to accept a letter tendered in support of an application to dismiss a claim because it would have been unfair to have accepted the letter as proof of a fact in issue in the absence of an opportunity to cross-examine its author: above n 12, at 76. 22 R Kune and G Kune, ‘Expert medico-scientific evidence before tribunals: Approaches to proof, expertise and conflicting opinions’ (2006) 13 Australian Journal of Administrative Law 69, 73–5. 23 Ibid 75. See also South Western Sydney Area Health Service v Edmonds [2007] NSWCA 16 [127]–[132]. 24 It is beyond the scope of this paper to delve into the conceptual distinctions between fact and law. The following discussion is based on an acceptance that fact and law can be distinguished for most practical purposes.

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found and refer to the evidence on which those findings were based.25 The High Court of Australia has confirmed that a legislative requirement to set out findings on material questions of fact focuses on the subjective thought processes of the decision-maker and obliges the decision-maker to set out its findings on those questions of fact which it considered to be material to the decision which it made (and not those which the reviewing court thinks it should have made).26 The High Court has stated that tribunal reasons ‘are not to be construed minutely and finely with an eye keenly attuned to the perception of error’.27 Facts characterised as ‘simple’ or ‘primary’ facts are usually assumed to be either correct or incorrect. It is common to try to isolate these ‘relatively simple or straightforward primary facts’ (such as whether a person is in a certain place at a certain time, or whether two towns are separate) from more complex findings.28 However, characterisation of these kinds of facts in this way assumes the existence of certain kinds of evidence. Questions such as the age of a person can be difficult to establish where no reliable record-keeping system exists, which is not uncommon in jurisdictions from which many aspiring migrants or asylum seekers come. The finding may be crucial, for example in deciding whether an individual is a dependent member of a family unit, or meets the minimum age for entry as an aged relative. While there may be an objectively ‘right’ answer to such a question, the process of reaching any answer at all may depend on evaluation of evidence of limited and variable reliability. Other superficially ‘simple’ questions of fact, for example, the distance between two places A and B, may require the resolution of a prior question (which may or may not be one of law), such as whether the measuring starts at A or B.29 Most factual issues before a tribunal involve some evaluative judgment which cannot be divorced from the legal framework in which it occurs. A commonly used approach is to analyse the decision-making process in three stages: fact-finding, rule-stating and application of the rule to the 25 Administrative Appeals Tribunal Act 1975 (Cth) s 43(2B); Administrative Decisions Tribunal Act 1997 (NSW) s 89(5). Justice Kirby has referred to a ‘common federal standard’ in the formal requirements for tribunal reasons: Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323, 358–9. 26 Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323. 27 Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259, 272. 28 P Craig, ‘Judicial Review, Appeal and Factual Error’ [2004] Public Law 788, 794; see also R Williams ‘When is an Error not an Error? Reform of Jurisdictional Review of Error of Law and Fact’ [2007] Public Law 793, 798. 29 See, eg, Re Kaderbhai and Secretary, Dept of Health, Housing and Community Services (1992) 31 ALD 784. Approval of a new pharmacy could not be recommended for premises located within 5km, by lawful access routes, of an existing pharmacy: measured from the existing pharmacy the distance was 5.3km, but because of a series of one way streets, measured from the proposed site the distance was around 4.5km.

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facts.30 This can be helpful in isolating a ‘question of law’ for the purposes of statutory appeal on that ground. The analysis has limitations, however. As Aronson, Dyer and Groves note: Fact-finding inevitably involves a prior knowledge of which facts might be legally relevant. We cannot know which facts to look for unless we know why we are looking, and it is the law which tells us that.31

The main value of this framework is that it helps to focus attention on the most contentious part of the decision-making process, that is, the third stage, which is often described as involving mixed questions of fact and law. In Azzopardi v Tasman UEB Industries Ltd Glass JA discussed how to describe an error at this third stage in the following terms: At the third stage when the law correctly stated is applied to the facts in order to produce a conclusion error may intrude again. An erroneous conclusion that facts properly determined satisfy a statutory test , for example injury arising out of the course of employment, substantial interruption to journey, or failure to provide suitable employment will ordinarily be an erroneous conclusion of fact. It is only in marginal cases that the statutory test is satisfied or not satisfied as a matter of law, because no other application is reasonably open.32

As the label suggests, there are very few ‘marginal’ cases, and most cases will involve an application of law to the facts where there is room for more than one conclusion. The starting point in the majority analysis in Azzopardi is that any error here will usually be one of fact but not law. However, that does not preclude there being errors in reasoning which may be characterised as demonstrating that the tribunal has misunderstood its task or failed properly to carry it out, and has thereby made an error. Such an error may well be, for an Australian court, characterised as an error of law for the purposes of a statutory appeal on that ground, or a jurisdictional error.

B Evidence A tribunal not bound by the rules of evidence is generally allowed to inform itself as it sees fit.33 Procedural fairness requires that the tribunal have regard to the material presented by each party in support of their case, and provide an opportunity for other parties to respond to that material. Of course, the extent to which the material presented by the 30 CT Emery and B Smythe, ‘Error of Law in Administrative Law’ (1984) 100 Law Quarterly Review 612; Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139. 31 Aronson, Dyer and Groves, above n 1, at 189. 32 (1985) 4 NSWLR 139, 157 (‘Azzopardi’). 33 See, eg, Administrative Appeals Tribunal Act 1975 (Cth) s 33(1)(c), which states that ‘the Tribunal is not bound by the rules of evidence but may inform itself on any matter in such manner as it thinks appropriate’.

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parties is relevant to the ultimate decision depends on the separate requirement that the tribunal must have regard to all mandatory relevant considerations and disregard irrelevant considerations. Tribunals are generally not limited to the material presented by the parties and some are expressly given power to obtain additional material. For example, under section 359 of the Migration Act 1958 (Cth) (‘Migration Act’) the Migration Review Tribunal (‘MRT’) ‘may get any information that it considers relevant’. Subsection 359(1) goes on to provide that if the MRT obtains such information, it must have regard to that information in making its decision. Section 73(5)(b) of the Administrative Decisions Tribunal Act 1997 (NSW) requires the Administrative Decisions Tribunal (‘ADT’) ‘to ensure that all relevant material is disclosed to the Tribunal so as to enable it to determine all of the relevant facts in issue in any proceedings’. The extent to which such provisions are in fact used by tribunals is limited both by resources and the need for expeditious decision-making, and by the absence thus far of clear judicial direction. The Australian courts have acknowledged a tension between the demands of procedural fairness, in ensuring that a party understands the issues and has an opportunity to provide material in support of their case, and in minimising the circumstances in which the tribunal is obliged to obtain further material. Procedural fairness does not require a tribunal ‘to tell the appellant that the material he had put forward was not sufficient and invite him to improve upon it’; nor does it require a tribunal to obtain further material ‘to bolster the appellant’s case’.34 A tribunal is not required to give an applicant a ‘running commentary’ on what it thinks of the evidence before it, and of course, to do so runs the risk of giving an impression of prejudgment.35

C Evaluation So how do tribunals evaluate the evidence before them? The starting point in the Australian cases is the assumption that, in the absence of an express statutory provision,36 it is not appropriate to talk in terms of a formal onus or burden of proof. However, tribunals (and administrative decisionmakers more generally) must have some mechanism for determining when the material before them is sufficient and how to proceed when left in a 34 SZEGT v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 1514 [29]. 35 SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 228 CLR 152, [48]. 36 Such as Freedom of Information Act 1982 (Cth) s 61, which states that the onus of establishing that a decision in respect of a request for access to documents or for amendments of documents is on the agency or Minister whose decision is under review.

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state of uncertainty by the evidence on a particular issue. The common approach is to turn to the applicable legislation, which will usually be worded in terms requiring the decision-maker to reach a state of satisfaction on a particular issue: for example, to be satisfied that an applicant is incapacitated for work to the extent required for eligibility for an income support payment; or to be satisfied that the holder of some benefit no longer meets the statutory criteria, so that the benefit should be cancelled.37 The process of identifying who has to be satisfied about what can be difficult. For example, section 36(2) of the Migration Act provides that a criterion for a protection visa is that the applicant is a non-citizen in Australia ‘to whom the Minister is satisfied Australia has protection obligations under the Refugees Convention’. A number of nationals of Afghanistan who had been granted temporary protection visas on the basis that they faced persecution under the Taliban regime because of their ethnicity or religious belief faced a change in the situation in Afghanistan during the period when their applications for the grant of a permanent protection visa were under consideration. Was the decision-maker required to be satisfied, at the time of their decision, that the applicant had a well-founded fear of persecution (that is, whether Article 1A(2) of the Convention Relating to the Status of Refugees38 was met)? Or was the decision-maker to ask whether the cessation provision in Article 1C(5) of the Refugee Convention applied (in other words, whether the circumstances in connexion with which the applicant had been recognised as a refugee, and accordingly granted a temporary protection visa, had ceased to exist)? If it was the latter, did the Minister have any obligation to provide evidence to establish that there had been substantial, effective and durable change in the situation in Afghanistan? The High Court (by majority) ultimately concluded that the Refugee Review Tribunal (‘RRT’) had been correct in framing the issue as being whether the cessation provision applied; the court reasserted that proceedings in the RRT are administrative in nature and that there was thus no onus on the Minister, or the applicant.39 However, in practical terms, while there was no formal ‘onus’ as such, had the tribunal been left in a state of indecision the Minister would have failed to discharge his or her evidentiary burden. Some tribunal decision-making is limited to a determination of fact at some point in the past (for example, determining the extent of incapacity at the date of a claim for a benefit). Some tribunal decision-making requires

37

McDonald v Director-General of Social Security (1984) 1 FCR 354. Convention Relating to the Status of Refugees (adopted 28 July 1951, entered into force 22 April 1954) 189 UNTS 137 (‘Refugee Convention’). 39 Minister for Immigration and Multicultural and Indigenous Affairs v QAAH of 2004 (2006) 231 CLR 1; NBGM v Minister for Immigration and Multicultural Affairs (2006) 231 CLR 52. 38

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both evaluation of the past and prediction of the future. Asylum claims are the obvious example, being framed in terms of the risk of persecution should the claimant be returned to their country of nationality, which often requires assessment of past events.40 Social security claims requiring assessment of an individual’s capacity for work or training over a defined period are similar.41 The tribunal must reach a point of ‘actual persuasion’ of the occurrence or existence of a particular fact.42 The appropriate level of ‘satisfaction’ will vary according to context, including the seriousness of the issues and the gravity of the consequences of a particular finding.43 Tribunals share with first instance courts the task of evaluating oral evidence. Assessment of credibility is a difficult task, made more so in the diverse contexts in which tribunals operate. The classic illustration of that is in determination of asylum claims, in which a tribunal must assess the claims of individuals from different cultural and language backgrounds, possibly in the context of reluctance to appear and give evidence and sometimes hampered by complex medical or psychological issues.44 As Aronson, Dyer and Groves comment, ‘credibility issues are par excellence issues of fact’, and are often at the heart of tribunal decisions.45 There is considerable debate in asylum decision-making as to how tribunals can, and should, balance assessment of credibility based on oral evidence with what might at first appear to be more ‘reliable’ documentary material such as country information prepared by government agencies.46 Tribunals are entitled to use the expertise of their members derived from specialist qualifications or experience to evaluate the material before them. Procedural fairness requires the disclosure of information coming from that expertise where the tribunal proposes to reach a conclusion based on the knowledge of a member of a particular fact, or relying on a particular expertise.47

40 See A Glass, ‘Subjectivity and Refugee Fact-Finding’ in J McAdam (ed), Forced Migration, Human Rights and Security (Oxford, Hart Publishing, 2008) 213–23. 41 For example, the requirement in Social Security Act 1991 (Cth) s 94(1)(c) that an applicant for disability support pension satisfy the decision-maker that the impairment prevents work or training during the next two years. 42 Briginshaw v Briginshaw (1938) 60 CLR 336, 361. 43 Minister for Immigration and Ethnic Affairs v Pochi (1980) 4 ALD 139. 44 F Houle, above n 15, at 6 describes this as a ‘subjective exercise which can be quite speculative’. See also S Kneebone, ‘The Refugee Review Tribunal and the Assessment of Credibility: an Inquisitorial Role?’ (1998) 5 Australian Journal of Administrative Law 78, 92. 45 Aronson, Dyer and Groves, above n 1, at 188. 46 F Houle, ‘The Credibility and Authoritativeness of Documentary Information in Determining Refugee Status: The Canadian Experience’ (1994) 6 International Journal of Refugee Law 6; G Coffey, ‘The Credibility of Credibility Evidence at the Refugee Review Tribunal’ (2003) 15 International Journal of Refugee Law 377. 47 Tisdall v Health Insurance Commission [2002] FCA 97. It is troubling to note that this does not always occur: G Richardson and D Machin, ‘Judicial Review and Tribunal Decision Making’ [2000] Public Law 494.

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The general principles and approaches to fact-finding as summarised above are relatively settled, if not always straightforward in their application. What is more contentious is how courts review tribunal fact-finding and reasoning processes, whether on appeal or through judicial review. Many of the Australian tribunals (including the Administrative Appeals Tribunal (‘AAT’)) are subject to review by the courts for error of law, or on a question of law. Where there is no specific provision for appeal, the judicial review remedies (common law, and in some instances, statutory) are generally available.48 Here it is important to note that Australia retains the distinction between jurisdictional and non-jurisdictional errors of law for the purposes of common law judicial review. While the High Court has significantly expanded the range of errors that are jurisdictional when committed by a tribunal as opposed to a court,49 not all errors of law made by a tribunal will be jurisdictional.50 If not within the ambit of certiorari for error of law on the face of the record, or if there is a privative clause in the relevant legislation that precludes certiorari, such errors may not be capable of being challenged. Statutory judicial review schemes generally allow review for an error of law, whether or not that error is jurisdictional.51

A Fact-Finding and Reasoning Most fact-finding requires evaluation and leaves a decision-maker open to challenge on the way in which they went about that process. The critical question is how the courts justify their scrutiny and the standards by which they do so. There is divergence in views as to the appropriate standard of review of fact-finding. The Australian courts have in general adopted a limited view and apply a ‘no evidence’ test: so long as there is some evidence to support a finding of fact, there is no error of law.52 The position is otherwise if the particular fact or circumstance is held to be a jurisdictional fact, in which case the court determines for itself, on material that may not have been before the original decision-maker, whether or not 48 The Australian courts tend to adopt a strict construction of privative or ouster clauses in legislation, reading them subject to a presumption that they will not exclude review generally, in particular where there is jurisdictional error, including a breach of natural justice: Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476. 49 Craig v South Australia (1995) 184 CLR 163. 50 M Aronson, ‘Jurisdictional Error without the Tears’ in M Groves and HP Lee (eds), Australian Administrative Law: Fundamentals, Principles and Doctrines (Melbourne, CUP, 2007) 330–44. 51 Administrative Decisions (Judicial Review) Act 1977 (Cth) s 5(1)(f). 52 Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321.

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that fact or circumstance exists.53 The justification for a cautious approach to review of findings of fact was provided by the High Court in Australian Broadcasting Tribunal v Bond: To expose all findings of fact, or the generality of them, to judicial review would expose the steps in administrative decision-making to comprehensive review by the courts and thus bring about a radical change in the relationship between the executive and judicial branches of government.54

Other jurisdictions take a broader view, for example, the ‘substantial evidence’ test adopted by the US courts. Canada now allows review for correctness in some contexts,55 otherwise for reasonableness on questions of fact, discretion and policy, and in some contexts, legal issues.56 Until recently the position in the UK was unclear, with some authority to support review on an absence of evidence and other authorities supporting review on the basis of sufficiency of evidence.57 The decision of the Court of Appeal in E v Secretary of State for the Home Department has cut through that debate, in accepting ‘that a mistake of fact giving rise to unfairness is a separate head of challenge in an appeal on a point of law’.58 The implications of this decision are considered below. There are at least three avenues that might be open to an Australian court to scrutinise tribunal fact-finding and reasoning other than on a ‘no evidence’ basis: procedural fairness, relevant considerations and serious irrationality or illogicality. Each of these has limitations as a mechanism for facilitating review of tribunal fact-finding. There is also a question as to whether they represent a ‘surrogate doctrinal device’ for dealing with factual mistake and whether direct fact review is preferable.59

53 Corporation of City of Enfield v Development Assessment Commission (2000) 199 CLR 135; M Aronson ‘The Resurgence of Jurisdictional Facts’ (2001) 12 Public Law Review 17. This paper will not explore the difficult issue of jurisdictional fact, but simply note that it allows the courts to engage directly in fact review and is thus an exception to much of what is discussed here. 54 (1990) 170 CLR 321, 341; affirmed in Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323, 344. 55 Including constitutional questions, determination of jurisdiction, questions of general law of central importance to the legal system as a whole, and jurisdictional lines between two or more competing tribunals: Dunsmuir v New Brunswick 2008 SCC 9 [58]–[61]. 56 Ibid. For discussion of the former distinction between ‘patent unreasonableness’ and ‘reasonableness simpliciter’ see G Huscroft, ‘Judicial Review from CUPE to CUPE: Less is not Always More’ in G Huscroft and M Taggart (eds), Inside and Outside Canadian Administrative Law: Essays in Honour of David Mullan (Toronto, University of Toronto Press, 2006) 296–326. 57 Edwards v Bairstow [1959] AC 14; Secretary of State for Education and Science v Tameside Metropolitan Borough Council [1977] AC 1014; Armah v Government of Ghana & Anor [1968] AC 192. 58 [2004] EWCA Civ 49 [66]. 59 Craig, above n 28, at 799.

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Procedural fairness sits outside the contested boundary between fact and law, and its focus on process (rather than substance) can avoid in some contexts the need either to define the boundary, or to explain on which side an issue falls. In R v Criminal Injuries Compensation Board, ex p A60 the House of Lords came close to accepting that a material error of fact could be a ground of judicial review, but ultimately opted to rely on breach of procedural fairness amounting to unfairness in setting aside a decision reached by the Board in the absence of crucial evidence contained in a doctor’s report, in the context where the applicant had been assured that the relevant documents would be provided to the Board by the police.61 The earlier decisions of R Deputy Industrial Injuries Commissioner, ex p Moore62 and Mahon v Air New Zealand63 required as part of procedural fairness that the decision be based on logically probative material, a view which was adopted by Deane J in Minister for Immigration and Ethnic Affairs v Pochi,64 and later as a member of the High Court, in Australian Broadcasting Tribunal v Bond.65 After stating that procedural fairness goes beyond ‘mere surface formalities’, and requires a decision-maker to make findings based on ‘some probative material or logical grounds’, Deane J commented: The point can be illustrated by reference to a hypothetical case where a decision could be supported by either a finding of fact A or a finding of fact B and where there was probative material to support a finding of A but no probative material at all to support a finding of fact B. If, in such a case, the Tribunal stated that it made no finding about, and placed no reliance upon, A but based a reviewable ‘decision’ on a positive finding of B, the Tribunal would have failed to discharge its duty to act judicially. Its decision would be based on a finding of fact which, being unsupported by any probative material, was, as a matter of law, not open. It would simply be irrelevant to say that there was probative evidence upon which the Tribunal had not relied which would have supported a finding of A which the Tribunal had neither made nor relied upon.66

The location of a requirement that decisions be based on ‘logically probative’ evidence in the ambit of procedural fairness has not been accepted by a majority of the High Court, which has limited its use in the scrutiny of fact-finding. However, there are some (probably exceptional) circumstances in which procedural fairness can be deployed in a challenge

60

[1999] 2 AC 330. The grounding in procedural fairness troubled the High Court in Re Minister for Immigration and Multicultural and Indigenous Affairs, ex p Applicants S134/2002 (2003) 211 CLR 441; see Aronson, Dyer and Groves, above n 1, at ch 4, 226. 62 [1965] 1 QB 456. 63 [1984] AC 808. 64 (1980) 4 ALD 139. 65 (1990) 170 CLR 321. 66 Ibid 368. 61

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on findings of fact, including credibility findings. In NAIS v Minister for Immigration and Multicultural and Indigenous Affairs67 the applicants had given oral evidence on two occasions, the former four-and-a-half years and the latter some 13 months before the tribunal decision was handed down. The tribunal decision was based in part on its assessment of the credibility of the applicants. The High Court found that the unexplained and extraordinary delay in finalising the decision gave rise to a breach of procedural fairness. It was not simply the delay itself, but because the delay gave rise to a ‘real and substantial risk’ that the tribunal’s capacity to assess the applicants was impaired, meaning that the applicants had not had a fair hearing.68 The relevant considerations ground requires a tribunal to properly identify and take into account mandatory relevant considerations and disregard irrelevant considerations. A tribunal might fail to have regard to evidence crucial to its consideration of a mandatory relevant consideration because, while it was potentially available, it was not before the tribunal at the time of its decision. Or it might emerge after the tribunal has made its decision, but cast doubt as to the correctness of the factual basis of that decision. In the former case, the issue can be re-framed as being one of determining who has the obligation to ensure that the tribunal has all relevant evidence. The proposition that procedural fairness requires a party to be afforded the opportunity to put their case (and does not require a tribunal to make a party’s case) must be qualified. The tribunal must be satisfied of all the ‘critical ingredients’, even if parties do not raise an issue.69 While many tribunals routinely adopt procedures similar to those of the courts, hearing evidence and oral argument from both sides, some adopt a less adversarial approach. For example, the decision-maker whose decision is subject to review does not play an active role in the Australian migration tribunals (the RRT and the MRT) or in the Social Security Appeals Tribunal (‘SSAT’). Those tribunals have available to them the departmental file and can make further inquiries of the department and other government agencies. The tribunal carries the task of identifying the issues and conducting the questioning. The High Court has described the nature of administrative review as conducted by the RRT, in the following terms: The Tribunal was not an independent arbiter charged with deciding an issue joined between adversaries. The tribunal was required to review a decision of the

67 68 69

(2005) 228 CLR 470. Ibid [10] (Gleeson CJ). Kuswardana v Minister for Immigration and Ethnic Affairs (1981) 54 FLR 335.

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Executive made under the Act and for that purpose the Tribunal was bound to make its own inquiries and form its own views upon the claim which the appellant made.70

The model of review adopted by the migration tribunals and the SSAT diverges from the adversarial, not just in how hearings are conducted, but in the acceptance that they are engaged in a process which begins with the lodging of the application and ends only when the decision is communicated to the applicant and any other party.71 This continuous process of ‘review’ requires the tribunal to be open to receipt of material up until the point of decision and to comply with continuing procedural fairness obligations until that time.72 To that extent tribunals are in a similar position to that of the departmental decision-maker, who is required to make the decision on the basis of material available at the time the decision is made.73 That will include updating material provided by a party and may include an obligation to obtain material that is ‘readily available which is centrally relevant to the decision to be made’.74 It is important, however, not to make too much of the differences in procedure between these tribunals and others, including the AAT, which operate in a more traditional adversarial mode. In Bushell v Repatriation Commission75 Brennan J commented that while proceedings before the AAT may appear to be adversarial, [e]ach of the Commission, the Board and the AAT is an administrative decision-maker, under a duty to arrive at the correct or preferable decision in the case before it according to the material before it. If the material is inadequate, the Commission, the Board or the AAT may request or itself compel the production of further material.76

Acceptance of the proposition that it is the nature of the function that matters, rather than the procedure adopted, would lead to a conclusion that all administrative tribunals have an obligation to ensure that they have before them all the relevant material which goes to their consideration of the mandatory relevant considerations. Framing the obligation in this way 70 Applicant VEAL of 2002 v Minister for Immigration, Multicultural and Indigenous Affairs (2005) 225 CLR 88, 99 (Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ). 71 NAFF v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 221 CLR 1. See also N Bedford and R Creyke, Inquisitorial Processes in Australian Tribunals (Australian Institute of Judicial Administration, 2006). 72 SAAP v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 228 CLR 294. 73 Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24, 45. 74 Prasad v Minister for Immigration and Ethnic Affairs (1985) 6 FCR 155. 75 (1992) 175 CLR 408. 76 (1992) 175 CLR 408, 424–5. This is also how the AAT views its task: see the comments of Deputy President Jarvis, that that tribunal ‘performs an administrative function and not a judicial function, and the proceedings are not inter partes’: Re Lees and Repatriation Commission (2004) 82 ALD 150, 161.

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allows a reviewing court a clear path for intervention where it is shown that the tribunal did not do so. It is important to acknowledge, however, that the relevant considerations ground of review may disguise what is in reality fact review. The slide into Wednesbury unreasonableness, where the decision-maker has placed too much weight on a factor of relatively little significance, or failed to give sufficient weight to a matter of significance,77 is open to this charge. From that perspective, the decision of the Court of Appeal in E v Secretary of State for the Home Department78 may represent a more honest approach. E involved two cases (E and R) where the Immigration Appeal Tribunal (‘IAT’) had refused leave to appeal to the Court of Appeal. E was an Egyptian national and his case for asylum was put on the basis that he was a Muslim Brotherhood sympathiser. After the IAT hearing in October 2002, but before the tribunal’s decision was promulgated in April 2003, a Human Rights Watch Report and a report of the World Organisation Against Torture were published. Both reports addressed the treatment of members of the Muslim Brotherhood in Egypt. R, an Afghan national, had based his claim for asylum on conversion from Islam to Christianity. The IAT decision was based on a finding that, since the Taliban were no longer in power, R’s fear of persecution was no longer justified. After the hearing in April 2003 but before the decision was promulgated in August 2003, a new Home Office Country Information and Policy Unit report on conditions in Afghanistan became available, which included reports of serious risk to converts. E and R argued that the IAT had erred in not re-opening and admitting the new evidence. The Court of Appeal described all three reports as credible, and material. The court rejected an argument that the applicant had some responsibility for ensuring that the reports were before the IAT before its decision was finalised. The ‘practical realities’ of limited legal assistance meant that it was ‘unrealistic to expect continuous monitoring of potential new evidence in the intervening periods’.79 The court acknowledged the IAT’s desire on practical grounds to limit the evidence to that produced at the hearing; however, it noted that these two cases involved delay in issuing the decision and the emergence of new evidence which undermined the basis of the conclusions reached at the hearing. The crux of the matter was unfairness. In statutory contexts where the parties share an interest in achieving the correct result, a finding of unfairness would ordinarily require the following:

77 The approach adopted by the Australian courts following Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 and also by the UK courts: Woolf, Jowell and Le Sueur, De Smith’s Judicial Review, 6th edn (Sweet & Maxwell, London, 2007) 84. 78 [2004] EWCA Civ 49 (‘E’). 79 Ibid [94].

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First, there must have been a mistake as to an existing fact, including a mistake as to the availability of evidence on a particular matter. Secondly, the fact or evidence must have been ‘established’, in the sense that it was uncontentious and objectively verifiable. Thirdly, the appellant (or his advisors) must not have been responsible for the mistake. Fourthly, the mistake must have played a material (not necessarily decisive) part in the tribunal’s reasoning.80

The reports at issue in this case are precisely the kinds of documents that would routinely be held in tribunal libraries and made available to members of tribunals determining asylum claims as part of the assessment of conditions in the applicant’s country of nationality, both past and present. In circumstances where there is some delay between the hearing and the final decision, an equivalent Australian tribunal which did not check the most recent information about current conditions in the relevant country before finalising its decision might fall foul of the obligation enunciated in Prasad v Minister for Immigration and Ethnic Affairs81 to ensure it had obtained all information that was readily available and centrally relevant to the decision to be made.82 While this is one answer to the concerns identified in E, it should be noted that more recent decisions of the High Court have placed a caution about this use of the relevant considerations ground. One example comes in Re Minister for Immigration and Multicultural and Indigenous Affairs, ex p Applicants S134/ 20002,83 where a tribunal which overlooked a file note containing information that would support a claim for asylum on a basis not claimed by the applicant was held not to have breached procedural fairness or made a jurisdictional error. The Court of Appeal was careful in E to note that it was dealing with a complaint of ‘ignorance of evidence which was available before the decision was made’, rather than a mistake arising from the IAT’s consideration of the evidence.84 The relevant considerations ground has little to say about a tribunal which has placed too much, or too little, weight on the material which it has considered. An avenue for challenge to the broadest range of fact-finding and reasoning errors comes in the ground of review described by Aronson, Dyer and Groves as ‘serious irrationality or illogicality’.85 The strongest support for this as a distinct ground of review

80

Ibid [66]. (1985) 6 FCR 155. The Federal Court in Prasad located this obligation in Wednesbury unreasonableness. Other decisions of the Federal Court have found such an obligation in a failure to consider relevant matters, for example, Videto v Minister for Immigration and Ethnic Affairs (1986) 8 FCR 167 and in the statutory obligation imposed by the Migration Act 1958 (Cth) to conduct a fair review: see Glass, above n 40, at 221. 83 (2003) 211 CLR 441. 84 [2004] EWCA Civ 49 [69]. 85 Aronson, Dyer and Groves, above n 1, at 249. 81 82

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comes in the High Court decision in Re Minister for Immigration and Multicultural Affairs, ex p Applicant S20/2002,86 which held that a decision which is ‘irrational, illogical and not based upon findings or inferences of fact supported by logical grounds’87 is affected by jurisdictional error, even if the error is not an error of law. It should be noted that the majority in S20 were not persuaded on the facts that the tribunal’s decision could be so characterised, and that there is considerable debate as to how far S20 goes in opening a new and distinctive avenue of review of tribunal reasoning processes.88 What is clear is that because of the specific provisions of the Migration Act at the time, the High Court needed to distinguish ‘serious irrationality or illogicality’ from Wednesbury unreasonableness, and did so.89 What is less clear is the extent to which ‘serious irrationality or illogicality’ is limited to considerations of reasoning processes rather than outcome, and how much the label ‘serious’ adds to the task of identifying an invalidating error. Even if the focus on ‘mistake as to an existing fact’ in E is a useful way forward, there are a number of reasons why an Australian court would have difficulty in adopting the reasoning on its face. First, the Court of Appeal accepted that it made no material difference whether the matter was an application for judicial review or an appeal on a point of law, as ‘it has become a generally safe working rule that the substantive grounds for intervention are identical’.90 As noted above, common law judicial review proceedings in Australia still accept the distinction between jurisdictional and non-jurisdictional error, even while acknowledging that the label is conclusory.91 Secondly, the Court of Appeal acknowledged that its articulation of ‘fairness’ as the test was a continuation of the trend to take fairness outside its traditional role of procedural irregularity: the Australian courts have refused to follow the UK courts down the path of substantive protection and it is unlikely that they would do so here. On a more fundamental level, the limitation in E to statutory contexts ‘where the parties share an interest in co-operation to achieve the correct result’92 is puzzling. The Court of Appeal regarded asylum decisionmaking and planning decisions as falling within that category. However, it

86

(2003) 198 ALR 59 (‘S20’). Re Minister for Immigration and Multicultural Affairs, ex p Applicant S20/2002(2003) 198 ALR 59 [34] (McHugh and Gummow JJ). 88 See Aronson, Dyer and Groves, above n 2, at ch 4, [4.415]. 89 That was essential as the Migration Act 1958 (Cth) at the time precluded judicial review on the ground of Wednesbury unreasonableness and also on breach of procedural fairness (other than actual bias). 90 E [2004] EWCA Civ 49 [42]. 91 An Australian court dealing with an error of law or question of law, or reviewing under the statutory ground of error of law provided by Administrative Decisions (Judicial Review) Act 1977 (Cth) s 5(1)(f), would have less difficulty. 92 [2004] EWCA Civ 49 [66]. 87

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is difficult to see which of the administrative tribunals whose task is to review decisions of government agencies should be excluded from this category. In the Australian context it clearly includes the AAT, whose legislation states that the person who made the decision under review ‘must use his or her best endeavours to assist the tribunal to make its decision in relation to the proceeding’,93 and all merits review tribunals whose task is defined as reaching correct or preferable decision. If the context is a shared search for the correct result, then the government agency whose decision was subject to review should also be able to ask the tribunal to re-open the matter. At least one case since E has accepted that the government can do just that, on the basis that ‘fairness’ includes having a ‘fair and rational immigration policy’.94 The major concern with the reasoning in E is in the nature of the fact about which the mistake has been made. The Court of Appeal stated that it has to be an ‘existing’ fact and must be established, in the sense that it was ‘uncontentious and objectively verifiable’.95 There are few, if any, such facts, although perhaps the clearest example comes in the similar cases of R (Ahmed) v Secretary of State for the Home Department,96 a decision of the UK Court of Appeal, and SZIFI v Minister for Immigration and Multicultural and Indigenous Affairs,97 a decision of the Federal Court of Australia. In the former case, the decision-maker had referred to the appellant as having given evidence in Egyptian and having referred to warrants for his arrest in Egypt: he was, however, a national of Pakistan who spoke no Egyptian and did not come from there. In the Australian case, the tribunal had noted the applicant’s claim to be a national of Pakistan, but then found that he was an Indonesian national who could be safely returned to China. On one view these decisions evidence clear errors concerning material facts. An alternative view is that they illustrate the dangers of careless cutting and pasting, either from a template or previous decision. In SZIFI the Federal Court declined to accept that the errors were merely typographical errors or errors of fact at the margin of the tribunal’s review. Since those errors went to the nationality of the applicant and the source of nation state conduct or tolerance of conduct giving rise to a well founded fear of persecution, the errors affected the tribunal’s exercise of power. The tribunal had an obligation to undertake ‘an un-distracted, focussed and

93

Administrative Appeals Tribunal Act 1975 (Cth) s 33(1AA). Cabo Verde v Secretary of State for the Home Dept [2004] EWCA Civ 1726, a decision which clearly troubled the Court of Appeal in Shaheen v Secretary of State for the Home Dept [2005] EWCA Civ 1294, but for other reasons. See M Groves, ‘Judicial Review and the Concept of Unfairness in English Public Law’ (2007) 18 Public Law Review 244, 246. 95 [2004] EWCA Civ 49 [66]. 96 [2004] EWCA Civ 552 (‘Ahmed’). 97 (2007) 94 ALD 298 (‘SZIFI’). 94

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deliberative assessment of only those facts and circumstances referable to the case of the Appellant’;98 in failing to comply with this essential element of the review function the tribunal had failed to provide procedural fairness. Consequently, the tribunal’s error amounted to jurisdictional error. While the outcome was similar, the reasoning in Ahmed was different. The Court of Appeal allowed the appeal from a decision to refuse permission to seek judicial review of the IAT’s decision on the basis that the reasoning was ‘unsatisfactory’, given ‘the mistaken references to the place from which the appellant had come, the place where he was in trouble with the police, the place to which he would be returned and the language in which he was said to have given his evidence’, together with ‘thinness’ of reasoning in the discussion of persecution of members of the Ahmadi faith. The approach of both courts could be characterised as focussing on the reasoning process, however Ahmed goes much further in scrutiny of the ultimate factual conclusion in its reference to ‘unsatisfactory’ reasoning, with little indication of the standard against which this assessment is made. Neither case needed the approach adopted in E. The ‘facts’ at issue in E were reports of activities in Egypt and Afghanistan during certain periods. Their relevance was in enabling the tribunal to assess the reliability of the applicants’ claims to have suffered persecution in the past, and in evaluating the chance of that continuing should they be returned to their countries of nationality. The nature of the evaluative task still to be performed is acknowledged in the court’s conclusion that both matters should be returned to the IAT for it to consider whether to allow the presentation of the additional material, as the tribunal ‘best fitted’ to make the assessment. In contrast with SZIFI and Ahmed, it is the existence of the report itself that is the ‘uncontentious and objectively verifiable’ fact in E, rather than its content. In Shaheen v Secretary of State for the Home Department99 the Court of Appeal distinguished between situations where a tribunal has made its decision on the basis of a belief as to the existence of a material fact since demonstrated to be wrong, and a situation where the decision is made in the mistaken belief that there was no apparently cogent evidence to refute a material finding.100 Only the former would fall clearly within E and, for the reasons outlined above, should be relatively rare. It is more likely that information that might have been relevant to the fact-finding process has come to light and, in that context, the Court of Appeal in Shaheen warned

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[2007] FCA 63 [43]. [2005] EWCA Civ 1294 (‘Shaheen’). In that case the Secretary of State alleged that the mistake of fact was that an applicant claiming to have suffered domestic violence at the hands of her husband at the encouragement of his mother had been in the United Kingdom (with her husband) at the time when the alleged abuse took place and not in Pakistan. 99

100

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of the danger of allowing the re-opening of appeals for error of law ‘merely because a witness has been subsequently found who could have made a witness statement challenging the factual conclusions that were reached by the original decision-maker in ignorance of such evidence’.101 The approach of Australian courts to review of tribunal decision-making has been described as evidencing a distrust of tribunals, both in the careful distinction drawn in Craig between courts and tribunals for the purposes of identifying a jurisdictional error and in the indeterminacy of the tests for jurisdictional error.102 While the attitude of the Court of Appeal in E appears more accepting of the realities of tribunal decision-making, the reliance on ‘fairness’ leaves open the potential for judicial intervention on unpredictable and uncertain grounds. Those concerns are clear from the decision in Shaheen, where the court expressed concern about allowing appeals on fact ‘to re-enter through a back door’ and stressed the importance of finality.103 More fundamentally, the same result could have been achieved in E through use of the relevant considerations ground of review. Perhaps what is really at stake here is the understandable concern that asylum decisions are unique in their evidentiary complexity, including the need to make findings on what in many instances are constantly changing circumstances, on evidence of limited reliability, and in the context of potentially serious consequences if the decision-maker gets it wrong. One way of acknowledging that, and respecting the interest in finality of review processes more generally, would be to provide that rather than re-opening the tribunal’s review decision on the basis of problems with fact-finding, an applicant claiming asylum should readily be able to start the process afresh by lodging a new application based on evidence of changed circumstances in their country of nationality.104

IV CONCLUSION

Judicial scrutiny of tribunal fact-finding and reasoning processes, whether through appeal on a question of law or on judicial review, ought to reflect the reasons why tribunals are established in the first place, not the least of which is the recognition of expertise and subject-matter competence. Decisions such as E cast doubt on the proposition that ‘the battle for the 101

[2005] EWCA Civ 1294 [28]. R Creyke, The Impact of Judicial Review on Tribunals, CIPL Law and Policy Paper 27 (Sydney, Federation Press, 2006) 4–5. 103 [2005] EWCA Civ 1294 [26]. 104 In Shaheen the Court of Appeal noted that, if the Secretary of State had been satisfied that the decision under challenge had been procured by fraud, ‘there is nothing to prevent him from taking appropriate action to have his own decision set aside’: [2005] EWCA Civ 1294 [23]. 102

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legitimacy of administrative tribunal decision-making in our systems of government’ has been won.105 Identifying an available Australian judicial review ground, or attempting to meet E’s four-part test, distracts from the essential task, which is to define properly the focus of judicial scrutiny of tribunal fact-finding and reasoning. That focus should be on whether the tribunal has met what Enid Campbell has described as ‘minimum standards of rationality’.106 That requires assessment of whether the tribunal is able to justify its findings of fact because it has before it sufficient material (whether or not that material would satisfy the demands of the rules of evidence) to make a finding that is objectively open on that evidence and whether it has provided reasons which demonstrate a thoughtful evaluation of those facts in reaching a conclusion.107 That approach is more principled than a direct assessment of correctness and more straightforward than manipulating other grounds of judicial review. It is also consistent with an appropriate role of judicial scrutiny of tribunals in a culture of justification.108

105 D Dyzenhaus, M Hunt and M Taggart, ‘The Principle of Legality in Administrative Law: Internationalisation as Constitutionalisation’ (2001) 1 Oxford University Commonwealth Law Journal 5, 29. 106 E Campbell, ‘Principles of Evidence and Administrative Tribunals’ in E Campbell and L Waller (eds), Well and Truly Tried: Essays on Evidence (Sydney, LawBook Co, 1982) 36, 87. 107 G Airo-Farulla, ‘Rationality and Judicial Review of Administrative Action’ (2000) 24 Melbourne University Law Review 543. 108 Dyzenhaus, Hunt and Taggart, above n 107; Hon M Gleeson, Chief Justice of Australia, ‘Outcome, Process and the Rule of Law’ (2006) 65 Australian Journal of Public Administration 5, 12.

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14 Administrative Law, Pluralism and the Legal Construction of Merits Review in Australian Environmental Courts and Tribunals ELIZABETH FISHER *

A

DMINISTRATIVE LAW SCHOLARS know that the hallmark of administrative law is pluralism.1 Not only is it a subject with no single set of disciplinary and normative foundations,2 public administration is constituted, limited and held to account by a variety of legal and non-legal forms3 that are often unique to specific areas of administrative activity.4 In the face of such pluralism, scholars have tended to narrow their focus. Not only do administrative law scholars tend to specialise in different areas of administrative law but also tend to do so using a single disciplinary lens. A prime example of this problem is the different disciplinary approaches to judicial review and merits review. Judicial review is regularly and thoroughly subject to conventional doctrinal analysis by scholars, while merits review is not. Rather, merits review tends to be analysed in functional terms and for what it contributes to ‘administrative justice’ or to * I would like to thank Roderick Bagshaw, Andrew Edgar and Linda Pearson for their comments on an earlier draft of this article. Any errors and omissions remain my own. 1 The best account of this is C Harlow and R Rawlings, Law and Administration, 2nd edn (London, Butterworths, 1997) ch 1, 2. 2 Ibid. See also M Loughlin, Public Law and Political Theory (Oxford, Clarendon Press, 1992). 3 H Arthurs, ‘Without the Law’: Administrative Justice and Legal Pluralism in Nineteenth Century England (University of Toronto Press, Toronto, 1985) 2–7. See generally B Tamanaha, ‘Understanding Legal Pluralism: Past to Present, Local to Global’ (2007) St John’s Legal Studies Research Paper No 07–0080. 4 TRS Allan, ‘The Constitutional Foundations of Judicial Review: Conceptual Conundrum or Interpretative Inquiry?’ (2002) 61 Cambridge Law Journal 87, 111–13.

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individual rights.5 Moreover, specialist merits review tribunals are generally ignored by mainstream administrative law scholars altogether. In this chapter I address this problem of compartmentalisation by examining the concepts of merits review that operate in Australian State environmental courts and tribunals. I do so through a legal lens in that my focus is upon legal frameworks and the reasoning in merits review decisions. My choice of topic is obscure but not accidental. It stems from a conversation I had with Mark Aronson as his student many years ago. As part of his advanced administrative law class, I wished to write a paper on the fact/law distinction in merits review decisions in the New South Wales Land and Environment Court (‘NSWLEC’). Mark kindly explained at great length why he did not think there was any law to analyse, and so I spent a very satisfying term researching ouster clauses instead. Since then I have increasingly needed to engage with concepts of merits review as part of my research.6 That process of engagement has led me to conclude that concepts of merits review are far more legally constructed, ambiguous and complex than most administrative lawyers have recognised; this chapter establishes exactly that. While it may consequently appear to be an exercise in proving Mark Aronson wrong, I do not understand it that way. Great scholars and teachers are those who encourage their readers and students to take a hard look at hard problems, to ask difficult questions and to challenge orthodoxy. Mark’s conversation with me many years ago, the research I did with him, and the many other conversations I have had with him since then have kept me doing all these things. As I will show, this process of reflection and examination in relation to merits review has not only led me to conclude that concepts of merits review are legally constructed, ambiguous and complex but also that there is a need for administrative law scholars to reflect more generally on how they deal with the pluralism of their subject. The structure of this chapter is as follows. First, I give an overview of my subject focus: State environmental courts and tribunals.7 The reasoning underpinning these bodies’ merits review decisions has been overlooked by

5 See, eg, Commonwealth, Commonwealth Administrative Review: Committee Report, Parl Paper No 144 (1971) 3, 91 (‘Kerr Committee Report’); Administrative Review Council, Better Decisions: Review of the Commonwealth Merits Review Tribunals (1993); G Fleming, ‘Administrative Review and the “Normative” Goal – Is Anybody Out There?’ (2000) 28 Federal Law Review 61. 6 For my earlier attempts to struggle with the topic see E Fisher, ‘The Precautionary Principle as a Legal Standard for Public Decision-Making: The Role of Judicial and Merits Review in Ensuring Reasoned Deliberation’ in R Harding and E Fisher (eds), Perspectives on the Precautionary Principle (Federation Press, Sydney, 1999) 83; E Fisher, ‘Is the Precautionary Principle Justiciable?’ (2001) 13 Journal of Environmental Law 317; E Fisher, Risk Regulation and Administrative Constitutionalism (Hart Publishing, Oxford, 2007) ch 4. 7 I focus on the four existing courts and tribunals. Between 2003 and 2005 the Western Australian Town Planning Appeal Tribunal (‘WATPAT’) also operated.

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administrative law scholars; I suggest three reasons for why this is the case. These reasons highlight how administrative law scholars have tended to deal with the pluralism of their subject by often downplaying the legal content of those aspects of the subject which do not conform to what is understood formally as ‘law’. In the second section I show, however, that concepts of merits review, far from being devoid of legal content, are legally constructed, legally ambiguous and legally complex. Indeed, the merits review powers of these different bodies vary along four different legal dimensions: the scope of review; what is understood to be a relevant factor in merits review; the procedure at the hearing; and the rules relating to evidence. In the last section I discuss my conclusions for merits review and administrative law more generally.

I MERITS REVIEW AND STATE ENVIRONMENTAL COURTS AND TRIBUNALS

Australian administrative law is probably the most pluralistic in the common law world. This state of affairs is due to a range of factors including three levels of government, the dual influence of American and English legal concepts8 and an ongoing commitment to a wide range of ambitious regulatory, economic and social programmes. Most significant is the numerous merits review tribunals which exist at the Federal and State level. While merits review has a long history in Australia,9 it was the Kerr Committee10 and the creation of the Federal Administrative Appeals Tribunal (‘AAT’) that made merits review tribunals a central feature of Australian administrative law.11 Moreover, since that time there has been a proliferation of specialist merits review tribunals both at the State and Federal level. This development has included the tribunals and courts which are the focus of this essay – State environmental courts and tribunals. The first and most high profile of these was the New South Wales Land and Environment Court (‘NSWLEC’), created in 1979.12 In the 1990s other States also set up such courts:13 the South Australian Environment Resources and 8 P Cane, ‘The Making of Australian Administrative Law’ in P Cane (ed), Centenary Essays for the High Court of Australia (Sydney, LexisNexis Butterworths, 2004) 314, 314. 9 Particularly in the planning and land valuation context. See A Edgar, Managing Non-Compliance: The Land and Environment Court and the Flexible Rules of Development Assessment (PhD Thesis, University of Sydney, 2006) ch 3. 10 Kerr Committee Report, above n 5. 11 Cane, above n 8, at 323. 12 Land and Environment Court Act 1979 (NSW). 13 See generally M Grant, Environmental Court Project: Final Report (Department of Transport, Environment and the Regions, London, 2000) chs 5–8. A strong impetus for this

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Development Court (‘SAERDC’) in 1994;14 the Queensland Planning and Environment Court (‘QPEC’) in 1990;15 and the Tasmanian Resource Management and Planning Appeal Tribunal (‘TRMPAT’) in 1993.16 As well, there are a number of generalist administrative tribunals which can engage in merits review of planning and environmental decisions: the Victorian Civil and Administrative Tribunal; the Western Australian State Administrative Tribunal; and the Australian Capital Territory Administrative Appeals Tribunal. These generalist tribunals are not the focus of this chapter but their existence does highlight that not all environmental and planning appeals are heard by a specialist tribunal. It is important to note that specialist environmental courts and tribunals do not conform to a common template. Indeed, a study of the institutional arrangements of these courts is a chapter in itself and there is no room to enter into that analysis here.17 Briefly though, it can be noted that these courts and tribunals occupy different places in the judicial hierarchy,18 vary in how they are staffed with those with legal training19 and have different jurisdictions and powers.20 Most of the legislative frameworks encourage mediation, although this ranges from promoting traditional forms of settlement21 to creating more innovative forms of community dispute resolution.22 Each court and tribunal also operates within distinct environmental and planning law regimes.23 In other words, these institutions, while often analysed together,24 exhibit all the heterogeneity and pluralism that is typical of administrative law. What these bodies do have in common

development in the 1990s was B Hayes and C Trenorden, Combined Jurisdiction for Development Appeals in States and Territories (AGPS, Canberra, 1990). 14 Environment Resources and Development Court Act 1993 (SA). 15 Local Government (Planning and Environment) Act 1990 (Qld). Although its role and nature was substantially transformed by the Integrated Planning Act 1997 (Qld). 16 Resource Management and Planning Appeal Tribunal Act 1993 (Tas). 17 Grant, above n 13. 18 The NSWLEC is a superior court of record: see Land and Environment Court Act 1979 (NSW) s 5(i). The QPEC and SAERDC are equivalent to the District Court in the judicial hierarchy: see Integrated Planning Act 1997 (Qld) s 4.1.1(2) and Environment Resources and Development Court Act 1993 (SA) s 5. 19 See Land and Environment Court Act 1979 (NSW) ss 6, 12; Resource Management and Planning Appeal Tribunal Act 1993 (Tas) s 10(1). 20 The NSWLEC has a number of different classes of jurisdiction, not all of which involve merits reviews. See Land and Environment Court Act 1979 (NSW) ss 16–21B. The QPEC has a relatively narrow merits review jurisdiction: See Integrated Planning Act 1997 (Qld) s 4.1.2. The SAERDC has a more ad-hoc jurisdiction: see Environment Resources and Development Court Act 1993 (SA) s 7. 21 Integrated Planning Act 1997 (Qld) s 4.1.48 and Environment Resources and Development Court Act 1993 (SA) s 28B. 22 Land and Environment Court Act 1979 (NSW) Pt 5A. 23 DE Fisher, Australian Environmental Law (Sydney, LawBook Co, 2003). 24 Grant, above n 13.

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is that they are all recognised as carrying out merits review of environmental and planning decisions.25 For a tribunal such as the TRMPAT that is its only function while for a court such as the NSWLEC it is one of a number of functions which also includes judicial review and the hearing of criminal cases. By merits review powers I mean that each of these bodies is vested with wide-ranging review powers which include the substantive power to remake the decision. For most scholars merits review is an important feature of the administrative law landscape but, in sharp contrast to judicial review, it is not a particularly legal feature of that landscape. As Cane has noted, the distinction between judicial review and merits review in Australian administrative law has a ‘unique and rigidifying significance’.26 There are many consequences of this distinction but for the purposes of this essay the most important is that judicial review is understood to be the province of formal legal doctrine while merits review is not. As such, administrative law articles and textbooks are dedicated to the sophisticated analysis of reasoning in judicial review cases but the reasoning of merits review decisions remains relatively overlooked. This is not to say that there has not been some outstanding scholarship concerning merits review; rather, very little of it has scrutinised the substantive nature of merits review decisions, favouring instead considerations of individual justice, improving decisions and assessing the impacts of merits review on administration.27 A prime example of this state of affairs can be seen in the excellent recent collection of essays edited by M Groves and HP Lee, Australian Administrative Law: Fundamentals, Principles and Doctrines.28 While there are at least 15 chapters analysing aspects of judicial review doctrine, there are only four pages which cover merits review in any detail and those pages are part of a larger discussion about the role of administrative tribunals.29 There are four reasons for merits review not being subject to legal analysis. These reasons show that this lack of legal analysis is not just due to oversight but that there is also an assumption that merits review decisions are not capable of mainstream legal analysis. That assumption, however, needs to be questioned. The first reason is the intellectual mindset governing the findings of the Kerr Committee, whose final report drew a 25

Ibid 2. Cane, above n 8, at 330. 27 L Pearson, ‘The Impact of External Administrative Law Review: Tribunals’ (2007) University of New South Wales Faculty of Law Research Series 53; R Creyke, ‘The Special Place of Tribunals in the System of Justice: How Can Tribunals Make a Difference?’ (2004) 15 Public Law Review 220; Administrative Review Council, above n 5. 28 M Groves and HP Lee (eds), Australian Administrative Law: Fundamentals, Principles and Doctrines (Melbourne, CUP, 2007). 29 R Creyke, ‘Administrative Tribunals’ in M Groves and HP Lee (eds), Australian Administrative Law: Fundamentals, Principles and Doctrines (Melbourne, CUP, 2007) 77, 83–86. 26

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sharp distinction between merits and judicial review for both constitutional and functional reasons.30 The consequence of this is that judicial review is understood as legal doctrine created by judicial power while merits review is defined as the opposite of this. Yet while the merits/judicial review distinction is a constitutional necessity at the Federal level it is not at the State level where tribunals and courts can exercise criminal, judicial and administrative power in one body.31 The second reason why merits review decisions of planning and environmental courts have not been the subject of legal analysis is that such decisions are presumed to be synonymous with factual review.32 On this basis, the creation of specialist courts and tribunals is due to the inability of central courts and mainstream law to deal with the fact-heavy realm of planning and environmental decisionmaking and the expertise of such courts is understood to be more in their skill as fact-finders than in applying or developing the law.33 Yet, these bodies are not just finding facts – they are applying and developing law;34 indeed, when they are finding facts they are doing so within legal constraints.35 The third reason why merits review has been doctrinally overlooked is that merits review decisions theoretically lack any value in terms of formal precedent – unlike a court decision they are not understood as having a ratio decidendi. The reality is, however, that in environmental and planning law practice and scholarship merits review decisions are treated as ratios for lawyers and primary decision-makers alike. Indeed, one of the purported aims of the NSWLEC was to develop a ‘body of precedents’36 and over time legal publishers have published more and more merits review decisions in volumes of law reports.37 None of this is surprising. Questions of law do arise in merits review cases and the answering of them becomes part of developing lines of legal authority. The case law concerning environmental

30 Kerr Committee Report, above n 5. In regards to the latter the concern was to untangle the relationship between principles and remedies: at 20. 31 On the constitutional issues at the Federal level see P Cane, ‘Merits Review and Judicial Review – The AAT as a Trojan Horse’ (2000) 28 Federal Law Review 213. 32 Grant, above n 13; P Ryan, ‘Court of Hope and False Expectations: Land and Environment Court 21 Years On’ (2002) 14 Journal of Environmental Law 301. 33 M Jeffrey, ‘Appropriateness of Judicial and Non Judicial Determination of Environmental Issues’ (1988) 5 Environmental Planning and Law Journal 265. 34 P Stein, ‘Specialist Environmental Courts: the Land and Environment Court of New South Wales, Australia’ (2002) 4 Environmental Law Review 5; B Preston, ‘Ecologically Sustainable Development in the Courts in Australia and Asia’ (Paper presented to a seminar on environmental law, Wellington, New Zealand, 28 August 2006). 35 See Section II.D of this chapter and E Fisher, The Role of Environmental Courts in Developing Environmental Law: The Administrative Law Dimension (Brodies Lectures in Environmental Law, School of Law, University of Edinburgh, 5 March 2008). 36 D Landa, quoted in Edgar, above n 9, at 22. 37 I am grateful to Andrew Edgar for drawing my attention to this.

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impact statements38 and the precautionary principle are prime examples of this.39 Likewise, in recent years the NSWLEC has recognised the role of ‘planning principles’ in their merits review decisions and cite cases as authorities for such principles.40 A consequence of this is that much environmental law scholarship analyses merits review decisions as if they were legal precedents.41 The fourth and final reason why merits review is not subject to legal analysis is because historically there has been a presumption that there has been no reasoning to analyse. Not only are merits review decisions understood to be highly factually dependent; merits review is understood as ‘review that includes, but goes beyond review for legality’42 and is therefore understood as not being capable of legal analysis. Not only is it ‘blancmange-like’43 in nature but it is presumed that there is little legal content in that blancmange. This conceptualisation of merits review reflects a more general assumption about forms of legal pluralism – that is, they contain little law44 – that does not reflect reality. Many merits review decisions contain detailed discussions about law, policy and the respective powers of the primary decision-maker and the court. Indeed, a number of administrative law scholars have recently shown merits review is not only closely related to judicial review45 but also has considerable legal content.46 The consequence of all of the above is that while it is understandable that merits review has not been subject to legal analysis this should not remain the case. There is, to paraphrase Macaulay (paraphrasing Gertrude Stein) something ‘there there’47 and that something is worthy of legal

38 Schaffer Corp Ltd v Hawkesbury City Council (1992) 77 LGRA 21 (merits review) and Greenpeace Australia Ltd v Redbank Power Co Pty Ltd (1994) 86 LGERA 143 (judicial review). 39 Telstra Corp Ltd v Hornsby Shire Council [2006] NSWLEC 133; Walker v Minister for Planning [2007] NSWLEC 741; Gray v Minister for Planning [2006] NSWLEC 720. 40 See accessed 15 April 2008, discussed in P Williams, ‘The Land and Environment Court’s Planning Principles: Relationship with Planning Theory and Practice’ (2005) 22 Environmental and Planning Law Journal 401. 41 J Peel, The Precautionary Principle in Practice: Environmental Decision-Making and Scientific Uncertainty (Sydney, Federation Press, 2005); W Gullett, ‘Environmental Protection and the “Precautionary Principle”: A Response to Uncertainty in Environmental Management’ (1997) 14 Environmental Planning And Assessment Law Journal 52. 42 A Mason, ‘Judicial Review: A View From Constitutional and Other Perspectives’ (2000) 28 Federal Law Review 331, 333. 43 Ibid. 44 Tamanaha, above n 3. 45 Cane, above n 31. 46 R Creyke and J McMillan, Control of Government Action: Text, Cases and Commentary (Sydney, LexisNexis Butterworths, 2005) ch 3; Creyke, above n 29. 47 S Macaulay, ‘Law and the Behavioral Sciences: Is There Any There There?’ (1984) 6 Law and Policy 149.

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doctrinal analysis. It is that something to which I now turn and my focus is upon the legal construction of merits review powers.

II THE LEGALLY CONSTRUCTED AND DIVERSE NATURE OF MERITS REVIEW

While environmental courts and tribunals are recognised as engaged in forms of merits review none of the review powers of these state environmental courts and tribunals are formally described in legislation in such terms. Moreover, each body is given the power to remake the primary decision in different ways by legislation. It is not just that the wording of the review power is different in each piece of legislation, the powers of a court or tribunal are constructed in divergent ways. For example, the powers and procedures of the TRMPAT48 are in separate legislative provisions while for the SAERDC they are combined as a set of ‘principles governing hearings’.49 This is important because in studying merits review powers there is not an easily definable source of those powers – rather the powers that courts and tribunals utilise in merits review are scattered and are ad-hoc. These variations in merits review powers are not, however, generally recognised. Rather, merits review is often referred to in merits review decisions in an offhand manner using a variety of shorthand phrases. For example, it can be described as hearing a case de novo;50 it may be framed in such a way that the reviewing body is seen to stand ‘in the shoes’ of the primary decision-maker;51 or the court or tribunal may find the ‘correct or preferable’ decision.52 These phrases are used across all four bodies without distinction (and often together)53 and with a presumption that they mean the same thing. With that said, those practicing and working in these courts and tribunals, as well as the courts above them in the judicial 48

Resource Management and Planning Appeal Tribunal Act 1993 (Tas) ss 16, 23. Environment, Resources and Development Court Act 1993 (SA) s 21. 50 Thaina Town (On Goulburn) Pty Ltd v Council of the City of Sydney [2006] NSWLEC 782 [8]; Hayes v Murray Bridge Bacon Pty Ltd [1998] SAERDC 512 [8]; Wanaruah Local Aboriginal Land Council v Minister Administering the Crown Lands Act [2001] NSWLEC 20 [9]; Little v Tasman Council [2006] TASRMPAT 137 [12]; Adam v Gold Coast City Council [2007] QPEC 25 [7]. 51 Walker v Minister for Planning [2007] NSWLEC 741 [84]; Australand Holdings Ltd v Gold Coast City Council [2007] QPEC 29 [30]; Hensley Ind Aust Pty Ltd v Environment Protection Authority [2001] SAERDC 14 [13]; Leimal Pty Ltd T/A Boots & Partners v Adelaide City Council [2006] SAERDC 38 [4]; A & J Armitage v Launceston City Council [2005] TASRMPAT 63 [26]. 52 St Helen’s Area Landcare and Coastcare Group Inc v Break O’Day Council [2007] TASSC 15 [124]; Gunns Ltd v Kingborough Council [2005] TASRMPAT 74 [9]. 53 Paes v City of Burnside [2004] SAERDC 79 [25]; Design Power Associates Pty Limited v Willoughby City Council [2005] NSWLEC 470 [21]. 49

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hierarchy, are acutely aware that merits review is not as a simple as it seems. This is because in practice merits review gives rise to a number of difficult legal questions. The most obvious is trying to ascertain when an error of law has been committed by a court or tribunal as part of a merits review;54 however, there are a range of other issues that have arisen, particularly to do with the powers of a court or tribunal.55 Indeed, a quick look at both the legislative frameworks and the decisions concerning merits review makes it clear that merits review not only has numerous definitions but also has a number of different legal dimensions. The vesting of a tribunal with the power to remake a decision is not the granting to it a single set of powers but rather at least four distinct types of powers. The first relates to the scope of review in that there must be some decision about the intensity and extent of the court or tribunal’s review. This is because the court or tribunal is not the same type of institution as the primary decision-maker and thus cannot have exactly the same power as the primary decision-maker. Indeed, merits review is a complex mixture of both remaking and reviewing the primary decision where the scope of review reflects the latter process. The second issue is whether there are particular issues that a tribunal or court must take into account in carrying out merits review. Not only does legislation dictate what relevant factors an environmental court or tribunal should have regard to, but legal authority has also developed regarding how these review bodies take into account policy and administrative law principle. A merits review decision made with a particular factor taken into account is very different from one that is not.56 The third dimension of the powers given to these courts and tribunals relates to the procedures by which they must hear a case. Nearly all these procedures relate to hearings but the procedures diverge between the different tribunals and courts. The final dimension of merits review concerns provisions relating to the acceptance of evidence by a tribunal or court. While closely related to procedural matters, this dimension is also distinct in that analysis of the evidentiary basis for a decision is a significant aspect of the substantive exercise of merits review power and also what makes it unique. These four dimensions of merits review are closely related and are often intertwined. Thus, for example, the SAERDC is required to ‘act according

54 Brimbella Pty Ltd v Mosman Municipal Council (1993) 79 LGERA 367; Segal v Waverley Council [2005] NSWCA 310; Yu Feng P/L v Maroochy Shire Council [1996] QCA 226. 55 See Sections II.A and II.B of this chapter in particular. Examples include Land and Environment Court Act 1979 (NSW) s 39(2); Integrated Planning Act 1997 (Qld) s 4.1.52(2)(a); Resource Management and Planning Appeal Tribunal Act 1993 (Tas) s 24. 56 Cf A Edgar, ‘Policy, Morality and the Land and Environment Court’ (2006) 14 Australian Journal of Administrative Law 38.

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to equity, good conscience, and the substantial merits of the case’,57 a legislative command which combines the scope of review and the considerations the court must have regard to. Moreover, each dimension can be divided into a set of sub-issues. With that said and as will be seen below, identifying these different legal dimensions of merits review aids in making sense of merits review. A Scope of Review One of the most commonly cited feature of merits review is that it enables a scope of review far greater than that of judicial review. The concept of scope of review is not easily defined (and may be incapable of definition);58 broadly speaking, though, it refers to a mixture of the intensity and extent of review. For the present purposes the focus is on the scope of review of the primary decision and it needs to be recognised that there is a separate scope of review in relation to evidentiary matters.59 At first glance the intensity of review of the primary decision may seem an irrelevant issue. This is because merits review involves a remaking of the decision and as such means that there is no need for a court or tribunal to make a decision about how carefully they will review the primary decision. Yet as noted above, merits review is a mixture of reviewing a decision and remaking it and the former process tends to dominate. For example, the QPEC has held that the reasons for a primary decision are relevant because of the onus provisions regulating court hearings.60 Likewise, while it is recognised that the SAERDC is remaking a decision,61 it has also found that the focus of its analysis is the decision being appealed (rather than other related decisions) and this is ‘the factual context’.62 Moreover, a court or tribunal is also remaking a decision in light of its review of the primary decision-maker’s evaluation of the evidence before it and that court or tribunal must decide how intensely that initial evaluation is reviewed.63

57

Environment, Resources and Development Court Act 1993 (SA) s 21(1)(c). E Gellhorn and G Robinson, ‘Perspectives on Administrative Law’ (1975) 75 Columbia Law Review 771, 780–1. 59 See part II.B of this chapter. 60 Mackay Conservation Group Inc v Mackay City Council [2004] QPEC 94 [56]. See also the discussion in Central Equity Limited v Gold Coast City Council [2007] QPEC 6 [24]. 61 Michelmore v Minister for Environment and Conservation (2004) 137 LGERA 306 [61]–[62]. 62 Baker v Minister for Environment and Conservation [2006] SAERDC 24 [12]. 63 Mackay Conservation Group Inc v Mackay City Council [2004] QPEC 94 [57]; Cheray Pty Ltd v City of Mitcham [1997] SAERDC 417. 58

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The issue becomes even more complicated when one considers the extent of merits review more carefully. In the merits review jurisdiction of the NSWLEC judges and commissioners, for the purposes of hearing and disposing of an appeal, have all the functions and discretions which the person or body whose decision is the subject of the appeal had in respect of the matter the subject of the appeal.64

In other words, the review power has the same extent as the primary power. In practice this has given rise to some difficult issues, particularly concerning cases where it has been argued that the NSWLEC should exercise powers which the primary decision-maker can exercise but which were not exercised in relation to the primary decision. For example, in Goldberg v Waverley Council the issue was whether in reviewing a development permission refusal under Part 4 of the Environmental Planning and Assessment Act 1979 (NSW) the court could exercise the power the Council had under section 138 of the Roads Act 1993 (NSW) and the Council’s role as determining authority under Part 5 of the Environmental Planning and Assessment Act 1979 (NSW).65 The court concluded that section 39(2) of the Land and Environment Court Act 1979 (NSW) allowed this, but reaching such a conclusion required not only a choice between a narrow and broad interpretation of ‘all the functions and the discretions’ of the original decision-maker but also what was ‘relevant’ to the matter.66 The scope of review of the TRMPAT is similar, albeit the wording is crucially different in that it ‘may exercise all the powers that are conferred by the relevant legislation on the person who made the decision that gave rise to the appeal’.67 Here it would seem that the scope is more limited by the phrase ‘relevant legislation’. This has been interpreted as allowing the tribunal to reach a ‘correct or preferable decision’68 although if the original decision is a nullity then it cannot review it.69 Moreover, the Resource Management and Planning Appeal Tribunal Act 1993 (Tas) as well as

64

Land and Environment Court Act 1979 (NSW) s 39(2). Goldberg v Waverley Council [2007] NSWLEC 259. 66 For a narrower approach see North Sydney Municipal Council v P D Mayoh Pty Ltd (1988) 14 NSWLR 740 and Strathfield Municipal Council v Drew (1985) 1 NSWLR 338. For a broader approach see Kogarah Municipal Council v Kent (1981) 46 LGRA 334; McDougall v Warringah Shire Council (1993) 30 NSWLR 258; Sydney City Council v Ipoh Pty Ltd (2006) 149 LGERA 329. 67 Resource Management and Planning Tribunal Act 1993 (Tas) s 23. 68 Gunns Ltd v Kingborough Council [2005] TASRMPAT 74 [8]. 69 Max Eaves Pty Ltd v Brighton Council and Churinga Waters Pty Ltd [1996] TASRMPAT 225; Break O’Day Council v Resource Management and Planning Appeal Tribunal [2004] TASSC 122 [20]. 65

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other pieces of legislation give additional powers to the tribunal.70 That tribunal has also made it clear that it does not consider hypothetical questions.71 In contrast, the scope of review is formulated very differently in the QPEC. An appeal to the QPEC ‘is by way of hearing anew’72 and has been described in the following terms: the duty of this court is to give an impartial decision on the merits of the application, based on the evidence before it. It often happens that the information before the court is more extensive than the information available to Council. The court is in no sense a town planning authority. That is the role of Council. The court’s duty is to apply the planning schemes to the facts revealed by the evidence. The developer has the task of persuading the court that the application should be approved – IPA s.4.1.50(2). The hearing is a fresh one, so that the court has to reach its own view of the application.73

Such a description prescribes a relatively limited scope of review, as in many ways the discretion of the QPEC is more limited than the primary decision-maker. This can also be seen in the fact that the QPEC ‘must not consider a change to the application on which the decision being appealed was made unless the change is only a minor change’.74 The QPEC has considered this provision on many occasions and has stressed that there is a tension between wishing to give ‘minor’ a generous interpretation and remembering that the matter comes before the court by way of an appeal and the court must not deprive the proceedings of that character by usurping the function of the decision-maker at first instance.75

The primary decision-maker does have the power to consider such changes, however, because the administrative decision-making process does allow such changes to be properly considered, whereas the QPEC procedure does not.76 As such, the QPEC’s powers are limited in this regard although may be widened where the changes would not have made a difference to the nature of the comments.77

70 Resource Management and Planning Appeal Tribunal Act 1993 (Tas) ss 22(2), 23(5), 23(6); Land Use and Planning Appeal Act 1993 (Tas) s 62. 71 Bennett v Clarence City Council [2000] TASRMPAT 27 [12]. 72 Integrated Planning Act 1997 (Qld) s 4.1.52(1). 73 Herbert v Brisbane City Council [2004] QPEC 17 [9]. 74 Integrated Planning Act 1997 (Qld) s 4.1.52(2)(b). 75 Transequator Pty Ltd v Brisbane City Council [2007] QPEC 37 [2]. See also Butler v Kingaroy Shire Council [2006] QPEC 93 [18] veering towards a more generous interpretation. 76 Macquarie Leisure Operations Limited v Gold Coast City Council [2007] QPEC 20 [23], [31]. 77 Colman v Brisbane City Council [2002] QPEC 3 [13], [21].

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In contrast again, the SAERDC enabling legislation makes no reference to the extent of review except that the court must act according to the ‘equity, good conscience, and the substantial merits’ of the case,78 terms used historically in other tribunals.79 Those provisions are supplemented by appeal rights that are included in other legislation.80 Likewise, the court has noted that the extent of review will vary depending on what is being appealed against.81 This demonstrates that the scope of merits review is by no means settled and that the claim that a court or tribunal is ‘standing in the shoes’ of the original decision-maker reveals little of the inherent complexity involved in the process.82 Nor does the concept of de novo review, which suggests something akin to a trial. Not only can it be seen that each different tribunal and court has a different intensity and extent of review but that each text can be interpreted by courts and tribunals a number of different ways.83 These choices are essentially legal choices because they involve decisions being made about the jurisdiction of the court or tribunal.

B Relevant Factors Closely associated with, though distinct from, the scope of review are those factors that a court or tribunal ought to take into account when carrying out a review. The key point to appreciate here is that a court or tribunal engaged in merits review will not only have a set of relevant factors to consider in addition to those that the primary decision-maker needed to take into account, but also that legal doctrine may require a court or tribunal to give a specific factor different weight from that given to it by the primary decision-maker. Again, this highlights the fact that merits review is not just remaking the decision. Broadly speaking, these relevant factors can be understood as falling into three different categories. The first is that courts or tribunals must have regard to administrative law principles. These include the administrative law principles that apply to the primary decision-maker.84 Moreover, a court or tribunal must also have regard to the separate body of administrative law doctrine concerning 78 79 80 81

Environment, Resources and Development Court Act 1993 (SA) s 21(c). See Telford v Minister for Water Resources [2002] SAERDC 4. See, eg, Development Act 1993 (SA) Pt 11. Hensley Ind Aust Pty Ltd v Environment Protection Authority [2001] SAERDC 14

[13]. 82

A point well made in Creyke, above n 29, at 85. See further Michelmore v Minister for Environment and Conservation (2004) 137 LGERA 306, fn 2. 84 Bennett v Clarence City Council [2000] TASRMPAT 27 [15]; David Cheney Pty Ltd v City of Adelaide [1998] SAERDC 47; Cheray Pty Ltd v City of Mitcham [1997] SAERDC 417. 83

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the powers of merits review bodies. Much of this doctrine has developed due to courts needing to determine when an appeal on a question of law from a merits review decision is allowable.85 What is striking is that there is considerable variation in where courts and tribunals are deriving administrative law principles. While the NSWLEC has tended to actively develop its own doctrine,86 the TRMPAT and the Tasmanian Supreme Court have relied on legal authorities from other Australian tribunals and courts.87 The second category of relevant factors for a tribunal or court to take into account is policy. Primary decision-makers must also take into account policy, but separate legal doctrines have developed concerning what status policies have in merits review.88 Policy has always played a significant role in planning law in the form of development control plans and the like.89 The starting point for the role of policies in merits review has been AAT doctrine – that a policy is a relevant consideration in merits review and can be followed so long as it does not contradict the legislative framework and that all the circumstances are taken into account.90 Beyond that, however, there is variation in the different courts’ approach. The SAERDC tends to emphasise the importance of individual facts and that any result is ‘fair and equitable’.91 In contrast, the QPEC tends to use the application of policy as its focus and the issue is more to do with how policies are applied than whether they should be applied at all.92 If the court is to depart from a policy then it is only when the policy gives ‘way to special circumstances that exist in a particular case provided a good town planning basis is demonstrated for this’.93 In contrast again, the NSW Court of Appeal has stated that a development control plan must be the subject of ‘proper,

85 Murlan Consulting Pty Ltd v Ku-ring-gai Council [2007] NSWLEC 704; K Richardson and Associates Pty Ltd v Yarrowlumla Shire Council [2002] NSWLEC 87. 86 Telstra Corp Ltd v Hornsby Shire Council [2006] NSWLEC 133; Stockland Development Pty Ltd v Manly Council [2004] NSWLEC 472. 87 Max Eaves Pty Ltd v Brighton Council and Churinga Waters Pty Ltd [1996] TASRMPAT 225; Break O’Day Council v Resource Management and Planning Appeal Tribunal [2004] TASSC 122. 88 Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409. 89 Edgar, above n 9. 90 Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409 applied in Richardson v Glenorchy City Council [2004] TASRMPAT 255; Aldekerk Pty Ltd v City of Port Adelaide Enfield and Environment Protection Authority [2000] SAERDC 47 [15]. 91 Aldekerk Pty Ltd v City of Port Adelaide Enfield and Environment Protection Authority [2000] SAERDC 47 [15]; Baker v Minister for Environment and Conservation [2006] SAERDC 24 [14]. 92 Fieldray Pty Ltd v Gold Coast City Council [2007] QPEC 98 [77]. 93 Tsunami Corp Pty Ltd v Brisbane City Council [1997] QPELR 238 [240]; Harburg Investments Pty Ltd v Council of the City of Gold Coast [2002] QPEC 61 [17].

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genuine and realistic consideration’ by the NSWLEC and be the focal point for analysis.94 The NSWLEC itself has fleshed out what that means in considerable detail.95 There is also variation between the courts and tribunals in regard to the issue of considering new policy made after the primary decision. Under its legislation the QPEC ‘may give weight to any new laws and policies the court considers appropriate’.96 In South Australia it is the development plan at the time of application which is relevant,97 while in NSW the policies themselves often deal with the issue.98 The final set of relevant factors to which a court or tribunal is to have regard is that in some cases legislation requires a court or tribunal to explicitly take into account issues additional to those that the primary decision-maker are required to take into account. Thus, the legislation establishing the NSWLEC and SAERDC respectively requires each Court to take into account ‘the circumstances of the case and the public interest’99 and ‘equity, good conscience and the substantial merits of the case’.100 The NSWLEC appears to understand its mandate as meaning that it is less concerned in a merits review decision with ‘winners and losers than with achieving the best community outcome’.101 In contrast, the provision governing the SAERDC has not been interpreted in such a broad way. Rather, it has tended to be recognised that a range of processes and outcomes could be understood to be fair and equitable.102 As with scope of review what can once again be seen is that not only are relevant factors a dimension of merits review but such factors are not fixed. Some of these variations arise out of different legislative frameworks but others are a consequence of how those carrying out merits review have perceived their own role. Thus, the NSWLEC has, in recent years, been active in developing its own distinctive environmental law doctrine while the QPEC and TRMPAT have focused more on the resolution of disputes.103

94 Zhang v Canterbury City Council (2001) 115 LGERA 373 [94]. See also Kindimindi Investments Pty Ltd v Lane Cove Council (2006) 143 LGERA 277; Belmorgan Development Pty Ltd v GPT Re Ltd [2007] NSWCA 171. 95 Stockland Development Pty Ltd v Manly Council [2004] NSWLEC 472 [91]–[92]. 96 Integrated Planning Act 1997 (Qld) s 4.1.52(2)(a). 97 Development Act 1993 (SA) s 53(2). 98 See Anderson v Minister for Infrastructure Planning & Natural Resources [2006] NSWLEC 725. 99 Land and Environment Court Act 1979 (NSW) s 39(4). 100 Environment Resources and Development Court Act 1993 (SA) s 21(1)(c). 101 Maxnox Pty Ltd v Hurstville City Council [2006] NSWLEC 146 [57]. 102 Baker v Minister for Environment and Conservation [2006] SAERDC 24 [14]. 103 Grant, above n 13; Preston, above n 34.

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C Procedure The third legal dimension of merits review is in relation to the procedure the tribunal or the court adopts in reviewing and remaking a primary decision. That procedure can take many different forms, but will usually involve some form of oral hearing in which both parties can present their arguments. There are two important things to note at the outset about court or tribunal procedure. First, procedure regulates what is put to a tribunal or court and how what is put is assessed. Different procedures produce different substantive outcomes.104 Second, court and tribunal procedures are distinct from the procedures utilised by a primary decisionmaker. This once again makes it clear that the process of merits review is very different from the primary decision-making process. Court and tribunal procedures are regulated through legislation, guidance and practice. In regards to legislation, the QPEC has the mostly heavily regulated procedure which is both adjudicative and adversarial in nature.105 The legislation applicable to the NSWLEC, SAERDC and the TRMPAT mandates that their hearing processes are freed from the strictures of normal adjudicative procedure – a reflection of the belief that the expensive and tangential trappings of the adversarial process do not aid proper review.106 The legislative mandates, however, are slightly different. Thus, hearings in merits review cases before the NSWLEC, shall be conducted with as little formality and technicality, and with as much expedition, as the requirements of this Act and of every other relevant enactment and as the proper consideration of the matters before the court permit.107

Consistent with above, the court has used this provision as a basis for delivering interim judgments108 and the provision is also relevant to the court’s decisions concerning costs.109 The SAERDC must conduct its procedure ‘with the minimum of formality’110 and for the TRMPAT its procedure is ‘within its discretion’ although it should be conducted ‘with as little formality and technicality, and with as much expedition, as a proper consideration of the matters before the Appeal Tribunal permits’.111 In other words, these three institutions have largely been given the ability to regulate their own processes, which they have done in a variety of ways. At 104

Fisher, Risk Regulation and Administrative Constitutionalism, above n 6, at ch 4. Integrated Planning Act 1997 (Qld) s 4.1.49–52. M Allars, ‘Neutrality, the Judicial Paradigm and Tribunal Procedure’ (1991) 13 Sydney Law Review 377, 380. 107 Land and Environment Court Act 1979 (NSW) s 38(1). 108 Maxnox Pty Ltd v Hurstville City Council [2006] NSWLEC 146 [54]. 109 Albeit more as a background factor. See Port Stephens Council v Samsom [2007] NSWCA 299 [15]–[27]. 110 Environment, Resources and Development Court Act 1993 (SA) s 21(1)(a). 111 Resource Management and Planning Appeal Tribunal Act 1993 (Tas) s 16(1)(a), (b). 105 106

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the very least, tribunals and courts are understood to be bound by the rules of natural justice either because the legislation so states112 or because it has been established by case law.113 Likewise, legislation allows some courts and tribunals such as the NSWLEC to make rules of procedure.114 What is also clear is that in each court and tribunal different practices in regards to procedure have developed. Thus, for example, the NSWLEC is generally recognised to be adversarial in nature despite the fact it was originally designed not to be.115 Related to this is the duty to give reasons. All courts and tribunals are understood to have a duty to give reasons for their decisions.116 In relation to the TRMPAT, that duty is in the legislation, which explicitly states that the reasons must include its findings on material questions of fact and a reference to the evidence or other material on which those findings were based.117

In contrast, the NSWLEC maintains that the reasons of Commissioners do not need to be as rigorous as the reasons of judges.118 As any good civil proceduralist knows, procedure is deeply embedded in legal culture119 and the above discussion only skims the surface of the procedural issues raised in these different courts and tribunals. What is clear however is that procedure plays a role in regulating the powers of tribunals and courts when they are engaged in merits review. Moreover, once again there are differences, complexities and ambiguities in how such regulation operates to constrain and construct the legal nature of such merits review.

D Evidentiary Requirements The fourth and final dimension to think about in conceptualising the merits review powers of these courts and tribunals is the regulation of evidence which a court or tribunal may hear or accept. As seen above, one 112 Resource Management and Planning Appeal Tribunal Act 1993 (Tas) s 16(1)(d). It is also implicit in the fact that the QPEC must conduct an appeal in accordance with ‘the rules of court’: Integrated Planning Act 1997 (Qld) s 4.1.49. 113 Stirling District Environment Association Inc v Bailey [1999] SAERDC 40 [3]; Baulkham Hills Shire Council v Basemount Pty Ltd (2003) 126 LGERA 339. 114 Land and Environment Court Act 1979 (NSW) s 38(4). 115 S Smith, A Review of the Land and Environment Court, Briefing Paper 13/2001 (NSW Parliament, 2001), See also Grant, above n 13, at 288–9 for a discussion of other courts and tribunals. Cf Residents Against Improper Development Incorporated v Chase Property Developments Pty Ltd [2006] NSWCA 323 [2]. 116 City Plan Services Ltd v Sydney City Council [1999] NSWLEC 186 [24]. 117 Resource Management and Planning Appeal Tribunal Act 1993 (Tas) s 24(2). 118 Design 23 Pty Ltd v Sutherland Shire Council [2003] NSWLEC 90 [27]. 119 G Edmond, ‘Secrets of the “Hot Tub”: Expert Witnesses, Concurrent Evidence and Judge-led Law Reform in Australia’ (2008) 27 Civil Justice Quarterly 51.

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of the major justifications for merits review in the environmental and planning context has been the fact-dependent nature of decisionmaking.120 Merits review bodies are perceived as necessary because of the inability of judicial review courts to deal with facts, both doctrinally and procedurally. The logical corollary then is how a tribunal accepts, manages and assesses facts is part of its merits review powers. Not surprisingly, in regards to each tribunal and court, a rich body of principles have been developed concerning the treatment of evidence. What is striking about this is that it has occurred against a legislative backdrop under which these courts and tribunals have effectively been given the power to self-regulate how they deal with the evidence. The exception again to this self-regulatory tendency is the QPEC which has many aspects of its evidentiary procedure regulated including who must prove a case.121 The court has perceived its task as ‘a traditional one’, in which it ‘is obliged to consider the evidence, and reach an independent view of the merits of this application’.122 The SAERDC is ‘not bound by the rules of evidence and may inform itself as it thinks fit’.123 It is given legislative power, however, to subpoena documents in accordance with the rules of the court124 and the court can examine these documents ‘and draw … any conclusions of fact it considers proper’.125 It can also commission expert reports and has the power to summon witnesses.126 While in some cases the court has been very flexible in the type of evidence it admits,127 there has been, in other cases, a heavy reliance on onuses of proof and a keenness to ensure that expert witnesses stay within their prescribed role.128 The TRMPAT is ‘not bound by the rules of evidence and may inform itself on any matter in any way it considers appropriate’.129 The TRMPAT may also ‘take account of new evidence not considered by the person who made the decision which gave rise to the appeal’.130 Merits review in the NSWLEC is

120

M Jeffrey, above n 33, at 266. Integrated Planning Act 1997 (Qld) ss 4.1.7, 4.1.26.6 and 4.1.50. 122 Charles & Howard Pty Ltd v Redland Shire Council [2006] QPEC 9 [8]. 123 Environment Resources and Development Court Act 1993 (SA) s 21(b). 124 Environment Resources and Development Court Act 1993 (SA) s 21(2). Note they can also order a report: s 21(3)(b). 125 Environment Resources and Development Court Act 1993 (SA) s 21(3)(a). 126 Environment, Resources and Development Court Act 1993 (SA) ss 22–7. 127 Cheray Pty Ltd v City of Mitcham [1997] SAERDC 417. 128 Conservation Council of South Australia v Development Assessment Commission & Tuna Boat Owners Association (No 2) [1999] SAERDC 86. 129 Resource Management and Planning Appeal Tribunal Act 1993 (Tas) s 16(e). 130 Resource Management and Planning Appeal Tribunal Act 1993 (Tas) s 16(e). 121

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by way of rehearing, and fresh evidence or evidence in addition to, or in substitution for, the evidence given on the making of the decision may be given on appeal.131

The court in these cases is not bound the by the rules of evidence but may inform itself on any matter in such manner as it thinks appropriate and as the proper consideration of the matters before the court permits.132

It is empowered to obtain the assistance of any person having professional or other qualifications relevant to any issue arising for determination in the proceedings and may receive in evidence the certificate of any such person.133

Using these provisions as a basis the court has developed a complex doctrine in relation to the treatment of evidence. It has allowed the effective joinder of parties so as to ‘inform itself’ of a particular matter;134 indeed, in earlier cases it was held that hearsay and expert opinions without proof of underlying facts could be admitted as evidence.135 In more recent years, however, the approach it has taken has been a more regulatory one on the part of the court. This is particularly in relation to expert evidence where the practice of expert conferences and concurrent evidence has been introduced.136 As Jagot J notes about this change: [M]any decisions emphasise that tribunals not bound by the rules of evidence nevertheless proceed on the basis that evidence must be logically probative of issues in dispute (see, for example, the observations in South Western Sydney Area Health Service v Edmonds [2007] NSWCA 16 [127]–[132]). To be logically probative of issues, whether the rules of evidence apply or not, expert opinions must be capable of being assessed by the trier of fact. Such opinions cannot be ‘a series of oracular pronouncements’ but must enable the trier of fact to reach their own ‘independent judgment by applying the criteria furnished to the facts proved’ (Makita [87]). Problems created by unregulated expert evidence in courts and tribunals have been subject of increasing focus over the past decade.137

131

Land and Environment Court Act 1979 (NSW) s 39(3). Land and Environment Court Act 1979 (NSW) s 38(2). 133 Land and Environment Court Act 1979 (NSW) s 38(3). 134 Double Bay Marina Pty Ltd v Woollahra Municipal Council (1985) 54 LGRA 313, 314–15. 135 King v Great Lakes Shire Council (1986) 58 LGRA 366, 371. 136 Land and Environment Court, ‘Practice Note: Classes 1, 2 and 3 Miscellaneous Appeals’ (2007). See generally Edmond, above n 119. 137 Ray Fitzpatrick Pty Ltd v Minister for Planning [2007] NSWLEC 791 [23]. 132

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Indeed, the court has made clear that any such expert evidence needs to be relevant138 and there is ‘no obligation on commissioners to adopt the opinions of expert witnesses before them’.139 The final point to note is the issue of intensity of review of evidence. As already noted, this issue is closely related to the more general scope of review of a court or tribunal as discussed in part II.A. Examining issues of intensity of factual review is profoundly difficult because what a court or tribunals says it is doing and what it is actually doing can be two different things. Likewise, as I have argued elsewhere, the treatment of evidence in review is closely related to what is understood to be, and should be, the role of the primary decision-maker.140 With that said, two general approaches can be seen across these different bodies.141 The first approach is that the purpose of a court or tribunal in accepting or hearing evidence is understood as an aid to the court in obtaining a better understanding of the issue before them.142 ‘Evidence’ thus loosely includes evidence of facts and evidence of policies and practices,143 while factual review requires ‘proper consideration and due consideration’ of issues rather than the discharging of any evidentiary onuses.144 In other words, evidence is only one factor to consider in ensuring the reasonable exercise of discretion. The second approach has been to understand the role of the courts or tribunals in more adjudicative terms so that the job in merits review is to decide which party’s evidence to accept.145 From this perspective issues to do with the burden of proof become particularly significant.146 On this basis the task of a court or tribunal is to decide who has proved their case.

III REFLECTIONS

In this last section I wish to briefly consider the implications of the above for thinking about merits review and administrative law more generally. Before doing so it is useful to summarise the analysis presented thus far. 138

Gemsted Pty Ltd v Gosford City Council (1993) 78 LGERA 395, 402. Murlan Consulting Pty Ltd v Ku-ring-gai Council [2007] NSWLEC 704 [71]. 140 Fisher, Risk Regulation and Administrative Constitutionalism, above n 6, at ch 1. 141 Ibid ch 4. 142 Miltonbrook Pty Ltd v Kiama Municipal Council [1998] NSWLEC 281 [281]; Murrumbidgee Groundwater Preservation Association v Minister for Natural Resources [2004] NSWLEC 122. 143 Gales Holdings Pty Limited v Tweed Shire Council [2006] NSWLEC 85 [68]. 144 Kroger v Southern Rural Water [2001] VCAT 1334 [55]. 145 Telstra Corp Ltd v Hornsby Shire Council [2006] NSWLEC 133; Conservation Council of South Australia v Development Assessment Commission & Tuna Boat Owners Association (No 2) [1999] SAERDC 86; CSR Limited v Caboolture Shire Council [2001] QPE 013; Shannon v Dalby Town Council [2004] QPEC 062. 146 See especially Conservation Council of South Australia v Development Assessment Commission & Tuna Boat Owners Association (No 2) [1999] SAERDC 86. 139

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Administrative law is inherently pluralistic; however, the study of it tends to be compartmentalised. One consequence of this is that, while judicial review is understood as a legal concept capable of legal analysis, merits review is understood not to have legal content, and thus it is not considered to be a worthy subject for doctrinal examination. However, a study of the merits reviews powers of one set of specialist courts and tribunals highlights the incorrectness of this assumption. Not only does merits review have a number of different legal dimensions but each of these different dimensions can be constructed in divergent ways. The concept of merits review is not only inherently legal but also legally complex, legally ambiguous and legally malleable. This conclusion is important for thinking about merits review and for thinking about administrative law more generally.

A Reflecting on Merits Review The above analysis provides much to think about in regards to merits review but in particular there are four points to highlight. The first is that concepts of merits review are legal concepts and must be analysed as such. As noted in the first section, that fact has already begun to be recognised and this chapter will aid in that process of recognition. In particular it highlights the fact that merits review powers have at least four different legal dimensions. The second point to note about merits review is that it is not a singular concept but rather can refer to a range of review powers which are legally constructed in many different ways. Merits review as conducted by the QPEC is very different from merits review as conducted by the NSWLEC which is different again from merits review conducted by the TRMPAT. A consequence of this is that if a merits review decision is to be used as a form of legal and academic authority then understanding the powers of the courts and tribunals making those decisions is an important step towards understanding the nature, quality, implications and relevance of the decision itself. The nature of a court or tribunal’s decision can only be made sense of in the context of what that court or tribunal had the power to decide. Likewise, its relevance to another court or tribunal can only be assessed when the relative powers of each body is compared side by side. As Jagot J correctly asserts: [C]are must be taken in applying observations about the level or extent of assessment of issues found to be appropriate in merits appeals to other contexts.

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Specifically, observations made by the Court in it merits jurisdiction cannot be understood as mandating a particular outcome in judicial review proceedings.147

What is clear is that such care is not always taken. Principles developed in the merits review context are then applied in the judicial review context148 or before other courts and tribunals.149 A third point to make about merits review follows on from this and that is that the nature of merits review can have a profound impact on the substance of the law. A prime example of this is in regards to the precautionary principle.150 In a different context I have examined how merits review can either be understood as a form of external review akin to judicial review or as a form of internal review akin to an adjudicative procedure. If understood in the former terms then the precautionary principle has been interpreted as a flexible principle applying to the exercise of discretion.151 If understood in the latter terms then the precautionary principle is understood to apply more narrowly to the treatment and assessment of evidence.152 I have described this relationship as one of ‘co-production’ and it clearly has implications for not only how we think about merits review but also judicial review. The final point to note is that the present examination of merits review powers merely scratches the surface. The examination above is only of a handful of cases and a far more exhaustive study is needed for a full picture. Such a study would not only need to analyse more of the decisions of the courts and tribunals discussed here but also those of their predecessors. Moreover, the type of issues seen in relation to environmental courts and tribunals are clearly relevant to other specialist and generalist tribunals. To be blunt, the opportunities for research are endless and the brief sketch above is no more significant than a tentative step in that process of analysis.

147 St Helen’s Area Landcare and Coastcare Group Inc v Break O’Day Council [2007] TASSC 15 [124]. 148 Telstra Corp Ltd v Hornsby Shire Council [2006] NSWLEC 133 as applied in Walker v Minister for Planning [2007] NSWLEC 741 and Gray v Minister for Planning [2006] NSWLEC 720. 149 See, eg, Leatch v National Parks and Wildlife Service (1993) 81 LGERA 270 considered in Aldekerk Pty Ltd v City of Port Adelaide Enfield and Environment Protection Authority [2000] SAERDC 47; Histpark Pty Ltd v Maroochy Shire Council [2001] QPEC 59; De Brett Investments Pty Ltd v Australian Fisheries Management Authority [2004] AATA 704. 150 Fisher, Risk Regulation and Administrative Constitutionalism, above n 6, at ch 4. 151 Leatch v National Parks and Wildlife Service (1993) 81 LGERA 270. 152 Conservation Council of South Australia v Development Assessment Commission & Tuna Boat Owners Association (No 2) [1999] SAERDC 86.

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B Reflecting on Administrative Law Scholarship As I made clear in the introduction, this chapter is not only about merits review. It is also about how administrative law scholars address the legal subject matter and normative pluralism of administrative law. In the face of such pluralism scholars tend to compartmentalise the subject. Judicial review is the province of doctrinal analysis while merits review is not. This compartmentalisation reflects an assumption that, as a form of legal pluralism, merits review has no legal content and that, in studying it, administrative lawyers must deploy other disciplinary tools. This abandonment of legal analysis in the face of legal pluralism is not unique to merits review but can also be seen in other areas of administrative law scholarship.153 Nevertheless, what this chapter demonstrates is that, while merits review bodies may be novel and ad hoc in their legal construction, their powers are by no means non-legal. These courts and tribunals do not operate outside the law; rather, they are legal constructions deploying or adapting conventional legal processes. As such, their powers only make sense in legal terms. As the analysis in part II makes clear, making sense of the merits review powers of these bodies requires understanding a wide range of legal concepts, including administrative law principles, civil procedure and rules of evidence. One lesson in all of this is that in engaging with different forms of pluralism, administrative law scholars should not abandon legal analysis; rather, they ought to become more sophisticated in its deployment. A study of merits review powers requires a sharper and more subtle set of legal analysis skills than is being deployed in much administrative law scholarship at present. Moreover, it requires painful attention to legislative and legal detail. Indeed, one of the many important things that Mark Aronson taught me was the importance of engaging with that detail and that without such engagement there is a danger that a scholar will fail to make sense of the subject.154 The need to tackle legal pluralism in legal terms is not the only lesson that one can take from this chapter. A legal deconstruction of merits review powers not only has implications for thinking about merits review but also for other aspects of administrative law scholarship. If merits review has

153 R Thomas, ‘Deprofessionalisation and the Postmodern State of Administrative Law Pedagogy’ (1992) 42 Journal of Legal Education 75; P Craig, ‘Public Law, Political Theory, and Legal Theory’ [2000] Public Law 211. 154 His detailed work on ouster clauses is a good example: see M Aronson, Statutory Restrictions of Remedies in English and Australian Administrative Law (D Phil Thesis, University of Oxford, 1973); M Aronson, ‘Jurisdictional Error Without the Tears’ in M Groves and HP Lee (eds), Australian Administrative Law: Fundamentals, Principles and Doctrines (Melbourne, CUP, 2007) 330.

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different legal dimensions then the same is probably true of judicial review; notwithstanding, there has been little scholarship which has recognised those dimensions. Through studying merits review a better understanding will thus be gained of other aspects of administrative law. Indeed, I would go so far to argue that much of the greatness of Aronson’s judicial review scholarship stems from his ability to incorporate pluralism into his analysis. In particular, his analysis of doctrine has been grounded in an appreciation of the ambiguous and malleable role of judicial review in the ‘struggle’ to establish administrative law as an ‘important institutional component in the attempt to achieve a just society’.155

IV CONCLUSION

As I explained in the introduction, the seeds of this chapter were planted many years ago in a conversation that I had with Mark Aronson. The purpose of this chapter has been two-fold: first, to demonstrate that concepts of merits review are legally constructed, legally complex and legally malleable; second, to show that an appreciation of that fact highlights the need for administrative law scholars to engage more fully with the legal nature of the different forms of legal pluralism that they encounter in administrative law.

155 M Aronson, B Dyer and M Groves, Judicial Review of Administrative Action 3rd edn (Sydney, LawBook Co, 2004) 8.

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15 Ombudsmen and Integrity Review ANITA STUHMCKE

I INTRODUCTION

T

HIS CHAPTER URGES policy makers, governments, citizens and ombudsmen1 to regard the ombudsman institution2 as existing at the ‘heart’3 of administrative law. The traditional outlier of the administrative law world – often relegated to last place in administrative law textbooks and seen as an oddity or a graft onto the Westminster system of government4 – the ombudsman is an institution which, while of critical importance to the individual citizen and for administrative justice, remains in the background of the more formal legal avenues of judicial review and merits review. This characterisation of ombudsmen as an important yet somehow lesser institution of administrative review has rarely been challenged by commentators5 or ombudsmen6 themselves. This 1

Due to general usage the plural ‘ombudsmen’ is used throughout this chapter. This chapter confines its discussion to classical or government or public sector ombudsmen. However, its observations may be applied to other forms of ombudsman institutions such as private industry ombudsmen or organisational ombudsmen as, even though these offices may have different functions (such as an ability of some private industry ombudsmen to make binding determinations), they generally bear the brand name ‘ombudsman’ due to the replication of many functions of the classical institution. 3 This phrase is taken from WB Lane and S Young, Administrative Law in Australia (Sydney, LawBook Co, 2007) in which the authors state that ‘[j]udicial review lies at the heart of administrative law’: at 33. 4 Descriptions include the Australian Government Ombudsman being a ‘hybrid’ or even a ‘constitutional misfit’: K del Villar, ‘Who Guards the Guardians? Recent Developments Concerning the Jurisdiction and Accountability of Ombudsman’ (2003) 36 AIAL Forum 25, 44. 5 Cf D Pearce, ‘The Commonwealth Ombudsman: the Right Office in the Wrong Place’ in R Creyke and J McMillan (eds), The Kerr Vision of Australian Administrative Law – At the Twenty-Five Year Mark (Canberra, Centre for International and Public Law, 1998) 54. 6 There is, however, a recent suggestion by the current Commonwealth Ombudsman, John McMillan, that ombudsmen form part of the integrity arm of government: J McMillan, ‘Future Directions – The Ombudsman’ (Speech delivered at the AIAL Forum, Canberra, July 2005). McMillan notes that the idea originates from the Hon Justice JJ Spigelman, ‘Lecture 1:The Integrity Branch of Government’ AIAL National Lecture Series on Administrative Law No 2 (Canberra, Australian Institute of Administrative Law, 2004)’. This suggestion has also 2

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chapter identifies recent changes occurring in the role of Australian Federal, State and Territory Government ombudsmen.7 It argues that these changes indicate that explicit recognition ought to be given to integrating the performance of ombudsmen with the function of integrity review. It is suggested that ‘integrity review’ by classical or government ombudsmen should co-exist alongside judicial review by courts and merits review by tribunals. This chapter has three parts. The first defines what is meant by integrity review, and argues that such review is most clearly embedded in the proactive roles of ombudsmen. The second part then discusses the expanding proactive roles of Australian Federal, State and Territory ombudsmen to emphasise both the changing nature of the ombudsman role and applicability of the integrity framework. Finally, explanation is provided as to the usefulness and limitations of the concept of integrity review with respect to its application to ombudsmen. It is suggested that integrity review forms the conceptual basis for the proactive systemic investigations of ombudsmen. This facilitates the definition and assessment of what it is an ombudsman actually achieves and augments the argument that integrity review ought to be applied as an accountability tool for courts and tribunals to assess the use of proactive powers by ombudsmen.

II WHAT IS INTEGRITY REVIEW?

The current Chief Justice of the New South Wales Supreme Court, the Hon JJ Spigelman, has stated extra-judicially that: The word ‘integrity’ in English covers two distinct matters. First, personal integrity and, secondly institutional integrity. The two matters are interrelated. Both involve an idea of purity, of an unimpaired or uncorrupted state of affairs.

been made by the current Victorian Ombudsman, Mr Brouwer, in a transcript before Public Accounts and Estimates Committee Inquiry into a Legislative Framework for Victorian Statutory Officers of Parliament on 8 February 2005: accessed 21 July 2008. 7 Australia has nine public law ombudsmen: one Federal Ombudsman, six State Ombudsmen and two Territory Ombudsmen. The Commonwealth Ombudsman was established in 1976 by the Ombudsman Act 1976 (Cth) and all of the State Ombudsmen were also established in the 1970s: Western Australia in 1971 by the Parliamentary Commissioner Act 1971 (WA) ; South Australia in 1972 by the Ombudsman Act 1972 (SA); Victoria in 1973 by the Ombudsman Act 1973 (Vic); Queensland in 1974 by the Ombudsman Act 2001 (Qld); New South Wales in 1974 by the Ombudsman Act 1974 (NSW); Tasmania in 1978 by the Ombudsman Act 1978 (Tas); Northern Territory in 1977 by the Ombudsman (Northern Territory) Act (NT); and the Australian Capital Territory in 1983 by the Ombudsman Act 1989 (ACT).

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In the case of personal integrity the focus of attention is on the conduct required of occupants of public office in terms of characteristics such as honesty, absence of corruption, ethical conduct and compliance with proper practice. In the case of institutional integrity, there are three elements. The conduct of every government agency: (1)

must be authorised by law;

(2)

must be faithful to the public purposes for the pursuit of which a power was conferred or a duty was imposed; and

(3)

must be in accordance with the values, including procedural values, which the institution is expected to obey.8

The term ‘institutional integrity’ has been given judicial consideration by the High Court with respect to the operation of courts. In the 2006 decision of Forge v Australian Securities and Investments Commission9 the High Court considered the term ‘institutional integrity’ with respect to the Supreme Court of New South Wales. In that decision Gummow, Hayne and Crennan JJ noted that when reference is made to the institutional ‘integrity’ of a court, the allusion is to what The Oxford English Dictionary describes as ‘[t]he condition of not being marred or violated; unimpaired or uncorrupted condition; original perfect state; soundness’.10

The High Court decision in Forge applies the concept of institutional integrity to the Supreme Court of New South Wales. The speech made by the Hon JJ Spigelman CJ11 referred to earlier suggests that institutional integrity may be applied to government agencies. His Honour has also suggested extra-judicially that the performance of decision-making functions in the body of law known as administrative law be viewed as ‘the performance of an integrity function’.12 Recent research across Australian

8 The Hon JJ Spigelman, ‘Judicial Review and the Integrity Branch of Government’ (Speech delivered to the World Jurist Congress, Shanghai, 8 September 2005) accessed 21 July 2008. 9 [2006] HCA 44 (‘Forge’). Approved in Gypsy Jokers Motorcycle Club Incorporated v Commissioner of Police [2008] HCA 4. 10 Forge [2006] HCA 44 [66]. The joint judgment of Gummow, Hayne and Crennan JJ was approved by the remaining members of the court. 11 Above, n 8. Integrity has also been recognised as a form of ‘humanizing defective administration’: the Hon G Brennan, ‘Reflections’ (1989) 58 Canberra Bulletin of Public Administration 32 (Special Edition, P Bayne, HF McKenna and JR Nethercote (eds), ‘The Fading of the Vision Splendid? Administrative Law Retrospect and Prospect’). 12 The Hon JJ Spigelman, ‘Lecture 2: Jurisdiction and Integrity’, AIAL National Lecture Series on Administrative Law No 2 (Canberra, Australian Institute of Administrative Law, 2004) 25.

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integrity institutions affirms this point by delineating the centrality of administrative law to the nation’s integrity systems and the need for those concerned with public integrity to think more broadly about how administrative law can, does and should interact with other elements of [the] integrity system.13

While this research into Australian public integrity regimes focuses upon the incoherence generated by a multiplicity of agencies, laws and ethical codes,14 and the problems associated with developing a national integrity system,15 the point to be made with respect to administrative law is that it is timely to reassess the value of administrative law mechanisms. While not rejecting the potential of these other agencies to offer a form of integrity review, this chapter confines its discussion to the mechanisms of administrative law and therefore limits its argument to the application of integrity review to ombudsmen in the same way that judicial review is limited to the courts and merits review is limited to tribunals.16 Indeed, the use of the term ‘institutional integrity’ in the above quotation by Spigelman CJ refers to the conduct of government agencies. It is suggested in this chapter that the narrower Forge notion of institutional integrity which applies to courts ought to be applied to the broader concept as defined by Spigelman CJ in order to set the standard to ensure agencies behave with institutional integrity. A further complementary step is to recognise that institutions of administrative law – courts and tribunals and especially ombudsmen – perform integrity review. The genesis for this argument stems from the three elements of institutional integrity mentioned by Spigelman CJ. Each of the three elements has a differing emphasis placed upon it by the administrative law mechanisms that ensure institutional integrity. Briefly, and of course very generally, judicial review as undertaken by courts ensures the first element, namely that decisions made by government agencies are authorised by law. Judicial review may also extend to the second element of ‘ensuring that powers are exercised for the purpose, broadly understood, for which they were conferred’.17 Tribunals are an example of the second element. Tribunals are bodies that

13 AJ Brown, ‘Putting Administrative Law Back into Integrity and Putting the Integrity Back Into Administrative Law’ (2007) 53 AIAL Forum 32. 14 C Sampford, R Smith and AJ Brown, ‘From Greek Temple to Bird’s Nest: Towards a Theory of Coherence and Mutual Accountability for National Integrity Systems’ (2005) 64 Australian Journal of Public Administration 96. 15 See, eg, AJ Brown and B Head, ‘Assessing Integrity Systems: Introduction to the Symposium’ (2005) 64 Australian Journal of Public Administration 42. See also the Hon JJ Spigelman’s ‘solution’ of recognising a ‘fourth branch of government’: ‘Lecture 1: The Integrity Branch of Government’, above, n.6. 16 This statement is very general and is most applicable to the federal level in Australia where the separation of the judicial function is most strictly observed. 17 Spigelman, above, n. 8.

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undertake merits review to ensure that both the correct and preferable decision is made in a particular case, thereby placing emphasis upon the first and second elements. While no doubt the third element of institutional values is infused to varying degrees within both the operation of judicial review and merits review, the mechanism of ombudsmen18 best reflects this element of review. It is in this manner that an ombudsman, by contributing to the values of which an institution must obey, provides integrity review. So what is integrity review and why is it suggested that ombudsmen perform this function to a greater extent than courts and tribunals? As hinted above, the initial step towards defining a notion of integrity review is to blend the definition of ‘integrity’ applied by the High Court in Forge with the operation of administrative law. The result is a very general definition of what may constitute the notion of integrity or ‘integrity review’ for the purposes of administrative law. As administrative law aims to render government decision-making transparent and accountable, the consequence is that integrity review will require ensuring that agency decision-making is ‘not … marred or violated’ and is presented in an ‘unimpaired or uncorrupted condition’ or in an ‘original perfect state’.19 In a broad sense this is the goal of all mechanisms of dispute resolution; for example, standard-setting by courts through the operation of precedent aims to ensure future ‘perfect’ outcomes. Indeed, in this broad sense, ombudsmen, courts and tribunals are part of a system of integrity review. For example, government ombudsmen have traditionally had input into the development of codes of conduct and other soft law regulatory mechanisms in agencies. This is also the case for private industry ombudsmen who have input into the self-regulation of industries through, for example, the creation of industry codes of practice.20 This ability to improve standards of administrative decision-making so as to prevent further complaints arising is integral to the notion of integrity review. Arguably, however, the more acute application of ‘integrity review’ in practice is diametrically opposed to the outcomes delivered by an adversarial system of dispute resolution. This is because, in the adversarial system, disputes arise precisely because there is a view by the litigant or complainant that the administrative decision was impaired and imperfect. Integrity review requires the opposite – that there is no originating dispute due to imperfection or incorrect administrative decision-makers. Indeed,

18 This chapter limits its discussion to ombudsmen as an administrative law institution. It does not venture into debate about applying integrity review across all institutions that perform integrity checks across Australian governments. 19 Forge [2006] HCA 44 [66]. 20 For example, the Telecommunications Industry Ombudsman not only has jurisdiction to investigate breaches of Industry Codes but may also assist other regulatory agencies such as the government regulator (Australian Communications Authority ‘ACA’). Industry codes will not be registered with the ACA unless the ACA is satisfied that the TIO has been consulted.

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effective integrity review means that administrative law will operate to ensure that government agency decision-making is perfect from its inception and that this is an ongoing state of government agency administrative decision-making.

III INTEGRITY REVIEW: FOUND IN THE PROACTIVE ROLES OF OMBUDSMEN

While this sounds too good to be true, it is argued that integrity review is increasingly becoming central to the activities of ombudsmen. This is due to the changing role of Australian ombudsmen whereby emphasis is steadily being given to prioritising proactive standard-setting roles rather than the traditional role of reactive complaint-handling. For the first three decades of operation, the core role of Australian ombudsman offices has been that of an individual complaint-handler.21 This role is reactive and ensures that citizens have an avenue to complain about a wide spectrum of government behaviour ranging from rudeness by officials to delay or lost records. This role provides Australian ombudsmen with an opportunity to identify and rectify ‘the values, including procedural values, which the institution is expected to obey’ (as defined by the third limb of the Spigelman conceptualisation). Clearly, however, in terms of integrity review this means that the focus of ombudsmen has generally not been premised upon assisting government agencies to remain ‘unviolated’ and ‘perfect’ in their administrative decision-making; rather it has performed a retrospective function by attempting to localise and fix the problem retrospectively. It is therefore the proactive roles of the Australian ombudsmen, rather than the traditional individual complaint-handling role, underpinning the call for recognition of ‘integrity review’. There are two such proactive roles: the system-fixing function and the audit function.

A The System-Fixing Role Generally, ombudsmen are recognised as performing dual roles – individual complaint-handling and system-fixing. The systemics role, generally 21 This is the traditional role of most classical ombudsmen: see GE Caiden, ‘The Institution of Ombudsman’ in GE Caiden (ed), International Handbook of the Ombudsman: Evolution and Present Function (London, Greenwood Press, 1983) 3. See further LB Hill, The Model Ombudsman: Institutionalizing New Zealand’s Democratic Experiment (Princeton, Princeton University Press, 1976) and more recent works such as M Seneviratne, Ombudsman: Public Services and Administrative Justice (London, Butterworths, 2002). This remains the core role of most Australian ombudsman offices, as discussed below.

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reflected in proactive activities such as own-motion investigations initiated by ombudsmen, provides a function which transcends the individual complainant, generating recommendations and investigations aimed at improving procedures, policy or legislation. As ombudsmen aim to improve the normative decision-making processes of administration, this role is pre-emptive and conforms to the narrower notion of integrity review, as described above, which is to prevent disputes before they arise by ensuring good administration. While, as noted above, individual complaint resolution is the central function of most ombudsmen, Australian ombudsmen offices, importantly in terms of promoting integrity review, have given steadily more emphasis to addressing systemic problems in public administration, usually by own motion or self-initiated inquiries. Partly that has been justified as a strategic use of resources, and partly it is a response to the development within agencies of more extensive and professional systems for complaint handling.22

B The Audit Role In addition to this growing emphasis upon systemic improvement it is important to also note that a third role for Australian ombudsmen is emerging – that of inspecting, auditing and monitoring. This is a ‘new’23 function for ombudsmen. Recognition of the importance of this role has been noted by Australian ombudsmen. For example, in 2004–05 the Commonwealth Ombudsman stated: [C]ompliance auditing has now developed as a distinct third function of the office, in addition to its traditional functions of complaint investigation and own motion investigations.24

The audit role is separate and identifiable from the more traditional roles of complaint-handling and system-fixing as it implies a lack of interference by ombudsmen in agency policy and processes and instead represents a role which is one of verification and examination.25 This third role cements 22 R Creyke, J McMillan and R Reynolds, Control of Government Action: Text, Cases and Commentary (Australia, LexisNexis Butterworths, 2005). 23 See the comments in Commonwealth Ombudsman, Annual Report (2006–07) ix, which suggests that it has been present in that jurisdiction since 1988. While this role has arguably been part of the operation of ombudsman institutions from inception, it is only recently that it has been embedded in legislation governing the jurisdiction of ombudsmen: see discussion below of the Commonwealth Ombudsman and the New South Wales Ombudsman. 24 Commonwealth Ombudsman, Annual Report (2004–05) 1. 25 A further difference is that this formal auditing role generally involves an ombudsman scrutinising agency policy and processes with respect to powers that most often impact upon the protection of persons, such as preventing child abuse and monitoring telephone interception powers. This is explained further below.

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the ombudsmen institution as an agency of integrity review. Arguably the very nature of any checking and monitoring system is to maintain the health of a process so as to ensure that administrative decision-making systems remain perfect.

IV EXPANDING PROACTIVE ROLES OF AUSTRALIAN OMBUDSMEN 26

This part briefly outlines how each of these proactive roles is increasing across Australian Commonwealth, State and Territory ombudsmen. It highlights that while this is occurring at different rates, the move towards an increasingly proactive focus is acknowledged by all government ombudsmen throughout Australia.

A The Integrity Review Front-Runners: the New South Wales Ombudsman and the Commonwealth Ombudsman The New South Wales Ombudsman (‘NSW Ombudsman’) and the Commonwealth Ombudsman are the offices which have clearly begun to reduce their reactive, individual-complainant focus and increase their proactive roles of auditing and system-fixing. Of the two, the NSW Ombudsman is the flagship example of the shift in roles. The NSW Ombudsman now prioritises system-fixing over the resolution of individual complaints. This is a significant change from the inception of the office in 1975 when the NSW Ombudsman was established as a reactive body to resolve individual complaints about government administration.27 Today the relationship between the roles is effectively reversed: Every year we receive more complaints than we have resources to deal with. To make the most effective use of our limited resources, we give priority to complaints that identify systemic and procedural deficiencies in public administration and individual cases of serious abuse of powers. We also give preference to complaints which, if investigated, are likely to lead to practical and measurable changes through recommendations.28

The investigation and rectification of systemic problems is therefore a central emphasis of the office, although it does value individual complaints: 26 This part considers the Annual Reports of State and Territory ombudsmen from the year 2000. 27 NSW Ombudsman, Annual Report (1999–2000) 13–14. 28 Ibid 64; see also NSW Ombudsman, Annual Report (2000–01) 2.

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‘[A]lthough the focus of our work is on systemic issues that have the potential to affect large numbers of people, we do assist a considerable number of individuals with their grievances with public authorities.29

This shift in roles emphasises the need for recognition of ombudsmen performing integrity review. As the website of the NSW Ombudsman states, [O]ur job is to make sure that the agencies we watch over fulfil their functions properly and improve their delivery of services to the public. We help agencies to be aware of their responsibilities to the public, to act reasonably and to comply with the law and best practice in administration.30

Indeed, if the NSW Ombudsman succeeds in this aim it proactively ensures that agencies remain ‘perfect’ in their delivery of administrative decisions – the aim of integrity review. Further to this point, the NSW Ombudsman is also developing its auditing and monitoring functions.31 The NSW Ombudsman views the auditing and monitoring role as part of its proactive functions. As the most recent Annual Report of the NSW Ombudsman states: While complaint-handling will always be a central and important part of what we do, it is our proactive work that is best suited to bringing about systemic and lasting change. For example, we work closely with agencies providing community services in NSW to help them improve the services they offer. In the past year, we have started to review the complaint-handling systems of more than 370 local councils and public sector agencies. We continue to use an extensive audit program to ensure best practice by agencies – such as our extremely successful audit of the NSW Police Force’s implementation of their Aboriginal Strategic Direction. We bring important community issues to the attention of Parliament including, this year, the policing of domestic violence and six legislative review reports about new police powers. We are providing more training and resources to both agencies and the community than ever before, as well as joining other Ombudsman and government agencies in national and international projects designed to improve complaint-handling practices and oversight systems.32

The above statement confirms the importance the NSW Ombudsman places upon its proactive roles and signals the increasing symbiosis

29 NSW Ombudsman, Annual Report (2000–01) 59. The NSW Ombudsman maintains a significant individual complaint resolution role with 10,096 formal matters being resolved in 2005–06: see NSW Ombudsman, Annual Report (2005–06) 10. In 2006–07 9,569 individual matters were dealt with: NSW Ombudsman, Annual Report (2006–07) 13. 30 See NSW Ombudsman accessed 25 April 2008. 31 The NSW Ombudsman has an extensive range and breadth of powers to audit, scrutinise and review. This includes scrutinising the systems of police, community services and workplace child protection issues; monitoring and reviewing community services; reviewing reviewable deaths; and reviewing the implementation of legislation: NSW Ombudsman accessed 25 April 2008. 32 NSW Ombudsman, Annual Report (2006–07) 1.

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between the tripartite roles of ombudsmen with the auditing function being given a similar status to that of individual complaint-handling and systemfixing roles. It also confirms the notion of ombudsmen removing obstacles to integrity before they occur – a proactive approach of maintaining agency perfection rather than stamping out spot-fires. The role the NSW Ombudsman performs under these audit powers is significantly different to its traditional dual roles of complaint resolution and system-fixing. For example: — The NSW Ombudsman has a variety of non-traditional functions, including reviews of deaths, setting standards, promoting access to advocacy support and monitoring delivery of services.33 — In relation to child protection the NSW Ombudsman has mandatory auditing powers.34 — The NSW Ombudsman also scrutinises the systems the police have in place to deal with complaints about officers.35 — The NSW Ombudsman has also been empowered by the NSW Parliament to oversee the introduction of new legislative schemes – especially where they impact upon civil liberties. The range and application of this audit power is extensive. For example, the NSW Ombudsman recently completed a four-year program of detailed audits to, check how well local police were complying with NSW Police Force’s Aboriginal Strategic Direction (ASD) initiatives in their day-to-day work with Aboriginal communities.36

A similar movement is occurring at the Commonwealth level, where the traditional role of the Commonwealth Ombudsman is to investigate complaints from members of the public about government administrative

33 This is primarily in relation to the monitoring and review of community services, in respect of which the NSW Ombudsman carries out its functions under the Ombudsman Act 1974 (NSW) and the Community Services (Complaints, Reviews & Monitoring) Act 1993 (NSW). 34 Such as being required to audit agencies’ child protection systems by assessing the policies and practices within an agency and providing them with direct advice about best practice and areas for improvement: see Ombudsman Act 1974 (NSW) Pt 3A. 35 See the Police Act 1990 (NSW). Similarly, the office scrutinises compliance by law enforcement agencies with accountability requirements relating to the use of telephone intercepts and undercover operations: Law Enforcement (Controlled Operations) Act 1997 (NSW) and Telecommunications (Interception) (NSW) Act 1987 (NSW). 36 See NSW Ombudsman, accessed 25 April 2008. The NSW Ombudsman also refers to the fact that it has carried out a ‘series of “mystery” audits of customer service standards in the NSW public sector’.

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decision-making.37 Despite this traditional focus, the use of the systemfixing role and audit role is increasing. For example, the traditional dual role of system-fixing38 has become more significant since the early 1990s.39 The auditing role of the Commonwealth Ombudsman is similarly increasing. While monitoring has always been part of the brief of the office in terms of ensuring the adoption of its recommendations made in own-motion investigations, recent legislative change enables the Commonwealth Ombudsman to audit government departments in three distinct areas:40 — The ombudsman is required to inspect the records of the Australian Federal Police (‘AFP’) and the Australian Crime Commission (‘ACC’) twice a year to ensure that they conduct telecommunications interception activities lawfully.41 — The Commonwealth Ombudsman has a new monitoring role to examine the usage of surveillance devices by members of the AFP and ACC.42 — The ombudsman has an oversight role in ensuring that controlled operations are approved and records maintained in accordance with Part 1AB of the Crimes Act 1914 (Cth) and that, in relation to these activities, information supplied by agencies in quarterly reports to both the minister and ombudsman is adequate.

37 Over its 30 years of operation the office has handled around 400,000 complaints and dealt with many more written and oral inquiries: see A Stuhmcke and A Tran, ‘The Commonwealth Ombudsman: An integrity branch of government?’ (2007) 32 Alternative Law Journal 232, 234. This focus fits with the description of the essential features of the Ombudsman Act 1976 (Cth) as stated in the Explanatory Memorandum: ‘[T]he essential function of an Ombudsman is to investigate complaints made to him about administrative functions of officials’. See Commonwealth Ombudsman, Annual Report (1977–78) 3. See also Second Reading Speech, Ombudsman Bill 1976 (Commonwealth), House of Representatives, 4 June 1976 (the Hon RJ Ellicott QC, Attorney-General of NSW). 38 Ombudsman Act 1976 (Cth) ss 5, 15. 39 For supporting data see Stuhmcke and Tran, above n 37, at 235. 40 Commonwealth Ombudsman, Annual Report (2004–05) accessed 25 April 2008. 41 See the Telecommunications (Interception) Act 1979 (Cth). This power has significantly expanded since inception and now includes the Australian Commission for Law Enforcement Integrity (‘ACLEI’) along with increased functions including the storage of information: Commonwealth Ombudsman, Annual Report (2006–07) 109. 42 Surveillance Devices Act 2004 (Cth). The first inspections were carried out in 2005–06.

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B The Integrity Review Second-Runners: the Queensland Ombudsman and the Victorian Ombudsman While not adopting the proactive roles at the same rate as the NSW and Commonwealth front-runners, both government ombudsmen in Queensland and Victoria show signs of increasing their proactive functions. With the introduction of the Ombudsman Act 2001 (Qld), a ‘new era’43 was signified for the Queensland Ombudsman. In terms of facilitating integrity review the legislation formalises a broader role to assist government agencies under the jurisdiction of the ombudsman to improve the quality of their decision-making and administrative practice. This increased proactive system-fixing focus is reflected in the recent Annual Reports of the office. For example, in 2003–04 Mr David Bevan, the Queensland Ombudsman, stated: [n]ow that the workload is at a more manageable level, we can be more proactive in identifying systemic issues of maladministration for investigation, and in pursuing advice and awareness strategies for both the public sector and members of the community.44

More specifically, in 2004–05, the office identified a strategy-identifying system as a goal, with measures of performance stating that almost half of its recommendations were aimed at systemic improvement.45 The most recent 2006–07 Annual Report of the Queensland Ombudsman states in its opening paragraphs that the office has made: efforts to balance our investigative role and our role of helping agencies improve their decision-making policies and procedures. We believe that the significant changes we made in 2006–07 to the way we carry out our responsibilities have helped us to identify the right mix of reactive and proactive work.46

With respect to the third role of monitoring and auditing, the most recent 2006–07 Annual Report of the Queensland Ombudsman states that in relation to achieving its goal of administrative justice it has ‘[d]eveloped an administrative audit approach to identify systemic problems in agencies’.47

43 See Queensland Ombudsman accessed 25 April 2008. The objects of the legislation explicitly recognise a dual role for the Ombudsman: (a) to give people a timely, effective, independent and just way of having administrative actions of agencies investigated; and (b) to improve the quality of decision-making and administrative practice in agencies. 44 Queensland Ombudsman, Annual Report (2003–04) 2. 45 See Queensland Ombudsman, Annual Report (2004–05), Performance Summary 4: ‘Of the 132 recommendations …we made to agencies: Sixty recommendations were made solely to address systemic problems (improving public administration) …; [f]orty-five recommendations were made to address both the complainants’ concerns and a systemic problem …; [t]wenty-seven recommendations solely addressed the complainants concerns.’ 46 Queensland Ombudsman, Annual Report (2006–07). 47 Queensland Ombudsman, Annual Report (2006–07) 15.

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In contrast to the Commonwealth Ombudsman and the NSW Ombudsman, the changes made with respect to auditing and monitoring by the Queensland Ombudsman have been internally conceived rather than being introduced through external legislative amendment. The office has developed its own monitoring systems such as initiating regular meetings with agencies to ensure compliance and to ‘monitor performance and identify complaint trends’.48 Similarly to the Queensland Ombudsman, the Victorian Ombudsman is moving towards an increased emphasis49 upon proactive maintenance of agency perfection. The aim of the office is to reduce individual complaints by proactively ensuring excellent administrative decision-making – the essence of integrity review. For example, in 2005 the Victorian Ombudsman stated: I have been asked why my office has embarked upon such an active program of major investigations. The reason is quite simple. If complaints are only dealt with on an individual basis, it is likely the problems remain entrenched within government agencies. By conducting own motion investigation I am able to investigate systemic issues with the aim of identifying underlying problems. This may lead to changes in practices so that complaint numbers in the longer term will be reduced.50

The Victorian Ombudsman is increasing its jurisdiction with respect to its audit or inspection function51 and also has existing statutory functions to inspect the records of some Victorian agencies to monitor their compliance with relevant legislation.52 These include the record inspection of Victoria 48 Ibid 25. The Queensland Ombudsman has programmes in place such as a ‘Corrections Program’ whereby its officers visit all 12 Queensland correctional centres twice: Ibid 66. There are also signs of expansion of this role. In 2006–07 the Queensland Ombudsman suggested to government that the Coroners Act 2003 (Qld) be amended to provide for the office to undertake a monitoring role of agencies’ implementation of coronial recommendations: Ibid 32. 49 Seventy-seven recommendations for systemic change were made in 2005–06: Victorian Ombudsman, Annual Report (2005–06) 101. 50 Victorian Ombudsman, Annual Report (2004–05) 7. 51 The 2006–07 Annual Report identified additional monitoring and auditing functions given to the office in that year: Victorian Ombudsman, Annual Report (2006–07) 10. The Terrorism (Community Protection) (Amendment) Act 2006 (Vic) identifies the Ombudsman as the only external body that a person held in custody under its provisions can contact to lodge a complaint about their treatment. In addition, Victoria Police must notify the Ombudsman in writing of any preventative detention order. The Victorian Ombudsman also has jurisdiction under the Domestic (Feral and Nuisance) Animals Act 1994 (Vic) to monitor compliance with the provisions of the Act by certain persons appointed by the Department of Primary Industries (‘DPI’) and local councils. The Annual Report also lists audit powers such as monitoring the compliance of RSPCA officers with the Prevention of Cruelty to Animals Act 1986 (Vic): Victorian Ombudsman, Annual Report (2006–07) 67. 52 Victorian Ombudsman, Annual Report (2006–07) 67. Some audit powers have been removed. For example, on 1 July 2006, the inspection functions under the Telecommunications (Interception) (State Provisions) Act 1988 (Vic) were transferred from the Victorian Ombudsman to the Special Investigations Monitor.

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Police53 and establishing protocols with the Department of Primary Industries for the reporting and referral of incidents where authorised fisheries inspectors use defensive equipment, such as capsicum spray, batons, handcuffs and other actions, while exercising their law enforcement functions.

C The Third-Place-Getters: Australian Capital Territory Ombudsman, Northern Territory Ombudsman, South Australian Ombudsman, Western Australian Ombudsman In the remaining Australian States and Territories individual complainthandling remains the priority over the other two proactive roles. The Australian Capital Territory Ombudsman (‘ACT Ombudsman’) states that ‘[c]omplaint handling is the core of the ACT Ombudsman’s role’.54 The ACT Ombudsman contributes to systemic improvements through submissions to the ACT Government upon legislation and to government departments.55 The ACT Ombudsman has gained a new role in monitoring compliance with the child sex offenders register which is kept and accessed by the ACT Chief Police Officer and persons authorised by that Officer.56 Similarly, the resolution of complaints is characterised as the first activity of the Northern Territory Ombudsman (‘NT Ombudsman’). The duality of roles in terms of a systemic function is identified as a secondary activity of the office, being to ‘improve the delivery of services’.57 The NT Ombudsman allocates a percentage of its resources to improving the system of public administration of the territory.58 With respect to audit, the NT 53 To ensure police comply with the requirements of the Melbourne City Link Act 1995 (Vic), which enables Victoria Police to receive restricted tolling information as defined in that Act for law enforcement purposes, two inspections were carried out during 2006–07 to determine compliance: Victorian Ombudsman, Annual Report (2006–07) 10. 54 ACT Ombudsman, Annual Report (2006–07) 2. This role is performed under the Ombudsman Act 1989 (ACT) s 18. In 2006–07 the office received 941 approaches and complaints from the public about ACT Government agencies (528) and ACT Policing (413). 55 This role is increasing: in 2006–07 the Annual Report notes that the Office ‘focused greater effort on making formal reports on investigations about ACT Government agencies than in previous years. This year we provided five reports on our investigations, with three of these under Ombudsman Act s 18. Each report contained recommendations for improvement of processes within the relevant agencies.’: ACT Ombudsman Annual Report (2006–07) 3. 56 The ACT Ombudsman conducted the first inspection of that register in June 2007: Crimes (Child Sex Offenders) Act 2005 (ACT) ch 4. 57 NT Ombudsman, Annual Report (2004–05). 58 In 2003–04 Mr Peter Boyce, in his penultimate annual report following 10 years as the NT Ombudsman, observed that the own-motion power is ‘particularly important in that it does provide an opportunity for the Ombudsman to act proactively to address concerns rather than reactively on the basis of a complaint made directly to the Office’: NT Ombudsman, Annual Report (2002–03) 11. In the 2004–05 reporting year nine per cent of its

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Ombudsman has a newly added audit role under the Telecommunications (Interception) Act 2001 (NT)59 which aims to limit the possibility of abuse of telecommunications interceptions powers through regular inspection, audit and reporting by the NT Ombudsman to ensure compliance with the legislation.60 The NT Ombudsman also performs an internal audit role in following up its recommendations for systemic improvement using the Annual Report to statistically record the outcome of recommended systemic change.61 The South Australian Ombudsman (‘SA Ombudsman’) also maintains heavy emphasis upon individual complaint resolution.62 In a similar manner to its State and Territory counterparts, the SA Ombudsman has a systemic function. For example, the SA Ombudsman states that it will ‘promote the betterment of administrative actions’63 and ‘may also recommend such administrative changes, as he thinks appropriate, in the circumstance of the case’.64 Recent Annual Reports provide examples of where the systemic investigation powers have been used.65 The SA Ombudsman has recently added an audit role.66 This role enables it to review broad structural issues. For example, the office has embarked upon a program to review the operation of local councils and in 2004–05 proposed a review of 15 selected councils for this purpose.67 The SA

total expenditure was allocated to the function of ‘improving system delivery’ by way of comparison the resolution of complaints took 69 per cent of the offices budget for that year: NT Ombudsman Annual Report (2004–05) 15, 29. The office is embedding a systemic proactive approach at the agency level: NT Ombudsman, Annual Report (2005–06) 7. 59 This legislation enables law enforcement agencies in the Territory to be approved by the Commonwealth Attorney-General under the Telecommunications (Interception and Access) Act 1979 (Cth) to intercept telecommunications. 60 The Surveillance Devices Amendment Bill was introduced into the Legislative Assembly in 2007 and will give the NT Ombudsman similar obligations to those under the Telecommunications (Interception and Access) Act 1979 (Cth). This will involve inspecting and reporting on compliance by NT Police since the legislation empowers police to use surveillance devices: NT Ombudsman, Annual Report (2006–07) 7. 61 NT Ombudsman, Annual Report (2004–05) 28. See ch 26, ‘Outcomes of finalized complaints’, which shows that with respect to the NT police there was, in two per cent of cases, change in practice/procedure as a result of a complaint. The office also notes that it is assisted in this by a new computer system introduced in 2002–03: NT Ombudsman, Annual Report (2003–04) 10, 29. For example, in the 2003–04 Annual Report the office states that: ‘[D]uring the year, the Ombudsman made 60 recommendations to government agencies, local councils and the NT police of which 55 were adopted in some form. This amounts to an adoption rate of 92%.’ 62 In 2007 Eugene Biganovsky retired after serving as ombudsman for 21 years. 63 SA Ombudsman, Annual Report (2004–05) 2. 64 SA Ombudsman, Annual Report (2004–05) 14. 65 SA Ombudsman, Annual Report (2003–04) 1, giving the example of the systemic investigation into prisons and referring to it as an ‘audit-style investigation’. 66 Added by the Ombudsman (Honesty and Accountability in Government) Act 2002 (SA). 67 SA Ombudsman, Annual Report (2004–05) 2. The completed audit was reported upon in SA Ombudsman, Annual Report (2005–06) 115.

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Ombudsman therefore reflects the tripartite roles of the new conceptualisation of the public law ombudsmen office with priority being given to individual complaints over the other proactive roles. The Tasmanian Ombudsman falls within this group as it prioritises individual complaints, although it is giving increasing emphasis to its proactive roles. In the 2001–02 Annual Report the Tasmanian Ombudsman noted: There is an increasing trend away from the redress of individual grievances and a growing emphasis on major systemic review and ‘own motion’ enquiries, which have their endpoint an improvement in the overall quality of public administration.68

The vision of the office is to ‘provide effective mechanisms for identifying major systemic issues’69 and the statistics of the office reflect some emphasis upon identifying and recording systemic change.70 The Tasmanian Ombudsman also has a variety of auditing and monitoring roles. For example, he oversees compliance by Tasmania Police, having an obligation to inspect the records of telecommunications interceptions at least once in every six-month period.71 The office also oversees witness protection programmes.72 The Western Australian Ombudsman (‘WA Ombudsman’) views the ‘core business’ or traditional role of ombudsmen as being ‘accessible to any member of the community who wishes to bring a complaint to our attention’.73 The office argues that the transition of the West Australian Government to promoting ‘accountability, transparency and integrity’ within the public sector represents a changing environment where the office will

68

Tasmanian Ombudsman, Annual Report (2001–02). Tasmanian Ombudsman, Annual Report (2003–04) 5. 70 For example, the office identifies that six per cent of its investigations result in policy change: Tasmanian Ombudsman, Annual Report (2004–05) 69. 71 Telecommunications (Interception) Tasmania Act1999 (Tas). The first such audit visit took place in November 2006. A further audit took place in June 2007. 72 Witness Protection Act 2000 (Tas). See Tasmanian Ombudsman, Annual Report (2006–07) 23. The Tasmanian Ombudsman also coordinates the Official Visitors to prisons who are appointed by the Minister under the Corrections Act 1997 (Tas). 73 WA Ombudsman, Annual Report (2005) 1. According to the 2006–07 Annual Report ‘our core function [is] complaint investigation and resolution’. The WA Ombudsman describes its role as follows: ‘[T]he Ombudsman’s main function is to assist the people of Western Australia to resolve disputes with public sector agencies of the State and to help those agencies to be accountable for, and to improve the standard of, their administrative decision-making, practices and conduct.’: see WA Ombudsman accessed 25 April 2008. 69

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increasingly play a more proactive role, assisting State and local government organizations improve the quality of their administrative decision-making, practices and procedures.74

The above comments signal a willingness of the WA Ombudsman to move to a more proactive focus in relation to systemic improvements. Four own-motion investigations were undertaken and reported upon in 2007, as opposed to one own-motion investigation being commenced in 2004.75 This reflects a greater commitment of time and resources by the office to systemic and formal investigations. Foreshadowing this shift in focus, the 2007 Annual Report states: In addition to investigating individual complaints, the Ombudsman’s office is increasingly focused on working proactively with the public sector to improve public administration. We do this in a range of ways such as undertaking major investigations of systemic issues and developing resource materials for use by the public sector, for example, The Ombudsman’s Redress Guidelines. In the coming year we will improve our capacity to identify key issues of systemic and serious importance either within single agencies or across the public sector generally. This will enable us to utilise our resources strategically to address areas of greatest need.76

Similarly to most other State ombudsmen, the office has an audit role with respect to telephone interceptions and the police. In relation to this role the WA Ombudsman has adopted its own monitoring process, stating: Our processes have been improved to include automatic audit of the implementation of recommendations and suggestions to agencies after six months. We also plan to strengthen our case management system by introducing an electronic tracking method to ensure agencies are acting on their commitments to improve public sector processes.77

V WHY APPLY INTEGRITY REVIEW TO OMBUDSMEN?

The above overview of Australian ombudsmen indicates, to differing degrees, that all Australian ombudsmen are giving increasing emphasis to proactive activities. This is likely to continue due to the unique position of the institution. As Australian government ombudsmen are a mechanism of administrative law they generally have a whole-of-government approach which is crucial to effective integrity review. This is a practical consideration of governments when granting ombudsmen increasing jurisdiction. 74 75 76 77

WA WA WA WA

Ombudsman, Ombudsman, Ombudsman, Ombudsman,

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For example, in NSW, when the decision was made by the State Government to transfer responsibility for privacy protection from the Privacy Commissioner to the ombudsman, the government noted the following reasons for transferring the powers to the NSW Ombudsman: —

the ombudsman has high public profile and expertise in administration

—

the ombudsman has experience in information management

—

the dual role of the ombudsman in relation to freedom of information and privacy will promote and integrated and coherent approach to information handling.78

As all Australian government ombudsmen have this ‘whole of government’ approach they are uniquely placed to ensure accountability of agencies with respect to improving overall government practice. To take the example of auditing, ombudsmen have regular contact with government administrators and industry resulting in the development of specialist knowledge which places ombudsmen in a unique position to encourage effective complaint handling processes and to promote standards of ‘good practice’. It is suggested that it is useful to think of ombudsmen as a mechanism of ‘integrity review’ for two central reasons. First, integrity review will assist in constructing a conceptual framework within which to understand and construct the expanding roles of ombudsmen. Second, integrity review has the potential to offer courts and tribunals a tool to render ombudsmen accountable through defining the limits of the operation of the office. Each of these is dealt with in turn.

A Integrity Review: a Conceptual Framework Integrity review may provide a measure of value. The absence of effective measures for valuing and proving economic significance is a major difficulty for all institutions in the wider system of the administration of justice. The point, well made by the Hon M Gleeson with respect to courts, is that if something is impossible to measure it is treated as if it does not exist.79 Justice Gleeson’s observation, which applies to the funding of courts, may be extended to ombudsmen. Arguably, as ombudsmen move 78 Second Reading Speech, Privacy and Personal Information Protection Amendment Bill 2003 (New South Wales) House of Representatives, 10 November 2003 (Bryce Gaudry on behalf of Bob Debus, A-G of NSW). 79 The Hon M Gleeson, ‘Managing Justice in the Australian Context’ (Speech delivered at the Australian Law Reform Commission Conference, Sydney, 19 May, 2000) accessed 9 March 2005.

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increasingly towards a systemic and auditing focus, the value of contributions to the improvement of public administration will become even more difficult to quantify.80 More specifically, in the past, descriptions such as ‘enigma’81 have been used to describe what ombudsmen do. The fact that the role of ombudsmen is capable of this description indicates a need for a conceptual framework, such as integrity review, which will assist in evaluating the performance of ombudsmen. Such a framework will assist the institution of the ombudsmen to defend its record, promote its aims or measure its value in the improvement of public administration. Given the expanding82 roles of the Australian ombudsmen (particularly at the Commonwealth level and in NSW) it is important for ombudsmen, who aim to ensure accountability of government decision-makers, to also be seen to be transparent. The usefulness of ‘integrity review’ is that once ombudsmen are framed as a mechanism of integrity review, the institution itself will be subject to assessment against defined criteria. To provide a practical example of how useful the framework of ‘integrity review’ may be, below are brief descriptions of two proactive systemic investigations, performed by two former Commonwealth Ombudsmen under own-motion powers of investigation. Following the descriptions is a brief discussion which suggests these investigations may be assessed transparently against an integrity framework. (i) Example 1 In a report titled ‘Report on the Investigation into a Complaint about the Processing and Refusal of a Subclass 202 (Split Family) Humanitarian Visa Application, August 2001’, Mr Rob McLeod, Commonwealth Ombudsman, stated: This investigation into the operation of the immigration portfolio states in the executive summary that: The history of this case is one of administrative ineptitude and of broken promises. Four and a half years after Mr Shahraz Kiane first attempted to bring his family to Australia, he is dead as a result of self-inflicted injuries sustained when he set fire to himself outside Parliament House. 80 This is the case as it is comparatively easy to measure cost performance in terms of individual complaints resolved but more difficult to assess the value of an audit or system fixing role. 81 R Snell, ‘Australian Ombudsman: A continued work in progress’ in M Groves and HP Lee (eds), Australian Administrative Law (Cambridge, CUP, 2007) 188. 82 As Professor John McMillan, the current Commonwealth Ombudsman, states: ‘[I]t is a matter of pride for the Ombudsman’s office that its stature and relevance has grown rather than diminished over thirty years’: Commonwealth Ombudsman, Annual Report (2006–07) ix.

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Further: From an administrative viewpoint, the handling of this case is a tragic reminder to all Government officials that in applying bureaucratic processes and procedures they should never lose sight of the human dimension of their work.

(ii) Example 2 Ombudsman Philippa Smith, in a report titled ‘Investigation into a Complaint about the Department of Primary Industries and Energy’s administration of the National Landcare Program in relation to a grant to a Community Landcare Group’, stated: The complaint highlighted a number of systemic problems in the administration of the National Landcare Program. These were the need for: —

procedures and policies to avoid conflicts of interest involving land owners and Government officials directly assisting Landcare groups;

—

redesign of application form used by Landcare groups to apply for grants;

—

the adequacy of mechanisms for verification of eligibility criteria;

—

the need to co-ordinate with states measures to improve the maintenence of records kept by Landcare groups; and

—

improved monitoring of the funding agreement between the States and the Commonwealth, particularly in regard to the verification and assessment of amounts claimed as project costings and group contributions.

The above examples illustrate what is traditionally difficult to define about ombudsmen: their impact in the humanisation of defective administration, or, in the words of the Hon G Brennan, the ‘integrity of administration’.83 Example One demonstrates the humanitarian focus of the office and its interest in improving the personal and individualistic element of administration. Example Two shows how wide-ranging the recommendations for systemic improvement by ombudsmen may be and demonstrates how no aspect of administration is quarantined from its scrutiny as to what constitutes ‘fair’ administrative process. It is this contribution to the improvement of administration in terms of integrity and humanity which will arguably, without a framework such as integrity review, remain part of the enigma of the office. It is here that the integrity impact of the office of ombudsmen may be demystified through the application of an integrity review framework. Through unpacking notions of what it means to have integrity – to be ‘sound’, ‘unimpaired’ and ‘perfect’ in terms of government administration – it may be possible to assess the contribution of the above own-motion 83

The Hon G Brennan, above n 11.

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investigations of ombudsmen. For example, the first own-motion investigation is an attempt to ensure humanity in administration; the second own-motion investigation sets standards and processes for facilitating effective administration. Both investigations meet requirements of integrity – they aim to contribute to an improvement in the quality of government administration through providing both administrative morality which is sound (in Example One) and administrative processes which are perfect and unimpaired (Example Two). While unpacking integrity means using terms such as ‘sound morality’ and ‘perfect process’, which may be nebulous and raise doubts as to whether they can be achieved in practice, they are nonetheless useful in providing measurement targets as to how ombudsmen may contribute to improving the quality of government administration.

B Integrity Review: an Accountability Tool Apart from using integrity review as a conceptual framework it is useful to apply the concept as a performance indicator to measure the appropriateness of the actions of ombudsmen. This part proposes that integrity review be used in the same manner as judicial and merits review with respect to controlling the operation of ombudsmen. The current judicial approach to the new powers of ombudsmen is to apply the traditional wide interpretation of powers rather than reading down the legislative mandate for the office.84 In the only Australian reported decision of a superior court on point, K v NSW Ombudsman,85 the court determined that the ‘new’ functions86 of ombudsmen should not be read down but rather should be given ‘ample meaning’.87 This judgment cited with approval the statements of Kirby P (as he then was) with respect to the NSW Ombudsman in the NSW Court of Appeal decision Botany Council v The Ombudsman:88 Those powers, as the Ombudsman Act reveals are, as they ought to be, extremely wide. They are not powers which this Court should read down. They are beneficial provisions designed in the public interest for the important object of improving public administration and increasing its accountability, including to ordinary citizens such as [the original FOI applicants here]. Sadly, the experience of the past (and not only the past) has been of the occasional misuse and even 84 Botany Council v Ombudsman (1995) 37 NSWLR 357 (Kirby J); Ainsworth v Ombudsman (1988) 17 NSWLR 276 (Enderby J). 85 [2000] NSWSC 771. 86 Ombudsman Act 1974 (NSW) ss 25D, 25E, 25F, 25G. 87 K v NSW Ombudsman and Anor [2000] NSWSC 771 [61] (‘K’), citing Botany Council v Ombudsman (1995) 37 NSWLR 357, 367. 88 (1995) 37 NSWLR 357, 363, 367–8.

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oppressive use of administrative power. One modern remedy against such wrongs has been the creation by Parliaments in all jurisdictions of Australia of the office of Ombudsmen. Whilst it may be expected that the Ombudsman will conform to the statute establishing office, a large power is intended. The words of the Ombudsman Act should be given ample meaning.

In K the plaintiff, a teacher accused of child abuse, argued that the new audit powers did not invest the ombudsman with power to investigate whether or not child abuse was in fact perpetrated. Instead, the plaintiff argued that the ‘traditional’ role of the ombudsman was ‘to improve public administration and increase the accountability of public administrators’ and that the ombudsman’s powers and procedures as established by the Act revolve around investigation by the ombudsman of the conduct of ‘public authorities’.89 Justice Whealy examined the functions granted in 1999 to the NSW Ombudsman, which gave the office power to oversee agencies, systems and procedures for preventing child abuse by employees and systems for responding to allegations of child abuse in the employment setting,90

including a surveillance function, a monitoring function, a response to notifications function and the functions to investigate child abuse allegations and any inappropriate handling or response to any such child abuse allegations. His Honour rejected the plaintiff’s approach and accepted that the traditional wide judicial interpretation of the powers of the ombudsman should apply to the new legislative audit functions. This approach to the new proactive powers of the NSW Ombudsman therefore accepts that the new auditing type roles of ombudsmen91 must also include considerations of substance. As Whealy J noted: [E]ven in the monitoring role, he is actively concerned with the substance of the child abuse allegation itself … Unless the Ombudsman is able to determine whether or not there is any substance underlying an allegation of child abuse or, alternatively, the nature of conduct giving rise to a conviction (if any), there is no adequate basis for the Ombudsman to assess the systems in place to monitor prevention of child abuse or the system in place to deal with allegations and convictions.92

In this sense the proactive audit function of the NSW Ombudsman with respect to child abuse is not restricted to investigating whether decisions of government conform to procedures and policies but is broader, ensuring that individuals are treated equitably and justly and through implementing 89 90 91 92

K [2000] NSWSC 771 [43]. Ibid [42]. As applied to Ombudsman Act 1974 (NSW) pt 3. K [2000] NSWSC 771 [86].

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investigations to determine the facts of allegations and review agency conduct. Both the proactive system-fixing and auditing roles of ombudsmen will take into account wider values, rights, questions of law and administrative practice, and give additional leverage to notions of fairness and equity as well as determining matters of substance. The proactive powers of ombudsmen are therefore far-reaching and it is here that the possibility of integrity review being used by both courts and tribunals arises. Applied as a jurisdictional review mechanism, integrity review may ensure the boundaries of use of proactive functions by ombudsmen. For example, in K the use of integrity review principles have allowed the court to assess the use of the audit powers of the NSW Ombudsman in terms of the whether the ombudsman was ensuring that the conduct of the Department in relation to disciplinary proceedings against the plaintiff was ‘perfect’ and ‘sound’. An application of the principles of ‘integrity review’ would lead the court in K to the same issue upon which the original decision turned. That is, whether it is necessary for the NSW Ombudsman to have jurisdiction to investigate the alleged involvement of the plaintiff in child abuse. In applying principles of integrity review a court may assess whether it was ‘sound’ and conduct within the ‘perfect’ state of the ombudsmen institution to investigate the substance of the allegation of child abuse. It is of course speculative to consider what the outcome may have been if concepts of integrity review were applied to this situation by the court. At most it can be said that it would at least have been open to the court to reverse the outcome reached, given that the role of ombudsmen is not to re-open investigations, but rather to examine the processes and procedures employed and, at most, to recommend a new investigation by another independent entity. As a tool of review, integrity review is therefore positive in that it offers a reviewer (such as a court) of impugned conduct allegedly contravening integrity the necessary flexibility in both interpretation and application. While ‘integrity review’ may not offer simple solutions, its value rests in ensuring that ombudsmen are made accountable for the application of the new proactive roles. It is extremely important for ombudsmen to be subject to scrutiny. Just as the significance of the ombudsmen institution is that it ‘bring[s] the lamp of scrutiny to otherwise dark places even over the resistance of those who would draw the blinds’,93 the viability of the institution rests upon the perception of its own accountability and transparency of operations within a democratic system of government. Integrity review, like judicial review and merits review, offers the possibility of not

93

Re Ombudsman Act (1970) 72 WWR 176, 190, 192 (Milvain CJ).

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just a practical test of boundaries for ombudsmen powers but a symbolic normative parameter of checks and balances for the operation of the institution itself.

VI CONCLUSION

The concept of ‘integrity review’ and its application as a test of validity to the proactive decision-making roles of ombudsmen is a novel one. There is little doubt that if applied in practice it will be subject to the same uncertainty and debate as its projected counterparts, judicial review and merits review. The importance, however, of at least debating recognition of integrity review is of more than passing academic interest. Application of judicial review and merits review to courts and tribunals aims to ensure the institutional integrity of those institutions. Similarly, in light of the changing role of Australian ombudsmen, there should be a similar form of review available to apply to the operation of those offices. In a system of democratic accountability we need to ensure that the watchdog institutions that monitor and recommend improvements such as ombudsmen are also evaluated by integrity standards. Naturally, there are limitations upon such a suggestion. It may not be appropriate for every ombudsman or for all jurisdictions. The office of ombudsmen is crafted to fit the government, industry or institution in which it operates and there are numerous descriptions of what ombudsmen do. These include: ‘combin[ing] the judicial functions of judge or magistrate and the administrative functions of an inquisitor’;94 a ‘strange mixture of counselling, mediation, investigation, analysis and administrative recommendation’;95 ‘a person who redresses the power imbalance’;96 a ‘man or woman who combines the functions of a mediator, reformer, and fighter’;97 a ‘unique institution’; and an ‘idea which has no precise demarcation’. Such descriptions highlight there is no one ‘model’ of an ombudsman. This point is reinforced through the prior overview of Australian ombudsmen which confirms different rates of development and varying emphases. Given that Australia is a federation it is appropriate that each office develop and adapt to best meet the needs of the citizen and to ensure 94

Commonwealth Ombudsman, Annual Report (1977–78) 7. H Selby, ‘Ombudsman Inc: A British Stock with a Bare Performance’ (1989) 58 Canberra Bulletin of Public Administration 174, 174. 96 Commonwealth Ombudsman’s First Annual Report, ‘The Concept of Ombudsman’ in The Ombudsman through the Looking Glass (Proceedings of a Seminar at the Law School, The Australian National University, 7 September 1985) 214. 97 A Maloney, ‘The Ombudsman as Mediator, Reformer, and Fighter?’ in GE Caiden (ed), above n 19, at 71. 95

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government accountability in each jurisdiction. Ombudsmen adjust to suit the socio-political, economic and legal environment within which they operate. Conversely, it must also be acknowledged that there is a shared history of Australian ombudsmen which means that similar movements are reflected across their roles.98 Essentially, this chapter suggests three reasons as to why Australian ombudsmen will become increasingly proactive and therefore reinforce the call for integrity review: 1. The changing and expanding role of the ombudsmen is facilitated by the whole-of-government approach which the institution is able to bring to bear in performing its functions. Increasingly, as ombudsmen see their role as proactively improving defective administration this whole-of-government approach becomes critical. This point is succinctly made by Bruce Barbour, the current NSW Ombudsman, in the 2005–06 NSW Annual Report: Our wide-ranging powers and jurisdiction have been of concern to some who believe it is better to have specialised watchdogs focused on individual agencies (for example, the police) or on groups of agencies providing similar services (for example, community services). But it is this very characteristic that gives us the unique capacity to identify issues of systemics failure and that involved more than one agency, and find ways to fix those problems. Our ability to see the whole picture – to garner information from a variety of sources and influence a range of players – is invaluable in producing success where there was failure.99

To clarify, the difference is one of seeing government as a whole with a need to improve its functioning as opposed to seeing government as individual agencies serving individual citizens. The implication of the above quotation is that the wider the jurisdiction of an ombudsman the more effective its impact as an institution of integrity review will be. As ombudsmen receive complaints across the entire spectrum of government administration they are uniquely placed, therefore, to develop a broad perspective on the overall effectiveness of service delivery in the public services and some of the practical issues facing agencies. 2. There is a ‘quiet revolution’ taking place in the ‘institutional design

98 Bennett, in a comparative study across OECD countries of the introduction of ombudsmen, has termed this the ‘ripple effect’, noting that policymakers draw inspiration from their counterparts in other jurisdictions: they ‘draw lessons; they learn; they borrow; they emulate; they even “pinch” and “copy”’: CJ Bennett, ‘Understanding Ripple Effects: The Cross-National Adoption of Policy Instruments for Bureaucratic Accountability’ (1997) 10 Governance: An International Journal of Policy and Administration 213. 99 NSW Ombudsman, Annual Report (2005–06) 1.

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Anita Stuhmcke and ideological foundation of governance in Australia’.100 Since the introduction of ombudsmen in the 1970s the nature of Australian governments, and of law itself, has significantly transformed. Processes of privatisation and corporatisation introduced in the 1980s and 1990s impact upon the public sector by facilitating, within government agencies, emulation of private sector ordering. Principles of economic rationality and managerialism have been variously adopted by the public sector with the result that the nature of law regulating government agencies has significantly altered. As Michael D’Ascenzo, the Commissioner of the Australian Taxation Office stated in 2007, [P]ublic sector bodies are now setting up systems and processes to test the health of their organisations. And the health of the system is more than compliance with law including administrative law.101

D’Ascenzo goes on to note that administrative law is only one of the many forms of regulatory options which govern behaviour in the public sector; instead, codes of conduct, standards and guidelines are increasingly prevalent ‘quasi-legal’ (or grey law or soft law) forms of regulation. Once it is recognised that ombudsmen embed values it is a short step to appreciate the significance of this institution in a new regime of government and governing which is increasingly using soft law to regulate agency decision-making concerning citizens. 3. The ombudsmen institution is both a comparatively102 nimble and responsive institution of administrative law. As noted above, the increasing use of ‘soft law’, which exists separately from hard or black-letter law and may include of ‘policy, rules of conduct and professionalism’, will play an increasingly large part in driving behaviour and setting standards within the public service.103 The ombudsman institution (which has arguably always had a ‘soft law’ focus) is best placed to improve processes and procedures which may be more influenced by departmental attitude and norms than black letter administrative law.

100

101

102 103

This term is borrowed from S Free, ‘Across the Public/Private Divide: Accountability and Administrative Justice in the Telecommunications Industry’ (1991) 21 Australian Institute of Administrative Law Forum 1. M D’Ascenzo ‘Effectiveness of Administrative Law in the Public Service’, (Paper presented at the 2007 National Administrative Law Forum, Canberra, 14–15 June 2007)

accessed 25 April 2008. D’Ascenzo hypothesises that this is due to administrative law standards with their emphasis on ‘fairness, rationality, lawfulness, transparency and efficiency focus on process rather than outcomes’. As compared to courts and tribunals. M D’Ascenzo, above n 101. While this paper is referring specifically to the ATO it arguably applies across all Australian jurisdictions where privatisation and corporatisation reforms have occurred.

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Given the above factors it seems likely that the tripartite roles of ombudsmen will become the norm. It is plausible that we are at a juncture in the path of the aims and operation of the ombudsmen institution’s development. On the one hand an increasing focus by Australian public law ombudsmen on the more proactive roles of system fixing and the newly created role of auditing could reflect a broader shift and maturity in the institution. That is, if these proactive roles are positioned within the traditional umbrella of ombudsmen operations they reflect a ‘coming-ofage’ of the institution. This is because the institution is no longer forced to react to individual complainants but instead may actively complement the individual complaint handling role by ‘drilling-down’ to correct underlying deficiencies in the system of government administration. On the other hand, it may be argued that these changes in the role and function of ombudsmen fundamentally alter the nature of ombudsmen and the landscape of public accountability mechanisms. At worst, as del Villar warns in relation to the expansion of functions of ombudsmen, greater attention needs to be paid to the accountability mechanisms in place to scrutinise the performance by ombudsman of these functions. Otherwise, there is a real risk that the very existence of ombudsman will legitimise public decisionmaking without providing either accountability or administrative justice for the individual.104

At best then a growth in functions may position the ombudsmen institution upon a more legalistic and determinative footing; at worst it may place ombudsmen upon a slippery slope of supplying a convenient managerial tool for executive government rather than accommodating the needs of citizens. Within this scenario the notion of integrity review resonates. The institution has always been concerned with ensuring that administrative justice is achieved. While the borders and definitions of the roles of ombudsmen may be subject to debate,105 the expansion of jurisdiction and roles of the institution inevitably raises the question as to its place in the landscape of government accountability. This chapter suggests that ‘integrity review’ provides a framework within which to begin to style and model the growing import and ever-increasing jurisdiction of Australian ombudsmen. As noted by Mark Aronson, ‘we want a legal system which addresses the ideals of good government according to law’.106 Administrative law aims to ensure good government based upon legal traditions and values. The 104

del Villar, above n 4. For example, it could be suggested that the ombudsman has a fourth, educative, role. However, for the purposes of this chapter it has been assumed that this role falls within the system-fixing role of the institution. 106 M Aronson, B Dyer and M Groves, Judicial Review of Administrative Action (Sydney, LawBook Co, 2004) 1. 105

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concept of integrity review embeds these aims. In handling complaints against agencies, in initiating own motion investigations and in auditing administrative decision-makers ombudsmen aim to embed principles of administrative law which include fairness, rationality, lawfulness, transparency and efficiency. They will mesh with these principles other relevant influencing factors such as agency policy, codes of conduct and professional requirements, including investigating alleged violations by public officials of rules, policies, ethics, morality or even good manners. Despite the blurred edges of defining integrity review ombudsmen are arguably an appropriate and uniquely positioned administrative review mechanism to offer integrity review, thereby ensuring institutional integrity of government agencies. Similarly, ombudsmen must be subject to the same standards of integrity review.

POSTSCRIPT

This paper is a back to the future return to a topic upon which Professor Aronson previously asked me to present to his students. Mark had sent through the following ‘stream of consciousness email’ outlining a possible topic: the changing role of the NSW State Ombudsman as far as his/her roles have expanded to the supervision of DNA databases, child assault allegations, and so on. We were thinking that as regards the latter, the Ombudsman’s role is pre-eminently one of setting process standards and auditing compliance – quite a different focus from the O’s initial role.

As I am sure justice was not done to Mark’s ideas on the day, this chapter revisits concepts raised by his email. Professor Mark Aronson has an erudite, sustained and robust interest in the challenges and issues confronting administrative law in the face of ongoing legal and non-legal regulatory reform. As it is somewhere here that our paths cross I thought it appropriate to provide a tribute to his remarkable and ongoing career on this point. This chapter is intended to reflect the inspiration to have freedom of thought that can be given by such a wonderful and awe-inspiring scholar – thank you, Mark.

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16 Soft Law v Hard Law ROBIN CREYKE AND JOHN MCMILLAN *

I THE EMERGENCE OF SOFT LAW

T

HE FIRST DISCUSSION of ‘soft law’ in the context of Australian regulation was in 1997 in the report of the Commonwealth Interdepartmental Committee on Quasi-regulation (‘Committee’).1 The Committee noted that quasi-regulation – which it dubbed ‘grey-letter law’ – was of concern principally for two reasons: ‘quasi-regulation can affect the behaviour of businesses and impose a burden similar to explicit government regulation’; and ‘there is no mechanism for ensuring that specific quasi-regulatory arrangements confer a net public benefit’.2 Thereafter, like Sleeping Beauty, the concept slept for the next decade, to be reawakened by Aronson, its Australian Prince Charming, in 2007.3 By then soft law was well known in the international literature, having appeared in the discourse from the 1970s.4 That comes as no surprise, since international law rules often appear in the guise of soft law, lacking as they do the secondary rules of recognition that give force to domestic rules.5 For similar reasons, soft law is prevalent in other supra-national * The authors acknowledge with gratitude the research done by Tom Smyth for the purposes of this chapter. 1 Commonwealth Interdepartmental Committee on Quasi-regulation, Grey-letter Law (December 1997) (‘Grey-letter Law report’). The Committee did not use the term ‘soft law’. 2 Ibid x. 3 M Aronson, ‘Private Bodies, Public Power and Soft Law in the High Court’ (2007) 35 Federal Law Review 2. 4 There is a wealth of writing on the World Bank Guidelines. See, eg, International Council of Environmental Law, International Environmental Soft Law: A Collection of Relevant Instruments (1993). 5 See J Klabbers, ‘The Undesirability of Soft Law’ (1998) 67 Nordic Journal of International Law 381,384: ‘[A]s Hart already pointed out … international law may be a collection of norms, but the rules on where those norms come from, how they can be changed, who is to enforce them, etc, are nebulous at best. And where the secondary rules are indeterminate, there is much scope for inventions and creativity, much more so that in the strict Procrustean confines of a well-developed legal system.’

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groupings such as European Community law.6 There was growing attention paid to soft law rules in other jurisdictions in the late 1980s and 1990s.7 The Committee’s Grey-letter Law report raises a number of questions. If business regards quasi-regulation as imposing burdens, what is the legal source of those burdens and is the concern realistic? A related question is what controls exist over the making and implementation of quasiregulatory or soft law rules? To answer those questions it is necessary to explore: what is soft law; its emergence in Australian domestic law; the prevalence of the concept; problems arising from soft law; its impact on Australian administrative law; its legal status in administrative law; and why it has, to date, received so little attention in Australia. Building on that analysis, this chapter proposes a place for ‘soft law’ in the spectrum of norms that impact on business and public administration.

II WHAT IS SOFT LAW?

The expression ‘soft law’ is, at first sight, a non sequitur. Law is either ‘hard’ – that is, enforceable, ultimately by the state – or it is not law. A norm that lacks formal consequences is foreign to the lexicon applied to describe a domestic legal system. Nonetheless, as this chapter argues, it may be the paucity of our legal lexicon, rather than the expression itself, which is deficient. Cini adopts the following definition of soft law: ‘rules of conduct which, in principle, have no legally binding force but which nevertheless may have practical effects’.8 The definition in the Grey-letter Law report is: ‘the range of rules, instruments and standards where government influences businesses to comply, but which does not form part of explicit government regulations’.9 Sossin and Smith described ‘soft law’ as ‘any written or unwritten rule which has the purpose or effect of influencing bureaucratic decision-making in a non-trivial fashion’.10 6

Ibid 384–7. See, eg, M Cini, ‘From Soft Law to Hard Law? Discretion and Rule-making in the Commission’s State Aid Regime’ (2000) Working Paper 35, European University Institute 4. 8 Ibid 4 (citing Snyder 1993). 9 Grey-letter Law report, above n 1, at ix. The definition was adopted by the Administrative Review Council for an Issues Paper on ‘Administrative Accountability in Areas where Business Activities are Subject to Complex Regulation’ (2008) 5 (‘ARC internal paper’). See also Office of Best Practice Regulation, Best Practice Regulation Handbook (2007) 17. 10 L Sossin and C W Smith, ‘Hard Choices and Soft Law: Ethical Codes, Policy Guidelines and the Role of the Courts in Regulating Government’ (2003) 40 Alberta Law Review 867, 871. 7

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In Australia the Administrative Review Council in a background paper for a study of complex business regulation, provided the following description: Soft law is concerned with rules of conduct or commitments. Second, these rules or commitments are laid down in instruments which have no legally binding force as such, but are nonetheless not devoid of all legal effect. Third, these rules or commitments aim at, or lead to, some practical effect or impact on behaviour.11

These definitions have the advantage of being principled in form. They suggest that soft law rules can be analogised to other rules on the basis of their purpose and effect.12 The descriptions generally exclude rules that form part of positive law, but draw the analogy that a distinguishing feature of soft law is that it is intended to influence behaviour. How soft law achieves this is not spelt out, except to say that an intention to do so is discernible and this intention is supported because the rules are not ‘devoid of all legal effect’. In summary, these descriptions suggest that there is a range of ‘rules’, and a spectrum of incentives, from an expression of intention to some form of legal enforceability mechanism, which come under the ‘soft law’ umbrella. It is important to note that in discussions of soft law it is common to find no distinction is drawn between rules that are promulgated in the form of a legislative instrument and those that have little or no statutory backing. That distinction is, however, maintained in this chapter, though the unavoidability of overlap is accepted. Another approach to defining soft law is to list examples of what is meant by soft law or quasi-regulation. An example in Australia is the Grey-letter Law report, stating that quasi-regulation comprises many forms such as codes of practice, advisory notes, guidelines, and rules of conduct, issued by either non-government or government bodies.13

The report goes on to describe quasi-regulation in these terms: Quasi-regulation refers to the range of rules, instruments and standards where government influences business to comply, but which does not form part of explicit government regulation.14

Aronson too described soft law as ‘internal guidelines, rule books and practice manuals of both public and private authorities’.15 Cini, for the purposes of European Commission law, refers to ‘codes of conduct, 11

ARC internal paper, above n 9. The Council will publish a report on this project in

2008. 12 Although Sossin refers to soft law as including unwritten rules, the indeterminacy of oral communication makes it too difficult to decide whether oral communication has the effect that is identified as an indicia of ‘soft law’. 13 Grey-letter Law report, above n 1, at ix. 14 Ibid 7. 15 Aronson, above n 3, at 3.

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frameworks, resolutions, communications, declarations, guidance notes, and circulars’.16 Sossin defines soft law as ‘informal guidelines, circulars, operational memoranda, directives, codes and oral instructions’ that may be given to communicate judicial standards to front line decision-makers.17 In a later publication, he refers to ‘[r]ules, manuals, directives, codes, guidelines, memoranda, correspondence, circulars, protocols, bulletins, employee handbooks and training materials’.18 Baldwin and Houghton, who have written extensively on this topic, list eight categories of soft law: procedural rules, interpretative guides, instructions to officials, prescriptive/evidential rules, commendatory rules, voluntary codes, rules of practice, management or operation, and consultative devices and administrative pronouncements.19 Some categories of rules (or instruments) are common to all those definitions. A deficiency in the definitions, however, is a tendency to be over-inclusive, while not giving sufficient information to enable a classification to be made. Without knowing the content of a particular species of instrument, it is impossible to draw guidance from the list about whether a particular instrument should be classed as soft law, or be placed further along the spectrum as an administrative instrument that, for example, provides policy guidance on the administration of a government program. A ‘circular’ or ‘bulletin’ may do little more than describe the objectives or timelines of a program. A ‘guidance note’ may only specify the template for preparing a formal advice or reasons statement. The code of conduct for an organisation may simply be aspirational – along the lines of the Australian Public Service (‘APS’) Values, stating that ‘the APS is apolitical, performing its functions in an impartial and professional manner’.20 Statements of that kind tell the public what they should expect of officials, but they are not prescriptive. An instrument called a code, a guide, or another of the titles listed earlier, cannot from that description alone be classified as ‘soft law’. An additional quality is needed, along the lines of the more principled approaches listed earlier. It is what an instrument does, not what it is called, that is important.

16

Cini, above n 7, at 4. L Sossin, ‘The Politics of Soft Law: how Judicial Decisions Influence Bureaucratic Discretion in Canada’ in M Hertogh and S Halliday (eds), Judicial Review and Bureaucratic Impact (Cambridge, CUP, 2004) 130. 18 Sossin and Smith, above n 10, at 871. 19 R Baldwin and J Houghton, ‘Circular Arguments: The Status and Legitimacy of Administrative Rules’ [1986] Public Law 239, 241–5. 20 Public Service Act 1999 (Cth) s 10(1)(a). 17

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A Statutory Definition? Some account must be taken, in this definitional quest, of statutory categorisations of legislative and other rules. The most developed framework is now the Legislative Instruments Act 2003 (Cth) (‘Legislative Instruments Act’), which lays down a framework for the making, publication and parliamentary scrutiny of legislative instruments. Implicitly, the Legislative Instruments Act distinguishes legislative from non-legislative instruments, and it might be thought that soft law instruments fall into the non-legislative category. Section 5 of the Legislative Instruments Act defines a ‘legislative instrument’ in the following manner: 5 (1) Subject to sections 6, 7 and 9, a legislative instrument is an instrument in writing: (a) that is of a legislative character; and (b) that is or was made in the exercise of a power delegated by the Parliament. (2) Without limiting the generality of subsection (1), an instrument is taken to be of a legislative character if: (a) it determines the law or alters the content of the law, rather than applying the law in a particular case; and (b) it has the direct or indirect effect of affecting a privilege or interest, imposing an obligation, creating a right, or varying or removing an obligation or right. (emphasis supplied)

A noticeable feature of this definition is its circularity: a ‘legislative instrument’ is an instrument that is ‘of a legislative character’. The further guidance given in section 5(2) is helpful in spelling out the notion of legislation, although terms such as ‘determines the law’ and ‘indirect effect’ are expansionary and, in part at least, question begging. Nor is it easy to gauge, at the level of principle, whether paragraphs (2)(a) and (2)(b) cover different territory or overlap. Perhaps not surprisingly, the Legislative Instruments Act contains a mechanism for deciding doubtful cases, by way of the Attorney-General certifying whether an instrument is legislative or not (section 10). Another feature of the Legislative Instruments Act provides more practical guidance in identifying instruments analogous to but excluded from the definition of legislative instrument. Arguably, this is a pointer to their ‘soft law’ status. Section 7 of the Legislative Instruments Act contains a list of instruments that are not legislative instruments for the purposes of the Legislative Instruments Act. The list includes: Commissioner’s orders under the Australian Federal Police Act 1979 (Cth) section 38; guidelines under the Australian Security Intelligence Organisation Act 1979 (Cth) section

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8A; ministerial directions of a specified kind; determinations under the Customs Act 1901 (Cth) section 273; instructions under the Defence Act 1903 (Cth) section 9A; designations, or revocations of designations made under the Payment Systems (Regulation) Act 1998 (Cth) section 11; orders of the Australian Industrial Relations Commission under the Workplace Relations Act 1996 (Cth); and private and public rulings under the Taxation Administration Act 1953 (Cth). Caution is nevertheless needed, for without some principle to explain the instruments included in that list, it cannot be assumed that they are joined thematically for purposes other than their exclusion from the Act.21 Two other points of a practical nature about the Legislative Instruments Act should be noted. First, there has been a tendency since the Legislative Instruments Act commenced operating in 2005 for more rather than fewer instruments to be registered under the Legislative Instruments Act on the Federal Register of Legislative Instruments. By 2008 over 37,000 instruments had been registered. The probable explanation for this trend is that failure to register an instrument that should have been registered means that it is unenforceable.22 The consequence is that many instruments that are now registered as legislative instruments would, applying the analysis in this paper, have alternately been classified as soft law. Secondly, another practice that has developed is that statutes enacted since 2005 commonly declare explicitly whether instruments authorised by the Legislative Instruments Act are or are not legislative instruments. This certainty obviates the need to rely on the section 5 definition of ‘legislative instrument’. At the same time, it shows the difficulty of developing a bright-line definition of legislative instrument – or, by analogy, what is not a legislative instrument but may be soft law. The Australian Capital Territory is another jurisdiction that defines ‘legislative instrument’, in the Legislation Act 2001 (ACT) section 12. This definition is less helpful, however, as the section refers only to a ‘subordinate law’, a ‘disallowable instrument’, a ‘notifiable instrument’ and a ‘commencement notice’. There is no safe guidance in that list on why an instrument is legislative, or how to distinguish legislative from nonlegislative instruments. No other Australian jurisdiction has replicated either of those schemes.

21 Section 7(2) of the Act states that the inclusion of an instrument in s 7 does not imply that it is otherwise a legislative instrument. 22 Legislative Instruments Act 2003 (Cth) s 31. See, eg, Roche Products Pty Ltd v National Drugs and Poisons Schedule Committee [2007] FCA 1352, holding that the Poison Standards, formerly thought to be of an administrative character and not registered, were in fact of a legislative character.

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B What Entitles a Rule to Be Called ‘Law’? Another field to which one can turn for guidance is the jurisprudence of what can be described as ‘law’. The Macquarie Dictionary definition of ‘law’ includes: 1. the principles and regulations emanating from a government and applicable to a people, whether in the form of legislation or of custom and policies recognised and enforced by judicial decision. 2. any written or positive rule, or collection of rules, prescribed under the authority of the state or nation, whether by the people in its constitution, as the organic law, or by the legislature in its statute law, or by the treaty-making power, or by municipalities in their ordinances or bylaws. 3. the controlling influence of such rules.23 (emphasis added)

It is inherent in the notion of law as so defined, at least in a domestic context, that it is designed to control and is enforceable. What is commonly called positive law, or law that embodies the authority of the state, has those two characteristics. From that one can draw a proposition that a soft law instrument, if it is to be so described, must be intended to influence or control behaviour, and that intention is backed up by some form of enforcement. The issue of enforcement is discussed further under the heading, ‘The legal status of soft law’.

III WHAT EXPLAINS THE DEVELOPMENT OF SOFT LAW?

There are several answers to this question, which will be grouped under three headings. They have to do with the practical advantages for government in developing soft law regulation; the use of soft law to define the higher professional standards expected of government; and the managerial preference for tailoring regulation to a particular area. A thread that runs through those explanations is a dissatisfaction with, or turning away from, administrative law as the means of defining standards and ensuring propriety in government administration.

A Practical Advantages For Government Soft law rules can be made by government without the delays and complexities associated with the creation of legislation. As Baldwin and Houghton have noted: 23

Macquarie Dictionary (2nd rev’n, 1987) 983.

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For bureaucrats, the attractions of informality are plain. Such rules inexpensively and swiftly routinise the exercise of discretion; they provide easy justifications for the use of statutory powers; they ‘get the job done’ whilst offering something to critics … they give a flexibility that primary legislation does not offer; and they are largely immune from judicial review.24

Soft law rules are also easy to change. The Australian Law Reform Commission in its report on censorship laws in Australia noted of censorship guidelines that they are an important way of ensuring that the classification criteria reflect community standards, without the need for constant changes to the national code.25

A soft law rule that is a supplement to legislation must of course be consistent with that legislation. The Grey-letter Law report listed the following advantages of soft law instruments. They can: —

encourage a collaborative, rather than an adversarial approach, to achieving joint industry-government-consumer objectives;

—

be more amenable to innovative ways of achieving objectives; and

—

avoid the formality and inscrutability of much legislation.26

Generally, the trend to soft law aligns with a policy in government to achieve regulatory objectives by more co-operative and inclusive means. The rigidity of legislative norms is a contributing factor to this preference. B Philosophical Changes: Professionalism Another explanation for the development of soft law is that it reflects a need within government to fill a void caused by the fact that formal administrative law rules no longer provide sufficient guidance or sufficiently high standards for the public sector.27 As D’Ascenzo put it: [I]n many respects administrative law standards are becoming the base level, not the ultimate benchmarks for the Australian public service. Superimposed on these standards are now a host of public demands, policy and operational imperatives which have raised the bar to require an even more accountable, responsive and professional public sector. … In some cases [the changes] were due to deficiencies in the administrative law system itself. Decisions of external scrutineer bodies sometimes were not filtered 24

Baldwin and Houghton, above n 19, at 239–40. Australian Law Reform Commission, Film and Literature Censorship Procedure, Report No 55 (1991) [3.8]. 26 Grey-letter Law report, above n 1, at xv. 27 A similar ‘ethics’ and ‘values-based’ behaviour is today expected of both the public and private sectors. 25

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down to line officers, thus preventing them from having an impact on the public sector as a whole. Nor was it appreciated that there were limits on the ability of administrative law standards to change, at a fundamental level, the behaviour of decision-makers.28

D’Ascenzo goes on to point to ‘a need for more responsive and sophisticated mechanisms to manage the complexity’ of government, and ‘new approaches to ensuring internal conformance’.29 These developments have arisen in the context of a fresh wave of thinking within the public sector. While a focus remains on lawfulness, effectiveness and efficiency, talk is now also of the ethical obligations on the public and private sector as well. The rhetoric is now ‘effectiveness, efficiency and ethicality’. At a structural level, compliance is to be managed through a fourth, integrity branch of government.30 The Taxpayers’ Charter, the APS Code of Conduct and the APS Values are illustrative of these developments. What this signals is that administrative law rules and principles are no longer sufficient to define the standards for propriety in government. There are now demands placed on government that exceed the standards provided by administrative law. As Hosking notes: [E]thical behaviour … goes beyond the requirements of law behaviour. It requires employees to merit the respect of the public in their official dealings. This is … a requirement [of] professionalism.31

The operation of administrative law rules also have shortcomings, noted by D’Ascenzo: The administrative law standards with their emphasis on fairness, rationality, lawfulness, transparency and efficiency focus on process rather than outcomes. As the Palmer Report noted an organisation that is ‘process rich’ and ‘outcomes poor’ may be meeting those standards but still not be behaving in an open, responsive, and accountable manner.32

D’Ascenzo goes on to note that administrative law challenges to government decision-making are patchy at best, so that officials know they can probably breach standards without facing adverse consequences. McMillan too has addressed this issue:

28 M D’Ascenzo, ‘Effectiveness of Administrative Law in the Australian Public Service’ (Paper presented at the 2007 National Administrative Law Forum, Canberra, 14–15 June 2007) 3. 29 Ibid 4. 30 Ibid. 31 N Hosking, ‘The APS Values and Code of Conduct: Their Practical Application to Government Lawyers’ (Paper presented at the Australian Corporate Lawyers Association Conference, ‘Government Lawyers: Your Role in Governance’, Canberra, 2 June 2006) 3. 32 D’Ascenzo, above n 28, at 5.

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[V]alues as well as legal safeguards must drive an accountability culture. Administrative law is in part an error or fault driven culture. It makes officials accountable by asking whether they have done something wrong, such as made the wrong decision, acted unlawfully, or misused their authority.33

The theme in those commentaries is that the demands of a more professional, values-oriented public sector have outstripped the underlying standards prescribed by administrative law legislation and case law. Something more is required to attain effective accountability. That ‘something more’ is enshrined in the public sector documents that exhort individual officers to adopt standards of behaviour that combine integrity, ethicality and professionalism. This objective is better achieved if officials internalise those standards than if overt and explicit sanctions are imposed for breaches. It becomes understandable to describe those higher standards as soft ‘law’.

C Philosophical Changes: Managerialism and Commercialisation Another trend in government that has encouraged the development of soft law has been the adoption of different mechanisms and principles for the delivery of government services. A notable example has been the contracting out of government service delivery to non-government organisations. Examples range as broadly as the management of prisons and immigration detention centres, construction and operation of public highways, provision of welfare assistance, building inspection, licensing and accreditation, assistance to job seekers and public sector recruitment. The arrangements between government and government service providers are usually based in contract, supplemented by a range of soft law instruments (codes, guidelines and the like) that specify how the function must be discharged. The performance of the function is often beyond the oversight of traditional administrative law mechanisms, which are defined by statute to apply to decisions made under statute or by government officials.34 This new arrangement in government has been associated with the trend to managerialism, which places emphasis on efficiency and effectiveness, as the prevailing operational ethos for the executive. Unlike the move to professionalism, where the emphasis was on higher standards, the trend to 33 J McMillan, ‘Accountability of Government’ (Paper presented at the AboveBoard Accountability Forum, Australian National University, Canberra, 12 May 2007 accessed 21 May 2008. 34 See, eg, Administrative Decisions (Judicial Review) Act 1977 (Cth) ss 3, 5, applying to decisions made ‘under an enactment’; Administrative Appeals Tribunal Act 1975 (Cth), which applies only to decisions made under statute. The Ombudsman Act 1976 (Cth) was amended to extend the jurisdiction of the Ombudsman to government services providers (s 3BA).

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managerialism and greater efficiency aimed to reduce reliance on traditional administrative law accountability. The internal functioning of government has also been transformed by this change in philosophy. For example, the enactment of the Public Service Act 1999 (Cth) (‘Public Service Act’) was designed to replace an earlier Act that had become mired in litigation about matters of promotion, discipline and employee entitlements.35 The new Public Service Act was designed to introduce a new structure that gave greater responsibility and discretion to public service managers to implement people management policies that were not based on concepts of entitlement and independent adjudication of management decisions. As noted elsewhere in this paper, this new structure relies more heavily on soft law instruments to provide a framework for public sector employment. Overall, these new approaches have taken government outside the traditional realms of positive law, and away from the framework of institutions that police the administrative law system. In their place are standards that are thought (at least, by the executive) to be more appropriate to the tasks of a modern, professional, efficient, effective and ethical public sector. This realm is inhabited by soft law, which has developed as a ‘principal administrative mechanism used to elaborate the legal standards and political values underlying bureaucratic decisionmaking’.36

IV PROBLEMS WITH SOFT LAW

The imperatives that support soft law rules are matched by concern at what is happening. Baldwin and Houghton, in their comprehensive analysis of soft law instruments in the United Kingdom, pointed to some of these. As they said, one view of such ‘rules’ is that they offer a useful structuring of discretion; another is that they are often used cynically so as to make law without resort to Parliament, to instruct judges on the meaning of statutes and to insulate bureaucracies from review.37 The Grey-Letter Law report echoed those concerns. It said that the increasing use of soft law led to back-door regulation that is difficult to access, gives too much discretion to regulators, sets higher compliance 35 See, eg, P Kennedy, ‘People Management and Administrative Law’ in S Argument (ed), Administrative Law and Public Administration: Happily Married or Living Apart under the Same Roof? (Australian Institute of Administrative Law, 1994) 78; and R Creyke and J McMillan, ‘Executive Perceptions of Administrative Law – An Empirical Study’ (2002) 4 Australian Journal of Administrative Law 159, 182–3. 36 Sossin and Smith, above n 10, at 871. 37 Baldwin and Houghton, above n 19, at 239.

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standards than are required by law, leads to uncertainty and litigation, causes confusion for small business and consumer organisations, and imposes higher costs on industry.38 As the report pointed out, quoting a consultant: Quasi-regulatory codes are very difficult to identify and maintain. There is no formal mechanism by which government announces the adoption of a quasiregulatory instrument. This makes identification, collection and monitoring extremely difficult. … Government agencies favour the use of codes because they are more easily introduced than traditional statutory rules and in some cases because they may be amended without reference to Parliament.39

The Grey-letter Law report also pointed to the danger that agencies would attribute an inflated stature to their own ‘policies’. Agency policies are designed to structure discretion, provide certainty and consistency, and guide officials in decision-making. Those objectives are intrinsically laudable, yet the soft law instruments can obscure the fact that a more flexible application of such rules is permissible. There is an illustration of this danger in Australian Tax Office Practice Statements, which contain the statement: It is mandatory for all Tax Office employees to … follow Practice Statements relevant to the tasks they are performing [except] ‘where there are concerns about the application of the Practice Statement (for example, unintended consequences)’.40

Since Practice Statements are no more than internal policy, this statement of their effect could lead to the policy being applied inflexibly. The effect may be to limit or confine a statutory discretionary power, possibly in a legally unacceptable manner. Soft law ‘rules’ can also create extra burdens on consumers. For example, a guideline identifying that an entity is in a ‘high risk’ category may subject that entity to a higher level of surveillance by regular auditing, or create additional barriers before services can be accessed. There is unlikely to be a right of direct review of the soft law rule, except by complaint to the ombudsman. Regulators can also impose inappropriate demands or create unnecessary delay when making soft law. For example, the Australian Confederation of Child Care noted in the Grey-letter report that ‘NSW regulations require that the surfaces under playground equipment conform with Australian Standard 4422: 1996 a ‘standard … written in highly technical

38 39 40

Grey-letter Law report, above n 1, at xii-xv. Ibid xi-xii (quoting Stenning). Tax Office Practice Statement System (PS 2003/01) 3.

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terms … directed at engineers, not child carers’.41 Some other processes, by contrast, can be ad hoc and lead to fragmentation. Nor, as a general rule, is there any external control or scrutiny over the drafting or content of soft law rules. Unlike legislative instruments, soft law rules do not generally have to be tabled in the Parliament for scrutiny by a committee of the Parliament. It is probable that many such instruments are not exposed for public view or consultation with stakeholders during their development. Soft law instruments are invariably drafted by ‘loving hands’ within the institution that has made them and not externally by experts such as parliamentary counsel or an office of legislative drafting. There is a heightened risk that the instruments will be poorly drafted and give rise to ambiguity, inconsistency or overlap between instruments and, in turn, to problems of interpretation. In summary, there is an accountability deficit, a lack of transparency and difficulties in accessing soft law. Whatever the drawbacks of soft law, it is apparent that it is now an established and developing element of the regulatory landscape. It holds a seductive appeal to officials, not least because of the control they have over how it is made and what it says, and the absence of parliamentary scrutiny but also because it can be presented as having the status of ‘law’.42 The next section chronicles the growth of soft law in Australia.

V HOW PREVALENT IS SOFT LAW IN AUSTRALIA?

The business regulatory environment is the area in which there has been the greatest growth in soft law. Some examples taken from that area illustrate the volume of soft law regulation emanating from the three tiers of government in Australia. The Grey-letter Law report on quasi-regulation identified ‘upwards of 30,000 codes, standards and specifications’ in force at that time.43 That figure covered all levels of government and all kinds of regulation – legislative, quasi-regulatory and self-regulatory. (Since that figure covered legislative instruments, which are not treated as part of soft law in this paper, there is some overstatement in the number.) The Grey-letter Law report also noted that the bulk of standards then in force were developed by Standards Australia and comprised 5,700 Australian Standards. About 41

Grey-letter Law report, above n 1, at 45. For example, compliance with voluntary standards may be a prerequisite to exercising a right, for example, to export. Similarly, some internal soft law instruments are said to be ‘mandatory’ on the basis that they represent a lawful and reasonable direction of an Agency Head, failure to comply with which is a breach of the Code of Conduct under the Public Service Act 1999 (Cth) s 13(5). 43 Grey-letter Law report, above n 1, at xi. 42

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half of those are referenced in legislation, with the remainder being observed on a voluntary basis.44 If that was the figure in 1997, and there has been no subsequent diminution in regulatory activity,45 the figure a decade later is likely to be higher. What this indicates is that there is now a plethora of instruments that fall into the soft law category and that, correspondingly, there is an urgent need to recognise this new genre of ‘rules’. It is soft law that now largely controls the actions in the workplace of a sizeable proportion of the workforce. As Sossin and Smith note, soft law has become the ‘principal administrative mechanism used to elaborate the legal standards and political values underlying bureaucratic decision-making’,46 and that, although [s]oft law cannot in theory bind decision-makers, yet in practice it often has as much or more influence than legislative standards.47

Soft law has taken the place of traditional forms of regulation in a number of areas. It is a body of rules and regulation that can no longer be ignored by administrative law. Not least, for administrative lawyers, is the question whether this form of regulation should reflect administrative law values and accountability mechanisms. Before addressing that question, it is necessary to discuss whether soft law is simply policy by another name.

VI SOFT LAW AND POLICY

Several questions arise. Can soft law be distinguished from policy? Does the addition of ‘law’ serve a covert purpose of giving a status that is not deserved? And is that a matter of concern? Why has soft law received so little attention in Australian jurisprudence and academic writing?

A Is Soft Law Different From Policy? Sossin and Smith’s opinion is that ‘[s]oft law may be said to bridge law and policy’.48 That conclusion is not explained; indeed their paper generally equates the two. The better view is that soft law is a form of policy, but for reasons that will be explored it is a special form of non-legislative 44

Ibid 35. See G Banks, ‘Reducing the Regulatory Burden: The Way Forward’ (Paper presented to the Monash Centre for Regulatory Studies, Melbourne, 17 May 2006). 46 Sossin and Smith, above n 10, at 871. 47 Ibid 869. 48 Ibid 892. 45

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instrument that warrants special recognition and an alternative label. To anticipate soft law, being partially enforceable, occupies a half-way house between ‘hard law’ and policy. The essential feature of an executive policy is that it is a non-statutory rule devised by the administration to provide decision-making guidance, particularly in administering legislation.49 Government policy has also been defined by the Macquarie Dictionary as ‘a definite course or line of action adopted and pursued by a government, ruler, political party, or the like’.50 Policy, like soft law, comes in many guises. Some policy, like the APS Values referred to earlier, is aspirational only. Other policies are more formal, being authorised by legislation, such as the Guide to the Assessment of Veterans’ Pensions for assessing veterans’ level of disability. Others still may be tabled in parliament or endorsed by a Minister or Cabinet,51 or are published by an agency, such as the Department of Immigration and Citizenship Identity Business Reference Model, which standardises identity management practices across the agency. Policies can result from formal Ministerial directions.52 At the other end of the spectrum are informal policies such as originate in a press release, or ‘folk lore’ within agencies, for example, about lines of communication and consultation within the agency. As those examples illustrate, the form in which policies appear often replicate the form of instruments listed in the definitions of soft law. The impact of administrative law on policy and soft law is much the same. Policy must not be inconsistent with the legislation to which it relates, policy is not binding, and although the application of policy promotes consistency and fairness, it must not be applied inflexibly to the exclusion of the merits of the individual case.53 Subject to that, it is open to a decision-maker to take guidelines into account when exercising discretion.54 Those same principles have been expressed in relation to forms of soft law. An example is Vero Insurance Ltd v Gombac Group Pty Ltd55 in

49 R Creyke and J McMillan, Control of Government Action: Text, Cases & Commentary (Sydney, LexisNexis Butterworths, 2005) 599. 50 The Macquarie Dictionary (2nd rev’n, 1987) 1317. 51 See, eg, Gerah Imports Pty Ltd v Minister for Industry, Technology and Commerce (1987) 17 FCR 1; Riddell v Secretary, Dept of Social Security (1993) 42 FCR 443; Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634. 52 See, eg, New South Wales Farmers’ Association v Minister for Primary Industries and Energy (1990) 21 FCR 332; Riddell v Secretary, Dept of Social Security (1993) 42 FCR 443; Smoker v Pharmacy Restructuring Authority (1994) 53 FCR 287. 53 Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634; Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409, 420; Chumbairux v Minister for Immigration and Ethnic Affairs (1986) 74 ALR 480, 492–3; Elias v Federal Commissioner of Taxation (2002) 123 FCR 499, 506–7. 54 Surinakova v Minister for Immigration, Local Government and Ethnic Affairs (1991) 33 FCR 87, 98. 55 Vero Insurance Ltd v Gombac Group Pty Ltd [2007] VSC 117.

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which the issue was the legal status of guidelines developed by the Victorian Civil and Administrative Tribunal to assist in exercising its discretion as to the award of costs. As Gillard J noted generally of guidelines developed by adjudicative bodies: A guideline is often laid down in respect to particular proceedings based upon previous applications and leading to particular results. In other words, if a similar application is made, then, based upon experience in previous similar matters, one would expect the same result. The advantage and benefit of such a guideline is that it provides a degree of certainty as to the outcome of a proceeding, and importantly, provides guidance to the parties concerned and their advisers. However, any such guideline is subject to different circumstances and it is important that the decision-making body concerned bears in mind that the guideline is nothing more than a guideline, and must give way if circumstances dictate. In other words, it does not shut out any party arguing that the guideline should not be applied.56

The position can be summarised by saying that policy and soft law cover the same spectrum of documents, and are often created, adopted and published in the same way. Generally, however, policy covers a broader range of documents, especially those developed for internal guidance and assistance. A characteristic of soft law, as noted earlier, is that it has a legal objective, of influencing or controlling behaviour, backed up by some form of enforcement. Furthermore, ‘soft law’ is a more apt description for instruments that regulate private behaviour, as part of a regulatory scheme that is either developed outside government, or in association with government, often on the premise that government could choose to impose a coercive scheme of regulation.

B Why Has Soft Law Received So Little Attention in Australia? As Sossin and Smith note in the context of Canadian law [i]t is fair to say that soft law operates below the radar screen of most administrative and constitutional law scholars.57

The same is undoubtedly true for Australian academics. What has led to this neglect? One explanation is that soft law has largely been developed within government or private sector bodies as part of their internal management. As such, soft law has not registered on the academic radar.

56 57

Ibid [29]. Sossin and Smith, above n 10, at 885.

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Another explanation is that the status of soft law was dealt with in such a satisfactory manner early in the life of Australian administrative law that there was less of a need thereafter for academic analysis of the interaction of policy and administrative law standards. That elucidation occurred in 1979 in an early deportation decision of the Commonwealth Administrative Appeals Tribunal (‘AAT’). The AAT affirmed a decision of the Minister to deport Mr Drake, a United States citizen, who had been convicted and sentenced to imprisonment. On appeal, the Full Court of the Federal Court held that the AAT had failed properly to perform its function because it had applied the Minister’s criminal deportation policy without making an independent assessment of its propriety.58 On remission to the AAT, the President, Justice Brennan, set out the principles which should guide the AAT when a government policy had been taken into account by the decision-maker in coming to a determination.59 His judgment is a classic exposition of the principles and has been followed since. The principles enunciated in Drake and later cases steered a deft path between the competing objectives underpinning reliance on policy: on the administrative side, certainty, predictability and guidance for decisionmakers; on the legal side, the requirements that policies be consistent with statute and not applied inflexibly. The difference between law and policy was clear thereafter, and became a strong theme in Australian administrative law. As a consequence, however, there has been a tendency in Australia to describe all non-statutory rules as ‘policy’. The concept of ‘soft law’, as applying to a different dimension or characteristic of some non-legislative instruments, has been slow to be recognised. It is time, therefore, to rectify that neglect.

VII THE LEGAL STATUS OF SOFT LAW

Academic interest in soft law has focused on its legal status and, more particularly, its legal status in the context of judicial review proceedings.60 As the following discussion will illustrate, the legal status of an instrument can depend on a number of factors, of which three stand out: the text of the instrument; the purpose to which it is being put; and whether the 58

Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409 (‘Drake’). Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634. 60 See, eg, Aronson, above n 3; Klabbers, above n 5; Cini, above n 7; Sossin and Smith, above n 10; Sossin, above n 17; Baldwin and Houghton, above n 19; H S Richardson ‘Administrative Policy-making: Rule of Law or Bureaucracy?’ in D Dyzenhaus (ed), Recrafting the Rule of Law: The Limits of Legal Order (1999) 319–30; A H Hammond, ‘Judicial Review: The Continuing Interplay between Law and Policy’ [1998] Public Law 34. 59

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instrument has statutory backing or authorisation. To include within this discussion instruments that are authorised by statute is, admittedly, to blur a distinction earlier drawn between legislative and non-legislative instruments. However, the interaction between legislation and non-legislative instruments is a pivotal issue in administrative law, and to look at one side of a scale is to reveal something of the other side. The following discussion focuses on administrative law cases in which the legal status of soft law has arisen. The kinds of issue that arise include whether a decision-maker could lawfully take account of or apply a particular soft law rule, the legal effect of misconstruing or misapplying such a rule, and the interaction of soft law rules and the obligation to accord natural justice. Other legal issues can also arise that are not taken up in this discussion. For example, under the Commonwealth Administrative Decisions (Judicial Review) Act 1977 (Cth) (‘ADJR Act’), a decision made in accordance with a soft law rule may not be directly reviewable because of the requirement that a decision be made ‘under an enactment’ (sections 3 and 5). Another administrative law context in which soft law rules arise is administrative investigations by the ombudsman. Under the Ombudsman Act 1976 (Cth) the ombudsman can look at any dimension of an administrative action. Thus, for example, a common topic in ombudsman reports is whether administrative manuals used within agencies provide accurate and adequate instruction to officials.61 The following discussion of administrative law issues is divided according to the principal categories of soft law instruments: guides/guidelines, codes, charters, manuals, standards and policy.

A Guides or Guidelines There are well-known guidelines that have direct statutory authorisation. For example, the Guide to the Assessment of Rates of Veterans’ Pensions is authorised by section 29 of the Veterans’ Entitlements Act 1986 (Cth). Once the Guide has been approved by the Minister and tabled in Parliament, it becomes binding on those assessing rates of pension for veterans. Similarly, the Permanent Impairment Guide made under the Safety, Rehabilitation and Compensation Act 1988 (Cth) (‘SRC Act’), which is used to estimate compensation for injury at work, is specifically authorised by section 28 of the SRC Act and is defined as a legislative 61 See, eg, the recommendations for change to agency manuals in Commonwealth Ombudsman, Application of Penalties under Welfare to Work, Report No 16/2007 and Department of Immigration and Citizenship: Administration of Detention Debt Waiver and Write-off, Report No 2/2008.

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instrument for the purposes of the Legislative Instruments Act.62 Guides of that nature give rise to few administrative law issues, apart from the question of whether the Guide has been properly construed and applied. An illustrative case is Adultshop.com v Members of the Classification Review Board. 63 The case concerned a challenge to the classification of a film, Viva Erotica, which contained depictions of sexual activity between consenting adults. The film was given a classification that meant it was only available for sale or hire to adults in the two Australian Territories. The Classification Review Board had determined that the film was offensive to a reasonable adult, a test taken from the Guidelines for the Classification of Films and Computer Games 2005. The Classification (Publication, Films and Computer Games) Act 1995 (‘Classification Act’) sections 9 and 12 require that publications, films and computer games are to be classified in accordance with the National Classification Code (‘Classification Code’) and authorised Guidelines are to be made to assist the decision-maker in applying the criteria set out in the Code. Adultshop.com challenged the classification decision on a number of grounds, including that the Guidelines were unlawful as exceeding the power of the Minister under the Classification Act because they dictated a classification without regard to the Classification Act or the Classification Code; that the Review Board misconstrued the expression in the Classification Code ‘likely to cause offence to a reasonable adult’; that the Review Board applied the Guidelines inflexibly and without regard to the merits of the case and without taking into account considerations that were relevant under the Classification Act and the Classification Code; and that the Guidelines were Wednesbury unreasonable. All grounds were rejected by the court, but the case nevertheless illustrates the legal issues that can arise when soft law guidelines (and codes) are applied. Similar issues arose in a different setting in Bird v Campbelltown Anglican Schools Council.64 The plaintiff argued unsuccessfully that guidelines made by a private school under section 131 of the Education Act 1990 (NSW) (‘Education Act’) imposed upon it an obligation to afford natural justice in student discipline decisions. In dismissing the argument, the court held that the guidelines were not meant to be binding. Other contextual features that supported the court’s conclusion were that the school in question was a non-government school, the legal relationship between the school and its clientele was essentially of a private law nature,

62

Safety, Rehabilitation and Compensation Act 1988 (Cth) s 28(3A). [2007] FCA 1871 (‘Adultshop.com’), upheld on appeal by the Full Federal Court in Adultshop.Com Ltd v Members of the Classification Review Board [2008] FCAFC 79 (21 May 2008). 64 [2007] NSWSC 1419. 63

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and the Education Act excluded civil causes of action arising in contract between non-government schools and their clientele for non-compliance with the Education Act. In Henzell v Centrelink,65 a failure to comply with an agency guideline was treated as possible evidence of a failure to provide procedural fairness, although in the result the court concluded that no such breach had occurred. The guideline was made by the head of Centrelink and contained procedures ‘for determining whether an APS employee … has breached the Code of Conduct’. There was an obligation imposed on agency heads by the Public Service Act section 15(3) to make such procedures. The Public Service Act in subsection 15(3) paragraphs (a) and (b) requires that the procedures ‘comply with basic procedural requirements’ and ‘must have regard to procedural fairness’. As Allsop J noted: Agency procedures and guidelines are not codes of law, but they are, in all the circumstances, indicative of what one would expect prima facie to be followed by way of procedural fairness. They are not a law or codification of procedural fairness, but, if not followed, would tend to create a presumption or at least a strong question as to whether there had been a denial of procedural fairness.66

Another case that recognised the possibility that a guideline could give rise to a justiciable issue was White Industries Australia v Federal Commissioner of Taxation.67 The Commissioner had published Guidelines to Accessing Professional Accounting Advisers’ Papers. The Guidelines provided that the Commissioner would accept that a tax advising by an accountant was confidential ‘in all but exceptional circumstances’. Access to an advising by tax officials in breach of that undertaking would only be undertaken with the approval of a senior taxation officer. The applicant alleged that the Guidelines gave rise to an expectation that the Commissioner would act in a certain way, and a departure from that expectation would be judicially reviewable. The court held that the action could proceed under the Judiciary Act 1903 (Cth) section 39B. The applicant’s attempt to commence the proceedings under the ADJR Act was dismissed by the court, applying Griffith University v Tang.68 The court held that the Guidelines were not an instrument made under the Income Tax Administration Act 1936 (Cth) (‘ITAA’) but were merely an incident of the Federal Commissioner of Taxation’s general power of administration under section 8 of the ITAA. As such, the ITAA did not give legal effect to the Guidelines or to the

65 66 67 68

[2006] [2006] (2007) (2005)

FCA 1844. FCA 1844 [31]. 160 FCR 298; 240 ALR 792. 221 CLR 99.

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taxation officer’s decision meaning that the decision was not made under an enactment as required by the ADJR Act.69 An interesting issue was thrown up by Tax Agents’ Board of NSW v Aqabani,70 indicating the difficulty of attributing legal significance to a guideline. The respondent had been denied registration as a tax agent by the NSW Tax Agents’ Board. The Board had applied guidelines that it had made, which spelt out the kinds of courses that would and would not be acceptable evidence of professional proficiency. As Hill J noted, there was a difficulty in a tribunal giving legal effect to those guidelines for the reason that there was nothing to prevent the tax agents’ boards of different jurisdictions adopting guidelines that were not consistent with those of other jurisdictions: There is, I think, a real question about the status of the guidelines in the present case. While I can accept that a statutory authority may promulgate guidelines notwithstanding that the statute under which it operates may make no provision for such guidelines (so long as the guidelines promulgated are relevant to the exercise of power or discretion with which they are concerned) there is a problem here, where the legislation (the Act), provides for the establishment of separate Tax Agents’ Boards, albeit that the Act is expressed in language which, at the least, can be said to contemplate that the boards will speak with one voice. … [T]here is a hypothetical difficulty if guidelines, promulgated by one board differed from guidelines promulgated by another. Would a Tribunal be required to take one set of guidelines into account when reviewing the decision of one board and another and potentially inconsistent set of guidelines when reviewing the decision of another board? [The guidelines] in question were not guidelines in force in all boards because it is known that at least one other board had no guidelines at all. … In the result, it would be possible that different conclusions might be reached by the tribunal depending upon whether it was reviewing a decision of the New South Wales board or of the Victorian board. This may well lead to the conclusion that [they] should not be given the status of a guideline in the same sense as the guidelines of national policy were given in Drake or Nikac and that failure to take the Guidelines into account might not constitute error of law.71

B Codes As noted earlier, codes have proliferated in Australia. Examples of the multiple forms of codes were listed in the Grey-letter Law report:72 69 70 71 72

Ibid [67]. [2005] FCA 383. Ibid [29]. Grey-letter Law report, above n 1, at ch 2.

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—

codes endorsed or promoted by government – such as the supermarket scanning code;

—

codes jointly developed by industry and government – such as the Electronic Funds Transfer Code of Conduct, which is monitored by the Australian Payments System Council and periodically reviewed by the Australian Competition and Consumer Commission and the Treasury; and the Code of Banking Practice, initially drafted by government but adopted by banks;

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codes that have been developed by industry to forestall legislative regulation, or the imposition of a mandatory licence condition – such as codes under the Broadcasting Services Act 1992 (Cth);

—

guidelines that must be complied with to obtain government funding – such as guidelines on childcare funding.

What those examples illustrate is that the vocabulary of soft law remains elastic. The description of an instrument as a code does not elucidate its legal status. Thus, ‘code’ has also been used to refer to instruments that impose mandatory compliance obligations on industry. Examples are the Third Party Access Code for Natural Gas Pipeline Systems found in Schedule 2 to the Gas Pipelines Access (South Australia) Act 1997 (SA);73 the Therapeutic Goods Advertising Code 2006 (Cth), made under section 3(1) of the Therapeutic Goods Act 1989 (Cth);74 and the Food Standards Code, made under the Australia and New Zealand Food Authority Act 1991 (Cth).75 Equally, the Franchising Code of Conduct, authorised by the Trade Practices Act 1974 (Cth) section 51, imposes mandatory obligations on parties to franchise agreements.76 The Trade Practices Act 1974 (Cth) (‘TPA’) illustrates another variation applying to codes. The TPA provides in section 51ACA that industry codes may be either mandatory or voluntary – although a ‘voluntary’ industry code may be made binding on anyone who has agreed to be bound by it.77 That example indicates the difficulty faced by those seeking to identify what the status of a soft law instrument is simply by relying on its categorisation. At the same time, as shown earlier by Adultshop.com, codes may have some legal effect. A similar statutory scheme to the one in

73 East Australian Pipeline PL v ACCC (2007) 239 ALR 50. The South Australian Act was the result of an inter-governmental agreement. The Western Australian version was considered in Re Michael, ex p WMC Resources [2003] WASC 288. 74 Roche Products PL v National Drugs and Poisons Schedule Committee (2007) 98 ALD 14. 75 Distilled Spirits Industry Council v Food Standards Australia and New Zealand [2003] FCA 1139. 76 Trade Practices Regulations 1998 (Cth) reg 3. 77 Trade Practices Act 1974 (Cth) s 51ACA.

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Adultshop.com was considered in Kazacos v Migration Agents’ Registration Authority.78 There, a Code regulating the conduct of migration agents had been provided for under a power conferred by the Migration Agents Regulations 1998 (Cth), which were made under the Migration Act 1958 (Cth) (‘Migration Act’). Section 303 of the Migration Act authorised the Authority to discipline a migration agent for breach of the Code. There was a right of appeal to the AAT, and from there to the Federal Court, thus enabling the court to interpret the Code and, in this case, decide whether the obligations it imposed could apply to the employees of a migration agent.79 A similar State scheme was considered in Paridis v Settlement Agents Supervisory Board.80 The Settlement Agents Act 1981 (WA) authorised the Settlement Agents Board to impose a disciplinary sanction for breach of the Settlement Agents’ Code of Conduct 1982, which was an instrument made under the Act.81 There was a right of review by the State Administrative Tribunal, and from there to the Supreme Court.82 Thus, both the tribunal and the court had jurisdiction to interpret provisions of the Code. Another case of a similar kind (discussed earlier) is Henzell v Centrelink,83 concerning an alleged breach of the Australian Public Service Code of Conduct made under the Public Service Act. The APS Code contains sanctions for breach.84

C Manuals A manual is a common description for a policy document within an agency designed to provide guidance to decision-makers, particularly on the application of legislation. An example is the Procedures Advice Manual issued by the Department of Immigration. Manuals are often the first stop for decision-makers when exercising their powers. Other forms of manual exist, however, as the cases illustrate. Heavylift Cargo Lines v Civil Aviation Safety Authority85 concerned operations manuals produced by Heavylift, a foreign registered aviation company. The manuals were produced by the company, not the agency, 78

[2007] FCA 1573. See also Hartnett v Migration Agents’ Registration Authority [2004] FCAFC 269. 80 [2006] WASC 234. 81 See further: Hastings v Brennan (No 3) [2005] VSC 228; Stogdale v Stonnington City Council [2004] VSC 348; Hutchinson v Roads & Traffic Authority [2002] NSWSC 148. 82 State Administrative Tribunal Act 2004 (WA) s 105(13). 83 See also Mongan v Woodward [2003] FCA 66. There are also State analogies: see, eg, the Code of Conduct enacted under a power conferred by the State Service Act 2000 (Tas), considered on a tangentially relevant basis in Cookson v Beveridge [2003] TASSC 28. 84 Public Service Act 1999 (Cth) s 15(1). 85 [2007] AATA 1005. 79

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and were a pre-requisite under the Civil Aviation Act 1988 (Cth) to the company obtaining a foreign aircraft air operator’s certificate (‘AOC’). In other words, having satisfactory manuals was a condition of obtaining permission to operate in the international cargo market. In May 2006 the Civil Aviation Safety Authority refused to issue an AOC to Heavylift on a number of grounds, including deficiencies in its internal operating manuals. The decision was upheld by the AAT in relation to the Operations Manual Part A (carriage of passengers), the emergency Response Guide, the Engineering Procedures Manual for the Boeing 727 and the Operational Manual Part D. The AAT also found shortcomings in the company’s procedures for promulgating the Safety Management Systems Manual. In light of those deficiencies, the AAT concluded that it was not satisfied that Heavylift had complied with the legislative requirements applying to safety. In Re Cusack and Australian Postal Corporation86 the AAT affirmed a decision to exempt from disclosure under the Freedom of Information Act 1982 (Cth) (‘FOI Act’) Australia Post’s Mail Contractor Management Manual. The request had been made by the director of a company that provided street mail delivery services on behalf of Australia Post. The reason for Australia Post’s FOI refusal was that the Manual related to its commercial activities, which was an exempt category under Schedule 2 of the FOI Act. The decision illustrates another way in which soft law instruments feature in administrative law disputes.87

D Charters The term ‘charter’ arose for consideration in Botany Bay City Council v Minister for Transport.88 Section 8(2) of the Local Government Act 1993 (NSW) provides that: A council, in the exercise of its functions, must pursue its charter but nothing in the charter or this section gives rise to, or can be taken into account in, any civil cause of action.

Justice Lehane nevertheless referred to the charter in concluding that the Council had standing to challenge an airport development as it had an interest greater than that of an ordinary member of the public. His Honour

86

Re Cusack and Australian Postal Corp [2007] AATA 1685. See also Australian Retailers’ Association v Reserve Bank of Australia [2005] FCA 1707, which involved consideration of a manual made under the Payment Systems (Regulation) Act 1998 (Cth), which governed the Consumer Electronic Clearing System, and, relevantly, the EFTPOS system. 88 [1996] FCA 1507. 87

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referred to the Council’s charter as ‘a set of principles intended to guide a council in carrying out its functions’.89

E Standards The standards developed by Standards Australia, a private organisation, are a form of soft law that are referred to in legislation, coupled with a sanction for breach. They are influential in other ways, as captured in the observation of the Grey-letter Law report, that ‘best practice standards may be adopted and subsequently become the mandatory minimum standard’.90 A common example is that many government agencies have adopted the Australian Standards on complaint handling (AS ISO 10002– 2006 Customer Satisfaction – Guidelines for Complaints Handling in Organisations) and whistleblowing (HB 401–2004 Applications of Corporate Governance). In that guise, the standards directly perform an administrative law function. The standards developed by Standards Australia can be important too when they are accepted by courts as relevant to the standard of care in an industry for the purposes of a negligence action.91 An example arose in Anne Christina Benton v Tea Tree Plaza Nominees,92 in which a voluntary Australian Standard on kerb height was one of the factors taken into account by the court in determining negligence. The Public Service Act is another source of standards, in the form of the APS Values, which are listed in section 10 of the Act. Among them are that the Australian Public Service is apolitical, is based on merit, recognises diversity, has the highest ethical standards, and provides ‘frank, honest, comprehensive, accurate, and timely advice’. In sum, these are a public statement of behaviour expected of those within the Australian Public Service. Although agency heads ‘must uphold and promote the APS Values’ (section 12), there is no sanction referred to in the Public Service Act for a failure by an agency head to do so. Nonetheless, a public servant is expected to observe the APS Values (section 13(11) and a failure to do so may be a breach of the Code of Conduct, for which sanctions exist (section 15(1)). To that extent the APS Values become part of a code of soft law.

89 90 91 92

Ibid [11]. Grey-letter Law report, above n 1, at 44. Ibid 36. (1995) 64 SASR 494.

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F Policy As noted earlier, the terms ‘policy’ and ‘soft law’ are interchangeable as applied to many instruments. There is a well-established jurisprudence on the status of policy in administrative law, which was broadly described earlier. Recent cases that apply that jurisprudence illustrate the legal issues that can arise concerning soft law. In Re Minister for Resources, ex p Cazaly Iron Pty Ltd,93 the issue was whether the State’s Iron Ore Policy, which was designed to promote the exploration and export of iron ore, was inconsistent with the Mining Act 1978 (WA) (‘Mining Act’). The Western Australian Court of Appeal held that the policy was consistent with the Mining Act and could properly be taken into account by the Minister in identifying matters of public interest that should be given weight when making the decision. Similarly, Nicholson-Brown v Jennings94 dealt with whether it was permissible to consider a policy on appointment and renewal of inspectors that was soon to be given legislative force under amending Victorian and Commonwealth legislation. The plaintiff argued that the policy was an irrelevant consideration prior to its enactment. In rejecting that argument, the Federal Court (citing Minister for Immigration and Multicultural Affairs v Jia Legeng95) commented that a Minister endowed with a discretionary power can take a particularly wide range of factors and sources of information … into account, given the types of influence to which Ministers are legitimately subject.96

Matters mentioned by the court were the Minister’s perception of community views, ‘his or her own policy and political considerations in respect of his or her decision to appoint, suspend or remove inspectors’, and the Minister’s desire to expedite the reform process prior to the amending legislation commencing operation.97 Conflict between legislation and policy was also the issue raised in Garland v Chief Executive, Department of Corrective Services.98 The Corrective Services Act 2000 (Qld) (‘Corrective Services Act’) authorised the making of successive maximum security orders, in this case for a prisoner convicted of serial rape offences. The Corrective Services Act also authorised the Chief Executive to make administrative policies and procedures for the management of corrective services; the policies were classified

93 94 95 96 97 98

[2007] WASC 175. (2007) 162 FCR 337. (2001) 205 CLR 507, 565 (Hayne J). (2007) 162 FCR 337 [43]. Ibid [43], [44], [46]. [2006] QCA 568.

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as a statutory instrument. The plaintiff argued that his continued confinement in maximum security was contrary to the Progression Guidelines for Maximum Security Unit Prisoners. The court dismissed that argument, noting that his continued confinement was authorised by the Corrective Services Act, and to the extent that the Guidelines required otherwise, they would be invalid as inconsistent with the Corrective Services Act. A more complex interaction between legislation and policy was considered in BHP Billiton Direct Reduced Iron Pty Ltd v Duffus, Deputy Federal Commissioner of Taxation.99 In the following extract, the court was considering a provision of a taxation statute that authorised the Commissioner for Taxation to issue a public ruling that would provide guidance on the Commissioner’s exercise of discretion: [The section] was evidently designed to allow the Commissioner to promulgate, under the public rulings system, administrative policies about the exercise of statutory discretions. Such ‘rulings’ did not differ in their legal character from administrative policies guiding the exercise of discretions published outside the framework of the public ruling system. In particular no such policy, whether ruling or not, could lawfully narrow the Commissioner’s discretion. On general principles of administrative law the Commissioner would be entitled to apply a ruling so made as a general policy provided that each case were considered on its merits. To apply an administrative policy, ruling or not, on the basis that it must be applied in every case regardless of the particular circumstances of the case would involve an error of law.100

In Ivanovic v Australian Customs Service101 the Federal Magistrates Court was asked to review a decision to terminate the employment of a person appointed on probation. The court dismissed an argument that the Probationary Conditions policy of the Australian Customs Service imposed a ‘procedure required by law’ within the meaning of the ADJR Act. Nonetheless, the court found that the policy was one of many relevant considerations that had to be taken into account by Customs (along with such matters as the contract of probationary employment, the Probationary Report and the Manager’s Toolkit which set out the processes for termination).102 In other words, agency policies and procedures sit alongside the individual facts of a case as being relevant matters to be considered. Finally, it is important to note the other end of the policy spectrum, where policies that have a political dimension are less likely to attract administrative law remedies. This was discussed by Emmett J in Ozepulse Pty Ltd v Minister for Agriculture Fisheries and Forestry: 99 100 101 102

[2007] FCA 1528. Ibid [100]. [2007] FMCA 503. Ibid [40]–[41].

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An executive or administrative decision of a kind that affects a person as a member of the public or a class of the public may properly be characterised as a ‘policy’ or ‘political’ decision. In such a case, there will be no entitlement to procedural fairness in relation to the making of the decision vested in a member of the public or a member of a class of the public affected by the decision. A minister is not bound to hear an individual before formulating or applying a general policy or exercising a discretion in a particular case by reference to the interests of the general public, even where the decision affects an individual’s interests. A minister may determine general policy or the interests of the general public free of procedural constraints. A minister will be confined only by the limits otherwise expressed or implied by statute.103

VIII CONCLUSION

The growth of soft law – of less formal legal instruments – is a trend that is well established and will not be stopped. In part this is to be explained by the expansion in rules generally, both hard and soft law rules. But mostly the trend reflects the changing face of government, the changing nature of regulation, and the changed relationship between government and the community. Businesses, individuals and governments are prepared to trade off the certainty and authoritative effect of legal rules for less formal but more flexible and adaptable soft law regulation. As Cini put it: [S]oft law is a characteristic of a distinctive form of regulation, one which implies a softer form of governance, resting for example on negotiated settlements and voluntarily agreed codes of practice. … [As a consequence] we might expect to find, at least in some policy areas, that a softer form of governance – based on soft law – would come to replace or serve as an alternative to more conventional, ‘hard’ forms of legislation.104

As Baldwin and Houghton put it, there is ‘now discernible a retreat from primary legislation in favour of government by informal rules’.105 The law is adjusting to take account of soft law instruments, as reflected in the previous discussion of recent case law. The Legislative Instruments Act is an example of a legislative response that is premised on the recognition that a great deal of legal regulation is now based in instruments that are not legislative in the traditional sense. The theme of this paper is that there is a considerable and growing number of instruments with legal effect that are not picked up even by those statutory and case law developments, important though they are. The new challenge, in part, is to take stock of the development of soft law and to understand the role it now plays in law, regulation and 103 104 105

[2007] FCA 1601 [60]. Cini, above n 7, at 6. R Baldwin and J Houghton, above n 19.

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government. But practical questions also arise. Should we, for example, develop more extensive procedures to require consultation, publicity and professional drafting in the making of soft law instruments? Should the range of instruments that are tabled in Parliament be extended? Should more be done to ensure that administrative law review mechanisms, remedies and grounds of review that focus on government decision-making be extended to apply to the development and application of soft law instruments by private sector organisations that discharge regulatory functions? Lying behind those and other questions is the more fundamental definitional issue of what comes within the category of soft law. Fundamental questions of that kind are never fully answered, but illustrate that law and government are constantly changing and evolving. The emergence of soft law is a fascinating illustration of that evolution.

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Publications of Mark Aronson BOOKS

Litigation: Evidence and Procedure 1st edn (with Norman Raeburn and Mark Weinberg) (Sydney, LexisNexis, 1976) (721pp); 2nd edn (with Norman Raeburn and Mark Weinberg) (Sydney, LexisNexis, 1979) (859pp); 3rd edn (with Norman Raeburn and Mark Weinberg) (Sydney, LexisNexis, 1982) (838pp); 4th edn (with Jill Hunter and Mark Weinberg) (Sydney, LexisNexis, 1988) (1084pp); 5th edn (with Jill Hunter) (Sydney, LexisNexis, 1995) (1003pp); 6th edn (with Jill Hunter) (Sydney, LexisNexis, 1998) (1164pp) Review of Administrative Action (with Harry Whitmore) (Sydney, LawBook Co, 1978) (512pp) Public Torts and Contracts (with Harry Whitmore) (Sydney, LawBook Co, 1982) (287pp) Review of Administrative Action (with Nicola Franklin) (Sydney, LawBook Co, 1987) (708pp) Judicial Review of Administrative Action 1st edn (with Bruce Dyer) (Sydney, LBC Information Services, 1996) (990pp); 2nd edn (with Bruce Dyer) (Sydney, LBC Information Services, 2000) (705pp); 3rd edn (with Bruce Dyer and Matthew Groves) (Sydney, LawBook Co, 2004) (868pp); 4th edn (with Bruce Dyer and Matthew Groves) (Sydney, LawBook Co, 2008) (forthcoming) CONTRIBUTIONS TO BOOKS

‘Remedies against the Bureaucracy’ in Ross, S and Weinberg, M (eds) Law For the People (Sydney, Penguin, 1976) 180–187 Australian commentary on ‘Administrative Law’ title in Halsbury’s Laws of England, 4th edn (London, Butterworths, 1980) (with H Whitmore and PH Clarke)

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408 ‘A Public Lawyer’s Responses to Privatisation and Outsourcing’ in Taggart, M (ed) The Province of Administrative Law (Oxford, Hart Publishing, 1997) 40–70 ‘Nullity’ in Groves, M (ed) Law and Government in Australia (Sydney, Federation Press, 2005) 139–159 ‘Jurisdictional Error Without the Tears’ in Groves, M and Lee, HP (eds) Australian Administrative Law: Fundamentals, Principles and Doctrines (Melbourne, CUP, 2007) 330–344

CONTRIBUTIONS TO JOURNALS

‘Official Representations’ [1973] Public Law 4–6 ‘Hostile Witnesses’ [1974] Australian Current Law Digest 151–152 ‘Must the Crown Call Adverse Witnesses?’ [1974] Australian Current Law Digest 152–154 ‘Amendments and Limitations Acts’ [1975] Law Society Journal (NSW) 184 ‘Goodbye Hearsay: Hello Relevance – Subjective Statements under section 48 of the New South Wales Evidence Bill 1991’ (1991) 65 Australian Law Journal 596–606 ‘Local Government Liability for Substandard Building’ (1992) 15 UNSW Law Journal 389–422 ‘Directors Trussed up on a Slab?’ (with M Corrigan) (1992) 8 (7) Company Director 20–21 ‘Complex Criminal Trials: AIJA Report’ (1992) 66 Australian Law Journal 825–830 ‘An Administrative Appeals Tribunal for New South Wales: Expensive Legalism or Overdue Reform?’ (1993) 52 Australian Journal of Public Administration 208–214 ‘Some comments on the Nader Report on Complex Criminal Trials’ (1994) 5 Current Issues in Criminal Justice 274–279 ‘Ministerial directions: the Battle of the Prerogatives’ (1995) 6 Public Law Review 77–95 ‘Criteria for Restricting Collateral Challenge’ (1998) 9 Public Law Review 237–254 ‘The Resurgence of Jurisdictional Facts’ (2001) 12 Public Law Review 17–39 ‘Unreasonableness and Error of Law’ (2001) 24 UNSW Law Journal 315–345 ‘Nullity’ (2004) 40 AIAL Forum 19–32 ‘Is the ADJR Act Hampering the Development of Australian Administrative Law?’ (2004) 15 Public Law Review 202–219

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‘Commentary on the First Lecture by the Hon J J Spigelman AC, Chief Justice of New South Wales’ AIAL National Lecture Series on Administrative Law No 2 (Australian Institute of Administrative Law, 2004) 17–23 ‘Is the ADJR Act Hampering the Development of Australian Administrative Law?’ (2005) 12 Australian Journal of Administrative Law 79–97 ‘Private Bodies, Public Power and Soft Law in the High Court’ (2007) 35 Federal Law Review 1–24 ‘Government Liability in Negligence’ (2008) 32 Melbourne University Law Review 44−82

BOOK REVIEWS

Review of Sharpe, RJ The Law of Habeas Corpus (1977) 40 Modern Law Review 239–240 Review of Heydon, JD Evidence: Cases and Materials (1977) 8 Sydney Law Review 270–271 Review of Freckleton, I and Selby, H Expert Evidence, (1994) 18 Criminal Law Journal 302 Review of Chan, J and Barnes, L The Price of Justice? Lengthy Criminal Trials (1996) 18 Sydney Law Review 413–415

REPORTS

Contribution to Motor Accidents: the Act and Background Papers (NSW Attorney General’s Department, 1989) Managing Complex Criminal Trials: Reform of the Rules of Evidence and Procedure (Australian Institute of Judicial Administration, 1992) (115pp) Report of the Review by the Hon James Samios, MBE, MLC, into the Operation of the Racial Vilification Law of New South Wales (1992)

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Index fact review 301–2, 308 future research 13–14 golden thread 5 jurisdictional error 99 legislation analysis 8 litigation, limitations of 186, 199, 203 merits review 326 political theory 161, 178, 184 Prince Charming 377 privative clauses 1, 3, 99, 326 proper purposes 147, 156–7 public/private divide 186, 205, 226 publications 407–9 quasi-regulation 377 role of administrative law 221, 375 scholarship 2–4 teacher 185, 301, 247, 326, 376 Australia deference 27–9 environmental courts/tribunals 327–32 High Court 23–7, 93–6, 125 legalism 23 merits review see merits review, Australia multifunctional agencies 282 pluralism 327 separation of powers 280, 287–9, 292 soft law in 389–90, 392–3 tribunals see tribunals

AAT (Administrative Appeals Tribunal (Australia)) 8, 290–91, 298–9, 303, 393 adjudication see administrative adjudication, tribunals administrative adjudication 273–99 and administration 282, 292, 294–6 background 273–5 history see United Kingdom, governmental system tribunals see tribunals Administrative Appeals Tribunal (AAT) (Australia) 8, 290–91, 298–9, 303, 393 administrative law constitutionalisation 17–19 future topics 13–14 guidance for government 384–5 internationalisation 18, 19–22 merits review and 347–8 pluralism 325, 327, 347 red light and green light 210–12 role 219–21, 375 Administrative Procedure Act 1946 (US), and common law 45–69 adjudication and rule making 296–7 background 45–7 common law, definition 46–7, 52 detailed prescriptions 47–8 ex parte comments 51 informal rule-making 48–9 judicial review see judicial review, US proposed rule making, notice of 50–51 Aronson, Mark academic career 2 bills of rights 124, 125 cited in cases 3–4 common law doctrines and price control 186, 199, 200 education 1, 99

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bills of rights see also Human Rights Act 1998 (UK); Human Rights Act 2004 (Australian Capital Territory), Charter of Human Rights Act 2006 (Vic) Australia 264 Canada see Charter of Rights and Freedoms (Canada) impact 123–6 New Zealand see New Zealand

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Canada, judicial review see also Charter of Rights and Freedoms (Canada) evolution 126–30 standard 313 Chancery reforms 153–4 Charter of Human Rights Act 2006 (Vic) 264 Charter of Rights and Freedoms (Canada) 123–45 abuse of discretion and 138, 139, 141, 143 Diefenbaker Bill of Rights 129–30 fundamental justice and 133–4 impact 123–6 concerns 131 procedural fairness 131–7 reach of s7 131–6 substantive review 137–44 charters 400–401 codes 397–9 commercialism 386–7 common law price control 185–204 airport services 193–5 background 185–6 dominant market position abuse 189–90 electricity sector 188–91, 192–3 electricity transmission charges 196–200 forms of doctrine 186–7 historical development 187–8 light-handed regulation 190 prime necessity 188–9, 191 private law context 191 quantum meruit 195, 197 rates immunity 200–202 state-owned enterprises (SOEs) 188–91, 191–3, 202–4 statutory duty as enforceable contract 191–3 Commonwealth (Australia) Ombudsman 359 compensation see tort law, punitive/deterrent role constitutional torts 261–2, 270–71 contracts 225–8, 246 see also London Tube, PPP

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double-handed role 225 hierarchy 225–6 limitations 226–7 public issues 228 standard terms 192–4 terms 236–7 contractual governance 225–6 corporatisation 199–202 courts relationship with executive 275–81 tribunals and, comparison 283–7 criminal law, torts and 247–8 Crown, legal personality 161–84 background 161–2 collective recognition 180–81 Crown as symbol of government 164–5 immunity of Crown/non-immunity of ministers 163–4 official liability 174–8 personal/punitive remedies 178–80, 182–4 political theory 170–74 public law methodology 166–70, 178–84 damages see tort law, punitive/deterrent role de novo review 65–6, 290–91, 332, 337 deference Australia 27–9 Canada 137–8 UK 36–8 democratic requirement 11, 219–21 deterrence see tort law, punitive/deterrent role devolution legislation, interpretative obligations and 100–101, 105–6, 119, 121 Diefenbaker Bill of Rights 129–30 Donoughmore Committee 1932 285–6 due process 68–9 England see United Kingdom Environment courts and tribunals, Australia

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Index

reading broadly 111–12 reading down 109–11 reading in 112–15 scope 103–4 Human Rights Act 2004 (Australian Capital Territory) 10, 264 human rights, and, tort law 263–8, 270

New South Wales Land and Environment Court 327, 330–31, 335, 339–41 Queensland Planning and Environment Court 328, 336, 338–9 South Australia Environment Resources and Development Court 327, 332–4, 337–9 Tasmania Resource Management and Planning Appeals Tribunal 328, 332, 335, 341 equitable relief see public power, and equitable relief evidence, rules of 304–6, 342–4 ex parte comments 51 exhaustion regime 60

improper purpose 158–60 integrity review, Australia accountability tool 369–72 application to ombudsmen 365–72 background 349–50 conceptual framework 366–9 definition 353–4 institutional integrity 351–3 integrity, definition 350–53 ombudsmen’s proactive role 12, 354–65, 373–4 audit 355–6 Australian Capital Territory Ombudsman 362 Commonwealth Ombudsman 359 NSW Ombudsman 356–9 Queensland Ombudsman 360–61 system fixing 354–5 Tasmanian Ombudsman 364 Victorian Ombudsman 361–2 Western Australian Ombudsman 364–5 interpretative obligations see under Human Rights Act 1998 (UK)

formalism 23, 25–7, 29–33 France official immunity 175–6 separation of powers 280 Franks Committee Report 1957 285–6 fraud, vitiating effect 83–8 government liability 250 governmental system see under United Kingdom grey-letter law see soft law guides/guidelines 394–7 Hickman principle 1, 3 Human Rights Act 1998 (UK) 33–5, 41–2, 43, 89, 99–121, 264–8 application 102–5 background 99–101 compatibility search 102–3 compensation 264–8 Convention rights compatibility 100 effect 119–21 interpretative obligations 99–101 examples 107 ordinary principles 102 judicial legislation and 104–5, 115–19 linguistic/conceptual compatibility 107–9

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judicial review 89–96 abuse of power 90 Australia 23–33 see also integrity review, Australia; merits review, Australia activism 23–5 constitutional writ 149 deference 27–9 formalism 9, 23, 25–7, 29–33, 93–6 human rights and 124–5 purposes 147, 154–5, 159–60 remedies 149–50

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Canada constitutional foundations 128–9 evolution 126–30 interests at stake 127 rights-based claims 129–30 standard of review 137–9 substantive review 137–9 common law approach 91–3 common law 20–22 constitutionalisation 17–19 fraud 83–7 internationalisation 18, 19–22 legitimate expectation 90–92 limitations 199,203 mistake of fact 77–82, 317–22 natural justice 72–6, 127, 304, 308–9, 311, 314–15 proportionality 34–9 public morality and 251 purposes 154–60 rule of law 89–90 substantive unfairness 90–92 ultra vires theory 126–7 UK 27–8, 33–42 background 33–4 deference 36–8 formalism 40–2 proportionality 27, 34–6, 37–40, 42 US 51–66 action committed to agency discretion 53–6 agency statutory interpretation 61–4 arbitrary and capricious test 64–5 availability 51–3 co-operative approach 97 de Novo review 65–6 non-statutory remedies 52–3 standards 61–6 standing to seek 56–9 timing 59–61 justices of the peace 276 Kerr Committee 1971 290, 327

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law, rules as 383 legal personality see Crown, legal personality legality principle 17–18 Leggatt Review of Tribunals 286–7 legitimate expectation 90–92 London Tube, PPP 223–46 see also public private partnerships (PPPs)/public finance initiatives (PFIs) arbiter 237–40, 242, 245 background 11, 223–5 contract issues see contracts flexibility/discretion 236–7 investment uncertainty 245–6 legal complexity 236 legislative framework 233–4 lessons 244–6 modernisation plans 240–41 performance 241–4 players’ roles/relations 234–5 previous model 234 risk transfer 235–6 tied supply chain 244–5 malice 254–5 managerialism 386–7 manuals 399–400 merits review, Australia administrative law and 347–8 background 290–1, 325–7, 329–30 definitions, variation 332–3, 345 environmental courts/tribunals 327–9 evidentiary requirements 341–4 legal analysis issues 329–32 legal dimensions, variation 333–4 pluralism and 327, 345, 347 precautionary principle and 346 procedure 340–41 relevant factors 337–9 scope 334–7 Metronet 241–4, 245 misfeasance in public office 254, 256–7, 262 multifunctional agencies 280–83

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Index

economic efficiency 212–13 experimentation 215–16 litigation 199 multiple modalities 218–19 multiple motivations 214–15 prisons, US 212–19 procedure/substance issues 207–12 railways 224 reform efficiency 215 opportunity 213 special interest protection 217–18 statutory duties 192 privative clauses 1, 3, 125 procedural fairness 18, 72–6, 127, 304, 308–9, 311, 314–15 professionalism 384–6 proper purpose improper purpose 158–60 principle 154–5, 160 tests 156–7 public finance initiatives (PFIs) see public private partnerships (PFIS)/public finance initiatives (PFIs) public law methodology 166–70 public opinion 176 public power, and equitable relief 147–60 background 147–8 Chancery reforms 153–4 law of powers see powers, law of origins 149–53 proper purpose see proper purpose public private partnerships (PPPs)/public finance initiatives (PFIs) 228–32 see also London Tube, PPP conditions 229–30 critique 231 deals 231–2 models 225, 228–9 rationale 229 risk transfers 230–31 value for money 229 public/private distinctions 186–8, 202–4, 205–7, 210–11, 218–19, 225, 244

natural justice see procedural fairness New Deal agencies 296 New Zealand Bill of Rights 131 compensation 263 common law price control see common law price control official liability 174–8 Ombudsmen see also integrity review, Australia Australian Capital Territory 362 Commonwealth 359 New South Wales 356–9 Northern Territory 362–3 Queensland 360–61 roles 354–6 South Australia 363–4 Tasmania 364 Victoria 361–2 Western Australia 364–5 people’s will 175–6 PFIs see public private partnerships (PFIs)/public finance initiatives (PFIs) political theory 9, 170–4 powers, law of 148–9 see also public power, and equitable relief cross-fertilisation and 155–6 distinctions 156–7 equitable origins 149 statutory context 258 PPPs see public private partnerships (PFIs)/public finance initiatives (PFIs) precautionary principle 346 preclusive clauses see privative clauses price control see common law price control prime necessity 188–9 prisons, US, privatisation 212–19 privatisation 205–21 administrative law issues 208–9 background 205–7 democratic requirement 11, 219–21

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mixed administrations 205, 244 see also privatisation punishment see tort law, punitive/deterrent role quasi-regulation see soft law rates immunity 200–202 rights jurisprudence see also judicial review, Australia; United Kingdom, judicial review approaches 16–17, 43 dimensions 15–16, 42–3 rule of law 89–90, 248, 251, 294 rules of evidence 304–6 as law 383 rule-making see under Administrative Procedure Act 1946 (US), and common law separation of powers 277–80, 285, 291–3 soft law 377–405 advantages for government 383–4 in Australia 389–90, 392–3 categories 379–80 charters 400–401 codes 397–9 commercialism 386–7 concerns 387–9 definitions 378–80, 383 emergence 377–8 guides/guidelines 394–7 legal status 393–404 managerialism 386–7 manuals 399–400 policy and 390–2, 402–4 professionalism 384–6 standards 401 statutory definitions 381–2 sovereign will 175–6 standards 401 state-owned enterprises (SOEs) 188–91, 191–3, 202–4 statutory duty as enforceable contract 191–3

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statutory interpretation agency, by 61–4 approaches 109–15 deference 28–9 interpretation obligations 99–105, 119–21 surrogacy principle decision-maker’s fault 72–3 divergent outcomes 88–9, 97 see also judicial review fraud, vitiating effect 83–8 material mistake of fact and 75–8 procedural fairness requirements and 73–5 public service principle 81–3 review/appeal principles 78–81 third party fault 71–2 third party fault 71–2 tort law, punitive/deterrent role 247–71 background 247–9 causes of action 253–7 compensatory function 268 constitutional torts 261–2, 270–71 deterrence 249–51 exemplary damages 252–3, 269–70 human rights and 263–8, 270 malice 254–5 misfeasance in public office 254, 256–7, 262 negligence 247–9, 268 punitive damages 251–3 theory 249–51 trespass 248–9, 257–61 trespass 248–9, 257–61 tribunals 274, 283–99, 301–23 adjudicatory function 274, 281–302 courts and comparison 283–6, 293 functional differentiation 287–93 fact-finding 301–23 background 301–3 evaluation 309–11 evidence 308–9, 341–2 facts 306–8 judicial scrutiny 312–22

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Index

administrative law judges 273, 294–7 APA see Administrative Procedure Act 1946 (US), and common law due process clauses (Constitution) 68–9 First Amendment 59 judicial review see judicial review, US multifunctional agencies 282 New Deal agencies 296 official immunity 175 prisons, privatisation 212–19 separation of powers 279 tribunals courts and 284–5 functional differentiation 292 institutional balance 294–8 unreasonableness test 27–8, 35

no-evidence/substantial evidence tests 312–13 policy 338, 393 institutional balance 293–9 problem 283 procedural fairness 304, 308–9, 311, 314–15 procedure 303, 309, 315, 333, 340–41 reform proposals 286–7 rules of evidence 304–6, 342–4 Tube see London Tube, PPP United Kingdom governmental system 275–83 early 275–6 multifunctional agencies 280–83 parliamentary sovereignty 276–7 tribunal reform 286–7 tri-partite division 277–80 judicial review see judicial review, UK United States adjudication and administration 293–5 administrative judges 273, 294–7

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value for money (VFM) 229, 230, 231 Wednesbury test 27–8, 34–6, 42, 147, 254, 317

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