Ballarat & Queens Anglican Grammar School v The Hon. Ryan, S

[1985] FCA 551

Re: BALLARAT AND QUEENS ANGLICAN GRAMMAR SCHOOL
And: SENATOR THE HONOURABLE SUSAN RYAN
No. VG53 of 1985
Administrative law

COURT

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Jenkinson J.

CATCHWORDS

Administrative law - judicial review - grant of financial assistance in respect of recurrent expenditure of non-systemic school - determination of level at which financial assistance to be provided to school - application of Education Resources Index - measure of total private income - ascertainment of net private income - deduction of expenditure on boarding operations.

Administrative Decisions (Judicial Review) Act 1977 - s.5

Commonwealth Schools Commission Act 1973

States Grants (Schools) Act 1976 - s.17

States Grants (Schools Assistance) Act 1983

States Grants (Schools Assistance) Act 1984 - ss. 3, 7, 29, 89, Sch. 9.

HEARING

MELBOURNE
#DATE 31:10:1985

JUDGE1

Application for an order of review in respect of a decision to which the Administrative Decisions (Judicial Review) Act 1977 applies.

1. The applicant company has at material times conducted a co-educational school in Ballarat, for both boarders and day scholars. The school and the applicant have the same name. The respondent is and at material times was the Minister of State for Education responsible for the administration of the States Grants (Schools Assistance) Act 1984, under which the decision was made by her delegate, James Frederick McMorrow. Section 89 of that Act both authorised the delegation and deemed the power exercised by the delegate to have been exercised by the Minister.

2. The States Grants (Schools Assistance) Act 1984 enables the Minister to authorise the grant of financial assistance to the States and the Northern Territory for and in relation to schools. One kind of financial assistance which the Act authorises is payment to a State or that Territory of amounts of money, in respect of recurrent expenditure in respect of the year 1985, and in respect of several successive years thereafter, of a "non-systemic school" situated in the State or Territory. It is unnecessary for present purposes to set out the elaborately defined meaning of "non-systemic school", within which the school conducted by the applicant falls. It is sufficient to say that the definition comprehends, in relation to the State of Victoria, primary and secondary schools, other than those conducted by or on behalf of the State Government or conducted for the profit of an individual, that are not included in "an approved school system" and are included in "the list of non-systemic schools". The Ballarat and Queens Anglican Grammar School was not in an approved school system, nor conducted for the profit of an individual, and it was at material times in the list of non-systemic schools. That list had been prepared and was maintained in compliance with the requirements of a series of Acts, of which the first was the States Grants (Schools) Act 1976 (see s.17 thereof) and of which the last preceding the enactment of the States Grants (Schools Assistance) Act 1984 was the States Grants (Schools Assistance) Act 1983. Section 7(1) of the States Grants (Schools Assistance) Act 1984 provides:
   
   

"In this Act, a reference to the list of non-systemic schools shall be construed as a reference to the list of non-systemic schools in force for the purposes of the States Grants (Schools Assistance) Act 1983 immediately before the commencing day or, if that list is varied after that day in accordance with this section, that list as so varied."

Section 7(2) provides:

"The Minister shall, where the Minister considers it appropriate to do so, as soon as practicable after the commencing day, determine in writing that the list of non-systemic schools be varied, with effect from a date specified in the determination including a date before the making of the determination, by substituting for the level, denominated as level 1a, level 1b, level 2 or level 3, at which financial assistance was provided in respect of the school under the States Grants (Schools Assistance) Act 1983 a new level, denominated by a number between 1 and 12 (inclusive), at which financial assistance is to be provided in respect of the school under this Act, and, where the Minister does so, the list shall, with effect from that date, be deemed to be so varied."

The "commencing day" was 25 October 1984. The power of determination conferred by s.7(2) having been delegated to James Frederick McMorrow, he determined in a writing dated 6 February 1985 that the list of non-systemic schools be varied, with effect from 1 January 1985, by substituting a new level, denominated by the number 3, at which financial assistance is to be provided in respect of the Ballarat and Queens Anglican Grammar School under the Act. That determination is the decision in respect of which the applicant seeks an order of review. The choice of level involved in the decision not only influences the amount of money authorised by the Act to be paid to the State of Victoria, but also determines the amount of money which that State will pay to the applicant, in fulfilment of a condition subject to which financial assistance under the Act is granted to the State. (See, for example, s.29(5)(a).) Accordingly the applicant is a "person who is aggrieved by" the decision, within the meaning of s.5 of the Administrative Decisions (Judicial Review) Act 1977.

1. The higher the number by which a level is denominated, the greater the amount, generally, fixed by the Act as that allowed, per student receiving education at the school, in the computation of the grant to the State in respect of recurrent expenditure of the school. The level assigned by Mr. McMorrow's decision was that denominated 3, for which s.29 and Schedule 9 of the Act authorised the Minister to allow $382 per student receiving primary education and $600 per student receiving secondary education. If level 4 had been assigned, the amounts would have been $565 and $898 respectively.

2. The decision to assign to the applicant's school the level 3 rather than level 4 was impugned by reference to the considerations given weight or said to have been given weight in the making of the decision. The terms of the Act, considered alone, do not clearly disclose what particular considerations the legislature intended should influence the decision. Sub-sections (3), (4), (5), (6), (7) and (8) of s.7 are concerned with variation of the list of non-systemic schools which the Minister may make in consequence of a change in the location of a school or part of a school or in consequence of a change constituted by the provision of a new level of education at a school. The criteria specified in s.7(8) for approval of such changes throw little light on the subjects of debate in this case. Sub-sections (9), (10), (11), (12), (13), (14) and (15) of s.7 are concerned with variation of the list of non-systemic schools by including in the list a school not in the list, or a school in so far as that school provides education at a particular level. (A school is included in the list of non-systemic schools in respect of specified levels of education, and the definition of the expression "non-systemic school" includes this limitation : "in so far as the school provides education at ...... the level or levels of education, in respect of which it is included in that list.") Section 7(12) authorises the Minister to make variations of that kind in the list of non-systemic schools. Section 7(13) provides:
   
   

"Where the Minister makes a determination under sub-section (12) varying the list of non-systemic schools as in force for the purposes of this Act or of a subsequent schools assistance Act by including in the list a school, or a school in so far as it provides education at a particular level, the Minister shall, in respect of the school so included, specify in the determination the level, being a level of assistance set out in column 1 of Parts I, II, III and IV of Schedule 9, at which financial assistance is to be provided under section 29 to the school, or to the school in so far as it provides education at that level, for the purpose of meeting recurrent expenditure of the school, or of the school in the provision of education at that level."

1. The expression "subsequent schools assistance Act" is defined to mean -
   
   

"an Act that comes into operation after the commencing day and that makes provision for the granting of financial assistance to the States and to the Northern Territory for and in relation to schools in respect of a matter or matters corresponding, or substantially corresponding, to a matter or matters in respect of which financial assistance may be provided under this Act."

Section 7(14) provides:

"The Minister shall, in determining, for the purposes of sub-section (13), the level at which financial assistance is to be provided under this section to a school, or to a school in so far as it provides education at a particular level, for the purpose of meeting recurrent expenditure of the school, or of the school in respect of the provision of education at that level, have regard to the need of the school for such assistance."

It is in these provisions that the legislative intentions are disclosed, first, that the financial assistance of which payment is authorized under s.29 in respect of recurrent expenditure of the school is provided to the school "for the purpose of meeting" that expenditure and, second, that the level at which that assistance is to be provided is to be determined with regard to "the need of the school for such assistance". No explicit legislative guidance of that kind is given to the Minister in relation to the exercise of the determinative function conferred on her by s.7(2). But the Act which directed the preparation of the list of non-systemic schools (the States Grants (Schools) Act 1976) also gave direction for specifying the level at which assistance was to be provided for each school in respect of recurrent expenditure by reference to "the respective needs of schools for assistance in respect of recurrent expenditure"; and the succeeding Acts which gave direction for the maintenance and variation of the list gave directions also of the same kind as those contained in sub-sections (13) and (14) of s.7 of the 1984 Act. It may be inferred that s.7(2) conferred a power of variation to enable a translation to be effected from schedules containing four levels of assistance to schedules containing 12 levels, and that it was thought unnecessary to give explicit direction to effect the translation with regard to the need of each school for assistance. The concept of need is also given explicit expression in s.7(20), which provides:

"The Minister may, having regard to any significant change in the need of a non-systemic school for financial assistance, for the purpose of meeting recurrent expenditure of the school, by determination in writing, vary the list of non-systemic schools by specifying, in the instrument of variation, in respect of the school, a different level at which financial assistance is to be provided to the school for the purpose of meeting recurrent expenditure of the school and, where the Minister does so, the variation to the list as so in force shall, unless the Minister, in special circumstances, specifies in his or her determination that it should take effect from the 1 January preceding the making of the determination, take effect from the expiration of the 31 December next following the making of the determination."

The 1984 Act gives no exposition of what the expression "the need ...... for financial assistance" means. It is the need of the institution of which the Act speaks, not the need of those who conduct the institution, for the provisions of the Act draw a clear distinction between the two. The need is that of "the school", the institution providing education. The person or persons who conduct the school, to whom payment is made by the State of moneys equal in amount to moneys paid by way of financial assistance to the State in respect of the school, and with whom the Commonwealth may make agreements with respect to the school, is or are comprehended in the Act by the expression "approved authority of the school".

1. The choice of level 3 was indicated by the result of the application of a mathematical formula, called an Educational Resources Index and so ERI, which compares annual income, from sources other than the public funds, conceived to be available to meet the recurrent expenditure of the school on education, and the amount of annual income which would be required to meet the recurrent expenditure of the school if the school were to provide education of a certain standard. Available annual income is expressed as a percentage of the recurrent annual expenditure thought to be required for attainment of that standard. A percentage above 50 and below 76 attracted assignment of level 3, unless special circumstances were thought to justify some other level. A percentage of 50 would have attracted assignment of level 4. It is unnecessary to consider the determination of the amount required for expenditure, because no criticism was directed by the applicant to that element of the formula. The applicant's attack on the decision calls into question the reasons advanced in justification of one of the steps involved in ascertaining the income from private sources available to meet that expenditure.

2. The States Grants (Schools Assistance) Act 1984 does not expressly declare the provision of residential accommodation for students at a school and the training of students so accommodated before and after the periods when day students are at school to be outside the conception of education in respect of which financial assistance is to be provided under the Act. But the expressions "primary education" and "secondary education" in relation to a "non-government school in a State" are defined in s.3(1) of the Act to mean education "of a kind similar to that provided for students at government" primary and secondary schools respectively in the State. And the parties were in agreement that the education and the recurrent expenditure with which the Act was concerned had nothing to do with what pertained only to boarders.

3. When the States Grants (Schools Assistance) Act 1984 was a Bill in the Parliament, both Houses had for information a statement, which the respondent Minister had published on 14 August 1984, of the policies which the Executive Government intended to advance in the administration of that Act. The statement was entitled "Commonwealth Schools Commission Guidelines 1985-88." The Commonwealth Schools Commission, constituted by the Commonwealth Schools Commission Act 1973, has for its principal functions the furnishing of information and advice to the Minister for Education with respect to the following matters:
   
   

"(a) The establishing of acceptable standards for buildings, equipment, teaching and other staff and other facilities at government and non-government primary and secondary schools in Australia, and means of attaining and maintaining those standards;

(b) The needs of such schools in respect of buildings, equipment, staff and other facilities, and the respective priorities to be given to the satisfying of those various needs;

(c) Matters in connexion with the grant by Australia of financial assistance to the States and the Northern Territory for and in respect of schools and school systems and to schools in the Australian Capital Territory, including matters relevant to the necessity for financial assistance to be so granted by Australia, the conditions upon which financial assistance should be so granted and the amount and allocation of any financial assistance so granted; and

(d) Any other matter relating to primary or secondary education in Australia, or to Australian schools, that may be referred to the Commission by the Minister or which the Commission considers to be a matter that should be inquired into by the Commission."

The respondent Minister's statement included the following passages:

"The Government's Guidelines to the Schools Commission are the principal statement of Government policy for schools in Australia. This year they present a major new policy initiative in recurrent funding by the Government, the first such development since the implementation of the Karmel report by the Whitlam Government a decade ago.

...

Last year the Government announced that it would be seeking to implement major changes in the principles and practices to be followed in the recurrent funding of schools. It asked the Schools Commission to review policies and provide relevant advice. These Guidelines represent the Government's response to that advice.

...

Special features of this new approach to policy by the Hawke Government are:

- a scheme for recurrent funding which has a common basis for all schools, both government and non-government;

- this common basis to be provided by a community standard of educational resources against which Commonwealth contributions to government and non-government schools can be determined;

- stability and long-term security for both sectors through the laying out of funding allocations towards an eight-year target with the first four years' funds to be legislated;

- significant increases in the level of Commonwealth funding to government schools, and a corresponding increase in the involvement of the Commonwealth in working with the States towards improved educational outcomes;

- significant increases in funding for non-government schools and a more effective application of the needs principle; this will involve a new scheme of funding categories and a new needs formula;

- provision for enhanced public accountability for the expenditure of Commonwealth funds by both government and non-government school authorities.

...

The Government has decided on a number of significant changes to the present system for the recurrent funding on non-government schools. These changes include the creation of 12 categories of schools, the adoption of a new needs assessment formula, the provision of funds in a planned way over a long term, and enhanced accountability arrangements.

...

Relative needs of schools will be assessed by a new measure of the total private income of schools. This measure will be more comprehensive than that used previously by the Schools Commission. This new approach will measure total private income and thus take account of income for both recurrent and capital purposes. Consideration will be given to appropriate allowances for boarding costs to a determined standard and for any other justifiable costs, including debt servicing for capital needs. The Commission is requested to consult with non-government school authorities and advise on the detailed arrangements for implementation of this approach from 1985."

What are called "categories" in that statement are called "levels" in s.7(2) and elsewhere in the Act. It is with what in the statement are called "appropriate allowances for boarding costs to a determined standard" that this application is concerned.

1. On 10 December 1984 the respondent Minister approved the Commission's proposals concerning the "new measure of the total private income" of non-government schools. The proposals were given expression in the "Education Resources Index" or "ERI", to which I have referred. The total private income of a non-government school was to be ascertained, for the purposes of the formula, by aggregating the amount by which professional salaries actually paid by the school fell short of the "average salaries" payable for the same professional services in a government school (an amount labelled "contributed services") and what was called "total private cash income". The latter sum was described, in the proposals which the respondent approved, thus:
   
   

"The sum of tuition and boarding components for each of the following items:-

. fees for operating purposes

. all other operating income from private sources

. fees reserved for capital purposes

. private contributions to loan principal repayments

. all other capital income from private sources excluding the proceeds of new long term loans for capital purposes."

The aggregate of "contributed services" and "total private cash income" is called, in the proposals approved by the respondent, "total private income". To ascertain "net private income", the amount of which the ERI formula requires to be expressed as a percentage of the amount ascertained as standard recurrent expenditure or "assessment standard", certain "allowances" are to be deducted from "total private income". In the proposals approved by the respondent these allowances are described thus:

". expenditure on boarding operations (including debt servicing and minor capital costs) up to a limit of $3,000 per boarder (in average 1983 price levels)

. major boarding school capital expenditure up to a limit of $500 per boarder (in average 1983 price levels)

. a general allowance for capital-related costs (capital expenditure, debt servicing, cash provisions for future capital works, etc) calculated as a percentage of the school's private cash income (net of allowable boarding costs), as follows

Private Cash Income Percentage of as % of Assessment Private Cash Standard Income Allowed

15 or less 40

100 or more 7.5

with progressive adjustments between these limits

. minimum allowance for capital-related costs set at 5% of assessment standard (see below)."

Below that passage are set out directions for ascertaining the school's "assessment standard."

1. When the decision to assign the Ballarat and Queens Anglican Grammar School to level 3 was made at the beginning of February 1985 the information in respect of 1984 required for the application of the ERI formula was not available to the respondent's delegate. Information in respect of 1981 and in respect of 1983 was used. The application of the formula resulted in a percentage of 58.447 for 1981 and 59.752 for 1983. An average of the two was adopted. It is convenient for present purposes to use the information in respect of 1983.

2. In that year the applicant received fees in respect of tuition which averaged $1,657 per student attending the school. The applicant received in the same year $540,908 in boarding fees, which averaged $3,093 per boarder attending the school. (A fee for tuition and a separate fee for board and lodging are charged in respect of a boarder.) Expenditure on "boarding operations (including debt servicing and minor capital costs)" by the applicant in that year amounted to $838,009, an average of $4,959 per boarder. Because the ERI formula limited to $507,000 ($3,000 per boarder) the deduction from total private income which might be allowed in respect of "expenditure on boarding operations (including debt servicing and minor capital costs)" (which I shall call "boarding expenditure"), approximately $331,000 of the school's private income in fact spent on boarding expenditure was treated as available to defray the expense considered to be required for the provision of education at the "assessment standard".

3. Mr. Larkins Q.C., who appeared with Mr. Boaden for the applicant, did not deny that the power conferred by s.7(2) might lawfully have been exercised in implementation of a policy that non-systemic schools be deterred from incurring an annual boarding expenditure in excess of $3,000 per boarder. He acknowledged that the "need" of a school for financial assistance for the purpose of meeting recurrent expenditure on education, to which need the Act impliedly directs that regard be paid, may lawfully be conceived by the Minister to whom the power is committed as diminished by an amount received and spent by those conducting the school on other things, such as buildings or playing fields or goods or services for the maintenance of boarders, which in the Minister's judgment would have been better spent in meeting recurrent expenditure on education. But, according to Mr. Larkins' submission, it was not in implementation of such a policy that the ERI formula was declared by the Minister's delegate to have been framed. In an affidavit read in opposition to the application Mr. McMorrow deposed:
   
   

"The ERI was designed to measure the relative need of a school by comparing its total private income level against a standard base. The general principle underlying the formula is that schools which demonstrate the same capacity to raise income from their supporting communities should receive the same level of recurrent grants from the Commonwealth."

This policy, expounded by the delegate who in exercise of the power conferred by s.7(2) made the decision of which the applicant complains, is not served, but contradicted by the limitation to $3,000 of the allowance in respect of boarding expenditure, according to Mr. Larkins' submission. If it be right - and Mr. Larkins was not concerned to deny that it was right - to eliminate from total private income so much of that income as is required for boarding expenditure, all that is required by the particular school for that purpose must in Mr. Larkins' submission be eliminated in order to give effect to the "general principle underlying the formula". If each of two schools receives annually the same total private income, including boarding fees of $5,000 in respect of each of its 100 boarders, and one school spends annually $4,500 per boarder and the other school $5,000 per boarder on boarding expenditure, the result of the application of the ERI formula will be that $300,000 of the $500,000 received in boarding fees will in each case be deducted from total private income in determining, according to Mr. Larkins' submission, what the capacity is of each school to raise income from its supporting community for the provision of education. Mr. Larkins acknowledged that the sum of $50,000 by which in the one case boarding fees exceeded boarding expenditure should be regarded as income available for the provision of education, but the balance of $150,000 which is also treated, according to the ERI formula, as available for that purpose is not in fact available, having been spent, and should not be included in the measure of that capacity. In the other case none of the $200,000 treated as available is in fact available, Mr. Larkins pointed out. As a measure of "relative" need the formula is defective, according to Mr. Larkins' submission : one school has a capacity to raise income from its supporting community greater by $50,000 than the capacity of the other, yet their capacities and, other things being equal, their "needs" will be reckoned equal on the ERI percentage scale. If the former school kept no boarders, or if it both received boarders' fees and incurred boarders' expenditure at the rate of $3,000 per boarder per annum, their capacities to raise income from their supporting communities would be equal, according to Mr. Larkins' argument, but their "net private incomes" would differ by $200,000.

1. Mr. Larkins' argument might perhaps be answered on a verbal level by suggesting that the "capacity to raise income" in the passage quoted from Mr. McMorrow's affidavit is a capacity to raise gross income at the level in fact achieved, conceived as a capacity unaffected by variation in the goods and services provided by the school or by variation in the cost to the school of the goods and services provided. So conceived, the capacity to attract boarders to the school at a boarder's fee of $5,000 per annum would be unimpaired by reduction in boarding expenditure from $4,500 or even from $5,000 to $3,000 per boarder per annum. Presuming upon the circumstance that the ERI formula affects to deduct money spent on boarding expenditure from income of the school, Mr. Larkins frames his argument on the assumption that the capacity to which Mr. McMorrow refers is a capacity to raise income for the provision of education. The passage from Mr. McMorrow's affidavit which I have quoted is followed by these observations:
   
   

"The use of standard allowances for day-school capital costs, and maximum allowances for the costs of boarding schools, ensures that this general principle is not distorted by the choices made by individual schools as to how they actually apply the private income available to them or by considerations of the relative standard of services provided by different schools collecting equivalent amounts of income. The ERI recognises the capital needs of schools by providing income allowances which vary on the basis of general assumptions about the capital needs of schools at different income levels. It recognises the costs of boarding services by providing income allowances up to a fixed maximum, which effectively limits the extent to which additional Commonwealth general recurrent grants may be obtained by virtue of a school operating boarding services which require subsidisation by the school's other activities."

The observations in that passage enable the reader to consider what qualifications he is to place on the optative verb in the preceding passage, previously quoted, and to consider the sense in which the phrase "capacity to raise income from their supporting communities" was intended.

1. Mr. Larkins' submission was that the limitation to $3,000 of boardng expenditure in the ERI formula prevented attainment, in many circumstances and certainly in the circumstances pertaining to the applicant's school, of the declared policy objective to the attainment of which the respondent intended that the exercise of the power conferred by s.7(2) should be directed : that available private income should measure the need of financial assistance to provide education at the assessment standard. The submission that the policy objective of the respondent was thus to be understood Mr. Larkins supported by reference to the Minister's statement, previously quoted, that "relative needs of schools will be assessed by a new measure of the total private income of schools", and by reference to statements in the oral and the affidavit evidence of Mr. McMorrow which might be thought to suggest that it was not an object of the policy informing the exercise of the power conferred by s.7(2) that those conducting non-systemic schools should keep or bring boarding expenditure within the $3,000 limit, and that that policy was framed in indifference to the measures taken - and to the cost of the measures taken - by non-systemic schools to provide boarding facilities.

2. It was not part of Mr. Larkins' argument that the applicant was so circumstanced that it could not reasonably have limited boarding expenditure in 1983 to $3,000 per boarder, or that it could not, after the announcement of the ERI formula, reasonably have limited annual boarding expenditure per boarder to an amount which was equivalent to $3,000 in the money of 1983. (The ERI formula accommodates monetary depreciation.) There was evidence to indicate that the boarding expenditure in fact incurred by the applicant was reasonable in all the circumstances in which the school was placed, as there was evidence to indicate that $3,000 per boarder would have been a reasonable boarding expenditure of many non-systemic schools in 1983. But the submissions advanced by both parties assumed that the boarding expenditure of $4,959 per boarder was the result of choices and preferences reasonably conceived by the applicant and that, if other choices and preferences of the applicant had resulted in boarding expenditure of $3,000 per boarder, there was no evidence to establish that any of those choices and preferences would have been unreasonable. The submission by Mr. Larkins was that the respondent's declared policy eschewed concern with those choices and preferences, the objective of the policy being to measure need of assistance to provide education by reference to the private income available for education. Unless income from boarding fees exceeded boarding expenditure and so yielded a surplus available for education, the policy recked not of what a school chose to spend in boarding expenditure. But, so the submission concluded, in that respect the policy was contradicted by the formula limitation of $3,000.

3. In my opinion neither the policy as declared by the respondent and explained by the Schools Commission in the documents tendered in evidence nor the policy as described and explained by Mr. McMorrow in evidence is to be understood as Mr. Larkins suggested. On a fair reading of the whole of those sources it is in my opinion plain that the ERI formula, including that provision which operates to deem the amount of boarding fees received in excess of $3,000 per boarder to be an amount available for expenditure on education whether or not the amount of boarding expenditure be in excess of $3,000 per boarder, gives effect to the declared policy of the respondent in accordance with which the power conferred by s.7(2) is to be exercised. There is in my opinion no indication in any of the material in evidence, either that the respondent or her delegate failed to appreciate the effect of the operation of the ERI formula, and so mistook the policy which the application of the formula tended to promote, as Mr. Larkins suggested may have been the case, or that either of them stooped to disingenuity in exposition of the policy. (I need not therefore consider what, if any, ground of review such disingenuity might have afforded the applicant.) Much of the material in evidence is expressed in a style current in the discussion of public affairs and governmental policies : most of the documents tendered were composed for public information. The material achieves, in my opinion, a reasonable clarity, judged by contemporary standards, and discloses no disharmony between the policy as it is described and explained and the effects of the operation of the ERI formula.

4. For those reasons, the application must be dismissed with costs.