Esmonds Motors Pty Ltd v Commonwealth

[1970] HCA 15

HIGH COURT OF AUSTRALIA

Barwick C.J., Kitto, Menzies, Owen and Walsh JJ.

ESMONDS MOTORS PTY. LTD. v. THE COMMONWEALTH

(1970) 120 CLR 463

8 June 1970

Crown

Crown—Delegation by Minister of power to appoint prescribed authority—Validity—City Area Leases Ordinance 1936-1967 (A.C.T.), ss. 6*, 25**, 38***—Seat of Government (Administration) Act 1910-1959 (Cth), s. 12.

Decisions

June 8.
The following written judgments were delivered:-
BARWICK C.J. This is an appeal from the refusal of the Supreme Court of the Australian Capital Territory to make certain declarations in favour of the appellant which is a lessee the amount of whose rent payable under a lease granted under the City Area Leases Ordinance 1936-1967 (The Ordinance) of the Australian Capital Territory is calculated upon the unimproved value of the leased land appraised as required by the Ordinance (Esmonds Motors Pty. Ltd. v. The Commonwealth (1969) 15 FLR 314 .) (at p465)

2. The declarations sought by the appellant were as follows:-

"1. That pursuant to the terms of Crown Lease Registered Volume 46 Folio 4540 the Appellant is required to pay as rental for such Crown Lease the sum of One hundred and fifty-five dollars ($155.00) only per annum at the time and in the manner specified in the said Crown Lease. 2. That there has been no re-appraisement of the unimproved value of the land included in Crown Lease Registered Volume 46 Folio 4540 in accordance with the provisions of the City Area Leases Ordinance 1936-1967 and the Regulations made thereunder. 3. That the purported re-appraisement of the unimproved value of the land included in the Crown Lease Registered Volume 46 Folio 4540 made on or about the 18th day of July 1968 is void and of no effect. 4. That the purported delegation bearing date the 17th day of April 1968 by the second-named Respondent of the powers and functions conferred upon him by the City Area Leases Ordinance 1936-1967 and the Regulations made thereunder to the Assistant Secretary, Second Division, Land Administration Branch, Land and Property Division, Department of the Interior, to the Executive Officer, Third Division, Land Administration Branch, Land and Property Division, Department of the Interior and to the Chief Clerk, Third Division, Land Administration Branch, Land and Property Division, Department of the Interior, is void and of no effect." (at p466)

3. Among the questions raised in this appeal is the important question whether the Minister for the Interior is authorized by s. 38 of the Ordinance to make a regulation appointing himself to be the prescribed authority within and for the purposes of s. 25 (1) of that Ordinance. If the Minister is not so authorized, there was no valid reappraisement of the unimproved value of the land leased to the appellant to satisfy the terms of s. 25 (1) and the terms of what is referred to in the learned primary judge's judgment as "the substituted lease" to the applicant bearing the date of 10th March 1957. The further consequence would be that the appellant is entitled to the first three declarations which it has sought of the Supreme Court, the first declaration being limited to the situation existing at the date of the determination of these proceedings. (at p466)

4. The answer to the question whether the Minister is so authorized is to be found upon a full consideration of the Ordinance read as a whole with the object of finding in its expressions the intention with which it was made and, in particular, the intended extent of the regulation making-power given to the Minister: and an examination of the ambit of the regulations considered in relation to the scope and purpose of the Ordinance so ascertained: see Morton v. Union Steamship Co. of New Zealand Ltd. (1951) 83 CLR 402 . (at p466)

5. The regulation-making power given by s. 38 is so far as presently concerned a power to make regulations not inconsistent with the Ordinance, prescribing all matters which are required or permitted to be prescribed, or which are necessary or convenient to be prescribed for carrying out or giving effect to the Ordinance. The regulations must be not merely consistent with the provisions of the Ordinance but must in their substance be also such as are by the Ordinance upon its true construction required or permitted to be made or be, again, in their substance, such as may reasonably be thought to be necessary or convenient for carrying out or giving effect to the Ordinance. The nature and purpose of the Ordinance and of its substantial provisions thus set the limits to the Minister's power to make regulations. The power is limited to making regulations which, in their substance, are capable of being regarded as required or necessary or convenient for giving effect to or carrying out the Ordinance. Consequently in the present case it is necessary to relate the nomination of the Minister as prescribed authority to the Ordinance and the effectuation of its purposes. (at p467)

6. I think it can be said that the nomination of a person to be the prescribed authority is a "matter" within the meaning of s. 38 and also perhaps a matter required to be prescribed but at least necessary to be prescribed for carrying out the Ordinance. But it is not merely that somebody be appointed which is the matter. The matter to be prescribed, in my opinion, is the appointment of a person who could be regarded as a proper person to be so nominated as a means of carrying out the Ordinance. In other words, it is not the mere making of some regulation which is the execution of the power given by s. 38. The identity of the person nominated, in my opinion, partakes of the essence of that exercise. Consequently, the radical question in the appeal, in my opinion, is whether the Minister's regulation, nominating himself as the prescribed authority for the purposes of s. 25 (1), could be thought to be required or permitted or necessary or convenient for giving effect to or carrying out the Ordinance. Of course, if it could be so regarded by reasonable minds, the Court could not interfere however much it might not think the particular nomination suitable or appropriate. The question is one of power. The Court's function is limited to deciding whether the regulation is valid. But performance of that function involves considering whether the regulation in its substance could conceivably be required, permitted, necessary or convenient for carrying out the Ordinance. (at p467)

7. The Ordinance empowers the Minister to grant leases of land for business or residential purposes or for both purposes where the land is within an area within the Australian Capital Territory specified by the Minister and to be known as the "City Area": ss. 4 and 5. The term of any such lease shall be for such period up to ninety-nine years and upon such terms and conditions as the Minister determines or as are prescribed: s. 12. Apparently, the purpose of the Ordinance is to allow of standard conditions being set out in regulations applicable to leases for the various uses or purposes for which they may be granted. The rent to be specified in the lease is to be at the rate of five per cent per annum of the amount that the Minister has notified as the unimproved value of the land before the right to a grant of the lease of the land was offered for sale or applications invited for such a right, or the Minister by Gazette notice has declared that the right to the grant of a lease of the subject land shall be determined by ballot or a lease of the land has been granted under s. 15 or s. 17 of the Ordinance as the case may be. The unimproved capital value of the land is a fact determined according to a formula found in s. 3 (2). It is thus quite clear that the amount of the rent to be paid is not to be in the discretion of the Minister. Emphatic of this state of affairs is the express power in s. 18 (4) to allow of the demand for an additional rent where the lease provides for additional rent to be payable upon failure duly to pay the reserved rent. By virtue of s. 22 of the Ordinance, the Minister may determine the lease if not satisfied with the lessee's explanation of the reason for his failure to comply with the terms of the lease. (at p468)

8. The situation before the grant of a lease is quite different from the situation thereafter. Before the grant the Minister may set the terms of the lease. So far the lessee has no rights, except as a citizen to the observance of the Ordinance, for there is no lease. But once the lease is granted, the lessee has rights thereunder and in a real sense, the Minister stands in the place of the other party to the bargain, the lessor. (at p468)

9. The general purpose of the Ordinance may thus be seen to enable a legal relationship in the form of a lease of Commonwealth owned land to be formed between the Commonwealth and a citizen. A further purpose, and one pertinent to the present matter, is to provide for a means of keeping current the relationship of the unimproved capital value of the land as it fluctuates from time to time in point of fact and the rental payable by the citizen to the Commonwealth. (at p468)

10. The Ordinance therefore contemplates that the reserved rent will be varied at intervals during the terms of the lease. Consequently, s. 25 (1) requires a reappraisement of the unimproved value of the leased land "by the prescribed authority" at specified intervals of time. The rent is to become five per cent of such reappraised value. (at p468)

11. By s. 3 (2) the unimproved value of land leased or to be leased under the Ordinance is the capital sum which the lease, subject to the terms and conditions upon which it is held or is to be held, might be expected to realize if offered for sale on reasonable terms, assuming that the improvements (if any) on the land had not been made and that the lease had an unexpired term of ninety-nine years at the time of the sale and leaving out of consideration any rent payable in respect of the lease other than prospective increments or decrement of rent after reappraisement. It is quite apparent from the intricate nature of this formula for determining the unimproved value of the leased land that the prescribed authority, whether a natural or a juristic person, must be in a position to determine with impartiality, both actual and apparent, and in accordance with the formula, the unimproved value of the leased land. This he may do either of his own skill, knowledge and experience or by his own judgment upon information and evidence given by others: but in the latter case, he must have the requisite skill, knowledge and experience to discern the true from the false or the misleading in the material offered and to evaluate the worth of what is accepted as true. There must also be available to such authority the necessary time to exercise these faculties and functions. Above all, the prescribed authority must be able fairly to hold and to be seen to hold the scales between the Crown and the lessee for each has an interest in the reappraisement. (at p469)

12. Further, the person chosen to be the prescribed authority would be expected to be chosen for the relevant qualities he possessed. It would be expected that the chosen person should himself exercise the function of the prescribed authority. A person with authority to delegate his functions to any person or authority would appear on the very face of things not merely an unlikely choice to be the prescribed authority but indeed an impossible choice. The Minister by s. 6 (1) of the Ordinance may by notice in the Gazette, delegate to any person or authority all or any of his powers and functions under the Ordinance or within any regulations made under the Ordinance. If he were the prescribed authority, his function as such would, in my opinion, fall within the scope of the power of delegation under the Ordinance. It may well be said that the Minister would be unlikely to delegate such a function except to a member of his Department. But, in the first place, there is no legal restriction on him only so to do and in the second place, it by no means follows that all members of his Department would have the appropriate capacity to be the prescribed authority and carry out the important functions conferred upon it by s. 25 particularly having regard to the definition for the purposes of the Ordinance of the unimproved value of the land. Indeed, for my part, I would doubt if any member of the Department could be considered to be the appropriate person to hold the scales between the Crown and its lessee in so vital a matter as the reappraisement of the unimproved value of the leased land for the purposes of the lease. It is nothing to the point that the Ordinance by s. 27 (3) provides for an appeal against a reappraisement. That circumstance can be no justification, in my opinion, for the choice of a person unqualified to form the necessary judgment either upon his own knowledge and experience or upon material provided by others. (at p470)

13. One further circumstance is worth noting. In many places throughout the Ordinance powers, authorities and functions are expressly given to the Minister. If the Governor-General had intended the Minister to have the power of reappraisement of the unimproved capital value of land, with the power of delegation of his position to more than one person at any one time, it is somewhat strange that s. 25 did not expressly give that power to the Minister. So far from doing so the section gives to the prescribed authority the function of reappraisement leaving it to the Minister to nominate the prescribed authority by a regulation which can be seen consistently with the Ordinance to be required, permitted, necessary or convenient to carry out the Ordinance. (at p470)

14. All these aspects of the Ordinance must be considered when answering the question whether an appointment by the Minister of himself as the prescribed authority is authorized by s. 38 of the Ordinance. Having done so, I am of opinion that upon the true construction of the Ordinance as a whole, and in the light of the matters I have mentioned, the regulation appointing the Minister to be the prescribed authority is void as being unauthorized by s. 38 of the Ordinance. Such an appointment, in my opinion, could not conceivably be considered as required or permitted or necessary or convenient to be prescribed to carry out or give effect to the Ordinance. Accordingly, the purported reappraisement of the unimproved capital value of the land leased to the appellant is void and of no effect. Had I not been of this opinion, it would have been necessary to consider the validity of s. 38 of the Ordinance, which for the purposes of this judgment I have assumed. That is a matter on which I express no opinion but which obviously calls for close examination in an appropriate case. (at p470)

15. The appeal should be allowed and appropriate declarations made. (at p470)

KITTO J. By originating summons in the Supreme Court of the Australian Capital Territory the appellant sought declarations to the effect that a purported reappraisement of the unimproved value of certain land which it holds by virtue of a Crown Lease granted under the provisions of the City Area Leases Ordinance 1936-1967 of the Territory was void. The Supreme Court (Kerr J.) dismissed the summons (1969) 15 FLR 314 (at p471)

2. The lease was granted on 10th March 1957 for a term expressed to have commenced on 1st October 1956 and to end on 5th July 2047, that being portion of a term of ninety-nine years from 6th July 1948 for which a previous lease, contemporaneously surrendered, had been granted. The rent reserved was 77 pounds 10s. per annum until 5th July 1968 and thereafter during the remainder of the term at the rate of five per cent per annum of the unimproved value of the land as determined from time to time upon reappraisement under any statute, ordinance or regulation. (at p471)

3. No reappraisement was made before 5th July 1968, but by notice dated 18th July 1968 the appellant was informed by a Mr. J. H. Marshall, purporting to act as the prescribed authority under s. 25 (3) of the City Area Leases Ordinance, that the unimproved value of the land had been reappraised and that the reappraised unimproved value was $400,000. An accompanying letter was dated the same day but marked as signed on 2nd August 1968. In that letter Mr. Marshall stated that rent would be payable at the rate of five per cent per annum of the reappraised value for the twenty-year period commencing on 6th July 1968. (at p471)

4. One of the appellant's contentions before the Supreme Court and on the appeal was that no reappraisement could validly be made after 5th July 1968. I need not express any conclusion on this point for, as I shall explain, I am of opinion that even if the purported reappraisement had been made before 5th July 1968 it would have been void as having been made by a person possessing no lawful authority to make it. (at p471)

5. The relevant provision for reappraisement is in s. 25 (1) of the Ordinance. That provision requires the reappraisement to be made by "the prescribed authority". The Ordinance does not define this expression, but s. 14 of the Interpretation Ordinance 1967 defines "prescribed" to mean prescribed by any Ordinance or by regulations under the Ordinance. The City Area Leases Ordinance contains in s. 38 a provision purporting to authorize the Minister to make regulations, not inconsistent with the Ordinance, prescribing all matters required or permitted to be prescribed, or necessary or convenient to be prescribed, for carrying out or giving effect to the Ordinance. In 1936 the then Minister purported to make, under this provision, regulations called the City Area Leases Regulations, and in 1944 his successor purported to insert in those regulations a new reg. 9 providing that the prescribed authority for the purpose of sub-s. (1) of s. 25 of the Ordinance shall be the Minister. I shall assume that the purported grant by s. 38 of power to the Minister to make regulations is valid; but I must not be understood as so holding. Dr. Wynes in his book on Legislative, Executive and Judicial Powers in Australia, 3rd ed. (1962), p. 156, note 16, has expressed a doubt on the point, and it is a doubt that I share. The principle is well-established, and the Privy Council recently reaffirmed it in Cobb &Co. Ltd. v. Kropp (1967) 1 AC 141; (1966) 40 ALJR 177 , that a grant to a legislative body of a general authority to make laws for the peace, welfare and good government of its territory is not a grant of delegated power but is validly exercisable by endowing with the force of law in the territory subordinate provisions to be made in the form of regulations, Ordinances or the like. This principle may suffice to support the conferring upon the Federal Executive by s. 12 of the Seat of Government (Administration) Act 1910-1965 (Cth) of a general power to make Ordinances having the force of law in respect of the Territory for the Seat of Government; but it is not readily apparent to me why that general power is not a delegated power in the sense that it cannot be regarded as extending to the empowering of someone other than the Executive - a Minister in the instance before us, but it might equally be anyone at all - to make provisions of his own which likewise shall have the force of law in respect of the Territory. (at p472)

6. I assume, then, that the power which s. 38 purports to repose in the Minister is validly conferred upon him. As a matter of construction it extends to the prescribing of an authority for the purpose of s. 25 (1). But the question that arises is whether it is within the intention of s. 25 (1) for "the Minister" to prescribe "the Minister" as the authority for the purpose of that provision. By virtue of s. 23 of the Interpretation Ordinance the expression "the Minister" means the Minister for the time being administering the City Area Leases Ordinance and includes a Minister or member of the Executive Council for the time being acting for and on behalf of that Minister. No doubt the power to prescribe an authority for the purpose of s. 25 (1) may be well exercised by employing a description having a variable application; but the point that requires consideration is that the individual who is "the Minister" at a given time is one who possesses, as an attribute of that character, a power under s. 6 (1) of the City Area Leases Ordinance to delegate to any other person or authority all or any of his powers and functions under the Ordinance or any regulations under the Ordinance (except the power of delegation) so that the delegated powers may be exercised by the delegate with respect to the matters or classes of matters specified in the instrument of delegation. In fact the Minister on 17th April 1968 delegated all his powers and functions under the Ordinance and the regulations (except the power of delegation) to certain officials including the person for the time being holding or performing the duties of the office of Assistant Secretary, Second Division, Land Administration Branch, Land and Property Division, Department of the Interior; and it was as the person performing the duties of that office that Mr. Marshall, in signing the notice of reappraisement, described himself as the 'Prescribed Authority under Subsection (3) of Section 25 of the City Area Leases Ordinance". If reg. 9 is valid the description was correct, for in that event he, as well as the Minister administering the Ordinance and any other Minister acting for him and any other person falling within the terms of the delegation, was the "prescribed authority": he was exercising a power of his own: he was not the agent of the Minister to exercise the power on the Minister's behalf. The point of present importance is that to prescribe "the Minister" as the repository of a power is to build into the prescription a capacity to delegate the power. This seems to be contrary to the plain intention of s. 25. The intention, it seems to me, is that a regulation shall prescribe an authority to perform the act of reappraisement - not necessarily, of course, to do so without obtaining advice from others, but to do the definitive act himself and on his own responsibility. By virtue of s. 50 of the Interpretation Ordinance such a regulation must be notified in the Gazette, and by virtue of s. 12 (8) and (9) of the Seat of Government (Administration) Act it must be laid before each House of the Parliament within fifteen sitting days or else become void and may be disallowed by either House. These important checks upon the setting up of a repository for the power of reappraisement would disappear if s. 25 were taken to mean that "the Minister" might prescribe "the Minister". That would mean that "the Minister" might by regulation convert his power to prescribe an authority by regulation into a power to appoint one by delegation. For this reason I am of opinion that the power to prescribe an authority for the purpose of s. 25, assuming it to be validly conferred on "the Minister", is not validly exercised by a regulation purporting to prescribe "the Minister", and reg. 9 is accordingly unauthorized and void. (at p473)

7. In my opinion the appeal should be allowed, the Order of the Supreme Court should be set aside, and in lieu thereof there should be an order declaring that the purported reappraisement of the unimproved value of the appellant's land made on 18th July 1968 was and is void and of no effect. (at p474)

MENZIES J. A number of points were touched upon in the argument of this appeal from the Australian Capital Territory Supreme Court. The only point of substance, however, as I see the case, is the validity of reg. 9 (1) of the City Area Leases Regulations which is as follows:

"The prescribed authority for the purpose of sub-section (1) of section 25 of the Ordinance shall be the Minister."

The appellant attacked this regulation upon the narrow ground that the prescription of "the Minister" is invalid in that such a prescription is inconsistent with the City Area Leases Ordinance under which the regulation was made. In the course of argument, however, the validity of the regulation was questioned upon a much more fundamental basis, i.e. that the grant of power made by s. 38 of the Ordinance to the Minister to make regulations not inconsistent with the Ordinance prescribing matters required to be prescribed either goes beyond the Ordinance-making power conferred upon the Governor-General by s. 12 of the Seat of Government (Administration) Act, or, that, to the extent to which s. 12 does authorize the Governor-General to empower the Minister to make such regulations, the section is itself unconstitutional. (at p474)

2. I would not embark upon the important questions of the construction and validity of s. 12 of the Act - which was not argued fully - were I able to agree with the argument that reg. 9 (1) is ultra vires the Ordinance, but, as I reject that argument, as will hereafter appear, I cannot escape from dealing with the larger questions. It is logical to deal with them first. (at p474)

3. The statutory edifice under consideration is as follows. First, an Act of Parliament, the Seat of Government (Administration) Act, authorizing the Governor-General to make Ordinances having the force of law in the Territory; s. 12 of the Act, 1910-1959, as amended by the Seat of Government (Administration) Act 1963. Secondly, the City Area Leases Ordinance, 1936-1969, made by the Governor-General under the foregoing authority of Parliament. The following provisions of the Ordinance are directly relevant: ss. 6, 25 and 38. Other provisions were relied upon as having some significance in relation to the question whether reg. 9 (1) is ultra vires the Ordinance. Thirdly, and finally, there is the City Area Leases Regulations, reg. 9 (1), which has already been set out. (at p475)

4. Section 12 of the Seat of Government (Administration) Act authorizes the Governor-General to make Ordinances having the force of law in the Territory (s. 12 (1)) but it does not stop there. It contains provisions relating to "regulations made under an Ordinance" which are sufficiently important to set out.

"12 (8). All regulations made under an Ordinance shall be laid before each House of the Parliament within fifteen sitting days of that House after the day on which the regulations are made and, if they are not so laid before each House of the Parliament, shall be void and of no effect.

(9). Sub-sections (4) to (7), inclusive, of this section apply to and in relation to regulations laid before a House of the Parliament as if the references in those sub-sections to an Ordinance were references to regulations.

(10). In this section - 'Ordinance' means an Ordinance made under this Act; 'regulations' includes rules and by-laws." (at p475)

5. In 1963 amendments - details of which are not important - wer made to the provisions of s. 12 relating to parliamentary disallowance of Ordinances - which, by virtue of sub-s. 9 of s. 12 are also applicable to regulations - and the provisions making these amendments were followed by this provision:

"3. Notwithstanding the amendments made by the last preceding section, section twelve of the Principal Act continues to apply in relation to notice of a motion to disallow an Ordinance or part of an Ordinance or a regulation made under an Ordinance given before the commencement of this Act." (at p475)

6. Here it is not necessary to determine whether the grant of legislative power made by s. 12 (1) itself is plenary in the sense that without more it contains Parliament's authority to the Governor-General to authorize subordinate legislation, i.e. regulations. It is not necessary because s. 12 - as does s. 3 of the Act of 1963 - expressly recognizes that regulations will be made under Ordinances and subjects such regulations to parliamentary scrutiny. A regulation "made under an Ordinance" is a regulation, the making of which is authorized by the Ordinance, and, in the face of parliamentary recognition in the Act that there will be such regulations, it seems to me beyond question that the grant of power made by s. 12 (1) is sufficiently wide to authorize the making of s. 38 of the Ordinance. (at p475)

7. There may be room for doubt whether s. 12 (1), standing by itself and without the context of the later provisions, should be considered as conferring power to make a provision such as s. 38 of the Ordinance. The better view would seem to be that, if it constitutes a plenary grant of legislative power, it would do so, but otherwise it would not. The point is discussed in two interesting articles where the authorities are collected: "Sub-Delegated Legislation and Delegatus Non Potest Delagare" by J. F. Northey, published in vol. 6 of Res Judicatae at p. 294, and an article in 28 Australian Law Journal 486, "Sub-Delegated Legislation" written by Russell Fox and O. M. L. Davies. I refrain from discussing this particular question further, however, or from expressing any opinion on the questions whether the grant of power in s. 12 (1) is "plenary" and, if so, whrther it would suffice without more to support authority conferred upon the Minister by s. 38 of the Ordinance. (at p476)

8. It is necessary, however, for me to consider whether s. 12 of the Act, understood as I have construed it, is unconstitutional. The legislative power of the Commonwealth is vested in the Parliament, but it has long been established that Parliament may, as part of the exercise of this legislative power, authorize the making of subordinate legislation. At this stage it is not necessary to go back beyond Meakes v. Dignan (1931) 46 CLR 73 , where the issue was finally resolved. As Fullagar J. said in Australian Communist Party v. The Commonwealth (1951) 83 CLR 1, at pp 256-257:

"It is well established that the so-called separation of powers under the Constitution does not preclude the Parliament from authorizing in the widest and most general terms subordinate legislation under any of the heads of its legislative power."

Accordingly, the grant by Parliament to the Governor-General of the power to make Ordinances having the force of law in the Australian Capital Territory is beyond question. Section 12 (1) of the Act is valid. Moreover, it cannot be that any limitation upon the power of the Governor-General under s. 12 (1) springs from the general limitation to be found throughout the law upon the power of a delegate. Even if this principle does apply to legislative power, and even if the Governor-General were to be regarded as a delegate of Parliament, according to my reading of s. 12 the Governor-General would be a delegate who has been given power to delegate further. If, therefore, the power to authorize the making of regulations, which I find has been conferred by s. 12, fails, it must be because of some as yet unexpressed limitation upon the power of Parliament to authorize the making of subordinate legislation. I have found no reason for concluding that Parliament may not, in authorizing subordinate legislation, confer power to authorize the making of regulations or by-laws not inconsistent with the legislation which Parliament has directly authorized - in this case the Ordinance - if the regulations or by-laws so made are themselves subjected by Parliament to its control in the manner provided by s. 12 (8) (9) and (10) of the Seat of Government (Administration) Act. It seems to me that every consideration in favour of the validity of the grant of subordinate legislative-making power in general extends to such legislation, authorizing the making of regulations not inconsistent with it and prescribing matters required or permitted to be prescribed, in all cases where the regulations or by-laws so to be made are subjected to direct parliamentary control. In Meakes v. Dignan Dixon J. (1931) 46 CLR, at pp 101, 102 and Evatt J. (1931) 46 CLR, at pp 119-121 stated the theory whereby subordinate legislation is justified and, reading what their Honours there said, it seems to me applicable to the regulations made here equally as well as to the Ordinance authorizing them. When Evatt J. said (1931) 46 CLR, at p 119:

"In my opinion every grant by the Commonwealth Parliament of authority to make rules and regulations, whether the grantee is the Executive Government or some other authority, is itself a grant of legislative power. The true nature and quality of the legislative power of the Commonwealth Parliament involves, as part of its content, power to confer law-making powers upon authorities other than Parliament itself. If such power to issue binding commands may lawfully be granted by Parliament to the Executive or other agencies, an increase in the extent of such power cannot of itself invalidate the grant. It is true that the extent of the power granted will often be a very material circumstance in the examination of the validity of the legislation conferring the grant. But this is for a reason quite different and distinct from the absolute restriction upon parliamentary action which is supposed to result from the theory of separation of powers."

his Honour used language which applies to subordinate legislation made under Parliament's grant of authority to one grantee to authorize a further grant of legislative power. (at p477)

9. In this case I disregard as unimportant a distinction that has sometimes been drawn between legislative power and administrative power, and, treating the power to make Ordinances and the power to make regulations under Ordinances both as legislative in character, I find no basis upon which to limit Parliament's power to grant subordinate legislative authority. It is not without significance that the power, about which a question has now been raised, has been assumed, without question, in circumstances that would have invited challenge could one have been effectively made. See, for instance, the National Security Act 1939, s. 5 (3) and (4). (at p478)

10. In my opinion s. 12 of the Act and s. 38 of the Ordinance do confer power upon the Minister to prescribe by regulation any matter which the Ordinance requires to be prescribed. (at p478)

11. Section 25 of the Ordinance requires a prescription by the Minister of an authority to reappraise the unimproved value of land included in leases and, in the exercise of an unquestionable power to prescribe, the Minister has, as already stated, purported to make the necessary prescription by reg. 9 (1). (at p478)

12. In an Ordinance "the Minister" means "the Minister for the time being administering the Ordinance": Interpretation Ordinance, 1967, s. 23. I assume that in the City Area Leases Regulations the words "the Minister" bear the same meaning as in the Ordinance, so that the Minister prescribes not only himself as the Minister then administering the Ordinance, but his successors in that administration. The question is, can the Minister administering the Ordinance prescribe the Minister administering the Ordinance as "the prescribed authority" for the purposes of s. 25? (at p478)

13. There is no express limitation in s. 25 or elsewhere in the Ordinance which prevents such a prescription and there is no general rule of law which requires a person, with a power to appoint, to appoint some person other than himself. Nor do I find any particular term of the Ordinance with which a regulation prescribing the Minister would be inconsistent. The matter is therefore very much one of impression. When I read s. 25 (1) and the opening words of s. 38 together, I find no sound ground for limiting in any way the Minister's power under s. 38 to prescribe an authority for the purposes of s. 25. What difficulty there is here stems, I think, from s. 6 of the Ordinance which authorizes the Minister to delegate his powers and functions under the Ordinance. However, giving this provision full weight, it does not seem to me to require any limitation upon the power conferred by s. 38. The effect of the prescription of the Minister is that s. 6 operates. I may say that I have considered and rejected a construction of s. 6 which would limit it to powers and functions directly conferred upon the Minister by some term of the Ordinance; the words "his powers and functions under the Ordinance" are too general for such a construction. The circumstance that s. 6 does operate does not seem to me really to bear upon the question of the construction of ss. 25 and 38. Its effect is simply that the Minister, as the prescribed authority, is not himself bound to make the reappraisal that s. 25 (1) requires. He may delegate that function and the reappraisal is still a reappraisal "by the prescribed authority" in exactly the same way as if the Minister were to delegate his power under s. 5 of the Ordinance to grant leases in the name of the Commonwealth. The grant by his delegate would be a grant by the Minister for the purposes of s. 5. The matter can, I think, be tested in this way. Suppose the Minister, as I think he could, had prescribed the Attorney-General and outside the Ordinance there existed a power in the Attorney-General to delegate his functions. Would that circumstance invalidate the prescription of the Attorney-General? Again, if the Minister, as I think he could, had prescribed the Head of his Department and, again, if outside the Ordinance there were to be found authority in the Head of the Department to delegate further, would that circumstance invalidate the prescription? I think not. Could it make any difference if the power to delegate, which I have supposed, were conferred by the Ordinance? (at p479)

14. Giving this construction to the power to prescribe conferred by s. 38 does not, I think, involve any inconsistency with s. 12 of the Act. The regulation prescribing the Minister must be laid before the Houses of Parliament but it is not to be inferred from the regulation that the Minister will, himself, and without any delegation which he is authorized to make, carry out the reappraisal required. I should think that any member of Parliament would know that it is common to confer a power to delegate upon a Minister, and although knowledge of the law is not to be imputed to any member of Parliament, neither should ignorance of provisions such as s. 6 of the Ordinance be imputed. The requirements of s. 12 seem to me to have nothing to do with the construction of the Ordinance. Nor do I think the circumstance that the Minister has the responsibility to appoint an appeal board, to which appeals against reappraisements may be brought (s. 27 of the Ordinance), bears at all upon the question whether the Minister may prescribe the Minister as the authority to make reappraisements. The result of s. 27, in the circumstances that exist, is merely that it is the duty of the Minister to appoint an appeal board to hear appeals from his own decisions. No doubt this has been done. In my estimation s. 12 of the Act and ss. 6 and 27 of the Ordinance are not even straws in the wind for the purpose of deciding what s. 25 (1) of the Ordinance authorizes. (at p479)

15. Accordingly, I would dismiss this appeal. (at p480)

OWEN J. By s. 12 of the Seat of Government (Administration) Act 1910-1959 the Governor-General is empowered to make Ordinances having the force of law in the Australian Capital Territory and, pursuant to the powers thus conferred, the City Area Leases Ordinance 1936-1969 was made. (I will refer to it as "the Ordinance".) It provides by s. 25 (1) that:

"The unimproved value of land included in a lease shall be re-appraised by the prescribed authority during the twentieth year of the term of the lease and during each twentieth year thereafter."

"Prescribed" is defined by s. 14 of the Interpretation Ordinance 1967 to mean prescribed by Ordinance or by regulations under an Ordinance. Section 38 of the Ordinance provides that:

"The Minister may make regulations, not inconsistent with this Ordinance, prescribing all matters which are required or permitted to be prescribed, or which are necessary or convenient to be prescribed, for carrying out or giving effect to this Ordinance . . ."

And by reg. 9 (1) of the City Area Leases Regulations the "prescribed authority" for the purpose of s. 25 (1) of the Ordinance was declared to be "the Minister", that is to say the Minister for the time being administering the Ordinance, including a Minister or member of the Executive Council for the time being acting for or on behalf of the Minister (s. 23 of the Interpretation Ordinance). (at p480)

2. One of the questions raised on this appeal is whether on the true construction of s. 25 (1) of the Ordinance the Minister may by regulation prescribe himself as the authority to make the reappraisement of the unimproved value of land for which that sub-section provides. If he cannot lawfully do so, reg. 9 (1) was and is invalid. If he can lawfully do so and reg. 9 (1) is valid, it follows that under s. 6 (1) of the Ordinance the Minister may delegate to any person or authority all or any of the powers and functions which s. 25 (1) confers upon him as the "prescribed authority" and in fact this has been done. But s. 25 (1) seems to me to proceed upon the basis that the authority prescribed to do the work of reappraisement shall itself undertake that task, obtaining no doubt such assistance and advice from others as it may think necessary or desirable. The section does not, I think, contemplate the appointment of an authority with statutory power to delegate to another the power to reappraise. It is, I think, also of significance to notice s. 12 of the Seat of Government (Administration) Act which provides that regulations made under an Ordinance must be laid before each House of the Parliament within a limited time and, if not so laid, are to be void and of no effect and that either House has power to disallow any regulation laid before it. Having regard to the Minister's power of delegation, the existence of s. 12 in my opinion lends some support for the conclusion that s. 25 (1) of the Ordinance should not be read as empowering the Minister to appoint himself as the prescribed authority. Neither House of Parliament might object to a regulation making the Minister the prescribed authority, but in such case he might thereafter delegate his power and functions of reappraisement to some other authority which, had it been prescribed by regulation, might have been regarded by one or other or both Houses as unsuitable for that task. As my brother Kitto has pointed out, if the Minister could appoint himself as the reappraising authority the power to prescribe an authority by regulation would be in effect converted into a power to appoint by delegation, and to read s. 25 (1) in the way for which the respondents contend would, it seems to me, tend to diminish or impede the parliamentary controls which s. 12 of the Seat of Government (Administration) Act is designed to provide. Again, s. 27 of the Ordinance seems to me also to provide some indication that it was not intended that the Minister should have power to prescribe himself as the reappraising authority. That section sets up an Appeal Board to which a lessee may appeal against a reappraisement and provides that the members of the Appeal Board shall be appointed by the Minister. It seems unlikely that it would have been intended to empower the Minister to appoint himself as the reappraising authority at the same time giving an appeal against his decision to a board comprised of his appointees. (at p481)

3. On the whole, therefore, I am of opinion that s. 25 (1) does not enable the Minister to prescribe himself as the reappraising authority and that reg. 9 (1) is invalid. In these circumstances it is unnecessary to consider the other submissions that were made in support of the appeal or the constitutional question which my brother Kitto raised during argument. (at p481)

4. I would therefore allow the appeal, set aside the order appealed from and instead declare that the purported reappraisement which the learned judge of first instance upheld is invalid. (at p481)

WALSH J. The appellant is the lessee, under a Crown lease, of certain land in the city area of the Australian Capital Territory. By an originating summons in the Supreme Court of the Territory, the appellant sought a declaration that there had been no reappraisement of the unimproved value of the land included in the lease in accordance with the provisions of the City Area Leases Ordinance 1936-1967 of the Territory and the regulations made thereunder, a declaration that the purported reappraisement of the unimproved value of that land made on or about 18th July 1968 was void and of no effect and certain other declarations. The Supreme Court (Kerr J.) (1969) 15 FLR 314 dismissed the summons. (at p482)

2. It has been submitted on behalf of the appellant that upon its proper construction the Ordinance did not empower the Minister to prescribe "the Minister" to be the authority for the purpose of sub-s. (1) of s. 25 of the Ordinance and that, therefore, reg. 9 (1) of the City Area Leases Regulations is invalid. The reasons for which it was submitted that a prescription of the Minister was not authorized require consideration only if a preliminary question is answered in favour of the respondents. This is a question as to the validity of s. 38 of the Ordinance. I agree with the reasons given in the judgment of Menzies J. for concluding that s. 12 of the Seat of Government (Administration) Act 1910-1959 (Cth) contained a valid grant of power to the Governor-General to make an ordinance including such a provision as s. 38. (at p482)

3. In my opinion it is clear that the prescribing of an authority for the purpose of s. 25 (1) of the Ordinance was within the power conferred by s. 38 upon the Minister to make regulations prescribing "all matters which are required or permitted to be prescribed, or which are necessary or convenient to be prescribed" for carrying out or giving effect to the Ordinance. Therefore, the answer to the question raised by the argument that reg. 9 (1) is invalid depends upon the construction of s. 25 (1) of the Ordinance. That provision contemplates that an authority is to be prescribed and its effect is that the unimproved value of land included in a lease shall be reappraised by an "authority", to be prescribed by a regulation made by the Minister under the power conferred on him by s. 38. The Ordinance contains no express provision limiting the power of selection thus conferred upon the Minister, but it was submitted that limitations should be placed upon it. One submission was that the appointee must be qualified by expert knowledge and experience to carry out the task of reappraising the value. But however desirable it may be thought to be that the prescribed authority should be so qualified, in my opinion, the Ordinance cannot be construed as imposing that requirement. But a more substantial reason is put forward in favour of a construction of the Ordinance which would deny a power to prescribe the Minister as the authority for the purpose of s. 25 (1). This suggested limitation depends primarily upon the inclusion in the Ordinance of s. 6, which gives power to the Minister to delegate "all or any of his powers and functions under this Ordinance or any regulations made under this Ordinance (except this power of delegation) so that the delegated powers may be exercised by the delegate with respect to the matters or class of matters specified in the instrument of delegation". There is no express provision in the Ordinance with which a prescription of the Minister would be inconsistent and would not, therefore, be authorized by the power conferred by s. 38 to make regulations not inconsistent with this Ordinance. There is no general principle of construction requiring that the power conferred upon the Minister by s. 38 should be limited to a power to appoint some person other than himself. But the question which calls for consideration is whether or not s. 25 (1), read with s. 6 and s. 38, should be construed as requiring that the prescribed authority must be named or described in a regulation made under s. 38 and laid before each House of Parliament in accordance with s. 12 of the Act, and that the prescribed authority, so named and described, must himself carry out the duty of reappraising the value and be responsible for it, after obtaining such assistance from others as he may think it proper to obtain. If that is the meaning which should be given to s. 25 (1) a prescription of the Minister would, because of his power under s. 6 to delegate, be inconsistent with s. 25 (1) and would be invalid. (at p483)

4. It is true that this consequence would be avoided if s. 6 itself were given a construction by which the power to delegate did not extend to the delegation of a function not directly given by the Ordinance itself to the Minister in his ministerial capacity. But, in my opinion, the language of s. 6 does not permit the adoption of that construction. It extends to all powers and functions which the Minister has under the Ordinance or under regulations made pursuant to it. There is nothing in s. 6 to limit the generality of that language, unless such a limitation should be extracted from its opening words "Subject to this Ordinance". If s. 25 (1) is read as meaning that the authority actually named or described in a regulation must carry out and be responsible for the reappraisement, it is a possible view that this does not limit the power conferred by s. 38 so as to preclude a prescription of the Minister, but does have the effect that the power under s. 6 to delegate is limited, so as not to be applicable to the Minister's function under s. 25 (1) if he becomes the prescribed authority. But if the Ordinance and, in particular, s. 25 (1) should be given a construction which invalidates the reappraisement which was made in this case by a delegate of the Minister, I think the better view would be that that construction ought to be regarded as rendering invalid the prescription of the Minister, rather than as having the result that the prescription was valid but the purported delegation was not. (at p484)

5. But I have reached the conclusion that both the prescription of the Minister and the delegation made by him were within the power conferred by the Ordinance and that the delegate who made the reappraisement was validly acting as the prescribed authority within the meaning of s. 25 (1). The question does not depend upon any evaluation of the desirability of the legislative scheme or of the actions taken under it which brought about that result. I am concerned only with questions of validity and of construction. The Parliament conferred a wide power upon the Governor-General to make Ordinances having the force of law in the Territory. The Act recognized that regulations would be made under powers conferred by Ordinances. The Ordinance did not name the reappraisement authority but left it to be constituted subsequently by being "prescribed". It gave power to the Minister to prescribe it, by regulation. The same Ordinance gave the Minister a power, expressed in general terms, to delegate any power or function vested in him by the Ordinance or by any regulation made under it. In my opinion, no relevant limitation was placed by the Ordinance, either upon the power conferred by s. 38, or, upon that conferred by s. 6. I do not find any sufficient justification for reading s. 25 (1) as imposing a limitation which could easily have been, but has not been, expressly stated in the Ordinance. I agree with the reasons of Menzies J. on this question and do not wish to add anything further to them. (at p484)

6. Some other questions were raised by the appeal upon which I shall state my conclusions. Regulation 9 (1) provides that the prescribed authority for the purpose of sub-s. (1) of s. 25 shall be the Minister. Regulation 9 (2) provides that the prescribed authority for the purpose of sub-s. (3) of s. 25 shall be a person appointed by the Minister to act for the purpose of that sub-section. It was submitted that the Ordinance requires that there shall be but one prescribed authority for the purposes of both sub-sections. It was said that it ought to be taken to be intended that a lessee receiving a notice of reappraisement under s. 25 (3) should be informed by it of the identity of the prescribed authority who had carried out the reappraisement. In my opinion, it is not essential that the same person should be prescribed as the authority for both purposes. In any event, it happened in the present case that it was the same person, Mr. Marshall, who acted as the prescribed authority under sub-s. (1), pursuant to a delegation to him of that function, and gave the notice under sub-s. (3), as a person appointed for that purpose by the Minister. (at p485)

7. In my opinion, the delegation made by the Minister to the person for the time being holding or performing the duties of certain specified offices was not invalidated, either for the reason that the delegation was to more than one person, or for the reason that it was not made to named persons. Similar objections to the validity of a delegation were considered and rejected by Windeyer J. in Owendale Pty. Ltd. v. Anthony (1967) 117 CLR 539, at pp 563-564 . In the same case on appeal Taylor J. and Owen J. (1967) 117 CLR 539, at pp 598, 611 rejected the contention that a delegation must be to a named person and not to a person described as the holder of a specified office. In my opinion, the view taken by their Honours on these questions was correct. (at p485)

8. In the Supreme Court it was argued that the reappraisement was invalid because it was not made until after the end of the twentieth year of the term of the lease. In this appeal counsel for the appellant stated that he did not wish to argue this point and, therefore, I need not consider it. (at p485)

9. It was submitted that the evidence showed that Mr. Marshall, who purported to make the reappraisement, did not apply his mind to it but merely adopted a valuation made by another person without considering or understanding the requirements of s. 3 (2) of the Ordinance. In the Supreme Court Kerr J. dealt fully with this question and with the evidence relevant to it and I find no reason to disagree with his Honour's findings or with his conclusion on this point. (at p485)

10. There were some further submissions relating to the reappraisement which may be stated shortly as being (1967) 117 CLR 539, at pp 563-564 that the formula set out in s. 3 (2) of the Ordinance for determining the unimproved value of land is meaningless; (1967) 117 CLR 539, at pp 598, 611 that if the formula is capable of being applied, any application of it could not lead to the fixing of an increased value for the land; and (3) that the use, by the valuer whose estimate was approved and adopted by Mr. Marshall, of information concerning comparable sales demonstrated that no attempt had been made to value in accordance with s. 3 (2) and that no reappraisement conforming to the Ordinance had been carried out. Similar submissions were considered by Kerr J. in the Supreme Court. He stated that he had been asked to hear evidence upon matters of valuation and to permit a detailed investigation of the approach and the methods to be used in making a valuation in accordance with the Ordinance. His Honour decided that in proceedings for declaratory orders he should not enter upon an investigation in detail of matters with which it would be proper for the Appeal Board constituted by the Ordinance (s. 27) to deal. His Honour did, however, consider submissions made to him by both parties as to the construction and the operation of s. 3 (2). He declined to hold that that provision must be so construed that its application would necessarily result in a value of nil or would preclude any alteration in the value of the land or that any reliance upon comparable sales was forbidden. I think that there are considerable difficulties in the application of s. 3 (2) of the Ordinance. But I am not persuaded that Kerr J. made any error in refusing to embark upon a comprehensive investigation of the methods of valuation which in the opinion of experts would be appropriate or in dealing as he did with these questions. In my opinion, none of the submissions outlined above relating to the reappraisement can be accepted by this Court, on the material which is before it, as leading to the conclusion that the reappraisement was void. (at p486)

11. In my opinion, the appeal should be dismissed. (at p486)

Orders

Appeal allowed with costs. Order of the Supreme Court of the Australian Capital Territory set aside and in lieu thereof declare:

(1) That there has been no reappraisement of the unimproved value of the land included in Crown Lease Registered Volume 46 Folio 4540 in accordance with the provisions of the City Area Leases Ordinance 1936-1967 and the Regulations made thereunder.

(2) That pursuant to the terms of Crown Lease Registered Volume 46 Folio 4540 the Applicant is at this date required to pay as rental for such Crown Lease the sum of One hundred and fifty-five dollars ($155.00) only per annum at the times and in the manner specified in the said Crown Lease.

Order that the defendant, the Commonwealth of Australia, pay the costs of the plaintiff, Esmonds Motors Pty. Limited.