Hartigan v Treasurer of the Australian Capital Territory
[2018] ACTSC 271
•28 September 2018
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Hartigan v Treasurer of the Australian Capital Territory |
Citation: | [2018] ACTSC 271 |
Hearing Date: | 16 May 2018 |
DecisionDate: | 28 September 2018 |
Before: | McWilliam AsJ |
Decision: | See [95] |
Catchwords: | JUDICIAL REVIEW – review of Minister’s decision refusing to make an “act of grace” payment pursuant to s 130 of the Financial Management Act 1996 (ACT) – whether decision amenable to judicial review – error of law in construing criteria for exercising the discretion |
Legislation Cited: | Administrative Decisions (Judicial Review) Act 1989 (ACT) ss 3A, 5(1), 10 |
Cases Cited: | Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 |
Parties: | Jack Joseph Hartigan, by his litigation guardian Joanne Elizabeth Mangan (Plaintiff) Treasurer of the Australian Capital Territory (Defendant) |
Representation: | Counsel P Herzfeld (Plaintiff) P Garrison AM SC, Solicitor-General for the ACT, and P Bindon (Defendant) |
| Solicitors Ken Cush & Associates (Plaintiff) ACT Government Solicitor (Defendant) | |
File Number: | SC 9 of 2018 |
Introduction
In 2010, when he was six years old, Jack Joseph Hartigan (the plaintiff), visited a tenant in a house in Griffith that had been managed by the ACT Commissioner for Social Housing (the Commissioner). While there, he was attacked by a Pit Bull Terrier. He suffered significant facial, head and leg injuries.
The plaintiff (by his mother as litigation guardian) sued the Commissioner in negligence and under the Domestic Animals Act 2000 (ACT), with a hearing before this Court occurring over three days in July 2015. In a judgment delivered on 5 May 2017, Penfold J found for the Commissioner: Hartigan v Commissioner for Social Housing in the ACT [2017] ACTSC 100; 319 FLR 158 (Hartigan v Commissioner).
On 16 May 2017, the plaintiff’s solicitors wrote to the Treasurer of the Australian Capital Territory (Treasurer), seeking an “act of grace” payment in the sum of $200,000, pursuant to Section 130 of the Financial Management Act 1996 (ACT) (the Act).
On 3 July 2017, the Treasurer responded as follows:
Thank you for your letter of 16 May 2017 about your client’s claim for compensation in relation to injuries suffered from a dog attack.
I have considered the issues you have raised but have not agreed to authorise an act of grace payment of $200,000 to your client. In reading the decision of the Supreme Court, I noted that Justice Penfold found that the Commissioner for Social Housing was not liable for the dog involved in the attack and breached no duty of care to prevent the dog attack on your client. Her Honour found that there were no steps the Commissioner might have reasonably taken that could have prevented the attack.
Accordingly, pursuant to section 130 of the Financial Management Act 1996, I am not satisfied that there are special circumstances to warrant authorising a payment to your client and it is for this reason that I am declining your request.
I am sympathetic to the serious injuries that your client sustained, but they are not the Commissioner’s or the Territory’s responsibility. Thank you again for raising this matter with me.
By originating application filed on 12 January 2018, and amended on 14 March 2018, the plaintiff seeks judicial review of that decision. As he is now aged 14, he does so, again through his mother as litigation guardian.
There are three issues for determination in the proceeding. The first issue is whether the Court should extend the time for the plaintiff to commence proceedings, as the originating application was filed out of time. The second issue is whether the decision made by the Treasurer is even amenable to judicial review. If it is, then the third issue is whether the decision was affected by legal error such as to warrant the Court, in the exercise of its discretion, setting aside the decision and remitting the matter to the Treasurer for further consideration.
For the reasons that follow, I have determined first, to grant leave to extend the time in which to file an application for judicial review; second, that the decision is amenable to judicial review by the Court; and third, that the decision should be set aside due to legal error being established by the plaintiff.
Legislation governing the Treasurer’s decision
Section 130 of the Act is in the following terms:
Act of grace payments
(1)If the Treasurer considers it appropriate to do so because of special circumstances, the Treasurer may authorise the payment by a directorate or territory authority of an amount to a person (the payee ) although the payment of that amount (the relevant amount ) would not otherwise be authorised by law or required to meet a legal liability.
(2)The authorisation may provide for the relevant amount to be paid by—
(a)more than 1 instalment and on the dates specified in the authorisation; or
(b)periodical payments of an amount, and for the period, specified in the authorisation.
(3)An authorisation may be expressed to be subject to conditions to be complied
with by the payee.
(4) If a condition is contravened, the Treasurer may by written notice addressed to the last-known address of the payee require the payee, within 30 days of receipt of the notice, to pay an amount equal to all or part of the relevant amount.
(5)If the payee does not pay the amount specified in the notice under subsection (4), the amount may be recovered by the Territory as a debt.
(6)If the payment of an amount by a directorate or territory authority is authorised under this section, the Treasurer must—
(a)direct that the amount be paid from an existing appropriation for the directorate or territory authority stated by the Treasurer; or
(b)authorise payment of the amount under section 18 (Treasurer's advance); or
(c)authorise payment of the amount by appropriation to the relevant directorate or territory authority.
(7)The public money of the Territory is appropriated for subsection (6) (c).
(8)A payment made by a directorate or territory authority under this section must be reported in notes to the financial statements of the directorate or territory authority that relate to the financial year when the payment was made.
(9)The notes must indicate in relation to each payment under this section the amount and grounds for the payment.
(10)The notes relating to a payment under this section must not disclose the identity of the payee unless disclosure was agreed to by the payee as a condition of authorising the payment.
The application for an extension of time
Although the basis for seeking judicial review was not set out in the originating application, the plaintiff argued the case on two alternatives, either under s 5(1) of the Administrative Decisions (Judicial Review) Act 1989 (ACT) (ADJR Act) or under s 34B of the Supreme Court Act 1933 (ACT) (Supreme Court Act). The two alternatives are addressed separately.
10. On the affidavit evidence of the litigation guardian, the Treasurer’s letter of 3 July 2017 was received by the plaintiff’s solicitors on 7 July 2017.
11. That letter constitutes the reasons for the decision under challenge. The plaintiff does not accept that characterisation of the letter, arguing that it is part of the evidence from which the Treasurer’s reasons are to be inferred. However, that letter is what the Treasurer communicated to the plaintiff was the basis for his decision. What is set out in the letter may have been informed by reading a Ministerial Brief, but I accept the Treasurer’s submission that the letter contains the reasons for decision.
12. This is relevant to determining whether to grant an extension of time, because it affects the reference point for how the statutory time limits are worked out under the ADJR Act.
13. Dealing first with the application for relief under s 34B of the Supreme Court Act, r 3557 of the Court Procedures Rules 2006 (ACT) (Rules) requires that such application must be made “not later than 60 days after the day when the grounds for the grant of the relief first arose.” The time may be extended by the Court under r 3557(4), but “only in special circumstances”.
14. That expression has been held to mean that the plaintiff must establish that the circumstances were sufficiently out of the ordinary to warrant a departure from the default rule: Cressy v Miloriad (No 2) [2016] ACTSC 339; 317 FLR 267 at [48]-[49]; Director of Public Prosecutions (ACT) v Martin [2014] ACTSC 104 (DPP v Martin); 9 ACTLR 1 at [153]. The test is elastic, flexible and suitable for application across a range of situations, from an oversight of a day to a neglect persisted in during a prolonged period: DPP v Martin at [154].
15. The date when “the grounds for relief first arose” is the date the plaintiff first became aware of the decision, being 7 July 2017, not the date the decision was made. This is because 7 July 2017 was the first day that the plaintiff could have filed an application containing any grounds arising from the reasons for decision. The plaintiff could not have applied for relief in respect of a decision he did not yet know had been made.
16. Sixty days from that date is 5 September 2017. The originating application was filed on 12 January 2018. The plaintiff’s application under s 34B of the Supreme Court Act was thus out of time by approximately four months.
17. Turning to consider the application under the ADJR Act, the time by which an application for review by this Court must be filed is shorter. Any application for review must be made within 28 days of the decision being made “or any further time allowed by the court”; and in this case, because there were brief reasons provided, such time commences to run from the date the reasons were given to the plaintiff, rather than the date the decision was made: see s 10(2) and s 10(6)(a) of the ADJR Act.
18. Accordingly, the plaintiff’s application invoking review under the ADJR Act was also out of time, by approximately five months.
19. The Court has the power to extend the time to commence proceedings under the ADJR Act pursuant to s 151C of the Legislation Act 2001 (ACT): DPP v Martin at [156]. Where this power is being exercised, no “special circumstances’” are required. In this case, nothing turns on the existence or otherwise of special circumstances. For example, it was not suggested that the relief would be different depending on whether the application was brought under the ADJR Act or in the inherent supervisory jurisdiction of the Court, reflected in s 34B of the Supreme Court Act.
20. The decision whether to extend the time to commence proceedings will involve consideration of what is necessary to do justice between the parties, the general principles being established by High Court authorities such as ReCommonwealth of Australia; Ex Parte Marks [2000] HCA 67; 177 ALR 491 and Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541.
21. Relevant factors include the length of the delay, the explanation for the delay, the merit of the proceeding, and any prejudice to the parties occasioned by the delay. An example of the application of these considerations is to be found in Director of Public Prosecution (ACT) v Martin [2014] ACTSC 104; 9 ACTLR 1 at [153]-[160].
22. In the circumstances of this case, the delay of five months was not unduly lengthy, and the Treasurer accepted that any delay has not occasioned prejudice.
23. Part of the explanation for the time taken to lodge the application was that the plaintiff applied to the Treasurer to reconsider his decision, and also sought access to the ‘Ministerial Brief’ on which the Treasurer relied to make his decision.
24. That explanation is unsatisfactory, particularly in light of the fact that the plaintiff was legally represented throughout that period of time. Parties may choose, as a matter of strategy, to attempt to negotiate a different outcome with the decision-maker through more informal means, but the fact of negotiations or ongoing correspondence between a decision maker and a person dissatisfied with the decision, does not present an opportunity to ignore the statutory time limits for bringing proceedings to this Court for resolution. Such time limits represent the public interest in the prompt institution and prosecution of litigation involving administrative decisions.
25. Nor does waiting for briefing documents to be provided by a decision-maker excuse a plaintiff from compliance with the ADJR Act or the Rules. The plaintiff had the reasons necessary to lodge any application for review. There was nothing stopping the plaintiff from adding further grounds or amending the application once he had received further briefing materials. Litigants, through their solicitors, must make every effort not to simply let known statutory time limits pass by, assuming that they will be able to persuade the Court to grant an extension of time. If there was a genuine need for additional materials before commencing review proceedings, then the preferable course was for the plaintiff’s legal representatives to approach the Court for leave to extend the time to file an application before the applicable statutory time limits had passed.
26. Ultimately, what is required to do justice between these parties in this case has come down to the prima facie merit of the application and any point of general importance (or wider application) raised by it. As will be seen from the reasons that follow, these two matters strongly favour the extension of time and accordingly, although on very fine balance, such an order will be made.
The Court’s power to review the decision
27. The competing arguments of the parties may be summarised as follows. The Treasurer contends that a decision whether or not to make an act of grace payment is not amenable to judicial review, either under the ADJR Act or otherwise.
28. The Treasurer relies on decisions such as Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149 at 159 and 161 for the proposition that in order to be reviewable, the impugned decision must have some sort of discernible or apparent effect upon a person’s legal rights. Judicial review is not available where the decision does not either directly determine, or of its own force affect, rights, or satisfy some condition precedent to the exercise of power which will in turn affect rights or otherwise give rise to legal consequences.
29. The Treasurer argues that his decision not to authorise the making of an act of grace payment changes nothing in terms of either the would-be recipient’s or the Treasurer’s legal rights or obligations. The very nature of an act of grace payment is that the plaintiff has no legal entitlement to it, and the Treasurer has no legal obligation to make such a payment.
30. The plaintiff does not dispute the principle that the decision must affect his legal rights and obligations in order to be of a character amenable to review by the Court, but argues that it is plain this decision does affect his legal rights: if made one way, it authorises a payment to him (requested to be $200,000). If made the other way, no such payment is authorised. The plaintiff contends that this is sufficient at least to require that procedural fairness be afforded and to give the plaintiff standing to seek relief, relying upon G & M Nicholas Pty Ltd v Minister for Finance and Deregulation [2009] FCA 121; 174 FCR 471 (G & M Nicholas) per Cowdroy J at [38]-[47]; and more generally, Plaintiff M61/2010E v Commonwealth [2010] HCA 41; 243 CLR 319 at [74]-[75].
The administrative character of the decision
31. The starting premise of the Treasurer’s argument should be accepted, namely that the nature or character of an act of grace payment authorised by the Treasurer has its genesis in notions of goodwill or a sense of moral obligation and not in legal right or entitlement. Section 130(1) of the Act makes it clear that a payment may be made even though the payment would “not otherwise be authorised by law or required to meet a legal liability.” That an individual might not have any legal entitlement to a payment, yet still receive money, reflects the grace of the Treasurer, and imbues the spirit of goodwill or moral obligation on which the provision is based.
32. That may suggest that it is not the type of decision that would be classed as administrative. However, the Legislative Assembly has seen fit to regulate the exercise of the power. As such, whether a decision concerning an act of grace payment is amenable to review by the Court is to be determined by reference to the words of s 130(1) of the Act.
33. Construing the section, the words “the Treasurer may” in s 130(1) create the power to authorise an act of grace payment. The evident purpose of the provision is to give to the Treasurer the power to confer a benefit on that a person.
34. The Treasurer argued that the power to decide to make an act of grace payment was entirely separate to s 130 of the Act, and that this section was really a mechanism for authorising the payment following on from any decision, including how and on what conditions the payment should be made. That is, the authorisation made under s 130(1) of the Act was a consequence of the decision having been made. It was not the decision itself. Thus, as I understood the submission, the actual decision by the Treasurer did not have the requisite administrative character to be subject to review by the Court.
35. The Treasurer placed reliance on the context of the provision, in that it sits in a statute concerned with the internal finances of the Territory. The provisions are designed to ensure transparency and accountability of the Territory’s finances through regulation and appropriation of funds, auditing and reporting.
36. I accept that is the context and evident purpose of the Act, but that does not mean that s 130 of the Act is not the source of the power under which the Treasurer made the decision. This is because s 130(1) prescribes a limit for the exercise of the Treasurer’s discretion, namely “if the Treasurer considers it appropriate to do so because of special circumstances”.
If the relevant words of the section were swapped around, they would read: the Treasurer may authorise the payment by a directorate or territory authority of an amount to a person if the Treasurer considers it appropriate to do so because of special circumstances.
38. Read in that way, the words clearly reflect the creation of a permissive power, to be exercised upon the Treasurer’s subjective consideration that it is an appropriate thing to do, because of special circumstances.
39. That the legislative drafter has chosen to structure the phrasing of the section in a manner that places the criteria for the exercise of the discretion first does not, to my mind, give rise to an inference that the legislature intended any decision by the Treasurer to be made outside the scope of s 130(1) of the Act.
40. However, even if that were the case, and the authorisation (or in this case, the refusal to authorise) followed the decision, that is a distinction without a difference. The operative decision pertained to the authorisation, and in any event, the Treasurer purported to make the decision under s 130(1) of the Act, as it was expressed in those terms in the letter of 3 July 2017.
41. The remainder of the section is mechanical, in that it enables the Treasurer to impose conditions (s 130(3) of the Act). If any conditions imposed are not met or are contravened, the Treasurer has the power to recover part or all of the payment made (s 130(4) and s 130(5) of the Act).
42. The section also gives the Treasurer discretion to choose how the payment is to be funded: out of an existing appropriation, through a Treasurer’s advance, or by authorising a further appropriation (s 130(6) of the Act).
43. Although the power given to the Treasurer is discretionary, and the discretion is obviously broad, it nevertheless is a power exercised pursuant to an enactment and subject to the constraints set out in the legislation.
44. These features are all reflected in the explanatory memorandum to the Financial Management Bill 1996 (ACT). The relevant extract is as follows:
PART IX—MISCELLANEOUS
Act of grace payments
Clause 64 The Treasurer may authorise a payment to a person even when the payment would not otherwise be authorised by law or required to meet a legal liability. Such payments are made where a moral rather than legal obligation exists.
Conditions may be attached to act of grace payments under this clause. If a condition is breached, the payment may be recovered by the Territory as a debt.
The Treasurer may identify the appropriation out of which the payment must be paid. The payment may be made without further appropriation. Payments shall be reported to the Assembly through the financial statements of departments.
45. Having considered the words, the context and the purpose of the section, there can be little doubt that this is a public power, reposed in a public officer, for a public purpose. The legislature having regulated the exercise of the power, judicial review by the Court is the means by which a person may ensure that such power has been exercised lawfully, including compliance with the (express or implied) constraints in the Act. Accordingly, I find that the decision of the Treasurer is of an administrative character.
The decision has a discernible legal effect on the plaintiff’s rights
46. Having established that the decision is administrative in character, it remains to deal with the Treasurer’s submission that the decision did not affect either the Treasurer’s or the plaintiff’s legal rights, with the consequence that the decision is not amenable to judicial review.
47. Again, accepting that the whole premise of an act of grace payment is an appeal to the Treasurer’s goodwill and moral conscience, that fact is recognised by the breadth of the discretion and the statutory language of s 130 of the Act basing the outcome of any request entirely upon whether the Treasurer takes a view that there are “special circumstances”.
48. However, the mere fact that a power is expressed in permissive rather than obligatory language does not mean the decision is excluded from the reach of judicial review.
49. The nature of the discretion under s 130 of the Act is as to an outcome. It is not a discretion whether or not to make a decision at all. That is, once a request has been made for the Treasurer to make an act of grace payment under s 130 of the Act, the Treasurer cannot simply ignore the request. He is under a duty to consider and determine it. That there is a discretion under the Act carries with it the implied existence of a duty to determine any application that is made to exercise such discretion: R v Anderson; Ex parte Ipec-Air Pty Ltd (1965) 113 CLR 177, 189 per Kitto J; Murphyores Inc Pty Ltd v Commonwealth (1976) 136 CLR 1, 18 per Mason J. Both these decisions were applied more recently in Yasmin v Attorney-General (Cth) [2015] FCAFC 145; 236 FCR 169 at [76]-[79], a decision relied upon by the plaintiff.
50. Once it is established that the plaintiff is able to compel the Treasurer to consider the request to act under s 130 of the Act, it follows that the Treasurer must do so lawfully.
51. Whether the plaintiff’s legal rights are affected is not to be judged by whether the plaintiff’s financial position altered as a result of the decision, or by whether the plaintiff can compel the Treasurer to make a decision in his favour.
52. In the context of the present statute, it is perhaps more helpful to think of the plaintiff’s right as a legal interest. The plaintiff has requested a sum of money to be paid under a statutory provision. The Treasurer has refused that request on certain grounds. Whether those grounds are based on the proper application of the statute, including matters of procedural fairness and the reasonable exercise of the power, are questions of law specifically pertaining to the plaintiff’s circumstances. The resolution of those questions will in turn have a direct consequence for the plaintiff. The most obvious consequence is that the plaintiff may receive a sum of money, or he may not. Either way, a lawfully made decision will bind the plaintiff. That consequence is sufficient to create an interest for the plaintiff in ensuring that any decision made by the Treasurer, either in his favour or against it, is done so lawfully.
53. The plaintiff may not have any legal right to a particular outcome under s 130 of the Act, but what he does have is a legal right or an interest to ensure that the law is correctly applied by the Treasurer in a decision that is directly affecting him. For these reasons, I find that the decision is amenable to judicial review.
The application of the ADJR Act
54. The same conclusion is reached when s 130 of the Act is considered purely in the context of the ADJR Act.
55. Section 5(1) of the ADJR Act provides that an eligible person (defined to include an individual in the Dictionary to the ADJR Act) may apply to the Supreme Court for an order of review in relation to “a decision to which this Act applies” on a number of grounds. Relevant to the present proceedings, the grounds include a breach of the rules of natural justice and error of law.
56. The Dictionary to the ADJR Act provides that a “decision to which this Act applies” means:
a decision of an administrative character made, proposed to be made or required to be made (whether in the exercise of a discretion or not) under an enactment, other than a decision mentioned in schedule 1.
57. Section 3A of the ADJR Act relevantly provides that the “making of a decision” includes refusing to give approval or permission, or the refusing to do anything else. Through that definition, the conduct of the Treasurer in refusing to may an act of grace payment is a “decision”.
58. The decision is of “an administrative character” and made “under an enactment” for the reasons given above.
59. Schedule 1 to the ADJR Act contains a list of decisions under various statutes that are excluded from the application of the ADJR Act. The Act is not among the legislation mentioned in Schedule 1.
60. The Treasurer’s decision is thus a decision to which the ADJR Act applies, and therefore also amenable to review under the ADJR Act.
Act of grace payments in the Federal jurisdiction
61. The conclusion to which I have come is fortified by the existence of the established line of authority in the Federal jurisdiction, where act of grace payments have been subject to judicial review under the Commonwealth equivalent of the ADJR Act and may attract prerogative relief.
62. The Court’s attention was drawn to Toomer v Slipper [2001] FCA 981 (Toomer); G & M Nicholas; Croker v Department of Families, Housing Community Services and Indigenous Affairs [2010] FCA 1136 (Croker); Quintano v Minister for Finance and Deregulation [2014] FCA 531 (Quintano) upheld on appeal: Quintano v Minister for Finance and Deregulation [2014] FCAFC 159; and Tomson v Minister for Finance and Deregulation [2013] FCA 664 (Tomson).
63. Those decisions concern s 33 of the Financial Management and Accountability Act 1997 (Cth) (FMA Act), the predecessor to which was s 34A of the Audit Act 1901 (Cth). The Treasurer accepts that these decisions were all concerning a legislative provision in similar terms. However, the Treasurer argued that those authorities were not binding on this Court; firstly, because of the different jurisdiction and secondly, because whether a decision concerning an act of grace payment was amenable to judicial review had never been directly put in issue.
64. The legislative history of the act of grace payments in the Commonwealth jurisdiction was discussed by Neville FM in Clement v Minister for Finance & Deregulation [2009] FMCA 43 (Clement) at [22]-[25]. At [25], his Honour cited the explanatory memorandum to the Financial Management and Accountability Bill 1996 (at 31), referring to two “fundamental premises” of an act of grace payment that (a) there are no other remedies available to the applicant, and (b) essentially as a matter of moral responsibility or obligation, the Minister chooses to act so as to remedy an injustice that otherwise remains incapable of repair or solution through the ordinary or usual processes of the law.
65. In G & M Nicholas, Cowdroy J accepted that the rules of natural justice apply to an act of grace payment claim under s 33 of the FMA Act. Elsewhere, when considering s 33 of the FMA Act, Weinberg J in Toomer stated at [47]:
The legislature has entrusted the power to make act of grace payments to the Minister. Such payments are not based upon any legal entitlement but are made in response to moral obligations assumed by the Commonwealth as a result of the actions of its employees or instrumentalities. The power to make such payments is, by its very nature, one which is particularly suited to be exercised by the Minister. The role of the Court is to ensure that the Minister exercises that power lawfully. Provided he does so, his decision cannot be impugned.
66. Those comments were recently cited with approval in Croker, per Robertson J at [18] and repeated in Simeon v Minister for Finance and Deregulation [2012] FCA 286 per Edmonds J at [6].
67. The words used by Weinberg J “as a result of the actions of its employees or instrumentalities” must be taken in the context of the case before his Honour. A letter of refusal had stated:
My power to approve act of grace payments under the FMA Act is only exercised where it is considered that the application of Commonwealth legislation has produced unintended, anomalous, or inequitable results, or where, because of its direct role in a particular situation the Commonwealth considers that it has a moral responsibility to redress the circumstances of the individual concerned.
68. I am not certain that the words “special circumstances” in s 130 of the Act go so far as to necessarily imply that the obligation assumed by the Territory arises only in those types of circumstances, but I do not need to decide that point in the application presently before the Court. I am satisfied that the authorities in the Federal jurisdiction are clear in confirming the ability of the Court to review a decision made to grant or refuse an act of grace payment.
69. For completeness, s 33 of the FMA Act has since been overtaken by s 65 of the Public Governance Commonwealth Performance and Accountability Act 2013 (Cth) (Public Governance Act), the terms of which are as follows:
Act of grace payments by the Commonwealth
(1) The Finance Minister may, on behalf of the Commonwealth, authorise, in writing, one or more payments to be made to a person if the Finance Minister considers it appropriate to do so because of special circumstances.
Note 1: A payment may be authorised even though the payment or payments would not otherwise be authorised by law or required to meet a legal liability.
Note 2: Act of grace payments under this section must be made from money appropriated by the Parliament. Generally, an act of grace payment can be debited against a non-corporate Commonwealth entity’s annual appropriation, providing that it relates to some matter that has arisen in the course of the administration of the entity.
(2) An authorisation of a payment must be in accordance with any requirements prescribed by the rules.
(3) Conditions may be attached to a payment. If a condition is contravened, the payment is recoverable by the Commonwealth as a debt in a court of competent jurisdiction.
(4) An authorisation of a payment is not a legislative instrument.
70. It will be seen that the words of s 130 of the Act remain textually similar to this Commonwealth provision. In Dennis v Minister for Finance [2017] FCCA 45, Judge Jarrett dealt with a judicial review application concerning s 65 of the Public Governance Act. His Honour applied the earlier authorities in the Federal Court of Australia concerning s 33 of the FMA Act, stating (at [42]) that both the current and the former Commonwealth sections purport to do the same work in generally the same way.
71. The legislative change in the Federal jurisdiction plainly has no impact on the amenability of decisions concerning act of grace payments to review by the courts.
Error of law established
72. The grounds of challenge (only two were pressed) are a denial of procedural fairness, and misconstruction of the nature of the power to be exercised under s 130 of the Act.
73. The argument concerning procedural fairness is that a set of criteria (that is, a policy) had been developed to guide the exercise of a statutory power, which the plaintiff did not know about and therefore did not address. Those criteria were first made public when tabled in the ACT Legislative Assembly on 2 August 2017 (a mere three weeks after the Treasurer had made the decision under challenge), and not provided to the plaintiff until a further letter was sent to the plaintiff on 13 December 2017, well after the Treasurer’s decision had been made.
74. The argument that the Treasurer misconstrued or misunderstood the nature of the power under s 130 of the Act derives from the very brief reasons given by the Treasurer. The plaintiff argues the sole reason for finding that there were no ‘special circumstances’ was that the Territory had successfully defended Court proceedings and thus had no legal liability.
75. Notwithstanding that a denial of procedural fairness would vitiate the entire process resulting in the decision and ought to be considered first, I have found it convenient to deal with whether the Treasurer’s reasons disclose a misunderstanding of the statute first. As it transpires, the point is based on an agreed principle of law between the parties, the evidence required to resolve it is short and the resolution of it is sufficient to dispose of the application.
76. In Quintano, Nicholas J observed of the earlier equivalent Commonwealth provision, s 33 of the FMA Act, at [34]:
It would necessarily involve an error of law for the respondent to consider the applicant’s application on the footing that s 33 of the [FMA] Act did not permit him to authorise an act of grace payment in circumstances where the Commonwealth (or one of its agencies) had no legal liability in relation to the loss to which the act of grace payment sought related.
77. The parties both rely on this passage. The plaintiff contends the Treasurer’s reasons solely focused on the lack of legal liability and that this was an error of law. The Treasurer appeared to accept that relying solely on a lack of legal liability as the basis for refusing an act of grace payment would be an error of law. That must be correct, because s 130 of the Act expressly provides that the payment may be made even though there is no legal liability on the part of the Territory or its instrumentalities.
78. However, the Treasurer then relied on the second part of Nicholas J’s reasoning in Quintano at [34]:
However, I am not satisfied that the respondent interpreted s 33 of the [FMA] Act in this manner. Rather, the respondent seems to have proceeded on the basis that in the absence of legal liability, there was no reason for the Commonwealth to accept any moral responsibility for what occurred such as to justify the making of an act of grace payment to the applicant.
79. The Treasurer submits that the contents of the letter here disclose the same type of reasoning, namely that in the absence of legal liability, there was no reason for the treasure to accept any moral responsibility for what occurred. The Treasurer submits his reasons must not be read with an eye for error, and that he directed attention to whether there were “special circumstances” rendering it “appropriate” to make a payment, which is the statutory test.
80. He says further that the reasons given in his letter indicate that a particular reason persuading the Treasurer not to make a payment was the finding of Penfold J in the earlier negligence proceedings that “there were no steps the Commissioner might have reasonably taken that could have prevented the attack”.
81. The Treasurer submits that this shows it was not simply the absence of legal liability that persuaded him there were no “special circumstances” warranting an act of grace payment. Rather, it was the fact that there were “no steps the Commissioner might have reasonably taken”.
82. Further, the Treasurer went on to state that while he was sympathetic to the serious injuries the plaintiff sustained, “they are not the Commissioner’s or the Territory’s responsibility”. The Treasurer sought to characterise these considerations as going directly to the issue of moral responsibility, and demonstrating that the Treasurer did not limit himself to the question of legal liability.
83. Although there is no doubt that the Treasurer’s reasons ought not be scrutinized with an eye attuned to error, I am unable to accept from the contents of the letter of 3 July 2017 that the Treasurer gives any reason other than the lack of a legal liability, albeit that reason was expressed three different ways.
84. The reference in the Treasurer’s letter to the finding of Penfold J is a reference to the legal reasoning on the cause of action in negligence of Penfold J in Hartigan v Commissioner. Her Honour stated at [283]-[285]:
Did the defendant breach any duty of care?
[283] If a duty of care was owed by the defendant to the plaintiff, however, it would only have imposed on the defendant an obligation to take “reasonable steps” to address the risk arising from the tenant’s keeping of dangerous dogs on the Roe Street premises (Harris at [186]).
[284] I have already rejected the suggestion that “reasonable steps” would have involved the establishment and implementation of a separate or additional regulatory scheme relating to the keeping of dangerous dogs in public housing.
[285] In terms of the steps that were, under the current arrangements, reasonably available to the defendant to address the identified risk, the evidence is that complaints made to the defendant were either acted on to the extent of the defendant’s powers, or passed on to DAS, within a reasonable time. The evidence does not suggest that the defendant failed to respond to any particular complaint or concern brought to its attention in respect of the tenant’s dogs by taking appropriate action within its area of responsibility (that action being, in many cases, passing on the complaints and concerns to DAS).
85. Penfold J then referred to the evidence before the Court and the exact circumstances of the attack on the plaintiff, before finding at [288]-[289] (emphasis added):
[288] That is, the dogs were confined within the tenant’s premises and, indeed, separated from the tenant’s visitors by a door. The attack would not have happened if the dogs had been confined in an adequate cage in the backyard, and it would not have happened if the person who took the plaintiff to the premises had not opened the door behind which the dogs were confined. There was nothing that the defendant could reasonably have done, within the scope of the powers that I have found it possessed, to prevent the attack on the plaintiff. Indeed there is nothing that the defendant could have done to prevent that attack, even within the scope of the obligations suggested by the plaintiff, except to the extent that the obligation was framed as an unqualified obligation to exclude dangerous dogs from public housing.
[289] There is no basis for finding that the defendant failed to take such steps as were reasonable to discharge any duty that the defendant as the occupier under s 168 of the Wrongs Act owed to the plaintiff. The defendant did not breach any duty that it owed to the plaintiff in that capacity.
86. The words emphasised are what the Treasurer referenced in his letter of 3 July 2017. However, it can be seen that Penfold J was not considering any matters relevant to goodwill or moral obligation or whether there were special circumstances that would warrant the payment of money outside the scope of the tort of negligence. All that her Honour was considering in the extract relied upon by the Treasurer was whether reasonable steps were taken by the Commissioner for the purpose of making a finding relevant to legal liability on the cause of action then before the Court.
87. Yet, this was the sole reason given by the Treasurer. The reference to Penfold J’s finding is directly tied to the consideration of whether there were “special circumstances”. This is seen from the paragraph in the letter that immediately follows, with the statement “[a]ccordingly, pursuant to section 130 of the [Act], I am not satisfied that there are special circumstances to warrant authorising a payment to your client and ‘it is for this reason that I am declining your request.”
88. The Treasurer’s reasoning consequently displays a consideration no further than confirming that the Commissioner had no legal liability.
89. Similarly, the Treasurer’s words of sympathy for the plaintiff’s injuries “but they are not the Commissioner’s or the Territory’s responsibility” is, in the context of the letter as a whole, a reference to legal responsibility. The Treasurer’s submission that the word “responsibility” should be read as a reference to moral responsibility is rejected in that regard. The statement is plainly a conclusory sentence summarising the earlier contents of the letter. It does not evince any expanded consideration that would comply with the statutory test under s 130(1) of the Act, which at the very least, required consideration of the plaintiff’s request from the starting premise that there was no legal liability.
90. Lest there be any doubt about that being a fair reading of the letter, the Ministerial Brief, expressly provided to the Treasurer for the purpose of making the decision on 3 July 2017, was in evidence. The paragraphs disclosing the reasons for the recommendation to the Treasurer to refuse an ex-gratia payment are as follows:
[3] Justice Penfold of the Supreme Court found in favour of the Commissioner for Social Housing in the ACT; that the Commissioner was not liable for the dog involved in the attack, and did not have a duty of care to prevent the dog attack. …
…
[5] It is recommended the request for an Act of Grace Payment under Section 130 of the Financial Management Act 1996 not be supported on the basis that the ACT Government Solicitor has advised that ‘this incident has run its course through the Courts and it was found the Territory has no legal liability’.
The Ministerial Brief attached a letter for the Treasurer to sign, which the parties agreed became the letter of 3 July 2017.
There being no reason other than the lack of legal liability given to the Treasurer, and the Treasurer signing the letter that had been drafted for him accompanying the Ministerial Brief recommending the decision, there can be no conclusion other than that the Treasurer only took into account that there was no legal liability in relation to the loss to which the act of grace payment sought related, and in doing so misconstrued the nature of the discretion given to him under s 130(1) of the Act.
As the plaintiff has succeeded in establishing an error of law on that basis, it is unnecessary to consider the procedural fairness ground.
Costs
The plaintiff has succeeded on his application and the case appears to be one where it is appropriate to order that costs follow the event. Neither party has submitted otherwise.
Conclusion
95. The orders of the Court are as follows:
(1)The time for filing an application seeking review of the decision of the Treasurer of the Australian Capital Territory dated 3 July 2017, refusing to authorise a payment to the plaintiff of an amount under s 130 of the Financial Management Act 1996 (ACT), is extended to 12 January 2018.
(2)The said decision of the Treasurer is set aside.
(3)The matter to which the decision relates is referred to the Treasurer for further consideration according to law.
(4)The Treasurer is to pay the plaintiff’s costs.
| I certify that the preceding ninety five [95] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Associate Justice McWilliam. Associate: Date: |
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