Peninsula Anglican Boys' School v Ryan
[1985] FCA 530
•17 OCTOBER 1985
Re: PENINSULA ANGLICAN BOYS SCHOOL
And: THE HONOURABLE SENATOR SUSAN RYAN and COMMONWEALTH SCHOOLS COMMISSION
(1985) 7 FCR 415
No. G415 of 1985
Administrative Law
COURT
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Wilcox J.(1)
CATCHWORDS
Administrative law - schools assistance - Application for capital grant - Application inconsistent with policy guidelines adopted by Minister after lodgment of application - Advice to Minister by Chairman of Commission as delegate of Commonwealth Schools Commission - Whether Chairman entitled to have regard in such advice to the policy guidelines - Whether, in reaching her decision, the Minister was bound by the requirements of natural justice - Whether there was any failure to comply with such requirements - Relevance to decision of material relating to impact of expansion of the school upon existing schools in the area.
States Grants (Schools Assistance) Act 1983 ss. 20, 21, 76.
Commonwealth Schools Commission Act 1973 ss. 4, 5, 13, 14, 17A
Administrative Decisions (Judicial Review) Act 1977 s. 5.
The Queen v. Australian Broadcasting Tribunal; ex parte 2 HD Pty Limited(1979) 144 C.L.R. 45, Re Drake and Minister for Immigration and Ethnic Affairs (1979) 2 ALO 634, Re Becker and Minister for Immigration and Ethnic Affairs (1977) 15 A.L.R. 696, R v. Port of London Authority; ex parte Kynoch Limited ((1919) 1 K.B. 176, British Oxygen Co. Limited v. Minister of Technology (1971) A.C. 610, Roncarelli v. Duplessis (1959) 16 D.L.R. (2d) 689, Twist v. Randwick Municipal Council (1976) 136 CLR 106, Bread Manufacturers of New South Wales v. Evans (1981) 56 A.L.J.R. 89, Banks v. Transport Regulation Board (Victoria)(1968) 119 C.L.R. 222, F.A.I. Insurance Limited v. Winneke (1982) 151 C.L.R. 342, Perron v. Central Land Council (Full Court, 10 May 1985, not reported), Re H.K. (An Infant) (1967) 2 Q.B. 417, Regina v. Gaming Board for Great Britain (1970) 2 Q.B. 417, Kanda v. Government of Malaya(1962) A.C. 322, Kioa v. Minister for Immigration and Ethnic Affairs (1984) 4 F.C.R. 40 referred to.
Administrative Law - Judicial review - Schools assistance - Application for capital grant - Relevance of policy guidelines - Whether natural justice applies to decision - Nature and content of advice of Commonwealth Schools Commission - States Grants (Schools Assistance) Act 1983 (Cth), ss 20, 21, 76 - Schools Commission Act 1973 (Cth), ss 4, 5, 13, 14, 17A - Administrative Decisions (Judicial Review) Act 1977 (Cth), s 5.
HEADNOTE
Held: (1) In refusing an application by a school for a capital grant the Minister did not act improperly in having regard to policy guidelines which effectively excluded the particular application. Provided a decision-maker remains ready to consider exceptional cases falling outside policy guidelines a policy may be adopted even though it may, in effect, restrict the type of application which may be granted.
(2) In making such a decision the Minister was under a duty to act in accordance with the rules of natural justice in that she had a duty to act fairly towards an applicant.
(3) Whilst one of the functions of the Commonwealth Schools Commission is to provide advice to the Minister regarding an application for a capital grant, the Minister is not bound to accept such advice, nor is the Commission obliged to canvass each of the matters in s 13(4) of the Schools Commission Act 1973 in its advice. The Commission is only required to consider such of those matters set out in s 13(4) as may be relevant to the particular task in hand.
R. v. Australian Broadcasting Tribunal; Ex parte 2HD Pty Ltd (1979) 144 CLR 45; Re Drake and Minister for Immigration and Ethnic Affairs (1979) 2 ALD 634; Re Becker and Minister for Immigration and Ethnic Affairs (1977) 32 FLR 469; R v. Port of London Authority; Ex parte Kynoch Ltd (1919) 1 KB 176; British Oxygen Co Ltd v. Minister of Technology (1971) AC 610; Roncarelli v. Duplessis (1959) 16 DLR (2d) 689; Twist v. Randwick Municipal Council (1976) 136 CLR 106; Bread Manufacturers of New South Wales v. Evans (1981) 56 ALJR 89; Banks v. Transport Regulation Board (Victoria) (1968) 119 CLR 222; FAI Insurance Ltd v. Winneke (1982) 151 CLR 342; Perron v. Central Land Council (1985) 60 ALR 575; Re HK (An Infant) (1967) 2 QB 617; R. v. Gaming Board For Great Britain (1970) 2 QB 417; Kanda v. Government of the Federation of Malaya (1962) AC 322; Kioa v. Minister for Immigration and Ethnic Affairs (1984) 4 FCR 40, referred to.
HEARING
Sydney, 1985, September 30; October 1-2, 17. #DATE 17:10:1985
APPLICATION
Application for orders of review under Administrative Decisions (Judicial Review) Act 1977, s 5.
B W Rayment QC and A J Sullivan, for the applicant.
D E Grieve QC and C J Stevens, for the respondent.
Cur adv vult
Solicitors for the applicant: Allen Allen & Hemsley.
Solicitors for the respondent: Australian Government Solicitor.
SMW
ORDER
The Application be dismissed.
The applicant pay to the respondents their costs of the proceedings.
The exhibits be handed out at the expiration of 21 days, unless a Notice of Appeal has been filed in the meantime.
NOTE: Settlement and entry of orders is dealt with in
Order 36 of the Federal Court Rules.
Orders accordingly
JUDGE1
This Application is made under the Administrative Decisions (Judicial Review) Act 1977. It challenges the validity in law of two decisions made by or on behalf of the first respondent, Senator Susan Ryan, Minister for Education and Youth Affairs, refusing an application for a capital grant to assist in the establishment of a new school. The Application also seeks review of the conduct of the second respondent, the Commonwealth Schools Commission, in respect of advice given to the Minister regarding the application and in respect of a recommendation for its refusal made by the Chairman of the Commission.
The subject school, the Peninsula Anglican Boys School, is a secondary school for boys at Warriewood on the Warringah peninsula north of Sydney. The school is intended to complement other Anglican schools in Warringah: primary schools at Dee Why and Bayview and a secondary school for girls at Dee Why. The school opened on 1 February 1983 with an enrolment of 24 pupils, all in year 7; but with plans to expand to an eventual enrolment of 60O boys.
Prior to the opening of the school, on 12 July 1982, its promoter, the Council for the Promotion of Sydney Anglican Diocesan Schools, applied to the Commission for a capital grant of $1,200,000. That sum related to the first and second stages of the establishment of the school. However, before any decision was reached, the immediate application was modified so as to relate only to stage one: the purchase of land and of demountable buildings. On 3 December 1982 the modified application was considered by the Planning and Finance Committee for New South Wales. The Committee resolved to give approval in principle to the project but its approval was subject to detailed investigation of the financial viability of the proposal.
The Planning and Finance Committee is an advisory committee established to assist the Commission under s. 17 of the Commonwealth Schools Commission Act 1973. The committee comprises 12 part-time members: seven nominees of organizations concerned with the establishment and operation of non-government schools, one representative of each of the Commonwealth and State Ministers for Education and three nominees of the Commonwealth Minister. The committee is serviced by officers of the Commission, but it has no authority to bind the Commission or the Minister in relation to any application. Some of the members of the committee serve upon a sub-committee known as the Finance Investigation Group.
The Finance Investigation Group considered the application on 9 December 1982. It decided that the material submitted by the Council was inadequate to enable it to determine the viability of the school and that Mr Norman Heslop, the Honorary Secretary of the Council, should be asked to supply additional information. Upon the following day, Mr John Yabsley, the chairman of the Planning and Finance Committee, telephoned Mr Heslop to inform him of the position. Mr Yabsley pointed out that it would be impossible to process the application before the projected opening date of 1 February 1983. As the Council desired to proceed with the opening on that date, Mr Yabsley suggested that stage 1 of the development proceed at the school's expense and that the application be amended so as to relate only to stage 2. Mr Yabsley said - as Mr Heslop already knew - that he was not able to give any promise that the application would be granted.
Mr Heslop accepted this suggestion. Thereafter the application proceeded as one for a stage 2 grant - covering the purchase of additional land and the erection of some permanent buildings - for $940,000. As such, it was considered at a meeting of the full committee on 16 December 1982. The committee resolved to confirm its earlier decision to recommend approval of the project; with an adjusted grant of $940,000 to be applied to stage 2, subject to the availability of funds.
Over the next few months there were telephone conversations from Mr Yabsley and officers of the Commission to Mr Heslop regarding the supply of the necessary financial information. Further, detailed, information was eventually supplied on 16 May 1983. However, unfortunately for the applicant, upon that very day there were circulated new policy guidelines incompatible with the success of its application.
During the campaign which preceded the federal election held on 5 March 1983, the Australian Labor Party had argued that priority should be given, in the making of capital grants for non-government schools, to the provision of new school places in developing areas and to the ensuring of adequate basic facilities in existing non-government schools serving poor communities. Following the party's success at the election and her appointment as Minister, Senator Ryan set about amending the existing guidelines relating to capital grants so as to give effect to this policy. The Minister had a number of conferences on the matter with the Chairman of the Commonwealth Schools Commission, Dr. Peter Tannock, and other officers of the Commission. These conferences resulted in the preparation, and approval by the Minister, of a document entitled "Instructions on the allocation of capital grants in 1983". This document was circulated by Dr. Tannock to all State offices of the Commission, with instructions "to provide copies to all major non-government school authorities in your State as soon as possible." Dr. Tannock's letter stated that the instructions "will apply to all applications for capital grants for building projects, new places grants, learning grants and loan guarantees." The relevant portions of the instructions are paras (a) and (b) which read as follow:
"(a) Diversity in Australian schooling to reflect the range of educational needs, beliefs and background in the Australian community is a major objective. An important expression of this comes through the non government school sector. Within the non-government school sector there are two priority concerns. The first is to assist non-government school authorities to provide new places in developing areas, in accordance with the overall planning for educational facilities. The second is to ensure that adequate basic facilities are provided in existing non-government schools serving poor communities. In regard to requests for grants for the provision of new places in established areas, schools will be eligible for Commonwealth capital assistance only if it can be shown that a legitimate educational demand is best satisfied by the provision of new school places and that there will not be a significant negative impact on enrolments in nearby government and non-government schools.
(b) Impact studies will be conducted before a recommendation is made to provide Commonwealth assistance for a new school in an established area. State Planning and Finance Committees will not rcommend funding for a new school in an established area unless it can be shown that there will not be a significant negative impact on the enrolments in nearby government and non-government schools and it can be shown that there is a legitimate demand for educational services that cannot be satisfied in existing schools."
The term "developing area" was defined in the document as "an area in which the existing government and non-government schools do not have the capacity to accommodate the present or projected (5-10 years) school aged population". Conversely, "established area" was defined as an area in which those schools do have that capacity. The applicant accepts that its school at Warriewood, applying those definitions, is within an established area.
In July 1983 the Commonwealth Department of Education, at the direction of the Minister, published a booklet "Participation and Equity - Funding Guidelines to the Commonwealth Education Commissions for 1984". This booklet dealt, amongst other matters, with grants to schools. Paragraph 40 reaffirmed and repeated the priorities specified in para (a) of the instruction circulated on 16 May. According to Dr. Tannock, the July booklet was widely distributed, including directly to schools. Mr Heslop denied having seen it but he agreed that he did receive a document in the latter half of 1983 setting out the new guidelines. The document to which he referred was not identified in the evidence but it is clear that Mr Heslop was aware in 1983 that new guidelines had been issued and that he understood, at least in broad outline, the nature of the changes. Mr Heslop said that, after he received the document, he assumed that the Warriewood application would be dealt with on the basis of "a mix" of the old and new guidelines. He agreed that he expected that "this mixture would involve an assessment first of the school's eligibility and, secondly, of its priority."
The significance of the new guidelines, in relation to the Warriewood application, may not immediately have been appreciated by all members of the Planning and Finance Committee. On 7 July 1983 Mr R.E. Whitfield, the New South Wales Director of the Commission, wrote to Mr Heslop that the Committee was considering recommending the project for approval but that it required additional information concerning enrolments before a final decision could be reached. That information was supplied on 18 August. At a meeting held on 27 September 1983 the Finance Investigation Group further considered the application and decided to seek clarification of a number of matters. This request was conveyed by Mr Whitfield on 10 October 1983; no reference being made to the new policy. Mr Heslop responded on 28 October 1983.
On 17 November 1983 the full Planning and Finance Committee again considered the application. According to a memorandum to the Secretary of the Commission in Canberra, prepared by Mr Whitfield and dated 30 November, the committee "noted that this school would have an impact on local government schools (in that existing downward enrolment trends would be accentuated)". Nonetheless it decided to re-endorse its 1982 decision. The reason stated by Mr Whitfield was "that the school had been assessed under the 1982 guidelines where emphasis in this case had been given to 'choice' as a criteria (sic), and a majority of members agreed it would now seriously disadvantage the school to totally reject the application on 'impact' criteria given that the school has already spent $860,000 for stage 1." Mr Whitfield obviously appreciated that the application may be unacceptable on policy grounds. In his memorandum he went on to express concern at the possibility of the school being involved in the expense of preparing an architectural profile of the project in support of a futile application. In this circumstance, he said, "it was decided... to present the issue in minute form rather than profile form". He went on to discuss at length the question of the impact upon local high schools of the establishment of the Warriewood School, making reference to the views expressed by the Manly-Warringah branch of the New South Wales Teachers Federation and to information obtained from the State Department of Education. He set out the response of the school to those matters before concluding:
"Quite clearly the final decision on this case needs to be taken at Ministerial level and it will be seen as setting a precedent. If at all possible the decision should be taken quickly. The school has been advised not to go to final sketch plans and costings at this time. The school hopes to be able to take up its option on the additional land and build in 1984 for opening in 1985."
Mr Whitfield's memorandum was considered by Mr S.G. Thompson, an Assistant Secretary of the Commission with responsibility for the Capital Grants program. Mr Thompson passed it on, with his comments, to Dr Tannock. Dr Tannock forwarded a minute, dated 10 February 1984, to the Minister. In that minute he set out the history of the matter and discussed the material relating to impact. He suggested a meeting to discuss the application.
Dr Tannock did discuss the matter with the Minister. Apparently as a result of that meeting, on 7 March 1984 Dr Tannock sent to Mr Whitfield a telex in these terms:
"Reference your note concerning the application for capital funding for the Peninsula Anglican Boys' High School, Warriewood. The proposed recommendation does not accord with the clear priorities of the government's guidelines. These guidelines state priority should be given to assisting non-government authorities to provide new places in developing areas and to ensure that basic facilities are provided in existing schools serving poor communities. Please request Planning and Finance Committee to review the proposal in the light of these guidelines and if any funding is recommended provide justification why the project should receive priority over other projects."
It is a point of present criticisdm by the applicant that no similar request for justification was made to it.
The Planning and Finance Committee discussed the application at its meeting of 15 March 1984. It had before it a memorandum of Mr Yabsley summarizing the history of the matter and concluding:
"In response to the Chairman's Telex, I recommend that the NSW P and FC again re-endorse priority for Stage II on the grounds that
(1) the decision was made before current guidelines
(2) that whilst recognising possible current guidelines priorities, other criteria remain
(3) that the need for educational facilities is critical to the development of this school
(4) that, even though we have no legal obligation to support, at least a moral obligation and understanding exists after 2 years of intense and detailed negotiations both in regard to staging and finances
(5) that the NSW P & FC fully considered the application on two previous occasions and decided to support and if such a decision is to be revoked it should be effected at the Central Office/Ministerial level."
The committee apparently adopted Mr Yabsley's recommendations. Certainly, it decided to reaffirm its earlier support for the project on the basis of a moral obligation towards the school.
By a memorandum of 27 April 1984 Mr Whitfield reported the committee's decision to Mr Peter Cameron, who had replaced Mr Thompson. He made clear his sympathy for the position of the school but indicated that he was not able to support the committee's recommendation "in view of the guidelines which we are currently required to observe."
Dr Tannock had power, pursuant to a delegation, made by the Minister under s. 76 of the States Grants (Schools Assistance) Act, himself to make a decision under s. 20(1) of that Act approving a building project. Nonetheless, in this instance, he thought it preferable that the Minister decide the application. On 3 May 1984 he submitted a further minute to the Minister. The minute dealt with two cases, one of them being that of the applicant. During the argument before me close attention was given to the contents of this minute. I therefore set out the whole of the minute, insofar as it relates to the Warriewood project:
"1. This minute concerns two projects which have been recommended for funding by Planning and Finance Committees.
2. The first case concerns the Peninsula Anglican Boys' High School at Warriewood and details of the proposed project are attached. You will recall from earlier discussions with you on this matter that it was agreed that the New South Wales Planning and Finance Committee should be advised that the project did not appear to accord with Government funding priorities. It should therefore be reconsidered and if funding was recommended evidence should be provided to support the case for special consideration.
3. The Government's guidelines require that priority in funding should be given to
(a) assist non-government school authorities to provide new places in developing areas in accordance with overall planning for educational facilities
(b) ensure that basic facilities are provided in existing non-government schools serving poor communities.
4. The New South Wales Planning and Finance Committee has responded that it accepts that the project does not accord with these guidelines but suggested that funding could be justified because the school had proceeded with stage one in the development of its facilities from its own resources in the expectation that the second stage would be supported by a Commonwealth capital grant. However, it was noted that there had been no commitment given by the committee that any support would be provided.
5. The secretariat has carefully examined the proposal and advised me that the reasons given by the Planning and Finance Committee do not justify why this project should be given priority over other projects. I endorse this view. However, given the sensitivity of this particular project and the fact that there has been strong lobbying for and against the project I have referred the matter to you for a final decision. In doing so I would wish to point out that the decision taken on the project will be seen to set the precedent for other similar projects involving the development of new schools in established areas.
6. The second case...
....
10. The two projects described above were submitted by Planning and Finance Committees as projects warranting special consideration.
11. They are both projects in schools in established areas that do not serve poor communities. Both schools are Group 1B for recurrent funding purposes.
12. The project at the Peninsula Boys' High School involves the provision of new places, and the proposed grant is $986,000 for a project costing $1,568,000.
13....
14. The project at Brisbane Girls' Grammar School is assessed as having the highest priority but in my view there appears to be insufficient evidence to support a case for funding either project."
On 12 June 1984 Senator Ryan endorsed on this minute: "I accept the advice of the secretariat. Proposals not approved."
Mr Whitfield communicated the Minister's decision to Mr Heslop. His letter of 20 June 1984 reads as follows:
"I am writing to you in connection with your application under the Capital Grants Program in respect of Peninsula Anglican Boys High, Warriewood.
As you would be aware projects are assessed in the light of Commission guidelines and government priorities relative to all other applicant schools in the state. In this regard you will be aware that the government's priorities are (a) to assist non-government authorities to provide new places in developing areas in accordance with overall planning for educational facilities and (b) to ensure that basic facilities are provided in existing non-government schools serving poor communities.
Although it was acknowledged that the school requires additional facilities to cater for an increase in enrolments, in terms of the above criteria and the competing needs of other schools your project did not rate a sufficiently high priority and has therefore been rejected. ..."
There is no provision under the relevant legislation for any appeal against the refusal of a Capital Grant. However, by letter of 24 July 1984 addressed to Mr Whitfield, Mr Heslop submitted what he called an appeal in which he argued at length the case for a grant. This letter was referred to Dr Tannock who, without further consulting the Minister, decided to re-affirm the refusal. On 27 August 1984 Dr Tannock wrote to Mr Heslop:
"Concerning your appeal against the decision I must inform you that there is no formal provision for an appeal against the decision taken by the Minister or her delegates in relation to capital grants. In response to your request, however, I have considered the information provided in your letter. I have also reviewed the application and the assessment procedures that were followed.
As a result of the review I am satisfied that the normal assessment procedures were followed and that these were rigorous and fair and I regret to inform you that I have been unable to establish any other grounds on which the decision to reject the application might be revised.
As you are aware the application was rejected on the grounds that it did not accord closely with the funding guidelines and therefore was not given a high priority relative to other projects.
You have proposed that because the application was lodged prior to the election of the present Commonwealth Government it should not have been subject to the new guidelines. All applications which had not been finalised at the time of the new guidelines were issued became subject to these new guidelines and therefore I am unable to accept that an earlier application be grounds for an appeal.
I have noted your comments about the impact of the school on enrolments in other schools in the area. However I would wish to point out that evidence relating to impact was not used as grounds for rejecting the application. The school was exempted from a formal impact assessment because it had opened prior to the issue of the guidelines which required impact studies for new schools.
You have also referred to the financial need of the school. I must inform you that financial need is taken into account only after a project has been given a priority ranking. The project at the Peninsula Anglican Boys' High School was not given a priority ranking because it did not accord with the guidelines which state that priority should be given to assisting non-government school authorities to provide new places in developing areas in accordance with overall planning for educational facilities; and to ensure that basic facilities are provided in existing non-government schools serving poor communities. For this reason financial need cannot be considered as grounds for a review of the decision.
In summary, I regret to inform you that I can find no reason to support your claim that the decision should be revised."
It has been the practice, over many years, for the Parliament to enact each year legislation providing for the grant to the various States - and also now to the Northern Territory - of funds for the assistance of schools. In accordance with that practice, there was enacted the States Grants (Schools Assistance) Act 1983. Part III of that Act (ss. 20-40) relates to non-government schools programs. Section 20(1) provides that, for the purposes of s. 21, "the Minister may ... approve building projects... in connection with non-government secondary schools, in a State". Section 21(1) permits the Minister to authorize the payment to a State, by way of financial assistance to the State in respect of expenditure in relation to a project approved under s. 20, of such amounts as the Minister determines; but not exceeding the total sum allocated in respect of that State in Schedule 7 of the Act: see s.22. Section 21(2) makes the grant of financial assistance to a State conditional upon the State paying to the approved authority of the relevant school an amount equal to that paid to the State in respect of the particular project of that school. In effect, the State operates as a conduit for the payment by the Commonwealth to the school of the approved amount. The Act does not impose any condition precedent to the exercise by the Minister of power under s.21, such as, for example, a requirement to be satisfied of specified matters or to have received particular advice or a particular recommendation. The situation is similar to that considered by the High Court of Australia in The Queen v. Australian Broadcasting Tribunal; ex parte 2H.D. Pty Limited (1979) 144 CLR 45, in relation to which the Court, at p 49, said:
"In the absence of some positive indication of the considerations on which a grant or refusal of consent is to depend, the discretion is 'unconfined except in so far as the subject matter and the scope and purpose of the statutory enactments may enable the Court to pronounce given reasons to be definitely extraneous to any objects the legislature could have had in view', to use the words of Dixon J. in Water Conservation and Irrigation Commission (N.S.W.) v. Browning (1947) 74 CLR 492 at p 505. In that case His Honour went on to remark ...' on the impossibility, when an administrative discretion is undefined, of a court's doing more than saying that this or that consideration is extraneous to the power'."
Some administrative discretions are exercised in circumstances under which it is possible for the decision maker to grant approval to all applications which meet appropriate criteria; there is no element of competition between applicants. That is not this case. The evidence of Mr Cameron is that there is strong competition for funds for building and equipment projects. In each year, the funds made available by Parliament in relation to non-government schools in each State are fully exhausted. Less than 20% of non-government school applicants are successful in obtaining any funds for building and equipment projects. Under such circumstances, choices - which will, no doubt, often involve refusing worthwhile proposals - must necessarily be made. Proper administration, and the avoidance of seemingly arbitrary and inconsistent decisions, usually will require the formulation of policy guidelines establishing priorities. As Brennan J. pointed out - in the context of an immigration policy - in Re Drake and Minister for Immigration and Ethnic Affairs (1979) 2 ALD 634 at p 640:
"Decision-making is facilitated by the guidance given by an adopted policy, and the integrity of decision-making in particular cases is the better assured if decisions can be tested against such a policy. By diminishing the importance of individual predilection, an adopted policy can diminish the inconsistencies which might otherwise appear in a series of decisions, and enhance the sense of satisfaction with the fairness and continuity of the administrative process."
Of course any such policy guidelines must be not inconsistent with the law. But otherwise their content is for the decision maker to determine having regard to such matters, related to the scope and purpose of the legislative framework, as the decision - maker thinks proper - see Re Becker and Minister for Immigration and Ethnic Affairs (1977) 15 ALR 696 at p 700. The decision maker may not lawfully refuse to entertain applications inconsistent with the adopted policy but he or she may properly take the policy into account: see Drake v. Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577 at p 590. He or she may adopt the approach that, in the absence of exceptional circumstances, the policy will be applied: see R v. Port of London Authority; ex parte Kynoch Limited (1919) 1 KB 176 at p 184, British Oxygen Co. Limited v. Minister of Technology (1971) AC 610 at p 625 and the article by Pearce "Courts, Tribunals and Government Policy" in vol. 11 Federal Law Review 203 at pp. 206-208.
The application of these principles leads to the conclusion that there was nothing illegal or improper in the adoption, in this case, by the Minister of the policy guidelines circulated on 16 May 1983 and reproduced in the booklet published in July 1983. It is true that the effect of the application of the guidelines, given the extent of competition by non-government schools for funds for building projects, would be to render it unlikely that projects which did not fall within the priority areas would be approved for funding. But, provided that the Minister remains ready to consider arguments of particular applicants that their cases should be regarded as exceptional and/or that the priorities should be revised, there is nothing to prevent the adoption of a policy which, in effect though not in terms, restricts grants to particular kinds of projects. Indeed, in British Oxygen, the House of Lords held to be valid a policy which, in terms although subject to the provisoes I have mentioned, excluded the making of particular types of grants.
Counsel for the applicant submit that, even if it was legally open to the Minister to adopt the policy guidelines of 16 May 1983, the decision to refuse the applications of their client was nonetheless bad in law. They advance three broad submissions: that Dr Tannock, acting on behalf of the Commission in tendering advice to the Minister failed to comply with the requirements of the Commonwealth Schools Commission Act - Administrative Decisions (Judicial Review) Act - s.5(1)(b) and (f) - and that the Minister, in making her decision, failed to comply with the requirements of natural justice - s. 5(1)(a) - and took into account an irrelevant consideration - s. 5(2)(a).
Section 4 of the Commonwealth Schools Commission Act establishes the Commission and provides that it is to be constituted by a Chairman and such number of other members, being not less than four nor more than 11, as is from time to time prescribed. The Chairman and not more than three other members are to be full-time members (s.5). In practice, according to the evidence, there has usually been a full complement of 12 members, including the Chairman, of whom four members, including the Chairman, have been full-time members. Section 13 of the Act sets out the functions of the Commission. As the terms of that section are at the heart of the applicant's first submission I quote them in full:
"13. (1) In the performance of its functions, the Commission shall consult and co-operate with representatives of the States and the Northern Territory, with authorities in the Australian Capital Territory responsible for primary or secondary education in that Territory and with persons, bodies and authorities conducting non-government schools in Australia, and may consult with such other persons, bodies and authorities as the Commission thinks necessary.
(2) The functions of the Commission are to inquire into, and to furnish information and advice to the Minister with respect to, the following matters:
(a) The establishing of acceptable standards for buldings, equipment, teaching and other staff and other facilities at government and non-government primary and secondary schools in Australia, and means of attaining and maintaining those standards;
(b) The needs of such schools in rspect of buildings, equipment, staff and other facilities, and the respective priorities to be given to the satisfying of those various needs;
(c) Matters in connexion with the grant by Australia of financial assistance to the States and the Northern Territory for and in respect of schools and school systems and to schools in the Australian Capital Territory, including matters relevant to the necessity for financial assistance to be so granted by Australia, the conditions upon which financial assistance should be so granted and the amount and allocation of any financial asistance so granted; and
(d) Any other matter relating to primary or secondary education in Australia, or to Australian Schools, that may be referred to the Commission by the Minister or which the Commission considers to be a matter that should be inquired into by the Commission.
(3) In addition to the functions of the Commission under sub-section (2), the Commission shall have such other functions as are conferred on it, either expressly or by implication, by or under any other Act.
(4) In the exercise of its functions, the Commission shall have regard to such matters as are relevant, including the need for improving primary and secondary educational facilities in Australia and of providing increased and equal opportunities for education in government and non-government schools in Australia and the need for ensuring that the facilities provided in all schools in Australia, whether government or non-government, are of the highest standard, and, in particular, shall have regard to -
(a) the primary obligation, in relation to education, for governments to provide and maintain government school systems that are of the highest standard and are open, without fees or religious tests, to all children;
(b) the prior right of parents to choose whether their children are educated at a government school or at a non-government school;
(c) the educational needs of handicapped children and handicapped young persons;
(d) the needs of disadvantaged schools and of students at disadvantaged schools, and of other students suffering disadvantages in relation to education for social, economic, ethnic, geographic, cultural, lingual or similar reasons;
(e) the need to encourage diversity and innovation in education in schools and in the curricula and teaching methods of schools;
(f) the need to stimulate and encourage public and private interest in, and support for, improvements in primary and secondary education and in schools and school systems;
(g) the desirability of providing special educational opportunities for students who have demonstrated their ability in a particular field of studies, including scientific, literary, artistic or musical studies; and
(h) the need, in relation to primary and secondary education and in schools and school systems, to promote the economic use of resources.
(5) For the purpose of the performance of its functions, the Commission may undertake, or cause to be undertaken, such research as it thinks necessary into matters that relate to the functions of the Commission."
Section 14(1) requires the Commission, at such times and in respect of such periods as the Minister directs, to furnish to the Minister reports containing recommendations with respect to the matters referred to in s. 13(2)(c). Such reports are to be laid before each House of the Parliament: see s. 14(2). Provision is made, by s. 14(3), for reports on other matters, which are not required to be laid before the Parliament and, by s. 17A, for an annual report which must be laid before each House of Parliament within 15 sitting days of the receipt of the report by the Minister. It is evident, as the applicant submits, that the Commission is intended to be a source of independent advice to the Minister, including upon the subjects of improving educational facilities and standards and of providing increased and equal opportunities for education in both government and non-government schools. In the formulation of that advice - and in the selection of the principles which must necessarily underlie any rational and consistent advice - the Commission is intended to function independently of, and be free from direction by, the Minister (cf. Roncarelli v. Duplessis (1959) 16 DLR (2d) 689 at pp 730, 742-743), expressing its own view regardless of whether or not that view is likely to be acceptable to the Minister. The Minister is not, of course, bound to accept the advice of the Commission in relation to any particular matter or in relation to policy generally. In deciding whether or not to accept the advice of the Commission, as in all other matters relating to the administration of the portfolio, the Minister is accountable to the Parliament. That circumstance is, no doubt, one reason for the inclusion in the Act of requirements for the laying of Commission reports before the Parliament.
The Commission itself apparently did not consider what advice should be furnished to the Minister in relation to the application of the present applicant. However, there was admitted into evidence a resolution of the Commission taken at a meeting of 1 April 1977 whereby it was agreed:
"that the Chairman of the Commission would have authority to recommend to the Minister on the Commission's behalf capital projects in non-government schools and that whenever practicable he would consult the full-time Commissioners on the projects to be so recommended. A report on the action taken in this way was to be presented to each subsequent Commission meeting."
In advising the Minister, in relation to the present application, Dr Tannock apparently acted pursuant to this resolution. The legal basis for this delegation does not appear but I shall assume, for the purpose of considering this submission, that it is correct to say that, in giving that advice, the Chairman was carrying out a function of the Commission, and in particular that referred to in s. 13(2)(c), and was, therefore, bound by the constraints of s. 13 in the same way as the Commission would have been in giving that advice. The question then arises whether, as the applicant contends, the Chairman, in giving that advice, acted in contravention of s. 13(4) in that he failed to refer to the various matters specified in that subsection and, instead, addressed only the question of the incompatibility of the application with the policy guidelines.
Section 13(4) sets out eight matters to which the Commission - and therefore, in this situation, the Chairman - is to have regard. Some of them are not easily reconcilable. For example, a "prior right of parents to choose whether their children are educated at a government school or at a non-government school" (para (b)) is likely sometimes to conflict with the "economic use of resources" (para (h)). Some of the other paragraphs will be relevant only to particular aspects of the Commission's work. The matters specified in subs (4) were not intended as a list of subjects to be separately and specifically addressed in respect of each inquiry made by the Commission, or each piece of information or advice tendered by the Commission to the Minister; any more than subs (1) was intended to require that, in relation to each inquiry or tender of information or advice, the Commission should consult with each of the authorities specified in that sub-section. The purpose of both sub-sections, as I read them, was to convey to the Commission the wishes of Parliament as to the manner in which it should perform the functions imposed upon it by s. 13(2) or by other legislation: see s. 13(3). The Commission's obligation under subs (1) is to consult the specified authorities, in the manner and to the extent which is necessary in respect of the performance of any particular function. The duty under subs (4) is to have regard to the matters specified in that sub-section to the extent that those matters may be relevant to the task on hand. To read subss.(1) and (4) in this manner is not to diminish their importance. They constitute guidelines - and, in the case of subs (4), an agenda - for the work of the Commission, against which its performance may be judged by the Minister and by the Parliament. Consistently with the right and obligation of the Commission to make and express its own findings and to state its own views, they ensure - so far as legislation may - that the work of the Commission will have regard to objectives and values considered by the Parliament to be important.
It follows from what I have said that it is erroneous to read subs (4) as requiring that, in relation to each Minute of advice to the Minister in respect of an application for approval of a building project, the Chairman is bound to canvass each of the matters set out in that sub-section. It may be that, in tendering advice relating to the formulation of policy on capital grants, many of those matters would have to be addressed. But, once the Minister has settled upon a policy, it would be absurd to re-canvass, in relation to each application, those fundamental matters. The Commission is not obliged to agree with any particular Ministerial policy. If it does not agree, it would be entitled, and perhaps be morally obliged, to so report to Parliament. But in the meantime it would be futile for it to do otherwise than to proceed upon the basis that the Minister has a settled policy and that its proper task is to advise the Minister upon the relationship between that policy and the particular application. The Commission is obliged, under subs (4), to "have regard to such matters as are relevant". Nothing could be more relevant than the Minister's settled policy and its relationship to the instant application.
There is an analogy between the situation in the present case and that applying in cases where an independent body, such as the Administrative Appreals Tribunal, has to review a decision in relation to which government policy has properly been taken into account. The authorities recognise that, in such a case, the independent body - although not bound by the policy - is entitled to take it into account as a relevant matter. As was said by Bowen CJ and Deane J. in Drake at 24 A.L.R. 590: "It would be contrary to commonsense to preclude the Tribunal, in its review of a decision, from paying any regard to what was a relevant and proper factor in the making of the decision itself". Although the present case reverses the temporal order of decisions, as between the usual decision maker and the independent body, the comment appears to me to be equally applicable.
Dr Tannock's understanding of the position of the Commission is consistent with the view I have expressed. In his evidence he said this:
"The Government is the body which sets policy with respect to the administration of these various funding programmes for schools. The Commission's role is to advise the Government in relation to policy and... on receipt of the response to that advice to implement the policy, whether the response is consistent with the advice that was given it or not."
The advice given by Dr Tannock in the present case concerned itself with the relationship between the application and the policy, including matters underlying the policy. Making the assumption that, in so advising the Minister, Dr Tannock was bound by s. 13(4), there was, in my view, no contravention of the requirements of that sub-section.
The argument for the applicant assumed that a contravention of s. 13(4) by Dr Tannock would necessarily result in the decision made by the Minister, after consideration of that advice, being invalid in law. I do not think that this assumption is correct. As I have pointed out, there is nothing in the States Grants (Schools Assistance) Act which makes the receipt of advice from the Commission a prerequisite to a valid decision by the Minister to approve or disapprove a building project. Whilst it is, no doubt, most desirable that the Minister have the advice of the Commission, this is not essential in law; with the result that a decision would not be vitiated because the purported advice was invalid in point of law. The first submission of the applicant could have been disposed of on this short ground. I have chosen to deal with the matter at greater length both because of the general importance of the relationship between an independent statutory body and government policy and in fairness to Dr Tannock, whose approach was subjected to stringent criticism at the hearing.
I turn to the submission that the Minister's decision is invalid because of her failure to comply with the requirements of natural justice. Whilst maintaining that there was, in fact, no such failure, counsel for the respondents submit that the situation of the applicant was not one to which those requirements applied. They point out that the decision of the Minister was not one affecting any existing property interest (cf Twist v. Randwick Municipal Council (1976) 136 CLR 106, Bread Manufacturers of New South Wales v. Evans (1981) 56 ALJR 89). Nor was the decision one to revoke (cf. Banks v. Transport Regulation Board (Victoria) (1968) 119 CLR 222) or to refuse renewal of (cf. F.A.I. Insurance Limited v. Winneke (1982) 151 CLR 342) an existing statutory licence or concession. The present case is one in which the applicant seeks the initial grant to it of a statutory concession. The applicant has no legal right to a capital grant.
It is, however, now clear that the cases in which the rules of natural justice apply are not confined to those in which some property interest or other existing right or privilege is involved. In a recent Full Court decision, Perron v. Central Land Council (10 May 1985, not reported), Toohey J. and I pointed out that "there are now numerous decisions which refer to the existence of a duty to act fairly in cases where an applicant has merely a legitimate expectation that prescribed procedures will be followed by the statutory decision-maker." We referred to Re H.K. (An Infant)(1967) 2 QB 417 -an immigration case - and Regina v. Gaming Board for Great Britain (1970) 2 QB 417 - a case involving an application for a gaming licence. In each of those cases the relevant statute contained criteria by reference to which the relevant application was to be judged. In Perron it did not. However, that circumstance was not seen in that case, by any member of the Court, as a proper ground of distinction. The principle which we applied was that, in the absence of a contrary statutory intent, the general rule was that, in considering and determining an application for the exercise of a discretion in favour of a particular person, a statutory decision maker has an obligation to act fairly towards that person. The content of the duty, that is the steps required to satisfy the obligation, varies from case to case; circumstances will be almost infinitely diverse. But the requirement of fairness is constant and fundamental. Applying that principle, I hold that, in the present case, the Minister was under a duty to act in accordance with the rules of natural justice, in the sense that she had a duty to act fairly towards the applicant in considering its application.
The applicant says that the Minister acted in breach of the duty of fairness because, without giving notice to the applicant of her intent so to do, she applied to the determination of the application the May 1983 guidelines. The application was originally submitted in 1982, when a different policy was in force. The adoption of the May 1983 guidelines by the Minister was such a fundamental matter, it is said, that fairness required that notice of the new policy be given to the applicant in order that it might address arguments why, nevertheless, its application should be granted. The applicant refers to potential arguments such as those mentioned in British Oxygen: that the policy ought to be abandoned or that the instant application should be treated as exceptional. In particular, the applicant points out that the telex of 7 March 1984 from Dr Tannock to Mr Whitfield recognised the possibility that a case might be made for the project notwithstanding the guidelines and complains that, although the Planning and Finance Committee was given an opportunity to advance that case, it - the body most directly concerned - was not.
Some may think that it would have been desirable, in the interests of good administration, for the significance of the new policy to have been brought to the specific attention of the applicant and for it to be invited to justify the application in the light of that policy. The matter was being delayed, in any event, pending advice from the committee. But a departure from optimum administrative procedures is not necessarily the same thing as unfairness, in the natural justice sense. The Commission had reason to believe, in March 1984, that the applicant would be aware of the new guidelines and that it would expect that they would be taken into account in determining the subject application. It might reasonably have assumed that the applicant would be aware of its entitlement to present such material as it wished in support of an argument that, notwithstanding the new guidelines, the application ought to be approved and that, as it had not done so, it took the view that nothing could usefully be added.
There is, however, a more fundamental reason for holding that the failure by the Minister to give warning of the new policy was not unfair. It is settled law that, in cases to which the obligation of natural justice applies, a decision maker must give fair warning to an affected person of the existence and nature of adverse allegations of fact; in that way ensuring to the person an opportunity of meeting those allegations before any decision is made: see Kanda v. Government of Malaya (1962) AC 322 at pp 337-338, Kioa v. Minister for Immigration and Ethnic Affairs (1984) 4 FCR 40 at pp 54-55. But, so far as I am aware, there is no case in which it has been held that a decision maker is bound to give an affected person notice of the policy considerations likely to be taken into account in arriving at his or her decision. This is not surprising. To impose such an obligation would be to impose a serious impediment to efficient decision making. Policy considerations are almost infinitely variable. In one case they may loom large, in another they may be insignificant. The relevance and weight of policy considerations may not be apparent until the matter is fully considered by the decision maker. A rule which required the then imminent decision to be deferred whilst notice was given of the policy considerations which appeared to be relevant would be, at least, highly inconvenient. Moreover, policy considerations change from time to time; sometimes quickly and frequently. The inconvenience and delay attendant upon giving notice of each shift of wind is obvious.
In the present case the matter did not rest with the Minister's decision of 12 June 1984, a decision communicated, with reasons, by Mr Whitfield's letter of 20 June 1984. Mr Heslop forwarded his "appeal" of 24 July 1984, in which he argued the merits of the application at length and against the background of the policy guidelines. When he wrote that letter he was under no doubt regarding the obstacle to approval. That "appeal" was considered by Dr Tannock, the delegate of the Minister in relation to the approval of projects, and refused. It is not suggested that Dr Tannock's reconsideration of the matter was other than genuine or was less than adequate. The position then is that, even if there had been a proper ground for criticizing the taking of the first decision without first drawing the attention of the applicant to the new guidelines, the application would in any event have been validly refused by the second decision.
Finally, the applicant argues that the decision of the Minister is bad in law because she took into account an extraneous circumstance: the impact of the school upon existing schools in the area. It is not suggested that this matter was inherently extraneous to a decision in respect of an application for a capital grant; plainly, such a proposition would be untenable having regard to the Minister's responsibility to ensure the efficient use of educational funds. However, it is suggested that the matter was extraneous to this particular decision, that the Minister had dealt with the question of impact in her approved guidelines and that she was bound in law to exclude consideration of any impact in relation to cases in respect of which she had not, by the guidelines, required an assessment of impact.
I pass by the question whether the Minister could, in law, be precluded from considering a matter otherwise relevant to an exercise of her statutory discretion because only of a restraint expressed or implied in her own guidelines. It is unnecessary to deal with that question because the submission is based upon a mis-reading of the guidelines. The Minister had not, by the guidelines, excluded consideration of the question of impact. In para (b) of the guidelines she indicated that impact studies will be conducted - apparently by the Commission or its advisers - before a recommendation is made to provide Commonwealth assistance for a new school in an established area. As the Peninsula Anglican Boys' Schook was established before the date upon which the guidelines were issued it was not a "new school" for the purposes of this paragraph. Accordingly, no impact study was required by the guidelines to be conducted; and in fact no impact study was conducted, or required to be conducted, before the Minister's decision was made. But a policy excluding a formal impact study in some cases does not exclude the relevance of such material relating to impact as happens to be available without a formal study. The Minister's intention to consider impact material is made clear by the last sentence of para (a). That sentence refers to "new places" rather than new schools, that is it includes proposals for the expansion of existing schools. It makes grants for the provision of new places conditional upon it being shown, inter alia, "that there will not be a significant negative impact on enrolments in nearby goverment and non-government schools". The impact material placed before the Minister went to this issue. Although, according to Dr Tannock, this material was not in fact a ground of refusal of the application, it was material properly to be considered in making the ultimate decision. This submission also fails.
It is not difficult to understand that those concerned with the development of the Pensinsula Anglican Boys' School are disappointed by the Minister's decision to refuse the school a capital grant. As the history of the application shows, there is room for differences of opinion about the reasonable course to take, under the circumstances. Although any such view has not found expression in the material relevant to this case, there may be some in the community who would quarrel with the policy whose application underlay the refusal. Education policies are often controversial. But it is not a mere formality for me to say that I indicate no view upon such matters. It would be wrong for me to do so. They are matters for determination by the Minister, who is accountable to Parliament and to the public, and not for the Court. The sole function of the Court in this case is to consider whether the decision of the Minister is invalid in point of law. In my opinion it is not. The Application must be dismissed with costs.
5
10
0