Warner, F. v First Mildura Irrigation Trust

[1993] FCA 844

FRED WARNER v. FIRST MILDURA IRRIGATION TRUST
No. VI51 of 1993
FED No. 844
Number of pages - 4
Industrial Law
(1993) 46 FCR 294

COURT

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY
INDUSTRIAL DIVISION
KEELY J

CATCHWORDS

Industrial Law - offence - Irrigation Trust - whether control by the Minister - whether Crown in right of the State of Victoria

Industrial Relations Act 1988 (Cth) s.6, s.334 (1)(e)

Water Act 1989 (Vic.) s.112, 125, 307(1)

Townsville Hospitals Board v. Council of the City of Townsville (1982) 149 CLR 282

The Victorian Railways Commissioners v. Herbert (1949) VLR 211

Wynyard Investments Pty Ltd v. Commissioner for Railways (N.S.W.) (1955) 93 CLR 376

Registrar of the Accident Compensation Tribunal v. Commissioner of Taxation (unreported, 20 october 1993, Full High Court)

The Council of the Town of Gladstone v. The Gladstone Harbour Board (1964) QdR 505

HEARING

MELBOURNE, 15-18 November 1993

#DATE 23:11:1993

Counsel for the prosecutor: Mr C.F. Fenwick

Solicitor for the prosecutor: Slater and Gordon

Counsel for the defendant: Mr R.R. Tracey QC

with Mr L. Kaufman

Solicitor for the defendant: Phillips Fox

ORDER

THE COURT ORDERS THAT:

1. The information be dismissed.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

KEELY J The prosecutor laid an information alleging that First Mildura Irrigation Trust (the Trust) on 28 July 1993 did dismiss each of Robert John Seaman, Bernard John Neilson and Michael John Innes "from his employment with the defendant because he was entitled to the benefit of an Award of the Australian Industrial Relations Commission, contrary to section 334(1)(e) of the Industrial Relations Act 1988" (the Act). The information also alleged that the Trust, in or about August 1993, "did injure Robert Ryczel in his employment with the defendant" because of his entitlement to the benefit of an award, contrary to the same sub-section.

1. Mr Fenwick, of counsel, appeared for the prosecutor and Mr Tracey of Queen's Counsel and Mr L. Kaufman, of counsel, appeared for the Trust. The Trust is an "Authority" within the meaning of the Victorian Water Act (the Water Act). The court was informed at the outset that both parties wished the court to determine, as a preliminary point, the question whether the Trust is the Crown in right of the State of Victoria, within the meaning of s.6 of the Act, which provides as follows:
   

"This Act binds the Crown in right of the Commonwealth, each of the States, the Australian Capital Territory and the Northern Territory, but nothing in this Act renders the Crown in right of the Commonwealth, a State, the Australian Capital Territory or the Northern Territory liable to be prosecuted for an offence."

In the week commencing next Monday, 29 November 1993, the court will be hearing the present matter if the Trust is not an agent of the Crown; if it is an agent, the court will hear a related application, brought by Messrs Seaman, Neilson and Innes against the Trust for alleged breaches of the Victorian Local Authorities Interim Award 1991 (the award). Mr Fenwick drew attention to the parties' need to know, as soon as possible, which matter will be heard next Monday.

1. The preliminary question was fully debated in a hearing from 15 to 18 November, during which the court was taken in great detail to the provisions of the Water Act and to the relevant authorities. I accept the defendant's submission that the Trust will be an agent of the Crown if it satisfies the common law test of control and accordingly will not be liable to be prosecuted for any offence against the Act. Mr Fenwick accepted that the appropriate test is the right to control the Trust, as opposed to the exercise of that right.

2. Mr Fenwick submitted that if an Authority exercised powers in its own discretion, independently of the Crown, then it would not be entitled to Crown immunity - citing Metropolitan Meat Industry Board v. Sheedy (1927) AC 899 at 905. He placed considerable reliance upon Townsville Hospitals Board v. Council of the City of Townsville (1982) 149 CLR 282. In that case Gibbs CJ, with whose reasons for judgment Murphy, Wilson and Brennan JJ agreed, said:
   

"(p 288) The alternative submission made on behalf of the Board was that the Board represented the Crown for the purpose of the erection of the buildings. Although the word "represent" is not infrequently used in this context, it would be more precise to say that the question is whether the Board, in erecting the building, enjoys the privileges and immunities of the Crown. It is possible that the Board might be given the immunities and privileges of the Crown for one purpose and not for another: Victorian Railways Commissioners v. Herbert (1949) VLR 211 at 213; Wynyard Investments Pty. Ltd. v. Commissioner for Railways (N.S.W.)

(1955) 93 CLR 376 at 394; The Commonwealth v. Rhind (1966) 119 CLR 584 at 600. . . .

(p 291) All persons should prima facie be regarded as equal before the law, and no statutory body should be accorded special privileges and immunities unless it clearly appears that it was the intention of the legislature to confer them. It is not difficult for the legislature to provide in express terms that a corporation shall have the privileges and immunities of the Crown, and where it does not do so it should not readily be concluded that it had that intention."

I have taken into account the fact that the Trust "consists of 6 members all of whom are elected by the occupiers or owners of rateable land . . ." (see Schedule 6 to the Water Act). That plainly relevant matter was relied upon by the prosecutor.

1. Having considered the provisions of the Water Act, the authorities cited and the submissions, I accept Mr Kaufman's submission that the Trust is subject to the control of the Crown by reason of the provisions of the Water Act 1989, and in particular sections 307(1), 125 and 112 of that Act. Those sections provide as follows:
   

"307. Power of Minister to give directions

(1) The Minister may give a direction to an Authority in relation to the performance of any of its functions and the exercise of any of its powers. . . .

(4) An Authority to which the Minister gives a direction must make sure that a statement or summary of the contents of the direction is included in the annual report of the Authority.

125. Accountability of Authorities

An Authority must perform its functions and exercise its powers subject to any direction given by the Minister under section 307.

112. Appointment of an administrator

(1) This section does not apply to the (Rural Water) Corporation.

(2) If an Authority fails or refuses to comply with a direction under section 307, the Governor in Council may, by Order published in the Government Gazette, appoint an administrator to take over the functions of the Authority for a period, not more than 12 months, specified in the Order.

(3) The Order -

(a) if the authority is not a council, may -

(i) suspend the Authority; or

(ii) dismiss its members and provide, if necessary, for elections to be held for new members; and

(b) if the Authority is a council, may suspend any functions of the council under this Act; and

(c) must set out reasons for the actions proposed in it; and

(d) must be laid by the Minister before both Houses of Parliament within 5 sitting days of each House after it is made; and

(e) may give the administrator all powers necessary to carry out the functions and duties of the appointment.

(4) In exercising the powers of his or her appointment, an administrator is subject to the same restrictions as the Authority that he or she is replacing.

(5) Any defect in relation to the appointment of the administrator does not invalidate that appointment or anything done by the administrator.

(6) On the expiry of a suspension declared in an Order made under sub-section (3)(a)(i) the Governor in Council must -

(a) reinstate the members whose terms have not expired to their offices and fix a date for any election necessary to fill any vacancy in the office of a member whose term has expired; or

(b) dismiss the Authority's members and provide for an election to be held for new members.

(7) The administrator goes out of office -

(a) if any members are reinstated, at the time of that reinstatement; and

(b) if all the members are dismissed -

(i) at the declaration of the poll for the election of new members; or

(ii) on the appointment of new members - as the case requires."

1. As to s.307(1) it was argued by Mr Fenwick that it was qualitatively different from the section considered by Sheppard J in Sharkey v. Fisher (1980) 33 ALR 173 and that it had to be read in the context of the Water Act as a whole, including sections 112 and 125. He said that s.125 did not "take it very far in terms of analysing what is the nature of the ministerial power" but that s.112 was significant because it set out the consequences which could flow from an Authority's failure to comply with a Ministerial direction under s.307. He submitted that those consequences were limited in three ways, including the fact that the Authority remained in existence and its functions were not altered.

2. He placed emphasis upon the words "in relation to" in s.307(1) and submitted that they "seem to import a notion of connection with the exercise of a particular power as opposed to controlling the otherwise independent discretion of the statutory body". He emphasized the objects of the Act, the nature of the Minister's power, the use of the words "in relation to" and the fact that Parliament, in enacting s.307(1) in 1989, had not used the words "An authority . . . is subject to the exercise of direction and control by the Minister".

3. He submitted that in s.307(1) the words "in relation to" confined the Ministerial power to a direction in relation to the manner in which a function or power of the Authority should be exercised; that it did not confer the power to compel the Authority to exercise some function or power which it did not wish to do. After reflecting upon that submission I have decided that the Minister's power under s.307(1) is not confined in that way.

4. Mr Fenwick submitted that if the court decided that the Trust is an agent of the Crown, it should hold that the Trust is not an agent for all purposes and, specifically, that it is not an agent of the Crown for the purpose of its employment of officers and its determination of their terms and conditions of employment under s.89 of the Water Act. He referred to The Victorian Railways Commissioners v. Herbert (1949) VLR 211 at 213-214 where Herring CJ, Lowe and Fullagar JJ said:
   

"But all these things must be looked at with due regard to the nature of the immunity or privilege of the Crown that is claimed, so that attention may be directed to what is relevant to the particular enquiry, which is being made."

That passage was cited by Kitto J in Wynyard Investments Pty Ltd v. Commissioner for Railways (N.S.W.) (1955) 93 CLR 376 at 395.

1. In The Registrar of the Accident Compensation Tribunal v. Commissioner of Taxation (delivered 20 October 1993 - not yet reported) Mason CJ, Deane, Toohey and Gaudron JJ said (at page 18):
   

"Clearly, it is or will often be inappropriate to describe a person or a statutory office holder as the servant or agent of the Crown in relation to some functions and not others. As a general rule, it will be the overall nature of the functions and duties involved which determines whether he or she is to be categorized as a servant or agent of the Crown, no matter for what purpose that classification is or becomes necessary. But there may be cases where there are discrete functions which involve no interest or purpose of the Crown and which are separate and distinct from other functions which serve a Crown purpose.

It is clear that the classification of a person as a servant or agent of the Crown, whether generally or in relation to particular functions, does not depend on there being some benefit to or some financial or other interest on the part of the Crown or the government involved. However, there may be cases where there is no Crown interest or purpose to be served at all or, in the case of discrete functions, no Crown interest or purpose to be served by those particular functions."

In my opinion, in the present case it is proper to determine the question by reference to "the overall nature of the functions and duties involved". The Trust's employment of officers, and its determination of their terms and conditions of employment, in my opinion could not properly be described as "discrete functions which involve no interest or purpose of the Crown and which are separate and distinct from other functions which serve a Crown purpose".

1. Mr Fenwick also referred to the reasons for judgment of Mansfield CJ (with which Jeffriess J agreed) in The Council of the Town of Gladstone v. The Gladstone Harbour Board (1964) QdR 505 at 510 where his Honour, after referring to "the independent powers and functions of the defendant", said:
   

"The defendant is a body which, in carrying out its functions, exercises an independent discretion of its own and though a Minister may prevent a defendant acting in certain cases, he does not direct the acts of the Board. The acts of the Board are therefore, not the acts of the Crown and in my opinion, the defendant is therefore a body independent of the Crown and does not represent it."

In my opinion that passage cannot be applied to the Trust, having regard to the powers of the Minister under s.307 to give directions, which power is not limited, in my opinion, to giving a direction to "prevent a defendant acting in certain cases".

1. Mr Fenwick tendered the Minister's second reading speech in commending to the Legislative Assembly the Water Bill which was enacted as the Water Act 1989. Although the tender was opposed by Mr Kaufman, who argued that there was no ambiguity, it was admitted in evidence on the basis that there was an ambiguity, illustrated by the competing contentions as to the construction of s.307.

2. In my opinion the second reading speech tends to support Mr Kaufman's submission that the degree of control that the Minister is legally entitled to exercise over the Trust is such that the Trust is an agent of the Crown. That speech, as reported in volume 394 of the Victoria, Legislative Assembly 1989, Debates, vol. 394, pp 2226-2230 for 26 May 1989, contained the following passages:
   

"(p 2226) The Water Bill is a complete rewrite of the law relating to water resources and water authorities in Victoria. It provides for integrated management of water resources in all their forms and it covers all the functions of authorities: water supply, sewerage, regional drainage, floodplain management, waterway management and irrigation. This Bill is the keystone of a reconstructed water management framework which will serve this State for decades to come. . . .

(p 2227) In a major statement on 2 December 1983, the then Minister for Water Resources, the Honourable David White, MLC, foreshadowed both the Water (Central Management Restructuring) Bill and an overhaul of all water legislation. He described the existing statutes as a maze of out-dated, imprecise, overly complex and often inconsistent legislation. He pointed out that they are concerned with matters better suited to administrative manuals than to Acts of Parliament. They do not set management objectives or define the proper relationship between the Minister and agencies within the water portfolio. The Bill now before the House replaces fifteen existing Acts, and over 1000 pages of out-dated statute law with about 200 pages of plain, clear language. The Bill is focused on resource management. It defines the Minister's executive powers clearly where present Acts do not. When private interests are at stake, avenues are provided for due process where for the most part none previously existed. Government bodies and also the Minister are made properly accountable. . . .

(p 2228) . . . I shall describe the philosophy which underlines the Bill, and then the key changes of substance which it contains. (1.) The first premise is that new legislation is needed even if no changes of substance were intended. The disorganised body of existing statute law is, in itself, a costly impediment to water management.

(2.) The second premise is that the Bill should not merely by its passage and proclamation, interfere with any existing private rights. It does change the way many things will be done in future but it has no retrospective effects and does not confiscate any rights.

(3.) Thirdly, government powers should be used sparingly, strategically, and only when required. The Bill presumes that anything is legal that is not explicitly controlled by statute. Where powers are created their uses are generally triggered by specific events or circumstances and not by the mere existence of these powers.

(4.) Fourthly, the Bill recognises the unity of the natural water cycle which means that all aspects of water should be administered together. At present, we have different statutes for different aspects as a legacy from the English origins of our statutes and of the disconnected events which caused the Victorian Parliament to legislate at different times for surface water, ground water, and other aspects of water.

I come now to the key matters of content contained in the Bill. Rights in water are sharply defined by Part 2. As in the Water Act 1958, the Crown has the primary right and responsibility for water and private rights are derived from the Crown. This principle is similar to the legal principles which support private rights in land. The Crown's formal right to water gives the Crown a duty to act in the interests of all who have rights to water. The principle appears time and again in the Bill. For example, in Part 4 the Minister must consider all possible interests when granting a licence to take water from a waterway. . . .

(p 2229) The Bill transforms the statutory arrangements governing authorities in the water sector. In Part 13 the financial accountability and autonomy of authorities are encouraged by obliging them to develop long-term business plans. Each authority will be able to adopt the tariff structure most suitable to its circumstances and its consumers. In most cases the period of the business plan will be five years or longer. This will foster long-term planning at authority level. Once the Minister has seen an authority's business plan, the authority will operate freely within the scope and duration of its plan. However, the Minister will have a new direction power to resort to in extreme circumstances."

1. Mr Fenwick pointed to the last passage quoted above as supporting his contention that the Trust is not an agent of the Crown. In the last sentence in that passage it is stated that "the Minister will have a new direction power to resort to in extreme circumstances" but the words "in extreme circumstances" do not detract from the existence of the power to control. As stated earlier, it was accepted by Mr Fenwick that the "control" test is directed towards a consideration of what degree of control the Minister has power to exercise, and does not depend on how often that power is exercised. The Minister's words "to resort to in extreme circumstances" are no more than his suggestion as to the circumstances in which the power will be used. The Act, in conferring the power in s.307(1), does not require the existence of "extreme circumstances" before the Minister can exercise the power to "give a direction to an Authority in relation to the performance of any of its functions and the exercise of any of its powers".

1. In my opinion the Trust, as an Authority under the Water Act, is an agent of the Crown in right of the State of Victoria and is not "liable to be prosecuted for an offence". It follows that the information must be dismissed.