Xenophon v State of South Australia
[2000] SASC 327
•21 December 2000
XENOPHON v STATE OF SOUTH AUSTRALIA AND OTHERS
[2000] SASC 327Full Court: Prior, Lander and Bleby JJ
1................ PRIOR J:........................ This application for judicial review and declarations has been referred to the Full Court for consideration upon affidavit evidence alone.
2 The applicant seeks to challenge the lawfulness of decisions made on behalf of the State to provide indemnities to a Minister of the Crown in respect of liability arising in two separate defamation actions brought by the applicant against the Treasurer personally. The Treasurer and the Attorney‑General are the second and third respondents to this application. They are named personally as was the case with the Treasurer in the defamation actions.
3 On 11 February 1999 the applicant issued proceedings in the Magistrates Court against the present respondent Lucas and another Member of Parliament, Mr Ingerson. Damages were sought for defamation alleged to have arisen from the circulation of a pamphlet in a parliamentary electorate on the letterhead of the respondent Lucas, as Treasurer of the State Government. The defendants consented to judgment in the full amount of the applicant’s claim and costs on 19 March 1999. Three days later, Mr Lucas’ solicitors advised that the State had indemnified Mr Lucas in respect of the total payment of $20900. An indemnity had been given in terms of a memorandum dated 25 February 1999, from the present respondent Griffin as Attorney-General to the respondent Lucas as Treasurer. The indemnity did not mention the second defendant to the claim for defamation, Mr Ingerson.
4 On 23 March 1999, the defendant’s solicitors were asked for payment. At the same time they were notified that the applicant had raised, with the Auditor‑General, an issue as to the propriety of the indemnity. A cheque for the full amount claimed was provided by the State and deposited in the Trust account of the applicant’s own legal firm on 22 April. The Auditor-General made a report to Parliament concerning the indemnity on 28 October. On 20 March 2000, the claim in the Magistrates Court was dismissed for want of prosecution.
5 A second defamation action was instituted on 6 May 1999 with respect to statements made by the Treasurer with respect to the settlement monies. It was claimed that those statements involved a re-statement of the defamatory statements made in the original pamphlet. It was also said that some remarks made by the Treasurer then were also defamatory of the applicant. This action is continuing in the District Court. On 17 August 1999 the Attorney-General advised Mr Lucas of a further indemnity with respect to those proceedings on the same terms as the earlier one.
6 The material before this Court establishes that funds to satisfy the indemnities had been provided by the South Australian Government Captive Insurance Corporation, a body established pursuant to the Public Corporations Act 1993. The Corporation has used funds derived from a source known as section 2 of the South Australian Government Captive Insurance and Risk Management Fund to meet these liabilities. The account is funded by draw-downs from the consolidated account of the South Australian Government.
7 The present proceedings were commenced on 10 December 1999. It is said that extensions of time are required for the bringing of these proceedings. Certainly that is so with respect to the first indemnity. Supreme Court Rule 98.06 imposes a time limit of six months for proceedings by way of judicial review. Counsel for the respondent Lucas also submits that, with respect to the relief sought over the second indemnity, an extension of time is also required. The rule cited does require proceedings to be issued as promptly as possible. Thus, the fact that proceedings have been brought within six months does not prevent the Court from rejecting the applications if delay is seen to be a factor.
8 The Court heard argument on the merits. It is appropriate to respond to the substantial issues raised, assuming any extensions of time required were granted. The Crown Solicitor submitted that proceedings by way of judicial review are not available with respect to the actions taken by any Minister of the Crown in this case because no question of statutory power properly arises. Judicial review is available against the Crown with respect to the exercise of statutory powers and to some aspects of the royal prerogative. However, the submission was that it is not available here since the action taken by the Attorney-General with respect to Mr Lucas’ liability and costs involves the exercise of a prerogative power in the widest sense embracing a power the exercise of which is not exercisable by reference to objective criteria or considerations, but rather policy and political ones. The power exercised here was likened to a person’s power to contract. The exercise of the power alone is not susceptible to judicial review[1]. It is unassailably correct that the Executive, in common with members of the community at large, may grant indemnities to any person to whom it is thought appropriate to grant such an indemnity. The Crown has certain special prerogative and statutory powers. That most of them are now open to judicial review does not dictate that all “rights and capacities” enjoyed by the Crown “in common with”[2] others should also be open to judicial review[3]. Thus, the exercise of a simple capacity to indemnify is not the exercise of a capacity which can be the subject of judicial review. The very subject matter of the power means that[4]. I would dismiss the application on this ground.
[1] General Newspapers Pty Ltd and Others v Telstra Corporation(1993) 117 ALR 629 at 637
[2] Davis v The Commonwealth (1988) 166 CLR 79 at 108
[3] Horwitz v Connor (1908) 6 CLR 38; The Queen v Toohey exparte Northern Land Council (1981) 151 CLR 170 at 220; Minister for Arts Heritage and Environment and Others v Peko Wallsend Ltd and Others (1987) 75 ALR 218 at 224 and 244 - 249; Von Einem v Griffin (1998) 72 SASR 110 at 126
[4] Von Einem v Griffin (1998) 72 SASR 110 at 126
9 It was further submitted that even if the power here exercised were of a type not excluded by its very nature from judicial review, the exercise of the power in this case did not pass the test of reviewability.
10 In Council of Civil Service Unions and Others v Minister for the Civil Service[5], Lord Diplock said:
“To qualify as a subject for judicial review the decision must have consequences which affect some person (or body of persons) other than the decision-maker, although it may affect him too. It must affect such other person either:
(a).. by altering rights or obligations of that person which are enforceable by or against him in private law; or
(b)by depriving him of some benefit or advantage which either (i) he had in the past been permitted by the decision-maker to enjoy and which he can legitimately expect to be permitted to continue to do until there has been communicated to him some rational grounds for withdrawing it on which he has been given an opportunity to comment; or (ii) he has received assurance from the decision-maker will not be withdrawn without giving him first an opportunity of advancing reasons for contending that they should not be withdrawn.”
[5] [1985] 1 AC 374 at 408
11 The submission was that the applicant’s rights and obligations, enforceable by him in private law, were not altered by the decision and action of the Attorney. He has not been deprived of some benefit or advantage which he had enjoyed and which he legitimately expected to continue, nor had he been given any relevant assurance. I think that submission is plainly correct. Thus, if contrary to my view, judicial review is available here the application would be dismissed on this ground.
12 Assuming that the Attorney-General’s decisions to grant indemnities are subject to judicial review the relief should also be denied upon the ground that no illegality, irrationality or procedural impropriety has been made out[6]. Nothing put to this Court has identified any illegal act. Nor could it be said that the Attorney’s decisions to indemnify were unreasonable in any relevant sense.
[6] Council of Civil Service Unions and Others v Minister for the Civil Service [1985] 1 AC 374 at 410
13 The evidence here establishes that, in 1994, Cabinet confirmed guidelines for the Attorney-General to follow when determining whether to grant an indemnity. The act of granting an indemnity is an act of the Attorney exercising a Ministerial power as an agent of the Crown[7]. I agree with the submission that there is no limit on the ability of the Attorney-General to grant an indemnity. It is not a matter regulated by statute or the common law. The ultimate authority of the Attorney to bind the Crown generally and to grant indemnity in particular flows from his appointment as a Minister of the Crown by the Governor. There is no requirement for the indemnity to be granted by the Governor in Council[8].
[7] Minister for the Arts Heritage and Environment and Others v Peko Wallsend Ltd and Others (1987) 75 ALR 218 at 225 and 245
[8] New South Wales v Bardolph (1934) 52 CLR 455 at 462, 472 - 475, 495 - 496, 502 - 503 and 508 - 510
14 The Cabinet guidelines make plain that the Attorney can bind the government to “provide assistance” to a Minister unless the “publication” or statements complained of do not “reasonably arise from the performance of Ministerial duties”. I agree with the submission put to us that the statements were not outside the limits of the Attorney’s authority. That accepted, however, the fact remains that even if the Attorney erred in failing to refuse assistance because the statements could not reasonably arise from performance of ministerial duties, the remedy with respect to such an action would be a reprimand or censure by the Premier. The Attorney’s actions would not be illegal and open to judicial review[9]. As the Crown Solicitor put it, the practice of an executive government providing indemnities for ministers for costs and damages in legal proceedings is a relatively common practice in this country and elsewhere. Whether an indemnity is provided with respect to things done by a minister that might be said not to have been in the course of ministerial duties is not a relevant consideration to the issue whether the Crown, acting through the Attorney-General, can determine to pay the costs and damages payable by any person it chooses. The remedy for any inappropriate decision of this kind is political, not legal[10].
[9] Australian Broadcasting Corporation v Redmore Pty Ltd (1989) 166 CLR 454 at 460
[10] Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 35 - 36
15 The submission put on behalf of the applicant was that the Crown Proceedings Act 1992 was a statutory restraint upon the powers in dispute here. I agree with the submission put on behalf of the respondents that nothing in that Act either directly, or otherwise, takes away or qualifies the power to grant an indemnity[11]. That Act is a procedural, facultative statute not qualifying or restraining the exercise of plenary powers. Indeed, by that Act, the State could be sued by the applicant if, as the Treasurer asserts, he was acting in his capacity as a Minister when the statements complained of were made.
[11] R v The Secretary of State for the Home Department Ex parte Northumbria Police Authority [1989] 1 QB 26 at 44 and 53; Vass v The Commonwealth of Australia (2000) 169 ALR 486 at 496 - 497.
16 It has to be acknowledged that it is within the duties of a minister to promote and comment upon policies of the Government within his portfolio. The evidence before the Court is that the Treasurer was acting in the performance of ministerial duties when making the statements the subject of the defamation actions. The distinction sought to be made by the applicant between the Minister’s acts, as a Minister of the Crown and a Member of the Parliament, cannot be maintained to generate some basis for interference in this case. Likewise, so far as the applicant sought to say that the question of appropriation was a relevant factor to the exercise of the Attorney’s power to grant an indemnity, authority is against that submission[12]. As the Crown Solicitor put it, entering into an obligation to pay money and an appropriation by Parliament to pay the money are separate issues. All that the Crown Proceedings Act relevantly authorises is payment of any judgment sum against the State without specific appropriation by Parliament for the purpose. In this case, the Crown Proceedings Act provided no warrant for satisfying any judgment or costs. Specific appropriation was required. That was properly identified within section 2 of the South Australian Government Captive Insurance and Risk Management Fund[13]. The decision to grant an indemnity meant that the liability to pay any damages or costs was a risk of the Crown. That is a function of South Australian Government Captive Insurance and Risk Management Fund[14]. Thus, no illegality has been identified.
[12] Bardolph 52 CLR at 474, 475 and 502; Vass 199 ALR at 499 - 500
[13] Appropriation Act 1999, s 4(1)
[14] Public Corporations (Treasurer) Regulations 1994, reg 5
17 The application should be dismissed. No occasion is made out for the grant of any of the relief sought by the application. In case it be assumed otherwise, I would reject the suggestion that these proceedings could properly give rise to declaratory relief absent any proper basis being made out for judicial review. The provisions of Supreme Court Rule 98.01 cannot be read as warranting declaratory relief at large.
18 LANDER J:I agree, for the reasons given by both Prior and Bleby JJ, that this application should be dismissed.
19 I agree with Bleby J that the plaintiff has no standing to bring these proceedings for judicial review.
20 I also agree with Prior J that it would not be appropriate to grant any declaratory relief absent any proper basis being made out for judicial review.
21 In my opinion no declaratory orders can be made under r 98.01 on any application for judicial review unless the plaintiff is entitled to an order in the nature or having the effect of a prerogative writ, and it would be just and convenient for the declaration or injunction to be granted on a summons for judicial review, after consideration of the matters in r 98.03(3).
22 I have reached that conclusion because of the wording of r 98.01(3) which provides:
“... the Court may grant the declaration or injunction claimed in lieu of, or in addition to, any order in the nature of, or having the effect of, a prerogative writ at common law ...”
23 It seems to me that any declaration or injunction which is to be granted under r 98.01(3) can only be granted if in fact there is an entitlement to an order in the nature of mandamus, prohibition, certiorari or quo warranto. That follows, it seems to me, by the use of the words “in lieu of or in addition to”.
24 It follows therefore that no declaration could be made in light of the fact that the plaintiff is not entitled to any order in the nature of or having the effect of a prerogative writ.
25 BLEBY J The circumstances giving rise to the indemnities the subject of this application are set forth in the reasons for judgment of Prior J. I will not repeat them.
The indemnities given
26 The indemnity granted by the Attorney‑General in respect of the first action was in the following terms:
“In accordance with Cabinet Guidelines I have determined that the Government will provide assistance to you in the defence of these proceedings.
This assistance will include the costs incurred in engagement of private legal practitioners and the Government will meet any order for damages and costs made against you or agreed to in a reasonably negotiated settlement.
The indemnity provided to you is provided on the conditions set out in the Guidelines approved by Cabinet....”
27 It can be seen that two indemnities were given. The first was by way of “assistance” in defence of the proceedings by indemnifying the Minister, in accordance with the guidelines, for the legal costs incurred in defence of the proceedings. The second was an indemnity for any damages and costs which might be payable by the Minister to the plaintiff.
28 The indemnity in respect of the second action was granted “on the same terms and conditions as that granted to you in respect of the first action brought by Mr Xenophon”.
29 The guidelines approved by Cabinet were contained in a document entitled “Representation for Ministers in Defamation Proceedings”, apparently approved by Cabinet on 10 April 1989 and confirmed by Cabinet in March 1994. The first two paragraphs relate only to the situation concerning defamation proceedings instituted by a Minister and the circumstances in which an indemnity may be granted for a Minister’s costs of such action. Paragraphs (iii), (iv) and (v) address the situation of a Minister being sued for defamation. They provide as follows:
(iii).. Where a Minister becomes involved, or appears likely to become involved, as a defendant in defamation proceedings arising out of the performance of his or her Ministerial duties the facts of the matter should be referred immediately to the Attorney‑General. The Attorney‑General will determine whether the Government should provide assistance to the Minister with respect to the defence of the proceedings. Such assistance will not be provided where the publication complained of did not reasonably arise from the performance of Ministerial duties.
(iv)Where it is decided that assistance will be provided to the Minister the Attorney‑General will determine whether the Crown Solicitor should conduct the Minister’s defence or whether the Minister should be indemnified against the reasonable costs of engaging private lawyers. Circumstances in which the Crown Solicitor will be instructed to conduct a Minister’s defence in defamation proceedings will be rare.
(v).... Where it is decided that assistance will be provided to the Minister the Government will normally agree if requested to do so -
(a).... to arrange for private lawyers to be instructed;
(b) to meet any order for damages and costs made against the Minister or agreed to in a reasonably negotiated settlement.”
30 Paragraph (vi) specifies the conditions on which any indemnity for costs will be granted.
31 Thus, it can be seen that the conditions approved by Cabinet only relate to the granting of indemnities for costs of defamation proceedings and the circumstances in which indemnities will be given. Paragraph (v) merely says that where such assistance is provided, the government will “normally” agree to meet an order for damages and costs made against the Minister. It does not follow that the government will necessarily give such an indemnity. Also, there is nothing to suggest that an indemnity for damages and costs ordered to be paid by the Minister will only be given if assistance is provided for legal representation. The two are quite separate, and the guidelines approved by Cabinet appear to relate only to the question of the provision of assistance for legal representation.
The Relief Claimed
32 In these proceedings the plaintiff seeks an order in the nature of certiorari to quash the decisions of the Executive Council and/or the Attorney‑General to indemnify the Minister with respect to his liability to pay damages and costs in each of the two actions. In each case there is an alternative claim for declaratory relief that the Minister was not entitled to such indemnities. In the case of the action which is still current, there is a further claim for an order in the nature of prohibition to restrain the Attorney‑General from giving an indemnity to the Minister or from taking any further steps to give effect to the indemnity. There is a claim for further declaratory relief as to the circumstances in which indemnities may be given, as to the liability of the State of South Australia to satisfy judgments against Ministers and as to supposed limitations on the Crown and the right of the State of South Australia to expend monies to satisfy judgments entered against Ministers, except in circumstances authorised by the Crown Proceedings Act 1992. The plaintiff also seeks a declaration that the Cabinet guidelines are not validly authorised by any statute or pursuant to the prerogative powers of the Crown. There is other consequential relief claimed.
33 With one possible exception, all the relief claimed relates to the granting of indemnities to the Minister against any liability he might incur for damages and costs. The plaintiff does not raise for consideration the granting of assistance by way of provision of legal representation to a Minister who is a defendant in defamation proceedings or the granting of an indemnity in respect of his own legal costs. The one possible exception is paragraph 10 of the relief claimed, which seeks a declaration “that the second defendant is not entitled to an indemnity under the terms of the guidelines with respect to the proceedings in District Court Action No 1306 of 1999”. However, that is expressed to be by way of an alternative to what is claimed in paragraph 8 which is plainly limited to the question of the State’s power to expend monies to satisfy judgments entered against Ministers. In the circumstances I consider that paragraph 10 is also so limited. Furthermore, the only argument addressed to this Court related to the granting of indemnities in respect of a liability for damages and plaintiffs’ costs.
34 Therefore, the only issue in this case relates to the validity of the indemnities given in respect of the liability of the Minister to pay damages and costs to the plaintiff. The proceedings do not challenge the provision of legal assistance by the Crown to the Minister for the defence of those proceedings. As the Cabinet guidelines relate only to the granting of such assistance, there is no further need to consider them.
35 The orders are sought by the plaintiff on the grounds that the Crown in the right of the State of South Australia “has neither statutory authority nor prerogative power to indemnify a Minister of the Crown other than for a liability incurred in connection with the exercise of the powers and duties vested in him as a Minister of the Crown”. For the purpose of what follows I am prepared to assume, without deciding, that the Minister’s liability, in the case of the first action was, and in the case of the second action, will, if he is found liable, be a liability incurred other than in connection with the exercise of the powers and duties vested in him as a Minister of the Crown.
Whether the granting of an indemnity is a valid exercise of prerogative power
36 There is no doubt that entry into a host of contracts is part of the necessary exercise of the Crown prerogative. In State of New South Wales v Bardolph (1934) 52 CLR 455 at 474 Evatt J, whose decision at first instance was affirmed on appeal, made it clear that a contract by the Crown entered into in the ordinary or necessary course of government administration and authorised by the responsible Minister would be enforceable. He continued:
“Under a constitution like that of New South Wales where the legislative and executive authority is not limited by reference to subject matter, the general capacity of the Crown to enter into a contract should be regarded from the same point of view as the capacity of the King would be by the Courts of common law. No doubt the King had special powers, privileges, immunities and prerogatives. But he never seems to have been regarded as being less powerful to enter into contracts than one of his subjects. The enforcement of such contracts is to be distinguished from their inherent validity.”
37 In the course of his judgment on appeal Starke J said that the validity of a contract was not conditional upon parliamentary authority. He continued (at 502):
“Constitutional practice, as in Commercial Cable Co. v. Government of Newfoundland [1916] 2 A.C. 610, or statutory provisions, as in Churchward v. The Queen (1865) L.R. 1 Q.B. 173 or Mackay v. Attorney-General for British Columbia [1922] 1 A.C. 457, may prescribe conditions precedent to the making of contracts with the Crown, and so far as these conditions exist they must be observed. But otherwise contracts made on behalf of the Crown by its officers or servants in the established course of their authority and duty are Crown contracts, and as such bind the Crown. The nature and extent of the authority may be defined by constitutional practice or express instructions, or inferred from the nature of the office or the duties entrusted to the particular officer or servant. It is not every contract made or purporting to have been made by an officer or servant of the Crown on its behalf that will bind the Crown, but only such as are within the authority delegated to that officer or servant. The authority is a matter which ultimately falls for determination in the Courts of law (see Musgrave v Pulido (1879) 5 App. Cas. 102). The fact that a Premier, or a responsible Minister of the Crown, has entered into a contract on the part of the Crown, or has directed a subordinate official so to do by no means established the necessary authority: such a rule, while it might not destroy Parliamentary control over the amount and manner of expenditure of public money, would seriously weaken that control. In each case, the character of the transaction, and also constitutional practice, must be considered. The question of authority, in the case of contracts providing for the carrying on of the ordinary activities or functions of government, presents, as a rule, but little difficulty; other contracts, however, must be considered each in relation to its own facts.”
38 Constitutional practice would seem to indicate that the granting of indemnities of this nature to Ministers and other persons holding public office is relatively common. A number of recent instances are cited in Brazier: Ministers of the Crown, Clarendon Press, Oxford, 1997, at 228 ‑ 233. A recent example in the sphere of Commonwealth Government is to be seen in Vass v Commonwealth of Australia (2000) 169 ALR 486. Indemnities have also been provided to others who are not employees of the Crown, e.g. a judge of the District Court: O’Connor v State of South Australia (1976) 14 SASR 187 at 188.
39 However, it is not necessary to rely merely on constitutional practice. The provision of an indemnity of the type in question bears statutory authority. As Prior J has pointed out, the material before the Court establishes that funds to satisfy indemnities of this nature are provided by the South Australian Government Captive Insurance Corporation, a body established pursuant to the Public Corporations Act 1993. Funds for the provision for such indemnities come from section two of the South Australian Government Captive Insurance and Risk Management Fund operated by the Corporation. The Corporation is established by the Public Corporations (Treasurer) Regulations 1994, being regulations made under the Public Corporations Act 1993. One of the functions of the Corporation is “to satisfy or compromise any claims made against the Crown in respect of risks of the Crown (including claims that may not necessarily be valid in law)” (Regulation 12(c)). “Risks of the Crown” include “a risk arising under a guarantee or indemnity given by the Crown, whether or not the risk relates to an officer, employee or agent of the Crown....” (Regulation 3). “The Crown” means “the Crown in right of the State of South Australia and includes any instrumentality or agency of the Crown” (Regulation 3).
40 The Corporation is a semi‑government authority for the purposes of the Public Finance and Audit Act 1987. As such, the Treasurer has, presumably in accordance with s 19 of that Act, indemnified the Corporation “to the extent necessary to ratify all the liabilities which arise out of the carrying out of its functions in accordance with the Public Corporations (Treasurer) Regulations 1994”. Section 19(4) of the Public Finance and Audit Act provides:
“(4) The money required to satisfy the obligations of the Treasurer under a guarantee or indemnity entered into under this section or under the repealed Public Finance Act will be paid out of the Consolidated Account which is appropriated for that purpose to the necessary extent.”
41 Thus, it can be seen that, by means of a statutory scheme, a corporation has been created under parliamentary authority, one of the purposes of which is to satisfy claims against the Crown which arise (inter alia) under an indemnity given by the Crown. By a complementary statutory scheme, Parliament has authorised the payment of funds to satisfy such liabilities. Whilst the statutory scheme does not specifically authorise the Crown to grant indemnities, the whole scheme proceeds on the assumption that the Crown will do so. It is a statutory recognition of that particular prerogative power. There is nothing which limits the power to the granting of an indemnity to a Minister, or to a Minister only in respect of a liability incurred in connection with the exercise of powers and duties vested in him or her as a Minister.
42 If the granting of indemnities is within the prerogative powers of the Executive, it can be exercised by Ministers acting together in Cabinet or by the Attorney‑General as agent of the Crown: Minister for Arts Heritage and Environment v Peko‑Wallsend Ltd (1987) 75 ALR 218 at 225; State of New South Wales v Bardolph (1934) 52 CLR 455 at 474, 490. The granting of the indemnity in this case was therefore a valid exercise of prerogative power.
Whether the exercise of the prerogative is now governed by the Crown Proceedings Act 1992
43 The plaintiff argued that the power to grant indemnity is now governed exclusively by the Crown Proceedings Act 1992. I disagree.
44 At common law, the Crown could not be sued. This was based on the theory that the King could not be subject to his own courts. For this purpose, the king included the government or body politic. This harsh rule was ameliorated to some extent by the petition of right. This enabled an action to be brought by petition of right to the Crown, but only in contract, and only with the Crown’s fiat. It did not extend to tortious liability.
45 Inability to sue in tort was based on a now outmoded theory of vicarious liability: see Aronson and Whitmore, Public Torts and Contracts, Law Book Co, Sydney, 1982 at page 1. This inability to sue was overcome in some instances by suing the Attorney‑General for a declaration of right.
46 Whilst the Crown enjoyed certain immunities, there was nothing to prevent an officer of the Crown or a public servant from being sued and being made personally liable for torts which he committed or which he authorised. Therefore, it is perhaps not surprising that the Crown might grant indemnities to such persons in some circumstances, whether or not the tort was authorised. Such an indemnity would nevertheless have been an indemnity for a liability for which the Crown was not otherwise responsible.
47 In South Australia, the liability of the Crown was changed significantly in 1853 by the passing of “An Act to give relief to Persons having Claims against the Local Government of South Australia, by authorising them to try the validity of such Claims in a Court of Law or Equity” (No 6 of 1853). The procedure was still by way of petition to the Governor and a process of referral of the petition to the Supreme Court, accompanied by the naming of a nominal defendant, but it applied to “all cases of dispute or difference, touching any pecuniary claim between any subject of Her Majesty and the colonial government of the province of South Australia....”(section 1). The Act therefore brought about a substantial adjustment in rights, but it did not render immune from suit or require indemnity to be given to any servants of the Crown or Ministers who might still be sued in their own name (cf s 27C, Wrongs Act 1936 in respect of employees).
48 Whilst there were substantive reforms, the Crown still retained certain immunities, such as the immunity from discovery: Welden v Smith [1922] SASR 186.
49 Act No 6 of 1853 was repealed and the substance of its provisions were re‑enacted in Part V of the Supreme Court Act 1935.
50 The Crown Proceedings Act 1972 effected both procedural and substantive reforms. It enabled proceedings to be brought in any court “in accordance with the ordinary practice and procedure of the court in proceedings between subject and subject” (s 5(1)); it removed Crown immunity from discovery of documents and from answering interrogatories; it ensured that the Crown was liable in contract and in tort in the same manner and to the same extent as a private individual. The Crown’s vicarious liability was for “any tort committed by a servant, agent or other person acting in the employment, or on behalf, of the Crown” (s 10(1)(b)); it provided for enforcement of judgments in favour of the Crown (s 9), and dealt with other incidental matters. It also enabled an action against “the Crown” to be brought against the State of South Australia: s 5(2). However, that was an enabling provision. An action could still be brought against a Minister in his or her own name.
51 Whilst “the Crown” was defined to mean:
(a)... the Crown in right of this State;
(b) any Minister of the Crown in right of this State;
(c).... any instrumentality or agency of the Crown in right of this State;
and
(d)... any person, body or authority declared by proclamation to be an instrumentality of the Crown to which this Act applies,
the Act was silent as to the circumstances in which State revenue was required to satisfy a judgment against a Minister who was sued. It was not concerned with the capacity in which a Minister is sued or with the capacity in which the Minister was acting if sued in the name of “The State of South Australia”. It did not provide for automatic appropriation from State revenue to meet any judgment against a Minister or against the State in respect of the actions of a Minister.
52 The same can be said of the Crown Proceedings Act 1992. The enactment of the Crown Proceedings Act 1972 and its present successor did not solve the problem whether, in a particular case of tortious liability, a Minister was acting in his ministerial capacity or in a purely private capacity. Since then there has been room for, and indeed a requirement for, a decision to be made by the Executive as to the circumstances in which Ministers, when sued, would be entitled to indemnity. If a Minister is sued, no execution, attachment or similar process can be issued out of any court against the Crown, or against the Minister (s 8(1), 1972 Act; s 10(1), 1992 Act). The judgment is to be transmitted to the Governor who may give directions as to the manner in which it is to be satisfied (s 8, 1972 Act; s 10, 1992 Act). Section 8(4) of the 1972 Act directed, and s 10(4) of the 1992 Act continues to require, that any judgment the subject of the Governor’s directions to the Treasurer or to a Minister respectively be paid out of the general revenue of the State, or out of the funds of the appropriate instrumentality if the direction so requires. Subsection (5) of each of the sections contains its own appropriation clause.
53 There would seem to be no doubt that at the stage of giving directions as to the manner in which the judgment is to be satisfied, or perhaps more usually, before the matter comes to judgment, the Governor, acting on the advice of the Executive Council, might determine that a judgment against a Minister (who by definition is included in “the Crown”) was or would be incurred in his capacity as a Minister or not as the case may be - if indeed that were the test adopted by the Governor. In the former case, he would no doubt give directions as to the satisfaction of the judgment. In the latter case, he would give directions that it was not to be so satisfied, and the judgment creditor would then have to proceed against the Minister. If indemnity was not to be afforded, it would be usual for that fact to be made known to the Minister and to the plaintiff beforehand.
54 Therefore, the granting of an indemnity, even under the Crown Proceedings Act 1972 and its successor, the Act of 1992, remains a valid exercise of the prerogative.
55 There is no reason why, in accordance with guidelines determined by the Cabinet, the exercise of such prerogative should not be delegated in advance to the Attorney‑General. Thus, far from displacing the common law prerogative of the Crown to grant indemnity to ministers, the Crown Proceedings Acts have required that the granting of indemnities to a minister be continued in appropriate cases. Whether an immunity should or should not be granted in particular circumstances is, as will be seen, a matter of political, not legal, judgment.
Whether the grant of the indemnity is immune from judicial review
56 It was argued that an exercise of the Crown prerogative of this nature was immune from judicial review. As Wilcox J pointed out in Minister for Arts Heritage and Environment v Peko Wallsend Ltd (1987) 75 ALR 218 at 246, courts have always been able to examine the validity of an Executive Council decision if it were said to be beyond power: Attorney-General (NSW) v Trethowlan (1931) 44 CLR 394; Banks v Transport Regulation Board (Vic) (1968) 119 CLR 222. Courts would also interfere if the decision was bad in form: Jones v The Commonwealth (1963) 109 CLR 475. Review on other grounds was not available. However, since the 1980’s, there had been considerable relaxation of that position. Decisions of Executive Council in the exercise of a statutory power were considered to be reviewable: CREEDNZ Inc v Governor-General [1981] 1 NZLR 172; R v Toohey; Ex parte Northern Land Council (1981) 151 CLR 170; and FAI Insurances Ltd v Winneke (1982) 151 CLR 342.
57 The prohibition on judicial review of executive decisions was relaxed substantially in the UK in Council of Civil Service Unions v Minister for the Civil Service [1985] 1 AC 374. King CJ, with whom Matheson J agreed, considered that it was well established by that decision and by Peko Wallsend (supra) that “the courts will review.... a decision [of the executive government] irrespective of whether it is made in the exercise of a power derived from statute, common law or the prerogative”: Blyth District Hospital Inc v SA Health Commission (1988) 49 SASR 501 at 509. His Honour recognised, however, as have others, that there is a “wide range of executive government decisions based upon policy and political considerations which are not subject to judicial review and which are not subject to a duty to provide persons affected thereby an opportunity to be heard”. As Lander J pointed out in Von Einem v Griffin (1998) 72 SASR 110 to 126, the unwillingness of courts to intervene by judicial review is not because the power in question is a prerogative power. It depends on the nature and subject matter of the power which is sought to be reviewed. The exercise of the prerogative of mercy is an area where courts will not intervene: Von Einem v Griffin (supra). Another is the power to lay an ex officio indictment: Barton v R (1980) 147 CLR 75. Other areas include national security, the making of treaties, the defence of the country, the grant of honours, the dissolution of parliament and the appointment of Ministers: Peko Wallsend (supra) at 223.
58 The elusive question is the nature of the power that will be excluded from judicial review and that which will be subject to judicial review. In R v Toohey; Ex parte Northern Land Council (1981) 151 CLR 170, Mason J gave a clue to some of the more significant factors which will render the nature of the power subject to judicial review. He noted the contrast between the readiness of the courts to review a statutory discretion and their reluctance to review the prerogative. He said (at 219):
“The statutory discretion is in so many instances readily susceptible to judicial review for a variety of reasons. Its exercise very often affects the right of the citizen; there may be a duty to exercise the discretion one way or another; the discretion may be precisely limited in scope; it may be conferred for a specific or an ascertainable purpose; and it will be exercisable by reference to criteria or considerations express or implied. The prerogative powers lack some or all of these characteristics. Moreover, they are in some instances by reason of their very nature not susceptible of judicial review. See the list of prerogative powers in ‘The Courts and the Executive: Four House of Lords Decisions’ by Philip Allott [1977] Cambridge Law Journal 255, at pp. 267-268. See also the observations in China Navigation Co. Ltd. v. Attorney-General [1932] 2 K.B. 197, at pp. 214-215, 228, 242-243 and Chandler v. Director of Public Prosecutions [1964] A.C. 763, at pp. 790-792, 796, 800-801, 809-810, 814.”
59 Most prerogative decisions to enter into contracts and to grant indemnities will not be subject to review. This is because they may properly be said not to be exercisable by reference to the rights of citizens, or for particular purposes or by reference to objective considerations and criteria. Some will be exercised by reference to policy and political considerations only. Some will be exercised as being essential for government administration. It is for these sorts of reasons that most decisions of this nature will not be subject to judicial review. In particular, courts cannot be made reviewers of government policy or administrative necessity.
60 In the case of indemnities granted to Ministers of the Crown in respect of liability for damages and costs in defamation proceedings there are no objective policies and criteria in place which might govern the granting of such indemnities. If there were, they could be changed by the executive government at any time. As will be seen below, the decision does not adversely affect the rights of any citizen. There are simply no criteria by which a court of law can judge the legal correctness or validity of any such decision. If it is a bad decision, it is a matter either for parliament to rectify or for the community to express its displeasure through the ballot box. Therefore, subject to one qualification, which has no application in this case, I would hold that the decision to grant or withhold an indemnity of the type in question is not reviewable by a court.
61 The possible exception relates to an observation of Lord Diplock in Council of Civil Service Unions v Minister for the Civil Service [1985] 1 AC 374. Lord Diplock set out some rules for determining the availability of judicial review. They have often been quoted with approval since. They do not distinguish between statutory and prerogative decisions. His Lordship said (at 408):
“To qualify as a subject for judicial review the decision must have consequences which affect some person (or body of persons) other than the decision‑maker, although it may affect him too. It must affect such other person either:
(a).... by altering rights or obligations of that person which are enforceable by or against him in private law; or
(b)by depriving him of some benefit or advantage which either (i) he had in the past been permitted by the decision‑maker to enjoy and which he can legitimately expect to be permitted to continue to do until there has been communicated to him some rational grounds for withdrawing it on which he has been given an opportunity to comment; or (ii) he has received assurance from the decision‑maker will not be withdrawn without giving him first an opportunity of advancing reasons for contending that they should not be withdrawn....
For a decision to be susceptible to judicial review the decision‑maker must be empowered by public law (and not merely, as in arbitration, by agreement between private parties) to make decisions that, if validly made, will lead to administrative action or abstention from action by an authority endowed by law with executive powers, which have one or other of the consequences mentioned in the preceding paragraph. The ultimate source of the decision‑making power is nearly always nowadays a statute or subordinate legislation made under the statute; but in the absence of any statute regulating the subject matter of the decision the source of the decision‑making power may still be the common law itself, i.e., that part of the common law that is given by lawyers the label of ‘the prerogative.’ Where this is the source of decision‑making power, the power is confined to executive officers of central as distinct from local government and in constitutional practice is generally exercised by those holding ministerial rank.”
62 It is possible that, in circumstances where a person seeking an indemnity - a decision that would alter the rights or obligations of the person - the person might have a legitimate expectation that such a right would be afforded. Alternatively, the person might have an assurance, on which he or she has acted, that it would be granted or not withdrawn. Depending on the circumstances, it might be possible for such a decision to be reviewable. However, that is not this case. I merely mention such a possibility to illustrate that the assertion that no prerogative decision to grant or withhold an indemnity is subject to judicial review may be too wide.
63 In my opinion the application must be dismissed because the decision in question is not subject to judicial review.
The standing of the plaintiff
64 If I am wrong in holding that the decision in this case is not subject to judicial review, then one must consider the plaintiff’s standing to bring the application. In my opinion he has no such standing.
65 The plaintiff, although a member of the South Australian Parliament, is in no better position, for present purposes, than a member of the public. He seeks to prevent payments being made out of the South Australian Government Captive Insurance Corporation’s funds to the Minister in settlement of his own claim for damages and costs against the Minister, which payment can only be made by reason of the authority of the indemnity granted to the Minister by the Attorney-General. He does not seek any order preventing the payment of the Minister’s own costs of the actions. The action complained of does not directly affect the rights or obligations of the plaintiff. His interest in the proceedings can be no greater than that of any member of the public in the expenditure of government funds on the payment of damages and costs for which a Minister of the Crown is or may become liable.
66 So far as applications for a declaration and injunction are concerned, standing in public law cases was governed by the principle established in Boyce v Paddington Borough Council [1903] 1 Ch 109 at 114. This required either interference with some private right or the suffering of special damage peculiar to the plaintiff from interference with the public right. For some time this was regarded as unsatisfactory, and in Australian Conservation Foundation v The Commonwealth (1980) 146 CLR 493 the High Court developed a concept of special interest over and above that enjoyed by the public generally as being necessary to grant locus standi to sue. As Gibbs CJ said at 530 ‑ 531:
“I would not deny that a person might have a special interest in the preservation of a particular environment. However, an interest, for present purposes, does not mean a mere intellectual or emotional concern. A person is not interested within the meaning of the rule, unless he is likely to gain some advantage, other than the satisfaction of righting a wrong, upholding a principle or winning a contest, if his action succeeds or to suffer some disadvantage, other than a sense of grievance or a debt for costs, if his action fails. A belief, however strongly felt, that the law generally, or a particular law, should be observed, or that conduct of a particular kind should be prevented, does not suffice to give its possessor locus standi. If that were not so, the rule requiring special interest would be meaningless. Any plaintiff who felt strongly enough to bring an action could maintain it.”
67 In that case the Australian Conservation Foundation was held to have no special interest to challenge the validity of decisions concerning a proposal to establish and operate a resort and tourist area on public and privately owned lands at Farnborough in central Queensland. That was despite the general objects of the Foundation and the fact that it had made a written submission on a draft environmental impact statement made available for public comment.
68 In Onus v Alcoa of Australia Ltd (1981) 149 CLR 27, Gibbs CJ recognised that the rule enunciated in the Australian Conservation Foundation Case was a flexible one and “will vary according to the nature of the subject matter of the litigation” (ibid at 36). The appellants in that case were members of a tribe of Aboriginal people and custodians of the relics of those people according to their laws and customs. The relics were of cultural and spiritual importance to them. They were held to have standing to restrain a breach of s 21 of the Archaeological and Aboriginal Relics Preservation Act 1972 (Vic).
69 In Shop Distributive and Allied Employees Association v Minister for Industrial Affairs (SA) (1995) 183 CLR 552, a trade union whose members were employed as shop assistants in the central shopping district of Adelaide were held to have standing to apply for a declaration and injunction challenging the validity of certificates issued by the Minister under the Shop Trading Hours Act 1977 (SA) having the effect of allowing certain shops to trade on Sundays. The special interest was that of the members whose terms and conditions of employment would be affected by such changes. Of the joint judgment in that case, Gaudron, Gummow and Kirby JJ in the subsequent decision of Bateman’s Bay Local Aboriginal Land Council v Aboriginal Community Benefit Fund Pty Ltd (1998) 194 CLR 247 at [46] said:
“In the joint judgment of Brennan, Dawson, Toohey, Gaudron and McHugh JJ in Shop Distributive and Allied Employees Association v Minister for Industrial Affairs (SA) (1995) 183 CLR 552 at 558, reference was made to the requirement that the plaintiff have ‘a special interest in the subject matter of the action’. Their Honours stated (at 558) that the rule is flexible and continued that ‘the nature and subject matter of the litigation will dictate what amounts to a special interest’. This emphasises the importance in applying the criteria as to sufficiency of interest to support equitable relief, with reference to the exigencies of modern life as occasion requires (cf Taff Vale Railway v Amalgamated Society of Railway Servants [1901] AC 426 at 443). It suggests the dangers involved in the adoption of any precise formula as to what suffices for a special interest in the subject matter of the action, where the consequences of doing so may be unduly to constrict the availability of equitable remedies to support that public interest in due administration which enlivens equitable intervention in public law. That would be the consequence of the adoption of the approach taken by the primary judge in this litigation. It will be recalled that, in Onus v Alcoa of Australia Ltd (1981) 149 CLR 27 at 73, Brennan J warned that to deny standing may be to ‘deny to an important category of modern public statutory duties an effective procedure for curial enforcement’.”
70 The respondents in that case brought an action claiming that the establishment and operation of the appellant’s proposed contributory funeral benefit fund for Aboriginal persons was beyond its statutory powers. They were held to have standing to bring the action because the proposed activities of the appellant would cause severe detriment to the respondents’ business. That was sufficient special interest to justify the seeking of equitable relief.
71 In the case of an applicant for certiorari, it is clear that an applicant need not necessarily be a party to the proceedings or decision under challenge. See, for example, R v The Corporation of the Town of Glenelg; Ex parte Pier House Pty Ltd [1968] SASR 246. A party aggrieved, that is, whose interests are affected, is entitled as of right to have his or her claim considered. Nevertheless, members of the general public, having no particular interest in the matter, may be granted standing as a matter of discretion: R v Surrey Justices (1870) LR 5 QB 466 at 473 ‑ 474. As appears in various texts on the subject, the application of this principle has been variable: De Smith, Woolf and Jowell, Judicial Review of Administrative Action (5th ed, Sweet & Maxwell, London, 1995) at 628 ‑ 630; Aronson and Dyer: Judicial Review of Administrative Action (Law Book Co, Sydney, 1996) at 703. Generally speaking, however, what is needed is a person with “a peculiar grievance of their own beyond some grievance suffered by them in common with the rest of the public”: R v Nicholson [1899] 2 QB 455 at 471; R v Surrey Justices (supra) at 474. Instances of the sort of grievance to provide standing are given by the cases cited by Aronson and Dyer (ibid) at 704, namely persons suffering economic loss, including business loss from competition, aesthetic harm to land if it adjoins or is close to the subject land, familial concern in a coronial inquest and parties to impugned proceedings, or persons who have objector status in the proceedings. Standing has also been afforded to a party who claims that his opponent in legal proceedings has been unlawfully granted legal aid: Tectran Corporation Pty Ltd v Legal Aid Commission of NSW (1986) 7 NSWLR 340.
72 All this raises the question whether there is any material difference in the test for standing to seek injunctive or declaratory relief, on the one hand, and certiorari and perhaps prohibition, on the other. A “special interest”, for the purposes of equitable relief, can be likened to a party aggrieved where, as the cases allow, that includes a peculiar grievance beyond that suffered by the public generally. At least one author suggests that in present terms any differences in Australian law between the two approaches have disappeared: Aronson and Dyer (ibid) at 662.
73 Certainly, cases evidencing the relaxation of rules as to standing for equitable remedies have been cited in cases involving claims for orders in the nature of certiorari. See for example Tectran Corporation Pty Ltd v Legal Aid Commission of NSW (supra) at 342.
74 In my opinion, in circumstances where, as here, either remedy may be sought, and is sought in the alternative, there is no point in maintaining a distinction, if such exists, on the question of standing to sue.
75 However, whether the interest, which the plaintiff must have, can be described as a special interest or a peculiar grievance, it must, in public interest litigation of this sort, be an interest which members of the public generally do not have. For the purpose of these proceedings, as presently constituted, the plaintiff is an ordinary member of the public who has been defamed once by the Minister and who alleges that he has been defamed again. The subject matter of the defamation may well be a matter of intense public interest. That does not help the plaintiff. The fact that it is a liability or potential liability of the Minister to the plaintiff which is the subject of the indemnity does not help either. The plaintiff’s economic or business interests are not affected. They may even be enhanced. His enjoyment of property rights, his cultural interests, his familial concerns and even his political interests are not affected by the indemnity of which he complains. His complaint is about the use of public monies to satisfy claims for damages and costs against a litigant who happens to be a Minister of the Crown. His interest can be no greater than that of any other member of the public concerned about the expenditure of public money.
76 It might be different if he complained about the indemnity given to the Minister in respect of the Minister’s own costs. It might not be difficult to establish some forensic disadvantage by having to fight litigation where one’s opponent has the resources of the State behind him. Such an interest has been held sufficient to grant standing to bring certiorari: Tectran Corporation Pty Ltd v Legal Aid Commission of NSW (supra); R v Manchester Legal Aid Committee; Ex parte R.A. Brand & Co Ltd [1952] 2 QB 413. However, that indemnity is not in question in these proceedings, and, in any event, there is no material before this Court to enable any judgment to be made about any forensic disadvantage that he might suffer.
77 I am therefore constrained to hold that the plaintiff has no standing to bring the present proceedings.
Conclusion
78 As is apparent from these reasons, the plaintiff’s claim must fail on a number of grounds. I have not decided whether the indemnity granted to the Minister was in respect of a liability incurred in connection with the exercise of the powers and duties vested in him as a Minister of the Crown. It is not necessary for me to do so, and I expressly refrain from doing so. A Minister’s duties are very wide, and cannot be defined with any black and white precision. There will always be areas of grey. That is one of the reasons why it must always remain a political decision as to whether an indemnity should be granted or not. In my opinion, the plaintiff’s application must be dismissed.
JUDGMENT CITATIONS
LISTED IN ORDER OF APPEARANCE IN JUDGMENT1.General Newspapers Pty Ltd and Others v Telstra Corporation(1993) 117 ALR 629 at 637
2. Davis v The Commonwealth (1988) 166 CLR 79 at 108
3.Horwitz v Connor (1908) 6 CLR 38; The Queen v Toohey exparte Northern Land Council (1981) 151 CLR 170 at 220; Minister for Arts Heritage and Environment and Others v Peko Wallsend Ltd and Others (1987) 75 ALR 218 at 224 and 244 - 249; Von Einem v Griffin (1998) 72 SASR 110 at 126
4.Von Einem v Griffin (1998) 72 SASR 110 at 126[1985] 1 AC 374 at 408
5.Council of Civil Service Unions and Others v Minister for the Civil Service [1985] 1 AC 374 at 410
6.Minister for the Arts Heritage and Environment and Others v Peko Wallsend Ltd and Others (1987) 75 ALR 218 at 225 and 245
7.New South Wales v Bardolph (1934) 52 CLR 455 at 462, 472 - 475, 495 - 496, 502 - 503 and 508 - 510
8.Australian Broadcasting Corporation v Redmore Pty Ltd (1989) 166 CLR at 460
9. Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 35 - 36
10.R v The Secretary of State for the Home Department Ex parte Northumbria Police Authority [1989] 1 QB 26 at 44 and 53; Vass v The Commonwealth of Australia (2000) 169 ALR 486 at 496 - 497.
11. Bardolph 52 CLR at 474, 475 and 502; Vass 199 ALR at 499 - 500
12. Appropriation Act 1999, s 4(1)
13. Public Corporations (Treasurer) Regulations 1994, reg 5
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