Published on 31/05/2007

Introduction

1. WHAT IS ADMIN LAW

Controls decisions made by Executive arm of government. You can’t challenge the Legislature’s decisions using administrative law – your only hope is the Constitution or international law.

Through the principle of “ministerial responsibility” ministers are collectively and individually responsible to the Parliament. However Mason J in R v Toohey highlighted the fact that this ministerial responsibility was an insufficient accountability mechanism. So we need administrative law to supplement political accountability. Finn in “Myths of Australian Public Administration” also states that the doctrine of ministerial responsibility is very narrow.

The whole point of administrative law is to throw the rule book at the government departments, Cabinet (if they are not immune), Ministers, the Directors General of departments etc. It is essential to democracy that we have administrative law to hold decision makers accountable.

2. THE CONSTITUTIONAL FRAMEWORK
Doctrine of Separation of Power
-    legislature, executive, judiciary

Legislature
-    Empowers the Executive (and the administration) to perform administrative functions by legislation
-    When government comes into power there is already pre-existing law. This arm of government passes statute.
-    Legislature is constituted by members of parliament. These people are elected which is a fundamental feature of democracy.
-    They make this law because government has a mandate. This is a mandate given to them by the people, enabling them to make laws.
-    By campaigning during elections, the government notifies the public of the legislative changes they intend to make once in power.
-    The law making process involves government putting out a white paper. Then the bill stage, where bill gets read in parliament and comments made about it and then it is passed in parliament

-    The Aus parliament is sovereign which mans it can pass any legislation it wants, with very few checks. Only the HCA can control this because it must ensure the legislature does not breach the constitution.
-    Australia does not have a bill of rights. A parliament with a bill of rights is not sovereign because law making can be challenged in a sup ct.

Executive
-    focus for this course
-    Executive (and administration) must act in accordance with the powers given by the legislature
-    it comprises the head of state, the cabinet (certain gov ministers)  Howard invites the more senior ministers to be part of cabinet
-    The role of cabinet is as the major policy-making arm of government
-    Ministers are responsible for a particular government department, ensuring it is run efficiently according to budget and the law etc.
-    Minister is responsible for the way their dept carries out its functions
-    Also Director General, senior bureaucrat
-    Many people in government required to make decisions
-    The administrative arm of government constantly applying for benefits
-    Decisions made by government agencies affect every area of life
-    Constitutional law is the state at rest  sets out the business of the state in a quiet way. Admin Law is the state in action. It puts into action the legislation of the legislature.
-    Gov agencies not only grant benefits but also admin arm of gov can also impose restrictions on people

Judiciary
-    Protects the rights of the individual against State action by ensuring that the executive (and the administration) exercises its powers in accordance with the empowering legislation.
-    The judiciary has an inherent power to review the administrative action of the Executive and the administration
-    It is a power given to it by constitution
-    The concept of the Rule of Law provides that the administration can be brought before the courts by an individual who is affected by administrative decisions
-    Primarily admin action is controlled by the judiciary
-    The focus of this course
-    Judiciary has an inherent constitutional right to protect individuals from the abuse of power
-    There is an interplay between all three arms of government
-    There is no power for admin arm of government to act unless the minister has power to act under statute
-    if parliament doesn’t like what HCA has said  they can simply enact new legislation
-    Very often courts will protest e.g. Kirby J
-    When judges interpret statue, they start with the common law presumption that statute interferes with common law rights only to the extent that is necessary.
-    Courts have power to control the executive and administrative arm of government.
-    Some people object to the power of the judiciary, because they are not democratically elected.
-    One way the judiciary maintains its legitimacy, is to say they are only checking the legality of an administrative decision not the merits.
-    The courts do not tell the minister whether they are right or wrong. The courts check whether min has the right to make that decision. If it is unlawful decision it gets set aside.
-    Judiciary has minimalist baseline of rules. They realise that the more rules they impose, the more difficult it will be for the admin arm of gov to perform its function
-    The courts are upholding the principle of the Rule of Law  The notion that no-one is above the law, including the government. We as individuals have the right to bring even cabinet before the court.

Murrambidgee Groundwater Preservation Association v Minister for Natural Resources [2003] NSWLEC 322

Facts: related to the subpoena of Cabinet Minutes, Cabinet decisions and memoranda prepared for the Minister.

Background: Since 1994 government tried to work together to reform water law. Govs were not managing water in a sustainable way. COAG = Council of Australian Government  made up of Commonwealth government and all the state premiers. It is an interjurisdictional policy-making body. Once COAG makes a decision, Commonwealth and States agree to implement the policies made by COAG. Legislation passed to accommodate this. Commonwealth has no power to control the environment therefore there are issues about whether what is happening through COAG is constitutional. The people who will be impacted are irrigators who are complaining that their water rights are being infringed. MGPA is saying that the minister is interfering with their rights and doing so, the minister wasn’t exercising an independent discretion as he would be expected to.

Irrigators argued that the minister is acting under the dictation of the NSW cabinet. NSW agrees to COAG and the impact hits irrigators. Irrigators wanted to subpoena cabinet documents to prove the minister didn’t make an independent decision. The DGs of the Department of Planning, Infrastructure and Natural Resources and Cabinet Office are trying to preserve the confidentiality of the cabinet docs under public interest immunity.

Minister argued that…

* Disclosure of Cabinet minutes and decisions should not be disclosed because Cabinet is a forum for discussion of significant and sensitive issues of public policy. Also, disclosure would cause administrative inconvenience.

* The Memoranda should not be disclosed because, in order to properly advise the Minister, the memo must be “confidential, concise, rigorous and uninhibited”. If the memo was to be disclosed it would have to be written entirely differently. Also, the collective responsibility of Cabinet is undermined if a Minister’s individual view on an issue is made public.

* Court held they must be kept confidential.

-    Advice prepared by DIPNR on what minister might say to cabinet must be confidential
-    Advice prepared by DIPNR on what Minister might say to caucus must be confidential
-    Advice prepared by departments to brief the premier on controversial issues prior to visits must be confidential

McClelland CJ refers to Sankey v Whitlam as leading case.
-    Says there is no blanket immunity of cabinet documents, but they will not be disclosed if injurious to public interest
-    2 main conflicting principles:
1.    protecting government from harm
2.    ensuring that justice can be effectively administered

Held: Cabinet documents should only be disclosed in exceptional circumstances. No need to make orders in present notices of motion because the claim is not made out and would have to be proved in a subsequent trial

The point is about how cabinet works and how important it is.
-    it is a judicial insight
-    since 94, water law has been fundamentally reformed
-    legislation in 00, law passed about irrigators right to use water
-    irrigators argued min rights exercised unlawfully. Cabinet made a decision and the minister failed to make an independent decision simply went with cabinet
-    irrigators requesting cabinet documents to be subpoenaed, to form an argument
-    Ct feels cabinet documents should not be released in most circumstances

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3. ACCOUNTABILITY
3.1 Avenues of Accountability

The Rule of Law says that the government is accountable before the Courts in the same way as individual people are. As long as a person satisfies the “standing” test, they have the right to bring the government before the Courts.

Administrative law is about accountability. Different mechanisms for making this branch of government accountable for the decisions it makes.
-    we come back to this at the end of the course also

POLITICAL ACCOUNTABILITY
-    Internal Administrative Procedures – eg public consultation by government departments. Problem with this include the internal politics of the department, conflicts of interest within the Department and if the Minister has made policies for his department to follow and they fail to do so, the Minister will lose face.
-    Parliamentary responsibility - parliament responsible to the people who put them there (public). Parliament as a body can call on ministers to account for their actions in the management of their portfolio.
-    Ministerial Responsibility - if minister does not perform according to parliament and the public can be pressured to resign. Question Time in parliament is time when ministers are answerable for their actions.
-    Most of the time, parliament is busy dealing with legislation

-    Public Participation is one way for keeping ministers accountable  it is not enough to vote every 4 yrs. The admin arm of govern should be accountable to the public politically.

JUDICIAL REVIEW/AAT
-    External Administrative Appeals – merits review and judicial review. In a merits review the tribunal steps into the shoes of the administrator and makes the decision again (eg the AAT). A judicial review is concerned with procedural fairness and natural justice. You need to have a statutory right to go to a Tribunal. So Parliament has to make the political decision to allow people to appeal decisions and then include that right in a statute. The downside is we don’t have fundamental rights as citizens to approach a merits tribunal. Also no precedent is developed through merits tribunal.

OTHERS
-    Ombudsman - Duty to investigate complaints. Has extensive authority to access government information and discover reasons for decision. No cost.

-    FOI Legislation – this is in line with the principle of “open government”. The idea is that disclosure requirements will lead to a better quality of decision making. FOI legislation is very important because at common law, decision makers do not have to provide reasons for their decisions and if you do not have a statement of reasons you can’t begin to take them on review or appeal.

-    s13 of AAT Act says that if you have been affected by government decision, you can request a written statement of reasons.

•    Role of executive/administrative arm of government
-    statute provides the framework for how the minister will exercise the law

3.2. The legality/merits distinction

•    A judicial review is concerned with the legality of the decision. It does not ask whether the decision was right or the best decision; it asks only whether it was a lawful or unlawful decision.

•    A merits review is concerned with the decision being right according to the facts.

•    Dubious distinction – in reality the courts look at the merits of a decision and then find a legal hook to hang their merits review on.

Ultra Vires = beyond power

JURISDICTION is another word for power
It is within parliament’s interest and the court’s interest to check whether ministers are acting within the power granted to them under the statute. Therefore parliament and the courts do not disagree on this point, because it is in both their interests.

ABUSE OF DISCRETION: using the power for an improper purpose; Administrator should consider all relevant information and not irrelevant information; Administrator should not make decisions without sufficient information, this is unreasonableness.

FAILURE TO CONSIDER
-    You cannot delegate power (non-delegation power)  minister chosen must make the decision
-    Acting under dictation
-    Inflexible application of policies  policy is a way of structuring the decision-making of thousands of those making decisions. Inflexible policies almost mandate decision-making, preventing person from using discretion and failing to consider circumstances etc.

Procedural Fairness

HEARING
Must give people the opportunity in a hearing

BIAS
Decision-makers should not be bias. The test is “a reasonable suspicion of bias” in the mind of the affected person.

TRS ALLEN PAPER
Admin law scholars worldwide are trying to understand the theoretical ideas underlying judicial review. What gives courts the power to interfere with decisions of executive? What is the source of this power? This debate has been polarised between two opposing schools of thought which Allen tries to mediate between.

Ultra Vires doctrine. (Forsyth)
-    General legislative intent that courts control the exercise of administrative power must be found in order to vindicate judicial review.
-    Parliament gives courts imprimatur to develop detailed grounds of review. Judicial review is sanctioned by parliament
-    This provides necessary constitutional underpinning for judicial review (but see review of non-statutory bodies which is undertaken at common law to control monopoly power and right to work – Forbes)
-    Not possible to impose controls unless legitimated by reference to parliamentary intent
-    If it is abandoned
-    Judicial review is considered less effective (But what about privative clauses)
-    Legislative supremacy is abandoned

Problem with this theory: It is seen as a joint controlling of the administrative arm of government but with parliament more in control. This may infringe the separation of powers because parliaments could exclude courts from interfering by enacting laws.

Common Law (Craig)
The other school of thought is represented by common law scholars. Judicial review has nothing to do with parliament’s intention because if parliament writes a law that keeps courts out, where does that leave the courts.

In Forbes Case, Courts said they will oversee activities of non-statutory bodies also e.g. trotting club, which is exercising public powers. Court is saying what is the difference between public power exercised by government officials and the exercise of public-like power by a trotting club. Court extended its jurisdiction particularly in procedural fairness issues, i.e. give Forbes a hearing to say why he should be able to attend meetings. Court claims it has an inherent power in the constitution to expand its jurisdiction. There is no statute here; therefore the court is not looking to parliamentary intention. This opposes Ultra Vires doctrine.

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Problem with this case is that the concept of having legitimacy is abandoned and also abandons idea of parliamentary supremacy. Therefore the only way is to have parliamentary intention.

-    Judges use the common law to develop the grounds of review
-    Content decided in accordance with the rule of law (i.e. that every one is subject to the law), or normative considerations of justice, which warrant the constraints. That’s why courts undertake judicial review
-    Problem with ultra vires doctrine is that it assumes parliament wishes to act fairly and rationally. There is a presumption that parliament legislates fairly and in the interests of the common good. But this does not always occur. E.g. South Africa, legislating to impact on every aspect relating to black people. The ultra vires doctrine would not get them far, because there would not be judicial review if the courts had to look to parliament for some kind of imprimatur.
-    Common law model does not challenge constitutional orthodoxy or parliamentary sovereignty
-    If parliament doesn’t like what courts are doing then it will pass legislation and the courts will accept this (still sovereign)
-    BUT parliament must state expressly that the normal grounds of review do not apply, otherwise they will
-    There is a difference between accepting the relevance of parliamentary intent and saying that the entire fabric of judicial review is founded on judicial intent
-    Judicial review is an ancient remedy and was never conferred by parliament
-    Sovereignty enables powers to be exercised by government, whereas the rule of law disables government from abusing its power

TRS ALLEN: ‘Constitutional foundations of judicial review’

While we adhere to an entirely formal or literal conception of sovereignty, apparently permitting a legislative majority to attain any object it chooses by employing suitably explicit language, our constitutional theory can never reflect our knowledge of the legal and political landscape it is supposed to explain

Parliamentary supremacy should be accepted in the sense that the legislature alone enjoys the sovereign power to alter the law by enactment of general rules BUT we should also recognize that Parliament’s power to determine the outcome of particular cases is confined by the judges’ duty to make sense of the law as a whole.

Each person’s rights and duties are those that the relevant statutes confer or impose, when fairly construed in the light of general principles of justice deriving their constitutional status from the common law

Since all words require interpretation their meaning is as much dependent on the values represented by the ideal of the rule of law, when these are duly explained and defended, as on the more immediate public purposes that may shape the statutory context

The intention of Parliament is not to be confused with a governmental intention or even with the unexpressed preferences of a majority of legislators

Parliamentary intention is a product of both legislative purposes, gleaned from the statutory scheme as a whole and judicial construction sensitive to deeply-rooted constitutional values

As one institution among others that together comprise the governmental machinery of a firmly established liberal democracy, parliament holds its legislative power in trust to secure the general good

Statute and common law must co-exist in constitutional harmony, secured by means of interpretation whose moral validity can be widely acknowledged.
The preservation of the rule of law, as a basic protection against arbitrary power, is always an essential first premise: and the danger of serious conflict between parliamentary intent and common law principle therefore dissolves in the process of judicial construction, faithful to the general constitutional scheme
Although the rule of law provides the ultimate foundation for judicial review, it cannot be equated with any purely formal scheme of control. It is fundamentally an ideal of constitutional justice, invoking specific conceptions of personal autonomy and legal equality, whose full meaning and systematic enforcement public law exists to discover and secure

The meaning of the rule of law must ultimately be found in certain ideals of freedom and justice, denying that any conception of law can be truly value-free

The court’s decision in any particular case, will depend on the nature and scale of the error or injustice disclosed, on the one hand, and the cogency (in the circumstances arising) of the reasons that can be discerned for restricting access to the courts, on the other, just as the true meaning of the statutory words is a function of purpose and context, not simply the result of consulting a dictionary

Common law principle and legislative purposes have to be combined, so that the work of courts, Parliament, and public officials can be conceived, at the most abstract level, as ‘instantiating in different ways a common order of fundamental values’

With respect to judicial activity in defence of Human Rights Act (which Allen says plays a role similar to that of the common law):

Such rights do not curtail decision-making powers conferred by Parliament but, on the contrary, should be understood merely to assist in defining the scope of such power, correctly interpreted: they ‘shape the internal contours of enabling provisions, thereby ensuring that the courts, in effecting judicial review on rights-based grounds, enforce the limits of discretionary powers with enabling legislation’

In Class Summary
We should not accept the doctrine of parliamentary sovereignty as a literal concept. Don’t conceive of parliamentary intent as merely the will of the majority at the time. Parliament has the power to give admin officials powers to reach legislative objectives, but it is not an unbounded supremacy. The courts are the ultimate interpreters of the law, statute and common law. The courts must take a holistic approach to the law. The values being relied upon by the courts are those embodied in the rule of law. Allen refers both schools of thought back to the constitutional principles of the rule of law. Parliamentary intention is the product of both legislative purpose but also judicial interpretation of parliamentary intention, which is deeply rooted to the rule of law.

Statute and common law must co-exist in constitutional harmony secured by means of interpretation whose moral validity can be widely acknowledged. Here Allen says it is secured by “interpretation” which is done by the courts, therefore he throws us back to thinking that the judges have the responsibility of determining how the rule of law is interpreted.

Reminder of the meaning of the rule of law (Allars)
• Ideal of justice
• Law is supreme and should replace the use of arbitrary force
• In the absence of legal norms, whether statutory of common law, the government has no power to interfere with the liberty of individuals
• Some basic principles:
    o There should be legal norms
    o All legal norms should be prospective, open and clear
    o It should not be impossible to comply with the legal norms
    o The marking of particular legal norms should be guided by open, clear and fairly stable general legal norms
    o Individual having legal authority to apply or enforce legal norms should do so correctly and consistently and should be accountable for their compliance with legal standards applicable to their decision-making

4. PUBLIC ADMINISTRATION
4.1 Competing Values of Public Administration

How economic rationalism has influenced the way government departments operate and the way services are delivered to us. Government should be the regulator but not the provider of services. Governments contract out services to multinational corporations. Provision of services are completely privatised, in NSW they are corporatised, therefore the Gov still own it, but it is set up as a separate corporate entity.

-    Legislation provides the framework for agencies to exercise broad but limited discretion
-    Features of bureaucratic discretion
-    specialised policies
-    technical and scientific expertise
-    allocation of benefits/impediments
-    Task is complex, variable, task-oriented
-    Shift towards interest group representation

Values Underpinning Administrative Decisions
-    Stability but not inflexibility - proper assessment of the merits
-    Rationality/minimising arbitrariness  can your decision be substantiated by evidence
-    Procedures – Efficiency and Fairness - don’t waste tax payer’s money. Moral and political principles are: FAIRNESS, OPENNESS, TRANSPARANCY, ACCOUNTABILITY

WILENSKI – “PUBLIC POWER AND PUBLIC ADMINISTRATION” (1986)

§   Administrators are expected to act in accordance with the policies laid down by their political administrators, who have the right to make policy because they are elected democratically

§    Administrators also expected not to waste public funds and to act equitably in accordance with their obligation to their fellow citizens and to obey procedural fairness.

§    Policy/Administration dichotomy – Authorities normally deny that the acts of public servants in administration are actually independent exercises of power. However public servants do take an active part in policy-making.

§    There is also a myth that when public servants are involved in policy making processes (advising Ministers etc) that they advise based on a “professional and detached assessment of the options”. The public servant’s personal values are of great importance.

§    Administrators do have to make policy decisions. They are not just transmitters of legislative decisions. We have to accept that acts of administration are acts of policy making at the very specific end of the spectrum.

Efficiency may conflict with the other things we want from administrative law (i.e. openness and participation).

COLE – “THE PUBLIC SECTOR: THE CONFLICT BETWEEN ACCOUNTABILTY AND EFFICIENCY (1988)

§    Public servants are not inefficient, it is the system. Inefficiency arises because the public sector is not set up to maximize efficiency. The elaborate arrangements to make the public sector accountable (to Ministers, Courts, Parliament and the public) mean that efficiency is a secondary consideration.

§    Public Service Act makes personnel management in the public sector a cumbersome, slow and costly process. Tells the story of one promotion appeal to the Public Service Board that cost the taxpayer over $200,000.

§    “being seen to be fair through laying down statutory procedures determining how promotions can be made, ranks above efficiency.”

§    ADJR Act allows anyone to ask for the reasons for an administrative decision affecting them if the decision is made under an enactment. These decisions are not made by lawyers but when reasons are requested under the Act, they have to be put in legal terms because a recipient often uses them to initiate judicial review of the decision

§    FIO Act impedes efficiency – staff are employed to work full time on satisfying FOI requests and the clientele are mainly public servants, businesses and journalists – not the poor and needy.

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Judges do not understand the impact that their decisions have. If judges impose procedures or say you have to take into account considerations, it will impact o the executive. Judges don’t understand how their decisions interfere with government departments and the policy making arm of government. The executive may say to the HCA you don’t understand how your decision interferes with the business of making decisions e.g. about refugees and the policies in this area.

There could be varying interpretation of what legal words mean. The judiciary insists that it is its function to have the final say about what statutes mean.

People in the administrative arm of government are not denying the fact that the judiciary has to monitor the executive arm. The executive is the state in action; they are implementing all the programs of government. They do not want to be impeded and want judges to realise the impact of their decisions. Allen said this is happening all because of the rue of law and that the executive arm must be kept accountable.

How has the economic theory of rationalisation impacted?
Economic rationalisation: Looks at where the government should be in terms of providing services etc. Gov based on minimalist government theory, which says businesses subject to market forces and competition can sometimes provide better services than what the government can. In Australian context it is derived from the Hilmer report.

Why is the state delivering all of these services? Government should be doing the minimal, i.e. regulating only, not delivering all these services. Economists believe private businesses should run the utilities; water and electricity etc.

Gov agencies should operate as efficiently as private corporations. Gov is there to deliver certain benefits and social programs. The impact of eco rationalism, is that Gov should conduct activities in same way as a private corporation. The head of a government department should be held as a CEO that will make sure the agency is run along efficient management principles. Everyone in the agency must act according to the corporate plan. There must be a budget for every program. Every program must be evaluated to see if it meets the goals of efficiency. The agency will have key performance indicators and evaluation will check performance of individuals in comparison to these indicators. The ethos of what a government agency is about has been influenced by this theory of managerialism and economic rationalism. Economists feel it is in everyone’s interests, e.g. taxpayers who are influenced by the decisions made in these departments.

Differing Norms: Admin law vs Managerialism

Admin Law
-   Fair procedures, even if it takes more time.
-   Reduction of efficiency, tolerated only in so far as the correct outcome is reached
-   Want the legislative procedures to be pursued
-   Serve a confined set of values  openness, accountability
Managerialism
-   Outputs
-   Goals are efficiency and cost effectiveness
-   Mechanical and neutral economic ideas

Features of Managerialism
-   CEO autonomous if consistent with policy – corporate plans
-   Devolution – ‘Let managers manage’ within framework of CEO not policy
-   Program budgeting
-   Program evaluation
-   Performance indicators
-   Performance contracts
-   Performance pay for senior managers

PEARCE – “EXECUTIVE v JUDICIARY” (1991)

•   The managerialist approach primarily measures efficiency by having regard to output whereas the judicial process looks more closely at individual outcomes. This difference in approach is at the heart of the tension that exists between the Executive and Judiciary.

•   Executive accuse judiciary of not paying any attention to the effect of their judgment on executive decision-making.

* A judgment may be given that requires urgent action on the part of the Executive but the judgment is handed down at a time when its implementation is very difficult.
* Courts insist on procedures by administrators that require the devotion of considerable resources.

•   Author says that procedural matters that have no bearing on the law itself are appropriate for the courts to consider. This recognizes that the Executive and judiciary are equal partners in government.

•   Article narrates examples of (i) departments not following the rulings of courts and (ii) departments resisting giving effect to judgments.

•   2 judicial responses to this – (i) recognize the difficulties facing Executive and tailor judgments accordingly – (ii) strengthen their role in supervising Executive decisions by imposing sanctions for a failure to follow rulings.

In Australia we have had the process of corporatisation and privatisation.

Corporatisation (favoured over priv): Gov still wholly owns Sydney Water, but it has to exercise commercial objectives. It is no longer a government department; it is a separate corporate entity. It has a BOD and the minister has an important role to play. The Gov still remains a share holder and receives dividends (in this case the only shareholder). These businesses are called Gov Business Enterprises or State Owned corporations. Agencies converted from being dept to a corporation, registered under corps act and subject to corps law. Must be state-owned either wholly or partially

Privatisation: The utility is transferred completely to private sector, often to multinational corps.

Government Business Enterprises GBEs
-   Agencies converted from Company structure to company structure
-   Continue to be state-owned, wholly or partially
-   Usually subject to Community Service Obligations (CSOs)
E.g. State Owned Corporations Act 1989 (NSW)
-   Must operate successfully as a business
-   Maximise net worth of states investment
-   Exhibit sense of social responsibility – ‘Interests of Community’
-   Conduct operations in compliance with Ecologically Sustainable Development
-   Exhibit responsibility towards regional development and decentralisation
-   All objectives equally important

These CSO create a conflict. GBEs have to make money for the government and at the same time remain responsible for its community services obligations.

Are these CSOs legally enforceable?

Yarmirr v Australian Telecommunications Corporation
Telstra said it was not economically viable to put new satellite system in this rural town. The town brought an action against Telstra for breaching its community obligations.
Courtt said these CSOs are duties on Telstra but they do not create rights. Therefore CSOs are not enforceable.

GBE’s are exempt from Freedom of Information regulations unless declared by regulation.

Ombudsman  GBE can be excluded from jurisdiction of ombudsman by regulation.
-   Corporatisation shows conflict between commercial and public interest goals.
-   Often established as a precursor to privatisation
-   Privatisation effects separation of economic and social goals
-   Liberal theory of the state says the private law operates in the private sphere e.g. corporations law, contract law and public law operates in its own sphere. Why is the demand for accountability of private entities a challenge to this theory?

Telecommunications totally privatised in Aust  more competition etc. But there are instances where there is no competition e.g. if Sydney Water which is a monopoly.

With Privatisation of utilities  we are converted from citizens to consumers and we have to consider our rights as consumers.

The public sector can regulate itself, it has its own ombudsmen. But what is the difference between a public sector ombudsman and a private sector ombudsman and what happens to the administrative law remedies available in this situation.

Sydney Water
-   Corporatised in 1994
-   Can set them up as Company state owned corporation or as a Statutory SOC  minister is at arms length in a Co SOC; it is effectively a private corporation. This is how Sydney Water was set up as Co state owned corp. (SOC).
-   Set up commission of enquiry when the “boil water alert” occurred  ultimately NSW government brought Sydney Water back to gov control giving the minister more control  Sydney water now a Statutory SOC.
-   What happens to the admin law remedies in these situations

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4.2 Public/Private Distinction

•   In the 1980s and 90s there was a new theory in public administration called “new managerialism”. It had several aspects:-

* concept that State had become too large and we needed a move to “small government”

* looking to efficiency (over fairness) and making government departments do more with less and be financially accountable.

* focus on things like program budgeting, program evaluation, performance indicators, performance contracts and performance bonuses for senior managers.

* corporatising and privatizing GBEs and contracting-out and outsourcing other government functions.

•   Creates problems for administrative law such as:-
* shift from citizens with public law remedies to consumers with private law and contract remedies.
* do we want government contracting out its regulatory functions such as building safety inspections?
* problems of privately owned monopolies in areas like water, sewerage.
* are there any public law remedies or avenues of appeal for decisions made by private corporations exercising ‘public’ powers?
* problems of corporatised GBEs – they have to make a commercial return but also have statutory obligations for fairness and community obligations – these are inconsistent objectives.

Commonwealth Administrative Review Council, “GBEs and Commonwealth Administrative Law”, Report No 38 (1995)

•   Purpose of report is to recommend to the Government general principles for determining how admin law should apply to GBEs.

•   GBEs are being required to operate commercially and are becoming subject to private sector accountability mechanisms. To what extent should they continue to be made subject to public sector accountability mechanisms?

•   To require GBEs to comply with admin law, as well as corporations regulations, would hinder their ability to compete in the market. However, the nexus between the GBE and government may be sufficient to justify continuing to apply admin law.

•   Admin law should not apply to GBEs that operate in markets where there is real competition. Customers can take their business elsewhere and can use private law to fix problems. (only prob is that private law remedies are expensive and not as accessible to most people)

•   Admin law should be applied to organizations that are under little pressure to manage themselves well or improve the quality of their services. It should also be applied where there is a monopoly so customers cannot take their business elsewhere.

Forbes Case
Facts:
-   A trotting club operated a racecourse on a piece of land.
-   There was an agreement between NSW government and all trotting Clubs, which wasn’t governed by statute, stating that the NSW trotting club was the administrator of the Trotting Rules which regulated trotting etc in NSW
-   Question arose as to whether the club was bound by the rules of natural justice, or procedural fairness, when it excluded a punter, Forbes from attending trotting meetings at all racecourses
-   Forbes argued that he would suffer severe financial disadvantage.
-   If the only power was under the Rules of Trotting, then the club must abide by Natural Justice.
-   Four members of the court decided that Forbes was denied natural justice, whilst two focused on the rules.
-   Gibbs and Murphy said that the issue was procedural fairness.
-   Natural justice can be extended to a domestic body.
-   Involved a powerful body that affects the public, and so cannot arbitrarily exclude from the property.
-   Gibbs felt that the club invited public onto the course; they benefit from attendance, and hence owe a duty to the public they invite to attend. They cannot exclude him due to the public nature of the race meeting.
-   Murphy J said the club was exercising power that affect the public who chose to watch the races, make bets, etc. He distinguished them from private landowners who had the right of arbitrary exclusion.

Courts previously applied the source of the power test about whether to get involved. Most of the time it is the legislation. Here it is a private entity, therefore the source of its power is the trotting rules. Everyone agrees to join the club and there have to be rules of operation and there are bodies within the club to ensure that rules are followed.

Court said here we are not interested in the source of the power, we are interested in the nature of the power. In this case it affected Forbes significant interest??? This is a major shift in thinking on behalf of the courts. The court had to explain why it thought the type of power the trotting club was exercising was public power.

Murphy J: Even though it is a private organisation, it can exercise powers in a way similar to public power. There is a difference between private and public power, but there may be circumstances where the exercise is so similar that one may shade into the other. The court was prepared to say the exercise of power here (disciplining members) was an exercise of public power. Public power must be exercised bona fide…where such power is exercised against an individual, due process or natural justice must be observed
This was Forbes way of earning a living and he was being deprived of this right. A body conducting a public racecourse at which betting is permitted under statutory authority, to which it admits members of public on payment of a fee is exercising public power. It may not arbitrarily exclude or remove such a person from the lands during a race meeting.

Clubs which exercise disciplinary proceedings, the courts were prepared to allow judicial review in order to ensure Forbes was given procedural fairness.

Neat Domestic Holdings Case

Facts:
-   Wheat Export Authority, a statutory corporation, with power to consent to the export of wheat
-   AWBI, a Co incorporated under the Corporations Law, a wholly owned subsidiary of AWB
-   Constitution o AWB and AWBI is designed to maximise returns fr growers by securing, developing and maintaining markets for wheat
-   WEA must get consent of AWBI in writing before consenting to the export of wheat by a competitor of AWBI.
-   In contrast, the AWB doesn’t need authority to export.
-   Neat Domestic applied 6 times to export but weren’t granted permission once.
-   The Trade Practices Act wasn’t applied in the situation due to statutory immunity, and so the action was brought under the ADJR Act.
-   It was argued that the WEA inflexibly applied its policy and hadn’t taken into account all factors (AWBI).
-   The two questions were whether the decision should be made under the ADJR Act and whether the AWBI had the influence in making the decision.
-   It was contended that it wasn’t of an administrative character. They weren’t provided power under s57, and there is no rule granting AWBI the power to decide. Said the source of power was from the private constitution.

Matthews J
-   WEA decisions are of an administrative character. However, no definitive answer as to what administrative is, and so rely on the general rule for the particular circumstances.
-   Need to look at the character of the decision, not whether it is a corporation. If AWB concedes that WEA are administrative, then it seems a logical extension that AWBI are also administrative.
-   AWBI’s constitution’s aim is maximizing returns for all its growers, which means there is a clash between private and public interests.
-   s57 expressly/impliedly authorized the decision by AWBI, and so could be subject to judicial review.
-   Still dismissed the application as Matthews concluded that the policy wasn’t inflexible.

Majority of HCA (McHugh, Hayne, Callinan JJ)
-   Recognised an intersection between the public and the private and no other similar Federal legislation.
-   In effect the monopoly is owned by AWBI but managed by WEA.
-   Can public law remedies be granted against priv bodies? No  Ct returns back
-   AWBI’s power to give approval arises under the Corporations Law NOT statute (i.e. not the Wheat Marketing Act 1989 (Cth))  it is a private body. The agency is the one exercising stat power. Therefore Ct goes back to source of law test
-   The ground of review here was inflexible exercise of policy

Continued on page 6

continued

S57 of the ADJR Act says will grant review only if you
1. Are challenging a decision
2. of an administrative character and
3. made under an enactment
-   Held that the decision was not an administrative decision because it was not ‘made under enactment’ and AWBI is under no statutory obligation to act – it was pursuing private objectives. But conduct was precedent to WEA’s power to act.
-   AWBI’s decision is not to be reviewed it is a private decision
-   Appeal dismissed

Gleeson:
-   Scheme gives AWBI capacity to veto bulk exports by competitors
-   AWBI was making ‘a decision of administrative character under an enactment’
-   The character of what the AWBI does is the exercise of a statutory power to deprive the Authority (WEA) of the capacity to consent to the exports. Acknowledged that it was a private corporation, but that more than private interests were involved, as the company held “monopoly” powers not just over growers but also the community.
-   BUT no grounds for judicial review because it was consistent with what the Act was intending and there is no unlawfulness in doing what the Act is set up to do.

Kirby:
-   classic case of outsourcing of public power
-   Where performance of a function is provided for by federal legislation, is a private corporation accountable under norms and values of public law, or is it cut adrift from such mechanisms and only accountable to shareholders and the requirements of the Corporations Law
-   Private corporations may exercise public power. Concluded that if WEA’s decisions were classed as administrative, then those of AWBI should be as well.
-   AWBI’s is a ‘decision of an administrative character made under an enactment’
-   Distinguishes AWBI decision from decisions made under contract (see Burns v ANU)
-   Interests of AWBI are wider than those of an ordinary corporation because it is involved in a scheme of regulation
-   Since no remedies under Trade Practices Act AWBI has absolute legal power
-   AWBI’s powers are more public than those in Forbes v Trotting Club of NSW
-   It is the role performed for the purposes of the Act and not the corporate structure of AWB that determines the character of its decisions
-   Ultimate test is an ‘appropriate nexus’ with Federal legislation. This would be enough to class it as a decision under an enactment
-   Neat satisfied all the elements to receive review on the ground of inflexible application of policy.

Appeal allowed with costs

-   Decision was only appropriate in the current circumstances.
-   The decision may have been different under the common law, and would have been related to Forbes.

HUTCHINSON – “MICE UNDER A CHAIR – DEMOCRACY, COURTS AND THE ADMINISTRATIVE STATE” (1990)

•   The “state” consists of much more than the government. By refusing to acknowledge the crucial importance of corporations and similar institutions in contemporary social life, traditional theories about the state is out of date and means that some elements of the state will escape admin law review.

•   By treating corporations as separate from the state, you overlook the important influence of corporations over government.

•   By treating corporations as being the same as citizens, you ignore the exercise of power by corporations over citizens.

•   The “state” is not an “institution or a set of institutions: it is a site and a structure for the creation or exercise of power.”

•   Acknowledging that the state is more than the government does not mean there must be a one-size-fits-all regime for review. At times the government and private sectors will be subject to similar norms of conduct. At other times the government will be under stricter control than the private sector and at other times the private sector will be required to meet a higher standard of behaviour than the government.

Jodi Freeman – Private Parties, Public Functions and the New Administrative Law

The threat of uncontrolled agency discretion lies at the heart of the traditional democracy problem in administrative law. BUT this obscures the role of non-government actors in the exercise of administrative authority which has equally significant implications for democracy. Contemporary regulation might be best described as a regime of ‘mixed administration’. Private actors are unelected but in an era of contracting out and privatization their insulation from legislative, administrative and judicial oversight has serious consequences. They threaten norms like openness, fairness, participation, consistency, rationality, impartiality and accessibility of judicial review

Privatising and contracting out
Consider contracting out of private prison management (cf detention centres in Australia) Public agencies believe they are contracting out policy implementation while they retain policy making – but the distinction is tenuous at best. Is this delegation constitutional and shouldn’t the company be treated as a public actor bound by constitutional constraints? Tremendous power of private prison guards to affect prisoner’s most fundamental liberty interest e.g. meals, showers, exercise time, cell condition, transportation, work assignment, visitation rights) – confers ‘governmental power’ to both legislate and adjudicate. Private provider creates conflict between public and private goals and provider is one step removed from accountability. Contractual system relies on judicial enforcement of the contract at behest of agency, rather than enforcement of administrative law principles at behest of private citizen. Privity of contract between agency and provider may prevent prisoner from suing to enforce the terms of the agreement or recovering damages for breach. Agency oversight does not protect against the myriad dangers of the regime

Direct and indirect delegation of Standard-Setting Authority
For example, where agencies adopt standards developed privately by an industry group with inadequate representation of interest groups.

Including private parties e.g. negotiated rulemaking, reg-negs, where agency establishes a panel to negotiate the rule – does agency exercise sufficient independent discretion in process?

Reliance on outside experts who exercise enormous influence

Continued on page 7

continued

Self-regulation
Voluntary self-regulation where industry sets and enforces a code Or compliance with international standards such as ISO14000 to establish environmental management systems Pose serious threat to legitimacy of environmental regulation Mandatory self-regulation

Traditional command and control: shared implementation and enforcement Private industry has an enormous information advantage over agencies which together with stakeholder groups allows industry to bargain for lenient standards

Continued on page 7Privatising and contracting out
Contracting Out: Gov decides there are certain functions it doesn’t want to exercise anymore and it contracts out these functions e.g. prisons
Contacting out of detention centres  GSL is a multinational that manages detention centres. It is not run by dept of immigration.

This agreement is governed by contract.
-   Gov believes they are only contracting out the implementation of its policy, gov is still making the policy
-   Is there such a fine distinction between policy making and implementation
-   But management are controlling the day to day activities of people in detention centres. There is tremendous power to control the conditions these people are subject to. They control the food, visiting hours, discipline (including solitary confinement if they misbehave)
-   Admin lawyers are concerned about these individuals
-   These managers are one step removed from accountability. GSL cant be taken to court because of privity of contract. No one knows the content of the contract and whether the manager will be sued for treatment of detainees. The gov and GSL are the only parties to the contract. Therefore only the gov could sue GSL.
-   Cornelia Rau  permanent resident of Aust, escaped psychiatric hospital ended up in detention  she became psychotic in detention and was locked in solitary confinement and she could not be found for 10 months and she went crazy.
-   How do we keep contractors accountable
-   See newspaper articles about Cornelia Rau

Questions about Cornelia Rau
1.   What happened to Cornelia Rau?
-   She is an Australian resident held in jail and immigration detention for 10 months
-   She spent periods of time in jail and detention because police didn’t know what to do with her. She discharged herself from mental hospital in Manly and ended up in Qld
-   While in detention, she demonstrated psychotic behaviour
-   She spent considerable time in solitary confinement
-   Miscommunication between NSW police that listed her as missing person and Qld police who had no idea she was missing in NSW
-   She is handed over to fed immigration auth
-   When they found her, she deteriorated considerably

2.   Which minister is responsible for detention centres
-   Amanda Vandstone  immigration minister
-   She is responsible for policy making
-   She has contracted out the management of detention centres to a MNC GSL
-   She asks for priv inquiry  former police minister is responsible
-   Private to protect the dignity of Cornelia

3.   Discuss pros and cons of a private or public inquiry into the issue
-   Public inquiry allows openness and transparency. Shows how people are managed in these centres even when mentally ill
-   Many refugees arrive severely traumatized by their experience

4.   How does each of these promote the Admin law values of fairness, openness, transparency and accountability
-   Contracting out is mechanical and distances management from the effect of

5.   Who manages detention centres in Australia and the UK
-   GSL a multinational corporation

6.   What sorts of abuses are alleged
7.   Under what legal instrument are detention centres managed and who has the authority to enforce the terms of the instrument
-   Contract b/w gov and GSL
-   No public participation or scrutiny of these contracts because of privity of contract
-   Public doesn’t know the terms of this agreement
-   Only the gov could enforce the contract against GSL and not the people in the detention centres
-   In admin we are concerned with the individuals

8.   What rights and remedies do inmates of detention centres have against managers of detention centres
-   John Howard will not give apology for legal reasons, until the result of the inquiry is received (compensation)
-   She could pursue a private remedy against GSL
-   She could sue the government but the sister has said she would not sue the government, they simply want an apology

9.   What does Jodi Freeman say about the separation of functions between responsibility for policy-making and policy-implementation?
-   Its no longer the dichotomy of public and private, we have a mixed system
-   Freeman’s solution is to put the contract out for public scrutiny. We should mix our legal instruments the same way our administration is now mixed
-   Contracting out probably will not go away. How to imbue a priv contract with public values
-   Gov has an important role in setting standards
-   She looks at ways in which the priv sector is involved in standard setting which is normally a gov function industries develop their own codes of practice
-   The priv sector is not only involved in standard setting it makes the standards itself which the gov adopts
-   Once the priv sector is involved in public sector  question of whether the gov is making independent decisions about standards. Gov is relying on the information given by industries and asking them to help them set standards (negotiated rulemaking)
-   The more the gov downsizes itself, the more it has to rely on outsiders to regulate themselves
-   Gov is moving more towards idea of self-regulation because it doesn’t have the resources to properly regulate industries. It is cheaper for gov. It gives incentives to corps if they clean up their operations.
-   ISO14000  int org sets standards internationally accepted. Have to comply with these standards in order to get ISO certification
-   The priv sector realizes that there is some value in public law remedies and has set up institutions to mirror some of these public law remedies