FEDERAL COURT OF AUSTRALIA

Chief Executive Centrelink v The Aboriginal Community Benefit Fund Pty Ltd [2016] FCAFC 153

ORDERS

THE COURT ORDERS THAT:

1.    Appeal allowed.

2.    The Appellant file and serve any written submission it wishes to make on costs within five business days, with the Respondents replying within a further five business days. Neither submission should exceed two pages.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

PERRAM J:

1    The issue on appeal concerns the meaning of Item 2 of Schedule 1 to the Human Services (Centrelink) Regulations 2011 (Cth) (‘the Regulation’). Schedule 1 is a list of some services provided, loosely speaking, by Centrelink and Item 2 is the second item in the list. It is in these terms:

2.    A service (known as Centrepay) of deducting an amount from a benefit payable to an individual and paying the amount directly to another person:

(a)    with the individual’s consent, or as otherwise authorised or permitted by a law of the Commonwealth; and

(b)    consistently with arrangements between the Department and the other person.

2    Item 2 therefore specifies the ‘Centrepay’ service. A series of provisions in the Regulation and in the Human Services (Centrelink) Act 1997 (Cth) (‘the Act’) confer on the Chief Executive Centrelink (‘the CEC’) the function of providing the ‘Centrepay’ service described in Item 2.

3    The respondent Fund provides funeral benefit cover, principally to Indigenous persons. The CEC has provided the Centrepay service to the Fund in the past in respect of premiums due from customers who are in receipt of Centrelink benefits. In practice, this has meant that the premiums have been deducted directly out of the social security entitlements of the Fund’s customers and paid directly to it. At all material times there was an ‘arrangement’ of the kind referred to in Item 2(b) in place between the Department and the Fund. On 1 July 2015, a Departmental official wrote to the Fund informing it that, subject to some presently immaterial grandfathering arrangements, the Centrepay service would no longer be available in respect of funeral insurance with effect from 31 August 2015.

4    The Fund’s case at trial was that the power which had been exercised was a power to make an ‘arrangement’ of the kind referred to in Item 2(b). No express power to make such an arrangement, however, is conferred by the Regulation. Both parties accepted nevertheless that there was such a power impliedly conferred by Item 2(b) itself, or if that were not sufficient, by s 8(1)(d) of the Act, which confers on the CEC the function of ‘doing anything incidental, conducive or related to the performance of any of his or her other functions.’ On either view, the power to make arrangements is a statutory power to which s 33(1) of the Acts Interpretation Act 1901 (Cth) applies. That provision is as follows:

33 Exercise of powers and performance of functions or duties

Powers, functions and duties may be exercised or must be performed as the occasion requires

(1)    Where an Act confers a power or function or imposes a duty, then the power may be exercised and the function or duty must be performed from time to time as occasion requires.

5    The appeal was conducted on the basis that s 33(1) permits a statutory power not only to be re-exercised, but also to be re-exercised in such a way as to detract from, add to, vary or even revoke an earlier exercise of underlying power: see, in relation to the meaning of ‘from time to time’, the obiter remarks of Lord Penzance in Lawrie v Lees (1881) 7 App Cas 19 at 29-30, and in relation to the operation of s 33(1) or its various analogues, Parkes Rural Distributions Pty Ltd v Glasson (1986) 7 NSWLR 332 at 335-336 per Glass JA (Samuels and Priestley JJA agreeing); Minister for Immigration and Ethnic Affairs v Kurtovic (1990) 21 FCR 193 at 218-219 per Gummow J (Ryan J agreeing). A narrower view was, perhaps, taken in Kabourakis v The Medical Practitioners Board of Victoria [2006] VSCA 301 at [84] per Nettle JA, but the narrower view in that case is not material to the situation in this case. Because it was not disputed in this case, it is not necessary to express any concluded views on the true operation of s 33(1).

6    Section 33(1) does not apply if the statute in question evinces a contrary intention: Acts Interpretation Act 1901 (Cth), s 2(2). It was not suggested in this case that the Act did exhibit such a contrary intention. Thus, as a matter of power, there can be no question but that the CEC had the power to revoke an earlier arrangement made under Item 2(b) and replace it with a new one. The contrary was not submitted.

7    Mr Doyle QC who, with Mr Black of Counsel, appeared for the Fund, submitted that the decision made on 1 July 2015 to cease making the Centrepay service available in respect of funeral insurance was liable to be set aside because the decision-maker had taken into account an irrelevant consideration. The irrelevant consideration was the desire of the Department to ensure that the Centrepay service not be available for the payment of funeral insurance premiums. There is no doubt that this is exactly what the decision-maker intended, and hence that this was a matter which was taken into account. The debate therefore devolves only to the issue of whether it can be said that the consideration was irrelevant in the sense explained by Mason J in Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 40; that is to say, that the matter was excluded by ‘the subject-matter, scope and purpose of the statute’.

8    A desire to make the Centrepay service unavailable for funeral insurance was said to be alien to the power to make an arrangement referred to in Item 2(b) because it only authorised ‘arrangements’ and, as a matter of construction, an ‘arrangement’ was merely a facilitative instrument to give effect to Centrepay services already determined to be available. A power to make arrangements could not be used, on this view, to achieve the substantive outcome that the Centrepay service would not be provided to a particular person or in respect of a particular category of payment.

9    I would accept this argument. Neither the Act nor the Regulation defines an arrangement, but the word itself does appear in two other locations in the Regulation. Reg 10(3)(e) provides that a particular function includes ‘making arrangements for health assessments and other assistance in relation to health care’.

10    In addition, Item 3 of Schedule 1 also uses ‘arrangement’ in an identical fashion to the way it is used in Item 2 (and therefore does not advance matters very far). These references are, however, sufficient to indicate that the word ‘arrangements’ does not mean a subordinate executive instrument such as the Administrative Arrangements Order by which portfolio responsibility for legislation is assigned to particular Ministers. Although not common, an exercise of a legislative or executive power resulting in an instrument containing prescriptions and called an arrangement is not unknown: see e.g. s 6(1) of the Coal Acquisition Act 1981 (NSW) (‘The Governor may by order make arrangements…’). I mention these matters because it is clear that this is not what the drafter had in mind in Item 2 of Schedule 1.

11    The word therefore bears its ordinary meaning. The online Oxford English Dictionary contains a number of definitions of ‘arrangement’, the seventh of which is as follows:

7.     Disposition of measures for the accomplishment of a purpose; preparations for successful performance.

1786    E. BURKE Articles of Charge against W. Hastings III, in Wks. XI. 432 Arrangements with the Rajah..for the better government and management of his Zemindary.

1837    W. C. MACREADY Reminisc. II. 82 With the latter I made arrangements about ballet, &c.

1854    THACKERAY Newcomes I. xxvi. 252 His own arrangements were made in another quarter.

1855    MACAULAY Hist. Eng. IV. xxii. 713 Donelagh made the arrangements for the flight. ‘

12    This seems to me most closely to correspond to the use of the word in Item 2. The online Macquarie Dictionary does not appear to have an equivalent definition. The closest would be definition 5: ‘(usually plural) preparatory measure; previous plan; preparation.’

13    However, I do not think that that definition quite captures the meaning set out in the quotes in the OED definition, which appear to have an additional sense of the measures being directed to a purpose. I do not doubt that the word ‘arrangements’ has just such a meaning in Australian English (cf. ‘he made arrangements to disinherit his heir’).

14    It seems to me therefore that the ‘arrangements’ in Item 2 are a set of measures whose end is the achievement of some purpose. In the case of Item 2, the purpose to be achieved is the provision of the Centrepay service.

15    If that be so, then the power to make arrangements under Item 2(b) is only a power to assist in the accomplishment of the purpose of providing the Centrepay service. Whatever that embraces – and it may embrace much – it does not take in a measure to prevent the delivery of the Centrepay service. Perhaps put another way, whatever the arrangement does it must facilitate, not wholly prevent, the provision of the service.

16    This does not mean that the CEC has no power to decide not to provide the Centrepay service with respect to particular third parties or in respect of particular kinds of payments. The power to provide the service flows from Item 2, reg 11(1) and s 8(1), which together confer on the CEC a ‘function’, inter alia, of providing the Centrepay service in Item 2 to non-governmental organisations. Section 8(1) of the Act provides:

8 Functions of Chief Executive Centrelink

Functions—general

(1)    The Chief Executive Centrelink has the following functions:

(a)     the service delivery functions mentioned in section 8A;

(b)     any functions conferred on the Chief Executive Centrelink under any other Act;

(ba)     any functions that are prescribed by the regulations;

(d)     doing anything incidental, conducive or related to the performance of any of his or her other functions.

17    Regulation 11(1) then provides:

11 Function of providing specified services

(1)    A prescribed function is to provide a service specified in Schedule 1 (a specified service) to any of the following:

(a)    a Commonwealth body;

(b)    a State or Territory body;

(c)    a local government body;

(d)    a non-government organisation.

18    So the full structure is that s 8(1)(ba) gives the CEC functions prescribed by the regulations; reg 11(1) prescribes the functions set out in the schedule to the Regulation; and Item 2 of the Schedule contains the Centrepay service. The CEC, therefore, has the function of providing the Centrepay service.

19    In the context of ‘functions’, it should be noted that s 3 of the Act (which deals with definitions) makes plain that a ‘function’ includes a power. It is clear, to my mind, that the CEC has a discretion under s 8(1) as to whether he provides the Centrepay service at all, or if provided, to whom, or in respect of what payments.

20    In this case, it would therefore be within the CEC’s power under s 8(1) to decide that the Department would no longer provide the Centrepay service in relation to funeral insurance premiums to a particular non-government organisation. This would be an exercise of power to provide the Centrepay service under s 8(1) (combined with s 33(1)), and not the power to make arrangements under Item 2(b).

21    What follows from this is that no decision to excise funeral insurance from the Centrepay service can have been made under Item 2, which would authorise no such decision. This has the immediate consequence that the Fund’s irrelevant consideration argument based, as it is, on an assumption that the source of the power was Item 2, must also fail.

22    Griffiths J and I, however, are in agreement that the actual source of power for a decision to excise funeral insurance from the Centrepay service is s 8(1) of the Act. His Honour has explained how the letter of 1 July 2015 from Mr Anderson is properly to be seen as an exercise of that power. I respectfully agree with that conclusion, and also with his analysis of the legal issues arising from that letter. I also agree with his Honour’s conclusion on the Fund’s notice of contention.

23    The result of these conclusions is that the appeal must be allowed. My tentative view is that there should be no costs order either on this appeal or at trial. However, the parties have not been heard on this. The course I would favour is that the appellant should put on any written submission it wishes to make on costs within five business days, with the Fund replying within a further five business days. Neither submission should exceed two pages.

Associate:

Dated:    11 November 2016

REASONS FOR JUDGMENT

GRIFFITHS J:

Introduction

24    The central issue in the appeal is whether the primary judge erred in concluding that the appellant’s delegate fell into jurisdictional error when he decided on or about 1 July 2015 that the Centrepay service, which hitherto had been used to deduct funeral insurance premiums from Centrelink payments and pay the premium amount directly to the respondents, would, in the short term, be replaced by a new administrative policy and, in the longer term, funeral insurance would be totally excluded from Centrepay after 30 June 2016.

25    A secondary issue in the appeal is whether the primary judge erred in finding that the decision-maker was not authorised to make the decision described in [24] above.

26    There is also a notice of contention, the sole ground of which is whether the primary judge should also have found that the new administrative policy was applied without regard to the merits of the respondents’ individual circumstances.

27    I have had the considerable advantage of reading a draft of Perram J’s reasons for judgment. I respectfully agree with the orders proposed by his Honour and with much of his reasoning. It is desirable that I express my own reasons in support of the orders being made.

Broad summary of background facts

28    The respondents are a group of companies which provide funeral benefit insurance, principally to Indigenous Australians. It is convenient to refer to the group collectively as ACBF.

29    Centrepay is a service provided by the Commonwealth Department of Human Services (the Department) under which deductions are made from Centrelink payments to welfare recipients and the deductions are then paid directly to various prescribed entities, which include non-government organisations. Centrelink is the Commonwealth agency within the Department which administers Centrepay. The Chief Executive Centrelink (CEC) is the appellant.

30    Prior to 1 July 2015, under an arrangement between the Department and ACBF (which was described as a contract), deductions were made from Centrelink benefits payable to individual welfare recipients and, with the consent of each such individual, the deducted amount was paid to ACBF in respect of the individual’s funeral benefit insurance premium.

31    On 22 May 2015, the then Minister for Human Services announced in a press release that funeral insurance would be excluded from Centrepay because “of the particular risks funeral insurance raises for vulnerable customers”.

32    On 1 July 2015, a Departmental officer (Mr Alex Anderson) wrote to ACBF and notified them that the Department was terminating the “existing Centrepay contract with effect at the end of the day on 31 August 2015” and was approving the ACBF business using Centrepay “under the new Centrepay policy and terms from 1 September 2015”. Furthermore, in this letter, Mr Anderson notified ACBF that, from 30 June 2016, Centrepay payment arrangements would not apply to any funeral insurance.

The proceedings below

33    ACBF initiated judicial review proceedings which challenged what was described as the “termination decision” recorded in Mr Anderson’s letter dated 1 July 2015, as well as a subsequent decision which was recorded in a letter dated 20 May 2016. The second letter, which was also written by Mr Anderson, advised ACBF that the CEC would not vacate the termination decision. For the purposes of the appeal, it is sufficient to concentrate on the so-called termination decision.

34    The grounds of review in the amended application were described by the primary judge as “prolix” (see Aboriginal Community Benefit Fund Pty Ltd v Chief Executive Centrelink [2016] FCA 769 at [20]). With respect, that is an accurate if perhaps understated description of the amended originating application. The terms of that document are set out in full in [20] of the primary judge’s reasons for judgment and need not be repeated here. For the purposes of this appeal proceeding, the relevant grounds of judicial review may be summarised as follows:

(1)    the termination decision was not authorised by either the Human Services (Centrelink) Act 1997 (Cth) (the Centrelink Act) or the Human Services (Centrelink) Regulations 2011 (Cth) (the Centrelink Regulations) in that the CEC was under an obligation to perform the function of providing Centrepay to ACBF for so long as the CEC was satisfied that the criteria in Sch 1 of the Centrelink Regulations were satisfied (ground 1(e));

(2)    alternatively, the termination decision involved an improper exercise of power, because it involved the exercise of a personal discretionary power at the direction or behest of another person (ground 2);

(3)    further or alternatively, the CEC’s decision involved an improper exercise of power, because it involved the exercise of a discretionary power in accordance with a rule or policy without regard to the merits of the particular case (ground 3(c));

(4)    in the further alternative, the termination decision involved reliance upon an irrelevant consideration, namely that the deductions paid to ACBF through the Centrepay service were for the purpose of paying for funeral insurance (ground 3(e)); and

(5)    alternatively, Mr Anderson was not in fact an authorised delegate and so had no authority under the Centrelink Act or Centrelink Regulations to make the termination decision (ground 1(f)).

35    The presentation of the parties’ cases both below and in the appeal introduced a degree of unfortunate and avoidable complexity. ACBF put its case below on two alternative and contradictory bases. Its primary claim was that the CEC had no discretion to refuse to provide Centrepay when the terms of Sch 1 of the Centrelink Regulations were satisfied. It contended that the CEC’s function of providing Centrepay “is in the nature of a duty rather than a discretion” and that the “function” is one to which s 33(1) of the Acts Interpretation Act 1901 (Cth) (AI Act) applied, such that the function (or duty) must be performed from time to time as occasion required. In support of this primary contention, ACBF relied upon matters such as the text of reg 11(1) of the Centrelink Regulations and what it described as the non-facultative language in the phrase “is to provide”, as opposed to a phrase such as “may provide”.

36    ACBF’s alternative (and secondary position) below was that, if the CEC exercised a discretionary power in making the termination decision, the exercise of that discretion was vitiated by the fact that an irrelevant consideration had been taken into account, namely that the purpose of the deductions payable to ACBF was to pay for funeral insurance. ACBF submitted that “to override an individual’s consent by making value judgements about what goods or services an individual should (or should not) pay for is entirely foreign to the purpose of Centrepay”.

37    As will shortly emerge, some elements of both these alternative positions advanced by ACBF were accepted by the primary judge.

38    The CEC’s case was presented differently on appeal than below. The CEC’s primary position below was that Centrepay was simply one administrative means by which social security benefits are paid to recipients and it was not a matter which required specific authorisation by regulation. The CEC challenged ACBF’s assumption that the Centrelink Act and Centrelink Regulations provided the sole authority for decisions about Centrepay. Detailed submissions were made in support of a contention that other legislation, including the Commonwealth Services Delivery Agency Act 1997 (Cth) and subsequent amendments to that Act, as well as the Social Security (Administration) Act 1999 (Cth) (the Administration Act), was also relevant.

39    The CEC’s central contention below is reflected in [21] of his outline of written submissions:

Here, the discretion whether or not to allow a customer to use the Centrepay service to make payments for particular types of good or services was one primarily for the Secretary of the Department of Social Services (as delegated) under the [Administration Act], to be exercised having regard to Government policy. The statutory underpinning of the Centrepay service came from the [Administration Act] which provided the general discretion as to how benefits could be paid. The “back room” administration of Centrepay could, of course, have been done under the [Administration Act], but it could also be done, having regard to the flexibility in arrangements provided for by the Centrelink Act and the Regulations, through the CEC as assisted by employees of the Department. Further, as recognised by Schedule 1 to the Regulations, in any particular case a payment under the Centrepay service would require that an arrangement was in place between the Department and the proposed recipient of the payment.

40    Below, the CEC submitted that there was no basis in the Administration Act for any contention that there was a mandatory obligation to provide for payments through Centrepay. The CEC also submitted that ACBF’s irrelevant considerations claim was misconceived because the Administration Act did not expressly forbid the Secretary or a delegate from considering the purpose for which a deduction was made (in this case for funeral insurance) and that the purpose “would normally be a factor to consider in determining whether that power should be exercised”.

41    Below, the CEC placed reliance upon the fact that responsibility for the payment of social security benefits was given to the Secretary of the Department of Social Services under s 55 of the Administration Act. As will shortly emerge, in the appeal, senior counsel for the CEC (who did not appear below) expressly eschewed any reliance upon s 55(4). In the appeal, the CEC also submitted that there were various alternative sources of the power to exclude funeral insurance from Centrepay, which included Item 2(b) of Sch 1 to the Centrelink Regulations, but alternative sources of power were also available in ss 8(1)(ba) or (d) of the Centrelink Act and reg 11(2)(b) if Item 2(b) was an inadequate source of power.

42    Before summarising the primary judge’s reasons for upholding ACBF’s judicial review challenge on two grounds, it is convenient to summarise the relevant legislative provisions as in force on 1 July 2015. They are to be found primarily in the Centrelink Act, the Centrelink Regulations and the Administration Act.

Relevant legislative provisions summarised

The Centrelink Act

43    Section 7 required that there be a “Chief Executive Centrelink”. The functions of that person were described in s 8, which provided separately in s 8(1) for general functions and in s 8(3) for what was described as a “parallel function” (i.e. where the CEC or his/her delegate may discharge a particular function or exercise a particular power even though the Secretary or his/her delegate may also have role of discharging that same function or exercising that same power). In s 3, the term “function” was defined to include “power”.

44    The general functions of the CEC were specified in s 8(1) as follows (noting in particular ss 8(1)(ba) and (d)):

Functions of Chief Executive Centrelink

Functions-general

(1)    The Chief Executive Centrelink has the following functions:

(a)    the service delivery functions mentioned in section 8A;

(b)    any functions conferred on the Chief Executive Centrelink under any other Act;

(ba)    any functions that are prescribed by the regulations;

(d)    doing anything incidental, conducive or related to the performance of any of his or her other functions.

45    Section 8A defined the CEC’s service delivery functions:

Chief Executive Centrelink's service delivery functions

The Chief Executive Centrelink's service delivery functions are as follows:

(a)    to provide services, benefits, programs or facilities that are provided for by the Commonwealth for a purpose for which the Parliament has the power to make laws;

(b)    to provide services, benefits, programs or facilities that are provided for by a person other than the Commonwealth for a purpose for which the Parliament has the power to make laws.

46    Under s 12(3), the CEC was empowered to delegate to a Departmental employee all or any of the functions delegated to the CEC under another Act (which included the Administration Act).

47    Sections 13 and 15 concern the conferral of powers or functions or the imposition of duties on the CEC by a State or Territory law. They provided as follows:

13    Commonwealth consent to conferral of powers etc. on Chief Executive Centrelink by State and Territory laws

(1)    A law of a State or Territory may confer powers or functions, or impose duties, on the Chief Executive Centrelink.

Note:    Section 15 sets out when such a law imposes a duty on the Chief Executive Centrelink.

(2)    Subsection (1) does not authorise the conferral of a power or function, or the imposition of a duty, by a law of a State or Territory to the extent to which:

(a)    the conferral or imposition, or the authorisation, would contravene any constitutional doctrines restricting the duties that may be imposed on the Chief Executive Centrelink; or

(b)    the authorisation would otherwise exceed the legislative power of the Commonwealth.

(3)    The Chief Executive Centrelink cannot exercise a power, or perform a duty or function, under a law of a State or Territory without the written approval of the Minister.

15    When State and Territory laws impose a duty on Chief Executive Centrelink

For the purposes of sections 13 and 14, a law of a State or Territory imposes a duty on the Chief Executive Centrelink if:

(a)    the law confers a power or function on the Chief Executive Centrelink; and

(b)    the circumstances in which the power or function is conferred give rise to an obligation on the Chief Executive Centrelink to exercise the power or to perform the function.

The Centrelink Regulations

48    Part 2 of the Centrelink Regulations prescribed the functions of the CEC for the purposes of s 8(1)(ba) of the Centrelink Act.

49    Regulations 10 and 11 are important. They respectively prescribed the CEC’s functions relating to providing both emergency services and specified services. It is convenient to set them out in full.

10    Functions related to provision of emergency services

(1)    The following are prescribed functions:

(a)    providing a service, benefit, program or facility to a person affected by an emergency (an emergency service);

(b)    participating in disaster policy and planning activities, including activities undertaken by disaster policy and planning committees.

(2)    Without limiting subregulation (1), the Chief Executive Centrelink may perform the functions for, or under an arrangement with, a State or Territory body.

(3)    The function mentioned in paragraph (1) (a) includes the following:

(a)    establishing and maintaining a register of persons affected by the emergency;

(b)    receiving, processing, investigating, deciding and paying claims for assistance;

(c)    operating a telephone enquiry line;

(d)    providing call centre assistance;

(e)    making arrangements for health assessments and other assistance in relation to health care;

(f)    referring a person to another organisation if the person requires assistance provided by that organisation;

(g)    working with, and providing information to, other government and non-government bodies in relation to the provision of assistance;

(h)    providing information to a State or Territory body about a person affected by the emergency that will assist the State or Territory body to provide a payment, benefit or other assistance to the person;

(i)    undertaking action (including starting legal proceedings) to recover payments that should not have been made;

(j)    disclosing statistical information (including de-identified information from the register mentioned in paragraph (a)) about assistance provided;

(k)    undertaking compliance, audit, review, investigation, enforcement and recovery services ancillary to the emergency service.

(4)    Information in subregulation (3) includes personal information.

(5)    If the Chief Executive Centrelink provides an emergency service to a person, or the person makes a request for an emergency service, the Chief Executive Centrelink may:

(a)    collect information about the person or the person’s family, including personal information; and

(b)    maintain records about the emergency service or the request.

11    Function of providing specified services

(1)    A prescribed function is to provide a service specified in Schedule 1 (a specified service) to any of the following:

(a)    a Commonwealth body;

(b)    a State or Territory body;

(c)    a local government body;

(d)    a non‑government organisation.

(2)    Without limiting subregulation (1), the prescribed function includes the following:

(a)    making the Chief Executive Centrelink or Departmental employees available to perform functions in relation to the provision of a specified service;

(b)    determining a person’s eligibility for a specified service, or entitlement to receive or have access to a specified service;

(c)    making payments in relation to the provision of a specified service;

(d)    maintaining records relating to the provision of a specified service;

(e)    charging fees for the provision of a specified service;

(f)    disclosing information relating to the provision of a specified service (including personal information about individuals receiving the service);

(g)    undertaking education, compliance, investigation and enforcement activities relating to the provision of a specified service;

(h)    taking part in teams and taskforces in relation to the provision or future provision of a specified service;

(i)    recovering overpayments and other amounts due to the Commonwealth in relation to the provision of a specified service;

(j)    conducting litigation or proceedings relating to the provision of a specified service.

(3)    The functions in paragraph (2) (a) include functions delegated to the Chief Executive Centrelink or Departmental employees under any law, including a law of a State or Territory.

50    Schedule 1 of the Centrelink Regulations described the services which are specified services as referred to in reg 11(1).

Schedule 1                Specified services

(regulation 11)

Item        Description of service

____________________________________________________________________

1    A service, benefit, program or facility that is intended to facilitate, promote or ensure the efficient and effective delivery of government services to, or relating to, an inmate of a correctional facility

2    A service (known as Centrepay) of deducting an amount from a benefit payable to an individual and paying the amount directly to another person:

(a)    with the individual’s consent, or as otherwise authorised or permitted by a law of the Commonwealth; and

(b)    consistently with arrangements between the Department and the other person

3    A service (known as Centrelink confirmation e‑service) of giving information about an individual to another person:

(a)    with the individual’s consent or direction; and

(b)    consistently with arrangements between the Department and the other person

____________________________________________________________________

Note

1.    All legislative instruments and compilations are registered on the Federal Register of Legislative Instruments kept under the Legislative Instruments Act 2003. See http://www.frli.gov.au.

51    It is notable that all the specified services are provided to a person other than the welfare recipient, the person being a person within one of the categories prescribed in reg 11(1). That does not mean that the individual welfare recipient does not derive some benefit from that specified service. Rather, the point is that the service is formally provided to a third party, albeit with the individual’s consent where the first limb of Item 2(a) happens to be engaged.

The Administration Act

52    Section 36 of the Administration Act imposed an obligation on the Secretary of the Department of Social Services (and not the Secretary of Department of Human Services) to determine a claim for a social security payment by either granting or rejecting the claim.

53    Section 41 provided that, unless another provision of a social security law provided otherwise, a social security payment was payable to a person on the person’s start day in relation to the social security payment.

54    Section 55 relevantly provided as follows (emphasis added in s 55(4) and noting again that the reference to the Secretary in s 55(4) is a reference to the Secretary of the Department of Social Services):

Payment into bank account etc.

(1)    Subject to Part 3A, an amount (the relevant amount) that is to be paid to a person under section 44, 45, 47, 48, 48A, 48B, 48C, 48D or 50 is to be paid in the manner set out in this section.

(2)    Subject to subsections (4) and (4A), the relevant amount is to be paid to the credit of a bank account nominated and maintained by the person.

(3)    The account may be an account that is maintained by the person either alone or jointly or in common with another person.

(4)    The Secretary may direct that the whole or a part of the relevant amount be paid to the person in a different way from that provided for by subsection (2). If the Secretary gives a direction, the relevant amount is to be paid in accordance with the direction.

…

55    The Secretary of that Department was empowered under s 234(2) of the Administration Act to delegate to the CEC or a Departmental employee all or any of the Secretary’s powers under the social security law.

56    The primary judge stated at [29] of his reasons for judgment that the effect of the combined operation of s 234(2) of the Administration Act and s 12(3) of the Centrelink Act was that it was lawfully possible for the CEC to delegate to a Departmental employee a power which previously had been delegated to the CEC by the Secretary of the Department of Social Services. As at 1 July 2015, the Secretary had delegated to the CEC the Secretary’s powers under the Administration Act, including the powers under s 55. The CEC had by a further delegation delegated to particular public servants specified powers and functions of the CEC, including those under s 55 of the Administration Act. These findings are broadly consistent with the contentions made below on behalf of the CEC regarding the relevant delegations which had been made.

The primary judge’s reasons summarised

57    His Honour found that ground 3(e) of the amended originating application was made out because Mr Anderson had taken into account an irrelevant consideration. That irrelevant consideration was identified by the primary judge at [59] as being “the fact that the deduction from the benefit was to be made so as to pay ACBF for funeral insurance”. The basis upon which that consideration was found by the primary judge to be an irrelevant consideration is to be found elsewhere in his Honour’s reasons. The primary judge considered that s 55(4) of the Administration Act did not confer power on Mr Anderson to terminate an arrangement with ACBF under which a deduction was being made with the consent of an individual Centrelink benefit recipient. In particular, the primary judge found that the discretionary power conferred upon the CEC under s 55(4) as delegate of the Secretary did not mean that the CEC (or his or her delegate) could unilaterally decide to terminate a specified service within the meaning of either Items 2 (a) or (b) of Sch 1 if the service was being provided with the consent of an individual who was receiving a Centrelink benefit.

58    His Honour’s core reasoning for upholding this particular ground is reflected at [47] to [49] of his reasons for judgment:

47    Acting on this basis, a payment to a third party by discretionary direction of the Secretary with the consent of the individual under s 55(4) of the Administration Act is not at all within the first of the alternatives offered by item 2, para (a). It is just an example of a deduction “otherwise authorised or permitted by a law of the Commonwealth” in terms of the second of the alternatives in that paragraph. Those otherwise permitted alternatives may well by their separate provision entail discretionary value judgments about the suitability of making a deduction from an individual's relevant amount so as to make a payment to a third party nominated by that individual. Under s 55(4) of the Administration Act, the Secretary might decline to specify such a different way for just such a reason.

48    It was put for the CEO that discretionary value judgments made by the Secretary under s 55(4) as to suitable third parties to whom a payment might be made so as to discharge in part the obligation to pay the relevant amount to the person might permissibly repose in an arrangement made by the Secretary for the purposes of item 2 para (b) of the Centrelink Regulations. I disagree.

49    So to construe para (b) would be subversive of the lack of any requirement in the alternative first specified in item 2, para (a) other than an individual's consent for the making of a lawful payment directly to another person from a benefit payable to the consenting individual. The Centrepay service is, inter alia, a means whereby that consenting individual, instead of giving a payment authority to the bank in which the nominated account is maintained in favour of the third party non-government organisation, can instead furnish a consent to the CEO which then permits a lawful deduction from that individual's relevant amount and a related payment to that third party. Where there is an arrangement in place with the non-government organisation concerned, the Centrepay service offers the individual the advantage that it is, for the individual, free, thereby not diminishing the worth of a relevant amount to that individual by bank charges in respect of a debit authority. Necessarily, the alternative first specified in item 2, para (a) leaves the individual free to decide how to expend his or her relevant amount in just the same way as he or she is free to spend that amount if it is credited directly to his or her nominated and maintained bank account. Paternalistic value judgments by the Minister or the Secretary, however well-intentioned, have no more place in the alternative first specified in item 2, para (a) than they do in respect of drawdowns by the individual from his or her nominated and maintained bank account. That is so irrespective of whether or not that individual is an Australian aboriginal. Income management as such is the province of Pt 3B of the Administration Act, not item 2, para (b). The arrangements made by the Secretary with a third party under item 2, para (b) must facilitate, not subvert, materially, the paying to the third party of the deducted amount to which the benefit recipient has consented.

59    As is evident from these extracts, together with other relevant passages in his Honour’s reasons for judgment (see [8], [59], [64] and [67]), even though the error as found by his Honour was expressed in terms of Mr Anderson having taken into account an irrelevant consideration, in substance this was because of his Honour’s view that Item 2 had to be construed on the basis that the conferral of the function of providing a Centrepay service involved an obligation which could not be displaced or overridden by discretionary considerations. For reasons which will be developed below, in my respectful opinion, his Honour erred in assuming that Item 2 was the sole source of relevant power and that there was no alternative source of discretionary power to exclude funeral insurance from Centrepay.

60    In relation to other grounds of review relied upon by ACBF, the primary judge rejected ACBF’s claims that the termination decision was vitiated because:

(1)    it involved an improper exercise of power in that there was an exercise of a personal discretionary power at the direction or behest of another person; and

(2)    there was an exercise of a discretionary power in accordance with a rule or policy without regard to the merits of the particular case.

61    These two matters are the subject of the notice of contention. Senior counsel for ACBF confirmed at the hearing that ground 1 was not pressed. Accordingly, it is unnecessary to say anything further about it.

62    As to ground 2 of the notice of contention, the primary judge rejected ACBF’s claim that the termination decision was made by Mr Anderson in accordance with a rule or policy and without regard to the merits of ACBF’s individual position. He did so after having regard to the terms of Mr Anderson’s letters dated 26 June 2015 and 1 July 2015. The first letter, which was sent by Mr Anderson to ACBF’s solicitors, contained an express reference to the new policy relating to Centrepay as announced by the Minister on 22 May 2015 and the exclusion of funeral insurance. The primary judge found at [35] that this letter “clearly anticipated, if not precisely foreshadowed, the imminent making of the termination decision” and that that letter, together with the 1 July 2015 letter (which was sent directly to some companies in the ACBF group), revealed such of the reasons for the termination decision as Mr Anderson was disposed to furnish (it not being disputed that he was under no legal obligation to provide a statement of reasons for the termination decision). A letter in substantially similar terms to that 1 July 2015 letter was sent on the same day to another company in the ACBF group.

63    Mr Anderson’s 26 June 2015 letter acknowledged receipt of ACBF’s submissions dated 2 June 2015 (which had also enclosed seven testimonials). The letter stated that the Department was “committed to taking all comments received into consideration, where possible, in implementing administrative arrangements for Centrepay” but that some “proposals advanced… were not consistent with decisions already announced, or established positions of the department”. It was further stated that the matters raised in ACBF’s letter of 2 June 2015 had been considered by the Department but that it “remains the case, as announced on 22 May 2015 by [the Minister] that under the new Centrepay Policy and Terms, customers will no longer be able to use Centrepay to pay for funeral insurance”. Mr Anderson told ACBF that the “change in policy is not a reflection of the activities of ACBF specifically but is related to broader Centrepay changes that have come about following the Independent Review of Centrepay and as a result of consultations with a range of Centrepay stakeholders”.

64    As to Mr Anderson’s letter dated 1 July 2015, it contained an express reference to the “new Centrepay Policy and Terms”, which was interpreted by the primary judge at [11] as a reference to the new Centrepay policy and related terms of service which were adopted on 1 July 2015 by the CEC and the Department, with the Minister’s approval. The relevant parts of that letter are as follows:

On 1 July 2015, the department introduced a new framework for providing Centrepay to businesses.

The department will no longer provide Centrepay under the existing Centrepay policy and a contract formed by the Department of Human Services Business Terms and Conditions, Centrepay Schedule 1 and in the agreed Special Condition.

Centrepay will now be provided under an administrative framework including new:

•    Centrepay Policy and Terms, and

•    Centrepay Procedural Guides.

65    The letter provided a link to those documents on the Department’s website. The letter informed ACBF as follows:

The Service Reason for which your business has been approved allows for the provision of goods and services to customers using funeral insurance. Under the new policy in respect of funeral expenses, Centrepay will only be available for making payments towards funeral bonds, prepaid funerals or actual costs of a funeral, the funeral homes, funeral directors or other providers that hold appropriate accreditations and registrations. Funeral insurance is now excluded from payment using Centrepay.

The new policy permits a period for your business to continue to receive existing payments through Centrepay to allow it to make other payment arrangements with those customers. No new Centrepay arrangements will be allowed for funeral insurance or other excluded goods or services.

…

66    The primary judge also took into account a Departmental Minute dated 17 September 2014 which the Minister signed on 13 April 2015. It appears that this provided part of the catalyst for the Minister’s press release dated 22 May 2015, in which it was announced inter alia that funeral insurance would be excluded from Centrepay. The Minute was written against the background of an earlier report to the Departmental Secretary in June 2013 concerning the operations of the Centrepay service. That report was called the Independent Review of Centrepay. Although the Minute contained no direct reference to ACBF by name, it did contain a statement that the Department was aware of only one provider using Centrepay for funeral insurance and that this provider had over 8,800 customers. The primary judge was satisfied that this was a clear reference to ACBF. Moreover, the primary judge noted at [50] that the Minute envisaged consultation with “external stakeholders” prior to the new policy being finalised and published and that the ACBF was identified as such an external stakeholder. His Honour found that ACBF took up the opportunity to participate in that consultative process, including by its solicitor’s letter dated 2 June 2015 and the provision of several testimonials to the Department.

67    In the light of all these matters, the primary judge was satisfied that consideration had in fact been given to ACBF’s individual position and that the termination decision was not arrived at by blindly applying the new policy.

68    On the issue raised by ground 1(f) of the amended originating application, namely whether Mr Anderson was an authorised delegate with authority to make the termination decision, the primary judge concluded at [65] that there was no evidence before the Court which demonstrated that anyone other than the Secretary personally had the power to make the termination decision (on the assumption that the sole source of power to make that decision was Item 2). The primary judge reasoned there as follows:

The evidenced delegation from the Secretary to the CEO dated 16 December 2014, which remained in force as at 1 July 2015, delegated his powers under the Administration Act and the Social Security Act to the extent specified in that delegation. That delegation did not, however, make any reference to the Secretary's powers of making or terminating an arrangement made for the purposes of item 2 of Sch 1 to the Centrelink Regulations. No delegation of these particular powers to the CEO or to such persons who were at the level in the public service as was Mr Anderson or who held or occupied for the time being his position was in evidence. Perhaps that was because, erroneously as I have found, s 55(4) of the Administration Act and related delegations were thought to confer the requisite power on Mr Anderson. The position is that there is nothing which would show that he, as opposed to the Secretary personally, possessed the power of making or terminating arrangements with non-government organisations such as ACBF.

Determination of the appeal

69    It is well settled that the task of statutory construction must begin and end with a consideration of the text itself, however, the meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision and, in particular, the mischief which it is seeking to remedy. Historical considerations and extrinsic materials cannot displace the clear meaning of the text and the language of the text is the surest guide to legislative intention (see Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) [2009] HCA 41; 239 CLR 27 at [47] per Hayne, Heydon, Crennan and Kiefel JJ). Moreover, a legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals (see Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [70] per McHugh, Gummow, Kirby and Hayne JJ). It is equally well settled that the word “function” may involve no more than the conferral of a power, but it may also create a duty. The resolution of whether a function involves a mere power as opposed to a mandatory duty falls to be determined by the proper construction of the relevant legislation as a whole (see, for example, Noy v Tapgnuk (1997) 138 FLR 205 at 209-210 per Mildren J (with whom Kearney and Thomas JJ agreed)).

70    For the following reasons, I respectfully consider that the primary judge erred in concluding that there was an obligation to continue to provide the Centrepay service to ACBF in respect to funeral insurance and there was no discretion to exclude that item from Centrepay. The primary judge may have been led into this error because his Honour’s attention was not sufficiently drawn to alternative sources of power to make the termination decision under s 8(1) and reg 11.

71    First, the terms of reg 11 strongly indicate that the prescribed function of providing a specified service is facilitative or empowering, rather than being a function which requires a strict obligation of performance. For example, reg 11(1) contains the phrase “is to provide” in the context of identifying the particular prescribed function concerning specified services. In its ordinary meaning, this phrase is not the equivalent of “is the mandatory provision of”, nor is there any contextual or purposive reason to construe the phrase as involving a strict duty of performance. Other aspects of the language of reg 11 support this view. For example, the reference in reg 11 to providing a specified service “to any of the following” (to be contrasted with “each of the following”) suggests that it was not intended to impose a duty on the CEC to provide any specified service to all four categories of entity described in that regulation. In principle, the CEC could choose to limit the provision of any or all of the specified services to the entities described in regs 11(1)(a), (b) and (c) and not provide any such specified service to a non-government organisation because, for example, of budgetary or resource constraints. There is likely to be a wide range of valid considerations which might influence the CEC’s decision as to which specified services would be provided, and continue to be provided, to any or all of the prescribed entities.

72    Regulation 11(2)(b) points strongly in the same direction. It provides that, without limiting reg 11(1), the prescribed function of providing the specified services to the prescribed entities includes “determining a person’s eligibility for a specified service, or entitlement to receive or have access to a specified service”. Thus, the CEC is empowered by this provision to determine who can access a specified service like Centrepay and to determine an entity’s eligibility for that service. This is inconsistent with any suggestion that the CEC is obliged to provide the Centrepay service to a non-government organisation for so long as an individual benefit recipient consents to the deducting of an amount payable to them and the paying of that amount to any such entity. If reg 11(1) and Item 2 obliged the provision (or ongoing provision) of the Centrepay service to a particular non-government organisation, performance of the function conferred by reg 11(2)(b) would necessarily have a limiting effect, contrary to the introductory words of reg 11(2), which make plain that that provision does not limit reg 11(1).

73    The terms of both reg 11(2)(g) and (h) are also inconsistent with the primary judge’s construction. The compliance, investigation and enforcement functions conferred by reg 11(2)(g) suggest that it was intended that the CEC might take performance issues into account when deciding whether to provide (or continue to provide, as here) a particular service or to a particular body. The reference to “future provision of a specified service” in reg 11(2)(h) necessarily comprehends non-provision of a particular service for the time being. These provisions are inconsistent with the primary judge’s finding at [8] that “[t]here is nothing elective about” the prescription of the CEC’s function and that the CEC’s function of providing specified services to, inter alia, a Commonwealth body or a non-government organisation is a function “which the CEO [i.e. CEC] must discharge”.

74    As is evident from [49] of the primary judge’s reasons for judgment (which is set out in [58] above), his Honour’s construction was driven in large measure by the significance which he attached to the terms of the service specified in Item 2 of Sch 1 and, in particular, to the fact that provision of the Centrepay service as described in the first limb of Item 2(a) must be with the relevant individual’s consent. I accept the CEC’s submission that the words in the second limb of Item 2(a), namely “or otherwise authorised or permitted by a law of the Commonwealth”, indicate that the consent of the individual welfare recipient operates as a form of authorisation or permission.

75    The language in Item 2(a) contradicts the following two propositions which underpinned the primary judge’s construction:

(1)    an individual recipient’s consent is the cardinal feature of the Centrepay service; and

(2)    such consent, being inviolable, cannot be overridden by any discretionary considerations.

76    Item 1 in the Schedule is also part of the statutory context of Item 2. The terms of Item 1 (see [50] above) are self-evidently facilitative. The same applies to Item 2.

77    Item 3 in Sch 1 further confirms this construction. The “Centrelink confirmation e-service” resembles the Centrepay service in that it is defined by reference to an individual’s “consent” and to arrangements between the Department and another person. Paragraph (a) of Item 3, however, distinguishes between the “consent” of an individual person to the giving of information about the individual to another person and that individual’s “direction” to do so. That distinction is significant: it suggests that any obligation on the part of the CEC only arises, if at all, where the individual makes a “direction”, not where he or she gives “consent”. In this way, the use of the term “consent” in Item 3(a) reinforces the conclusion that an individual’s “consent” in Item 2 does not, in and of itself, oblige the CEC to facilitate payment to the third party of the deducted amount to which the benefit recipient has consented.

78    There are additional matters of text and context which are relevant.

79    One such matter is the overlap in the functions prescribed by the Centrelink Regulations and the CEC’s service delivery functions set out in the Centrelink Act. Section 8 of the Centrelink Act sets out the functions which the CEC “has”, as opposed to “must exercise”. Those functions include the “service delivery functions” conferred on the CEC under s 8A of the Act, as well as “any” functions prescribed under s 8(1)(ba) (for which the Centrelink Regulations provide). Another function is that which is the subject of s 8(1)(d), namely “doing” anything incidental, conducive or related to the performance of any of [the CEC’s] other functions. This function, which necessarily involves the exercise of power, when read in conjunction with s 33(1) of the AI Act, provides a clear source of power for the CEC, in his or her discretion, to exclude funeral insurance from Centrepay. The same may be said in respect of s 8(1)(ba) when read in conjunction with reg 11 and s 33(1) of the AI Act.

80    Sections 8(3), (5) and (6) of the Centrelink Act deal specifically with functions prescribed in the Centrelink Regulations for the purposes of s 8(1)(ba). Those provisions expressly contemplate that the nature and extent of the CEC’s performance of any such service delivery function under the Centrelink Regulations could be influenced by the nature and extent of another person’s performance of the same function under a law of the Commonwealth (that other person is described as the “primary person” and/or his or her delegate). Similarly, ss 8(10), (11), and (12) contemplate conferral of functions under the Centrelink Regulations of “acting on behalf of another person … whether under a law of the Commonwealth or otherwise” (see s 8(10)). All of these provisions expressly contemplate conferral of functions under the Centrelink Regulations of a facilitative, as opposed to mandatory, nature and kind.

81    Section 8A of the Centrelink Act (which specifies the CEC’s service delivery functions and which the primary judge regarded as not assisting the task of construction: [28]), is framed in notably general and perambulatory terms. This indicates that the CEC was intended to have considerable discretion with respect to the provision of “the services, benefits, programs or facilities” described in this provision. The breadth of the CEC’s service delivery functions strongly suggests that it was intended that the CEC exercise considerable judgment in determining the following kinds of matters:

(1)    whether to provide a particular service, benefit, program or facility;

(2)    to which entities any service, benefit, program or facility would be provided; and

(3)    on what conditions any particular service delivery function would be provided to any particular person.

82    Further, the CEC’s service delivery functions under s 8A clearly overlap with the CEC’s prescribed functions under the Centrelink Regulations (reinforced, in relation to charging for services, by s 39 and reg 11(2)(e)). In light of this overlap, the CEC’s submission that it would be anomalous to construe reg 11 as imposing strict obligations of the kind that the primary judge found should be accepted.

83    The terms of ss 13 and 15 (see [47] above) reinforce the proposition that the mere conferral of functions under or pursuant to the Centrelink Act was not intended, in and of itself, to create duties of performance. Sections 13 and 15 recognise a distinction between functions per se and duties. In respect of functions conferred by State or Territory laws, a duty only arises where “the circumstances in which the power or function is conferred give rise to an obligation on the [CEC] to exercise the power or to perform the function”. The legislature could not have sensibly intended a different outcome with respect to functions conferred directly by the Centrelink Act or other Commonwealth laws. For instance, when regard is had to the terms of ss 8A(a) and (b), the legislature could hardly have intended to oblige the CEC to provide every service, benefit, program or facility that is “provided for” (whether by the Commonwealth or by any person) with respect to every purpose for which the Commonwealth has power to make laws.

84    Before the primary judge, ACBF relied upon s 33(1) of the AI Act in support of their contention that the CEC is, as a matter of statutory construction, obliged to provide and to continue to provide the Centrepay service to them, as long as the relevant welfare beneficiary gave his or her consent. The CEC’s submission that this reliance was misplaced should be accepted.

85    The operation of s 33(1) is subject to a contrary intention: see s 2(2) of the AI Act. For the reasons given above, the CEC is not obliged to deliver the Centrepay service to ACBF. Section 33(1) does not operate to convert a facilitative function into one which must be performed at all times and in all circumstances. In any event, the ACBF’s submission is predicated on Item 2 being the relevant source of power, which is incorrect for the reasons given by Perram J.

86    Secondly, it is unlikely that regs 10 and 11 were intended to operate in a dramatically different way. In particular, it must strongly be doubted that the function conferred by reg 10 was intended to be facilitative, whereas the function conferred by reg 11 was intended to attract a strict obligation of performance (without any discretionary latitude of any kind). The terms of both reg 10(2) (see the reference to “may perform”) and reg 10(5) (see the references to “If” and “may”) strongly indicate that the function conferred by reg 10(1) was facilitative or empowering, as opposed to one which attracts a strict obligation of performance with respect to any person affected by an emergency.

87    Thirdly, and for completeness, I accept the CEC’s submission that relevant extracts from the Explanatory Statement which accompanied the introduction of the Centrelink Regulations support the view that the relevant provisions in the Centrelink Regulations were intended to be permissive and not mandatory. This is evident from the Explanatory Statement (emphasis added):

(1)    Regulation 9 “is intended to put beyond doubt the Chief Executive Centrelink's legal capacity to exercise powers and functions delegated to him or her ...”;

(2)    The purposes of reg 10 were to “make clear that the Chief Executive Centrelink can assist or cooperate with State and Territory bodies in responding to emergencies” and “can collect, use and disclose personal information ....”;

(3)    As for the function set out at reg 10, reg 11 is intended to serve the dual purposes of ensuring that the CEC “can provide the specified services to non-Commonwealth bodies, and ensure that in providing those services, personal information may be collected, used and disclosed for purposes related to those services”.

88    The Explanatory Statement is a relevant extrinsic aid having regard to s 13 of the Legislation Act 2003 (Cth) (the Legislation Act).

89    ACBF did not point to any part of the Explanatory Statement which supported its contention that the primary judge was correct to construe the first limb in Item 2(a) in Sch 1 as having a distinctive, non-discretionary operation.

90    I respectfully agree with Perram J’s view that Item 2 does not provide a lawful source for the decision to excise funeral insurance from Centrepay, for the reasons given by his Honour. The source of the power to make the so-called “termination decision” is to be found in either s 8(1)(ba) or (d) of the Centrelink Act and their combined operation with reg 11, together with s 33(1) of the AI Act and s 13(1)(a) of the Legislation Act respectively. The effect of these provisions was to empower the CEC (or his delegate or alter ego) to decide whether or not to provide the Centrepay service to anyone and in respect of which particular items, including amending or revoking the current position.

91    There is a well-established principle that, when a power is exercised, a mistake in the source of the power works no invalidity (see Johns v Australian Securities Commission [1993] HCA 56; 178 CLR 408 at [18] per Brennan J citing Moore v Attorney-General (Irish Free State) [1935] AC 484 at 498; R v Bevan; Ex parte Elias and Gordon [1942] HCA 12; 66 CLR 452 at 487 and Brown v West [1990] HCA 7; 169 CLR 195 at 203). Thus, if it be the case that Mr Anderson relied on Item 2 as the source of power to make the termination decision (and there is no such assertion to that effect in his letter dated 1 July 2015), or that particular provision did not provide a source of power for his decision, alternative sources of power were available to sustain that decision. Different considerations would arise if the exercise of a relevant power turned upon the existence of a particular condition, as in Commissioner of Taxation v Cripps & Jones Holdings Pty Ltd (1987) 17 FCR 55 at 63-64.

92    In my respectful view, it was open to the primary judge to find, as his Honour did in [50] of his reasons for judgment, that Mr Anderson took into account the policy announced by the Minister on 22 May 2015 that funeral insurance would be excluded from Centrepay. In his letter dated 1 July 2015 to ACBF, Mr Anderson referred to the Department having introduced on 1 July 2015 “a new framework for providing Centrepay to businesses” and that under the new policy funeral insurance was now excluded from payment using Centrepay, but that there would be a transitional period until 30 June 2016 before that exclusion would take effect in relation to existing customers. In essence, in making the termination decision, Mr Anderson relied upon and applied the policy announced by the Minister on 22 May 2015 to exclude funeral insurance from Centrepay, which policy was then included in the new policy dated 1 July 2015.

Authority to make the termination decision

93    The primary judge also indicated that Mr Anderson had no delegated power to terminate arrangements with a non-government organisation such as ACBF (see [68] above). In reaching that conclusion the primary judge focussed on whether the Departmental Secretary had power to make and terminate arrangements.

94    It is evident that his Honour proceeded on the basis that the power to make or terminate arrangements depended upon Item 2 of Sch 1 to the Centrelink Regulations and that there had to be a delegation of that particular power if it was not exercised personally by the Departmental Secretary. His Honour’s approach to these matters may well reflect the way in which the case was presented, which appears to have focussed largely on the question whether the source of the power to make the termination decision was Item 2 and, if so, whether there was a delegation which authorised Mr Anderson to exercise that particular power.

95    In my respectful opinion, the primary judge erred in finding that Mr Anderson was not authorised to make the termination decision. This error necessarily flowed from his Honour’s understanding that Item 2 was the only potential source of power for the decision described in Mr Anderson’s letter dated 1 July 2015. For the reasons given above, there were alternative sources of power for that decision. Even if there was no formal delegation to Mr Anderson in respect of the exercise of those alternative powers, he would be entitled to exercise them in accordance with the principle in Carltona Ltd v Commissioners of Works [1943] 2 All ER 560 (see also Plaintiff M61/2010E v Commonwealth of Australia [2010] HCA 41; 243 CLR 319 at [68]-[69] per French CJ, Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ).

The notice of contention

96    As noted above, ACBF did not press ground 1 of its notice of contention. The remaining contention was that the primary judge erred in not finding that, in effect, Mr Anderson made the termination decision without regard to ACBF’s individual circumstances.

97    In my respectful view, however, the primary judge did not err in rejecting the claim that the policy of excluding funeral insurance from Centrepay was applied inflexibly and without regard to ACBF’s individual circumstances. The following materials reveal that consideration was given to ACBF’s individual circumstances prior to Mr Anderson deciding on or about 1 July 2015 to apply that policy in ACBF’s case.

(1)    The Minutes dated 17 September and 27 November 2014, which were respectively headed “Centrepay: Proposed Changes and Next Steps” and “Centrepay Policy Changes – Supplementary Advice” and were each signed by the Minister on 13 April 2015 [B14/821 and B14/1146], fairly indicate that the Minister agreed in principle to the proposed changes in the new policy.

(2)    On 13 April 2015, the Minister signed a document provided to her by the Department in which the Minister agreed to the Department’s recommendation that funeral insurance be excluded from Centrepay, with 12 months grandfathering, but the Minister added the annotation “Subject to disc re business impact/ management of decision”.

(3)    On 19 May 2015, Mr Anderson provided ACBF by email with information about the proposed changes to Centrepay, including the latest draft of the proposed new policy, and invited comments and suggestions by 2 June 2015 from ACBF on what was described as the new policy and terms.

(4)    On 22 May 2015, the Minister issued a press release which was titled “Changes to Centrepay Deductions” and announced, inter alia, that “funeral insurance will also be excluded from Centrepay because of the particular risks funeral insurance raises for vulnerable customers”.

(5)    On 2 June 2015, ACBF made extensive written submissions to Mr Anderson through its solicitors and provided testimonials in support of its position that funeral insurance should not be excluded from Centrepay. It was stated in the submission that the submission was in respect of the “proposal announced in [the Minister’s] media release of 22 May 2015 to exclude funeral insurance from Centrepay”.

(6)    On 4 June 2015, the Minister signed another Departmental Minute [B15/413], which included a reference to consultation arrangements in preparation for “transition to the new policy and terms, to be published on the department’s website on 29 June 2015”. There was a recommendation at the beginning of the Minute that the Minister “note the information in this brief on activities underway or planned to improve the Centrepay programme or related outcomes, and to document positions and work undertaken in relation to the recommendations of the Independent Review of Centrepay”. It was also stated in the Minute that the “department is preparing for transition to the new policy and terms, to be published on the department’s website on 29 June 2015 and then published by email to all currently approved providers”.

(7)    On 11 June 2015, another Minute was received by the Minister from her Department [B15/477], which she signed on 25 June 2015. The Minute referred to the Department’s “confidential consultation on a draft of the new Centrepay Policy and Terms” and “the proposed new Centrepay policy generally”. The ACBF’s written submission of 2 June 2015 was referred to in [3] of this Minute and was summarised at some length. The Minute contained recommendations that the Minister note that the Department had undertaken confidential consultation on “a draft of the new Centrepay Policy and Terms” and that she agree that “no substantive changes are required at this time to any of the previously agreed policy settings for the new Policy and Terms”. When the Minister signed the Minute, she annotated the words “There may still be changes to be made”.

98    This documentary material indicates that, following the announcement by the Minister on 22 May 2015 that funeral insurance would be excluded from Centrepay, Mr Anderson had regard to the submissions he received from ACBF concerning its individual circumstances and why the policy should not be applied to it. No error has been demonstrated in relation to the primary judge’s finding that Mr Anderson did consider ACBF’s individual circumstances in making the termination decision which is reflected in his letter dated 1 July 2015, but they were not seen to have sufficient force to displace the application of the policy. The notice of contention should be dismissed.

Conclusion

99    For these reasons, I consider that the appeal should be allowed. The notice of contention should be dismissed as also should the amended originating application. The orders made by the Court on 30 June 2016 should be set aside. For the reasons given by Perram J the parties should have an opportunity to address the tentative costs orders in both the appeal and below.

Associate:

Dated:    11 November 2016

REASONS FOR JUDGMENT

MORTIMER J:

100    The relevant facts and legislative provisions are set out in the reasons for judgment of both Perram J and Griffiths J.

101    I agree with the orders proposed, including the orders as to costs. However, my reasons for doing so differ from their Honours’ reasons and it is necessary to briefly explain them.

Disposition of the grounds of appeal

102    The decision identified by the respondents in their judicial review application was, as Griffiths J describes at [33], the “termination decision” recorded in Mr Anderson’s letter dated 1 July 2015, as well as a subsequent decision recorded in a letter dated 20 May 2016, the second decision being in effect a refusal to reconsider the first decision. In the letter of 1 July 2015, Mr Anderson stated:

On 1 July 2015, the department introduced a new framework for providing Centrepay to businesses.

The department will no longer provide Centrepay under the existing Centrepay policy and a contract formed by the Department of Human Services Business Terms and Conditions, Centrepay Schedule 1 and any agreed Special Conditions.

Centrepay will now be provided under an administrative framework including new:

•    Centrepay Policy and Terms, and

•    Centrepay Procedural Guides.

…

The Service Reason for which your business has been approved allows for the provision of goods and services to customers using funeral insurance. Under the new policy in respect of funeral expenses, Centrepay will only be available for making payments towards funeral bonds, prepaid funerals or actual costs of a funeral, to funeral homes, funeral directors or other providers that hold appropriate accreditations and registrations. Funeral insurance is now excluded from payment using Centrepay.

The new policy permits a period for your business to continue to receive existing payments through Centrepay, to allow it to make other payment arrangements with those customers. No new Centrepay arrangements will be allowed for funeral insurance or other excluded goods or services.

To transition your business to the new Policy and Terms, the department is terminating your existing Centrepay contract with effect at the end of the day on 31 August 2015 and approving your business to use Centrepay under the new Centrepay Policy and Terms from 1 September 2015.

(Emphasis added.)

103    The respondents contended before the primary judge that the appellant had no power to make such a decision and was, in substance, obliged to continue to allow the Centrepay service to be used for the payment of funeral insurance for so long as the benefit recipients’ consent to the use of Centrepay for this purpose continued.

104    I accept the appellant’s submissions that the primary judge erred in his description that there was “nothing elective” about the conferral of functions upon the appellant by, respectively, s 8(1)(ba) of the Human Services (Centrelink) Act 1997 (Cth) and reg 11(1) of the Human Services (Centrelink) Regulations 2011 (Cth). Regulation 11 and Item 2 of Sch 1 to the Centrelink Regulations do not oblige or require the appellant to continue to provide the Centrepay service to non-government organisations (nor to any of the other entities set out in reg 11(1)) simply because the consent of individual benefit recipients, given pursuant to Item 2 of Sch 1, subsists. That approach pays insufficient regard to the whole of the terms of Item 2(a) and the terms of Item 2(b) of Sch 1 to the Centrelink Regulations, and elevates the role of the consent of a benefit recipient beyond the role assigned by reg 11 and Item 2 of Sch 1. I agree with Griffiths J’s reasons at [59] that this was the basis of the primary judge’s decision, despite his Honour using the characterisation of taking into account an irrelevant consideration.

The Centrepay scheme

105    The Centrepay scheme established through reg 11 and Sch 1 to the Centrelink Regulations is a discretionary scheme in the sense that reg 11(2)(b) reposes in the Chief Executive Centrelink (the CEC) the function of “determining a person’s eligibility for a specified service, or entitlement to receive or have access to a specified service”. The specified service is, relevantly, the service specified in Item 2 of Sch 1 to the Centrelink Regulations: namely, the Centrepay service. The “person” whose eligibility, or access, is to be determined by the CEC is the person identified in reg 11(1): here, the Aboriginal Community Benefit Fund (ACBF).

106    The only service specified in Item 2 of Sch 1 is a service with two essential characteristics attaching to the deduction of an amount from a benefit payable to an individual and the payment of that amount directly to another person. Those two essential characteristics are: first, the deduction and payment to another person must be “with the individual’s consent, or as otherwise authorised or permitted by a law of the Commonwealth” and, second, the deduction and payment must be undertaken “consistently with arrangements between the Department and the other person”. Unless the service bears those two essential characteristics, it is not a specified service which can be provided by the CEC under reg 11(1) and it is not a specified service to which the CEC can determine access or eligibility.

107    Two features of these essential characteristics demonstrate, in my respectful opinion, the error made by the primary judge.

108    First, consent is only one of two authorisation mechanisms for the Centrepay service. It is not required if deduction from a recipient’s social security benefit is authorised or permitted by a law of the Commonwealth. By one of these two mechanisms, the effect of payability provisions in the Social Security (Administration) Act 1999 (Cth) (in Pt 3 of Div 4, including s 55) can be averted. However, it is important to note the scheme contemplates a specified service can be provided without consent (where authorised or permitted by legislation) as much as it contemplates the specified service may be provided with the consent of the person to whom the social security benefit is payable.

109    Second, the mechanism identified for deduction from a social security benefit and payment to the third party (such as the ACBF) is an “arrangement” between the Department of Human Services and the third party. The use of the word “arrangements” in Item 2(b) of Sch 1 indicates a degree of flexibility is intended. The “arrangements” need not be contractual, especially given the scheme is intended to affect, and have some benefits for, the recipient of the social security benefit, who is not party to the “arrangements”.

110    I do not accept the respondents’ submissions that the construction of “arrangements” is necessarily limited to practical measures concerning the delivery of the Centrepay service. In my opinion there is nothing in the text or context of Item 2 of Sch 1 to impose such a constraint. The “arrangements” made between the Department and the other person may be substantive arrangements, or they may be mechanical. Since Item 2 is not the source of power to make the decision of the kind under review, I do not see the issue as material to the outcome of the appeal.

111    The source of power is reg 11(2)(b): what Mr Anderson did was to determine the entitlement of the ACBF to receive the specified service of having deductions made from a benefit payable to individuals and having those deductions paid to the ACBF. It seems to me this is the appropriate characterisation, since what occurred by reason of the ministerial policy was a change to the entitlement of non-government organisations to have instalments for funeral insurance paid through Centrepay. This was an alteration in their entitlement to receive the Centrepay service. The function performed might also be characterised as a change in the ACBF’s access to the Centrepay service but, in the circumstances as established in the evidence, it seems to me what occurred is that their entitlement to payments, which had previously existed, was removed.

112    In making that decision, Mr Anderson did not err in the ways submitted by the respondents, nor in the way found by the trial judge.

Authority to make the termination decision

113    On appeal, no reliance was placed by the appellant on the terms of s 55 of the Administration Act, which is reproduced at [54] of Griffiths J’s reasons, although submissions had been made to the primary judge about the relevance of s 55, and especially s 55(4), to the deduction of payments from a social security benefit payable to a person under the Centrepay service. As I understand it, the change in position on appeal arises because of some confusion between the roles of the Department of Human Services and its officers, and the Department of Social Services and its officers. The latter, and the Secretary of the Department of Social Services, are charged with the administration of the Administration Act, and it is the Secretary of the Department of Social Services in whom the power in s 55(4) of the Administration Act is reposed. Although there is evidence of a delegation of powers, including the power in s 55, by the Secretary of the Department of Social Services to the CEC (see the primary judge’s reasons at [29]-[30] and Griffiths J’s reasons at [56]), on appeal no reliance was placed on these powers.

114    Rather, the appellant contended there was a sufficient source of power to administer the Centrepay service, and perform functions related to it, in the Centrelink Act itself, without resort to the Administration Act. I agree with Perram J and Griffiths J that this is the case. Relevantly, by s 8(1)(ba), the CEC has the functions prescribed by the regulations. The Centrelink Regulations, and reg 11 read with Sch 1 in particular, are such regulations.

115    Section 3 of the Centrelink Act provides that “function includes power”. Clearly, the “function” in reg 11(2)(b) of the Centrelink Regulations of determining eligibility and access to a specified service is a power to determine eligibility and access to a specified service. In my opinion, this was the power exercised by Mr Anderson when he made the “termination decision”. In making that decision he was “assisting” the CEC in the performance of functions (and, read with the definition in s 3, the exercise of powers) within s 16 of the Centrelink Act. Section 16 is, as the appellant submitted, a statutory embodiment of the Carltona principle. Insofar as the primary judge found that Mr Anderson was not authorised to make the termination decision, I respectfully consider his Honour erred in reaching that conclusion.

Disposition of the Notice of Contention

116    There was no decision in accordance with a policy without regard to the merits of the case. The “policy” here was not a policy issued to guide individual decision-making and the authorities on which the respondents rely are inapplicable. This is not a policy such as the one dealt with by the Full Court in Minister for Immigration, Local Government and Ethnic Affairs v Gray (1994) 50 FCR 189 at 208.

117    Rather, a political decision was made to remove the payment of funeral expenses from the Centrepay service. There was some room for accommodation and discretion about how this was done in respect of affected non-government organisations – and that was, in my opinion, the area in which Mr Anderson had some decisional freedom. However as his original letter and reconsideration correspondence make clear, there had been a change in substantive government policy, which was to be given effect through the termination of current Departmental “arrangements”, described by Mr Anderson as contractual arrangements. It was the decision to change those arrangements that Mr Anderson was giving effect to by exercising a power under reg 11(2)(b) to determine, and alter, the ACBF’s entitlement to access the Centrepay service. In doing so, he was preserving the consistency of the specified service with the second essential characteristic in Item 2(b) of Sch 1 to the Centrelink Regulations, so that the function in reg 11(1) could be performed in accordance with Item 2 of Sch 1.

118    Ground 1 of the notice of contention was not pressed. Ground 2 should be rejected on the basis it is misconceived, for the reasons I have given. The notice of contention does not preclude the appeal from being allowed.

Associate:

Dated:    11 November 2016