FEDERAL COURT OF AUSTRALIA

National Aboriginal & Torres Strait Islander Legal Services Secretariat Limited v Minister for Immigration & Multicultural & Indigenous Affairs [2003]

FCA 287

ADMINISTRATIVE LAW – whether Directions made by the Minister preventing ATSIC from making grants of money in certain cases are invalid – what constitutes a “general direction”

Corporations Act 2001 (Cth)

Aboriginal & Torres Strait Islanders Commission Act 1989 (Cth) s 3(a), 3(b), 4A, 7(1)(a), 7(1)(f), 7(1)(m), 7(2), 9, 10(1), 11, 11(1), 12, 12(1), 12(4), 13A, 14, 15, 16, 17, 22, 38, 40(1), 44(5), 45, 51, 61, 74(1), 74(2), 76(1)(b), 119(2), 119A, 119A(2), 119A(4), 119(4), 196(1), Div 9

Administrative Decisions (Judicial Review) Act 1977 (Cth)s 5

Judiciary Act 1903 (Cth) s 39B

Commonwealth Authorities & Companies Act 1997 (Cth) s 27J, 27K

Aboriginal Development Commission Act 1980 (Cth) s 12

Social Security Commissioner v Macfarlane [1979] 2 NZLR 34 referred to

Riddell v Secretary, Department of Social Security (1993) 42 FCR 443 contrasted

Aboriginal Legal Service v Minister for Aboriginal & Torres Strait Islanders Affairs (1996) 69 FCR 565 applied

Bosnjak’s Bus Service Pty Ltd v Commissioner for Motor Transport (1970) 92 WN 1003 cited

Zayen Nominees Pty Ltd v Minister for Health (1983) 47 ALR 158 cited

Aboriginal Development Commission v Hand (1988) 15 ALD 410 referred to

Minister for Primary Industries & Energy v Austral Fisheries Pty Ltd (1993) 40 FCR 381 referred to

Macquarie Dictionary (3^rd ed)

NATIONAL ABORIGINAL & TORRES STRAIT ISLANDER LEGAL SERVICES SECRETARIAT LIMITED v MINISTER FOR IMMIGRATION & MULTICULTURAL & INDIGENOUS AFFAIRS & ANOR

N 45 OF 2003

HELY J

3 APRIL 2003

SYDNEY

THE COURT ORDERS THAT:

1.         The application is dismissed with costs.

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

REASONS FOR JUDGMENT

1                     The applicant is a company to which the provisions of the Corporations Act 2001 (Cth) (“the Act”) apply.  The applicant is engaged, as the national secretariat body, in co-ordinating the provision of gratuitous legal advice to Aboriginal persons and Torres Strait Islanders.  The applicant derives its operational funding from grants made by the second respondent (“ATSIC”) pursuant to s 14 of the Aboriginal & Torres Strait Islander Commission Act 1989 (Cth) (“the ATSIC Act”).  The grants have, in each instance, been made subject to terms and conditions determined by ATSIC.

2                     At all times material to this proceeding the directors of the applicant have included, and currently include, Robert Raymond Lloyd Robinson (“Mr Robinson”).  Mr Robinson is also the Deputy Chairperson of ATSIC.

3                     On 26 November 2002 the first respondent (“the Minister”) issued a media release in relation to the perception of conflict of interests in ATSIC where an ATSIC officeholder is also a director of a body seeking ATSIC funding.  The Minister stated that in order to overcome this perception, which had the tendency to bring ATSIC into disrepute, he intended to make a general direction under s 12 of the ATSIC Act preventing ATSIC from funding organisations of which full-time ATSIC officeholders are directors, or in which they have a controlling interest.

4                     Section 12(1) of the ATSIC Act provides as follows:

“12      Directions by Minister

(1)       The Commission shall perform its functions and exercise its powers in accordance with such general directions as are given to it by the Minister in writing.”

The Minister is required to cause a copy of any direction given under subsection (1) to be laid before each House of the Parliament within 15 sitting days of that House after that direction was given: s 12(4).  There is no provision for disallowance by either House of the Parliament of a s 12 direction.

5                     On 23 December 2002 the Minister gave the following Directions purporting to act under s 12 of the ATSIC Act:

“1        Name of Directions

            These Directions are the Aboriginal and Torres Strait Islander Commission (Conflict of Interests) Directions 2002.

2          Commencement

            These Directions commence when they are given to the Aboriginal and Torres Strait Islander Commission.

3          Definitions

            (1)        In these Directions:

                        Act means the Aboriginal and Torres Strait Islander Commission Act 1989.

                        director, of a body corporate, means a person who is a director of the body corporate within the meaning of the Corporations Act 2001, other than a person who:

                        (a)        is appointed by a Minister as a director of the body corporate; or

                        (b)        is a director of the body corporate because the person is a relevant person.

                        related body corporate means a body corporate (other than the Commission, the TSRA or a Regional Council):

                        (a)        of which a relevant person is a director; or

                        (b)        over which a relevant person is in a position to exercise control.

            (2)        In these Directions, each of the following is a relevant person:

                        (a)        the Commission Chairperson;

                        (b)        the Deputy Chairperson;

                        (c)        another Commissioner;

                        (d)        the Chief Executive Officer;

                        (e)        a member of the staff required to assist the Commission in the performance of its functions, and who is:

                                    (i)         a delegate of the Commission; or

                                    (ii)        a sub-delegate of the Chief Executive Officer;

                        (f)        the Chairperson of a Regional Council.

                        Note    Other terms defined or used in the Act have the same meaning in these Directions (see Acts Interpretation Act 1901).  These include the following:

·        Chairperson of a Regional Council

·        Chief Executive Officer

·        Commission

·        Commissioner.

4          Grants and Loans

            (1)        The Commission must not, under subsection 14(1) of the Act:

                        (a)        make a grant of money to a related body corporate; or

                        (b)        grant an interest in land to a related body corporate; or

                        (c)        grant an interest in personal property to a related body corporate; or

                        (d)        make a loan of money (whether secured or unsecured) to a related body corporate.

            (2)        The Commission must not, under subsection 203C(2) of the Native Title Act 1993, make a grant of money to a related body corporate that is a representative body within the meaning of that Act.

5          Guarantees

            The Commission must not, under subsection 15(1) of the Act, guarantee the due payment of money (including interest) payable by a borrower that is a related body corporate.”

6                     On 3 February 2003 the Minister gave the following further Directions purporting to act under s 12 of the ATSIC Act:

“1        Name of Directions

            These Directions are the Aboriginal and Torres Strait Islander Commission (Conflict of Interests) Amendment Directions 2003 (No. 1).

2          Commencement

            These Directions commence when they are given to the Aboriginal and Torres Strait Islander Commission.

3          Amendment of Aboriginal and Torres Strait Islander Commission (Conflict of Interests) Directions 2002

            Schedule 1 amends the Aboriginal and Torres Strait Islander Commission (Conflict of Interests) Directions 2002.

            Schedule 1 Amendments

            [1]        Subsection 3(1), definitions of director and related body corporate

                        substitute

                        director, of a body corporate, means:

                        (a)        for a body corporate within the meaning of the Corporations Act 2001 – a person who:

                                    (i)         is appointed to the position of a director; or

                                    (ii)        is appointed to the position of an alternate director and is acting in that capacity;

                        regardless of the name that is given to their position; and

                        (b)        for a body corporate that is an Incorporated Aboriginal Association within the meaning of the Aboriginal Councils and Associations Act 1976 – a member of the Governing Committee of the Incorporated Aboriginal Association; and

                        (c)        for any other body corporate – a person who would be a director of the body corporate under paragraph (a) if the body corporate were a body corporate within the meaning of the Corporations Act 2001; and

                        (d)        a person who, whether or not the person is a director of a body corporate under paragraph (a), (b) or (c) (a formal director):

                                    (i)         acts in the position of a formal director of the body corporate; or

                                    (ii)        subject to subsection (3), is a person in accordance with whose instructions or wishes the formal directors of the body corporate are accustomed to act; or

                                    (iii)       is a member of a board, committee or group of persons (however described) that is responsible for managing or overseeing the affairs of the body corporate.

                        official director, of a body corporate, means a person who is a director:

                        (a)        because the person was appointed by a Minister as a director; or

                        (b)        in the person’s capacity as a relevant person.

                        related body corporate means a body corporate (other than the TSRA, the Commission, or a Regional Council:

                        (a)        of which a relevant person is a director (other than an official director); or

                        (b)        over which a relevant person is in a position to exercise control (other than in the person’s capacity as an official director).

            [2]        After subsection 3(2)

                        insert

                                    (3)        Subparagraph (d)(ii) of the definition of director in subsection (1) does not apply merely because the directors act on advice given by the person in the proper performance of functions attaching to the person’s professional capacity, or the person’s business relationship with the formal directors or the body corporate.”

7                     In this judgment I use the expression “the Directions” to describe the first direction as amended by the second.

8                     So far as the applicant is concerned the effect of the Directions, if valid, is that ATSIC is prevented from (inter alia) making grants of money to the applicant whilst Mr Robinson is a director of the applicant, and also the Chairperson, Deputy Chairperson or a Commissioner of ATSIC, or the Chairperson of a Regional Council under the ATSIC Act.

9                     The applicant seeks a declaration as to the invalidity of the Directions, and invokes the Administrative Decisions (Judicial Review) Act 1977 (Cth) (“the ADJR Act”) and s 39B of the Judiciary Act 1903 (Cth) (“the Judiciary Act”) in that respect.  It is not disputed that the applicant has standing to bring the application under the Judiciary Act.  If jurisdiction arises under the ADJR Act it is not disputed that the applicant is a “person aggrieved” within the meaning of that Act.  In the written submissions of the parties an issue was raised as to whether the Court has jurisdiction to review the making of the Directions under s 5 of the ADJR Act, it being the Minister’s contention that the making of the Directions was a legislative, rather than an administrative, act.  During the course of argument, it became common ground that it is unnecessary to pursue this issue, as, if the applicant’s submissions are accepted, it would be entitled to appropriate relief under s 39B of the Judiciary Act.

The legislative context – ATSIC’s role

10                  The objects of the ATSIC Act under s 3 include:

“3 Objects

(a)       to ensure maximum participation of Aboriginal persons and Torres Strait Islanders in the formulation and implementation of government policies that affect them;

(b)       to promote the development of self-management and self-sufficiency among Aboriginal persons and Torres Strait Islanders.”

ATSIC’s functions include the formulation and implementation of programs for Aboriginal persons and Torres Strait Islanders (s 7(1)(a)).  ATSIC has power to do all things that are necessary or convenient to be done in connection with the performance of its functions (s 10(1)).  ATSIC is obliged by s 11(1) of the Act, from time to time, in consultation with the Minister, to prepare a corporate plan setting out a statement of ATSIC’s objectives and outlining the strategies and policies that ATSIC intends to adopt in order to achieve those objectives.

11                  Section 14 of the Act provides as follows:

“14      Commission may make grants and loans

            (1)        The Commission may:

                        (a)        make a grant of money; or

                        (b)        grant an interest in land; or

                        (c)        grant an interest in personal property; or

                        (d)        make a loan of money (whether secured or unsecured); to:

                        (e)        an individual; or

                        (f)        a body corporate (other than a Regional Council or the TSRA); or

                        (g)        an unincorporated body;

                        for the purpose of furthering the social, economic or cultural development of Aboriginal persons or Torres Strait Islanders.

            (2)        A grant or loan is subject to such terms and conditions as the Commission determines.

            (3)        The Commission may acquire by agreement an interest in land, or personal property, for the purpose of making a grant under this section.”

12                  Under s 15 of the Act, ATSIC is authorised to guarantee the payment of monies lent to a borrower if the purpose of the loan is such that ATSIC could have made the loan to the borrower.  Under s 16 of the Act, ATSIC may make grants and loans to State and Territory governments and authorities for the purpose of furthering the social, economic or cultural development of Aboriginal persons or Torres Strait Islanders.  Under s 17 of the Act, ATSIC may subscribe for shares or stock in the capital of a body corporate for the purpose of furthering the social, economic or cultural development of Aboriginal persons or Torres Strait Islanders.

13                  Section 22 of the Act provides as follows:

“22      Commission to formulate decision-making principles about grants, loans and guarantees

            (1)        The Commission must formulate written principles (decision-making principles), not inconsistent with the objects of this Act, about:

                        (a)        making grants and loans under section 14 or 16; and

                        (b)        giving guarantees under section 15; and

                        (c)        subscribing for, or otherwise acquiring, shares or stock under section 17.

            (2)        Subject to section 74, the Commission must perform its functions and exercise its powers under sections 14, 15, 16 and 17 in accordance with applicable provisions of the decision-making principles in force from time to time.

            (3)        Without limiting the operation of the Freedom of Information Act 1982, the Chief Executive Officer must ensure that copies of the decision-making principles as in force from time to time are:

                        (a)        given to each Regional Council; and

                        (b)        available for inspection and purchase at each of the Commission’s offices.

            (4)        The Chief Executive Officer must cause notice of the making of decision-making principles to be published in the Gazette.”

14                  An application may be made to the Administrative Appeals Tribunal (“the AAT”) pursuant to s 196(1) of the Act for review of decisions made by ATSIC of various types.  The decisions which may be reviewed by the AAT include:

“(a)     a decision made by the Commission to refuse a housing loan under section 14 to an individual; or

(aa)     a decision made by the Commission to refuse a loan under section 14 to an individual, a body corporate or an unincorporated body to enable the individual or body to engage in a business enterprise; or

(ab)     a decision made by the Commission to refuse to give a guarantee under section 15 in respect of a housing loan made or to be made to an individual; or

(b)       a decision made by the Commission to refuse to give a guarantee under section 15 in respect of a loan made or to be made to an individual, a body corporate or an unincorporated body, where the purpose of the loan is to enable the individual or body to engage in a business enterprise …”

15                  The Act contains provisions for the delegation of certain functions and powers to the Chief Executive Officer of ATSIC, or to a member of the staff of ATSIC (s 45).  The Act also contains provisions enabling ATSIC to delegate its powers under ss 14, 15 and 16 of the Act to a Regional Council.

The legislative context – disclosure of interests

16                  The Act contains a number of provisions dealing with the disclosure of direct or indirect pecuniary interests.  Thus:

-                     a member of an advisory committee who has a direct or indirect pecuniary interest in a matter before the committee is required to disclose the nature of his interest, which must be recorded in the minutes of the committee (s 13A);

-                     a Commissioner or acting Commissioner and each member of a Regional Council must make written disclosure to ATSIC of the member’s direct or indirect pecuniary interests in accordance with a Ministerial determination under s 119A(4) (ss 38 and s 119A).  Section 119(4) empowers the Minister to make a written determination specifying the kinds of interests to be disclosed.  ATSIC must keep a register of interests disclosed in accordance with a Ministerial determination under subs (4) (s 119A(2)); and

-                     the Chief Executive Officer of ATSIC is required to give written notice to the Minister and the Chairperson of all direct or indirect pecuniary interests which he has in any business, or in any body corporate that carries on a business.  If the Chief Executive Officer has a direct or indirect pecuniary interest in a matter which is before ATSIC he must give written notice of the nature of his interest to the Chairperson (s 51).

17                  ATSIC is a Commonwealth Authority for the purposes of the Commonwealth Authorities & Companies Act 1997  (Cth).  Section 27J of that Act provides that a director who has a material personal interest in a matter that is being considered at a directors’ meeting must not be present at the meeting, and vote on the matter, unless the disinterested directors resolve that the interest should not disqualify the director from voting or being present, or unless the director is entitled to be present and vote under a declaration or order made by the responsible Minister under s 27K of that Act.  Section 44(5) of the Act contains provisions relating to the quorum at a meeting, when s 27J requires a Commissioner not to be present at a meeting.

The legislative context – the Minister

18                  There are a number of provisions in the Act, apart from s 12, which indicate that the Minister has a significant role to play in relation to ATSIC.  Thus:

-                     the Minister may request ATSIC to provide him with information or advice (s 7(1)(f)) including information about ATSIC’s expenditure (s 7(2));

-                     the Minister may approve the performance by ATSIC of a function conferred on ATSIC by a law of a State or of an internal Territory (s 7(1)(m), s 9);

-                     ATSIC’s corporate plan is to be prepared in consultation with the Minister (s 11);

-                     ATSIC’s monies are not to be spent except in accordance with estimates of expenditure approved by the Minister (s 61);

-                     the Minister is to give ATSIC written Directions about the administration of ATSIC’s finances (s 74(1)).  Directions under s 74(1) must not be inconsistent with the Act or the Regulations, but ATSIC must comply with a direction that is in force even if it is inconsistent with the provision of the corporate plan or decision-making principles in force under s 22 (s 74(2));

-                     the Office of Evaluation & Audit established by Division 9 of the Act is to evaluate and audit particular aspects of ATSIC when requested by ATSIC or the Minister (s 76(1)(b)); and

-                     the Minister may make a written determination providing that specified behaviour is taken to be misbehaviour for the purposes of the Act (s 4A).  The Minister may suspend a Commissioner from office because of misbehaviour (s 40(1)).

The applicant’s submissions

19                  In the applicant’s submission, the Directions are not within the scope and purpose of the power conferred by s 12 of the Act for a number of related reasons, which are outlined in the following paragraphs. 

20                  Relevantly to the present situation, it is ATSIC which has the power to make grants under s 14 of the Act, and it is ATSIC which is required by s 22 to formulate decision-making principles about making grants.  In construing the scope to be given to s 12, it is necessary to reconcile the position that the Minister may make general directions, on the one hand, with the position that it is ATSIC which has the statutory powers and functions to perform, on the other.  These two positions cannot be reconciled if the Minister may give a direction which, within the field of its operation, gives no room for the exercise of any power or function by ATSIC.  The two positions can be reconciled if the section is construed as not permitting general directions which are mandates which afford ATSIC no residual discretion, but as only authorising directions which provide a framework within which ATSIC’s discretion is to be exercised.

21                  The Directions take away the power of ATSIC to make grants (and the like) in certain cases.  The effect of the Directions is that a related body corporate is ineligible to receive financial assistance from ATSIC.  The Directions thus dictate the outcome of any application by a corporation to which the Directions apply.  In doing so the Directions cannot be described as general directions as to the exercise by ATSIC of its functions and powers; rather the Directions are a dictate or a mandate which preclude the exercise of those functions and powers in the circumstances in which the Directions apply.  In doing so the Directions are beyond power.  Reliance is placed on Social Security Commissioner v Macfarlane [1979] 2 NZLR 34 at 41-42; Riddell v Secretary, Department of Social Security (1993) 42 FCR 443 at 449; Aboriginal Legal Service v Minister for Aboriginal & Torres Strait Islander Affairs (“the ALS case”) (1996) 69 FCR 565 at 567, 576-578, 581-582; Bosnjak’s Bus Service Pty Ltd v Commissioner for Motor Transport (1970) 92 WN 1003 at 1014-1015; Zayen Nominees Pty Ltd v Minister for Health (1983) 47 ALR 158 at 188-189.

22                  The Directions will apply to prohibit the exercise by ATSIC of its powers under ss 14 and 15 of the ATSIC Act in favour of a related body corporate.  The Directions are general only in the sense that they apply whenever a person within the definition of a relevant person is also a director of a body corporate, or is in a position to exercise control of the body corporate.  But uniformity of operation of a direction does not mean that the direction is a general direction for the purposes of the Act if it dictates the outcome of an individual application for a grant.

23                  Finally, the objects of the Act, particularly those specified in ss 3(a) and (b) of the Act quoted above lead away from taking an expansive view of the s 12 power which take decision making away from ATSIC: see the ALS case (supra) at 568 (per Black CJ), 582 (per Sackville J).

24                  The Directions are not general directions in the sense understood by the Full Court in the ALS case.  The Directions do not provide the framework for the exercise by ATSIC of its powers and functions, but take away the right to exercise those powers in specific cases.  The Directions are specific mandates that ATSIC make funding decisions affecting a specific class of corporations in a specific way.  They are specific, not general; mandatory, not directory.

Consideration

25                  In Aboriginal Development Commission v Hand (1988) 15 ALD 410 Davies J had to consider the provisions of s 11 of the Aboriginal Development Commission Act 1980 (Cth) which was in material respects in the same terms as s 12 of the Act.  At 414 his Honour said:

“In many Federal statutes the term ‘general directions’ appears.  The adjective ‘general’ indicates that the direction must be one which is not directed merely to a particular case or to a particular decision but is one to be applied generally.  In this respect, a general direction is similar to a binding guideline.  It sets the structure of activity or decision-making.  However, both a guideline and a general direction may be more or less specific, having regard to the terms which it uses and the concept which it conveys.

Section 11(1) of the Act empowers the Minister to give general directions to the Commission. The sub-section provides that the Commission shall perform its functions and exercise its powers in accordance with such general directions.  The sub-section adopts words of its own.  Rather than expressing the power of the Minister to give directions and infer the obligation to give effect to such directions, the section implies the power of the Minister to give directions and expresses the obligation of the Commission to give effect thereto.  Section 11(1) is an ample provision and reflects the point that, though the Commission is a statutory authority of the Commonwealth, the Minister has overall control of and responsibility for it.”

26                  Hand’s case (supra) was cited with approval by the Full Court in the ALS case.  The ALS case concerned directions given by the Minister in reliance on s 12 of the Act.  The central element of the directions in that case was that ATSIC was prevented from making a grant or loan of money to a body if the Special Auditor (a person to be appointed by the Minister) notified ATSIC and the Minister that the body was not a fit and proper person to receive public money, subject to a power in the Minister to relax the prohibition in an appropriate case.  The Full Court held that the directions were invalid, even though they established a procedure which could be applied to more than one potential recipient of a grant from ATSIC.

27                  In ALS at 567 Black CJ said:

“To give such a direction is not to give a general direction as to the exercise of a power by a body; rather, it is to take away elements of the exercise of a power that has been committed to a particular body and to commit them to a person upon whom the Parliament has not conferred the power.  Although limitations on the exercise of a power can, obviously, result from the proper exercise of a power to give general directions, it is quite another thing for the limitations to be accompanied by the committal of elements of the exercise of the power to another person.”

28                  At 578 Tamberlin J said:

“… the directions in this case travel beyond the setting up of a general process and confer a power and discretion on the Special Auditor to override the discretion of ATSIC in respect of particular applicants.  In so doing, the direction goes beyond the description of a general direction and in some cases has the result of requiring a particular outcome, namely, refusal of the particular application.”

29                  At 581 Sackville J said of the direction with which that case was concerned:

“In my opinion, its vice is that it confers on a particular decision-maker (not being the Commission) a power to render a particular body ineligible to receive a grant, because of a judgment made by the decision-maker about the fitness and propriety of that particular body to receive public money.  It is not a direction that sets the structure for decision-making by the Commission.  It establishes a procedure for a third party to make decisions about the eligibility of individual bodies, by reference to a judgment formed about each body.  The fact that the Special Auditor might exercise the power in relation to more than one potential recipient of a grant from the Commission does not make the direction a general one within the meaning of s 12(1) of the Act.”

30                  The circumstances of the present case are materially different from those which were considered in the ALS case.  The essence of the present directions is that no body corporate is eligible for ATSIC funding while its directors include an ATSIC Commissioner or officer.  Whilst the effect of the Direction may be to dictate that certain individual applications for an ATSIC grant must fail, that does not establish that the Directions are not general, or are otherwise than with respect to the exercise by ATSIC as to the performance of its functions or the exercise of its powers.  Unlike the Direction in the ALScase, the outcome of individual cases is not determined on a case by case basis by an outside person.

31                  The other decisions relied upon by the applicants were given in different statutory contexts, and provide little assistance in the resolution of the present problem.

32                  Depending on the context, the expression “directions” is capable of encompassing guidelines or commands.  (See, eg the Macquarie Dictionary (3^rd ed) “Direction”: “5. Guidance; instruction.  6.  Order; command”.)  The language of s 12 indicates that the directions which the Minister is impliedly authorised to give to ATSIC may be more potent than mere guidelines from which ATSIC is free to depart if ATSIC considers that the circumstances of the individual case warrant such a departure.  In this respect, the present case may be contrasted with the position in Riddell (supra) at 449.

33                  But, as Sackville J observed in the ALS case at 582 the phrase “general directions” as used in s 12(1) takes its context having regard to the scope and purpose of the legislation of which it forms part.  Thus, for example, directions which laid down precise rules dictating the result of all, or nearly all, applications would be a radical departure from the statutory scheme (cf Riddell at 450), and thus outside the scope and purpose of the Act.

34                  Section 12 does not authorise the giving of general directions which are inconsistent with the Act, or beyond the scope and purpose of the legislation of which s 12 forms part.  Subject to those limitations and to the limitations contained in subsections (2) and (3), s 12 authorises the giving of general directions which are authoritative and binding instructions which constrain what would otherwise have been ATSIC’s powers in relation to the matter the subject of the directions, provided the directions are truly general in character.

35                  In the ALS case at 567 Black CJ recognised that limitations on the proper exercise of power can result from the proper exercise of a power to give general directions.  And at 581 in the ALS case Sackville J said that the fact that the Ministerial Direction overrides the judgment of ATSIC does not of itself establish that the direction is other than a “general direction”.

36                  The applicant’s submissions proceed upon the basis that for a direction to be a “general direction” it must stop short of dictating the outcome of any application, no matter how uniform its operation.  To be valid, the direction must be confined such that some residual discretion subsists in ATSIC to decide the fate of the application.  But in the ALS case (at 575) Tamberlin J rejected any presumption that the power to give directions should be read down so as not to unduly encroach on any reserved discretionary powers of ATSIC.  The applicant’s submissions proceed upon the fallacious assumption that there is a potential inconsistency between the powers of the Minister under s 12 and the powers conferred upon ATSIC by, eg, s 14 which needs to be resolved by a process of construction.  There is no such inconsistency, because a valid direction under s 12 circumscribes what would otherwise have been ATSIC’s powers and functions. There is no difficulty in reconciling the two provisions.  ATSIC’s powers under s 14 are subject to directions validly given under s 12.

37                  Section 22 of the Act does not indicate or require any different conclusion.  A statutory obligation on ATSIC to formulate decision-making principles which it must apply in the performance of its functions and the exercise of its powers under ss 14, 15, 16 and 17 does not abrogate or limit the power given to the Minister under s 12.  Section 22 throws no light on the content of general directions which the Minister is authorised to give to ATSIC under s 12.  The absence from s 12 of subsections equivalent to s 74(1A) and s 74(2) leads nowhere, as those provisions have been included in s 74 for more abundant precaution.

38                  In my view, the Directions in the present case are truly general in character as they impose an objective standard against which all applications for ATSIC funding are to be measured by ATSIC.

Unreasonableness

39                  The applicant submits that the Directions  will operate across a very wide field; even where no reasonable person could come to the view that there was a relevant conflict of interest.  Therefore the Directions have an operation which is capricious and irrational, and they cannot be justified on any reasonable ground.  The Directions are thus invalid:  Minister for Primary Industries & Energy v Austral Fisheries Pty Ltd (1993) 40 FCR 381 at 399.

40                  The applicant seeks to sustain that submission by reference to the following examples:

a.         A body corporate which applies for a grant will be ineligible if, for example, one of its directors is a member of the ATSIC staff within the scope of paragraph (2)(e) of the definition of relevant person.  Such a person may well have (and is likely to have) nothing to do with the consideration of the application for a grant;

b.         The disqualification applies even if the person’s position as director is disclosed and known to those who make the decision in relation to the grant;

c.         And indeed the disqualification exists even if the person played no part in the decision by the applicant to make any application (because the person excused him or herself from the relevant deliberations), and even if the person is also to take no part in any decision as to how the grant is to be applied (should it be granted);

d.         Nor is the purpose for which the grant sought relevant to the disqualification.  It is possible the grant may be sought in relation to the provision of important facilities for the health or education of a community, in relation to which no real issue of conflict of interest could in a practical sense be said to arise.

41                  The fact that the Directions may operate in circumstances where in fact there is no relevant conflict of interest does not establish unreasonableness.  The Minister’s concern as expressed in the media release extended to perceived conflicts of interest.  The power of the Minister under s 12 is not required to be exercised by reference to any specific criteria and he has a broad discretion in deciding what directions to give.  It cannot be said that the decision to establish objective criteria as the basis for determining ineligibility for an ATSIC grant is arbitrary or irrational merely because it does not allow for individual consideration of the merits of a particular case.  The method adopted by the Minister is one of a number of ways in which the objective of overcoming a perception of conflicts of interest within ATSIC might be achieved.  It is calculated to provide certainty, and it allows potential grant recipients to arrange their affairs so that they are not disqualified from consideration for grants.

42                  Alternatively it is submitted that the Directions are unreasonable because an (unintended) effect of the Directions is that every applicant for an ATSIC grant thereby becomes a related body and thus ineligible to receive a grant.  That is because by s 14 of the Act, ATSIC, when making a grant may impose conditions, and by force of this, every proposed recipient of a grant is a body corporate over whom ATSIC Commissioners are “in a position to exercise control”, at least in the case of applicants who rely entirely or largely on ATSIC for funding.

43                  There is no substance in this submission.  The fact that grants may be made subject to conditions may lead to the conclusion that ATSIC is in a position to exercise control over the funds granted.  It does not lead to the conclusion that ATSIC Commissioners are in a position to exercise control over the body corporate itself.

Conclusion

44                  The application is dismissed with costs.

Associate:

Dated:              3 April 2003