FEDERAL COURT OF AUSTRALIA
Cummeragunga Pty Ltd (In Liq) v Aboriginal & Torres Strait Islander Commission [2004] FCA 1098
CORPORATIONS – powers of liquidator – possible statutory constraint on liquidator’s power of sale – liquidator as agent
ESTOPPEL – clear and unambiguous representation – administrative discretion
ADMINISTRATIVE LAW – whether policy inconsistent with statute – whether discretion exercised in inflexible manner – whether failure to consider relevant considerations – whether weight to be given to considerations - unreasonableness
Aboriginal & Torres Strait Islander Commission Act 1989 (Cth) s 14, s 21
Corporations Act 2001 (Cth) s 477, s 479
Butterell v Docker Smith Pty Limited (1997) 41 NSWLR 129 referred to
Re Dallhold Investments (1994) 53 FCR 339 referred to
UTSA Pty Ltd v Ultra Tune Australia Pty Ltd (1996) 21 ACSR 457 referred to
Seear v Lawson (1880) 15 Ch D 426 referred to
Cotterill v Bank of Singapore (Australia) Ltd (1995) 37 NSWLR 238 referred to
Nominal Defendant v Owens (1978) 22 ALR 128 referred to
Luxton v Vines (1952) 85 CLR 352 referred to
Kerr v Ayr Steam Shipping Co Pty Ltd [1915] AC 217 referred to
Minister for Immigration and Ethnic Affairs v Kurtovic (1990) 21 FCR 193 referred to
Legione v Hateley (1983) 152 CLR 406 applied
Green v Daniels (1977) 13 ALR 1 distinguished
Elias v Commissioner of Taxation (2002) 123 FCR 499 applied
Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 applied
Braganza v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCAFC 170 applied
Minister for Aboriginal Affairs v Peko-Wallsend (1986) 162 CLR 24applied
Khan v Minister for Immigration and Ethnic Affairs (1987) 14 ALD 291discussed
Minister for Immigration and Multicultural Affairs v Anthonypillai (2001) 106 FCR 426discussed
Bruce v Cole (1998) 45 NSWLR 163 referred to
SFGB v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 77 ALD 402 applied
A Keay, McPherson, The Law of Company Liquidation, 4th ed, LBC Information Services, Sydney, 1999
J D Heydon, Cross on Evidence, 6th Aust ed, Butterworths, Sydney, 2000
M Aronson & B Dyer, Judicial Review of Administrative Action, 2nd ed, LBC Information Services, Sydney, 2000
M Aronson, B Dyer & M Groves, Judicial Review of Administrative Action, 3rd ed, Lawbook Company, 2004
CUMMERAGUNGA PTY LTD (IN LIQ) (ACN 000 477 510) v
ABORIGINAL AND TORRES STRAIT ISLANDER COMMISSION
N 926 of 2004
JACOBSON J
25 AUGUST 2004
SYDNEY
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IN THE FEDERAL COURT OF AUSTRALIA |
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NEW SOUTH WALES DISTRICT REGISTRY |
N926 of 2004 |
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BETWEEN: |
CUMMERAGUNGA PTY LIMITED (In Liquidation) (ACN 000 477 510) APPLICANT
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AND: |
THE ABORIGINAL & TORRES STRAIT ISLANDER COMMISSION RESPONDENT
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JACOBSON J |
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DATE OF ORDER: |
25 AUGUST 2004 |
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WHERE MADE: |
SYDNEY |
THE COURT ORDERS THAT:
1. The relief sought in paragraphs 1 to 6 inclusive of the Further Amended Application is refused.
2. The applicant is to pay the respondent’s costs of and incidental to the hearing of the preliminary issues.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
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IN THE FEDERAL COURT OF AUSTRALIA |
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NEW SOUTH WALES DISTRICT REGISTRY |
N926 of 2004 |
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BETWEEN: |
CUMMERAGUNGA PTY LIMITED (In Liquidation) (ACN 000 477 510) APPLICANT
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AND: |
THE ABORIGINAL & TORRES STRAIT ISLANDER COMMISSION RESPONDENT
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JUDGE: |
JACOBSON J |
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DATE: |
25 AUGUST 2004 |
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PLACE: |
SYDNEY |
REASONS FOR JUDGMENT
Introduction
1 This is an application under ss 5 and 7 of the Administrative Decisions (Judicial Review) Act 1977 (Cth)(“the ADJR Act”) and s 39B of the Judiciary Act 1903 (Cth) for the review of a decision of a delegate of the respondent (“the Commission”) refusing to grant written consent under s 21(2) of the Aboriginal & Torres Strait Islander Commission Act 1989 (Cth) (“the Act”) to the disposal of a property at 38 Francis Street Moama (“the property”).
2 The applicant (“the Company”) acquired the property in May 1997 with funds of approximately $127,000 provided to the Company under a grant made by the Commission pursuant to s 14(1)(a) of the Act. That sub-section confers power on the Commission to make a grant of money to a body corporate for the purpose of furthering the social, economic or cultural development of Aboriginal persons or Torres Strait Islanders.
3 The Commission’s agreement to provide the funds was recorded in a “Purposes Agreement” made in April 1997. One of the purposes for which the funds were granted was to provide suitable and affordable rental accommodation to Aboriginal and Torres Strait Islander families.
4 The Purposes Agreement provided that the Company would not dispose of or sell the property without the prior written consent of the Commission. That clause of the Purposes Agreement embodied the statutory restriction contained in s 21(2) of the Act.
5 The Purposes Agreement provided for the Company to deposit the title documents to the property with the Commission. The Company also granted a charge to the Commission over its interest in the property. A caveat was lodged to protect the Commission’s rights under s 21(2) of the Act and to protect its interests under the charge.
6 On 30 September 2002 the Company was ordered to be wound up and Ms Susan Ruth Carter (“Ms Carter”) was appointed as liquidator. The claims of creditors amounted to approximately $60,000 yet, in addition to the property, the Company owns farming land situated at Barmah (“the Barmah land”) worth many hundreds of thousands of dollars. The Barmah land was also acquired with funds granted by the Commission and was operated as a commercial farming business.
7 On 7 October 2003 Ms Carter sought the Commission’s consent to market and sell the property, which she considered would yield sufficient funds to discharge the Company’s unsecured creditors as well as Ms Carter’s fees and disbursements. She proposed that she would then resign as liquidator, leaving the stewardship of the Company and the Barmah land in the hands of the directors. The Barmah land could then be used for farming purposes as intended by the grant of funds made by the Commission.
8 On 8 January 2004 Ms Carter had a conversation with Ms Corinne Hart who was then the Senior Project Officer of the Commission at its Wagga Wagga regional office. Ms Carter gave evidence that Ms Hart told her in the course of the conversation that Ms Carter should go ahead and sell the property. Ms Hart’s evidence was that she did not recollect a conversation with Ms Carter in those terms and did not believe she said words to that effect.
9 However, Ms Carter apparently believed that Ms Hart had given some form of approval to proceed with the sale in the conversation on 8 January 2004. About a week later Ms Carter listed the property for sale with a local agent.
10 The property was sold at auction on 13 March 2004 for $147,000. The contract was not made conditional upon the Commission’s approval to the disposal of the property.
11 It is plain that no written consent was provided by the Commission to Ms Carter prior to the sale. Ms Carter knew this and she also knew that the question of whether written consent would be forthcoming was to be considered by a delegate of the Commission other than Ms Hart. Nevertheless, Ms Carter’s evidence was that approval had been given by Ms Hart and that in her view written consent was merely a “rubber-stamping exercise”.
12 In April 2004 the Wagga Wagga Regional Office of the Commission requested the approval of the Commission’s Housing and Environment Branch to the disposal of the property. Approval was recommended by Ms Hart on 15 April 2004. Her recommendation was supported on 18 April 2004 by the Wagga Wagga Network Regional Manager, Ms Colleen Murray.
13 Two days earlier, on 16 April 2004, Ms Murray received a letter from the Chief Executive Officer of the NSW Aboriginal Housing Office stating that he agreed with the sale of the property.
14 In early May 2004 there were conversations between a conveyancing clerk then in the employ of the Company’s solicitors and Ms Hart and another officer of the Commission. The evidence of the clerk, Ms Longmore, was that Ms Hart said that there would be “no problem having the caveat withdrawn”. Ms Hart did not agree that a conversation took place in those terms.
15 At about the same time, that is to say, in early May 2004, the delegate of the Commission who was considering the request for consent, Mr Peter Taylor, began to explore the possibility of achieving a payout of the Company’s secured creditors and the costs and disbursements due to Ms Carter without the need to dispose of the property. Mr Taylor’s preferred approach was that the total amount of the liabilities, which was in the order of $100,000, could be met from the Business Development section of the Commission.
16 On 19 May 2004 another officer of the Commission, Mr Garry Young, recommended to Mr Taylor that he not approve the disposal of the property because to do so would contravene a policy approved by the Commission in 2001 and known as the Community Housing & Infrastructure Program Policy for 2002 – 2005 (“the CHIP Policy”). The CHIP Policy stated that, generally, approval would not be given to the sale of a residential property to meet the debts of a commercial venture.
17 On 20 May 2004 Mr Taylor agreed with Mr Young’s recommendation and declined the request for consent to the disposal of the property.
18 On 26 May 2004 the Assistant Manager of the Housing & Environmental Branch of the Commission wrote to Ms Murray notifying her that approval for the disposal of the property had been declined.
19 These proceedings have been listed for an early hearing. The further amended application (“the application”) seeks an order for review of the decision, a declaration that the Commission is estopped from denying that consent has been given by various officers of the Commission, a declaration that the CHIP Policy is not authorised by the Act and certain other relief related to the question of consent to the disposal.
20 The application also seeks directions under s 479(3) of the Corporations Act 2001 (Cth) (“the Corporations Act”) concerning the realisation of the property and the farm property at Barmah.
21 I made an order under O 29 r 2, the effect of which is that all the issues raised by the application other than the directions under the Corporations Act be heard separately from and before the request for directions is determined.
22 The issues which now fall for consideration are as follows: - first, whether upon the proper construction of s 21 of the Act, consent was required to the disposal of the property; second, whether, if consent was necessary, it was given in the letter of 13 April 2004 from the Aboriginal Housing Office or in one of the several other ways contended by Senior Counsel for the Company; third, whether the Commission is estopped from denying that consent was given in the conversation of 8 January 2004 or in a number of other conversations in May 2004.
23 The fourth issue, which arises only if the first to third issues are determined adversely to the Company, is whether the decision made by Mr Peter Taylor on 20 April 2004 is vitiated by error on administrative law grounds.
24 The principal grounds relied upon by the Company on the fourth issue are, first, that the CHIP Policy was unlawful and not authorised by the Act so that the decision involved an error of law, second, that the decision involved an inflexible application of the CHIP Policy, third that the decision maker gave excessive weight to the CHIP Policy and fourth, unreasonableness.
The Legislation
25 The objects of the Act stated in s 3 include the furtherance of the economic, social and cultural development of Aboriginal persons and Torres Strait Islanders.
26 The Commission is established by s 6 of the Act which provides that it is a body corporate with perpetual succession.
27 The Commission’s functions are stated in s 7 of the Act. They include assistance to Aboriginal and Torres Strait Islander organisations; see s 7(1)(d). The functions also include doing anything that is incidental to the performance of the stated functions; see s 7(1)(o).
28 Section 14 provides as follows:-
“(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.”
29 Section 20 of the Act provides for a grant made to a person or body to be repayable where the Commission is satisfied that the terms or conditions of the grant have been breached.
30 Section 21 of the Act relevantly provides as follows:-
(1) This section applies if:
(a) both:
(i) an individual or body has acquired an interest in land; and
(ii) any of the following applies:
(A) the interest was acquired using money granted to the individual or body by the Commission under paragraph 14(1)(a);
(B) the interest was acquired from the Commission under paragraph14(1)(b);
(C) the acquisition of the interest was financed by a loan that was guaranteed by the Commission under section 15; or
(b) a body has acquired an interest in land, or in shares or stock in the capital of a company, under section 27 of the Aboriginal Development Commission Act 1980 or as a result of a grant under section 23 of that Act.
(2) The individual or body must not dispose of the interest without the Commission's written consent to that particular disposal or to a disposal of that kind.
(3) The consent must specify the disposal, or the kind of disposal, it covers by identifying the person or class of persons to whom the interest is to be disposed of.
…
(5) A purported disposal of the interest by the individual or body has no effect unless it is covered by the Commission's written consent.”
31 Section 21A(1) provides that any obligation of, inter alia, a body corporate to the Commission arising under the terms and conditions of a grant referred to in s 14(2) or under ss 20 or 21 is taken to be an interest of the Commission in the land to which it relates.
The background facts
32 The Purposes Agreement was contained in a deed made on 30 April 2004. It recited that the Commission had approved a grant of $127,725 to enable the Company to purchase the property. It also recited that the Company had agreed to use the property to provide suitable and affordable rental accommodation to Aboriginal and/or Torres Strait Islander families.
33 Clause 1 of the Purposes Agreement stated that the Company undertook to use the property for the designated use only, to place the title documents to the property in the custody of the Commission and:-
“d. Not dispose of, sell or otherwise transfer, lease, sub-lease, mortgage, encumber or otherwise part with possession of the Property without the prior written consent of the Commission.”
34 Clause 2 was as follows:-
“2. For better securing its obligation under this Deed, the Grantee hereby charges in favour of the Commission all its estate or interest, legal or equitable, in the property.”
35 Clause 3 provided:-
“3. The Grantee agrees to perform and observe and in all respects comply with the provisions of the Act applicable to the Property which on its part are to be performed and observed and the Act shall be and is hereby deemed and incorporated in and shall form part of this Deed in so far as it is applicable.”
36 The Company became the registered proprietor of the property pursuant to a transfer dated 25 May 1997.
37 In July 1997 the Commission lodged Caveat No 3277390 claiming an equitable interest in the property by virtue, inter alia, of the Commission’s right to obtain an injunction to enforce the provisions of s 21 of the Act and the equitable charge contained in clause 2 of the Purposes Agreement.
38 On 30 September 2002 the Company was wound up by an order of the Supreme Court of New South Wales on the application of Zurich Australian Workers’ Corporation Ltdwhich was owed approximately $6,000 for workers compensation insurance premiums. At the date of liquidation the Company had creditors totalling approximately $60,000 most of which appear to be attributable to the farming business carried on at the Barmah land.
39 In early 2003 Ms Carter’s then lawyers, Jones King, began to correspond with the Commission.
40 In February 2003 Ms Carter sought from the Commission, and was apparently supplied with a copy of the Purposes Agreement and the caveat.
41 On 22 May 2003, the Commission informed Messrs Jones King that it “would support you seeking approval for the disposal” of the property with a view to the funds realised from the sale being used to meet the debts of the unsecured creditors and the costs of the liquidation thereby allowing the Barmah land to be transferred debt free to another indigenous organisation.
42 On 28 May 2003 Ms Murray wrote to Ms Carter conceding that the sale of the property may be “unavoidable”. Ms Murray requested Ms Carter’s opinion as to whether the sale of the property would realise sufficient funds to satisfy the claims without the sale of the property. Ms Murray concluded as follows:-
“In order to obtain consent for the sale of the house or the property I will need to prepare a briefing to a higher delegate. It is therefore vitally important for the sake of expediency that I receive your advice on the above asap.”
43 On 17 June 2003 Ms Carter wrote to the Commission for the attention of Ms Murray. Ms Carter acknowledged Ms Murray’s comments that she wished to ensure that the Barmah land be available to be passed on to another community organisation. The letter concluded with the following:-
“Would you please advise the best way to obtain consent from Housing & Environment to sell the Francis Street property.”
44 On 18 June 2003 Ms Murray replied to Ms Carter by email. She stated that in order to “obtain consent from the ATSIC delegate this office needs to prepare a briefing and obtain support from the elected arm”. Ms Murray also stated that a valuation and a written request to dispose of the property were required.
45 Ms Carter’s written request was not made until 7 October 2003. It was addressed to the Network Regional Manager, that is, to Ms Murray, at Wagga. The letter stated that Ms Carter had obtained an independent valuation of the Barmah land of $620,000 and indications from local agents that the property was worth in the order of $100,000. She said her remuneration and outlays were approximately $36,000.
46 The letter stated, under the heading “My understanding of your position”:-
“From correspondence with your Ms Murray, I understand that you may be willing to allow me to sell the residential property for the benefit of the unsecured creditors of the company, and so that the community property in the form of the Barmah land, may be used for the purposes intended by your legislation.”
47 The letter also stated, under the heading “My proposal”:-
“Mindful of all the issues which surround this company and conscious of my obligations under the Act, I intend, with your permission, to market and sell the residential property at Moama which should, together with the funds already on hand, yield sufficient to discharge all known unsecured debts and my fees and outlays in full. I would then resign as Liquidator, leaving the stewardship of the company and its remaining assets in the hands of the directors. At that stage, it may be appropriate for you to take action in relation to the control of the company and possibly require that other directors be appointed. Alternatively, I am happy to work with you prior to my resignation in order to achieve the result required by your legislation. Perhaps when we approach that position, we can have further discussions.”
48 On 13 October 2003 Ms Murray sent a handwritten note to Ms Hart instructing her to prepare a submission to “the appropriate delegate” for the disposal of the property. The memo stated that this course would “save” the Barmah land for future use although there were other issues which needed to be considered later.
49 On 31 October 2003 Ms Hart emailed Ms Carter stating that in order to put forward a submission to the delegate to approve the sale of the Moama property, the Commission needed a copy of the valuation for the property to confirm the sale price would exceed the amounts due to creditors and to Ms Carter.
50 There were further conversations in October and November 2003 in which the Commission sought to follow up the request to Ms Carter for a valuation.
51 On or about 31 October 2003 Ms Hart wrote to the Binaal Billa Regional Council requesting the Council’s consent to allow Ms Carter to sell the property. The letter concluded with a recommendation that the Council give its consent.
52 At a meeting of the Binaal Billa Regional Council which took place at Albury on
5-7 November 2003 the following resolution was passed:-
“Binaal Billa Regional Council ENDORSE the lifting of the Caveat on the property known as 38 Francis St, Moama to assist the liquidator of Cummeragunja (sic) Pty Ltd to satisfy the debts of the corporation on the condition that any identified surpluses are expended in a manner approved by the Regional Manager.”
53 The resolution was signed as a correct record by the Chairperson of the meeting on 19 November 2003.
54 On 12 December 2003 Ms Hart signed a written request for approval to dispose of the property. The request attached the Binaal Billa Regional Council’s resolution approving the sale. Ms Hart referred to the appraisal of the property as $100,000 and to Ms Carter’s costs and expenses of approximately $36,000 as well as to the list of creditors totalling approximately $60,000. Ms Hart stated that this information indicated that the sale of the property would pay all outstanding creditors and leave sufficient funds to meet Ms Carter’s costs.
55 Ms Hart’s recommendation, dated 12 December 2003 was that the Commission give its consent pursuant to s 21(2) of the Act.
56 In December 2003 or early January 2004 Ms Murray endorsed Ms Hart’s recommendation.
57 On 7 January 2004 Mr Steven Gordon, who was described as the Commissioner Western Zone, endorsed Ms Hart’s recommendation by signing the request form in the space provided for him on the recommendation page of the document.
58 Provision was also made on the document for a fourth person, Mr Peter Taylor, to approve or decline the request by signing the document and striking out one of the words “approved/declined” in the place provided. Mr Taylor was described on the document as the Program Manager Housing & Infrastructure. Mr Taylor did not sign the document or provide any indication on it as to whether he approved or declined the request.
59 On 8 January 2004 there was a conversation between Ms Carter and Ms Hart. The only written record of the conversation is Ms Carter’s file note, which is in very brief terms. It contains Ms Hart’s name and phone number and it states “Indic. $100K.” I will deal in more detail with the conversation when I address Ms Carter’s evidence.
60 On 9 January 2004 Ms Carter wrote to one of the directors of the Company stating that the Commission had “recently approved for sale the Company’s property located at 38 Francis Street Moama.” Ms Carter stated that she had engaged agents to list and market the property.
61 On 14 January 2004 Ms Hart emailed Mr Chris Haddad, an employee of Ms Carter, stating that “(o)ur delegate requires a full registered valuation of the Francis Street property prior to giving his consideration for consent to lift the caveat.
62 On 16 January 2004 Ms Carter wrote to the Commission, for the attention of Ms Hart, advising that she had listed the property with a local agent for sale by auction. She enclosed letters from other agents providing indications that the property was worth in the order of $130,000 to $150,000.
63 The Commission was not satisfied with indications of value. It wanted a registered valuation as it had previously requested. Ms Hart emailed Ms Carter to this effect on 19 January 2004 stating that “our delegate requires a registered valuation of the Francis Street property as part of the decision making process.” The email stated that Ms Hart had requested Mr Haddad to provide her with an update of Ms Carter’s fees. The email concluded with the following:-
“Both the registered valuation and the fees figure are required PRIOR to our delegate considering the lifting of the caveat.”
64 On 22 January 2004 Ms Carter informed Ms Hart that she had engaged a valuer. The property was valued at $180,000 on 13 February 2004 and the written valuation was supplied to Ms Hart about three weeks later.
65 On 13 February 2004, prior to delivery of the written valuation, Ms Hart telephoned Ms Carter. Ms Hart made a file note of the conversation as follows:-
“phoned Susan re: letter & again said that valuation needed before delegate could consider. I told them that sale of property prior to decision might be a problem. She asked whether it was possible that the delegate would say no. I said I could not second guess the delegate but generally if we comply with all the requirements & R/C & Commish endorse them usually the delegate will agree. Reiterate that the valuationmustbe provided before I can even give the request to the delegate.”
66 Ms Hart deposed to a conversation to the effect of the file note of 13 February 2004 in her affidavit.
67 On 5 March 2004 Ms Carter wrote to the Commission for the attention of Ms Hart. She stated that the auction had been fixed for 13 March 2004 and she encloses the registered valuation. She said that the reserve had been set at $150,000.
68 On 9 March 2004 Mr Haddad had a conversation with Ms Hart which he recorded in his file note. The file note stated:-
“- take 10 days to lift caveat once ATSIS has processed it.”
69 As I have said above, the property was sold at auction on 13 March 2004 for $147,000. The completion date was stated to be 60 days from the date of contract, that is, approximately mid May 2004. As already noted, the contract was not made subject to the Commission’s written consent, notwithstanding that no such consent had been obtained before Ms Carter entered into the contract.
70 On 15 March 2004 Ms Carter wrote to Ms Hart informing her that the property had been sold at auction for $147,000. Ms Carter requested that the caveat be lifted in preparation for settlement.
71 On 19 March 2004 there was a conversation between Ms Carter’s office and Ms Murray. The conversation was recorded in a file note which appears to have been made by Mr Haddad. The file note was as follows:-
“- Delegate is hestitant (sic) to lift caveat.
- Whats (sic) to know what is happening with rest of co assets.
- has major reservations about handing control back to directors once liquidation finished. Doesn’t think this should happen.
- Delegate not happy at property being sold without permission.”
72 On 25 March 2004 Ms Carter wrote to the Commission for the attention of Ms Murray. The letter set out a schedule of the communications that had taken place between Ms Carter’s office and the Commission from November 2003 to 15 March 2004. One of the communications in the schedule was the conversation of 8 January 2004. The schedule describes this as a file note of a conversation between Ms Carter and Ms Hart “regarding the property’s indicative value.”
73 After setting out the schedule, the letter of 25 March 2004 then stated:-
“Not only did we apprise your office of our efforts every step of the way, but Ms Hart confirmed that our actions were appropriate to meet your requirements.
We have attempted to co-operate with your office at every turn, to the point of agreeing to realise the residential property rather that the rural one, with a view that your rights in relation to your grant would be preserved, whilst still ensuring that the rights of creditors were not prejudiced.
In the circumstances, I respectfully request that you allow the sale of the property to settle as scheduled by lifting your caveat.”
74 On 26 March 2004 Ms Murray and Ms Hart had a conversation with Ms Jo Perry of the Housing & Environment Branch of the Commission. The conversation is recorded in a file note. Ms Murray and Ms Hart expressed frustration at the delay of the New South Wales Aboriginal Housing Office (“the NSW AHO”) and expressed their wish to finalise the sale. Ms Perry then told them their submission would be unlikely to be approved without NSW AHO consent.
75 On 30 March 2004, Ms Murray wrote to Mr Russell Taylor, the CEO of the NSW AHO seeking expedition of the matter.
76 Mr Russell Taylor (who is a different person from the delegate who eventually declined consent ie Mr Peter Taylor) replied to Ms Murray by fax on 13 April 2004. The fax stated:-
“I note that Cummeragunja (sic) Pty Ltd (In Liquidation) is not a registered Aboriginal housing provider. While acknowledging that ATSIS policy requires AHO approval to the sale, in this situation involving a proprietary limited company which appears to have been operating a farming enterprise, AHO involvement is somewhat tenuous. Nevertheless, I will agree to the sale.
As delegate of the NSW Aboriginal Housing Office, I concur to the sale known as 38 Francis Street Moama, previously sold by auction on 13th March 2004.”
77 On about 15 April 2004 Ms Hart prepared a written request to the Manager of the Housing & Environment Branch of the Commission for approval to dispose of the property. The document set out the background which included information that there would be an estimated surplus from the sale of around $56,000 (ie, although not expressly stated, the sale price of $147,000 less liquidators costs and expenses and unsecured creditors.)
78 The request stated that the main function of the company was farming and it was not registered with the NSW AHO as a housing provider. The request stated that it was imperative that the farming enterprise not be lost from indigenous ownership and that the Commission’s Wagga Wagga office would work with Ms Carter to ensure necessary changes in the management of the Company.
79 The request pointed out that the Commissioner, Mr Gordon, was not asked to sign the document because he had already signed a previous document and the request was unchanged.
80 Ms Hart signed the request on 15 April 2004 recommending in favour of approval. Ms Hart’s recommendation was supported by Ms Murray who signed the document on 18 April 2004. The request was received by the Housing & Environment Branch of the Commission on 20 April 2004.
81 On 27 April 2004 Ms Hart emailed Ms Perry pointing out that settlement was imminent. Ms Perry replied stating that the Manager, Mr Garry Young, had raised a number of queries. It is unnecessary to set them out.
82 On 4 May 2004 there was a conversation between Ms Longmore and Ms Hart. Ms Longmore says that in the course of the conversation Ms Hart said:-
“Oh there will be no probs having the Caveat withdrawn it’s just that the Delegate is hard to pin down to have him actually sign the withdrawal of caveat.”
83 On 12 May 2004 Ms Perry sent an email to Ms Carter stating, inter alia:-
“I regret that you were wrongly advised by the Wagga Regional Office to proceed with the auction of the property. Consent to dispose must be obtained before any contract for sale is entered into. I am afraid at this stage the sale will certainly need to be postponed.”
84 On 13 May 2004 Ms Longmore had a conversation with Mr Adam Gemmell of the Commission. Ms Longmore says that in the course of the conversation Mr Gemmell said:-
“I am arranging for the Caveat to be lifted this afternoon. The property was used as community housing and by rights, the property should not have been sold in the first place. However, I am speaking with the Delegate today to lift the Caveat.”
85 On 19 May 2004 Mr Young wrote a handwritten memorandum to Mr Peter Taylor endorsed on the request to the Housing and Environment Branch. The memo was as follows:-
“Peter I recommend that you do not approve the disposal of 38 Francis Street Moama NSW for the following reasons:
· It would be in contravention of ATSIC Board approved CHIP Policy 2002-2005 as it is the sale of a residential property to pay the debts of a commercial venture;
· The resolution of the farm debts and management related issues is something BDP should be involved in, and possibly work with the liquidator to resolve.”
86 On 20 May 2004 Mr Peter Taylor decided to refuse the request. He wrote on the document immediately above Mr Young’s memo, the words “Agreed, disposal declined”. He initialled the note and dated it 20 May 2004.
87 On 26 May 2004 Mr Gemmell wrote to Ms Murray and Ms Hart stating:-
“Please note that approval for the disposal of this property has been declined for the following reasons:
(i) it would be in contravention of ATSIC Board approved CHIP Policy 2002-2005 as it is the sale of a residential property to pay the debts of a commercial venture; and
(ii) the resolution of the farm debts and management related issues is the responsibility of the Business Development Program.”
88 On or about 8 June 2004 the Commission’s Wagga office wrote to Ms Nash stating that:-
“Pursuant to ATSIC Authorisation 106, the Delegate, on behalf of the Commonwealth, has formally declined to dispose of an interest in the residential land at 38 Francis Street Moama. The reason for the decision is that the disposal of interest in this property would be in direct conflict with ATSIC Community Housing and Infrastructure Program (CHIP) Policy for 2002-2005.”
Ms Carter’s evidence
89 Ms Carter gave four different versions of the conversation of 8 January 2004. She gave two versions in chief and two different ones in cross-examination. Initially, she said that Ms Hart told her “it was in order for me to place the property on the market”. But she then said Ms Hart told her “you should go ahead and sell the property”.
90 Under cross-examination Ms Carter said her best recollection was “that we agreed that the property should be sold”. When it was put to her that this was a third version, Ms Carter said that, to her, it was a matter of semantics. She then said she had a very strong recollection of “being under no misconception whatsoever that ATSIC wanted me to sell the property”.
91 Ms Carter conceded that she knew the Commission’s written consent was required to sell the property. I understood her concession to be that she was aware of this at the time of her conversation with Ms Hart on 8 January 2004. Ms Carter acknowledged that it was critical for her to have the Commission’s written consent, and that this was not referred to in the file note.
92 Nevertheless, Ms Carter insisted that she could look at her “shorthand” in the file note and remember the gist of the conversation with Ms Hart.
93 Ms Carter acknowledged that the conversation of 8 January 2004 was the only conversation which she put forward as constituting Ms Hart’s oral consent before the exchange of contracts. However, she said that before the exchange:-
“ I operated on the basis that approval for me to sell the property had been given. I was always under the impression that once I comply with all these parts that they required, that ATSIC required, that it would literally be a rubber-stamping exercise for approval to be given.”
94 Although, according to Ms Carter, she relied on “the approval” given to her by Ms Hart on 8 January 2004, Ms Carter acknowledged that the decision-making process was continuing after the conversation.
95 Ms Carter acknowledged, somewhat reluctantly, that she knew that Ms Hart was not the delegate from whom written consent was required and that she knew she did not have the Commission’s written consent before exchanging contracts.
96 Ms Carter conceded that nothing said or done by the Commission after 13 March 2004 could alter the fact that she had entered into the contract.
97 Mr Haddad did not give evidence but Ms Carter said that he was the point of contact for Ms Longmore and that Mr Haddad reported to Ms Carter on his conversations with Ms Longmore. Ms Carter said the messages she received between about 4 May 2004 and 14 May 2004 were that if and when the delegate’s consent was granted there would be no further delay in withdrawing the caveat.
98 Ms Carter acknowledged that she knew from 4 May 2004 to 14 May 2004 that the delegate’s consent had not been given.
Ms Hart’s evidence
99 Ms Hart swore in her affidavit of 2 August 2004 that she had no recollection of any conversation with Ms Carter in which she said it would be in order for her to place the property on the market. She said she did not believe she would have said words to that effect.
100 Ms Hart swore a further affidavit of 5 August 2004, which was admitted over objection from Senior Counsel for the Company, who submitted that the late service of the affidavit caused prejudice because the Company was unable to contact Ms Longmore, no prior notice having been given that Ms Longmore was required for cross-examination.
101 Ms Hart swore in the affidavit that she recalled a conversation with Ms Longmore on 8 May 2004. She conceded in cross-examination that this was a mistake and the correct date was 4 May 2004.
102 Ms Hart’s evidence in the supplementary affidavit was that her conversation with Ms Longmore included the following exchange:-
“She (Ms Longmore) said, if the delegate were to consent to the sale today, would you have time to have the caveat withdrawn by the time of settlement.”
I (Ms Hart) said: - no problems, the turn around time for our Commercial Law Unit in Canberra to draw up Withdrawals of Caveats is around 24 hours ….”
103 Ms Hart was not available for cross-examination in person but Senior Counsel for the Company agreed to cross-examine her on the telephone.
104 Ms Hart was quite firm in saying under cross-examination that she would not have said, and that she did not recall saying, to Ms Carter that it was in order for her to place the property on the market.
105 She was clear in her denial in cross-examination that she did not tell Ms Longmore on 4 May 2004 that there would be “no probs” having the caveat withdrawn.
106 Ms Hart was cross-examined about another topic, namely her request for alternative funding from within the Commission to pay out the liquidator and the unsecured creditors. She said that between about 13 May 2004 and 15 May 2004 she sent an email to an officer of the Business Development Program of the Commission seeking funding for that purpose. She said that she received an email in reply the next day giving approval subject to some conditions.
Ms Murray’s evidence
107 Ms Murray’s affidavit evidence dealt in some detail with the correspondence between the parties.
108 She was asked in cross-examination whether after the receipt of the formal valuation, there were any other requirements to be satisfied before the request for approval could be sent to the delegate. Ms Murray said that, to her knowledge, there were no other requirements but she was not dealing directly with the file.
109 She said that normally the delegate would approve such a request but it was purely the delegate’s decision.
110 Ms Murray was also asked about the request for alternative funding from the Business Development section. She said that Mr Garry Young rang her on about 13 May 2004 with a proposal that Ms Carter’s remuneration and expenses and the amounts due to creditors be met from an alternative source.
111 The following exchange took place:-
“As best as you can recall, could you tell his Honour, please, what he said to
you and what you said to him? --- He actually rang because he said that
Peter, who was the delegate, was not inclined to approve the disposal of a
property, a residential property to meet the bills of a commercial enterprise
and that we should try to secure alternative funds to pay those creditors and
the liquidators fees.
Right, and what did you say? --- We said that time, had you told us that
earlier, we would have been looking for it earlier but we certainly will get
on to Ivan Parrett from the business area and see whether or not he can
come up with the money.
What happened after that conversation? --- Nothing. I mean, we contacted
Ivan Parrett looking for those funds, those alternate funds to meet the
creditors and the liquidators costs.
Did you have any discussion with Mr Parrett? --- No, I didn't. Corinne Hart
actually spoke to Ivan in relation to securing additional funds - those funds
from an alternate course.”
Mr Taylor’s evidence
112 Mr Taylor’s affidavit evidence was that he had regard to the submissions made to him in support of the sale of the property. He said, however, that those submissions did not have regard to the considerations stated in the CHIP policy.
113 Mr Taylor referred in particular to that part of the CHIP Policy which stated the Commission will not generally allow residential assets to be sole to meet the debts of failed commercial ventures. He said that each case has to be considered on its merits but in the present case there were no external or other issues which caused him to depart from the policy.
114 In cross-examination Mr Taylor said that, upon the basis of the estimated surplus of $56,000 referred to in the request document, he formed the view that about $100,000 was required to meet the creditor’s claims and the costs and expenses of the liquidator.
115 Mr Taylor was asked what consideration he gave to the desirability of preserving the Barmah land for the indigenous community. He answered the question as follows:-
“I considered the proposal that Moama property would be sold and that the Barmah property should be retained as far as possible intact. I formed the view that that was not a desirable outcome from the Australian Government's point of view and ATSICs point of view, principally because that would in a sense dispose of all the entirety of the organisation's assets for the purposes of giving ..... providing community home and rental services and I formed the view that it would be preferable if the Australian Government did this in ..... and community house rental properties be retained and as far as possible the status of the Barmah property be further negotiated, if possible, without selling it over. In ..... I formed the view that there was an unclear balance, the interest through the Government having invested in both of these properties. As was ..... the quality guidelines, I took a position to secure the Australian Government interests in retaining an investment in an interest specific community home rental.”
116 Mr Taylor’s evidence was that in May 2004 his view was that neither the property nor the Barmah land need be sold because funding was available from the Business Development Section. He said in cross-examination that, to his recollection, the funds were available from that source to meet the sums due to the creditors and the liquidator. He said his enquiries were made on the expectation that $100,000 was needed but he satisfied himself that funds would be available if the remuneration or expenses of the liquidator varied from the amount advised to him.
117 Mr Taylor conceded that he saw the situation as one which presented an opportunity to the Commission to reach a general settlement of the claims of the unsecured creditors and the liquidator while at the same time reorganising the management of the Company in a way which was more acceptable to the Commission and the interests of the indigenous community.
118 He acknowledged that it was not part of his decision-making process to deny payment of the amounts due to the unsecured creditors and the liquidator. His intention was that their claims be met from the Business Development Section.
119 Mr Taylor was asked how certain he was that the money would come from the Business Development program. His answer was:-
“The only uncertainty that I had in mind were whether we would reach a reasonable negotiation outcome and the future management of the farming property, creditors and liquidators costs were settled and just an unresolved issue in discussion as to whether or not once the creditors, etcetera, were settled, whether as part of the negotiations around settlement, whether the ATSIS should be transferred to another organisation or be transferred to the Australian Government pending the application of another edition of organisation would be in position to manage the farm more effectively. That was the only unresolved matter about providing assistance. We had terms around the negotiated outcomes and the provisions of the Business Development program.”
Whether consent was necessary
120 The submission as to whether consent was required to sell the property was put in two different ways. First, it was said that as a matter of construction of s 21 of the Act, it was no part of the powers or functions of the Commission to constrain the exercise by a liquidator of the powers conferred on him or her by the provisions of the Corporations Act. Reference was made, in particular, to s 477(2)(c) of the Corporations Act which confers a power of sale of all or any part of the property of a company upon a liquidator.
121 Second, it was submitted that s 21 focuses upon a sale by the individual or body that is subject to the constraint on sale referred to in s 21(2) of the Act. Here, it was submitted that the liquidator is subject to no such constraint.
122 It is true that the extent of a liquidator’s powers are to be derived from the Corporations Act; see Butterell v Docker Smith Pty Limited (1997) 41 NSWLR 129 at 137-138 (McLelland CJ in Eq); Re Dallhold Investments (1994) 53 FCR 339 at 342 (Sackville J).
123 It is also true that the provisions of s 477 of the Corporations Act do more than merely identify the circumstances in which a liquidator can exercise powers which otherwise rest with the Company; see UTSA Pty Ltd v Ultra Tune Australia Pty Ltd (1996) 21 ACSR 457 at 464 (Hayne JA) (“UTSA”).
124 Moreover, the extent and manner of the power of sale conferred by s 477(2)(c) is wide; see UTSA at 463.
125 But it does not follow that there is any conflict between the extent of the power of sale conferred by s 477(2)(c) of the Corporations Act and the constraints imposed by s 21(2) of the Act.
126 In the absence of a vesting order the property of the Company does not vest in the liquidator; ss 474(1) and (2) of the Corporations Act. However, a liquidator can do no more than sell the “property” of the Company in the same way as the trustee in bankruptcy may sell whatever property was vested in him or her; see Seear v Lawson (1880) 15 Ch D 426 at 433-434 (James LJ); Cotterill v Bank of Singapore (Australia) Ltd (1995) 37 NSWLR 238 (Bainton J); see also and the definition of “property” in s 59 of the Corporations Act; and see A Keay, McPherson, The Law of Company Liquidation, 4th ed, LBC Information Services, Sydney, 1999, at 427.
127 Thus, the liquidator must take the property as he of she finds it and is subject to whatever constraints exist in the nature of the property over which the liquidator seeks to exercise the power of sale. It follows that since the property was subject to the constraints contained in s 21(2) of the Act,the exercise of the power of sale is similarly restricted.
128 The power of sale conferred on a liquidator by s 477(2)(c) of the Corporations Act has existed in companies legislation in similar form for many years; see eg Companies Act 1961 (NSW) s 236(2)(c). These provisions well and truly pre-date the enactment of s 21 of the Act. If the legislature intended to exclude the exercise of a liquidator’s power of sale from the constraint contained in s 21 of the Act, it could easily have done so.
129 The submission that the sale in the present case was made by Ms Carter rather than by the company cannot be accepted. The contract makes it plain that the Company purported to dispose of the property. Ms Carter merely acted as the Company’s agent. It was a purported disposal to which s 21 of the Actapplied because the subject matter of the contract was an interest acquired by the Company in the property using money granted to the Company by the Commission. The disposal required the Commissioner’s consent under
s 21(2) and it was invalid without it under s 21(5) of the Act.
Whether consent in writing was obtained
130 The Company’s case that written consent had been granted was put in three different ways. First, it was said that it is to be inferred from the various conversations between Ms Carter and Ms Longmore and officers of the Commission to which I have referred, that written consent had been granted. Second, it was said that written consent had been given in the communication faxed by the NSW AHO to Ms Murray on 13 April 2004. Third, it was submitted that written consent was granted by the resolution of the Binaal Bila Regional Council on 19 November 2003.
131 The conversations which were relied upon to support the first submission were those of 8 January 2004 between Ms Carter and Ms Hart, 4 May 2004 between Ms Longmore and Ms Hart and 13 May 2004 between Ms Longmore and Mr Gemmell.
132 The effect of the submission was that I should infer from the fact that an officer of the Commission said that it was in order for Ms Carter to place the property on the market or that officers of the Commission said that the caveat would be withdrawn, that written consent had been given.
133 Even if I were to accept that the conversations took place in the terms put forward by the Company, I cannot accept the submission that an inference of written consent should be drawn. Section 21(2) of the Actrequires written consent and it would only be in the clearest circumstances that such consent would be inferred from conversations in the absence of production of the writing.
134 The inference which is sought to be drawn must not be a guess, a theory or conjecture and the circumstances relied upon must give rise to a reasonable and definite inference; see Nominal Defendant v Owens (1978) 22 ALR 128 at 132 (Muirhead J); Luxton v Vines (1952) 85 CLR 352; see also J D Heydon, Cross on Evidence, 6th Aust ed, Butterworths, Sydney, 2000 at [9055].
135 As Lord Shaw observed, the distinction between an inference and a conjecture is that “an inference rests upon premises of fact”: Kerr v Ayr Steam Shipping Co Pty Ltd [1915] AC 217 at 233.
136 Even if the officers of the Commission said words to the effect attributed to them, there are any number of possible explanations for such statements other than the fact that written consent had been given. What is put forward as an inference amounts to nothing more than a theory or to conjecture. It cannot meet the test stated in the authorities.
137 The fax of 13 March 2004 was not the written consent of the Commission. It might, on one view, amount to the consent of the NSW AHO. But the NSW AHO is a statutory corporation established by s 7 of the Aboriginal Housing Act 1998 (Cth). Plainly, it is not the Commission. Section 21(2) and s 21(5) clearly require the written consent of the Commission, which cannot be found in another party’s document.
138 So too, the resolution of the Binaal Bila Regional Council cannot amount to the written consent of the Commission. The Regional Council is a statutory body corporate established by s 92 of the Act.
Estoppel
139 The Company submitted that an estoppel by representation was to be found in the statement said to have been made by Ms Hart to Ms Carter on 8 January 2004. The Company’s case was that Ms Carter relied upon the representation in entering into the contract on 13 March 2004.
140 An alternative case of estoppel was put. It was submitted that the conversations to which I have referred in May 2004 evinced the grant of consent from which it was not open to the Commission to resile.
141 In Minister for Immigration and Ethnic Affairs v Kurtovic (1990) 21 FCR 193 at 207-208 (“Kurtovic”), Gummow J pointed out that there are considerable difficulties in propounding an estoppel against the exercise of an administrative discretion. His Honour explained the difficulties at 208 – 216 and 220 – 221. The principal difficulty is that an estoppel cannot be raised to prevent or hinder the exercise of a discretion conferred by statute upon a decision-maker.
142 Cases where the decision-maker seeks to resile from a decision previously made are explained not by the doctrine of estoppel but from the principle that the power, once exercised, is spent and a second decision would be ultra vires; see Kurtovic at 211.
143 His Honour left open the possibility that the doctrine of estoppel may apply to operational decisions which implement administrative decisions made in the exercise of a policy, although he noted that it may be difficult to draw the line between a decision which involves the exercise of discretion and one which is merely operational; see at 215.
144 It is unnecessary to consider whether these objections to the application of the doctrine of estoppel in public law prevent the Company from raising the estoppel by representation which was said to flow from the conversation between Ms Carter and Ms Hart of 8 January 2004.
145 There are three reasons for this. First, I have reservations about Ms Carter’s evidence on this issue. The propositions that Senior Counsel for the Commission put to her in cross-examination seemed to me to demonstrate the unreliability of Ms Carter’s recollection.
146 In my opinion, it is likely that something was said by Ms Hart that gave Ms Carter reason to believe that there would not be any difficulty in obtaining the necessary consent. This is borne out by her action in writing the letter of 9 January 2004 but it does not follow that I can accept that Ms Hart said words to the effect of any of the different versions of the conversation given by Ms Carter.
147 Second, as in Kurtovic (at 207), the claim fails at the threshold because the different versions of the conversation given by Ms Carter do not make out a sufficiently clear and unambiguous representation to give rise to an estoppel; see Legione v Hateley (1983) 152 CLR 406 at 435-437.
148 Third, reliance cannot be made out because Ms Carter was aware before the exchange of contracts that consent had not been given.
149 I also reject the submission that it was not open to the delegate to resile from what was said to be the Commission’s prior consent to the sale. There was nothing in the conversations or the written communications between the parties prior to 20 May 2004 that amounted to the grant of consent by the Commission.
150 The decision in question in the present case is not an operational decision and accordingly nothing turns on the distinction between the exercise of a discretion and an operational decision to which Gummow J referred in Kurtovic.
Error of Law
151 The Company submitted that the decision of 20 May 2004 was affected by error of law because the CHIP Policy, which the delegate applied, was unlawful and inconsistent with the provisions of the Act. It was also submitted that the CHIP Policy placed an impermissible fetter upon the statutory power of consent conferred on the Commission.
152 As to the submission of inconsistency, Senior Counsel for the Company referred me to the decision of Stephen J in Green v Daniels (1977) 13 ALR 1 (“Green v Daniels”). There, his Honour held that instructions issued concerning the grant of unemployment benefits to school leavers were inconsistent with the statutory criteria for the grant of such benefits.
153 Green v Daniels was not a case of inflexible application of policy. Rather, as his Honour said at 8, it raised the question of whether the departmental policy or instructions revealed an attempt to substitute inconsistent departmental criteria for those which the Parliament had enacted.
154 Stephen J said at 9:-
“The Director-General is not concerned, in his administration of s 107, with the carrying out of any policy. No general discretion is conferred upon him; instead specific criteria are laid down by the Act and all that is left for him to do is to decide whether or not he attains a state of satisfaction that the circumstances exist to which each of these criteria refer. He must, no doubt, for the benefit of his delegates and in the interests of good and consistent administration, provide guidelines indicating what he regards as justifying such a state of satisfaction. But if, in the course of doing this, he issues instructions as to what will give rise to the requisite state of satisfaction on the part of his delegates and these are inconsistent with a proper observance of the statutory criteria he acts unlawfully; should his delegates then observe those instructions, their conclusions concerning an applicant's compliance with the criteria will be vitiated.”
155 Unlike Green v Daniels, the present case is not concerned with a statute that lays down specific statutory criteria. Rather, s 21 of the Act confers a discretion in wide terms. No doubt the discretion must be exercised in light of the object stated in s 3(d) and in light of the purpose for which the grant was made under s 14(1), that is, to further the social, economic or cultural development of Aboriginal persons or Torres Strait Islanders. But I can see no inconsistency between the CHIP Policy that provides, as a general rule, that consent will not be given for the sale of residential properties to permit payment of commercial debts and the broad discretion conferred on the Commission by s 21 of the Act.
156 The position in the present case seems to me to be covered by the following observations of Hely J in Elias v Commissioner of Taxation (2002) 123 FCR 499 (“Elias”) at [34]:-
“The Commissioner is entitled to adopt a policy to provide guidance as to the exercise of the discretion, provided the policy is consistent with the statute by which the discretion is conferred. Thus if the statute gives a discretion in general terms, the discretion cannot be truncated or confined by an inflexible policy that it shall only be exercised in a limited range of circumstances. A general policy as to how a discretion will " normally" be exercised does not infringe these principles, so long as the applicant is able to put forward reasons why the policy should be changed, or should not be applied in the circumstances of the particular case.”
157 The CHIP Policy stated that the discretion will generally be exercised in a particular way. Thus, it did not constitute an impermissible fetter on the discretion.
158 I will deal below with the question of whether the delegate exercised the discretion in an inflexible manner. That was a principle to which Hely J referred in Elias and which was considered by Brennan J in the well-known decision of Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 (“Drake”).
159 The observations of Brennan J in Drake are also relevant to the question of whether the CHIP Policy was consistent with s 21 of the Act. As Brennan J said in Drake at 640:-
“Of course, a policy must be consistent with the statute. It must allow the Minister to take into account the relevant circumstances, it must not require him to take into account irrelevant circumstances, and it must not serve a purpose foreign to the purpose for which the discretionary power was created. A policy which contravenes these criteria would be inconsistent with the statute …”
160 Here, the discretion was conferred by the Act in general terms that were unconfined by any statutory criteria. Thus the factors that could be taken into account were similarly unconfined. There was nothing in the subject matter, scope or purpose of the Act which implied a limitation on the exercise of the discretion in the manner stated in the CHIP Policy; see Elias at [56] – [57].
Inflexible application of Policy
161 As Brennan J said in Drake at 641, a decision-maker may adopt a policy that guides but does not control the making of the decision. The only qualification is, as his Honour said, that the decision-maker must not apply the policy so rigidly as to reject the application without hearing the applicant or considering the merits.
162 In order to find that the CHIP Policy was applied inflexibly I would have to be satisfied that the policy alone dictated the exercise of the discretion: Braganza v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCAFC 170 at [36].
163 I cannot be so satisfied because the evidence of Mr Taylor, which I accept, was that he did give some weight to other factors. In particular, he considered that the objective which was favoured by those recommending approval, that is payment of the unsecured creditors and the liquidator with the consequent freeing up of the Barmah land for continued use by the indigenous community, could be achieved by other means. The other means were the payment of those moneys out of the Business Development program.
164 It follows that I cannot be satisfied that the CHIP Policy was applied inflexibly.
Failure to consider relevant considerations
165 It also follows, from my conclusion at [163] that I cannot accept the submission that there was a failure to consider relevant considerations. This ground can only be made out if a decision-maker fails to take into account a consideration which he or she is bound to take into account in making that decision: Minister for Aboriginal Affairs v Peko-Wallsend (1986) 162 CLR 24 (“Peko”) at 39 (Mason J)
166 Section 21 of the Act confers a broad, discretionary power on the decision maker, to be construed with reference to the objects of the Act as stated in s 3. The evidence indicates that, Mr Taylor took into account a range of considerations in exercising his power, all of which were consistent with the objectives of the Act.
167 It may well be that Mr Taylor was bound to consider the possibility of the freeing up of the Barmah land which would have followed from the payment of the liquidator and the unsecured creditors. However, I am satisfied he did so.
Excessive weight to the CHIP Policy
168 Senior Counsel for the Company further submitted that evidence revealed that the delegate had given excessive weight to the CHIP Policy without giving sufficient weight to the need to ensure the payment of the unsecured creditors and the liquidator’s costs and expenses so as to leave the Barmah land available for the indigenous community.
169 However, the weight to be given to a particular factor is a matter for the decision-maker; see Peko at 41 (Mason J).
170 As Hely J said in Elias at [57] the ground of irrelevant considerations will not be available where the essence of the complaint is that the decision-maker paid too little or too much attention to a relevant factor. As authority for this proposition, his Honour referred to M Aronson & B Dyer, Judicial Review of Administrative Action, 2nd ed, LBC Information Services, Sydney, 2000, p 225.
171 Senior Counsel for the Company submitted that the evidence showed that Mr Taylor had not given “proper, genuine and realistic consideration to the merits of the case”; see Khan v Minister for Immigration and Ethnic Affairs (1987) 14 ALD 291 (“Khan”) at 292 (Gummow J).
172 However, the formula as expressed by Gummow J in Khan was criticised by a Full Federal Court in Minister for Immigration and Multicultural Affairs v Anthonypillai (2001) 106 FCR 426 (“Anthonypillai”) at [59] – [66] (Heerey, Goldberg and Weinberg JJ). Their Honours said that the formula:-
“creates a kind of general warrant, invoking language of indefinite and subjective application, in which the procedural and substantive merits of any Tribunal decision can be scrutinised.”
See also Bruce v Cole (1998) 45 NSWLR 163 at 184-185 (Spigelman CJ).
173 It seems to me that in light of this criticism, it may be unsafe to proceed upon the basis that the formula stated in Khan represents the law. As observed in M Aronson, B Dyer & M Groves, Judicial Review of Administrative Action, 3rd ed, Lawbook Company, 2004, pp 258-259, it would seem that the “proper, genuine and reasonable” formula has now been subsumed in the unreasonableness or irrationality ground of review. However, if the formula is still applicable, I cannot say that the decision-maker failed to give proper, genuine or realistic consideration to the merits.
Unreasonableness
174 The applicable principles have been stated recently by a Full Federal Court (Mansfield, Selway and Bennett JJ) in SFGB v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 77 ALD 402 at [19]-[20]:-
“If the tribunal makes a finding and that finding is a critical step in its ultimate conclusion and there is no evidence to support that finding then this may well constitute a jurisdictional error: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 355–7; 94 ALR 11 at 37–8; 21 ALD 1 at 23-24. If the decision of the tribunal was “Wednesbury” unreasonableness or if the material on which the tribunal relied was so inadequate that the only inference was that the tribunal applied the wrong test or was not, in reality, satisfied in respect of the correct test, then there would also be jurisdictional error: see Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 (2003) 198 ALR 59 at 62, 67, 76, 90–91; 73 ALD 1 at 4, 8–9, 18, 31–3. (S20).
On the other hand, if there is sufficient evidence or other information before the tribunal on which it could reach the conclusion it did then it is for the tribunal to determine what weight it gives to that evidence. Indeed, unless the relevant fact can be identified as a “jurisdictional fact”, there is no error of law, let alone a jurisdictional error, in the tribunal making a wrong finding of fact: Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 35–6; 93 ALR 1 at 24–5. It is for the tribunal to determine the merit of the claim. The line between merit review and jurisdictional error may not be a “bright line”, but it is nevertheless an essential one: Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272; 136 ALR 481 at 490–1; 41 ALD 1 at 9.”
175 The effect of the Company’s submission was that the delegate’s decision was so unreasonable that no reasonable decision-maker could have come to it.
176 This conclusion was said to flow from two propositions. Firstly, that the delegate relegated the liquidator and the creditors from a position of a secure, contractual, entitlement to payment to mere “supplicants” dependent upon the outcome of negotiations with the Business Development section of the Commission. Secondly, that all other officers of the Commission recommended granting consent.
177 As to the first proposition, neither the creditors nor the liquidator had any secured entitlements. They were dependent upon the delegate’s favourable exercise of discretion to receive payment.
178 Furthermore, the delegate did give consideration to the claims of the creditors and the liquidator. He satisfied himself that funds would be available from the Business Development Program. The only uncertainty that he saw was as to whether the negotiations regarding the change of management of the Company would be successful.
179 I do not consider that this can be said to be an unlawful, unreasonable or irrational exercise of the discretion. Nor can it be said to be so unreasonable that no reasonable decision-maker would arrive at it.
180 Turning to the second proposition, the suggestion that the decision of the delegate was unreasonable merely because it was contrary to the recommendations of other officers must also be rejected.
181 Section 21 of the Act confers a broad discretion on the decision maker, which I have already found was exercised in accordance with the purpose expressed in s 3 of the Act. Ultimately, it was for the delegate to make the decision. He was not bound to follow the recommendations, he was bound only to exercise his discretion lawfully. In my view he did. There was nothing unreasonable or irrational about this.
Orders
182 The orders I will make are that the relief sought in paragraphs 1 to 6 inclusive of the Further Amended Application is refused and the applicant is to pay the respondent’s costs of and incidental to the hearing of the preliminary issues.
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I certify that the preceding one hundred and eighty-two (182) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. |
Associate:
Date: 25 August 2004
|
Counsel for the Applicant: |
Dr G Flick SC with Mr J Johnson |
|
Solicitor for the Applicant: |
Sally Nash & Co |
|
Counsel for the Respondent: |
Mr M Aldridge SC |
|
Solicitor for the Respondent: |
Australian Government Solicitor |
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Date of Hearing: |
4 – 5 August 2004 |
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Date of Judgment: |
25 August 2004 |
