Compliance with statutory requirements

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This article is a topic within the subject Administrative Law.

Contents

Required Reading

R Creyke & J McMillan, Control of Government Action: Text, Cases and Commentary, 3rd ed, 2012, [15.2.1-11C].

Compliance with statutory requirements

[1] Powers are often conferred on administrative agencies subject to statutory requirements. A question which usually arises is whether parliament intended that the validity of a decision would be conditional on strict compliance with each and every statutory requirement.

It is necessary to distinguish two points at which this question can arise:

  1. At a preliminary stage of the decision-making process, in proceedings to prevent a decision being made.
    • If proceedings are commenced before any substantive decision is made (for example, at the time a development application lodged but in a defective form), it is likely that a court would rule that compliance with the necessary statutory condition was essential and make an appropriate declaratory or injunctive order to enforce compliance with the statutory requirement.
  2. Later in proceedings to invalidate a decision on the basis that a preliminary statutory step was not observed.
    • If the issue is raised (for example, after the development application is granted) after considerable time and resources have been expended, it is not certain that a court would declare that the final decision was tainted by the earlier defect. This distinction is drawn in Project Blue Sky and Redmore, noting that compliance with statutory requirements are necessary, yet breach will not necessarily result in the invalidity of a resulting decision.

Case law

In Project Blue Sky[2] the court disapproved of a longstanding distinction between statutory requirements being either ‘mandatory’ or ‘directory’. Redmore[3] is an example of a case applying the mandatory/directory distinction, cases such as this one continue to be influential because they avert to the same factors relied upon by the court in Project Blue Sky (such as statutory language, subject matter, consequences, the nature of the requirement and who is responsible for ensuring compliance).

  • In Montreal Street Railway Co v Normandin,[4] the factor of ‘convenience and consequences’ weighed heavily in a decision by the Privy Council that a failure to update official jury lists did not cause subsequent criminal trials to be invalid.
  • In Kutlu v Director of Professional Services Review,[5] the Federal Court held that members were invalidly appointed to a Professional Services Review Committee, because the words ‘must consult’ and ‘before advising’ in the statute had a ‘rule-like quality’ and ‘imposed essential preliminaries or preconditions to the exercise of the minister’s power to appoint a person’. In this case the inconvenience did not counteract the statutory language.

The issue has also been approached in other ways:

  • Procedural errors, particularly in the context of proceedings of the courts, are often treated as errors within jurisdiction rather than errors that go to the jurisdiction of the court. As such, the error can only be set aside by statutory appeal or certiorari for error on the face of the record rather than judicial review or collateral action.
  • The ADJR Act s 5(1)(b) has gone a step further than the common law, by providing that an order of review can be sought on the ground ‘that procedures that were required in law to be observed connection with the making of the decision were not observed’.
  • Legislation sometimes spells out expressly the consequence attaching to non-compliance with a statutory requirement i.e. whether it will lead to invalidity.

Project Blue Sky[6]

Facts: Under the Broadcasting Services Act 1992 (Cth) s 160 the Australian Broadcasting Authority (ABA) was given authority to develop codes and practice and program standards. The ABA implemented a local content standard, ensuring that television would have a minimum percentage of shows produced in Australia. Project Blue Sky, a New Zealand company, challenged the validity of the standard on the basis that the ABA had not performed its obligations under a trade protocol which provided that New Zealand producers would not be treated in a manner less favourable than Australian producers. The High Court held that the standard was in breach the protocol, but that it was not invalid.
Held: “The better test for determining the issue of validity is to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid.” The legislative purpose is to be ascertained by reference to factors such as the language of the statute, the subject matter and the consequence for those affected of a finding of invalidity.
  • “An act done in breach of a condition regulating the exercise of a statutory power is not necessarily invalid and of no effect. Whether it is depends upon whether there can be discerned a legislative purpose to invalidate any act that fails to comply with the condition.”
  • “The fact that s 160 regulates the exercise of functions already conferred on the ABA rather than imposes essential preliminaries to the exercise of its functions strongly indicates that it was not a purpose of the Act that a breach of s 160 was intended to invalidate any act done in breach of that section.”
  • Protocols are often more aptly described as “goals to be achieved rather than rules to be obeyed.”
  • “Courts have always accepted that it is unlikely that it was a purpose of the legislation that an act done in breach of a statutory provision should be invalid if public inconvenience would be a result of the invalidity of the act.”

Redmore[7]

Facts: The ABC was a tenant of property owned by Redmore. A dispute arose concerning the tenancy, resulting in the ABC repudiating the agreement. Redmore sought declaratory relief and damages.
The Australian Broadcating Act 1983 (Cth) provided:
69(2) The moneys of the Corporation shall not be expended otherwise than in accordance with the estimates of expenditure approved by the Minister.
70(1) The Corporation shall not, without the approval of the Minister, enter into a contract under which the Corporation is to pay or receive an amount exceeding $500,000.
The ABC claimed the repudiated agreement would have involved expenditure of over $500,000 and was unenforceable because the Corporation had not obtained the approval of the Minister. The High Court by majority dismissed that argument and held that the agreement was enforceable.
Held: The words of the sub-section were not clear as to whether an act in breach of the section should be invalidated however, the court held that the general structure of the Act and context provided that such an act should not be invalidated. The court took into consideration that to deny relief to Redmore would leave the breach of the contract without remedy and that enabling the ABC to escape obligations was not the purpose of the Act.
In dissent, Brennan and Dawson JJ observed that “The purpose of s 70(1) is the protection of public funds against affection by large contractual obligation or benefits incurred or acquired without prior ministerial approval.

End

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References

Textbook refers to R Creyke & J McMillan, Control of Government Action: Text, Cases and Commentary, 3rd ed, 2012.

  1. Textbook, pp 860-6.
  2. Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355.
  3. Australian Broadcasting Corporation v Redmore Pty Ltd (1989) 166 CLR 456.
  4. [1917] AC 170.
  5. (2011) 197 FCR 177.
  6. Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355.
  7. Australian Broadcasting Corporation v Redmore Pty Ltd (1989) 166 CLR 456.
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