The interaction of public law with private law

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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, [11.6.1]-[11.6.12]; [10.3.6]-[10.3.17].

Notes on “Government liability in tort” by Greg Weeks (pp. 41-5 of the Course Study Kit).

The following piece is available on Moodle: Greg Weeks, ‘Estoppel and Public Authorities: Examining the Case for an Equitable Remedy’ (2010) 4(3) Journal of Equity 247.

Jurisdiction of Federal Review

[1] As a part of their original jurisdiction, federal bodies have the right to review administrative decisions. The jurisdiction is conferred upon the High Court by s 75 (v) of the Constitution, whilst the Federal Court is conferred jurisdiction by s 39B of the Judiciary Act. The section are practically identical and give the courts power over all matters:

  • "in which a writ of Mandamus or prohibition or an injunction is sought against an officer of the Commonwealth".

Really, there are three requirements for federal review:

  1. There must be a controversy about rights, duties or liabilities that can be quelled by the exercise of judicial power (McBain).[2]
  2. The jurisdiction is to issue a remedy. A litigant invoking this jurisdiction must therefore establish an entitlement to one of those remedies.
  3. Relief must be sought against ‘an officer of the commonwealth.’
    • In Plaintiff M61/2010E v Commonwealth[3] the High Court acknowledged but did not resolve whether an independent contractor discharging administrative functions on behalf of the Commonwealth falls under the definition of an officer of the Commonwealth.

Section 39B (1a) (c) of the Judiciary Act also adds an alternative jurisdictional requirement:

  • “any matter... arising under any laws made by the Parliament.”

'Officer of the Commonwealth' material online -

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Government liability in tort

Can public authorities ever be liable in tort?

[4] The historical background behind the ability to hold public authorities liable in tort stemmed from:

  • The true meaning of the phrase “the King can do no wrong” which meant that the King was under a legal or equitable obligation to remove the procedural barrier to a petitioner bringing suit against the Crown because the King was not allowed or entitled to do wrong.
  • When this principle was later misinterpreted it led to a doctrine of sovereign immunity, which was opposed by A.V. Dicey.
  • Dicey argued that government officials should be liable in tort in the same way as other private individuals through actions brought against them personally because by acting unlawfully their actions were unofficial as well.
  • In Australia the Crown’s specially protected position was removed by statute in the 1850s and by s 75(iii) of the Constitution. Section 64 of the Judiciary Act also recognises the existence of the Commonwealth’s liability in tort.

Can public authorities ever be liable in tort where individuals would not be?

[5]In contrast to the old Diceyan view, governments cannot be dealt with on exactly the same basis as private individuals because their responsibilities make them different in some important senses. They may be liable for a wider scope of activities and also have a positive duty in certain circumstances.

  • Government can be liable for the negligent performance of acts which are never performed by private individuals, which is obvious once one realises that “otherwise, all sorts of governmental activities such as police, prisons, fire fighters, air traffic control and licensing – would be free of any duty of care.”
  • Public authorities may in some circumstances have a common law duty to perform a positive act in order to prevent loss or damage to an individual, even without that individual having any subjective expectation of, or express reliance on, such action.
  • In Stuart, Crennan and Kiefel JJ stated that “...the rule of equality is not wholly applicable. [Government] has public functions and statutory authority which the citizen does not.”

Can public authorities be liable for both acts and omissions in breach of common law duty?

[6]Public authorities are sometimes held to a higher standard than the private individual for negligent omissions. Although there is no general common law duty to act to prevent another from being harmed, there are a limited set of circumstances where this duty is owed:

  1. Where the person or authority creates a risk.
  2. By undertaking some task which leads another to rely on its being performed.
  3. Where the authority has conducted itself in such a way that others have relied on it to exercise its statutory power or discretion. This doctrine has been described as “specific reliance”.

East Suffolk River Catchment Board v Kent

Facts: The plaintiff suffered flooding to his land as the result of a breach in a sea wall which was no caused by any positive act of the defendant authority. The defendant had exercised its statutory duty to repair the wall in such an inefficient manner that Mr Kent’s farm land remained flooded for longer than it would have done if the Board had exercised its powers with due care and skill.
Issue: Positive duty on the part of a public authority.
Held: The dissent of Lord Atkin provides a vague basis on which to extend a duty of care to public authorities which have a statutory power to act but not a statutory duty.

Public law estoppel

[7]Government representations, advice, assurances and policies are administrative, not legislative, in character and can give rise to expectations as to how the government will act in the future. The law has responded by attaching legal consequences to some representations.

  • The law may impose a natural justice obligation on a decision-maker to give a hearing to a person before action is taken that is inconsistent with an earlier representation.
  • Loss incurred by a person from reliance on a negligent misrepresentation by an agency can be compensated by an award of damages in a tort action.
  • Can a government agency be estopped – or prevented – from acting inconsistently with a representation?
    • A leading example is Commonwealth v Verwayen,[8] where the High Court held by majority that in a tort claim arising from the collision between HMAS Voyager and HMAS Melbourne in 1964, the Commonwealth could not act inconsistently with an earlier representation to the plaintiff that it would not raise as a defence that the claim was time-barred or that there was no duty of care arising from a combat exercise.
    • When the government is acting in a capacity that an ordinary citizen could perform, such as in the context of litigation, it may be liable to be estopped to avoid acting inconsistently with an earlier representation.
  • In Bristol-Myers Squibb Pharmaceuticals,[9] the court held that it was always open to a government at a later stage to decide that budgetary considerations required that a decision be made inconsistent with a representation.
  • In Minister for Immigration and Ethnic Affairs v Petrovski,[10] through a combination of serious administrative errors, representations had been made to the plaintiff about his status which were incorrect and could lead to grave hardship as a result. The court said that although estoppel was not available, “there is no doubt about the duty of administrators to take account of the unfairness, and even misery, that serious mistakes in the action of government may cause.”[11]
  • The justification for the rule that a principle of estoppel does not prevent the government from acting inconsistently with a prior representation is examined in the following extract, where Gummow J refers to the principle of sovereign immunity, the legal doctrines of rule of law, ultra vires and the separation of powers, and to practical considerations such as the need to avoid fraud and collusion and to preserve administrative efficiency and flexibility:

Minister for Immigration, Local Government and Ethnic Affairs v Kurtovic[12]

Facts: A deportation order had been made against Mr Kurtovic, arising from his conviction for the manslaughter of his parents in law. Following a favourable recommendation from the AAT, the Minister revoked the order and sent him a letter advising him that any further conviction would lead to his deportation being reconsidered. Although Mr Kurtovic was not convicted of any further offences, the Minister made a fresh deportation order the following year. The Full Federal Court held that the letter did not give rise to the expectation that Mr Kurtovic would be allowed to stay in Australia and regardless, estoppel would fetter ministerial powers. The Minister’s order was still invalid on the grounds that it breached natural justice.
Issue: Can government agency action be estopped?
Held: There are difficulties in the way of propounding an estoppel against the exercise of an administrative decision.
  • Estoppel cannot operate to prevent or hinder the performance of a positive statutory duty or the exercise of a statutory discretion which is intended to be performed or exercised for the benefit of the public or a section of the public.
  • An argument that is no longer given much weight is underpinned by the doctrine of sovereign immunity; estoppel of a government claims and defences would result in the impermissible forfeiture of federal rights without sovereign consent.
  • Under more general concerns of public policy, holding the government bound by improper acts of its agents might promote fraud and collusion, some fear uncontrollable liability and the crippling of the public treasury (although this is probably overly dramatic) and considerations of efficiency and flexibility.
  • The connection between estoppel and ultra vires has been explained as relating to the supremacy of legislation as legal relations arising from legislation are independent of official action.
  • If a public authority cannot fetter duties or discretion by entering contracts, it is illogical to fetter them through the principle of estoppel.

Attorney-General (NSW) v Quin[13]

Facts: Mr Quin, a former magistrate seeking reappointment, claimed that any decision to reappoint him should be made in accordance with an earlier policy and not in accordance with a later policy introduced by the AG. The High Court rejected the claim. Mason J discussed the issue of whether a principle of administrative estoppel would prevent the NSW Government from applying a later policy.
Issue: Estoppel of a government policy.
Held: “The executive cannot by representation or promise disable itself from, or hinder itself in, performing a statutory duty or exercising a statutory discretion to be performed or exercised in the public interest, by binding itself not to perform the duty or exercise the discretion in a particular way in advance of the actual performance...”
  • It should not be readily supposed that the legislature intended that a proper exercise of discretion in the public interest was to be frustrated.
  • This does not deny the availability of estoppel against the executive when it does not significantly hinder the exercise of relevant discretion in the public interest.

Alternative executive strategies to redress administrative misrepresentations

  • [14]Discretionary payment by a government agency of compensation to a person for defective administration.
  • Adoption by agencies of codes of administrative conduct that stress high standards in advising and assisting the public.
  • Preparedness by government to take responsibility for the adverse consequences ensuing from public reliance upon defective advice.
  • Having a degree of flexibility for statutory requirements that have not been complied with by a person as a result of advice received from a government agency.
  • In an appropriate case a court can exercise its discretion to refuse relief to the Crown where it is seeking to enforce a legal right that is inconsistent with an earlier representation.
  • Some of these strategies were adopted following recommendations from the Commonwealth Ombudsman, who noted that “the current attitude of ‘caveat emptor’ by some agencies is inappropriate” and expressed concern “about individuals’ inability to obtain redress, particularly for poor quality advice.”[15]
  • It should be noted, however, that government agencies face a difficulty in responding to requests for advice from the public due to the fact that only the inquirer knows his or her own complete situation and the staff member is trying to apply their limited knowledge of this situation to complex criteria, therefore they can only respond subject to a disclaimer.

Legitimate expectation

[16]This factor warrants separate treatment for doctrinal and historical reasons. The role played by the concept of legitimate expectation, as noted by McHugh J in Haoucher, is to extend the range of protection given by the common law rules of natural justice. There are no fixed categories of legitimate expectation but some well-recognised classes include:

a) An expectation either that an existing licence will be renewed or that advance warning will be given of the prospect of non-renewal.
b) An expectation that an established liberty or interest will not be taken away or that a beneficial recommendation will not be overturned.
c) An expectation arising from an established course of practice.
d) An expectation that an opportunity will be given to demonstrate compliance with statutory criteria for a benefit or concession.

A legitimate expectation should be distinguished from a mere hope. It must be ‘legitimate’, ‘reasonable’ or ‘well-founded’. As discussed in Quin,[17] a legitimate expectation only gives rise to a right to procedural fairness and not to substantive enforcement of the content of the expectation. Not every departure from a stated intention necessarily involves unfairness, even if it defeats an expectation. The following circumstances that have not given rise to a legitimate expectations also illustrate the limitations imposed on the concept:

a) Recommendations in a report of an Ombudsman that would have no impact until accepted.
b) The appointment of a person to conduct an investigation.
c) The initiation of a statutory decision-making process that was not directed towards individuals or distinct bodies.
d) Where a practice or assurance had been negated or terminated by the executive.

English courts have gone further than Australian courts in giving legal recognition to legitimate expectation, giving it substantial enforcement to the extent of holding that it was a relevant consideration that the decision-maker was bound to take into account.

The utility of the concept may now be somewhat limited given the acceptance of a doctrine of natural justice, following the line of cases including Lam.

Haoucher v Minister for Immigration and Ethnic Affairs[18]

Facts: The minister had published a policy on criminal deportation, stating that an ATT recommendation would be rejected “only in exceptional circumstances and only when strong evidence can be produced to justify” the rejection of the recommendation. The High Court held by majority that the minister’s decision to reject the AAT’s favourable recommendation to Mr Haoucher was invalid because he had not been accorded natural justice.
Issue: Legitimate expectations giving rise to a right to natural justice.
Held: Although the minister was not bound to accept an AAT recommendation or to follow his own policy, subject to any contrary statutory intention, a person is entitled to be heard in opposition to the proposed exercise of a statutory power if its exercise will deprive him or her of a benefit or privilege which that person has a legitimate expectation of obtaining or continuing to exercise.
  • The concept of legitimate expectation extends the protection given by common law rules of natural justice to prospective, as well as existing, rights, interests, privileges and benefits.
  • The common law now gives a right to be heard before the exercise of a statutory power prejudices some right or interest which that person can legitimately expect to obtain in the future.
    • This should be distinguished from a mere hope.
  • The expectation was legitimate in this case because it was founded on a considered statement of policy made by the responsible minister in parliament.
  • The failure of the minister to provide the appellant with any reasons for defeating his expectations is a denial of procedural fairness.
  • McHugh commented that “The law seems to me to be moving towards a conceptually more satisfying position where common law requirements of procedural fairness will, in the absence of any clear contrary legislative intent, be recognised as applying generally to governmental executive decision-making...”

Attorney-General (NSW) v Quin[19]

Facts: The High Court, by majority rejected an application by Mr Quin for a declaration along the lines that he and other magistrates be appointed to a newly-constituted court unless they were unfit for judicial office.
Issue: Does legitimate expectation give rise to a substantial enforcement?
Held: Protection of legitimate expectations take the form of procedural protection, by insisting that the decision-maker apply the rules of natural justice. The individual is not entitled to substantive protection in the form of an order requiring the decision-maker to exercise discretion in a particular way.
  • Substantive enforcement would entail curial interference with administrative decisions on the merits by precluding the decision-maker from ultimately making the decision which they consider most appropriate in the circumstances. This would be contrary to separation of powers.

Minister of State for Immigration and Ethnic Affairs v Teoh[20]

Facts: A deportation order had been made against Mr Teoh on the basis of his conviction for possession of heroin in Australia. Mr Teoh had seven dependents in Australia, including natural and step-children. The High Court held by majority that there had been a breach of natural justice, as the department had failed to invite Mr Teoh to make a submission on whether a deportation order should be made, contrary to the International Covenant on the Rights of the Child, which provides that in any administrative decision concerning a child, the child’s best interests must be a primary consideration.
Issue: Can an international treaty which Australia has signed give rise to a legitimate expectation?
Held: A treaty which has not been incorporated into our municipal law cannot operate as a direct source of individual rights and obligations under that law but this does not mean that its ratification holds no significance for Australian law.
  • Where a statute or subordinate legislation is ambiguous, the courts should favour that construction which accords with Australia’s obligations under a treaty or international convention to which Australia is a party.
  • Ratification of a treaty is a positive statement by the executive to the world and the Australian people that the executive and its agencies will act in accordance with the Convention. This positive statement is an adequate foundation for a legitimate expectation.
McHugh J dissenting:
  • It is only too obvious that Mr Teoh was unaware of the existence of the Convention and therefore neither fairness nor good administration requires a decision-maker to inform a person that a rule will not be applied when the decision-maker has not lead that person to believe it would be applied.
  • A person cannot lose an expectation that they do not hold.
  • How, when or where undertakings in a Convention will be given force is a matter for the federal Parliament. This is a basic consequence of the fact that conventions do not have the force of law within Australia.

Teoh held that ratification by Australia of an international convention gives rise to a legitimate expectation for Australians that administrative discretionary decisions will be exercised in conformity with the terms of the convention.

  • A Joint Statement was issued under consecutive Labor and Coalition governments by the Attorney-General and the Minister for Foreign Affairs, stating that members of the public should not derive a legitimate expectation of treaty compliance from ratification by the executive. The statement was found to be ineffective because of its generality and the fact that it was not made at the time of ratification of a particular treaty.
  • Teoh has been applied in a number of cases, all of which dealt with the effect of the Convention on the Rights of the Child on immigration decision-making, and not with treaty compliance in other areas of administrative decision-making.

Doubt was later cast on Teoh by the majority in Lam:

Re Minister for Immigration and Multicultural Affairs; Ex parte Lam[21]

Facts: While Mr Lam was in prison, the Department of Immigration was considering whether he should be deported and wrote to him seeking the details of the carer of his children, so as to contact them in order to assess his relationship with the children. The department neither followed through to contact the carer, nor informed Mr Lam before making the deportation decision that no such contact had been made. The High Court held by majority that there had been no breach of natural justice.
Issue: The requirement of unfairness.
Held: “In a context such as the present, where there is already an obligation to extend procedural fairness, the creation of an expectation may bear upon the practical content of that obligation.”
  • There was no attempt to show that Mr Lam held any subjective expectation which lead him to do or omit to do anything, likewise, there was no evidence that he lost an opportunity to put any information or argument to the decision-maker, or otherwise suffered any detriment. No practical injustice was shown.
  • McHugh J’s dissenting judgement in Teoh was cited, where he questioned whether, given the development of the requirements of procedural fairness, the doctrine of legitimate expectations was left with any distinct role. The question becomes instead, what does fairness require in all the circumstances of the case?
  • The rules of procedural fairness require a decision-maker to bring to a person’s attention the critical issue or factor on which the administrative decision is likely to turn so that he may have an opportunity of dealing with it (Kioa). The notion of legitimate expectation serves to focus attention on the requirement of natural justice.
  • Hayne J commented that “it would be better if [legitimate expectation] were only applied in cases in which there is an actual expectation, or at the very least a reasonable inference is available that had a party turned his or her mind consciously to the matter in circumstances only in which that person was likely to have done so, he or she would reasonably have believed and expected that certain procedures would be followed.”


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 107-8.
  2. Re McBain; Ex Parte Australian Catholic Bishops Conference (2002) 209 CLR 372.
  3. (2010) 243 CLR 319.
  4. Course Study Kit, pp 41-3.
  5. Ibid, pp43-4.
  6. Ibid, pp 44-5.
  7. Textbook, pp 724-34.
  8. (1990) 170 CLR 394.
  9. Bristol-Myers Pharmaceuticals Pty Ltd v Minister for Human Services and Health (1996) 42 ALD 540.
  10. (1997) 73 FCR 303.
  11. Ibid, at 21.
  12. (1990) 21 FCR 193.
  13. (1990) 170 CLR 1.
  14. Textbook, pp 734-6.
  15. Ms Philippa Smith, Annual Report 1996-97.
  16. Textbook, pp 599-
  17. Attorney-General (NSW) v Quin (1990) 170 CLR 1.
  18. (1990) 169 CLR 648.
  19. (1990) 170 CLR 1.
  20. (1995) 183 CLR 273.
  21. (2003) 214 CLR 1.
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