DUTY TO Exercise Discretionary Power - delegation PDF

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DUTY TO Exercise Discretionary Power - delegation...

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DUTY TO EXERCISE DISCRETIONARY POWER - delegation If a decision maker is given a discretion power the DM must actively exercise that discretion. A decision maker cannot always delegate their power to someone else. A discretion conferred in a statute can only be delegated to an authorised person.

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Rationale – there must be accountability for the exercise of public power; presumption that if someone is specifically named as being the decision maker then they should make the decision – need for some statutory mandate to exercise the power.

It is a presumption that can, in appropriate circumstances, be rebutted; either by an express power of delegation or a power of agency (delegation in another guise) which is implied by the statute.

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Terminology Principal The person nominated in the legislation to exercise the power. The principal retains the authority to make decisions, even when the power has been delegated to other officers. Delegate A person or officer to whom a power has been delegated by a written instrument signed by the principal and pursuant to statutory authority to delegate. Power of delegation continues until formally revoked (even if the principal leaves office). The delegation may accord the delegate the same powers as the principal, or limits and conditions may be placed on the delegation. Within any limits or conditions set out in the written authority of delegation, the delegate acts independently of the principal. It is expected that the delegate would sign a decision in his or her own name and not that of the principal

Re Reference under Section 11 of the Ombudsman Act 1976 for an Advisory Opinion; Ex parte Director-General of Social Services (1979) 2 ALD 86 – President Brennan AAT Facts: Mr Prowse (the delegate) exercised a power delegated to him under s.12 of the Social Services Act 1947 (Cth), he signed his decision ‘L. J. Daniels’, and then signed his own initials next to the Daniels’ signature.

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The Ombudsman sought an advisory opinion from the AAT as to whether by signing the decision in the name of his principal (the Director-General Mr Daniels) rather than signing his own name Mr Prowse’s otherwise lawful decision was invalid. Held: The delegate had to exercise power in his own name or it was an invalid exercise of power. The rationale - accountability - the DM should be identifiable to the person whose interests etc are affected by the decision. ‘if the applicant had been aware of his appeal rights under s.15, he might have been misled into thinking that he could not appeal to any higher official’ because the signature may lead him to believe that the Director-General himself had made the decision.

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Agent In limited circumstances – where there is a ‘practical administrative necessity’ - a person may act as an agent, surrogate, or alter ego of the named principal decision maker. An agent acts in the name of the principal. An agent is subject to the direction of the person on whose behalf they are acting, and their authority cease when the principal leaves office. Agent/delegate are terms that are used interchangeably Minister for Aboriginal Affairs v Peko Wallsend.

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Administrative Assistant An authorised decision maker can obtain assistance from others (to conduct research, interview, prepare a briefing paper etc). There is no need for an administrative assistant to be authorised formally or to act under delegation.

The key differences between a delegate and an agent: 

A delegate will act in their own name as delegate.

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An agent acts in the name of the person who appoints them.

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A person who appoints a delegate is not legally responsible for their acts. The person who appoints an agent is legally responsible for the acts of their agent.

Under what circumstance might a delegate or agent be appointed?

General rule someone to whom a power is granted is expected to exercise the power, he or she cannot delegate that power unless authorised by an express power of delegation in the relevant act. But it may be possible and appropriate to imply from the terms of statute and circumstances of the case that it is appropriate to allow a person to act as an agent (delegate by another name).

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EXPRESS power of delegation 

A statute may for example give a power to a minister and then state specifically that the minister may ‘delegate’ that power to a departmental officer.

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Or a council may for example be given an express power to ‘assign to its officers such duties as it deems appropriate’.

In such cases however the delegate (departmental officer, council officer) usually cannot further delegate. If the initial power to delegate is specific and restricted then further delegations are restricted unless there is a contrary statutory intention (see O’Reilly below).

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Is IMPLIED delegation (to an ‘agent’) possible? The law has devised principles which will allow a power to be exercised by an authorised agent - agency principle or the alter ego principle. Legislation will usually state which person is authorised to exercise a power and so empowered to make a decision - eg. ‘the minister’. Often the duties that are imposed on ministers, and the powers given to ministers, are exercised under the authority of the minister by appropriate departmental officials, either acting as delegates or agents. Someone who acts in the name of the relevant minister is said to be the minister’s alter ego or authorised agent. The alter ego principle was first developed in the English case Carltona v Commissioner of Works (1943) This principle has really developed out of necessity – it is a pragmatic response to the growth of government.

If this type of defacto delegation were not allowed the decision making responsibilities of the minister would become too large – too many areas of responsibility – too many pieces of legislation. To expect the minister to make all decisions in his or her department would be impossible. Minister for Aboriginal Affairs v Peko Wallsend (1986) 162 CLR 24

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“The cases in which the principle has been applied are cases in which the nature, scope and purpose of the function vested in the repository made it unlikely that Parliament intended that it be exercised by the repository personally because administrative necessity indicated that it was impractical for him to act otherwise than through his officers” Minister for Aboriginal Affairs v Peko Wallsend (1986) 162 CLR 24 per Mason J Importantly delegation according to the alter ego principle is justified on the basis of accountability – although the minister may not make the final decision he or she can supervise or control the authorised agent therefore he or she remains accountable to the parliament.

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Aronson, Dyer & Groves note that “the courts have confined Carltona to contexts in which it does no violence to accepted accountability structures.” (6.60 4th edn)

What to consider when determining whether power to appoint an agent can be implied In order to determine whether the right to appoint an authorised agent (delegate) is implied in the statute, it is necessary to consider the terms of the statute – 

Does it require the power to be exercised personally by the person designated?

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What is the nature of the power?

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Will exercise of the power significantly impact on rights and interests?

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Does the person authorised to act as agent have the expertise etc necessary to be capable of exercising the power effectively?

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Is there a practical necessity for the principal to authorise an agent to act on his/her behalf?

Eg. If the agent is to simply ascertain facts on the basis of objective evidence (interviewing, research, assessing data etc), rather than exercise a discretion which impacts on an individual’s interests or rights then the agency is more likely to be sound Secretary, Department of Social Security v Alvaro (1994) 50 FCR 213

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Carltona v Commissioner of Works (1943) 2 ALL ER FACTS: Statute here gave power to “a competent authority”. This was defined to include the Commissioner of Works. Eventually the competent authority became the Ministry of Works. The government wanted to acquire Carltona’s factory for purposes of wartime manufacture. Plaintiff received a letter from the Ministry of Works which was signed by an official on behalf of the Commissioner. The letter said that it was to take possession of the plaintiff’s factory. Plaintiff challenged the exercise of discretion arguing that it was ultra vires because the repository of the discretion, the Commissioner, had failed to exercise the power personally. HELD: Ministers cannot possibly exercise all the powers with which they are vested. The task of government is too large for them to do so personally. Therefore it was okay that an official act as the alter ego or agent of the minister. This principle is supported in Australia as long as accountability mechanisms can remain in place and the agency is justified by ‘practical administrative necessity’. Any delegation expressly authorised by statute or agency arrangement pursuant to the Carltona principle must be undertaken properly – it must comply with the terms of the statute.

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O’Reilly v State Bank of Victoria Commissioners (1982) 153 CLR 1 FACTS: Tax Commissioner had discretion – formally delegated to the Deputy Commissioner who was prohibited by statute from subdelegating the power. Here the tax office was investigating a Mr Lawson – notice was sent to him in the name of the Deputy Commissioner. Notice had a copy of the Deputy Commissioner’s signature but this was placed on it by a Chief Investigation Officer. Deputy Commissioner had no personal knowledge about the preparation or delivery of the notice. BUT …

The Chief Investigative Officer was acting in accordance with a general authorisation signed by the Deputy Commissioner – an authorisation for him to act as an agent and sign his name. It was argued that the delegation /authorisation of power from the Deputy Commissioner to the Officer was invalid, therefore the decision was ultra vires. Issue: It was clear that the Commissioner was able to delegate power to the Deputy Commissioner – this was expressly provided for in the statute. The central question was whether further transfer of power to the Chief Investigative Officer was permissable.

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Can the Deputy Commissioner sub-delegate a power delegated to him onto the Chief Investigation Officer? – the statute specifically said no.

HELD: The court was able to get around this by using the Carltona principle – this was not a delegation but rather an authorisation of an agent to act on the principal’s behalf and in his name. Again the rationale underlying the application of the Carltona principle in this case was necessity – Millions of tax notices are issued in Australia each year. Just as in the case of ministers administering departments, it is not possible for the Commissioner or the Deputy Commissioner to administer and exercise personally the entirety of the tasks and powers assigned to them by statute. “[I]t would reduce the administration of the taxation laws to chaos if the powers conferred by those sections could only be exercised by the Commissioner or Deputy Commissioner. It can not be supposed that the Parliament intended such a result …” Carltona - Agency or delegation? Carltona is clearly a principle of agency NOT delegation. This means that the agent acts in the principal’s name – can use the principal’s power. Essentially the agent is like a shadow of the principal. Summary General rule - someone to whom a power is granted is expected to exercise the power, he or she cannot delegate that power. Unless there is an express power of delegation.

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Or it may be possible and appropriate to imply from the terms of statute and circumstances of the case that it is appropriate to use Carltona principles of agency.

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There are some limitations on the Carltona principle. Tickner v Chapman (1995) 57 FCR 451 (Hindmarsh Island case) FACTS: Aboriginal Affairs Minister issued a preservation order over an area of Aboriginal heritage significance. His decision was based in part on some material identified as secret Narrindgerri women’s business. He did not consider the material but based his decision on the opinion of a female member of staff who had read the material. He had also not personally considered a number of representations made by interested parties.

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The Act gave him a discretion to make a decision, but the condition of the discretionary power was the requirement that he be ‘satisfied’ that the Area was of heritage significance and under threat. ISSUE: Was whether this was a valid exercise of his discretion. HELD: It was not. The statute required that the Minister consider the material. The court said that this decision was too important to be delegable. The knowledge of others could not be attributed to the Minister and the discretion could not be delegated. The Court interpreted this condition as requiring the Minister to personally consider such material. Re ‘Women’s Business’ – if he could not consider the documents a female minister should be given the task. Minister for Aboriginal Affairs v Peko Wallsend (1986) 162 CLR 24 Takes a similar approach to Tickner v Chapman case FACTS: Minister decided to grant land to Aboriginal claimants pursuant to s.11 of the Aboriginal Land Rights (NT) Act 1976 (Cth), he did so on the basis of a briefing paper prepared by departmental officers. The Departmental brief had failed to refer to submissions received by the Department from Peko after the Land Commissioner’s Report recommending the grant had been received by the Department. In those submissions Peko had objected to the limited consideration the Land Commissioner had given to the impact of the grant on their mining interests and sought to correct an clarify relevant facts.

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The Act included provision for formal delegation (s.76), but the Minister had not formally delegated his function under s.11 by a written instrument. HELD: The nature, scope and purpose of the power had such important consequences, both for Aboriginal claimants and others affected by any grant, that the Court held the s.11 power must be exercised by the Minister personally unless formally delegated. It was therefore not possible to argue on Carltona principles that the department considered the Peko submissions as the Minister’s authorised agent. In the preparation of summaries and recommendations the Minister’s department provided administrative assistance, they did not act as agents.

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The Minister is excused from the burden of reading the underlying documentation (note: the Minister in Tickner was required to read all documentation himself), provided he has read a briefing note that summarizes those documents without omitting any material facts. If relevant facts are omitted the Minister cannot argue that the department assessed all the underlying documents as Carltona agents, and therefore his department’s knowledge and consideration of the facts central and relevant to the decision is effectively the Minister’s own.

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Summary 

The principles of delegation and agency “give effect to the plain language of the legislation; they facilitate legal accountability of decision-makers by creating a clear and transparent structure for decision-making; and they safeguard individual rights by confining and structuring the authority to make decisions that encroach on rights.” (C&McM (3rd edn) 8.5.13; (4th edn) 8.5.11)

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Discretion must be exercised by the person to whom it is granted.

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The principle against delegation can be expressly or impliedly rebutted.

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Alter ego or agency principles may be used to ease a decisionmaker’s workload and retain administrative efficiency.

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Peko-Wallsend and Tickner - an obligation on a decision maker to personally consider all relevant matters cannot be performed by an assistant on the Minister’s behalf.

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The common law principles may be, and have been, modified by federal and state legislation – usually to ensure that decisions are not made void for a technical breach of the principles of delegation (see C&Mc (3rd and 4th edn) 8.5.14)

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