Administrative Law
Client Newsletter
Current Issues in Delegations
May 2008
Introduction
No public servant wants to be challenged as to
the legal validity of decisions they have made, or
actions they have taken. Care must be taken to
ensure that statutory powers, duties and
functions are allocated to persons who can
validly carry them out.
These issues may arise when a new government
comes into power, when Cabinet is reshuffled, or
simply when new statutory office holders are
appointed in public agencies. Such changes often
create a flurry of administrative activity. In that
flurry, it is easy to overlook the matter of
revising delegations. VGSO encourages public
agencies to revisit delegations whenever there is
a significant change in office. We will deal with
some of the difficulties that may arise if
delegations are not kept updated below.
General principles
Any given power, duty or function set out in an
enactment may be exercised in one of three
possible ways:
•
The person vested with the power, duty or
function may exercise it him/herself;
•
Where the enactment enables it, a power,
duty or function may be delegated
pursuant to an instrument of delegation
and exercised in the name of a delegate.1
Summary
In this newsletter, we briefly refer to the
general principles in connection with
delegations and authorisations and then
discuss two issues which commonly arise in
the context of delegations, namely, the effect
of a delegation following a change in office
and the effect of a defective delegation.
•
Where the enactment does not include a
delegation provision, and the power, duty
or function is of an administrative nature,
the person in whom it is vested may
authorise, expressly or impliedly, another
person to exercise it ‘in the name of’ the
person vested with it, that is, as an agent.
In order to determine the appropriate person to
exercise a power, duty or function it is necessary
to consider its nature. It is also of course
necessary to consider whether there is a
provision for delegation in the enactment.
As a general rule, where the nature of the power,
duty or function requires the person vested with
it to come to an opinion, belief or state of mind
as to if or how it should be exercised, it should
only be exercised by the person vested with the
power, duty or function him/herself, or by a
properly appointed delegate through an
instrument of delegation.
Page 2
It is also useful to note that conditions or
limitations may be set by a delegator, when
delegating a power, duty or function to another
officer and that where a delegation is made to
the holder of public office (as opposed to a
particular person holding that position) the
delegation may ordinarily be taken to apply to a
person ‘acting’ in the role of the office holder.2
Where an enactment does not contain an express
provision for delegation, a power, duty or
function generally cannot be delegated. Where
there is no provision for delegation in the
enactment, it is necessary to consider the
purpose of the enactment and whether
Parliament would have intended that the person
vested with powers, duties or functions ought to
be the only person able to exercise them. In
circumstances where the power, duty or function
to be exercised is of an administrative nature,
and routine, it may be exercised by subordinate
officers in the absence of a delegation.
Administrative law recognises that ‘no
permanent head of a department in the Public
Service is expected to discharge personally all the
duties which are performed in his name’.3 In
such circumstances, officers may act pursuant to
an express or implied authorisation to carry out
the power, duty or function, as agents of the
person who is vested with it. This is referred to
as the ‘alter ego’ or ‘Carltona principle’.4
Effect of a delegation
following a change in office
Changes in government, Ministerial reshuffles
and changes within the public service all
impinge on the administration of government.
How do such changes affect delegations by the
person who formerly held office? Are delegations
by a former office holder valid once that person
leaves office?
These issues have arisen in a number of cases.
In Kelly v Watson (1985) 64 ALR 113 (Kelly),
the Secretary to the Commonwealth Department
of Primary Industries (the Secretary) delegated
certain powers under the Public Service Act
1922 (Cth), to his Deputy Secretary, including
the power to transfer public servants to a
position within his department. The instrument
of delegation was signed by the Secretary on 18
May 1978. The Secretary left office on 11 March
1980, and on 23 April 1980 a new Secretary was
appointed. The new Secretary took no steps to
revoke the instrument of delegation by the
Secretary, nor to issue a new delegation. On 12
March 1982, acting under the delegation of the
Secretary, the Deputy Secretary transferred Mr
Kelly to an office within the Secretary’s
department.
The delegations related issue that arose in this
case was whether the Deputy Secretary’s transfer
of Mr Kelly was valid, given that the Deputy
Secretary was acting under the delegation of the
former Secretary, who had since left office.
Neaves J of the Federal Court distinguished the
relationship of delegator and delegate from the
relationship between a principal and agent, in
that a delegation ordinarily continues to have
effect when the delegator leaves office. He said
that in determining whether a delegation is valid
following a delegator leaving office, it is firstly
necessary to consider the language of the Act
which confers the power to delegate, and to
consider whether the Act intends that a
delegation ceases to operate once the delegator
leaves office. He stated that such an intention
would need to be expressed through ‘clear and
unambiguous language’, as a failure of a
delegation to remain operational once the
delegator leaves office would produce an
administratively inconvenient result.
Neaves J referred to a Canadian decision, Re
Putnoki and Public Service Grievance Board
(1975) 56 DLR (3d) 197, in which Henry J made
the following useful comments:
While it is undoubtedly good practice
that a new Minister should, immediately
upon assuming office, ensure that he
exercises his authority in respect of all
necessary consents and delegations
under the statutes which he administers,
previously existing authorities granted
or conferred by his predecessor continue
until such time as he is able to put his
mind to endorsing or otherwise
Page 3
disposing of them. To hold otherwise
would be to cause great difficulties in
the administration of statutes during the
period of transition in the normal
transfer of portfolios from one Minister
to another. Such acts represent the
authority of the office, not of the
individual, and they do not cease to
have effect because the incumbent
changes, unless the statute otherwise
declares.
Neaves J also referred to Crockett J’s comments
in the Victorian Supreme Court case of Benwall
v Gottwald [1978] VR 253, that:
The relevant question is whether the
grantor of the authority was at the time
of its exercise empowered so to act and
not whether at the time of the exercise
of the authority by the grantee the
grantor is still in office.
Neaves J consequentially determined that the
transfer of Mr Kelly was valid.
Neaves J’s decision was followed in the Federal
Court decision of Aban v Minister for
Immigration, Local Government and Ethnic
Affairs (1991) 31 FCR 93, and more recently in
the Federal Court decision of Johnson v Veterans
Review Board [2002] FCA 1543 (Johnson).
Johnson concerned a delegation made by the
Principal Member of the Commonwealth
Veterans’ Review Board (the Board) of his power
to dismiss certain applications under the
Veterans’ Entitlements Act 1986 (Cth) to
Registrars of the Board. This delegation was
made on 21 July 1992. The Principal Member
left office on 8 April 1997, and a new Principal
Member took over. The new Principal Member
did not revoke the delegation until 15 January
2001 when a new delegation was issued by the
new Principal Member, in similar but not
identical terms to the previous delegation.
Mansfield J noted that in contrast to a principal
and agent situation, when a delegator vacates
office, the delegation will ordinarily remain in
place. This is because a delegate is empowered to
make a decision in accordance with his/her own
discretion as opposed to an agent, who may only
exercise power in the name of the principal. He
confirmed that a delegation made by a delegator
who has vacated office will remain valid, unless
the relevant enactment expressly provides to the
contrary.
Mansfield J’s decision was affirmed by the Full
Federal Court in Johnson v Veterans’ Review
Board [2005] FCA 1136.
In summary:
1. A delegation will not ordinarily become
ineffective where the delegator ceases to
hold office.
2. It is necessary to examine a delegation
provision in an Act to consider whether it
expressly states that a delegation will become
ineffective when the delegator ceases to hold
office.
3. It is best practice for a new officer holder to
review and, if necessary, re-issue delegations
in relation to powers, duties and functions
delegated by a previous office holder.
4. In contrast to the legal position concerning
delegations, where an office holder
authorises staff to perform functions or carry
our duties as an agent of the office holder,
such authorisation ceases when the office
holder leaves office. (In the case of an
implied authorisation, however, it is likely
that decisions of an administrative nature can
continue to be made in the name of the
officer vested with the power, despite the
change in the identity of the officer).
Effect of a defective
delegation
The risk in relation to a defective delegation is
that a statutory power may be wrongly exercised
by a recipient of a defective delegation, and,
consequentially, any decisions made by the
recipient of a defective delegation may be
ineffective.
Of course, it is best that a delegation be valid in
the first place, however, it may be possible to
‘save’ a defective delegation.
Page 4
We discuss below the effect of several ‘defects’ to
a delegation.
Delegation by an office holder who does
not hold power
An office holder is unable to delegate a power
duty or function that s/he does not hold.
This proposition was demonstrated in the New
South Wales Court of Criminal Appeal case,
Australian Chemical Refiners Pty Ltd v John
Edward Bradwell (unreported, NSWCCA 236 of
1985)(Bradwell). In Bradwell, by an instrument
of delegation dated 6 December 1974, New South
Wales State Pollution Control Commission (the
Commission) delegated its powers under the
Clean Air Act 1961 (NSW) pursuant to its power
of delegation in s 16 of the State Pollution
Control Commission Act 1970 (NSW). This
conferred upon the Commission the power to
delegate its powers under that Act and any other
Act. On 2 May 1975, an amendment was made
to the Clean Air Act, granting the Commission
power to consent to the institution of
proceedings under the Clean Air Act for an
offence against that Act. Mr Bradwell purported
to consent to the institution of proceedings for
an offence under the Clean Air Act pursuant to
the Commission’s delegation dated 6 December
1974- that is, he purported to rely on an ‘old’
instrument of delegation to delegate a ‘new’
power.
Street CJ held that the Commission was unable
to delegate a power that it did not have at the
time of the delegation and the delegation was
held to be ineffective to the extent that it
purported to delegate powers not held by the
Commission at the date of execution of the
instrument of delegation. Street CJ stated:
The delegation plainly enough must
speak at the date at which it is
executed... It would indeed be surprising
to contemplate such a solemn act as the
delegation of statutory powers to a
permanent officer being made, so to
speak per incuriam, that is to say
without specific awareness and
consideration of the content and
significance of the delegation. I would
hesitate long before recognising that the
delegation could be construed as
operating in future in this way.
Thus where an instrument of delegation purports
to generally delegate powers, the delegator will
not be able to rely on the instrument of
delegation to delegate a power not held by the
office holder at the time the instrument of
delegation was created.
Departmental legal officers and their legal
advisors should therefore be vigilant about
considering any new statutory amendments,
insofar as they may affect their delegation
arrangements.
Instrument of delegation cites erroneous
source of power
Where an instrument of delegation cites an
erroneous source of power, a delegation will not
necessarily be ineffective.
This issue was considered in the Federal Court in
Mercantile Mutual Life Insurance Co Ltd v
Australian Securities Commission (1993) 112
ALR 463. In this case the Australian Securities
Commission (ASC) delegated powers and
functions under the Corporations Law to persons
including the Regional Commissioner for the
State of New South Wales (the Commissioner).
Pursuant to this delegation, the Commissioner
issued an instrument of authorisation, dated 2
April 1992, to Mr John Murphy and Mr Peter
Allen for the purpose of making an application in
relation to the liquidation of a company.
The instrument of authorisation purported to
authorise its recipients pursuant to s 597 of the
Corporations Law, which provides a procedure
for a prescribed person to apply to the Court in
relation to winding up proceedings. Section 597
did not, however, provide for the authorisation
of prescribed persons to carry out actions
pursuant to s 597.
The relevant source of the power was in fact s
11(4) of the Australian Securities Commission
Act 1989 (Cth), which empowered the ASC to do
whatever is necessary for, or in connection with
the performance of its functions. The instrument
of authorisation did not refer to this provision.
Page 5
Black CJ held that the ASC’s mistaken
assumption as to the source of ASC’s power to
authorise persons to make applications pursuant
to s 597 was not fatal to ASC’s purported
authorisation to Mssrs Murphy and Allen.
However, he warned that where a delegator
purportedly delegates a power through the
wrong source of power, there may be a risk of
the delegation being ineffective in circumstances
where the correct source of power has a precondition attached to it which has not been
addressed in the purported delegation.
Therefore, whilst an instrument of delegation
which cites an erroneous source of power, or
purports to delegate upon a mistaken assumption
about the source of a power may still be
effective, there is a risk that it will not be, and
that actions taken by officers pursuant to that
delegation would be invalid.
For further information
For further information or legal advice on any
issues raised in this newsletter contact:
James Ruddle on 8684 0470
Deputy Victorian Government Solicitor
Jonathan Smithers on 8684 0411
Assistant Victorian Government Solicitor
Penina Berkovic on 8684 0469
Solicitor
The VGSO is the primary source of legal services
to the Victorian State Government and its
statutory authorities, providing strategic advice
and practical legal solutions.
In summary, ‘defective’ delegations may be in
some instances remain effective. In order to
determine whether a defective delegation will be
operationally effective it is necessary to carry out
the following steps:
1
1. Examine the Act conferring the power upon
the delegator;
2. Examine the purported instrument of
delegation to identify the ‘defect’; and
3. Carefully consider whether the powers
conferred by the purported instrument of
delegation are able to be validly exercised,
despite the ‘defect’. In the event that it is
doubtful that the powers conferred by the
purported instrument of delegation are able
to be validly exercised, a new instrument of
delegation should be created to ‘fix’ the
‘defect’.
Section 42 of the Interpretation of Legislation Act
1984 provides that a delegated power, duty or
function is to be carried out in accordance with the
delegate’s ‘opinion, belief of state of mind’.
2
See s 42A of the Interpretation of Legislation Act 1984
.
3
O’Reilly v State Bank of Victoria Commissioners
(1983) 153 CLR 1
4
This principle was discussed by the Court in the case
of Carltona Pty Ltd v Commissioners of Works [1943]
2 All ER 560