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Interpreting Ministerial Directions to Statutory Corporations: What Does a Theory of Responsible Government Deliver?

Published online by Cambridge University Press:  24 January 2025

Christos Mantziaris
Christos Mantziaris*
Affiliation:
Law Program, Research School of Social Sciences and Centre for Commercial Law (Faculty of Law), Australian National University
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Extract

The ability of ministers to exercise de facto control over statutory corporations presents a significant governance problem for the Australian public sector. Parliaments have attempted to define the degree of autonomy granted to the statutory corporation by regulating the flow of communication between ministers and boards. Reporting requirements are one legal technique. Another is the use of legislative provisions which grant the minister formal powers of direction over the corporation and which impose upon its directors obligations to disclose corporate information to the minister. These provisions vary widely in their language; and their meaning is often a source of concern for corporate office holders and third parties dealing with the corporation. Statutory powers of direction raise fundamental questions of institutional design: how closely ought statutory corporations be controlled by the Executive? And in what manner ought the Executive be accountable to Parliament for its activities?

Type
Research Article
Information
Federal Law Review , Volume 26 , Issue 2 , June 1998 , pp. 309 - 347
Copyright
Copyright © 1998 The Australian National University

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Footnotes

I would like to thank Stephen Bottomley, Peta Spender, Jane Stapleton, Leslie Zines and the referee for their comments on an earlier version of this paper. I have also benefited from a number of discussions with Mark Aronson, Keven Booker, Angus Corbett and Paul Redmond during a stay at the University of New South Wales Law School in January 1998. Despite a superficial appearance to the contrary, this paper and its author are indebted to Justice Paul Finn for his intellectual guidance and generosity of spirit. The responsibility for errors is entirely my own.

References

1 See below n 76 and Commonwealth Authorities and Companies; Act 1997 (Cth), ss 15-16.

2 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520, to be discussed below.

3 These terms of analysis are defined below: see below text at nn 9-12.

4 (1997) 146 ALR 1.

5 Finn J's statements on the subject as a legal academic are numerous: Finn, P D, Law and Government in Colonial Australia (1987)Google Scholar; “Public Trust and Public Accountability” (1993) Australian Quarterly 65; “The Abuse of Public Power in Australia: Making Our Governors Our Servants” (1994) 5 Public Law Rev 43; “The Forgotten Trust: The People and the State” in M Cope (ed), Equity: Issues and Trends (1994) ch 5; “A Sovereign People, A Public Trust” in PD Finn (ed), Essays on Law and Government vol 1 (1995) ch 1; and PD Finn and G J Lindell, “The Accountability of Statutory Authorities” in Commonwealth Parliament Senate Standing Committee on Finance and Government Operations, Statutory Authorities of the Commonwealth: Fifth Report (1982), appendix 4.

6 On the distinction between the legal and economic models of agency and its relevance to corporate law analysis, see B R Cheffins, Company Law: Theory, Structure and Operation (1997) at 45 and L Dallas, “Two Models of Corporate Governance: Beyond Berle and Means” (1988) 22 U Mich J Law Reform 19 at 34-6.

7 Cf Palmer, M, “Toward an Economics of Comparative Political Organization: Examining Ministerial Responsibility” (1995) 11 J of Law, Econ and Org 164Google Scholar. On the problem of agency cost, Jensen, M Meckling, W. “Theory of the Firm: Managerial Behaviour, Agency Costs and Ownership Structure” (1976) 3 J of Fin Eco 305CrossRefGoogle Scholar.

8 Cf Dunleavy, P, Bureaucracy and Public Choice: Economic Explanations in Political Science (1991)Google Scholar and, within the tradition of transaction cost economics, Hom, M, The Political Economy of Public Administration: Institutional Choice in the Public Sector (1995)Google Scholar.

9 Shills, E A and Finch, H A (eds), Max Weber on The Methodology of the Social Sciences (1949) at 89ffGoogle Scholar; Hekman, S J, Max Weber and Contemporary Social Theory (1983) ch 2Google Scholar.

10 McVicar v Commissioner for Railways (NSW) (1951) 83 CLR 521 at 534 and Crouch v Commissioner for Railways (Qld) (1985) 159 CLR 22 at 35. The practice has common law origins of considerable antiquity: Stoljar, S J, Groups and Entities: An Inquiry into Corporate Theory (1973) ch 9Google Scholar; Archbishop of Perth v “AA” to “JC” (1995) 18 ACSR 333; Kantorowicz, E H, The King's Two Bodies: A Study in Medieval Political Theology (1957)Google Scholar; Maitland, F W, “The Corporation Sole” (1901) 17 LQR 335Google Scholar.

11 The most recent (non-exhaustive) list of Commonwealth statutory corporations may be found in Senate Finance and Public Administrations Legislation Committee, List of Commonwealth Bodies (1996).

12 Wettenhall, R; “Corporations and Corporatisation: An Administrative History Perspective (1995) 6 Public Law Rev 7Google Scholar; I Beckett, “Public Enterprise Boards in Australia” in J Corkery, C O'Nuallain and R Wettenhall (eds), Public Enterprise Boards — What They are and What they do: Reports from an International Study (1994) 172; G Sawer, “The Public Corporation in Australia” in W Friedmann (ed), The Public Corporation: A Comparative Symposium (1954), ch 1; G Sawer, “Ministerial Responsibility and Quangos” in Curnow, G R and Saunders, C A, Quangos: The Australian Experience (1983) 73-81Google Scholar. For a sample of early literature on Australian statutory corporations see Eggleston, F W, State Socialism in Victoria (1932)Google Scholar.

13 Note the Commonwealth Authorities and Companies Act 1997 (Cth), Pt 4. The most recent (non-exhaustive) list of Commonwealth companies limited by shares or guarantee is also found in Senate Finance and Public Administrations Legislation Committee, above n 11.

14 Corporations Law, s 45A ands 9 definition of “public company”.

15 Cf Hart, H L A, “Definition and Theory in Jurisprudence” (1954) 70 LQR 37 at 52-9Google Scholar.

16 Under the Corporations Law, s 45A(3):

A proprietary company is a large proprietary company for a financial year if it satisfies at least 2 of the following paragraphs:

(a) the consolidated gross operating revenue for the financial year of the company and the entities it controls (if any) is $10 million or more;

(b) the value of the consolidated gross assets at the end of the financial year of the company and the entities it controls (if any) is $5 million or more;

(c) the company and the entities it controls (if any) have 50 or more employees at the end of the financial year.

17 A small proprietary company is a company that falls beneath this threshold: s 45A(2). Established, respectively, under the following enactments: Science And Industry Research Act 1949 (Cth); Broadcasting Services Act 1992 (Cth); Special Broadcasting Service Act 1991 (Cth); Australian Trade Commission Act 1985 (Cth) and the Primary Industries and Energy Research and Development Act 1989 (Cth) in conjunction with the Grains Research and Development Corporation Regulations 1990 (Cth).

18 Pratt, J W and Zeckhauser, R J, “Principals and Agents: An Overview” in J W Pratt and R J Zeckhauser (eds), Principals and Agents: The Structure of Business (1985) ch 1 esp. at 4Google Scholarff.

19 Aghion, P Tirole, J, “Formal and Real Authority in Organizations” (1997) 105 J of Pol Econ 1CrossRefGoogle Scholar.

20 To select but two examples: the use of the corporation as a form for associations in civil society (see SJ Stoljar, above n 10; L C B Gower, Gower's Principles of Modern Company Law (7th ed 1997) chs 1-2 and Associations Incorporation Act 1984 (NSW)); or as an expedient means for the recognition of groups of indigenous people (see Aboriginal Councils and Associations Act 1976 (Cth)).

21 Corcoran, S, “does a corporation have a sex?” in N Naffine and R J Owens (eds), sexing the subject of law (1997) 215Google Scholar.

22 For a recent exploration of the constitutional division of powers within the Corporations Law company, see Bottomley, S, “From Contractualism to Constitutionalism: A Framework for Corporate Governance” (1997) 19 Syd LR 277Google Scholar.

23 Corporations Law, Sch 1, Table A, Art 66 states: “Subject to the [Corporations Law] and to any other provisions of these [Articles], the business of the company shall be managed by the directors, who may pay all expenses incurred in promoting and forming the company, and may exercise all such powers of the company as are not, by the Law or by these regulations, required to be exercised by the company in general meeting”.

24 Corporations Law, Sch 1, Table A, Arts 2, 3, 12 and 27 respectively.

25 Automatic Self-Cleansing Filter Syndicate Co v Cunninghame [1906] 2 Ch 34; John Shaw and Sons (Salford) Ltd v Shaw [1935] 2 KB 113 at 134; Howard Smith v Ampol Ltd [1974] AC 821 at 837; NRMA v Parker (1986) 11 ACLR 1 at 5; Poliwka v Helen Holdings Pty Ltd (1992) 8 ACSR 747 at 787-8.

26 For example, Corporations Law, Pt 3.3 (meetings); Pt 2.4 Div 4B (approval procedures for share buy-backs), ss 197-8 (alteration of rights of a class of shareholders).

27 Corporations Law, Pt 3.6 Divs 5-7.

28 Corporations Law, Pt 3.7 Div 2 and ss 1001A, 1001B respectively.

29 Corporations Law, s 245(2A) inserted by First Corporations Law Simplification Act 1995 (Cth), Sch 4.

30 This is most obvious in the ever-growing recognition of the duty owed by directors to the creditors of the company: Walker v Wimborne (1976} 137 CLR 1; Equiticorp Finance Ltd (in liq) v Bank of New Zealand (1993) 11 ACSR 642 at 680, 724-5; Kinsela v Russell Kinsela Pty Ltd (in liq) (1986) 4 NSWLR 722 at 730. See KJ Hopt, “Directors' Duties to Shareholders, Employees, and Other Creditors: A View From the Continent” in E McKendrick (ed), Commercial Aspects of Trusts and Fiduciary Obligations (1992); D Prentice, “Directors, Creditors, and Shareholders” in E McKendrick (ed), Commercial Aspects of Trusts and Fiduciary Obligations (1992); LS Sealy, “Directors' 'Wider' Responsibilities — Problems Conceptual, Practical and Procedural” (1987) 3 Monash Univ LR 164; and in historic rules such as the share capital maintenance rule: Trevor v Whitworth (1887) AC 409.

31 Percival v Wright [1902] Ch 2 Ch 421; Bell v Lever Bros Ltd [1932] AC 161. Exceptions to thisrule have been made in particular circumstances: Coleman v Myers [1977] 2 NZLR 225 and Glavanics v Brunninghausen (1996) 19 ACSR 204.

32 Gramophone and Typewriter Ltd v Stanley [1908] 2 KB 89. See also Imperial Hydropathic Hotel Co Blackpool v Hampson (1882) 23 Ch D 1.

33 H Ford and R Austin, Ford and Austin's Principles of Corporations Law (looseleaf) at paras [8.070-8.190] and PD Finn, Fiduciary Obligations (1977) at paras 111ff.

34 Corporations Law, s 60; Standard Chartered Bankof Australia Ltd v Antico (1995) 18 ACSR 1; ASC v AS Nominees (1995) 18 ACSR 459; Re Hydrodam (Corby) Ltd [1994] 2 BCLC 180. In more limited circumstances, an appointor may be vicariously liable for the acts of its appointee on the board of a company, where those acts occur in the course of the appointee's employment: Dairy Containers Ltd v NZI [1995] 2 NZLR 30. See generally P Koh, “Shadow Director, Shadow Director, Who Art Thou?” (1996} 14 C & SLJ 334; J Pizer, “Holding an Appointor Vicariously Liable for its Nominee Director's Wrongdoing #x2014; An Australian Roadmap” (1997) 15 C & SLJ 81; E W Thomas, “The Role of Nominee Directors and the Liability of their Appointors” in I Ramsay (ed), Corporate Governance and the Duties of Company Directors (1997) 184.

35 Harkness v Commonwealth Bank of Australia (1993) 12 ACSR 165. Not even the more “liberal” approach of Jacobs J in Re Broadcasting Station 2GB Pty Ltd [1964-65] NSWR 1648 and Levin v Clark [1962] NSWR 686 would support such a disclosure. On nominee directors' duties, see generally: Redmond, P, “Nominee Directors” (1987) 10 UNSWLJ 194Google Scholar; Crutchfield, P, “Nominee Directors: the law and commercial reality” (1992) 20 ABLR 109Google Scholar; E W Thomas, ibid.

36 Bank of Tokyo v Karoon [1986] 3 All ER 468 at 476.

37 Toronto Stock Exchange Committee on Corporate Governance in Canada, Where were the Directors? Guidelines for Improved Corporate Governance in Canada (December 1994) paras 7.1-7.11; Committee on the Financial Aspects of Corporate Governance, (Cadbury Committee) 1996, paras 6.9-6.11.

38 For example, Toronto Stock Exchange, ibid paras 7.8-7.9 and see also 3.10.

39 Primary Industries and Energy Research and Development Act 1989 (Cth).

40 See text above at nn 9-12. This account is based on a survey of the legislation cited above n 17. Surveys of general characteristics of Australian statutory corporations may also be found in R Wettenhall, “Quangos, Quagos, and the Problems of Non-Ministerial Organization” in GR Curnow and CA Saunders (eds), Quangos: The Australian Experience (1983) ch 2; I Beckett, above n 12; L Zines, “Federal Public Corporations in Australia” in W Friedmann and J F Gamer (eds), Government Enterprise: A Comparative Study (1965) ch 13 and G Sawer, “The Public Corporation in Australia” in W Friedmann (ed), The Public Corporation: A Comparative Symposium (1954) ch 1.

41 Bank of New South Wales v Commonwealth (1948) 76 CLR 1 at 361.

42 A contemporary legislative technique is to impose these requirement through a generic statute applying across the board to statutory corporations: eg, Commonwealth Authorities and Companies Act 1997 (Cth), Pt 3.

43 For example, Commonwealth Authorities and Companies Act 1997 (Cth), ss 16-17.

44 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 561; Lindell, G J, “Parliamentary Inquiries and Government Witnesses” (1995) 20 MULR 383Google Scholar and E Campbell, “Parliament and the Executive” in Zines, L (ed), Commentaries on the Australian Constitution (1977) at 90ffGoogle Scholar. Wettenhall has examined political control techniques exercised over statutory corporations, see above n 40 especially at 28-9.

45 The decision must be of an administrative character under an enactment for the purposes of the Administrative Decisions Oudicial Review) Act 1976 (Cth), s 3(1). See Australian National University v Burns (1982) 43 ALR 25 (decision under a contract); General Newspapers Pty Ltd v Telstra Corporation (1993) 117 ALR 629 (decision to enter a contract). See generally Seddon, N, Government Contracts: Federal, State and Local (1995) 270-80Google Scholar; Allars, M, “Private Law But Public Power: Removing Administrative Law Review From Government Business Enterprises” (1995) 6 Public Law Rev 44Google Scholar; Aronson, M and Dyer, B, Judicial Review of Administrative Action (1996) at 49ffGoogle Scholar. There is also the possibility of making use of the common law basis of review: Mercury Energy Ltd v Electricity Corporation of New Zealand Ltd [1994] 1 WLR 22; Bayne, P, “The Common Law Basis of Judicial Review” (1993) 67 ALJ 780Google Scholar and Taggart, M, “Corporatisation, Contracting and the Courts” (1994) Public Law 351Google Scholar.

46 See generally M Aronson and B Dyer, ibid ch 12.

47 Freedom of Information Act 1982 (Cth), s 4 (definition of “prescribed authority”), s 7 and Sch 2 (schedule of excluded bodies).

48 Hanson, A H, Parliament and Public Ownership (1961)Google Scholar; Robson, W A, Nationalized Industry and Public Ownership (1960)Google Scholar; Prosser, T, Nationalised Industries and Public Control: Legal, Constitutional and Political Issues (1986)Google Scholar and Woodhouse, D, Ministers and Parliament: Accountability in Theory and Practice (1994) at 20-2CrossRefGoogle Scholar. Cf the brief discussion of these issues in Commonwealth Parliament, Joint Committee of Public Accounts, The Australian Aluminium Production Commission (Report no 21, 1955), Pt 1, Ch 3.

49 United Kingdom Parliament, Select Committee on Nationalised Industries Session 1967-68, Ministerial Control of the Nationalised Industries: First Report (1968) especially ch III.

50 Ibid. Cf J Corkery and R Wettenhall, “Public Enterprise Boards: A Neglected Area of Governance” paper published by the International Institute of Administrative Sciences Brussels (1990) at 14-5 and C Mantziaris, “When the Minister Leans on the Board: the Forced Resignation of the Managing Director of Australia's Overseas Telecommunications Commission” (1997) 19 Asian J Pub Admin 157 at 174-5, 191.

51 Nevertheless, compare G Stapledon's empirical analysis of “extraordinary” action taken by institutional investors in the governance of listed companies in the United Kingdom and Australia: Stapledon, G, Institutional Shareholders and Corporate Governance (1996) at 122-31CrossRefGoogle Scholar, 185-96 and Appendices B and D.

52 Rydon, J, “The Australian Broadcasting Commission 1942-48” (1952) 11 Public Administration (Sydney) 190Google Scholar; Bolton, G, Dick Boyer: an Australian Humanist (1967) chs 6-9Google Scholar; and, more recently, Simper, E, “Alston pressures ABC on bias” The Australian 4 May 1998 at 1Google Scholar.

53 R Wettenhall, above n 40 at 44-5.

54 C Mantziaris, above n 50.

55 J Short and M Gordon, “Howard under pressure as Sharp admits jobs ploy” The Australian 13 February 1997. The evidence of Ministerial intervention in respect of government companies is too limited to support any conclusions: S Bottomley, “Corporatisation and Accountability: the Case of Commonwealth Companies” (1997) 7 Aust J of Corp Law 157 at 170 {intervention is rare). Cf documented instances of departmental or ministerial intervention in the cases of AIDC Ltd (resignation of government directors requested by their department to disclose information confidential to AIDC Ltd) and ANL Ltd {minister pressuring board for a quick sale of the entity's assets as part of a privatisation process): Commonwealth Parliament, Department of the Parliamentary Library, AIDC Sale Bill 1997, Bills Digest 115 (1996-97) at 1 and Australian National Audit Office, Matters Relating to Proposed Sale of ANL Ltd (Audit Report no 2 1995-96) and K Trace, “'You Couldn't Give it Away': Privatising the Australian National Line” (1996) 2 Agenda 433-44.

56 A point most clearly made in the economic analysis of the statutory corporation: M J Trebilcock and J RS Pritchard, “Crown Corporations: The Calculus of Instrument Choice” in Trebilcock, M J Pritchard, J R S, Crown Corporations in Canada: The Calculus of Instrument Choice (1983) ch 1Google Scholar; and M Horn, above n 8.

57 Legislation (in combination with common law understandings) may also subsume or separate the corporation from “the Crown”. See generally: P W Hogg, Liability of the Crown (2nd ed 1989); Kneebone, S, Tort Liability of Public Authorities (1998) ch 7Google Scholar and N Seddon, above n 45 ch 4.

58 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 561; British Steel Corporation v Granada Television Ltd [1981] AC 1096 at 1168 and Hughes Aircraft Systems International v Airservices Australia (1997) 146 ALR 1 at 24-5, 74, 88-9.

59 See below text at nn 144 and 159-77.

60 In the case of government business enterprises, this problem has led to the demand for central policy coordinating agencies: R Wettenhall and C O'Nullain (eds), Getting Together in Public Enterprise (1987); Department of Finance, Review of GBE Governance Arrangements – Report by Richard Humphry (1997) at 4.

61 The instability caused by this “commitment problem” within political transactions has been noted by students of the US Congressional system: M Horn, above n 8 at 16-19 and Moe, T, “Political Institutions: The Neglected Side of the Story” (1990) 6 J of Law, Econ and Org 213CrossRefGoogle Scholar.

62 For example, contributions to the Special Issue on the Corporate Stakeholder Debate: The Classical Theory and its Critics (1993) 43 U Toronto LJ and Millon, D, “Communitarianism in Corporate Law: Foundations and Law Reform Strategies” in L Mitchell (ed), Progressive Corporate Law (1995) ch 1CrossRefGoogle Scholar.

63 Hutton v West Cork Railway Co (1883) 23 Ch D 654; Parke v Daily News Ltd [1962] Ch 927. Within the law of (private non-charitable) trusts, cf Cowan v Scargill [1985] 1 Ch 270.

64 Finn, P D, Law and Government in Colonial Australia (1987) at 60-1Google Scholar, 97-9 and 129-31.

65 For example, Commonwealth of Australia, Joint Committee of Public Accounts, n 48 above, ch 3 paras 33-52.

66 Uhr, J, Deliberative Democracy in Australia: The Changing Place of Parliament (1998) at 199-201Google Scholar.

67 Domstein, M, Boards of Directors under Public Ownership (1988)CrossRefGoogle Scholar ch 6 and J Corkery and R Wettenhall, above n 50.

68 Select Committee on Nationalised Industries, above n 49 ch IV.

69 Ibid at 34.

70 Ibid at 39.

71 Ibid at 35.

72 Ibid at para 147 (“Principle V”).

73 Ibid at paras 150-2.

74 Ibid at para 153.

75 For example, Science And Industry Research Act 1949 (Cth), s 13; Broadcasting Services Act 1992 (Cth), s 162; Special Broadcasting Service Act 1991 (Cth), s 12; Australian Trade Commission Act 1985 (Cth), s 10; Primary Industries and Energy Research and Development Act 1989 (Cth), s 143.

76 Aronson, M, “Ministerial Directions: The Battle of the Prerogatives” (1995) 6 Public Law Rev 77esp at 88ffGoogle Scholar.

77 The most comprehensive survey of these provisions is that of M Aronson, ibid.

78 See below text at n 151

79 Under certain statutes, there is an arrangement for the indemnification of the statutory corporation for any loss incurred by reason of compliance with a ministerial direction: see Aronson's discussion of these provisions, above n 76 at 84-5. The successor of the corporation considered in Hughes, Airservices Australia, is now the beneficiary of such an indemnification clause under the Air Services Act 1995 (Cth), s 16, but only in so far as directions are concerned. “Financial detriment” suffered by the corporation as a result of compliance with a formal notification of government policy is specifically exempted: s 16(6).

80 For example, Commonwealth Authorities and Companies Act 1997 (Cth), s 28.

81 Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54 and Hughes (1997) 146 ALR 1 at 52. Cf J McMillan, Review of Government Policy by Administrative Tribunals, Law and Policy Papers, ANU (no 9, 1998), on the problem of administrative tribunals applying government policy.

82 For example, the guidelines suggested in Australian National Audit Office, Aspects of Corporate Governance: The Australian Tourist Commission (Audit Report no 10 1997-98) at 82. See the discussion by M Aronson, above n 76 at 85-6.

83 (1997) 146 ALR 1.

84 At the time of publication, the litigation was still in progress because the case was “split” and the decisions so far made only related to liability. Causation and damages were still to be argued at the time of publication.

85 (1997) 146 ALR 1 at 73 per Finn J.

86 At the time of the tender process, the CAA fulfilled both regulatory and service provision functions. It was later abolished and replaced by the Civil Aviation Safety Authority (a regulator) and Airservices Australia (a service provider) which eventually became the respondent in the action.

87 (1997) 146 ALR 1 at 65.

88 Finn J also considered the disclosure of information regarding the tenders by the CAA's Tender Evaluation Committee – a committee of senior CAA managers — to an officer of DITRD who then relayed this information to her colleagues.

89 See comparative analysis by I Beckett, above n 12 at 178-87.

90 Civil Aviation Act 1988 (Cth), ss 32A, 33(1), 32B.

91 Ibid, ss 84, 89.

92 Ibid, ss 44, 46, 16 and 48A, respectively.

93 Ibid, s 42 (cf s 89), ss 12, 43-48 ands 56, respectively. Discussed in (1997) 146 ALR 1 at 20.

94 (1997) 146 ALR 1 at 75. The Court appears to have considered the letter on the basis that it sought to influence the CAA's exercise of its power to enter into contracts (under Civil Aviation Act 1988 (Cth), s 13). The construction of the directions power therefore centred on s 12(1) and not on the limitation ins 12(2) regarding “general” directions in respect of regulatory functions. If the letters had been considered as attempts to direct the CAA with respect to the exercise of its regulatory functions, the Court might have been forced to consider the restrictive interpretation placed on such clauses in its earlier decisions of Aboriginal Legal Service Ltd v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 45 ALD 235 and Aboriginal Development Commission v Hand (1988) 15 ALD 410. See below text at nn 149-55.

95 (1997) 146 ALR 1 at 75.

96 Ibid at 76-7.

97 See below text at nn 102-111.

98 (1997) 146 ALR 1 at 74. Finn J noted, but did not feel bound to consider, the question whether the only member of the ministry who ought to communicate directly with the statutory corporation was the portfolio Minister or the corollary issue, whether non– portfolio ministers need to communicate with the corporation about the corporation's affairs through the portfolio Minister (at 75).

99 Ibid at 75. Finn J referred to Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54 at 76 and L'Huillier v Victoria [1996] 2 VR 465 at 481. On the various versions of the doctrine of executive necessity and its recognition in Australian courts, see N Seddon, above n 45 at 149-167.

100 Ibid at 74.

101 Ibid. This aspect of the case is discussed immediately below.

102 The CEO disclosed the information to the minister (i) voluntarily, (ii) without the authority of the board and (iii) prior to the board's decision to award the contract. The provision of this information was not mandated by the Act.

103 (1997) 146 ALR 1 at 88.

104 Ibid at 89.

105 Ibid at 89, referring to Brennan J's dicta in Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10 at 37-8.

106 Ibid at 88.

107 Ibid at 88-9.

108 Ibid at 89.

109 Ibid at 88.

110 Ibid at 92-3.

111 Ibid at 91.

112 The other “fissure” was “the extent to which the manner of scrutiny of the formally 'non-governmental' action of a statutory corporation (ie, entering into a 'commercial' contract) can or should be affected by the considerations that it nonetheless is a public body that is so acting and that in so doing it is exercising a public function.” Ibid at 24.

113 Ibid at 24-5.

114 Ibid at 89.

115 Cf Stone, J, Precedent and Law: Dynamics of Common Law Growth (1985) at 114Google Scholar.

116 For example, Kathleen Investments Australia Ltd v Australian Atomic Energy Commission (1977) 139 CLR 117 and Williams v Hursey (1959) 103 CLR 30 at 52-6, per Fullagar Jon the broader principle.

117 DC Pearce and RD Geddes, Statutory Interpretation in Australia (4th ed 1996) para [2.2] ff and F Bennion, Statutory Interpretation: A Code (2nd ed 1992) at Pts VII and XX; cf Acts Interpretation Act 1901 (Cth), s 15AA.

118 Brewer, S, “Exemplary Reasoning: Semantics, Pragmatics, and the Rational Force of Legal Argument by Analogy” (1996) 109 Harvard LR 926CrossRefGoogle Scholar and Sunstein, C R, “On Analogical Reasoning” (1993) 106 Harvard LR 741CrossRefGoogle Scholar.

119 Note in particular the effect of the Commonwealth Authorities and Companies Act 1997 (Cth), Pt 3.

120 For example, State Bank of South Australia v Marcus Clark (1996) 19 ACSR 606 at 628; Hughes (1997) 146 ALR 1 at 89-90.

121 For example, Tamlin v Hannaford [1950] 1 KB 18 at 22-4 (Crown immunity context) and Bank of New South Wales v Commonwealth (1948) 76 CLR 1 at 273 (construing the entity which was the subject of post-war bank nationalisation legislation).

122 Cf Lindell, G J, “Responsible Government” in PD Finn (ed), Essays on Law and Government vol 1: Principles and Values (1995) at 82Google Scholar.

123 See text below at nn 185-190.

124 Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129 at 147; R v Kirby; Ex parte Boilermaker's Society of Australia (1956) 254 at 275; New South Wales v Commonwealth (Seas and Submerged Lands case) (1975) 135 CLR 337 at 364-5; Attorney-General (Commonwealth); Ex rel McKinlay v Commonwealth (1975) 135 CLR 1 at 24. See generally G Winterton, Parliament, the Executive and the Governor-General (1983) at 71ff; L Zines, The High Court and the Constitution {4th ed 1997) at 249-51. In respect of the States, see RD Lumb, The Constitutions of the Australian States (5th ed 1991) ch 4 and PD Finn, Law and Government in Colonial Australia (1987) at 39ff.

125 (1997) 189 CLR 520. The decision in Lange was handed down on 8 July 1997, one week after the decision in Hughes (30 June 1997).

126 Ibid at 558.

127 Ibid at 558-9.

128 Constitution, ss 1, 7, 8, 13, 24, 25, 28 and 30 discussed in ibid at 557-8, 560-1.

129 See eg, G J Lindell, above n 122 at 76-9; G Winterton, above n 124 at 71ff; L Zines, above n 124 at 249-51; RS Parker, “Responsible Government in Australia” in P Weller and D Jaensch (eds), Responsible Government in Australia (1981) at 11-22; Erny, H, “The Public Service and Political Control: The Problem of Accountability in a Westminster System with Special Reference to the Concept of Ministerial Responsibility” in Royal Commission on Australian Government Administration Appendix: vol 1 (1976) at 16Google Scholar.

130 G J Lindell, above n 122 at 76-9 reworking RS Parker's definition in ibid. Lindell did not place emphasis on the effect of section 49 (cf G J Lindell, below n 133).

131 Lindell noted that several Australian jurisdictions have either adopted (eg, New South Wales), or are proposing to adopt, fixed-term parliaments.

132 (1997) 189 CLR 520 at 557-9.

133 E Campbell, above n 44 at 92-8 and G J Lindell, above n 44 at 400-1. Lindell draws an express distinction between the legal obligations and restrictions which frame Parliament's inquisitorial jurisdiction granted under s 49 of the Constitution and a vaguer set of rules which are identified under the label of “Responsible Government”.

134 J Uhr, above n 66 ch 8.

135 Western Australia, Royal Commission into Commercial Activities of Government and Other Matters - Report Pt II (1992), para 3.10.1. The relationship between the Auditor-General and Parliament is unclear: J Uhr, above n 66 at 188-90 and Commonwealth Parliament, Joint Committee of Public Accounts, The Auditor-General: Ally of the People and Parliament (Report No 296, 1989) ch 5.

136 For example, G Winterton, above n 124 at 71ff.

137 J Uhr, above n 66 at 194.

138 Incidental to the individual and collective responsibility of Ministers within the Australian setting are a set of conventions regarding the Vice-Regal representative (eg, the convention that the Governor or Governor-General acts on the advice of the Minister) and the conventions of Cabinet solidarity and Cabinet secrecy.

139 D Woodhouse, above n 48 ch 2. Cf Uhr, above n 66 at 194ff; R Brazier, Ministers of the Crown (1997) at 262-75; SE Finer, “The Individual Responsibility of Ministers” (1956) 54 Public Administration 377; and C Turpin, “Ministerial Responsibility: Myth or Reality?” in J Jowell and D Jaensch (eds), The Changing Constitution (2nd ed, 1989) 53 at 56.

140 J Uhr, above n 66 at 165-6, 195-8 and D Woodhouse, above n 48, Pt II.

141 G Winterton, above n 124 at 110; D Woodhouse, ibid at 27.

142 D Woodhouse, ibid ch 2.

143 See text below at nn 159-77.

144 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 0561 (emphasis added).

145 Cf G Winterton above n 124 at 101.

146 New South Wales Farmers' Federation v Minister for Primary Industries and Energy (1990) 21 FCR 332; Aboriginal Legal Service Ltd v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 45 ALO 235; Aboriginal Development Commission v Hand (1988) 15 ALO 410; Botany Bay City Council v Minister of State for Transport and Regional Development (Federal Court of Australia, Lehane J, 30 May 1966, unreported); Ankers v Attorney-General [1995] 2 NZLR 595; Social Security Commission v Macfarlane [1979] 2 NZLR 34.

147 Bosjnak's Bus Service v Commissioner for Motor Transport (1970) 92 WN (NSW) 1003; Blayney Abbatoirs Pty Ltd v New South Wales (NSW Court of Appeal, 18 July 1996, unreported); Kremer v North Sydney Municipal Council (1982) 47 LGRA 209; Ankers v Attorney-General [1995] 2 NZLR 595.

148 Associated Provincial Picture Houses Ltd v Wednesbury Corp [1948] 1 KB 223.

149 Broadly speaking, this is determined according to the principles in Bread Manufacturers of New South Wales v Evans (1981) 180 CLR 404. See generally M Aronson and B Dyer, above n 45 at 314-23.

150 (1988) 15 ALD 410.

151 (Emphasis added). The section under consideration was Aboriginal Development Commission Act 1980 (Cth), s 11.

152 On Commonwealth drafting practice regarding the distinction between “general” and “specific” directions, see M Aronson, above n 76 at 83-4.

153 (1988) 15 ALD 410 at 413-4.

154 Ibid at 414.

155 (1996) 45 ALD 235. The case concerned the construction of a ministerial direction issued to the Aboriginal and Torres Strait Islander Commission.

156 Ibid at 247 per Sackville J; see also at 243 per Tamberlin J.

157 (1990) 21 FCR 332.

158 Ibid at 340 (emphasis added), distinguishing Bosjnak's Bus Service v Commissioner for Motor Transport (1970) 92 WN (NSW) 1003.

159 Blayney Abbatoirs Pty Ltd v New South Wales (NSW Court of Appeal, 18 July 1996, unreported per Powell JA).

160 Cf text at above n 145 and G Winterton, above n 124 at 101ff.

161 See text at above at nn 114-5.

162 PD Finn and G J Lindell, above n 5 Appendix 4.

163 This is the view of Goldring, J, “Accountability of Commonwealth Statutory Authorities and Responsible Government” (1980) 11 Fed L Rev 353Google Scholar.

164 This is the view of Richardson, J, “The Executive Power of the Commonwealth” in L Zines (ed), Commentaries on the Australian Constitution: A Tribute to Geoffrey Sawer (1977) especially at84-5Google Scholar.

165 Cf text at n 142.

166 P D Finn and G J Lindell, above n 5 at 183.

167 Ibid at 194.

168 Ibid at 185.

169 G Winterton, above n 124 at 101-110, esp at 103 and 110.

170 Ibid at 104 (footnotes omitted).

171 Horta v Commonwealth (1994) 181 CLR 183 cited in Hughes (1997) 146 ALR 1 at 24 in the context of s 61 of the Constitution.

172 The Petroleum (Australia-Indonesia Zone Of Cooperation) Act 1990 (Cth) and the Petroleum (Australia-Indonesia Zone Of Cooperation) (Consequential Provisions) Act 1990 (Cth).

173 Petroleum (Australia-Indonesia Zone Of Cooperation) Act 1990 (Cth), s 4

174 Article 7 of the Treaty between Australia and the Republic of Indonesia on the Zone of Cooperation in an Area between the Indonesian Province of East Timor and Northern Australia (11 December 1989) provided, inter alia:

3.The Joint Authority shall be responsible to the Ministerial Council.

4.Decisions of the Executive Directors of the Joint Authority shall be arrived at by consensus. Where consensus cannot be reached, the matter shall be referred to the Ministerial Council.

5.Unless otherwise decided by the Ministerial Council, the Joint Authority shall have its head office in the Republic of Indonesia and an office in Australia, each of which shall be headed by an Executive Director.

175 (1994) 181 CLR 183 at 197.

176 Re Duncan; Ex parte Australian Iron and Steel Pty Ltd (1983) 158 CLR 535 at 563 per Mason J. See generally L Zines, above n 124 at 270-1; G Winterton, above n 124 at 101ff. Cf Cranston, R, “From Cooperative to Coercive Federalism and Back?” (1979) 10 Fed L Rev 121Google Scholar.

177 Finn, P D, “A Sovereign People, A Public Trust” in PD Finn (ed), Essays on Law and Government Vol 1 (1995) at 20-1Google Scholar.

178 Cf Re Residential Tenancies Tribunal of New South Wales: Ex parte Defence Housing Authority (1997) 146 ALR 495 at 510 per Dawson, Toohey, Gaudron JJ and Broken Hill Proprietary Company Ltd v Dagi [1996] 2 VR 117 at 204-205 per Hayne JA. See generally Winterton, G, “Popular Sovereignty and Constitutional Continuity” (1998) ;2.6 FL Rev 1Google Scholar.

179 G J Lindell, above n 122 at 80ff and G J Lindell, above n 44 at 400-1.

180 J Uhr, above n 66 especially at 77-80. Cf Finn, P D, Law and Government in Colonial Australia (1987) ch 2Google Scholar.

181 G Winterton, above n 124 at 71 ff, especially 72.

182 The distinction was introduced into English constitutional discourse by W Bagehot, The English Constitution (1867). See R H S Crossman's “Introduction” in Bagehot, W, The English Constitution (1963) at 16ffGoogle Scholar.

183 See sources cited in above nn 8,12 and 40 and also R Wettenhall, Organizing Government (1986) chs 2-3 and 6; and Halligan, J and Power, P, Political Management in the 1990s (1992) especially ch 3Google Scholar.

184 The main policy documents associated with these changes were: J Kerin (Minister for Primary Industry), Reform of Commonwealth Primary Industry Marketing Authorities (1986); P Walsh (Minister for Finance), Policy Guidelines for Commonwealth Statutory Authorities and Government Business Enterprises (1987); G Evans (Minister for Transport and Communications), Reshaping the Transport and Communications Government Business Enterprises (1988). See generally J Halligan and J Power, ibid and M Considine and M Painter (eds), Managerialism: The Great Debate (1997).

185 M Aronson, above n 76 at 89-92.

186 See eg, Commonwealth Authorities and Companies Act 1997 (Cth), Pt 3 and Sch 1; Australian National Audit Office, Government Business Enterprise Monitoring Practices: Selected Agencies (Audit Report no 21997-98); Management Advisory Board, Accountability in the Commonwealth Public Sector, Report no 11 (1993) at 13; Commonwealth Parliament Joint Committee of Public Accounts, Public Business in the Public Interest: An Inquiry into Commercialisation in the Commonwealth Public Sector (Report 336 1995) at 150ff and Appendix VII “Accountability and Ministerial Oversight Arrangements for Commonwealth Government Business Enterprises”.

187 It must be noted that the cases cited in above nn 146-7 were not argued before His Honour.

188 (1997) 146 ALR 1 at48-9.

189 Commonwealth Parliament, H Reps Deb 1990 vol 171 at 611 cited in (1997) 146 ALR 1 at 48-9.

190 (1997) 146 ALR 1 at 49.

191 Minister Collins' letter concluded: “Of course the decision is clearly a matter for the CAA board using all the evaluation criteria established for the tender process” extracted ibid at 73.

192 Finn, P D, “Public Trust and Public Accountability” (1993) Australian Quarterly 65 at 58CrossRefGoogle Scholar.