Statutory Construction in Administrative Law: Recent Developments

Two recent decisions of the High Court explain two principles of statutory interpretation which are significant in the context of judiciary review of administrative action. The decisions also reinforce, yet again, the importance of the careful construction of statutory provisions.

Forrest & Forrest Pty Ltd v Wilson (2017) 91 ALJR 833

Forrest affirms the High Court’s strict approach to the construction of resource legislation. The Court held that failure to comply with any statutory condition regulating the grant of a right to exploit resources will be a jurisdictional error, unless in the statute there is provision to the contrary.

Forrest also provides an example of the application of the principles established in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355. Those principles explain the factors relevant to determining whether a failure to comply with a particular condition on the exercise of a statutory power leads to invalidity.

Facts

At issue in Forrest was whether non-compliance with certain provisions of the Mining Act 1978 (WA) operated to invalidate a mining lease purportedly granted by the Minister.

Yarri Mining Pty Ltd and Onslow Resources Ltd (‘the applicants’) lodged applications in 2011 for mining leases on land within a pastoral lease held by Forrest & Forrest Pty Ltd (‘Forrest’). Section 74 of the Mining Act provided that an application for a mining lease ‘shall be accompanied by … a mineralisation report’. No mineralisation report was provided when the applications were lodged, but one was submitted a few months later. The Mining Warden held that he had jurisdiction to hear the application and to make a recommendation to the Minister, who later granted the mining lease. Forrest unsuccessfully sought judicial review in the Supreme Court of Western Australia, and its appeal to the Court of Appeal was dismissed. The Court of Appeal held that s 74 did require the mineralisation report to be lodged with the application, but that, applying Project Blue Sky, non-compliance with that requirement did not deprive the Minister of jurisdiction to grant the lease.

High Court decision

The High Court allowed Forrest’s appeal. The majority (Kiefel CJ, Bell, Gageler and Keane JJ) agreed with the Court of Appeal that s 74 of the Mining Act required contemporaneous lodgement of the mineralisation report, but held that non-compliance with that requirement meant that the Mining Warden had no jurisdiction to consider the application or make a recommendation, and that the Minister’s grant of the mining lease was invalid.

The majority held that, unlike the statute considered in Project Blue Sky, the condition imposed by s 74 was an ‘essential preliminary to the exercise of the power’ (rather than the regulation of a power already conferred), and had a rule-like quality that could be easily identified and applied. Moreover, it was only those with some responsibility for non-compliance who suffered the inconvenience caused by invalidity.

But most significant for the majority was a line of authority not considered by the Court of Appeal. Those authorities hold that, where a statute providing for the grant of interests in resources ‘prescribes a mode of exercise of the statutory power, that mode must be followed and observed’, or the grant will be invalid.

The majority found no indication in the language of the Act to depart from that settled approach to the construction of resource legislation. That was despite the fact that the Mining Act included s 75(6)(b), which allowed the Minister to grant a mining lease notwithstanding an applicant’s non-compliance in all respects with the provisions of the Act; and s 116(2), which provided that a mining tenement granted under the Mining Act was not to be impeached or defeasible by reason of any ‘informality or irregularity’ in the application. The majority held that s 75(6)(b) did not allow the Minister to grant a lease despite the Mining Warden’s(rather than the applicant’s) non-compliance with the Act. Moreover, the Mining Warden’s failure to observe the Act could not be described as an ‘informality or irregularity’ for s 116(2). 'Informality' meant ‘want of form’. ‘Irregularity’ meant a lack of regularity in the manner of exercise of a power and was ‘used in deliberate contrast to an act beyond power’.

Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd (2018) 92 ALJR 248

Probuild confirms that a State law may validly oust the jurisdiction of a State Supreme Court to grant relief for an error of law on the face of the record that does not go to jurisdiction, if it evinces a clear intention to do so. Such an intention need not take the form of an express privative clause.

Facts

The issue in Probuild was whether the NSW Supreme Court had jurisdiction to grant relief for a non-jurisdictional error of law on the face of the record affecting a decision by a statutory adjudicator under the Building and Construction industry Security of Payment Act 1999 (NSW).

The Act establishes a statutory entitlement for contractors and sub-contractors to receive progress payments for work completed under a relevant construction contract, irrespective of whether the contract makes provision for such payments. Where a contractor makes a claim for a progress payment, the respondent must respond within 10 business days, or they become liable to pay the claimed amount. Disputes in relation to claims are referred to an adjudicator.

In 2015, Shade Systems Pty Ltd sought adjudication of its claim for approximately $277,000 in progress payments against Probuild Constructions (Aust) Pty Ltd. The adjudicator determined that Shade Systems was entitled to the amount claimed. Probuild commenced proceedings in the NSW Supreme Court to quash the adjudicator’s decision for error of law on the face of the record. Shade Systems contended the Court had no jurisdiction to grant such relief because it had been excluded by the Act. The primary judge held that the Court had jurisdiction and granted the relief sought. Shade Systems successfully appealed to the NSW Court of Appeal; and then Probuild was granted special leave to appeal to the High Court.

High Court decision

The High Court unanimously dismissed the appeal, holding that the Security of Payment Act evinced a clear intention to exclude the Supreme Court’s jurisdiction to quash an adjudicator’s determination for non-jurisdictional error of law on the face of the record, and despite the absence of an express provision ousting the Supreme Court’s jurisdiction.

The High Court reiterated that jurisdiction of a State Supreme Court to grant relief for non-jurisdictional error of law on the face of the record is not a ‘defining characteristic’ of a State Supreme Court and is not constitutionally entrenched. In this respect it is to be contrasted with a Supreme Court’s jurisdiction to ‘enforce the limits of executive and judicial power’ by granting relief for jurisdictional error which is constitutionally entrenched.

Chief Justice Kiefel, and Bell, Keane, Nettle and Gordon JJ held that while the legislative intention to exclude the non-entrenched jurisdiction must be clear, it need not be express. In Probuild, the clear intention was discerned from:

• the purpose of the enactment, which was to establish a coherent, expeditious and self-contained system for prompt recovery of progress payments;
• the fact that the Act was not concerned with finally and conclusively determining the entitlements of parties to construction contracts, but only with ‘interim’ entitlements and payments;
• the necessity under the regime for ‘brutally fast’ decision-making by an adjudicator;
• the availability under the regime for informal resolution of the issues; and
• the absence of any right of appeal from a decision of the adjudicator.

Chief Justice Kiefel, and Bell, Keane, Nettle and Gordon JJ emphasised that, notwithstanding the serious consequences that may follow a non-jurisdictional error of law by the adjudicator, the appropriate recourse for remedying such an error was through civil proceedings under the construction contract, rights under which were preserved by the Act.

^{The information in this publication is provided for general purposes only. It is not to be relied on as a substitute for legal advice. Crown Law and the Department of Justice and Attorney-General accept no liability for losses caused by reliance on the material in this publication. Formal legal advice should be obtained for particular matters.}