Williams [No 2] Symposium: Graeme Hill on Narrowing the Issues

By Graeme Hill, Barrister

Williams [No 2] Case Page

The High Court delivered its judgment in Williams [No 2] only 6 weeks after the hearing, much more quickly than is usual in complex constitutional cases. One reason the Court was able to deliver its judgment so quickly was that the Court carefully narrowed the issues to be dealt with. The Court concentrated on whether the particular item in the Financial Management and Accountability Regulations 1997 (Cth) (FMA Regulations) that referred to the school chaplaincy program was supported by a head of Commonwealth legislative power. The Court’s negative answer to that question meant it was unnecessary to deal with the other arguments raised by the plaintiff.

The Court’s reasoning in this respect is orthodox and, I would suggest, appropriate in this case.

Narrowing the issues
Williams [No 2] considered the validity of the Financial Framework Legislation Amendment Act (No 3) 2012 (Cth) (FFLA Act), which was enacted days after, and in response to, the High Court’s judgment in Williams [No 1]. In outline, the FFLA Act amended the Financial Management and Accountability Act 1997 (Cth) (FMA Act) and FMA Regulations in an attempt to confer statutory authority on the Commonwealth executive to make payments under existing grants and programs, including the school chaplaincy program.

  • New s 32B(1) of the FMA Act provides that if, apart from that provision, the Commonwealth ‘does not have power’ to make, vary or administer a payment of public money, and the payment is specified in the FMA Regulations, then the Commonwealth ‘has power’ to make, vary or administer the payment.
  • New Pt 5AA and Sch 1AA of the FMA Regulations were added by the FFLA Act, and specify various grants and programs for the purposes of s 32B of the FMA Act. The specified programs include the school chaplaincy program (Sch 1AA, item 407.013).
  • The FFLA Act did not confer express authority to make regulations adding to the arrangements, grants and programs that were specified by the FFLA Act itself. However, implicit in s 32B is that the executive may make regulations under the existing regulation making power that add to, or even remove, the grants and programs added to the FMA Regulations directly by the FFLA Act.

The Applicant contended that new s 32B of the FMA Act was invalid in its entirety. One argument was that s 32B was impossibly vague, because it was not possible to give meaning to the concept that the Commonwealth ‘does not have power’ to make a payment. A second argument was that s 32B was an impermissible delegation of legislative power to the executive, because it authorised the executive ‘in blank’ to determine future categories of expenditure.

The Court rejected the first of these arguments, and held it was not necessary to deal with the second. The Commonwealth’s power to enact the FMA Act is derived from every head of legislative power that supports the Commonwealth (or a person acting on behalf of the Commonwealth) making a payment (Williams [No 2] at [35]). Although s 32B could have a very wide field of operation if read literally, ordinary principles of statutory construction required that s 32B be read as not extending to when the Commonwealth did not have constitutional power to make, vary or administer a payment. Rather, s 32B(1) should be read as providing (statutory) authority to make, vary or administer a payment only when it is within the legislative power of the Commonwealth to do so (Williams [No 2] at [36], referring to s 15A of the Acts Interpretation Act 1901 (Cth)). The Court held that the delegation arguments were not reached and should not be considered (Williams [No 2] at [36]). That meant it was not necessary to consider whether Mr Williams had standing to challenge payments of money in respect of matters that did not affect him or his children (at [30]).

The Court’s reasoning on reading down is in line with previous cases. In principle, the Court will not read down a generally-expressed Commonwealth statute unless the statute provides a standard by which it can be read down to remain within legislative power (Victoria v Commonwealth [1996] HCA 56 at [82]–[83] (Industrial Relations Act Case)). Otherwise, the Court would be purporting (invalidly) to exercise legislative power. However, in practice, the Court has sometimes read down Commonwealth statutes even when the necessary limitation does not clearly appear in the text. For example, in R v Hughes [2000] HCA 22, the Court held that an entirely general Commonwealth law that purported to authorise the Commonwealth DPP to prosecute corporations offences under State law could be read down only to apply to State offences that had a connection with Commonwealth legislative power. In the Industrial Relations Act Case, the Court read down Commonwealth provisions so as not to apply to State officials engaged ‘at the higher levels of government’, to avoid invalidity under the principles in Re Australian Education Union; Ex parte Victoria [1995] HCA 71.

In Williams [No 2], the process of reading down was relatively straightforward, because the FFLA Act not only conferred a general authority to spend in s 32B of the FMA Act, but also listed grants and programs in new Sch 1AA of the FMA Regulations to which the s 32B power would apply. The Court could if necessary delete particular grants or programs, separately expressed, which were beyond legislative power (cf Industrial Relations Act Case at [81]).

This listing of authorised grants and programs by the FFLA Act also meant that there was no question of delegation by the Parliament in relation to the grants and programs listed in the new Sch 1AA of the FMA Regulations, which included the school chaplaincy program. The fact that the FFLA Act listed these grants and programs in the FMA Regulations does not make this an exercise of delegated legislative power. Any question of delegation could only arise with a future exercise of the regulation making power to add to, vary or delete the list of authorised grants and programs. Even if there were an impermissible delegation, the consequence would only be to invalidate any future regulations. The delegation argument would not invalidate any of the grants and programs that were listed by the Parliament itself in the FFLA Act.

Two unresolved issues
As noted, the Court in Williams [No 2] did not need to decide whether s 32B of the FMA Act is an impermissible delegation of legislative power to the executive. Another issue left for another day is whether the principles identified in Williams [No 1] apply to spending by the States, as well as by the Commonwealth.

Is s 32B of the FMA Act an impermissible delegation of legislative power?
The invalid delegation argument in Williams [No 2] relied on some statements in Victorian Stevedoring and General Contracting Co Pty Ltd v Dignan [1931] HCA 34 (Dignan). Dignan established that the Commonwealth Constitution does not require a separation of federal legislative and executive power, despite the constitutional separation of federal judicial power. Accordingly, there is no general difficulty with the Parliament delegating legislative power to the executive. Historically, there have been some broad delegations of legislative power, particularly during the Second World War.

However, some passages in Dignan also suggest that there might be a point at which a delegation of legislative power is so unconstrained that it is invalid. Dixon J stated that the fact that the Parliament may delegate legislative power to the executive ‘does not mean that a law confiding authority to the Executive will be valid, however extensive or vague the subject matter may be, if it does not fall outside the boundaries of Federal power’, because there may be ‘such a width or such an uncertainty of the subject matter to be handed over that the enactment attempting it is not a law with respect to any particular head or heads of legislative power’. Evatt J doubted whether a Commonwealth law could validly provide that ‘the Executive Government may make regulations having the force of law upon the subject of trade and commerce with other countries or among the States’.

To date, the Court has not invalidated a law on the basis that it was an impermissibly wide delegation of legislative power. In the case of s 32B, there was at least the constraint that the regulations could only authorise the expenditure of money (as distinct from some general regulatory scheme). And by necessary implication, that money could only be spent for a purpose that was within Commonwealth legislative power. If a provision of this sort were invalid, that result is more likely to follow from some conclusion about the necessary role of the Parliament in supervising expenditure of public money, rather than the width of the delegation in itself.

Do the principles in Williams [No 1] apply to the States?
A second issue left unresolved is whether the principles in Williams [No 1] apply to the States, as well as the Commonwealth. Williams [No 1] held that, subject to some exceptions, the Commonwealth executive requires statutory authority to spend money, in addition to an appropriation of that money. In Williams [No 2], the Commonwealth argued that the uncertainty as to whether these principles apply to the States as well as the Commonwealth was a reason to reopen the decision in Williams [No 1]. The Court rejected that argument in fairly terse terms, stating that Williams [No 1] ‘does not consider any question about State expenditure powers: no such question was put in issue in that proceeding or this’ (Williams [No 2] at [64]).

For those who find Professor Winterton’s distinction between ‘breadth’ and ‘depth’ of executive power useful (see here and here), it might be thought that so much of Williams [No 1] that concerned the ‘depth’ of executive power is potentially relevant to the States. Other principles of the ‘depth’ of executive power apply equally to the States as well as the Commonwealth — for example, neither level of government in Australia can impose a tax without legislative authority, or dispense with the operation of the law. And notions of responsible government, and the need for the Parliament to supervise the expenditure of public money, are broadly similar at the Commonwealth and State levels.

However, the High Court has not been disposed to use this distinction between ‘breadth’ and ‘depth’. Moreover, at least some of the reasoning in Williams [No 1] about why the Commonwealth needed statutory authority to spend money is not easily applied to the States. In particular, some members of the Court in Williams [No 1] relied on federal concepts, such as the role of the Senate and s 96 in the Constitution, in concluding that the Commonwealth executive required statutory authority to spend money: see Gabrielle Appleby and Stephen McDonald, ‘Looking at the Executive Power through the High Court’s New Spectacles’ (2013) 35 Sydney Law Review 253, 263–70.

At a practical level, it may be easier for a State to address the application of Williams [No 1]-style reasoning to its spending than it is for the Commonwealth. For one thing, there is no subject-matter constraint on any validating State law, of the sort that arose in Williams [No 2]. In addition, State Constitutions can generally be amended by another State law, which means that any validating legislation can be made part of a State’s organising structure. By way of example, the Constitution Act 2001 (Qld) provides that the State ‘has all the powers, and the legal capacity, of an individual’ (s 51(1)), and confers authority on the State executive to carry out ‘commercial activities’ without further statutory authority (s 53(3)).

AGLC3 Citation: Graeme Hill, ‘Williams [No 2] Symposium: Graeme Hill on Narrowing the Issues’ on Opinions on High (23 June 2014) <http://blogs.unimelb.edu.au/opinionsonhigh/2014/06/23/hill-williams/>.

Graeme Hill is a Senior Fellow (Melbourne Law Masters) at Melbourne Law School and a Barrister at the Melbourne Bar.