4.2 The Tribunal misconstrued s 66 of the Banking Act
25 In my view, APRA's submissions as to the proper construction of s 66 should be accepted, even though, as the respondent submits, s 66 does not expressly impose any general requirement that consent be granted only in exceptional cases for non-ADIs.
26 First, there was no dispute between the parties that APRA's implicit power to grant consent is subject to such limits as are implied from the subject-matter, scope, and purpose of the Banking Act: Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 (Peko-Wallsend) at 39-40 (Mason J).
27 In ascertaining the implied limits upon the power, ordinary principles of statutory construction apply. As McHugh, Gummow, Kirby and Hayne JJ explained in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355:
69. The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole". In Commissioner for Railways (NSW) v Agalianos [(1955) 92 CLR 390 at 397], Dixon CJ pointed out that "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed". Thus the process of construction must always begin by examining the context of the provision that is being construed.
70. A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions….
28 Furthermore, as French CJ and Hayne J explained in Certain Lloyd's Underwriters v Cross [2012] HCA 56; (2012) 248 CLR 378 (Certain Lloyd's Underwriters) at [25], the determination of the purpose of a provision may be based upon "inference from its text and structure and, where appropriate, reference to extrinsic materials."
29 On the other hand, as their Honours cautioned, a danger to be avoided in identifying the purpose of a statute "is the making of some a priori assumption about its purpose. The purpose of legislation must be derived from what the legislation says, and not from any assumption about the desired or desirable reach or operation of the relevant provisions.": Certain Lloyd's Underwriters at [26]; see also e.g. Deal v Father Pius Kodakkathanath [2016] HCA 31; (2016) 258 CLR 281 at [37] (French CJ, Kiefel, Bell and Nettle JJ).
30 Furthermore the general principle that the construction that best promotes the legislative purpose or object is to be preferred may be of little assistance in resolving the issue of construction where the statutory provision strikes a balance between competing interests, and the issue of interpretation is one of uncertainty as to how far the provision goes in seeking to achieve the underlying purpose. In such cases the question is, therefore, not what was the purpose or object underlying the legislation, but how far does it go in pursuit of that purpose or object: Carr v Western Australia (2007) 232 CLR 138 (Carr) at [5]-[7] (Gleeson CJ) (in a passage quoted with approval by the High Court in Construction Forestry Mining and Energy Union v Mammoet Australia Pty Ltd [2013] HCA 36; (2013) 248 CLR 619 at [40]).
31 Secondly, the implied power to grant consent under s 66 is a case of the kind referred to by Gleeson CJ in Carr. Specifically, uncertainty exists as to the limits of the s 66 power which seeks to strike a balance between protecting the public against confusion, on the one hand, and promoting such interests as competition in the market place, on the other hand. The imperative to balance such interests is recognised more generally in the requirement under s 8(2) of the APRA Act that, in the exercise of its functions, APRA is to balance the objectives of financial safety and efficiency, competition, contestability, and competitive neutrality so as to promote financial system stability. It follows that it is not sufficient, as the Tribunal did, to define the metes and bounds of the implied power to grant consent simply by restating s 66's broad purpose to protect the public from confusion. Rather, the question identified by Gleeson CJ in Carr must be addressed, namely, how far does the legislation go in pursuit of that underlying purpose? Resolving this issue requires that close attention be paid to the text of the Banking Act and its context, including the means by which the Parliament has sought to give effect to that broader statutory purpose.
32 Thirdly, it is significant in answering the question in Carr that, when APRA grants consent, the effect under subs 66(1)(d) is to render lawful that which Parliament has otherwise provided is a criminal offence. As such, as APRA submits, the Parliament has expressly departed from the "general constitutional principle" that there is no general executive dispensation from statute law, let alone from criminal law: Port of Portland Pty Ltd v Victoria (2010) 242 CLR 348 at [13] (the Court) (adopting the language of Dixon CJ in Cam & Sons Pty Ltd v Ramsay (1960) 104 CLR 247 at 258). As an aspect of the rule of law, any such statutory departure from the "general constitutional principle" which delineates the hierarchy of legislative and executive power, should be strictly construed. That context, in other words, is a telling consideration against the respondent's submission that the discretion implicitly conferred on APRA by s 66 is "unconfined".
33 By contrast, in Kumar v Minister for Immigration and Border Protection [2015] FCA 446; (2015) 231 FCR 308 (on which the respondent relied in support of the unconfined nature of the discretion), a discretion to allow an exception to the general residence requirement for the grant of Australian citizenship was broadly construed so as to permit the Minister to consider any matters, provided that they were not "definitely extraneous to any objects the legislature could have had in view" (at [20] and [23]). However, as APRA submits, the purpose of that discretion was remedial and beneficial (being to ameliorate the strictness of the general residence requirement), rather than prohibitive or protective. As such, it does not follow that a like construction should be adopted with respect to the scope of the discretion implicitly conferred by s 66 of the Banking Act which serves a very different purpose.
34 Fourthly, as APRA submits, the limited exceptions to the prohibition in s 66(1) for which the Parliament has expressly provided in subs (1AB) (use by the Reserve Bank), subs (1AC) (use of the word "banking" by an ADI in referring to the fact that it holds an authority under the Banking Act), and s 11 (a determination by APRA that s 66 does not apply), are further indications of the Parliament's concern as to the risks that use of the restricted words may confuse and mislead, and its intention to strictly limit the use and assumption of those words as a result.
35 In the fifth place, the Tribunal's broader construction would potentially lead to the making of ad hoc assessments by different decision-makers within APRA and the Tribunal as to whether the public is adequately protected from confusion in individual cases. As APRA submits:
Although any one individual consent may not raise significant concerns about protection of the public, a series of such individual consents may be apt to create a confusing ecology of non-bank financial businesses using restricted words. That is the very mischief sought to be avoided by s 66. No one decision-maker directing [herself or himself] merely to the question as framed by the Tribunal, would be well-placed to consider these broader and systemic concerns.
36 The respondent's submission that this is merely a "floodgates" argument, with respect, misses the point and should be rejected. Rather, to ask afresh whether the use of "bank" in the individual case may confuse the public ignores the fact that, by imposing a general prohibition with criminal sanctions, s 66 itself provides a bulwark against the broader, systemic consequences of using (or, perhaps more accurately, overusing) the restricted words. The choice by the Parliament to confer the power to grant consent upon APRA as opposed to some other entity therefore provides a second layer of protection which is consistent with a concern to address the broader, long term impacts of granting consents, as well as the circumstances of the individual case. This is because, as earlier explained, APRA is specifically required, in exercising its functions and powers, to balance various objectives in order "…to promote financial system stability in Australia" (s 8(2) of the APRA Act).
37 It follows that the Tribunal's construction could create disharmony within the statutory scheme and would not best further the protective purpose served by the prohibition in s 66 by focusing upon whether the particular use of the restricted word has the potential to confuse the public, rather than taking into account the potentially corrosive effect of granting multiple consents. As such, an interpretation that would avoid such results is to be preferred: see s 15AA, Acts Interpretation Act 1901 (Cth).
38 The respondent also submitted that its wide construction is confirmed by the Explanatory Memorandum. Specific reliance was placed upon the following passage in the Explanatory Memorandum stating that:
Subsection 66(2) will allow the Treasurer a greater degree of flexibility in the administration of the section by allowing him to give conditional approval, vary conditions revoke or a consent.
39 In the alternative, the respondent submitted that if s 66 is ambiguous, the Explanatory Memorandum resolves that ambiguity by making plain the intention to confer greater flexibility on APRA and therefore a broad discretion, which ought not be narrowed by the Guidelines. In my view, the intended flexibility in this provision does not detract from the other contextual considerations which make plain the intention to limit the grant of consent to exceptional cases. Rather, it ensures that where an exceptional case might exist justifying the grant of consent, conditions may be imposed to ensure that the person granted consent cannot thereafter use the restricted word in a way that may mislead or confuse. In other words, it provides a means by which the consent may be limited so as to ensure the continued integrity of the basis on which it was granted.
40 For these reasons, the first question of law posed by the notice of appeal must be answered "yes": the Tribunal did misconstrue s 66 of the Banking Act in determining to consent to the assumption or use of the word "bank" in the proposed company name "Bankrolla". While it follows that the appeal must be allowed, it is helpful to consider the remaining grounds as the matter must now be remitted to the Tribunal for determination according to law and it is desirable, if possible, to avoid the Tribunal potentially falling into error again.