Christian Community Ministries Ltd v Minister for Education and Early Learning

Primary judgment summarised

1. CCM raised multiple grounds of judicial review below, some of which turned upon issues of statutory construction. The primary judge rejected CCM's construction of the relevant statutory provisions and all of its grounds of review. The further amended summons filed on 24 January 2023 (FAS) was dismissed with costs.
2. On appeal, only the primary judge's findings in relation to matters of statutory construction are challenged. In oral address on the appeal, senior counsel for CCM said these issues are largely reflected in ground 2A of the FAS below. Ground 2A stated: The Minister erred in the Recovery Decision in purporting to recover amounts of financial assistance which were: (a) paid prior to the making of her non-compliance declaration in respect of the school under s 83F(1) of the Act; (b) therefore not provided in respect of a period when the school was a non-compliant school.
3. In oral address on the appeal, senior counsel for CCM identified two key issues. First, can a school be non-compliant prior to the Minister forming the state of satisfaction referred to in s 83E of the Act? Secondly, whether s 83J permits recovery of financial assistance paid to a school for any period prior to the Minister forming that state of satisfaction.

(a) Non-compliance status: s 83E

1. CCM contended below (and on appeal) that the School was not non-compliant until the Minister had formed the requisite states of satisfaction under ss 83E(2) and (3). Those subsections are set out at [7] above.
2. The primary judge accepted CCM's submission that each of the elements in s 83E(3), namely that the school "operates for profit, or has operated for profit" and sub-ss (a) and (b), are to be understood as dependent upon the state of satisfaction of the Minister. It is well to set out the primary judge's reasoning on this matter at PJ[45]: To the extent that it is necessary to resolve the construction of s 83E, the plaintiff's reading is, in part, to be accepted. That is, each of the elements in subs (3) is to be understood as dependent upon the state of satisfaction of the Minister. The effect of s 83E(2) and (3) would have been clearer if subs (3) had stated that a school was also non-compliant if, "the Minister was satisfied that the school operates for profit or has operated for profit". However, because (i) each of the matters set out in subs (2) is for the satisfaction of the Minister, (ii) subs (3) supplements subs (2), and (iii) the matters identified in pars (a) and (b) are for the satisfaction of the Minister, the matters identified in the chapeau to subs (3) should be understood in the same way. The rest of subs (3) is a saving provision: that element of non-compliance is not excluded by satisfaction as to the circumstances specified in pars (a) and (b).
3. Notwithstanding that it appears to be arguable (given the text of s 83E(3) and contrasting that text with that in s 83E(2)) that the first part of s 83E(3) (namely that a school is also a non-compliant school if it operates for profit) is an objective matter and not one which turns on the Minister's state of satisfaction, neither party challenged the correctness of the primary judge's view that all the elements in s 83E(3) depended upon the Minister's state of satisfaction. In these circumstances, it is appropriate that the appeal proceed on that basis.
4. The primary judge held that: 1. a school can have a non-compliant status prior to the Minister forming the relevant opinion under s 83E; and 2. the Minister's state of satisfaction that a school is non-compliant can apply to past events. His Honour reasoned at PJ[46] in respect of ss 83E(2) and (3): …That it may is evident from the fact that both subs (2) and (3) include circumstances which have occurred in the past. The use of the present tense, namely that a school "is" a non-compliant school, does not mean that the school was compliant at the time in the past when it had failed to take some step, or had operated for profit. Such a construction would not promote the apparent purpose of the provision, but would tend to subvert it.

(b) Construction of s 83J

1. The primary judge identified at PJ[49] the following elements of what he described as CCM's primary statutory construction contention: 1. recovery of funds was only available in respect of a period when the School was a non-compliant school; 2. it is only a non-compliant school when declared to be such; 3. a declaration could only relate to the present status of the School (i.e., as at May 2021). This was because the Minister was not empowered to make a declaration under s 83H that the School "is" a non-compliant school with reference to earlier years; and 4. thus the Minister lacked power to recover funds paid to the School in earlier years.
2. CCM contended that its position was supported by the wording of the first sentence in the relevant paragraph of the Minister's letter dated 10 May 2021 (see at [12] above). It contended that this sentence constituted the entirety of the declaration, being that the School "is a non-compliant school" (emphasis added).
3. In brief, CCM's primary statutory construction contention was rejected by the primary judge for the following reasons. First, CCM's contention failed to address the different tenses used in the language of s 83E(3), which provided that a school "is" a non-compliant school if it "has" operated for profit.
4. Secondly, it was clear that the Minister was satisfied that the School had operated for profit in each of the relevant calendar years and she was also satisfied that it was appropriate to take action under s 83J(1).
5. Thirdly, noting that the relevant paragraph in the letter dated 10 May 2021 was headed "Non-Compliance Declaration", both sentences in that paragraph should be understood as "making a declaration as to present non-compliance, on the basis of past operation for profit in the identified years": PJ[52]. The declaration was validly expressed in the continuing present tense.
6. Fourthly, insofar as CCM's primary statutory construction contention was that recovery under s 83J required there to be a declaration in place (relevantly here under s 83F), the primary judge concluded at PJ[55] that nothing in the terms of s 83J (or in any other provision) indicated that a precondition to the Minister's power to recover funding from non-government schools was that there be a declaration in place under either ss 83D or 83F. (On appeal, CCM submitted that its position did not depend on there being any such declaration in place).
7. Fifthly, s 83J is a "freestanding power" empowering the recovery of funds relating to periods "when the school operated for profit or was a non-compliant school" (see PJ[57], emphasis added).
8. Finally, although on the facts here it was unnecessary to determine whether Rothman J was correct to find in Malek Fahd Islamic School Limited v Minister for Education and Early Childhood Learning [2022] NSWSC 1176 that a recommendation of the Advisory Committee was a precondition to recovery, that position was difficult to understand if the making of a declaration itself was not such a precondition.
9. The correctness of Malek Fahd is not raised in this appeal, presumably in light of this Court's recent decision in Malek Fahd Islamic School Limited v Minister for Education and Early Learning [2023] NSWCA 143. It was held there at [61] that there is no power to make a declaration of non-compliance unless two statutory preconditions have been satisfied, namely: 1. the existence of a recommendation by the Advisory Committee; and 2. the giving of a notice of such a recommendation to the affected school.
10. Both these preconditions were fulfilled in the present appeal.

The appeal

1. The grounds of appeal are as follows: 1. The primary judge erred in holding (at PJ[46]) that the School could have the status of "a non-compliant school" for the purpose of s 83E(3) of the Act prior to the Minister forming the state of satisfaction required by that subsection. 2. Further and in the alternative to ground 1, the primary judge erred in holding (at PJ[52]) that s 83F(1) of the Act permitted the Minister to declare that the School was, or had been, a non-compliant school with respect to periods prior to the Minister forming the state of satisfaction required by either ss 83E(2) or 83E(3). 3. The primary judge erred in holding that s 83J(1) of the Act permitted the Minister to recover financial assistance provided to the School for any period prior to 10 May 2021 (when the Minister formed the state of satisfaction required by s 83E(3) and made a declaration under s 83F(1)).
2. Senior counsel for CCM acknowledged that success on ground 2 alone would not be sufficient for the appeal to be allowed. Rather, he explained that this ground was "contextual" in the sense that the issue of the power to make a declaration under s 83F informs the construction of ss 83E and 83J which, together, were described as "the key provisions in issue".

A CCM's primary construction

1. As noted above, CCM's primary construction contention is that the power of recovery under s 83J is confined by s 83C insofar as recovery of funds for past for profit activities are concerned. It contends that where the Minister is satisfied of either of the matters specified in sub-ss 83C(4)(a) or (b) (i.e., the relevant contravening conduct is of such a minor nature so as not to justify termination of financial assistance or, alternatively, more appropriate action can be taken under s 83E), this creates an election on the Minister's part as to how to treat past for profit activity. Thus, on this construction as applied to the circumstances here, recovery of funding under s 83J was not available because the Minister had elected to proceed under s 83E (with particular reference to sub-s 83E(4)(b)) and not terminate future financial assistance to the School. Senior counsel for CCM contended that "once the Minister goes down the 83E path, recovery under 83J is not permitted".
2. For the following reasons, I reject those contentions. First, CCM's primary construction contention does not adequately address the significance of the fact that ss 83E and 83J are directed to different subject matters. The former deals with future funding, whereas the latter deals with past funding. Both limbs of s 83C(4) address the taking of future action where a school has operated for profit. Those limbs relieve the Minister from terminating future funding where a school has operated for profit. Following an investigation under Div 3, the Minister can, under the first limb of s 83C(4), continue to provide funding where the minor nature of a school's contravening conduct does not justify termination of funding. Alternatively, and importantly, even if the contravening conduct is not minor, the Minister may be satisfied that more appropriate action can be taken under s 83E in respect of future funding.
3. It is difficult to understand why action taken under either of these two limbs in respect of future funding should preclude resort to s 83J to recover past funding. It is no sufficient answer to this to say, as CCM did, that s 83E simply "creates a mechanism for dealing with past for profit activities in appropriate cases, and it should be construed as excluding an attempt by the Minister to effectively, on one hand, impose conditions, and on the other hand, recover funds for past funding". This explanation is not supported by any of the text, context or purpose of the provision.
4. Indeed, I will now explain why I consider that each of these relevant elements of contemporary statutory construction supports the primary judge's rejection of CCM's primary construction.
5. With respect to text, as noted above, the text of the provisions relates to different subject matters and time frames. The primary judge was correct to describe s 83J as a "freestanding power". This provision confers upon the Minister a power to recover past funding (whether provided under Div 3 or otherwise) if the preconditions stated therein exist. Significantly, these preconditions do not include any express requirement that consideration be given as to whether any action has been taken under s 83E. Nor do the preconditions include a requirement that there be a declaration under either ss 83D or 83F (noting again, however, that CCM emphasised on the appeal that its primary construction contention did not rely upon this matter).
6. In respect of considerations of context in the task of statutory construction, it is notable that if a school has operated for profit or is non-compliant, the scheme of Div 3 is to confer on the Minister a range of powers or sanctions which reflect the broad range of circumstances which can give rise to contravening conduct. Despite the absoluteness of the prohibition imposed by s 83C on the provision of financial assistance to a school that operates for profit, s 83E itself equips the Minister with a variety of potential sanctions of variable severity which stop short of terminating financial assistance. They include suspending any such assistance, reducing the amount, or imposing conditions on future financial assistance under s 83E(1). Further flexibility is provided by s 83E(3) where it is made clear that, in the circumstances specified, financial assistance need not be terminated.
7. All the sanctions available under s 83E relate to present or future funding. In contrast, the power to recover financial assistance under s 83J necessarily relates to past funding. There is no sound reason why that power of recovery is not available to be used if the Minister considers it appropriate to do so even where one or more sanctions has been imposed under s 83E in relation to present or future funding. As senior counsel for the Minister pointed out, s 83E can be engaged even if the past contravening conduct is not minor, such as where an offending school has reformed or is on the road to reform. That does not mean, however, that sanctions imposed under s 83E, which are forward looking, preclude recovery under s 83J concerning past periods of financial assistance.
8. As to the issue of purpose in the task of statutory construction, as the primary judge noted at PJ[33], the parties disagreed as to the purpose underlying the relevant statutory provisions. CCM said that the purpose was to provide financial assistance to non-government schools, pointing to the heading to Div 3. In contrast, the Minister submitted that the purpose was reflected in the heading to s 83C which states "Financial assistance not to be provided to schools that operate for profit". The primary judge resolved this dispute by identifying the purpose at PJ[33] as "the provision of financial assistance to non-Government schools not operating for profit".
9. I respectfully agree with that view, but would also add that it does not contribute significantly to the resolution of the issues of statutory construction on the appeal. That is primarily because it is plain from the statutory scheme of Div 3 as a whole that, whichever of those purposes is selected, neither purpose was implemented in absolute terms in the legislation. Rather, as is evident from the analysis above, both the Minister's power under s 83B to provide financial (and other) assistance to non-government schools and the prohibition imposed by s 83C on providing financial assistance to schools that operate for profit are subject to various qualifications and exceptions under other provisions in Div 3. Thus, while not denying that the role of purposive construction of the relevant statutory provision may be important, this is a case of the kind referred to in Carr v State of Western Australia (2007) 232 CLR 138; [2007] HCA 47, where Gleeson CJ stated at [5] that purposive construction: …may be of little assistance where a statutory provision strikes a balance between competing interests, and the problem of interpretation is that there is uncertainty as to how far the provision goes in seeking to achieve the underlying purpose or object of the Act. Legislation rarely pursues a single purpose at all costs…
10. Having regard to the balancing of competing interests which is reflected in the qualifications and exceptions in some of the statutory provisions in Div 3, as discussed above, the difficulty of the task of statutory construction here is not greatly assisted by purposive construction.
11. For all these reasons, I reject CCM's primary construction.

B CCM's alternative construction

1. If s 83J does not contain the implicit limitation which is at the heart of CCM's primary construction, its alternative construction is that the recovery power under s 83J is not available in respect of contravening conduct which occurs prior to the Minister attaining the state of satisfaction under either ss 83E(2) or (3). As noted above, in this case CCM contended that the requisite state of satisfaction was not reached until 10 May 2021, when the Minister made the non-compliance declaration.
2. The essence of CCM's alternative construction is that the power of recovery under s 83J applies only where the financial assistance sought to be recovered was provided in respect of a period when the School operated for profit or was a non-compliant school. This means that the relevant period for recovery can only be from a time when the school has the status of being a "non-compliant school" which status requires the Minister to have formed the state of satisfaction as referred to in what CCM describes as the exhaustive definitions in ss 83E(2) and (3).
3. Thus, CCM's alternative construction emphasises the distinction between a school operating for profit and it being a non-compliant school. Its position is that, even if there is a power of recovery in respect of previous for profit operations, this was not the stated basis for the recovery decision made by the Minister here. Rather, that basis was stated to be related to the School being non-compliant (as opposed to having operated for profit), which status can only be acquired once the Minister has formed the requisite state of satisfaction referred to in ss 83E(2) and (3). Thus CCM submitted that because of this stated basis for the recovery decision, the Minister was not entitled to validate her recovery decision by reference to the fact that she also could have relied upon the alternative limb in s 83E(3) concerning periods when the School operated for profit.
4. CCM submitted that the primary judge mischaracterised its argument below at PJ[38] insofar as his Honour considered that its case depended upon the proposition that the power of recovery under s 83J could not be exercised unless a declaration was made under either ss 83D or 83F. Rather, CCM contended that s 83F is relevant to the proper construction of s 83J and supports its proposition that there is a "statutory intention to treat noncompliance as a present state of affairs as opposed to a past state of affairs". CCM submitted that a non-compliance declaration under s 83F(1) may only be made as to a "presently existing state of affairs".
5. For the following reasons, I reject CCM's alternative construction. First, it should be made clear that the correctness of this alternative construction can be resolved on the basis which was made clear on the appeal by CCM's senior counsel that its alternative position did not depend on whether or not a declaration had been made under either ss 83D or 83F.
6. Secondly, as CCM correctly pointed out, different tenses are used in some of the provisions in Div 3. For example: 1. The prohibition in s 83C on making financial assistance relates to a school "that operates" for profit (similarly, see s 83D(6)). 2. A for profit declaration can be made under s 83D where a school "operates" and/or "has operated" for profit. 3. Section 83D(5) provides that a for profit declaration may specify a period to which the declaration applies that is wholly or partly before the declaration is made. CCM submitted that this emphasised that a for profit activity may relate to periods of time prior to the Minister forming the requisite state of satisfaction for a declaration to be made. 4. The present tense is also used in the Minister's powers under s 83E to suspend, reduce or impose conditions on the provision of financial assistance in relation to a school which "is a non-compliant school". 5. The Minister's power under s 83F to make a non-compliance declaration relates to a school which "is" a non-compliant school (similarly, see ss 83F(2), (4) and (5)). 6. The Minister's power under s 83J to recover any financial assistance operates where the assistance was provided in respect of a period where the school "operated for profit" or "was a non-compliant school" (emphasis added).
7. The contrast between the use of the present tense in s 83E(2) and the use of the past tense in other provisions, including s 83J(1), provides only superficial and limited support for CCM's alternative construction. In my view, there are several stronger reasons why that construction should not be accepted. Those reasons are as follows: 1. As the Minister pointed out, s 83E(2) is properly viewed as a definitional provision. Such provisions are normally expressed in the present tense but may require some adaptation when the defined concept is used in other provisions of a statute. As senior counsel for the Minister correctly pointed out, "definitional provisions, typically drafted in the present tense, do not import a temporal limitation". 2. Moreover, undue significance should not attach to the fact that the word "is" has been used in s 83E(3). As Young J stated in Gaffey v Chief Commissioner of State Revenue [2000] NSWSC 403 at [13], in all cases it is necessary to look at the use of a word such as "is" in context. Albeit in a different statutory context to that here, his Honour's primary observations at [12] resonate in this matter (emphasis in original): The word "is" in its most common use indicates an immediately present situation: Public Trustee v McKay [1969] NZLR 995, 1001. However, as McCarthy J pointed out in that case at 1002, the use of the present tense does not necessarily focus on a point in time because it is quite customary to use the present tense as though the past, and indeed the future, were present such as "the steamer leaves every Tuesday in winter". The word "is" is also often used in a continuous sense, such as "where the court is satisfied" of something, referred to as the "continuous present" by Gee J in Penza v Penza [1998] FLC 91-949 at 76,858. Occasionally the word can have a past significance such as in Hargreaves v Hopper (1875) 1 CPD 195, where the Act gave the vote to a person who "is on the last day of July in any year" a person who possesses the prescribed qualifications. The word can mean "shall be" or "will be": Botts v Simpson 167 P (2d) 231, 233 (1946) (Cal); Jersey City v Flynn 70 A 497, 510 (1908) (NJ Chancery). Sometimes the word has no temporal significance at all: Pye v Minister for Lands NSW [1954] 1 WLR 1410, 1425. See generally Darkingung Local Aboriginal Land Council v Minister for Natural Resources (1985) 58 LGRA 298. 1. As the primary judge also correctly pointed out at PJ[52], it is important to recognise that, in its own terms, s 83E(3) states that a school "is" a non-compliant school if it "has operated for profit". Thus a school's status as a non-compliant school may arise from the fact that it has operated in the past for profit. This is plainly the basis upon which the Minister made the non-compliance declaration dated 10 May 2021. Fairly read, the relevant paragraph of the letter dated 10 May 2021 makes clear that the Minister was satisfied that the School had operated for profit during each of the relevant years.
8. I respectfully agree with the primary judge's reasoning at PJ[52] that the declaration is not confined to the first sentence of the Minister's statement, but also includes the next sentence which states the basis upon which the Minister was satisfied of the School's non-compliant status. This reading is supported by the heading to the paragraph in which both sentences appear in the document dated 10 May 2021 (see at [12] above). As has previously been mentioned, CCM did not challenge the Minister's finding that the School had in fact operated for profit during each of the relevant years.
9. For these reasons, I reject CCM's alternative construction. Accordingly, it is unnecessary to address and determine an issue which would have arisen if CCM's alternative construction had prevailed as to whether what might be described as the Minister's "labelling error" (i.e., in proceeding to seek recovery under s 83J after having made a non-compliance declaration alone and not having made a for profit declaration under s 83D) was a material error in the sense described in cases such as Shrestha v Minister for Immigration and Border Protection (2018) 264 CLR 151; [2018] HCA 35 at [10]-[11] per Kiefel CJ, Gageler and Keane JJ.
10. For similar reasons, it is also unnecessary to address the question whether CCM's role in the making of the NCAT consent orders, which were then put into place by the Minister, including making the non-compliance declaration, may have been relevant to discretionary considerations pertaining to the grant of relief in a judicial review proceeding.

Conclusion

1. For all these reasons, the appeal should be dismissed, with costs.

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