Ground 1: Alleged misunderstanding or misapplication of s 65(1) of the Act
18 The first ground of the Amended Originating Application alleges that:
1. The delegate erred in misconstruing, misunderstanding and/or misapplying the statutory phrase "special circumstances" in s 65(1) of the PGPA Act and/or by conflating the consideration of whether "special circumstances" existed with the consideration of whether it was "appropriate" to make an act of grace payment.
19 The applicant argues that the first ground involves three categories of error. In respect of the first category, the applicant submits that s 65(1) of the Act requires a three-step process: first, the Minister must determine whether "special circumstances" exist; second, the Minister must then determine whether it is "appropriate" to make an act of grace payment; and third, the Minister must determine whether to authorise a payment in the exercise of his or her discretion. It is submitted that the issue of "appropriateness" does not arise until it is first determined that "special circumstances" exist.
20 The applicant submits that to properly undertake the task of evaluating whether "special circumstances" existed, the delegate was required to have regard to:
(a) the degree of underperformance and culpability or accountability of the CDPP; and
(b) the fact that the applicant was unable to obtain recompense against the Commonwealth for the CDPP's errors.
It is submitted that the delegate's failure to undertake any examination of these matters, demonstrates a failure to properly understand, or apply, the statutory concept of "special circumstances". The applicant submits that examination of the "appropriateness" of a payment could only be lawfully conducted if the delegate first properly considered whether "special circumstances" existed.
21 As to the second category of error, the applicant submits that, whereas his case was that a number of circumstances cumulatively amounted to "special circumstances", the delegate only considered in isolation whether each circumstance was a "special circumstance". The applicant relies upon the judgment of White J in BVZ16 v Minister for Immigration and Border Protection (2017) 254 FCR 221 at [41].
22 As to the third category of error, the applicant submits that the delegate did not appreciate that his decision-making task involved a stepped process, and conflated the first two steps. The third category is intertwined with the first.
23 The respondent submits that the text and purpose of s 65(1) of the Act make it clear that a multi-staged process is not required. The respondent submits that, in any case, matters such as the conduct of the CDPP and the applicant's lack of compensation were considered by the delegate.
24 Section 65(1) of the Act provides that:
65 Act of grace payments by the Commonwealth
(1) The Finance Minister may, on behalf of the Commonwealth, authorise, in writing, one or more payments to be made to a person if the Finance Minister considers it appropriate to do so because of special circumstances.
Note 1: A payment may be authorised even though the payment or payments would not otherwise be authorised by law or required to meet a legal liability.
…
25 Section 65(1) replaced s 33 of the Financial Management and Accountability Act 1997 (Cth) (FMA Act). The provisions are not relevantly distinguishable. Section 33 of the FMA Act was considered in Toomer v Slipper [2001] FCA 981, where Weinberg J held at [31]:
The statutory context in which the term "special circumstances" arises in the present case is one in which the Minister is given a discretion to authorise the making of act of grace payments where such payments "would not otherwise be authorised by law or required to meet a legal liability". There are any number of circumstances which may give rise to a claim for a payment of this type. It is impossible to anticipate the situations in which such payments may be warranted. The discretion vested in the Minister is obviously broad.
26 In Tomson v Minister for Finance and Deregulation (2013) 136 ALD 610; [2013] FCA 664, Rares J held at [33]:
The discretion conferred on the Finance Minister by s 33(1) of the FMA Act is enlivened if she "considers it appropriate because of special circumstances" to authorise one or more payments to a person. Critically, the section authorises such a payment notwithstanding that it is not made under any law or to satisfy a legal liability. The Parliament did not circumscribe the breadth of the discretion it conferred on the Finance Minister in s 33(1) except to require her to consider that the making of the payment be "appropriate" because of "special circumstances"…
27 The Minister is conferred with a broad discretion to authorise payments if the Minister considers it appropriate to do so because of special circumstances. An object of the Act is, under s 5, to require the Commonwealth and Commonwealth entities to meet high standards of governance, performance and accountability, so what is generally (but not exclusively) contemplated under s 65(1) is authorisation of payments in appropriate cases where those standards are not met. A payment may be authorised even though the payment would not otherwise be authorised by law or be required to meet a legal liability. The Minister's function is to make a subjective judgment as to whether it is appropriate to authorise a payment because of circumstances that he or she considers special. The legislature has not otherwise circumscribed the scope of the Minister's evaluative judgment, as the full range of special circumstances that may make authorisation of payments appropriate is impossible to predict.
28 Having regard to the purpose of s 65(1) and the breadth of the evaluative judgment left to the Minister, it would be surprising if there were a legislative intention to prescribe that the Minister must apply a particular process of reasoning in making that judgment.
29 The phrase, "if the Finance Minister considers it appropriate to do so because of special circumstances", in s 65(1) of the Act envisages an interrelationship and interaction between the circumstances, their specialness and the appropriateness of authorising a payment. It contemplates a melange of those considerations, rather than some neat compartmentalisation or division between them. The provision does not require the Minister to approach the process of decision-making in any particular way. The language and purpose of the provision are inconsistent with any requirement that the Minister must engage in a staged process where it must be first determined whether the circumstances are special and only then whether those circumstances make it appropriate to authorise a payment.
30 Accordingly, the applicant's submissions that s 65(1) of the Act requires a staged process of decision-making, and that a failure to engage in such a process indicates a failure to properly understand or apply the concept of "special circumstances", must be rejected.
31 Further, the applicant's submission that the delegate was required to have regard to the degree of underperformance and culpability or accountability of the CDPP and that the applicant was otherwise unable to obtain recompense must be rejected. Section 65(1) of the Act confers a broad evaluative function on the Minister and the provision is not amenable to any construction requiring those specific matters to be taken into account. In any event, these matters were considered by the delegate.
32 I reject the submission that the delegate only considered the applicant's claims of special circumstances individually and not cumulatively. The delegate found:
You have claimed that special circumstances arise from:
• The conduct of the CDPP during your trial,
• Misdirection of the jury by the trial judge,
• Findings of the Queensland Court of Appeal that overturned your conviction,
• The lack of compensation for time served in prison in light of your acquittal, and
• You consider this situation constitutes a breach of your Human Rights.
In short, you consider that you should be compensated by the Commonwealth as you were never been lawfully convicted of taxation offences, but suffered imprisonment, loss of your business and the capacity to earn an income, and due to detrimental impacts on your health during your imprisonment.
Having considered all the relevant material available to me, I do not consider there to be special circumstances that would make an act of grace payment to you appropriate.
33 These passages demonstrate that the delegate was conscious that the applicant relied upon a number of circumstances as together constituting special circumstances, but did not consider them to amount to special circumstances that would make it appropriate to authorise a payment. The delegate went on to explain the basis for his conclusion by, in part, referring to each of the circumstances relied on by the applicant and considering whether they individually constituted special circumstances. However, the delegate's consideration of these circumstances coalesced into his conclusion that, "[h]aving considered all the relevant material available to me, I do not consider there to be special circumstances that would make an act of grace payment to you appropriate". In my opinion, that conclusion, considered in the context of the preceding passages, was made by reference to the whole of the relevant circumstances relied on by the applicant.
34 Each of the applicant's three categories of error encompassed in the first ground of review must be rejected.