NSWNSWSC

Malek Fahd Islamic School Limited v Minister for Education and Early Childhood Learning

[2022] NSWSC 1176

Supreme Court of NSW|2022-04-21|Before: Rothman J

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2022-04-21

Before

Rothman J

Catchwords

[1990] HCA 21 Baldwin & Francis Ltd v Patents Appeal Tribunal [1959] AC 663
[1959] 2 All ER 433 Campbelltown City Council v Vegan (2006) 67 NSWLR 372
[2006] NSWCA 284 Collector of Customs v Pozzolanic (1993) 43 FCR 280 at 287
[1993] FCA 456 Colonial Bank of Australasia v Willan (1874) LR 5 PC 417 Craig v South Australia (1995) 184 CLR 163

Source

Original judgment source is linked above.

Catchwords

[1990] HCA 21 Baldwin & Francis Ltd v Patents Appeal Tribunal [1959] AC 663[1959] 2 All ER 433 Campbelltown City Council v Vegan (2006) 67 NSWLR 372[2006] NSWCA 284 Collector of Customs v Pozzolanic (1993) 43 FCR 280 at 287[1993] FCA 456 Colonial Bank of Australasia v Willan (1874) LR 5 PC 417 Craig v South Australia (1995) 184 CLR 163[1995] HCA 58 Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 77 ALJR 1088[2003] HCA 26 Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89[2007] HCA 22 Hill v Zuda Pty Ltd (2022) 96 ALJR 540[2022] HCA 21 House v The King (1936) 55 CLR 499[1936] HCA 40 Kirk v Industrial Court of New South Wales (2010) 239 CLR 531[2010] HCA 1 L&B Linings Pty Ltd v WorkCover Authority of New South Wales [2011] NSWSC 474 Lovell v Lovell (1950) 81 CLR 513[1950] HCA 52 Minister For Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24[1986] HCA 40 Minister for Immigration and Citizenship v Li (2013) 249 CLR 332[2013] HCA 18 Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1986) 185 CLR 259[1996] HCA 6 Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611

Judgment (38 paragraphs)

[1]

Background Facts and Procedural History

The facts in these proceedings are relevantly uncontentious, many of them having been the subject of previous decisions and judgments to which reference will be made. There is also an Agreed Chronology that details the events and circumstances leading up to this litigation but does not deal with the early years prior to the commencement of an investigation to which reference will be made later in these reasons. [1]
The plaintiff, being the School, was established by the Australian Federation of Islamic Councils Inc ("AFIC") in 1989 and, from its establishment until March 2016, AFIC had the right to appoint all or a majority of the members of the Board of Directors of the School. The School pleads that the Directors of the School were accustomed to act in accordance with AFIC's wishes. As a consequence, the role of AFIC rendered it a director of the School within the meaning of s 9 of the Corporations Act 2001 (Cth). [2]
The defendant, as already noted, is the New South Wales Minister for Education and Early Childhood Learning. In 2014 and 2015, the New South Wales Government, on the recommendation of the Minister, provided the School with financial assistance totalling $11,065,584.69. This funding was purportedly provided pursuant to s 21 of the Education Act 1990 - 2014 and 83B of the Education Act 1990 (NSW) (hereinafter "the Act"). [3]
In January 2016, the Minister for Education commenced an investigation into the School to determine, in particular, whether the School was operating for-profit or was non-compliant, within the meaning of the Act. [4]
On 1 June 2017, the Non-Government Schools Not-For-Profit Advisory Committee (in these reasons called "the Advisory Committee") determined that the School and/or its proprietor operated for-profit within the meaning of s 21A, [5] and s 83C of the Act for the years 2014 and 2015. In that Report, the Advisory Committee recommended that the Minister make a "non-compliance" declaration in respect of the School for 2014 and 2015.
On 13 July 2017, following an internal review, the recommendations of the Advisory Committee were confirmed.

[2]

Supreme Court proceedings against AFIC

In March 2016, the School finalised governance reforms, and asserts that it began to operate through a Board of Directors independent of AFIC. In the meantime, the School commenced proceedings in the Court, suing AFIC for breach of statutory and fiduciary duties owed to the School in relation to payments in 2014 and 2015 by the School to AFIC.
On 9 November 2017, the Court issued orders reflecting an Open Statement by AFIC which offered, without admission: to repay to the School an amount of $1.42 million, together with interest; to pay a further amount of just over $530,000, with interest; to pay a refund of the payment of an amount of $2.2 million, with interest; to pay a refund of the payment of $2.7 million (or just over) in respect of arrears of rent; to pay to the School the difference between the rent paid on properties and the rent at market value; a variation to leases; and, the transfer of property at Beaumont Hills.
Those proceedings concluded and judgment was delivered on 12 December 2017. [6] The orders issued by the Court were ultimately settled but are otherwise described in [132]-[134] of the aforesaid reasons for judgment. Those orders concluded that: the School was not entitled to any orders in its favour in addition to those made by the Court on 9 November 2017; and AFIC was entitled to recover rent on two properties for dates specified, calculated at market rent determined by an independent assessor, which amounts, together with interest, may be set off against the amounts owed pursuant to the orders issued on 9 November 2017.
Further, over and above the reflection of the open offer, the Court ordered the School to repay AFIC a loan of $814,778.64 plus interest. [7] The orders earlier recited and/or summarised dealt with the remaining issues to be determined following the orders of 9 November 2017. [8]

[3]

Tribunal proceedings

Following the internal review - which confirmed the finding of the Advisory Committee - and following the judgment of the Court to which reference has just been made, the School applied to the NSW Civil and Administrative Tribunal (hereinafter "NCAT" or "the Tribunal").
The application to NCAT was heard by a Senior Member on 29 and 30 July 2019. The School challenged the finding by the Advisory Committee that the School operated "for-profit" and the recommendation made to the Minister that declarations for "non-compliance" be made pursuant to the provisions of the Act. On 6 September 2019, the Senior Member confirmed the recommendation of the Advisory Committee and, to the extent necessary, the internal review. [9]
The Senior Member quantified the "for-profit activity" that was outstanding, being three payments that had not been remedied by the School's restructure and proceedings against AFIC, together with other matters. The payments identified were unrecovered payments of $37,481.25 of GST or $29,920 of leave entitlements (as a result of a finding that either could have been paid, but not both) to a former Director or someone involved in the operation of the School and/or AFIC (the "G Payments"); $11,460 in relation to payments to another person in a similar position (the "M Payments"); and, $2,200 in "minor" Board Member Payments, which the Senior Member found should be disregarded. [10]
An appeal against the decision of the Senior Member was taken to an Appeal Panel of NCAT, which heard the matter on 3 December 2019. The Appeal Panel, in its decision of 6 February 2020, allowed the appeal in part, in that the Appeal Panel took the view that it was for the Minister alone to determine whether there would be recovery of the amounts of assistance; it was not a matter for the Advisory Committee to recommend. [11]
As a consequence, the Appeal Panel issued orders the effect of which was to replace the order/decision made by the Senior Member and made a recommendation and/or finding that the School operated for-profit, and that all financial assistance be suspended until reform of its operation, which had been outlined in detail. The Appeal Panel made no recommendation in relation to the recovery of amounts provided for assistance in 2014 and 2015.
Notwithstanding that the appeal was allowed in part, the Appeal Panel agreed with the conclusions of fact of the Senior Member, and did not refer to, or overturn, the Senior Member's identification of the outstanding payments. The Appeal Panel further confirmed the findings that gave rise to the recommendations of the Advisory Committee and the findings of the Senior Member and confirmed orders relating to the future provision of assistance. The overturning of the recommendation as to recovery was not determined on its merits, but on the basis of the jurisdiction of the Advisory Committee.

[4]

Communication between the Minister and the School

Following the NCAT Appeal Panel decision, the Minister issued a "Non-Compliance Declaration", purportedly pursuant to the terms of s 83F(1) of the Act, by letter dated 28 May 2020. The Minister declared that the School was non-compliant for its operations in 2014 and 2015; suspended financial assistance pending satisfaction of further conditions; and, sought submissions from the School in relation to the Minister's possible exercise of power (under s 83J of the Act) to recover the amount of financial assistance provided in 2014 and 2015. [12] A time limit was provided for the receipt of submissions.
The letter referred to the Notice of 7 August 2017, issued under s 83G of the Act, addressed to the School, which set out the recommendations of the Advisory Committee.
Relevantly, the 28 May 2020 letter includes the following passage: "Recovery of Financial Assistance Under section 83J(1), I may recover the amount of any financial assistance provided by the Minister to or for the benefit of a school in respect of a period when the school was a non-compliant school. In 2014 and 2015, the School received the sum of $11,065,584.69 in financial assistance from the NSW Government. In making the decision regarding the recovery of financial assistance from the School, and the amount which may be recovered, I will have regard to the following: * s. 4.6(1) of the Government Sector Finance Act 2018 (NSW); * Education Act 1990 (NSW); * The public interest in ensuring that funds paid by government are properly authorised and used for their intended purposes; and * The public interest in seeing that non-government schools receiving financial assistance take seriously their not-for-profit obligations under the Education Act 1990. Show Cause Before I make my decision regarding any possible future recovery, I am providing you with an opportunity to make submissions as to whether recovery should occur, the timing and amount of any financial assistance to be recovered." (Emphasis added.)
On 22 June 2020, the School lodged submissions with the Minister in relation to those issues. [13] The School, in its submissions, referred to the reform of the Board of the School, and the abovementioned proceedings in the Supreme Court and the Tribunal. The School then referred to the $4,235,457.62 of "overpayments" made by the School in 2014 and 2015 that the Advisory Committee had identified, which, it said, determined the School was not a not-for-profit institution.

[5]

The Decision

On 5 March 2021, the Minister wrote to the School. This letter is, or contains, the decision that is challenged in these proceedings.
In the letter of 5 March 2021, the Minister communicated that she had decided "to seek recovery of all the financial assistance paid to the school in 2014 and 2015, which is clarified to mean the amount of $11,065,584.69". The Minister, purportedly for the purpose of allowing the School to adjust its operations to reduce any impact on current and future students, decided to recover that amount by reducing future amounts of financial assistance payable over the next five years until the debt is fully recovered.
There are some important aspects of the letter that require extraction. The Minister made the following comments: "I accept that the power given to me under section 83J of the Act to recover the amount of any financial assistance provided to the school in respect of a period when the school was a non-compliant school, is discretionary, in the sense that I may decide not to recover that amount of financial assistance so provided. However, I also accept that, should I decide to exercise that power, the question of the amount to be recovered is less clear. As explained in my letter dated 11 November 2020, in response to your submission regarding recovery commensurate with the amount of financial assistance spent on 'for-profit' activities, the provisions contained in section 83J of the Act are concerned with the repayment of financial assistance provided in respect of a period when the school operated for-profit (or was a non-compliant school). … … I have based my decision regarding the amount of recovery on the relevant legislative provisions (specifically, section 83J of the Act and more broadly Division 3 of Part 7 of the Act), and by also carefully considering the school's submissions on this issue. The School submits that the amount of recovery should be based on the amount of money it says was spent on for-profit activities which has not been recovered by the School. Those submissions are, in my opinion, not supported by the Act. Section 83J of the Act is based on an important principle. Where a School has been found to be operating for-profit, it is reasonable that the School should repay the public funds it received while the school was in breach of the pre-conditions to receiving funding. There is a community expectation that public funding provided during a period when a school was later found to be ineligible for funding will be recovered and returned to the people of NSW. I am also mindful that the school is currently paying for a debt incurred as a result of for-profit activity that occurred in 2010-2012. That debt is due to be settled in 2024. Having considered the annual rate of repayment, I do not consider it appropriate that recovery should only occur after that debt has been repaid. Having considered the school's submissions on the potential impact of recovery on students, and in order to reduce that impact, I have decided to recover the amount of financial assistance provided to the school in 2014-2015 when the school operated for-profit, by reducing future amounts of financial assistance payable to the school by $2,213,116 per annum for five (5) years." [19]

[6]

The Education Act Legislative Scheme

It is necessary to deal first with the legislative scheme under which the decision of the Minister issued, and upon which the grounds of the appeal are based.
As no appeal is sought in relation to the decision of the Appeal Panel, it is unnecessary to recite the provisions of the Civil and Administrative Tribunal Act 2013 (NSW). It is sufficient for present purposes to note that an appeal lies from a decision of the Tribunal to the Supreme Court, by leave, on a question of law, under s 83 of the Civil and Administrative Tribunal Act.
The foregoing is not intended as a criticism or an indication that an appeal would lie or be successful. Nevertheless, if facts were otherwise available to be challenged in these proceedings, in the circumstances, such a challenge has not been pursued.

[7]

Preliminary provisions of the Education Act

The terms, and objects, of the Education Act need greater attention. First, the Parliament's promulgation of the Act is expressly stated to be based on the following principles: every child has a right to receive an education; the education of a child is primarily the responsibility of the child's parents; the State's duty is to ensure that every child receives an education of the highest quality; and, the principal responsibility of the State in the education of children is the provision of public education. [20] It is of possible relevance to the construction of the Act, in relation to the issues now before the Court, that one of the principles upon which the Act is based is the State's duty to ensure that every child receives an education of the highest quality.
The principal objects of the Act are the establishment of a curriculum including a minimum curriculum for school registration, including that which must be completed in order to complete schooling; providing for the establishment and operation of government schools; ensuring that the only schools that operate in New South Wales are government schools or non-government schools registered under the Act; to allow children to be educated at home; and, to provide for Records of School Achievement and Higher School Certificates and for the accreditation of non-government schools that are competent to present candidates for them. [21]
Interestingly, in the foregoing, there is no reference to issues associated with the funding of non-government schools.
There is a further provision dealing with the objects for the administration of the Act or of education. It is unnecessary to recite each of those objects, but the Court notes that those objects include: assisting each child to achieve his or her educational potential; encouraging innovation and diversity within and among schools; mitigating educational disadvantage, including disadvantage arising from gender, geographic, economic, social, cultural, lingual or other causes; the provision of education for children from non-English speaking backgrounds; and, the provision of an education for children promoting family and community values. [22]
The Act is then divided into Parts dealing with the school curriculum, functions of the Minister and the New South Wales Education Standards Authority (hereinafter "NESA") in the education portfolio. The provisions of s 20A of the Act prescribe the functions of NESA to include advising on the registration of non-government schools under Part 7; accreditation of registered non-government schools under Part 8; the monitoring of the application of NESA's policies in schools; and advising the Minister on any other matter which the Minister requests. The last-mentioned aspect, presumably, is limited to matters associated with its authority and/or expertise.

[8]

Provisions relating to non-government schools (Part 7)

Part 7 of the Act deals with non-government schools and home-schooling. The Part does not apply to government schools. [24] Under this Part, non-government schools may be registered either individually or as part of a system of schools, which involves slightly different procedures and approvals. [25]
The approvals are granted by the Minister and, in the case of a system of less than 20 but more than 10 schools, the establishment and registration of such a system must be on the recommendation of NESA. By the operation of s 46 of the Act, the Minister is required to have regard to the advice of NESA in relation to the exercise of any of the Minister's functions regarding the registration of a system for non-government schools. There is also a delineated process for the withdrawal of registration of either a school or a system.
Section 47 of the Act sets out the registration requirements for non-government schools, which include that: the proprietor of the school be a corporation; the school to be financially viable; each officer of the school be a fit and proper person; the school must have policies and procedures for proper governance; requirements as to the competence of teaching staff; the educational facilities be adequate; there be a safe and supportive environment for students; there be minimum curriculum requirements; and that policies and procedures ensure the school's participation in annual reporting to the Minister and/or NESA.
The foregoing is not intended to be exhaustive, and NESA may set out guidelines for the assistance of a non-government school to comply with the requirements for registration. [26] It is NESA that considers the initial registration of a non-government school and provides the Minister with a written report about the application. [27] The report is required to include a recommendation as to whether the school should be registered. Assuming the Minister approves the registration of the school, the registration exists for an initial period of 12 months only. [28]
Thereafter, the school applies for continuing registration and/or renewal of the registration of the school, which must be filed prior to the expiry of three months of the initial registration and at least nine months prior to the expiry of any other registration. [29] NESA provides reports and recommendations to the Minister regarding the registration and renewal of a non-government school. [30]

[9]

Provisions relating to financial assistance

The provisions of the Act contained in Div 3 of Pt 7 deal with financial assistance for non-government schools. These provisions are the most relevant to the current issues between the parties.
As expected, the Advisory Committee is defined as the Non-Government Schools Not-For-Profit Advisory Committee. Section 83B of the Act authorises the Minister to provide financial assistance (and other assistance) "in respect of non-government school children".
By operation of s 83B(2) of the Act, the determination of the amount of financial assistance is subject to the obligations of New South Wales under the Commonwealth/State finance agreements relating to non-government schools. The State may exceed the amount it is obliged to contribute under the Commonwealth/State agreement.
Section 83BA(1) of the Act deems Commonwealth financial assistance - provided via the State to a school under the Commonwealth/State agreement (the National Education Reform Agreement) - to be an arrangement between the school and the State. Such an arrangement determines that the State is entitled to recover any debt owed by a school that relates to assistance provided by the Commonwealth. [33] The State is capable of assigning the debt to the Commonwealth. [34]
The terms of s 83C of the Act are particularly relevant to these proceedings and should be extracted. So too, the terms of ss 83D, 83E, 83F and 83J need to be recited. Those provisions are in the following terms: "83C Financial assistance not to be provided to schools that operate for profit (1) The Minister must not provide financial assistance (whether under this Division or otherwise) to or for the benefit of a school that operates for profit. (2) A school operates for profit (without limiting the circumstances in which it does so) if the Minister is satisfied that - (a) any part of its proprietor's assets (in so far as they relate to the school) or its proprietor's income (in so far as it arises from the operation of the school) is used for any purpose other than for the operation of the school, or (b) any payment is made by the school to a related entity or other person or body - (i) for property, goods or services at more than reasonable market value, or (ii) for property, goods or services that are not required for the operation of the school, or (iii) for property, goods or services that is in any other way unreasonable in the circumstances having regard to the fact that financial assistance is provided to or for the benefit of the school by the Minister, or (c) any payment is made by the school to a person in connection with the person's activities as a member of the governing body of the school unless it is in reimbursement for a payment made by the person in connection with the operation of the school. (3) The regulations may specify whether or not a school operates for profit because of any particular use of assets or income, any particular payment in relation to the school or any other matter. Any such regulation has effect despite anything to the contrary in subsection (2). (4) The Minister is not obliged to terminate the provision of financial assistance because of this section if, following an investigation under this Division, the Minister is satisfied that - (a) termination of financial assistance is not justified because of the minor nature of the relevant conduct, or (b) more appropriate action can be taken under section 83E. (5) In this section - 'asset' means an economic resource that may depreciate in value over time. 'income' means money or other forms of consideration received periodically from the provision of property, goods or services, investments, gifts, donations, grants, financial assistance or any other gain obtained from the use of a school's assets or its proprietor's assets. 'payment' means a transaction involving consideration (including non-monetary consideration) and includes a commitment to spend or a liability incurred (whether or not the time for payment has arisen). 83D Declaration that school operating for profit (1) The Minister may declare that a school operates for profit or has operated for profit during a specified previous period, or both (a 'for profit declaration'). (2) The Minister may make a for profit declaration only if the Advisory Committee recommends that the declaration be made because the school operates for profit or has so operated for profit (as the case requires). (3) A for profit declaration in respect of a school is conclusive evidence that the school operates for profit or has so operated for profit (as the case requires). (4) The Minister may revoke a for profit declaration at any time, and is to do so if the Advisory Committee advises the Minister, or the Minister is satisfied, that the school no longer operates for profit. (5) A for profit declaration may specify a period to which it applies that is wholly or partly before the declaration is made (including before the commencement of this section). (6) The Minister's obligation under this Division not to provide financial assistance to or for the benefit of a school that operates for profit applies, whether or not a for profit declaration has been made. 83E Financial assistance to schools may be suspended, reduced or made subject to conditions (1) The Minister may suspend, reduce or impose conditions on the provision of financial assistance (whether under this Division or otherwise) to or for the benefit of a school that is a non-compliant school. (2) A school is a non-compliant school if the Minister is satisfied that - (a) the school or the proprietor of the school has failed to provide reasonable assistance in relation to the conduct of any investigation of the school or proprietor under this Division, or (b) the school or the proprietor of the school has failed to comply with a direction of the Minister given under this Division to the school or proprietor, or (c) it is a non-compliant school because of any other circumstances set out in the regulations. (3) A school is also a non-compliant school if the school operates for profit, or has operated for profit, but following an investigation under this Division, the Minister is satisfied that - (a) termination of financial assistance to the school is not justified because of the minor nature of the relevant conduct, or (b) more appropriate action can be taken in respect of the school under this section. (4) If a school ceases to be a non-compliant school, the school is not entitled to any payment that was not made because it was a non-compliant school. 83F Declaration that school non-compliant (1) The Minister may declare that a school is a non-compliant school (a 'non-compliance declaration'). (2) The Minister may make a non-compliance declaration only if the Advisory Committee recommends that the declaration be made because the school is a non-compliant school. (3) Any such recommendation of the Advisory Committee may include a recommendation on any consequent suspension or reduction of, or imposition of conditions on, the provision of financial assistance. (4) A non-compliance declaration in respect of a school is conclusive evidence that it is a non-compliant school and that grounds exist for the Minister to suspend, reduce or impose conditions on the provision of financial assistance in respect of the school. (5) The Minister may revoke a non-compliance declaration at any time, and is to do so if the Advisory Committee advises the Minister, or the Minister is satisfied, that the school is no longer a non-compliant school. (6) The Minister's power under this Division to suspend, reduce or impose conditions on the provision of financial assistance to or for the benefit of a non-compliant school applies, whether or not a non-compliance declaration has been made and whether or not the suspension, reduction or imposition is recommended by the Advisory Committee. … 83J Recovery of amounts from schools (1) The Minister may recover the amount of any financial assistance provided by the Minister to or for the benefit of a school (whether under this Division or otherwise) if the financial assistance was provided in respect of a period when the school operated for profit or was a non-compliant school. (2) Any amount of costs under section 83I(3) that is not paid by a school or the proprietor of a school may be recovered by the Minister as if it were financial assistance provided under this Division to the school when the school was a non-compliant school. (3) The Minister may recover an amount under this section - (a) as a debt in a court of competent jurisdiction, or (b) by reducing future amounts of financial assistance payable by the Minister to or for the benefit of the school concerned, or both. (4) A school, the proprietor of a school and any system, authority, person or body referred to in section 83B(6)(b) to which an amount recoverable under this section (or part of the amount) was paid are jointly and severally liable for repayment of the amount."

[10]

Submissions of the School

In some respects, the recitation of the grounds of appeal renders self-explanatory the submissions of the plaintiff School. The School relies upon the grounds of the Summons, filed 4 June 2021; written submissions dated 25 October 2021; and submissions in reply dated 3 December 2021.
As a preliminary matter, it is relevant to note that the School submits that the three outstanding payments calculated in the first instance NCAT decision are those which the School has not otherwise justified and/or recovered.
It is thus important to address the discrepancy that has arisen in relation to the calculation of the three payments. In the letter to the Minister of 22 June 2020 (referred to above), the School submitted that the relevant calculation was, "at most" $51,141.25. [36] In the further submissions to the Minister of 27 November 2020, the School represented that all funds had been "accounted for and/or justified" except for the sum of $43,580. [37] The Summons refers to $48,941.25 as the amount which has not been satisfactorily reconciled by proceedings bought by the School (at [14]), as well as the $43,580 referred in the 27 November 2020 letter (at [23]). In the written submissions, at [53], the School submits that "the only amount which has not been accounted for and/or justified is in the order of some $50,000", and refers to the $43,580 amount in the 27 November 2020 letter (at [40]) (and repeated in submissions in reply at [15]). In the hearing before this Court, counsel for each party referred to, at different times, "some $50,000 figure", a $43,000 amount, and a $45,000 amount.
The above discrepancy appears to arise as a result of alternative calculations of the three unresolved "for profit" payment findings of NCAT. The lower figure of $43,580 is calculated as the sum of the lower leave-related G Payments figure, the M Payments, and excluding the Board Member Payments. The higher figure of $51,141.25 is the sum of the higher GST-related G Payments, the M Payments, and including the Board Member Payments.
The exact figure is, in the context of these reasons, largely immaterial. There appears to be no dispute between the parties that a figure in the range of $43,580 - $51,141.25 is the quantum of the "for profit" payments which the School has not accounted for, justified or recovered after 2015. Relying on some calculation of the above amounts, the School made submissions in respect of each of the grounds of appeal.

[11]

Ground 1: Error re absence of discretion as to amount

The plaintiff submits that, on its proper construction, s 83J(1) of the Act, recited above, affords the Minister a discretion as to whether to recover any financial assistance provided to a school while operated "for-profit" or "non-compliant", and also a discretion as to the amount to be recovered. The dual discretion is referred to by the School as the "flexible construction".
The ordinary meaning of the text of s 83J(1) of the Act, and, in particular, the use of the term "any", is relied upon to construe the section in a manner that the recovery can be for some financial assistance other than all of the financial assistance provided during the period in question. Further, the purpose and effect of the section, and the existence of a discretion as to whether recovery will be sought, leads to the flexible construction being one that accords with achieving harmonious goals. In that respect, the School submits that a rigid construction would lead to arbitrary, capricious and unreasonable consequences.
The Minister, according to the submission of the School, proceeded on the "primary basis" of a rigid construction of the section, being that the Minister did not have a discretion as to the amount to be recovered and her discretion was limited to recovering all or none of the financial assistance (which the Minister considers to be the proper construction). [38] The evidence, it is submitted, does not support an assertion that the Minister considered an alternative construction or discretion.
In the alternative, the School submitted that the Minister committed an error of law on the face of the record, which the School maintains includes the Minister's reasons, and, therefore, judicial review is available, and the Minister's decision may be set aside for error of law that falls short of jurisdictional error.
In that regard, it should be noted at this juncture that, in reply, the School submitted that the Minister's alternative contention that a "flexible construction" was contemplated is not supported by admissible evidence. That submission refers to the objection taken by the plaintiff to the admissibility of the letter from the Minister of 25 June 2021 on the basis that the letter amounts to reasons provided after the commencement of this proceeding.

[12]

Ground 2: Failure to engage with School's submissions

In this respect, the School submits, first, that the Minister mischaracterised the School's submissions as cavilling with the Advisory Committees findings and failed to appreciate that the School's reforms addressed the conditions imposed upon it; a matter going to the issue of recovery. Secondly, the School submits that the Minister failed to engage with the submission regarding the relevance of the quantum of "for-profit" activity that had not been remedied, as contrasted with the full "for-profit" quantum.
Thirdly, the submission was to the effect that the Minister failed to consider the relevance of the reforms and changes in the School Board's governance, mischaracterising the liability being on the School as currently constituted, rather than the actions attributable to those previously in control of the School. Lastly, in relation to Ground 2, the School submits that the Minister failed to engage with the remedy with respect to the property at Beaumont Hills.
Having regard to the entirety of the Minister's reasons, the School submits that the Minister failed to engage in an "active intellectual process" with respect to the School's submissions, of 22 June and 27 November 2020, and engaged in a peremptory approach to those submissions.

[13]

Ground 3: Failure to consider mandatory relevant considerations

The School submits that a proper construction of s 83J of the Act implicitly requires the Minister to take into account the nature, context and severity of "for-profit" activity, including: the extent of any for-profit or non-compliant activity; any remedial action taken by the School; the extent to which financial assistance previously used for for-profit or non-compliant activity has been recovered by the School; and, the identity of those responsible for the School's for-profit or non-compliant activity and their current role (if any) in the governance of the School.
I note at this stage that the Minister, in her Response to Summons, [39] admitted that the foregoing matters are relevant. Notwithstanding that admission, it does not appear that the Minister admits that the considerations raised by the School were mandatory considerations or considerations required to be taken into account, as distinct from matters that were relevant, in the sense that they were not extraneous to the exercise of discretion reposed in the Minister.

[14]

Ground 4: The decision was disproportionate and legally unreasonable

In considering all the relevant matters - including the former control of the School by AFIC, the governance reforms and the remaining quantum of "for-profit" activity for which the School's governing body, as presently constituted, is accountable - the School submits that the request to repay the full quantum, being approximately $11 million, is grossly disproportionate and legally unreasonable. The only amount, according to the School, justified by the foregoing circumstances is recovery of an amount in the order of between $43,580 and $51,141.25.
Further, in reply, the School submitted that the quantum of "for-profit" activity, the circumstances in which it occurred, and the remedial action taken by the School, are factors relevant to the exercise of discretion under s 83J of the Act. The School clarified that it does not contend that s 83J of the Act is limited to the recovery of amounts expended by a School on non-compliant or for-profit activity.

[15]

Ground 5: Recovery is barred under Limitation Act

The School submits that financial assistance is recoverable under s 83J of the Act and, as a consequence, is "money recoverable by virtue of an enactment" as described in s 14(1)(d) of the Limitation Act.
Therefore, there is a limitation period on the recovery of monies, being six years from the date on which the cause of action first accrued to the Minister, which is, on the School's submissions, six years after the payment was made to the School. As the payments to the School were made in 2014 and 2015, the School submits that the right to recover the amounts paid was extinguished in 2020 and 2021, respectively.
The submission also depends upon the terms of s 63(1) of the Limitation Act, which is in the following terms: "63 Debt, damages etc (1) Subject to subsection (2), on the expiration of a limitation period fixed by or under this Act for a cause of action to recover any debt damages or other money, the right and title of the person formerly having the cause of action to the debt damages or other money is, as against the person against whom the cause of action formerly lay and as against the person's successors, extinguished."
Thus, the School submits that, at the expiration of the limitation period of six years from the date upon which payment was made to the School, the right and title of the Minister - being the person formerly having a cause of action to the debt, damages or other money - is extinguished, whether or not the Minister chooses to recover the amount as a debt in a court of competent jurisdiction. On the School's submission, it matters not that recovery has been sought by reducing future amounts of financial assistance, as was the circumstance in the matter currently before the Court.

[16]

Ground 1: Discretion as to amount to recover

The Minister submitted the proper construction of s 83J of the Act is determined by the language of the provision to recover "the amount" (emphasis added). In the submission of the Minister, the use of the definite article signifies that it should correspond with the amount of financial assistance provided. The Second Reading Speech, [40] the Minister submits, confirms a focus on the correlation between the provision of assistance and the period, as distinct from the quantum, of non-compliant/for-profit activity.
In the alternative, the Minister submits that the Minister did otherwise consider the School's submissions as to the amount of financial assistance to be recovered. A proper construction of the response of the Minister and her reasons would include the proposition that the Minister did not believe the Act permitted her a discretion to recover part, but not all, of the financial assistance. However, the Minister submits that, even if her belief as to the proper construction of the Act was wrong and there were a discretion in that respect, she considered that she would exercise her discretion to recover all of the amount.

[17]

Ground 2: Failure to engage with School's submissions

The Minister submitted that, in making the decision, she addressed all elements to which the School referred in submissions to her. Further, the Minister submitted that the elements that the plaintiff submits the Minister failed to consider is an attempt by the School impermissibly to have the Court undertake a merits review of the Minister's decision.
A proper reading of the exchange, the decision of the Minister and her reasons discloses that the Minister, on her submission, engaged in an "active intellectual process", in relation to the School's submissions and did consider, but ultimately rejected, the reasons advanced.

[18]

Ground 3: Failure to consider mandatory relevant considerations

The Minister points to the fact that the Act does not identify any matter or thing to which the Minister must have regard or even should have regard. There are no prescribed criteria in the exercise of the Minister's discretion. Further, there is nothing in the subject matter, scope or purpose of the Act which supports the implication that the Minister is bound, as a matter of statutory construction, to have regard to the matters alleged by the plaintiff.
The Minister submits that s 83J of the Act is based on the "important principle" that where an investigation finds that a school is operating for profit, then it is reasonable that the school should repay the public funds received by it when in breach. This is particularly so when read in the context of Part 7, Division 3 of the Act as a whole.
Alternatively, in any event, the Minister did have regard to the considerations alleged by the School. The Minister reached a conclusion that those matters did not warrant a different outcome. Such a conclusion cannot be equated with a failure to take the considerations into account.

[19]

Ground 4: Disproportionate and legally unreasonable outcome

The Minister submits that the submission under this ground seeks to have the Court embark impermissibly upon a merits review of the Minister's decision. The decision cannot be said, having regard to the Minister's reasons, to lack an evident and intelligible justification or to reflect a disproportionate exercise of the power conferred by s 83J of the Act.
The Minister submits that the School's premise that the Minister should recover the difference between the amount of financial assistance provided and the amount expended on the non-compliant or for-profit activity is not supported by the terms of the provision or the extrinsic material. This is an underlying premise to the submission of the School.
The Minister submits that the existence of the power of recovery to recoup finances where a school is non-compliant provides a strong basis for rejecting the School's suggestion that the relevant portion to be recouped is the amount calculated by the School (between $43,580 and $51,141.25).

[20]

Ground 5: Limitation Act

First, the Minister submits that the power reposed in the Minister to recover financial assistance by s 83J of the Act is not an "action" or "cause of action" within the meaning of s 14 of the Limitation Act and is not a "proceeding in a court" within the meaning of s 11(1) of the Limitation Act. Therefore, the recovery of financial assistance otherwise than by way of curial proceedings falls outside the purview of the Limitation Act. The Court notes that the definition of "action" in the Limitation Act is inclusive, not exhaustive. [41]
Alternatively, if there were a limitation to a cause of action that may be commenced or prosecuted by the Minister under s 83J of the Act, the power of recovery is only triggered by the making of a Declaration that the School is a for-profit or non-compliant School. Thus, the cause of action would not arise until 28 May 2020, when the Declaration by the Minister was made and the decision of the Minister falls within the applicable 6-year limitation period.

[21]

Statutory Construction: Principles

The principles of statutory construction have been stated by the highest authority on many occasions. It is unnecessary to deal with them at length. Nevertheless, it is necessary to restate some basic principles.
First, it should be reiterated that the prima facie basis upon which a statute or other instrument will be construed is that the provisions of the statute or other instrument are intended to give effect to harmonious goals. Secondly, the task of a court in construing legislation is to give effect to the legislative purpose derived from the terms of the statute. In this way, it is the terms and words utilised in the statute from which the Court is to derive the purpose of the statute, bearing in mind that the statute must be read as a whole. [42]
Thirdly, where there are tensions between the different provisions of the statute that are incapable of being reconciled by a purposive construction, it may be necessary to determine which of the provisions is the "leading provision" and which is the "subordinate provision". [43]
The other aspect that deserves reiterating from the judgment on Project Blue Sky, supra, is the issue associated with the distinction between mandatory and directory provisions. Notwithstanding the comments of the High Court deprecating the use of the terms, the terms continue to be utilised.
Nevertheless, the distinction needs to be understood as a conclusion based upon the proper construction of the statutory provisions, not a basis upon which the statutory provision will be construed. In other words, the first step is the purposive construction of the statute as a whole, such that it is consistent with the language and purpose of all of the provisions of the statute, which may then lead to a conclusion that a provision is mandatory or directory. [44]
It is unnecessary, for the purposes of any issue in these proceedings, to deal with whether, if a provision were "mandatory", an act done otherwise than in accordance with the provision, or not done in accordance with a provision, would be invalid.

[22]

Jurisdiction of the Court

The summons for relief seeks, as earlier stated, orders in the nature of certiorari and/or a declaration of jurisdictional error, and that the decision is void and of no effect. It also seeks further declarations relating to the proper interpretation of s 83J of the Act, namely, whether the Minister has a discretion as to the amount to be recovered under that provision, and declarations as to the operation of the Limitation Act, to the effect that the Minister was incapable of recovering payments on the basis that the right so to do had been extinguished.
Neither party addressed the Court on the limitations applicable to the issuing of orders in the nature of certiorari. Further, neither party dealt with the capacity of the Court to base judicial review on the reasons of the Minister.
The declarations sought will not, if issued, have the effect of quashing the decision. Prohibition, if available, affects the consequences of the decision, not the decision itself. Orders in the nature of prohibition have not been sought, although the School submits that there was jurisdictional error.
The first task of a court or tribunal, in dealing with a proceeding commenced before it, is to ensure that it has the jurisdiction to deal with the matter. Most often, because of the number of times a matter of the type has been before the Court, jurisdiction is assumed. Nevertheless, there are times when it is necessary to deal with the jurisdictional question. This is one of them.

[23]

Supreme Court jurisdiction to issue certiorari

The provisions of s 69 of the Supreme Court Act 1970 (NSW) abolish the writs - previously referred to as prerogative writs and federally referred to as Constitutional writs - and require the Court, in lieu of such writs, to make orders in the nature of the writs. Thus, the provisions of s 69 of the Supreme Court Act abolish the writ of certiorari (and prohibition and mandamus) and continue the Court's jurisdiction to grant the relief but, in so doing, require the Court not to issue writs.
The first prayer in the School's Summons seeks an order of that nature. The jurisdiction to issue such an order is continued only where the relief, remedy or writ might otherwise have issued. [45] As a consequence, the limitations on the issue of certiorari apply to orders in the nature of certiorari.
It is next necessary to note, in passing, that an intermediate appellate court should not depart from considered dicta of a majority of the High Court, and neither an intermediate appellate court nor a trial judge should depart from decisions of another intermediate appellate court, relevantly, on the common law of Australia. This would, necessarily, include the limitations on the issue of certiorari.
There is a qualification on the second of those principles, namely, that there can be departure from an intermediate appellate court of another jurisdiction in circumstances where the interpretation is plainly wrong or there is a compelling reason so to do. [46] The obvious lacuna in the statement of principle in Hill v Zuda, supra, ought not be understood to allow a trial judge to depart from seriously considered dicta of a majority judgment of the High Court.
The High Court in Kirk [47] was required to deal with the efficaciousness of a privative clause preventing, amongst others, orders in the nature of certiorari against the then Industrial Court of New South Wales. In the course of its analysis, the High Court determined that a state legislature could not remove from the jurisdiction of a State Supreme Court the capacity to issue certiorari, or orders in the nature thereof, for jurisdictional error.
The High Court also remarked, as dicta which was strictly unnecessary for the specific issue then before it, that a state legislature could deny the availability of relief for non-jurisdictional error of law appearing on the face of the record. [48] The foregoing dictum, binding on this Court, is a principle from which the Court may not depart.

[24]

Nature of the writ of certiorari

The term "certiorari" derives from the opening word of the Latin writ, the opening two words of which were "Certiorari volumus", meaning "we wish to be informed", and the word "certiorari" is the passive infinitive of the verb "to inform". This terminology derives from the circumstance that the superior courts, historically, called up the entirety of a matter in order that it could be heard and determined in accordance with law. The writ developed such that the "record" was removed for the purpose of determining whether, on the face of the record, there had been error of law or jurisdictional error.
The writ was used overwhelmingly in criminal matters, in which the most arcane technical irregularity in an Indictment would give rise to the issue of certiorari. Nevertheless, because, in criminal matters, the record consisted of the Indictment, the verdict and the sentence, and jurisdiction was conferred by arraignment on indictment, jurisdictional error was the overwhelming basis upon which certiorari issued.
In civil proceedings, certiorari was used less often but still depended upon the nature of the record, which included the pleadings and the judgment, and very little else. The term "judgment" should be distinguished from the reasons for judgment.
Leaving aside some comments of Lord Denning, [54] the accepted view is that certiorari will lie for error on the face of the record, and the record does not contain the reasons for judgment or the evidence upon which the judgment depends. It will usually comprise the documents initiating the proceedings, the pleadings and the determination of the inferior court or tribunal. [55] In Craig, supra, the High Court said: "The determination of the precise documents which constitute 'the record' of the inferior court for the purposes of a particular application for certiorari is ultimately a matter for the court hearing the application. The effect of the foregoing is that '(o)rdinarily, in the absence of statutory prescription, the record will comprise no more than the documentation which initiates the proceedings and thereby grounds the jurisdiction of the tribunal, the pleadings (if any) and the adjudication'. Where the inferior court or tribunal has prepared a formal record, the court hearing the application may amend it by discarding material which should not have been included. Where the inferior court or tribunal has not prepared a formal record or the formal record prepared is incomplete, the court hearing the application can, if the material placed before it is adequate for the purpose, construct or complete the record. In the present case where no formal order has been taken out and no complete record had been prepared by the District Court, the record included the information, the transcript record of the appellant's statement to the effect that he made what he called 'a Dietrich application', the orders made by the trial judge on 22 June 1993 and the challenged stay order which the trial judge finally made on 28 July 1993. It is fair to say that the 'record' is not exhaustively defined in authority, but it is also fair that it did not include the reasons for decision nor any other document, unless it was 'part of the record'. In that sense, the document, including the reasons, could not be introductory or supplementary to the orders issued from the court, which orders are part of the record, but was required to be necessary for the understanding of the record."

[25]

Decision against which certiorari will issue

The history of the expansion of certiorari is relevant to the current proceedings for the manner in which it impacts upon the purpose and construction of the provisions of s 69 of the Supreme Court Act. These provisions are in the following terms: "69 Proceedings in lieu of writs (1) Where formerly-- (a) the Court had jurisdiction to grant any relief or remedy or do any other thing by way of writ, whether of prohibition, mandamus, certiorari or of any other description, or (b) in any proceedings in the Court for any relief or remedy any writ might have issued out of the Court for the purpose of the commencement or conduct of the proceedings, or otherwise in relation to the proceedings, whether the writ might have issued pursuant to any rule or order of the Court or of course, then, after the commencement of this Act-- (c) the Court shall continue to have jurisdiction to grant that relief or remedy or to do that thing; but (d) shall not issue any such writ, and (e) shall grant that relief or remedy or do that thing by way of judgment or order under this Act and the rules, and (f) proceedings for that relief or remedy or for the doing of that thing shall be in accordance with this Act and the rules. (2) Subject to the rules, this section does not apply to-- (a) the writ of habeas corpus ad subjiciendum, (b) any writ of execution for the enforcement of a judgment or order of the Court, or (c) any writ in aid of any such writ of execution. (3) The jurisdiction of the Court to grant any relief or remedy in the nature of a writ of certiorari includes, if the Court is satisfied that the ultimate determination of a court or tribunal in any proceedings has been made on the basis of an error of law that appears on the face of the record of the proceedings-- (a) jurisdiction to quash the ultimate determination of the court or tribunal, and (b) if the Court determines that, as a matter of law, only one particular determination should have been made by the court or tribunal, jurisdiction to make such judgment or orders as are required for the purpose of finally determining the proceedings. (4) For the purposes of subsection (3), the face of the record includes the reasons expressed by the court or tribunal for its ultimate determination. (5) Subsections (3) and (4) do not affect the operation of any legislative provision to the extent to which the provision is, according to common law principles and disregarding those subsections, effective to prevent the Court from exercising its powers to quash or otherwise review a decision."

[26]

"Record" upon which error may be determined

Strictly, because of the foregoing interpretation of s 69 of the Supreme Court Act, it is unnecessary to determine whether, absent the provisions of s 69 of the Supreme Court Act, the reasons of the Minister, form part of the record to which the Court is confined when addressing whether grounds have been made out for the grant of orders of the kind sought.
Nevertheless, because the foregoing interpretation of s 69 is contentious, the Court will determine whether the reasons of the Minister would be part of the record, under the common law, and may be examined for the purpose of determining whether grounds have been established for the issue of orders in the nature of certiorari.
These reasons have previously extracted significant sections of the correspondence between the parties, which correspondence includes some of the reasons of the Minister. There is also included the history of the proceedings.
While the correspondence between the parties is necessary for understanding the history and the context in which this dispute arises, much of it would not form part of the "record", even on the extended meaning of the face of the record to which the Court has earlier referred.
As earlier indicated, on 5 March 2021, the Minister wrote to the school communicating her decision to exercise her discretion to recover the amount of financial assistance provided to the School in 2014 and 2015, by reducing future amounts of financial assistance payable to the School for five years until the amount is fully recovered.
That decision was purportedly made under the provisions of s 83J of the Act. The determination or decision is confined to the second paragraph of that letter and, in respect to the method of recovery, to the third paragraph of the letter. The remainder of the letter and all that has been previously extracted are part of the reasons for the determination. The second and third paragraphs of the letter are in the following terms: "In response to those submissions and the previous submissions made on behalf of the school in your letter dated 22 June 2020, I have decided to seek recovery of all the financial assistance paid to the school in 2014 and 2015. I note that the total amount of financial assistance paid to the school in those years was $11,065,584.69. Given the amount to be recovered and to allow the school to make appropriate adjustments to its operations to reduce the impact on current and future students, recovery will be facilitated by reducing future amounts of financial assistance payable to the school over the next five (5) years until this debt is fully extinguished. Recovery shall commence from the first payment of financial assistance payable to the school after the date of this letter." [71]

[27]

Construction of the Education Act

There are minor, and somewhat insignificant, tensions in the wording of the Act, particularly in relation to non-government school funding. The provisions of s 83E of the Act permit the Minister to suspend, reduce or impose conditions on the provision of "financial assistance… to or for the benefit of a school". Section 83J of the Act permits the Minister to recover "the amount of any financial assistance provided… for the benefit of a school". The provisions of s 83C of the Act, as recited above, make clear that the Minister must not provide "financial assistance… to or for the benefit of a school" if it operates for profit.
The tension arises from the enabling provision granting the Minister the capacity to provide financial assistance. According to the provisions of s 83B(1), the Minister provides "financial assistance or other assistance … in respect of non-government school children." (Emphasis added.)
The financial assistance is subject to the obligations of the State under the National Education Reform Agreement (or its replacement) and may be provided directly to the school that the children attend or, relevantly, a person or body approved by the Minister for that purpose. The material before the Court does not suggest that the School is part of a system of non-government schools or an otherwise approved system under the Commonwealth Act. [77] Thus, the terms of the Act provide for financial assistance in respect of non-government school children; not financial assistance for the school or its benefit.
I have referred to "minor" in relation to the tension, because it seems that the tension in the wording is easily reconciled. The assistance is paid "in respect of non-government school children", not to non-government school children. The provisions of s 83B(6) do not permit the Minister to provide such assistance to the school children.
Leaving aside, for present purposes, the payment of monies to a system (of either kind), the only assistance that may be provided in respect of non-government school children must be provided to the school itself. It is obvious that the appropriate construction of the Act is that, when the legislation utilises a term referring to the provision of financial assistance to a school, it is referring to financial assistance "in respect of non-government school children" which is paid to the school.

[28]

The Existence of the Minister's Discretion to Recover

I now come to the fundamental issue between the parties, being the existence of a discretion in the Minister to seek to recover an amount less than the full amount of financial assistance provided during a period in which the school is either for-profit or non-compliant. This question is to be determined by the construction of s 83J(1) of the Act within the context of the Act as a whole.
On the view I take of the facts, it is probably unnecessary for the Court to deal with the issue. Given the quantum of money involved, however, and the submissions put, together with the possibility of an appeal, it is appropriate for the Court to express a view as to the interpretation of the Act on this issue.
As already stated, the legislation must be construed as a whole, with the aim of ensuring harmonious goals. While most of the provisions in Pt 7, Div 3 are permissive, and provide the Minister with a discretion based upon the Minister's exercise of that discretion or an evaluative process - albeit with some restrictions - the provisions of s 83C(1) are not in permissive terms.
The provisions of s 83C(1) of the Act prohibit the Minister from providing "financial assistance (whether under this Division or otherwise) to or for the benefit of a school that operates for profit". It is unnecessary to determine whether the prohibition in s 83C(1) is mandatory or directory, if that be a relevant classification. The Act, by the provisions of s 83J, provides the consequences of the prohibition, being that, subject to the discretion prescribed by s 83E(3) of the Act, assistance is not to be provided and, if provided, the Minister is empowered to recover the amount of any financial assistance.
Notwithstanding the general prohibition, s83J(1) of the Act provides to the Minister a discretion, and thus prescribes the basis upon which any flexibility may be effected, and the conditions of that flexibility. As a consequence, the Minister is permitted not to recover "the amount of any financial assistance" provided.
In that regard, it is important to note the strict limitations on the exercise of the discretion not to provide assistance. The Minister's discretion is confined to circumstances involving that termination of assistance not being justified because the non-compliance is minor; and, more appropriate action can be taken. [81]

[29]

The Exercise of the Minister's Discretion

As already stated, the Minister for Education directed that an investigation into the School be undertaken in or about January 2016. On 1 June 2017, the Non-Government Schools Not-For-Profit Advisory Committee ("in these reasons called "the Advisory Committee") determined that the School and/or its proprietor operated for profit within the meaning of s 21A (as it then was) and s 83C of the Education Act. The impugned operation was for the years 2014 and 2015. The Advisory Committee recommended that the Minister make a "non-compliant" Declaration in respect of the School for those years.
There was an internal review of the recommendations of the Advisory Committee and, on 13 July 2017, the internal review confirmed the findings.
There was an administrative appeal taken by the School to NCAT, which confirmed the relevant findings in a decision of 6 September 2019. On 6 February 2020, the decision of the Appeal Panel in the appeal taken by the School against the first instance decision of NCAT upheld the original decision insofar as it confirmed or refused to interfere with the findings of the Advisory Committee relating to the for-profit activities of the School.
On 28 May 2020, the Minister, by letter, made the Declaration of non-compliance and suspended financial assistance to the School. The letter sought submissions and part of it has been extracted earlier in these reasons. The letter seeks for the School to show cause and, as earlier recited, contains the following passage: "Before I make my decision regarding any possible future recovery, I am providing you with an opportunity to make submissions as to whether recovery should occur, the timing and amount of any financial assistance to be recovered." [82]
The plain and ordinary meaning of the invitation provided by the Minister was for the School to have the opportunity to put submissions to the Minister, inter alia, on the amount of any financial assistance that the Minister would recover.
This letter and/or the invitation extracted above is, in my view, part of the record relating to the Minister's Decision and would be part of the record, regardless of whether s 69(4) of the Supreme Courts Act applies to the record. The invitation is inconsistent with the proposition that the Minister was operating on the basis that there was no discretion as to the amount of financial assistance to be recovered.

[30]

Consideration of the Grounds of Review

Before dealing with the separate grounds of review, it is necessary to reiterate a number of fundamental propositions that govern judicial review.
First, the Court, on judicial review, is not concerned with "looseness of language" nor "unhappy phrasing". Nor is the Court in exercising its functions, examining the reasons of the decision-maker in a manner such that they are "construed minutely and finely with an eye keenly attuned to the perception of error". [84]
It is also necessary to repeat the principles that underpin and confine judicial review to issues of law rather than issues of "fairness". The classic comment to that effect is that of Brennan J (as his Honour then was) in Attorney-General (NSW) v Quin, [85] in which his Honour said: "[17] Judicial review has undoubtedly been invoked, and invoked beneficially, to set aside administrative acts and decisions which are unjust or otherwise inappropriate, but only when the purported exercise of power is excessive or otherwise unlawful. … The essential warrant for judicial intervention is the declaration and enforcing of the law affecting the extent and exercise of power: that is the characteristic duty of the judicature as the third branch of government. In Victoria v The Commonwealth and Hayden, Gibbs J said that the duty of the courts extends to pronouncing on the validity of executive action when challenged on the ground that it exceeds constitutional power, but the duty extends to judicial review of administrative action alleged to go beyond the power conferred by statute or by the prerogative or alleged to be otherwise in disconformity with the law. The duty and the jurisdiction of the courts are expressed in the memorable words of Marshall CJ in Marbury v. Madison: 'It is, emphatically, the province and duty of the judicial department to say what the law is.' The duty and jurisdiction of the court to review administrative action do not go beyond the declaration and enforcing of the law which determines the limits and governs the exercise of the repository's power. If, in so doing, the court avoids administrative injustice or error, so be it; but the court has no jurisdiction simply to cure administrative injustice or error. The merits of administrative action, to the extent that they can be distinguished from legality, are for the repository of the relevant power and, subject to political control, for the repository alone. [18] The consequence is that the scope of judicial review must be defined not in terms of the protection of individual interests but in terms of the extent of power and the legality of its exercise. In Australia, the modern development and expansion of the law of judicial review of administrative action have been achieved by an increasingly sophisticated exposition of implied limitations on the extent or the exercise of statutory power, but those limitations are not calculated to secure judicial scrutiny of the merits of a particular case. [19] … [Even] Wednesbury unreasonableness leaves the merits of a decision or action unaffected unless the decision or action is such as to amount to an abuse of power …. Acting on the implied intention of the legislature that a power be exercised reasonably, the court holds invalid a purported exercise of the power which is so unreasonable that no reasonable repository of the power could have taken the impugned decision or action." [86]

[31]

Ground 1: Determination there was an absence of discretion as to the amount

The submissions of the parties have been summarised already. Further, the Court, as presently constituted, has already construed the legislation on the issue raised by this ground of review.
In short, the Court takes the view that the term "the amount of any financial assistance provided" permits the Minister to recover each of the amounts provided by way of financial assistance, under any legislative or regulatory program or grant. Thus, if there be one payment only of recurrent financial assistance, the Minister is permitted to recover that amount.
A proper construction of the provisions does not permit the Minister, as an extreme example, to recover $1 of an amount of $4 million paid by way of financial assistance, unless that $1 is in a separate category of financial assistance. If financial assistance of $1 million is paid, relating to one category and in one payment, then it cannot be said that any lesser part of that $1 million is "the amount of any financial assistance provided".
The construction to which the Court has arrived is a construction that, in part, accepts that there is a discretion as to "the amount" to be recovered, but the discretion is limited to "the amounts" that have been provided. It does not permit the Minister to recover one undefined part of the amount provided.
Notwithstanding the view that the Court has taken of the proper construction of the Act and the discretion of the Minister, the plaintiff School has not established that the Minister arrived at a definite view of the discretion available as to the sum that may be recovered. The Minister, in her reasons, noted that the existence of such a discretion was not as clear-cut as the existence of the discretion not to recover at all. But it cannot be said that the Minister failed to have regard to the availability of such a discretion and determined the result of the exercise on the basis that the Act provided no discretion as to the amount.
In those circumstances, this ground fails. Further, the plaintiff School has not established that the financial assistance provided in 2014 and 2015 was in more than one category or consisted of more than one payment. Thirdly, the School has not suggested that the Minister did not consider that the discretion could be exercised differently in relation to the amount received in 2014, from the amount received in 2015. The Minister could have exercised the discretion to recover the amount paid in 2014, but not recover the amount paid in 2015, and vice versa. My conclusion is that this ground has not been established.

[32]

Ground 2: Minister's failure to engage with central elements of submissions

The issues raised before the Court and, ultimately, before the Minister do not include the findings of fact that the School operated for profit in 2014 and in 2015. Much material before the Court, and before the Minister, sought to re-agitate a number of those issues.
For example, the School continued to submit that, notwithstanding the for-profit activities that were undertaken - because in later years the money expended in those for-profit activities was recovered either in Court or by consent, or both - the Minister should not have regard, in the exercise of the Minister's discretion, to the activities that resulted in payments that were ultimately recovered. Thus, on the submission of the School it is said there were two aspects that required the Minister's consideration. First, that there was a discretion as to whether any amount would be recovered; and, secondly, the amount to be recovered.
In so doing, the School, as is set out earlier in these reasons, argued for the Minister to recover only that amount which had not otherwise been recovered by the School. The Minister dealt with both arguments.
As recounted in relation to Ground 1, the Minister did not express a final view on the existence of a discretion as to the amount to be recovered. The Minister reached her conclusion on the basis that such a discretion existed, but that the primary or prima facie basis in relation to the recovery of financial assistance provided was that all of the financial assistance should be recovered. There is no error in that legal analysis. Nor is there a failure to engage with the argument as to the existence of the discretion.
In dealing with this ground and Ground 4, it is important that the Court, on judicial review, be astute to ensure that it does not slip from the exercise of judicial power and judicial review to a discussion on the merits of the issues. The fact, if it were the fact, that the Court might exercise the discretion differently, or might express its reasons differently, is not a basis upon which to hold that the grounds for judicial review have been established.
As should be clear from the foregoing extracts of the correspondence, the Minister engaged fully with the submission of the School. The Minister, correctly, noted that the "for profit" activity related to a particular period during which financial assistance had been provided. The Act prohibits the provision of financial assistance to a school that operates for-profit or that is non-compliant. The School relied upon the "recovery" of some of the amounts that were said to be "for-profit activities", but that recovery occurred in later years.

[33]

Ground 3: Failure to consider mandatory relevant considerations

As already stated, the School submits that the Minister admits that certain matters are relevant that were raised by the School but submits that the Minister failed to take them into account. Obviously, if considerations are mandatory, they are relevant. The converse is not accurate.
The term "relevant" in the context of judicial review may be used in two different ways. First, it is a requirement of legal efficaciousness of a decision that the decision maker take into account all relevant considerations. A failure to take into account a relevant consideration, in that context, amounts to jurisdictional error. However, in that context, a "relevant consideration" is a consideration that is required to be taken into account, otherwise referred to as a "mandatory consideration". [92]
A consideration may be "relevant" in that it is not extraneous to the formation of opinion that informs the exercise of the discretion (i.e. it is not irrelevant), but is not required to be taken into account. In those circumstances, a failure to take into account a probative consideration, which is not mandatory, is neither an error of law nor jurisdictional error.
The School submits that a proper construction of s 83J of the Act requires the Minister to take into account: the nature, context and severity of "for-profit" activity; the extent of any for-profit or non-compliant activity; any remedial action taken by the School; the extent to which financial assistance previously used for for-profit or non-compliant activity has been recovered by the School; and, the identity of those responsible for the School's for-profit or non-compliant activity and their current role (if any) in the governance of the school.
As stated, the Minister admits that these matters are relevant, in the sense that they are not irrelevant. The Minister maintains that these matters were considered before reaching the decision.
No discretion is "unfettered". A legislative direction to decide does not, unless express words were utilised for that purpose, involve a discretion to give effect to what the decision-maker considers desirable. Such a discretion would be implied only if the context necessitated it and where the context provided no positive indication of the considerations informing the discretion. Ordinarily, every discretion must have regard to and be limited by the scope and purposes of the legislation. [93]

[34]

Ground 4: The decision was disproportionate and legally unreasonable.

The School presented a clearly articulated argument seeking to have the Minister recover only that amount that was the result of for-profit activity and which had not subsequently been recovered. In terms of judicial review, the arguments put were "clearly articulated" and relied upon established facts.
However, the Minister responded to that argument and, in so doing, did not constructively fail to exercise the jurisdiction conferred upon her. I am not persuaded that the Minister misunderstood the School's case, or failed to address it. [94]
In this ground of judicial review, the Court needs to be vigilant in ensuring that the separation between the function of the Court and the administrative decision maker does not elide. In this area, the comments of Brennan J (as the Chief Justice then was), in Quin, supra, must be heeded.
The requirement that an administrative decision must be a reasonable exercise of the discretion conferred is, surprisingly to some, of long standing. It underpins the doctrines established in Wednesbury [95] unreasonableness, and was the subject of comment by Mason J (as the Chief Justice then was) in Peko-Wallsend, supra.
As part of a classic passage on judicial review and referring to "unreasonableness", Mason J said: "The limited role of a court reviewing the exercise of an administrative discretion must constantly be borne in mind. It is not the function of the court to substitute its own decision for that of the administrator by exercising a discretion which the legislature has vested in the administrator. Its role is to set limits on the exercise of that discretion, and a decision made within those boundaries cannot be impugned (Wednesbury Corporation, at p.228). It follows that, in the absence of any statutory indication of the weight to be given to various considerations, it is generally for the decision-maker and not the court to determine the appropriate weight to be given to the matters which are required to be taken into account in exercising the statutory power (Sean Investments Pty Ltd v. MacKellar, at p 375; Reg. v. Anderson; Ex parte Ipec-Air Pty Ltd (1965) 113 CLR 177, at p 205; Elliott v. Southwark London Borough Council (1976) 1 WLR 499, at p 507; (1976) 2 All ER 781, at p 788; Pickwell v. Camden London Borough Council (1983) QB 962, at p 990). I say 'generally' because both principle and authority indicate that in some circumstances a court may set aside an administrative decision which has failed to give adequate weight to a relevant factor of great importance, or has given excessive weight to a relevant factor of no great importance. The preferred ground on which this is done, however, is not the failure to take into account relevant considerations or the taking into account of irrelevant considerations, but that the decision is 'manifestly unreasonable'. This ground of review was considered by Lord Greene M.R. in Wednesbury Corporation, at pp.230, 233-234, in which his Lordship said that it would only be made out if it were shown that the decision was so unreasonable that no reasonable person could have come to it. This ground is now expressed in ss.5(2)(g) and 6(2)(g) of the ADJR Act in these terms. The test has been embraced in both Australia and England." [96]

[35]

Ground 5: The operation of the Limitation Act.

The Act permits the Minister to recover the amount of financial assistance that is determined by the Minister to warrant recovery as a debt in a court of competent jurisdiction. [106]
As summarised above, the School submits that the provisions of the Limitation Act bar any recovery. The submission, properly understood, is that the limitation applies not only to any action in a court of competent jurisdiction, but also to recovery of the debt by other means, including, as is the situation currently, by reduction of future financial assistance for the purpose of recovering the debt.
The submission that the Limitation Act applies to proceedings in a court of competent jurisdiction and recovery of the debt by other means is correct.
Financial assistance that may be recovered under s 83J of the Act is, within the term used in s 14(1)(d) the Limitation Act, "money recoverable by virtue of an enactment". As a consequence, pursuant to the terms of s 14 of the Limitation Act, an action for a cause of action based on money recoverable by virtue of an enactment is not maintainable after the expiration period of six years.
Further, by operation of s 63(1) of the Limitation Act, at the expiration of the limitation period, being the expiration of six years, the right and title of the person that would otherwise have had the cause of action is extinguished. The School submits that the combination of the operation of s 14(1)(d) and s 63(1) of the Limitation Act has the effect that the Minister is not entitled to recover the financial assistance, in the case of financial assistance provided in 2014, after 2020 and, in the case of financial assistance provided in 2015, after 2021.
It is not clear when in 2015 the financial assistance was provided, but it is unnecessary to explore, or determine, this date further. The Minister's determination to recover the amount of financial assistance occurred in March 2021.
It is further unnecessary to explore whether the provisions of s 55 of the Limitation Act operate in a manner that would extend the limitation period otherwise fixed.
The limitation period operating on a cause of action to recover money recoverable by virtue of enactment - which is any cause of action to recover financial assistance pursuant to Part 7 of Division 3 of the Act - is six years "from the date on which the cause of action first accrued to the plaintiff". [107] Even though the Minister, in reducing future financial assistance, is not instituting an action, the limitation period operates, by virtue of s 63, to extinguish the debt that is sought to be recovered. Therefore, any action, including a reduction in future financial assistance, intended to recover the debt, would be unfounded because, if the limitation period had expired, the debt would have been extinguished.

[36]

Conclusion

For the reasons expressed, I have determined that each of the grounds of review fail. Although the Court has not considered whether the amount sought to be recovered comprises only one amount of financial assistance, or a number of amounts in each year, the finding of the Court does not depend upon the absence of that evidence.
The Court makes the following orders: 1. Judgment for the defendant; 2. Summons and proceedings dismissed; 3. The plaintiff shall pay the defendant's costs of and incidental to the proceedings.

[37]

Endnotes

Exhibit A, Court Book-Part D, Tab 7, p 68.
Malek Fahd Islamic School Limited v The Australian Federation of Islamic Councils Inc [2017] NSWSC 1712 (Ball J), at [3].
Section 21 of the Act is now repealed, but was, until October 2014, in substantially similar terms to s 83B Act, as currently in force.
Education Act 1990 (NSW), Pt 7, Div 3.
Section 21A of the Act is now repealed, but was, until October 2014, relevantly identical terms to s 83C of the Act.
Malek Fahd Islamic School Limited v The Australian Federation of Islamic Councils Inc [2017] NSWSC 1712 (Ball J).
Ibid, at [39]-[40].
Ibid, at [41].
Malek Fahd Islamic School Limited v Non-Government Schools Not-For-Profit Advisory Committee, NSW Department of Education [2019] NSWCATAD 183.
Ibid, at [67], [81], [89], [90].
Malek Fahd Islamic School Limited v Non-Government Schools Not-For-Profit Advisory Committee [2020] NSWCATAP 19.
Exhibit A, Court Book, Tab 8, p 155-156.
Exhibit A, Court Book-Part G, Tab 13, p 285ff.
Exhibit A, Court Book-Part G, Tab 16, pp 292-293.
Exhibit A, Court Book-Part G, Tab 17, p 294.
Exhibit A, Court Book-Part G, Tab 18, p 296.
Identity anonymised by the Court.
Identity anonymised by the Court.
Exhibit A, Court Book-Part C, Tab 6, p 62; Part G, Tab 19, p 306.
Education Act, s 4.
Education Act, s 5.
Education Act, s 6.
Education Act, Part 5, 5A and 6.
Education Act, s 37.
Education Act, Part 7, Div 2.
Education Act, s 47.
Education Act, s 50.
Education Act, s 52.
Education Act, s 54A.
Education Act, s 55.
Education Act, s 57A.
Education Act, s 59.
Education Act, s 83B(2).
Education Act, s 83BA(5).
Education Act, s 83E(3).
Exhibit A, Court Book-Part G, Tab 13, p 287.

[38]

Amendments 01 September 2022 - Typographical error 24 October 2022 - Typographical errors DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 24 October 2022

Malek Fahd Islamic School Limited v Minister for Education and Early Childhood Learning

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