Metro West v Sudi

Metro West v Sudi - [2009] VCAT 2025 - VCAT 2009 case summary — Zoe

[6]

Disadvantaged people in need of social housing and at risk of homelessness are among the most vulnerable in the community. Their human rights are imperilled by their circumstances.
That such people get the housing they need is a vital function of government. It exercises this function in the public interest through a variety of programs. When it does so directly, undoubtedly the Charter of Human Rights and Responsibilities Act 2006 (Vic) applies and human rights must be respected. The question in this case is whether that is so when it contracts out the same function to a private organisation.
Metro West Housing Services Limited is a provider of social housing to people at risk of homelessness in the western suburbs of Melbourne. The company was incorporated to carry out that and other related social purposes. It is a private company with its own autonomous governance mechanisms. It has a service agreement with, and exercises statutory powers of delegation from, the government. Under that agreement and with those powers, it provides transitional housing to eligible people and families who are awaiting allocation of public housing or trying to find something suitable for their long-term needs. The government gives it block funding for this purpose. Metro West supplements that funding with the rent it receives from tenants.
Metro West provided fixed-term transitional accommodation to two recent-arriving African families, one from Somalia and the other from Ethiopia. To ensure they did not overstay, it served notices to vacate at the end of the tenancy virtually immediately after the tenants took possession. That was done in accordance with its general policy for managing transitional tenancies. Under the policy, after serving the notice to vacate, Metro West seeks an order for possession from the tribunal just before the tenants are due to leave. It then uses the order to persuade the tenants to move on, giving them help to find longer-term housing.
It being time for the families to leave their premises, and having served the notices to vacate on them, Metro West applied for orders for possession. But the families had not obtained alternative housing, despite their many genuine attempts to do so. Metro West says it will not actually evict the tenants if they have nowhere to go. But the tenants feel unreasonably pressured and say their human rights have been breached, especially their right to family life. They say the notices to vacate should never have been served and no orders for possession should be made.
As has occurred in a number of other cases involving providers of social services, Metro West initially contended it was not a 'public authority' as defined in the Charter. Therefore, it says, it was not legally obliged to observe the tenants' human rights. The tenants have sought declarations to the contrary. As it was important in the public interest for the general issue to be resolved, I gave directions for that issue to be determined as a preliminary question. I gave leave for the Human Rights Law Resource Centre to make submissions as amicus curie. The parties prepared for the hearing as a test case. Pro bono lawyers gave freely of their time to ensure the matter was properly argued.
When it came to the hearing of the question, Metro West conceded it was a public authority bound by the Charter. That too has occurred in several other similar cases, frustrating the judicial resolution of the question. This time the tenants, as is their right, have insisted on a formal determination. They advanced full argument on the question, as did the amicus. Metro West did not make submissions countering those submissions. It eventually withdrew from the proceedings. As the question is relevant to the other issues in the proceedings, the issues have been so well canvassed in argument and the question is important in many other cases, I will make a formal determination. I now give my reasons for making the declaration sought by the tenants, which means the special question is answered in their favour.

[7]

Mahdi Sudi and Nimo Mohumud and their nine children originally came from Somalia. They left that country during the civil war. The family arrived in Australia in 2005. At first they had to split up and live with relatives and friends in the Ascot Vale area. Towards the end of 2005, Mr Sudi contacted a welfare agency for assistance with housing. He was referred to Metro West. Their main source of income is government assistance.
Metro West provided the family rented accommodation in Airport West, far away from the childrens' schools. Then in November 2006 the family were offered the premises at Ascot Vale, where they still live. This is transitional housing, but the family have been unable to find alternative suitable accommodation.
Mr Sudi and his family would be homeless but for the housing provided by Metro West. If they lose that accommodation, they will have to find other social housing, which would be very difficult. This large family of refugees is extremely vulnerable to homelessness.
Michael and Fantanesh Hailu are aged about 19 and 17 years. They are refugees from Ethiopia who arrived in Australia with their family in 2002. The family has since broken up. This brother and sister are studying at a local university and school. Their sole source of income is government assistance.
Michael and Fantanesh live together as a small family in premises at West Footscray, which they rent from Metro West. It too was meant to be transitional housing. They are awaiting permanent placement in public housing and believed they could stay at their present accommodation until it became available.
These two young people are also very vulnerable. It is important for both of them to live together and to support each other. If evicted, they fear becoming separated and homeless, of which they are of real risk. Unless emergency housing were to be provided, they would have to live with friends, almost certainly separately..
Mahdi Sudi, his wife Nimo Mohumud and their nine children, and Michael and Fantanesh Hailu, are recent-arriving African families at risk of homelessness and very vulnerable. They have a strong interest in maintaining their present accommodation, which is the means by which they are keeping their families intact.
The provision of social housing and the prevention of homelessness is a function of government of fundamental importance. It is not at the margins but at the centre of what the community generally expects governments to do. While the methods of provided social housing in its various forms may vary, there is a strong public interest in the government making the necessary arrangements for this to be done.

[9]

Arising out of the Victorian homelessness strategy in 2000, the Victorian Government, through the Department of Human Services and the Director of Housing, has operated a variety of programs to meet the housing needs of disadvantaged people in the community. In 2007 they included 'direct tenure public rental housing, community managed housing, financial assistance to people in the private rental sector, homelessness assistance and home ownership assistance.'[2]
Two of these programs are of particular importance in this case: the transitional housing management program ('the THMP') and the supported accommodation assistance program ('the SAAP').
The THMP compliments the provision of crisis supported accommodation. It is meant for periods of three to eighteen months. The necessary property and tenancy management and housing information services are provided by twenty community-based organisations. The program is closely linked to the SAAP. Its purpose is effectively to address the housing and support needs of homeless people and those at risk of homelessness. The target groups are people experiencing homelessness, low income families, single people, women and children experiencing family violence, as well as those with complex needs.[3]
The SAAP assists people who are homeless or at imminent risk of homelessness through a range of support and supported accommodation services to achieve the maximum possible degree of self-reliance and independence. Support is provided to minimise the risk of ongoing dependency and the recurrence of homelessness. Services include supported accommodation, counselling, advocacy, and links to health, education, employment and other services. The target group is the same as the THMP.[4]
By 2008, transitional housing managers had become the primary providers of transitional housing services. Each (including Metro West) possessed delegated power from the director of housing to administer a transitional housing portfolio of 40-300 properties.[5] In April 2008 the government described the broad aim of the program thus:

[16]

Metro West provides (among other things) transitional housing under the THMP. It receives block annual funding from the Department of Human Services to do so and can supplement this funding with rent from tenancies. It has also been given delegated power under s 35 of the Housing Act 1983 allowing it to lease, sub-lease, acquire and dispose of property.[9] Those powers are possessed by the Director of Housing under ss 14 and 15 of that Act.
The funding is provided under a service agreement between Metro West and the Secretary of the Department of Human Services. Originally entered into in mid-2006 with effect from 1 July 2006, it has been twice renewed. It covers the period of relevance in this case. The extensions were entered into between Metro West and the Director of Housing rather than the secretary. I do not think anything turns on that. As I have said, both clearly represent the State and are public authorities for the purposes of the question at issue.
By the agreement, the government funds Metro West in return for the provision of specified services, including transitional housing.[10] Metro West is obliged to comply with the specified service standards, performance targets, applicable departmental policies and applicable laws and regulations.[11] The agreement imposes reporting[12] and auditing[13] requirements on Metro West. It states that Metro West was engaged as an independent contractor.[14]
In October 2008 the company stated that it managed over 320 transitional housing properties and over 800 tenancies each year.[15]
According to its own publications, Metro West is 'accountable for the government funding it receives'; that accountability is to the Victorian Government through the Office of Housing, under both the legislation governing its operations and its service agreement with the Secretary of the Department of Human Services.[16]
In 2008 the government introduced new arrangements for the registration of community organisations as providers of social housing. Consistently with its role under the previous arrangements, Metro West applied for that registration.
Pursuant to its function as a contract provider of transitional housing, Metro West entered into a series of tenancy agreements under the Residential Tenancies Act 1997 (Vic) with Mahdi Sudi and Nimo Mohumud. The relevant agreement is dated 22 May 2008. The rent is specified to be $297 payable fortnightly to Metro West, not the government. The notice to vacate those premises given by Metro West and which led to the current proceedings was dated 23 May 2008. Metro West issued an application for possession on 28 August 2008.
In the exercise of the same function, Metro West entered into a tenancy agreement with Michael and Fantanesh Hiailu, dated 10 June 2008. The rent is specified to be $194.32 payable fortnightly to Metro West. The notice to vacate which led to the current proceedings was dated 16 June 2008. Metro West issued an application for possession dated 30 September 2008.
That is the factual setting in which the question for determination arises. I now turn to the concept of a public authority under the Charter.

[17]

The Charter brings human rights into Victorian law by two principal methods. The first method is direct: s 38(1) makes it unlawful for a public authority to act or make a decision incompatibly with human rights. This is sometimes called the vertical application of the Charter. The second method is indirect: s 32(1) requires statutory provisions to be interpreted compatibly with human rights so far as it is possible to do so consistently with their purpose. This is sometimes called the horizontal application of the Charter. We are concerned in this case with the direct or vertical application.
The direct application of the Charter is built on the responsibilities of public authorities, which are defined in s 4(1). Before analysing the detail of the definition, it is worth examining the nature of the concept.
In comparable jurisdictions, there are human rights legislative models applying to both public and private persons and bodies. South Africa is one example. Under s 8(1) and (2) of the Constitution of the Republic of South Africa Act 1996 (SA), both the institutions of government and natural and juristic persons are bound by human rights to a specified extent. The Victorian Charter does not fall into this category. It applies only to public authorities, as defined, not to private persons outside that definition. Moreover, the obligation in s 38(1) to act compatibly with human rights does not apply to acts of a private nature.[17]
In other comparable jurisdictions - the United Kingdom, Canada and New Zealand, for example - the legislative or constitutional provisions impose human rights obligations primarily on public or government parties and on persons or bodies exercising public functions. The Human Rights Act 1998 (UK) employs the concept of a public authority.[18] The Canadian Charter of Rights and Freedoms imposes human rights obligations on the federal and provincial legislatures and governments.[19] The New Zealand Bill of Rights Act 1990 (NZ) applies to acts done by the institutions of government and any persons performing public functions.[20] Similarly, the obligations which arise under the ICCPR rest upon states, not private persons.
Each of these jurisdictions has had to deal with the modern conditions in which public administration is carried out. Under those conditions, governmental and public functions are often transferred to semi-autonomous or private parties. Contracting out the delivery of an essential service to a private provider is a simple example. The comparable human rights schemes apply to such arrangements to varying degrees.
In the United Kingdom, for example, a public authority includes persons whose functions are of a public nature.[21] The New Zealand Bill of Rights Act applies to persons in the performance of any public function, power, or duty under law.[22] Under the Canadian jurisprudence, the Canadian Charter of Rights and Freedoms applies both to governments and to private entities implementing specific government programs.[23]
Our Charter was enacted in 2006 at a particular point in the evolution and judicial consideration of these comparable statutes, and in quite specific terms. When we compare the provisions of the Charter with this other legislation, especially as regards the definition of a public authority in s 4, and consider the statements made in the parliamentary materials and the report of the Human Rights Consultative Committee,[24] the intention of the legislature is clear. The Charter is to apply fully to private parties exercising public functions on behalf of the state; the state cannot evade its Charter obligations by implementing its public policies through private arrangements.
Because the Charter is so different and so clear, the comparable jurisprudence has to be approached with caution. Having said that, there still is common ground, and something valuable to be learned from the comparison. Moreover, as we will see, the drafting of the provisions of the Charter with respect to public authorities was influenced by these precedents. I will start with the decisions of the English courts, which will show our provisions are wider in scope than there.

[29]

The terms 'core' and 'pure' public authority are used to describe those specified in s 6(1). The terms 'hybrid' and 'functional' public authority are used to describe those in s 6(3)(b).
You can see the definition of public authority in s 6(3) is inclusive and extends to persons with functions of a public nature.
For many years there has been debate about the extent to which the test in s 6(3)(b) should take into account the nature of the entity or, rather, focus on the nature of the functions. That question was resolved in YL v Birmingham City Council,[25] by a bare majority of three to two, in favour of paying close attention to the nature of the entity. This has operated to narrow the class of entities who are bound to observe human rights.
While it may have limitations, the scope of the definition of a functional public authority in the legislation in the United Kingdom should be appreciated. Bodies found to be public authorities under s 6(3)(b) include the social housing provider in Poplar Housing Association Limited v Donoghue,[26] the private psychiatric hospital (in respect of a detained patient) in R(A) v Partnerships in Care Limited,[27] a company set up by a local authority to operate a farmers market in R (Beer) v Hampshire Farmers Market Limited,[28] the sewerage authority in Marcic v Thames Water Utilities Limited,[29] the public school in A v Head Teacher and Governors of Lord Grey School,[30] the social housing provider in R (Weaver) v London and Quadrant Housing Trust[31] and the contracted out detention centre in Yarl's Wood Immigration Limited v Bedfordshire Police Authority.[32]
The Charter encompasses all such cases, and goes further.
That the legislation in the United Kingdom does not go further is a consequence of the decision in YL.[33] As the reasoning in that decision reaches back to Poplar Housing,[34] I will consider it first.
Although the social housing provider in Poplar Housing was found to be a public authority, that was because the role of the company to whom the housing stock was transferred was 'closely assimilated' with the local housing authority who made the transfer.[35] The principle stated in the case, which applies to this day, is that a private body is not a public authority simply because it performs a public function.[36] Nor is a private body a public authority simply because it performs acts on behalf of a public authority which would be public if performed by that body itself.[37] That is a test which shifts the focus of attention away from the functions performed towards the body performing them. It is an institutional test, not a functional test. I think the Charter was passed in terms which were deliberately aimed at avoiding this kind of outcome.
In Aston Cantlow Parochial Church Council v Wallbank,[38] which was decided before and not overruled by YL, the House of Lords held the parochial church council was not a core public authority within s 6(1) of the Human Rights Act. The court reached that conclusion even though the council had a foundation in legislation[39] and was capable of exercising statutory powers.[40] In the words of Lord Hope, it was not a core public authority because it was not a 'governmental organisation'.[41] That is to say, it was not part of the central or local government, was not accountable to the general public for what it did and received no ongoing public funding.[42] This was a relatively narrow test for core public authorities.
The court then considered whether the council was a functional public authority under s 6(3)(b). The court adopted a relatively wide test for functional public authorities. Lord Nicholls pointed out that s 6(3)(b) referred to a 'public function, not governmental function.'[43] His Lordship held a 'generously wide scope' should be given to the expression 'functions of a public nature' in s 6(3)(b), as this would 'further the statutory aim of promoting the observance of human rights values'.[44] His Lordship went on:

[50]

Persons or bodies held to be performing public functions, powers or duties within s 3(b) include the state-owned postal delivery enterprise in Federated Farmers of New Zealand (Inc) v New Zealand Post Ltd,[82] the licensed private television broadcaster (by accepted concession) in TV3 Network Ltd v Eveready New Zealand Ltd,[83] the local government authority in Zdrahal v Wellington City Council,[83] the director-general of health and the local heath service in Innes v Wong,[84] the state-controlled but independently incorporated private company providing social housing in Lawson v Housing New Zealand,[85] the statutory accident rehabilitation and compensation insurance regulator (by accepted concession) in Freeborn v Accident Rehabilitation and Compensation Insurance Corporation,[86] the private professional regulatory body in Beaton v Institute of Chartered Accountants of New Zealand[87] and the private free-to-air television broadcaster in respect of election coverage in Dunne v CanWest TVWorks Ltd.[88]
1. Persons or bodies held not to be performing public functions, powers or duties within s 3(b) include the state-owned enterprise which traded in television broadcasting (in respect of its ordinary broadcasting activities) in Television New Zealand Ltd v Newsmonitor Services Ltd[89] and (in respect of a single aspect of the presentation of a news item) in Mangu v Television New Zealand Ltd,[90] the private school in M v Palmerston North Boys' High School,[91] the independent ambulance service in Alexander v Police,[92] the non-statutory citizen's arrests in R v H[93] and R v N[94] and the private radio broadcaster in respect of ordinary talk-back radio in Ransfield v Radio Network Ltd.[95]
2. Federated Farmers of New Zealand (Inc) v New Zealand Post Ltd,[96] Lawson v Housing New Zealand,[97] and Ransfield v Radio Network Ltd[98] need to be examined more closely.
3. In New Zealand Post Ltd,[99] the postal service was a business enterprise covered by legislation[100] which made it wholly owned and controlled by the state,[101] although it was privately incorporated under the ordinary companies legislation.[102] It was required to be as profitable and efficient as any comparable private business.[103] Under companion regulatory legislation,[104] it was entitled to enter into contracts with respect to, and charge for, the provision of postal services. It was the monopoly provider.[105] When it tried to increase the charges for delivering post to the gate in rural areas, farmers claimed (among other things) that the right of the freedom of expression of the rural community under s 14 of the New Zealand Bill of Rights Act was being infringed.
4. McGechan J held New Zealand Post was not part of the executive within s 3(a), 'given the context provided by s 3(b).'[106] His Honour rejected the submission that the service was just a private business supplying a service. The right to freedom of expression was important; it would not be in the spirit of interpreting the New Zealand Bill of Rights Act generously and purposively to exclude a major vehicle from the obligation to observe that right.[107] The company provided a postal service 'for the public, in the public interest'.[108] The courts should not draw 'fine distinctions' between public functions and others.[109] 'Mail handling, in the broad sense' was a public function undertaken under the laws respecting state-owned enterprises, companies and the provision and regulations of post. It was not undertaken at the 'whim, or voluntary decision' of the service.[110]
5. In Housing New Zealand,[111] the main state social housing provider had independent corporate status under the Housing Restructuring Act 1992 (NZ). Government ministers owned all of its shares,[112] which is why I said it was state-controlled. Under the legislation, they were responsible for the performance of the company, including those relating to its social objectives.[113] When Housing New Zealand started implementing a market rent policy, a tenant claimed her human right to life under s 8 of New Zealand Bill of Rights Act was being violated.
6. Williams J held Housing New Zealand was exercising public functions within by s 3(b). His Honour rejected the submission that charging market rents was a private function of a landlord, not a public function of a social housing provider. The premise of that submission was the legislation made no mention of market rents. Williams J held the source of the power in law did not have to be that immediate: 'the wording of s 3(b) does not require that a function must be explicitly mentioned in legislation for it to be "public"'.[114] Further, under s 3(b), the act - here, increasing the rent - 'does not need to be public provided it is done in the performance of a public function power or duty.'[115]
7. In Radio Network Ltd,[116] the network banned the plaintiffs from talkback radio. They alleged this breached their human right to freedom of expression.
8. The network was a major broadcaster in New Zealand, owning some 97 stations. It was privately incorporated, owned and operated. For an irrelevant regulatory reason,[117] a government minister held just one of its million shares. The network held licences under, and was subject to the general regulatory provisions of, the radio broadcasting legislation.[118] That legislation set program standards and established a complaints regime which broadcasters had to follow. These did not constitute a duty to broadcast particular programs or to permit access to talkback radio.[119]
9. The question was, in excluding the plaintiffs from talkback radio, whether Radio Network Ltd performed functions within s 3(b). Like McGechan J in New Zealand Post Ltd,[120] Randerson J started with the values and interests which the New Zealand Bill of Rights Act protected. His Honour said 'the scope and significance of the right to freedom of expression in a democratic society is a relevant issue when considering whether the NZBORA is engaged.'[121] His Honour said s 3(b) applied to acts (a) in the performance of a function, power duty; (b) conferred or imposed by or pursuant to law; and (c) which were public.[122]
10. Randerson J held broadcasting radio programmes involved the exercise of a function or power conferred by law because it occurred under the authority of the licences.[123] The more difficult question was whether the radio station was exercising a public function or power.
11. After reviewing the New Zealand, Canadian and United Kingdom authorities, Randerson J gave a summary of the principles. The tests and indicia in s 4 of our Charter seem to have been influenced by the considerations which his Honour mentioned. With respect, the judgment repays close attention. His Honour held the 'primary focus' is on the 'function, power, or duty rather than the nature of the entity at issue', although the nature of the entity may be relevant.[124] There was 'no single test of universal application ... to determine what is a public function'. [125] The question was 'fact dependent'[126] and a 'flexible and generous approach'[127] was required. Broadly, the question is 'how closely the particular function, power, or duty is connected to or identified with the exercise of the powers and responsibilities of the state. 'Is it "governmental" in nature or is it essentially of a private nature.'[128] The relevant indicia include these:
  - (i) whether the entity concerned is publicly owned or is privately owned and exists for private profit;

[104]

As to s 4(5), it said that, as well as public funding, 'all the circumstances, such as the degree of government regulation and control and the nature of the functions being performed, are relevant factors to consider.'[183]
In that context, I turn to the interpretation of the 'public authority' in s 4(1) and (2) of the Charter.
The central purpose of the Charter is to protect and promote human rights.[184] This is indispensable in a democratic and inclusive society which respects the rule of law, human dignity, equality and freedom.[185] The interests protected by the Charter are those of individuals, whose birthright is freedom, equality and dignity in rights.[186] The responsibility for respecting human rights is placed on public authorities. Their actions and decisions are unlawful when incompatible with human rights, subject only to contrary legislation.[187] Therefore the concept of a public authority is of fundamental importance to the achievement of the central purpose of the Charter. As with the comparable legislation in the United Kingdom[188] and New Zealand,[189] the definition of 'public authority' in s 4 must be given a wide and generous interpretation which is consistent with that purpose.
The scheme of the Charter is that only public authorities are bound to act compatibly with human rights.[190] Private individuals, organisations and businesses are public authorities and so bound only to the extent that they exercise public functions on behalf of the state or public authorities. They must comply with the general laws of the land.[191] But otherwise they can act according to their own interests and are not legally obliged to act compatibly with the Charter.
The definition of 'public authority' reflects the manner in which the modern state exercises its responsibilities in the public interest. It does so through its core agencies, such as the public service and statutory authorities, which are part of the state in the traditional sense. It may also do so through numerous arrangements, both formal and informal, with a variety of entities which are not part of the state in that sense.
Lying behind every human rights problem is an individual. It is the general purpose of the Charter to promote and protect the human rights of that individual. The premise of the broad concept of a public authority in s 4 is that the purposes of the Charter are equally important, whether the capacity to engage human rights is in the hands of the state or a private entity exercising public functions on its behalf. When a private entity breaches human rights, the individual experiences the personal consequences no differently than if the entity was a core public authority. The damage to society, which is another consequence, is also no different. The consequences are produced by the exercise of the functions - by what was done, not who did it.
When the state acts in the public interest on its own behalf, it is responsible for respecting the human rights of individuals affected. When the state acts in the public interest through others exercising public functions on its behalf, it is they who are responsible. The direct[192] obligations in the Charter extend to private parties in civil society to that extent.
The human rights protections in the Charter are not so weak that they apply to the government but not its functional proxies. The state cannot shirk its human rights responsibilities by implementing its programs and policies through private entities acting on its behalf. Where private entities exercise functions of a public nature on behalf of the State or a public authority, the functions come with unavoidable human rights responsibilities for the entity itself.
Sub-sections 4(1)(a), (b), (d), (e) (f) and (g) of the definition of public authority describe core public authorities and do not present difficulty. Core public authorities are bound generally by the Charter and not just when they are exercising public functions. Section 4(1)(a) is a powerful provision which brings in virtually the entire Victorian public service.[193] Section 4(1)(b) brings in entities established by statue which have functions of a public nature. Sub-sections 4(2)-(3) are relevant to whether an entity has such function. If it does, the entity is generally bound like any other core public authority. To be a public authority under s 4(1)(b), it is not necessary for a statutory entity having functions of a public nature to be exercising them on behalf of the state or a public authority. That the entity was established by statute and has such functions is enough.
The definition of a functional public authority in s 4(1)(c) focuses on the functions performed by the entity, not on the nature of the entity itself. The guiding factors in s 4(2) (except for s 4(2)(e)) likewise focus on the nature of the functions. The intended consequence is that private entities exercising public functions on behalf of the state will be bound to observe human rights.
The underlying rationale for attaching human rights responsibilities to public functions exercised on behalf of the state lies in the responsibility which the state has for ensuring the performance of the function. In the words of Baroness Hale in YL, the function 'is a task for which the public, in the shape of the state, have assumed responsibility, at public expense if need be, and in the public interest.'[194] Whoever is exercising them, functions of that nature carry public responsibilities, including the obligation to act compatibly with the human rights of individuals affected. Such functions are to be distinguished from those having a private character and carrying no such responsibilities. The dichotomy in s 4(1)(c) (and s 4 generally) is thus between public functions exercised on behalf of the State or a public authority in the public interest and private functions exercised by private entities in their own interests.
Under s 4(1)(c), whatever be the private functions of the entity, if it has functions of a public nature, and exercises those functions on behalf of the state or a public authority, it is a public authority when doing so. To that extent, it is bound to act compatibly with human rights.
The definition does not require the public functions to have been acquired in any particular manner.[195] Consistently with the purposes of the Charter and the underlying rationale of the definition of a functional public authority, this question is approached as a matter of substance and not form or legal technicality. If, as a matter of fact and fair characterisation, the functions of the entity 'are or include functions of a public nature', then it is a public authority when exercising them on behalf of the state or a public authority. The entity could acquire the functions by statute (as mentioned in s 4(2)(a)), contract (as mentioned in s 4(1)(c)), informal arrangement, voluntary acceptance, lawful imposition or, as s 4(1)(c) itself says, 'otherwise'.
In the application of the definition of a functional public authority in s 4(1)(c), there is no universal test and every case must be considered on its own facts and merits.[196] The focus of the definition is on matters of substance, not form and legal technicalities. Consistently with the wide and generous interpretation required of s 4(1)(c), the guiding factors in s 4(2)-(5) are not prescriptive and other factors may be relevant.[197] Nonetheless, a private entity whose functions do not fairly answer the description in s 4(1)(c) is not bound to observe the Charter.
As with the legislation in the United Kingdom,[198] and in contrast to that in Canada,[199] the phrase used in s 4(1)(c) is public function, not governmental function. Nor, in reference to the function, does it use the term statutory. The Charter encompasses a broader range of functions than those which might be identified as governmental or which are statutory.
Getting back to the underlying rationale of the definition of public authority, the state can act in the public interest towards ends or by means which might not be governmental in the traditional sense. The means might not be statutory. The functions of government can change as society can change, as Lord Bingham said in YL.[200] What may be seen to be a proper subject for government action or regulation in one era may be seen differently in the next. The means used to achieve the ends of government are equally changeable. The modern use of various forms or contracting out and outsourcing are examples. As human rights are interpreted as living trees, so is the Charter interpreted.[201] To ensure the purposes of the Charter are achieved in an enduring way, the concept of a functional public authority has not been confined to what may be seen to be governmental or what is statutory. The Charter relies on the broader concept of a public function.
That the function 'is connected to or generally identified with functions of government' is, however, a relevant factor under s 4(2)(b). This factor invites consideration of the connection between, or the general identification of, the function with what government does. This is inclusive language. To be relevant, it is sufficient that the function is only connected to the functions of government. It is relevant even if it is identified with those functions only in a general way. You saw the explanatory memorandum gave the function of a private company managing a public prison as an example. It said that 'function has its origin in governmental responsibilities and is being performed in the broader public interest.'[202]
In deciding whether an entity is a functional authority within s 4(1)(c), it is important to take into account the responsibility which government has for the care and protection of vulnerable and disadvantaged people. Governments have traditionally performed this function in the public interest, even if the means of doing so have varied. A fundamental value of the Charter is respect for the dignity and personal integrity of the individual, especially those who are vulnerable and disadvantaged. As history has shown, such people are at risk of having their human rights breached when services are provided for their own care and protection. When the government provides services to vulnerable and disadvantaged individuals under arrangements with a private entity, the application of s 4(1)(c) needs to be considered with one eye on the function being performed and the other on the human rights of the individual.
Thus, in YL,[203] Lord Bingham and Baroness Hale did not accept the home was simply performing the private function of giving care. Lord Bingham said it was acting under an arrangement with the government. This arrangement was the means by which the government was carrying out its function of ensuring

[109]

Under the primary definition in s 4(1)(c), a non-statutory function can be of a public nature. But, as a relevant factor, s 4(2)(a) nominates, 'that the function is conferred on the entity by or under a statutory provision'. Consistently with the purposes of the Charter, this provision should be widely and generously interpreted. The conferring can be 'by' or 'under' the statute, the latter being a less immediate source than the former. Thus s 4(2)(a) contemplates a function being of a public nature whether it is directly or indirectly authorised or enabled by statute. The explanatory memorandum gives a specific statutory power of arrest as an example of direct conferment 'by' statute.[207] It recognises that functions may be conferred less directly 'under' statutory authority, such as 'via contract or otherwise'.[208]
In YL, Lord Bingham thought statutory power threw 'light on the nature and extent of the state's concern and of the responsibility (if any) undertaken.'[209] Conversely, the absence of any such power might suggest the function was 'private and so an inappropriate subject of public regulation.'[210] Baroness Hale held similarly.[211]
Section 4(2)(d) specifies, as a factor relevant to the nature of the function, that 'the entity is publicly funded to perform the function'. Under that paragraph, the relevant factor is the provision of the public funding, not the form it takes. Section 4(5) makes this a non-determinative factor.
The majority in YL held the care home was not a public authority, even thought it was being paid by the government to care for and attend to the residents. Lord Scott held the payment by the government of a fee for that service did not amount to public funding.[212] Lord Bingham and Baroness Hale disagreed because of the social importance of the function. On the question of public funding, Lord Bingham held it was relevant whether 'the state is by one means or another willing to pay.'[213] Baroess Hale agreed with Lord Bingham. She held the care home was providing care and attention to residents 'at public expense'.[214] With respect, as regards the application of the Charter, the views of Lord Bingham and Baroness Hale are to be preferred.
In the present case the funding provided to Metro West by the government is block annual funding. That is public funding for the purposes of s 4(2)(d). Metro West retains the rent it receives. That just supplements its public funding. If the government had funded Metro West directly on a case by case basis in respect of housing provided to tenants, and all other things were equal, I would still have decided the question in the same way.
The guidance offered by s 4(4) confirms that the definition of a functional public authority in s 4(1)(c) is to be widely and generously interpreted.
As s 4(1)(c) and (4) makes clear, an entity can be acting on behalf of the State or a public authority even though the relationship is more loosely connected than one in a recognised legal category, such as contract or agency. Accordingly, the relationships encompassed by s 4(1)(c) do not need to be characterised, or even be capable of characterisation, in formal legal terms. Under s 4(1)(c), an entity can exercise public functions on behalf of the State or a public authority under contract 'or otherwise'. All aspects of the relationship must be considered. Consistently with the purposes of the Charter and s 4(1)(c), if there is an arrangement under which, in exercising functions of a public nature, an entity represents or carries out the purposes of the State or a public authority in the practical sense, it will be acting on their behalf within s 4(1)(c). The nature of the functions should not be overlooked in this regard. That is especially so where the functions are exercised in respect of vulnerable and disadvantaged people whose human rights protection is an important purpose of the Charter.
Those being the governing principles, let me now turn to their application in the present case.

[110]

To determine whether an entity is a public authority under the Charter it is necessary to examine two questions. The first is whether the functions being exercised are of a public nature. That turns on the nature of the functions, and whether they are being exercised in the public interest, not on the nature of the entity. The second is whether the functions are being exercised on behalf of the State or a public authority. That turns on the relationship between them and the entity, and whether there is some arrangement under which, in exercising the functions, it is representing them or carrying out their purposes in the practical sense.
On the nature of the function, Metro West is exercising the function of providing a form of social housing to vulnerable and disadvantaged people. The tenants are two recent-arriving African families who are at risk of homelessness. Metro West provided them with fixed-term transitional housing pending their entry into longer-term accommodation. It then served them with notices to vacate. It has now sought orders for possession against them in respect of that housing, even though they have tried and failed to obtain alternative accommodation. The function at issue is the function of providing social housing, which includes those and other aspects of managing tenancies in pursuance of that function.
It is consistent with the purposes and values of the Charter to characterise the provision of social housing as a public function. Vulnerable and disadvantaged people are at risk of homelessness where their human rights would be imperilled.
Providing social housing is a function of fundamental importance, which the government exercises on behalf of the community in the public interest. It is a function which is generally identified with the functions of government, as mentioned in s 4(2)(b). The government has a well-developed set of policies and programs by which this function is carried out. These include transitional housing policies and programs which operate throughout Victoria, including in the western suburbs through Metro West. The government publicly funds the exercise of this function by community-based organisations like Metro West. I return to this consideration later.
That would be enough to characterise the functions being exercised by Metro West as being of a public nature. But there are other factors pointing in that direction.
In particular, the policies and programs have a statutory foundation. The Housing Act recognises the importance of housing as a function of government. The first object of that Act is 'to ensure that every person in Victoria has adequate and appropriate housing at a price within his or her means'.[215] It goes on to specify 'the provision of well maintained public housing of suitable quality and location'[216] as one means of doing so. Further, the Director of Housing is given ample power for the implementation of those purposes among others, including the power to develop and manage land,[217] which may be delegated to community-based and other organisations.[218]
I turn to the relationship between Metro West and the State or a public authority. The focus is on the relationship in respect of the function, although it may often be relevant to examine the relationship more generally.
The Director of Housing and the Secretary of the Department Human Services are both public authorities within s 4(1)(a) and as mentioned in s 4(1)(c) of the Charter. In their relevant dealings with Metro West, they also constitute the State within s 4(1)(c).
The government, in the form of the director and the secretary, has contracted out the provision of social housing to Metro West. The company has provided transitional housing to the tenant families as the government's paid independent contractor. Those facts suggest Metro West was exercising the public function of providing social housing on behalf of the State or a public authority. Closer examination of the arrangements only confirms that conclusion.
Under the terms of the service agreement, Metro West must provide transitional housing to those at risk of homelessness. While the functions are not conferred by or under a statutory provision, as mentioned in s 4(2)(a), they must be exercised by reason of contractual obligations to the government which Metro West has accepted.
The agreement specifies who the eligible people are and the service standards and other conditions with which Metro West must comply. These include a number of government policies and applicable regulations which are incorporated in the agreement by reference. The agreement imposes reporting and auditing obligations on Metro West. Through this framework, the government exercises a substantial degree of control over the exercise by Metro West of its functions under the agreement. The nature and extent of the control exceeds that which is commonly exercised in respect of generally regulated business activities.
The precise source of the power of the director and the secretary to enter into and vary the service agreement with Metro West was not fully explored in argument. It seems the source was statutory. That would not bring the case into one in which the functions were conferred 'by' a statutory provision, as mentioned in s 4(2)(a). The function was exercised pursuant to the agreement, not by the provision authorising the officers to enter into it. But it would bring the case into one in which the function was conferred 'under' a statutory provision, as mentioned in that paragraph. The function was conferred in an agreement which seems to have been entered into by officers of the government under powers conferred by a statutory provision. The connection between the provision and the agreement is such as to warrant the conclusion that functions exercised pursuant to the agreement were conferred under the provision.
The position is clearer as regards the delegation of the director. As we have seen, he exercised the power in s 35 of the Housing Act to delegate to Metro West his authority under ss 14 and 15 to lease, sub-lease, acquire and dispose of property. That authority is exercised by Metro West as necessary when it exercises the function of providing transitional housing to people at risk of homelessness. Exercising a delegated statutory function may well involve exercising a function conferred 'by' a statutory provision. But at the least it involves exercising a function conferred 'under' a statutory provision. The connection between the provision authorising the delegation and the provisions conferring the powers which have been delegated, on the one hand, and the functions exercised by Metro West pursuant to the delegation, on the other hand, is such as to warrant the conclusion that those functions were conferred under those provisions.
As mentioned in s 4(2)(d), Metro West is publicly funded by the government to exercise the public function of providing social housing. The form of that funding is annual block funding. While that is the fact, what is important is that the government has funded the exercise of the function, not the precise form which that funding takes. Metro West retains rent from tenancies. That just supplements its public funding.
The provision of public funding can indicate both that the functions are of a public nature and that the entity acts on behalf of the State or a public authority when exercising them.
When public funding is expended on a function, it usually signifies that exercising the function is in the public interest. By providing the funding, the government carries out its assumed responsibility for ensuring the function is exercised. That indicates the function is of a public nature, especially where it is not routine, but involves the provision of important social services to vulnerable and disadvantaged people.
Public funding also signifies a relationship between the government and the entity. As s 4(5) provides, that relationship may not be enough to support a conclusion that, when exercising the functions, the entity is acting on behalf of the State or a public authority. Other indications may show that it is.
Here, Metro West is the government's paid contract provider of social housing. The arrangements by which it exercises that function place it in a different position to a private school receiving public funding under a grant scheme applying to such schools generally. Education can be a function of a public character. But the relationship between the government and private schools is not such that, just because they receive grants of that kind, they exercise the function of providing education on behalf of the government. By contrast, the government has contracted out to Metro West the provision of a form of social housing to people at risk of homelessness, for which the government has supplied public funding. That is a different kind of relationship. It is right to say of that relationship that, when Metro West is exercising those functions, it is acting on behalf of the government or, more precisely, the State or a public authority.
Metro West was incorporated for public purposes by a number of community-based organisations in the western suburbs of Melbourne. It is a private company. It was not established by the government. It is not owned or controlled by the government. The government is not represented on its board of directors. The service agreement specifies certain governance standards, and auditing and reporting obligations, which Metro West must meet. These do not interfere with its organisational independence and autonomy. Nonetheless, in my view, the functions it exercises under the service agreement are of a public nature and it is exercising those functions on behalf of the State or a public authority.
That the functions exercised by Metro West are of a public nature is to be determined by reference to the nature of the functions, not the nature of Metro West. I have given my reasons for concluding the functions are of a public nature. Metro West's nature does not alter that conclusion.
Metro West in an independent contractor and, in the way I have described, it is organisationally independent of the government. As to the relationship between it and the State or a public authority, that independence is a factor of relevance. Moreover, Metro West has party-party relationships with the persons to whom it provides social housing. Accordingly, it is the landlord of the tenant families in the present case. At no time was it acting as the agent of the government. That too is a factor of relevance in characterising the relationship between it and the government.
But, s 4(1)(c), interpreted with the guidance of s 4(4), covers relationships which may be looser than contract, agency and other legal categories but which still involve exercising functions of a public nature on behalf of the State or a public authority. It covers arrangements under which the entity is acting as their representative or for their purposes in the practical sense.
In the present case, as the government's paid independent contractor, Metro West provides social housing, which is a function of a pubic nature, to people at risk of homelessness. In doing so, it is acting on behalf of the State or a public authority within s 4(1)(c).
I therefore conclude that Metro West is a public authority within s 4(1)(c) of the Charter. There will be a declaration accordingly.

[113]

After examining the comparable human rights legislation overseas, I identified how s 4(1)(c) should be interpreted and applied.
The definition of 'public authority' in s 4 is of fundamental importance to the achievement of the purposes of the Charter. Therefore the definition is to be interpreted widely and generously with those purposes in mind. That applies equally to s 4(1)(c).
The application of s 4(1)(c) involves two questions: (a) whether the functions being exercised are of a public nature, which turns on the nature of the functions, and whether they are being exercised in the public interest, not on the nature of the entity; and (b) whether the functions are being exercised on behalf of the State or a public authority, which turns on the relationship between them and the entity, and whether there is some arrangement under which the entity, in exercising the functions, is acting as their representative or for their purposes in the practical sense.
As to the first question, protecting the human rights of vulnerable and disadvantaged people, and especially families who are at risk of homelessness, is an important value of the Charter. It would be consistent with the purposes of the Charter to interpret s 4(1)(c) as including Metro West. The company would then be required to respect, and act compatibly with, the human rights of families to whom it provides transitional housing.
Whether a function is of a public nature requires attention to be paid to the nature of the function, not the entity exercising it - on what is being done, not who is doing it. This too is consistent with the purpose of the Charter. Human rights consequences flow from the exercise of public functions, not from the nature of the entity exercising them.
Providing social housing to people at risk of homelessness is an important function which government exercises on behalf of the community in the public interest. It exercises this function in various ways under the Housing Act 1983 (Vic). Contracting out the provision of transitional housing to entities like Metro West is one way of doing so. The government publicly funds Metro West to provide this service.
Therefore I have concluded the function of providing social housing, which includes the management of transitional housing tenancies, is a function of a public nature.
As to the second question, the arrangement between Metro West and the government is set out in a service agreement. It is very detailed and specifies the performance standards which Metro West must achieve and the government policies and regulations which it must apply. It also specifies the company's auditing and reporting requirements. The Director of Housing has delegated certain statutory functions to Metro West. The director and the Secretary of the Department of Human Services are both public authorities within s 4(1)(a) and constitute the State within s 4(1)(c) in respect of the arrangements with Metro West.
The agreement does not make Metro West the agent of the government in the provision of the housing. It is an independent contractor. Moreover, Metro West in an autonomous private company. However, it is still responsible under the agreement to the government for the provision of social housing to people at risk of homelessness. As I have said, it is publicly funded to do so.
Under s 4(1)(c), arrangements which are looser than contract, agency and other legal categories can involve the exercise of functions of a public nature on behalf of the State or a public authority, including arrangements under which an entity, in exercising such functions, is acting as their representative or for their purposes in the practical sense. That applies in the present case. Where, under arrangements like those proved here, the government contracts out the provision of social housing to a private company in return for public funding, the provider is a public authority under the Charter and thus bound to act compatibly with human rights.
I will declare that, when exercising the function of providing transitional housing (including the management of tenancies) under the service agreement with the Secretary of the Department of Human Services dated June 2006 and which came into effect on 1 July 2006 (including the variations with the Director of Housing dated 9 July 2007 and 28 September 2008), Metro West Housing Services Limited is a public authority under s 4(1)(c) of the Charter of Human Rights and Responsibilities Act 2006.

At a glance

Court

Decision date

Before

Source

Judgment (238 paragraphs)

Metro West v Sudi (Residential Tenancies) [2009] VCAT 2025 (9 October 2009)

Parties

Legislation Cited (15)

Cases Cited (2)