[2024] WASCA 126
General information, not legal advice.
Court of Appeal (WA)
2024-10-09
Quinlan CJ
Original judgment source is linked above.
The State's power to enter into employment contracts
Application of the bias rule to the engagement of Public Sector employees
[T]he law has evolved to include an established and 'strong' common law presumption, generally applicable to any statutory power the exercise of which is capable of having an adverse effect on legally recognised rights or interests, that the exercise of the power is impliedly conditioned on the observance of procedural fairness. Consistent with the historical scope of the duty of procedural fairness, the core operation of the presumption requires the provision of procedural fairness where the relevant power directly affects the rights or interests of a particular individual. In such a case, the presumption operates 'unless clearly displaced by the particular statutory scheme'.
Notwithstanding the breadth of the stated presumption, there remain statutory powers that are not conditioned upon a duty to give procedural fairness. In particular, powers that affect individuals in an undifferentiated way from the general public may not attract an obligation of procedural fairness.
(citations omitted)
[T]he fact that a power takes a statutory form, whilst a relevant consideration, does not necessarily mean that it is impliedly constrained by the administrative law principles that commonly condition the exercise of statutory powers. It is relevant to have regard to the nature of the power, and not simply its statutory form, when considering whether any jurisdictional pre‑requisites to its exercise should be implied. For example, where the power is, or is closely analogous to, a power possessed in common with natural persons (such as the power to contract, to undertake non‑coercive investigations or to hold and transfer property and information), this may be an indicator that it is not subject to implied statutory constraints. (citations omitted)
The principles of human resource management that are to be observed in and in relation to the Public Sector are that -
(a) all selection processes are to be directed towards, and based on, a proper assessment of merit and equity; and
(b) no power with regard to human resource management is to be exercised on the basis of nepotism or patronage[.]
(i) this Act and any other Act governing their conduct; and
(ii) the Commissioner's instructions, public sector standards ...
prescribing procedures, whether by way of appeal, review, conciliation, arbitration, mediation or otherwise, for employees and other persons to obtain relief in respect of the breaching of public sector standards[.]
An act done in breach of a condition regulating the exercise of a statutory power is not necessarily invalid and of no effect. Whether it is depends upon whether there can be discerned a legislative purpose to invalidate any act that fails to comply with the condition. The existence of the purpose is ascertained by reference to the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the condition. Unfortunately, a finding of purpose or no purpose in this context often reflects a contestable judgment ... There is no decisive rule that can be applied; there is not even a ranking of relevant factors or categories to give guidance on the issue.
Had Dr Wood not provided a referee report, I do not consider that a reasonable apprehension of bias would have arisen. In my view, had he not provided the report, there would be no reasonable basis to fear he might not be willing to give genuine and appropriate consideration to the merits of another candidate. Simply by being a panel member, holding views about [the second respondent's] suitability, and expressing those views to the other members of the panel would not provide a reasonable basis for such a fear. Indeed, I consider that a fair‑minded lay observer would recognise the benefit of having people with knowledge of one or more of the candidates, and would not fear prejudgment on that basis alone. However, the position is less clear‑cut where, as here, a referee report has been provided by a member of the selection panel.
[I]f someone says something orally, they are far more easy to persuade than if they have committed themselves in writing. If someone says something orally at a meeting, it may be that they're able to be persuaded because that is the nature of oral conversation. When someone has put in writing, 'I support this candidate', that is something different.
basis for refusing relief if jurisdictional error had been established.[42] While the issue has not been raised by the parties in the present case, it is a matter that future applicants for judicial review of decisions relating to the engagement of Public Sector employees should consider. Where the grounds of review raise matters which could be the subject of a breach of standards claim under the Regulations, future applicants may need to demonstrate cogent reasons why relief by way of judicial review should be granted given the availability of alternative relief.
(a) the chair of the selection panel who completed the paperwork confirming the outcome of the selection process; and
>
> (b) the delegated officer who authorised the award of [the position] to the second respondent.
(a) 'we declare that no conflict of interest exists that could reasonably create a perception of bias in the process [namely the selection process]'; and
>
> (b) 'at all stages of the process the Recruitment, Selection and Appointment Public Sector Standard [sic the Employment Standard] was adhered to'.
A health service provider's main function is to provide:
(a) health services stated in the service agreements for the health service provider; and
(b) teaching, training and research that supports the provision of health services as agreed with the Department CEO; and
(c) any other services agreed with the Department CEO.
(1) A health service provider may employ and manage employees for and on behalf of the State.
(2) Employees employed under subsection (1) are in addition to employees employed as health executives in the Health Executive Service.
(3) Subject to any relevant award, order or industrial agreement under the Industrial Relations Act 1979, the terms and conditions of employment of employees employed under subsection (1) are the terms and conditions the health service provider determines.
(1) Unless otherwise specified in this Act or by the regulations, the PSM Act [ie the Public Sector Management Act 1994 (WA)] applies to administration and management, human resource management and conduct of health service providers and employees under this Act.
(2) For the purposes of subsection (1) the PSM Act applies as if:
(a) a reference in that Act to an employee were a reference to an employee as defined in section 6 [ie a person employed in a health service provider];
(b) a reference in that Act to an employing authority were a reference to an employing authority as defined in section 103 [ie relevantly the chief executive or board on whom the power to employ or engage employees is conferred].
(3) The PSM Act Part 3 does not apply to employees [pt 3 is concerned with the public service].
(1) The principles of human resource management that are to be observed in and in relation to the Public Sector are that:
(a) all selection processes are to be directed towards, and based on, a proper assessment of merit and equity;
(c) employees are to be treated fairly and consistently and are not to be subjected to arbitrary or capricious administrative acts;
The principles of conduct that are to be observed by all public sector bodies and employees are that they:
(a) are to comply with the provisions of:
(i) this Act and any other Act governing their conduct; and
(ii) the Commissioner's instructions, public sector standards and codes of ethics; and
(iii) any code of conduct applicable to the public sector body or employee concerned;
A fair‑minded lay observer might reasonably apprehend that the CAHS might not have brought an impartial mind to the decision to award [the position] to [the second respondent] because it had already prejudged the award of the position in favour of the [second respondent], because:
The learned primary judge erred in fact in finding at [208] that the decision was made in circumstances giving rise to a reasonable apprehension of bias, when the primary judge should have found that the decision was not made in circumstances giving rise to a reasonable apprehension of bias.
Ground 1: alleged error in holding that the decision was not amenable to judicial review
No statutory power to make a contract in the ordinary course of administering a recognised part of the government of the State appears to me to be necessary in order that, if made by the appropriate servant of the Crown, it should become the contract of the Crown, and, subject to the provision of funds to answer it, binding upon the Crown.[64]
[I]t must now be taken to be settled that procedural fairness is implied as a condition of the exercise of a statutory power through the application of a common law principle of statutory interpretation. The common law principle, sufficiently stated for present purposes, is that a statute conferring a power the exercise of which is apt to affect an interest of an individual is presumed to confer that power on condition that the power is exercised in a manner that affords procedural fairness to that individual. The presumption operates unless clearly displaced by the particular statutory scheme.[65]
In most cases that would follow because the making of a contract is the exercise of the personal or private, not public, powers of the executive. In affecting rights and interests by exercising the common law power to contract, which the executive enjoys in common with all persons, the executive should not be burdened by procedural requirements which attend the exercise of its public powers under statute or the prerogative. Moreover, it should enjoy the same freedom of contract allowed [to] all other persons to contract on such terms as it deems beneficial to it. Even if the executive's contractual decisions were reviewable in principle it would be surprising if it were bound by a public duty, superimposed on any contractual dealings, to give procedural fairness to a party with whom it was in a commercial relationship, or to take into account that party's, or any third parties', interest in determining the terms and conditions of its contractual offers.[70]
[T]he majority comprising Vanstone and Lovell JJ held at [91] to [106] that the decision to enter into an option contract for the purchase of land was not judicially reviewable because the power was a bare power of contract. Debelle AJ in dissent held at [240] that the applicable legislative framework meant that the power to contract was not a bare power to contract and so was judicially reviewable.[83]
Mr Reeves [counsel for the plaintiff] submitted that, in the present case, there was an elaborate framework 'engrafted on to the ordinary principles of master and servant', and accordingly the plaintiff was entitled to obtain redress for any breach of those provisions by the defendant. I consider that that proposition is correct. The usual public law principles and remedies and the remedy of declaration, would apply, if the procedures in cl 9 [of the award] are not followed.[87]
the employing authority cannot make the appointment ... unless subregulation (2) or (3) applies.[89]
[W]here an examination and review process has been constituted as a special regime to resolve complaints made by disappointed applicants, it is difficult to accept that the consequence of non‑compliance with a step in the recruitment process should result in an invalidity of the kind previously attached to provisions of the kind characterised as mandatory.[97]
Statement of Intent
This Commissioner's instruction (CI) establishes the minimum standards of merit, equity and probity to be complied with by the employing authority of each public sector body when filling a vacancy.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
[1] See Re Refugee Review Tribunal; ex parte Aala [2000] HCA 57; (2000) 204 CLR 82 [163] (Hayne J), adopted in Kirk v Industrial Court (NSW) [2010] HCA 1; (2010) 239 CLR 531 [66] and discussed by this court in Forrest & Forrest Pty Ltd v Minister for Mines and Petroleum [2017] WASCA 153; (2017) 51 WAR 425 [86] - [92].
[2] LPDT v Minister for Immigration [2024] HCA 12; (2024) 98 ALJR 610 [2] - [5].
[3] Plaintiff S10/2011 v Minister for Immigration [2012] HCA 31; (2012) 246 CLR 636 [97].
[5] See Council of Civil Service Unions v Minister for the Civil Service (GCHQ Case) [1985] AC 374; Jarratt v Commissioner of Police (NSW) [2005] HCA 50; (2005) 224 CLR 44 [69].
[6] See Lord Diplock in the GCHQ case at 409, cited in Jarrett at [80].
[7] Clough v Leahy [1904] HCA 38; (1904) 2 CLR 139, 156 (Griffith CJ).
[8] As occurred in Williams v Commonwealth [2012] HCA 23; (2012) 248 CLR 156 and Williams v Commonwealth [No 2] [2014] HCA 23; (2014) 252 CLR 416.
[9] As occurred in The State of Victoria v Master Builders' Association of Victoria [1995] VicRp 47; [1995] 2 VR 121 and cf MBA Land Holdings Pty Ltd v Gungahlin Development Authority [2000] ACTSC 89; (2000) 206 FLR 120 [220] (where the existence of a tender process contract may have made resort to the concept of procedural fairness unnecessary).
[10] As occurred in Davis v Minister for Immigration [2023] HCA 10; (2023) 97 ALJR 214.
[11] See, for example, Attorney-General (Tasmania) v Casimaty [2024] HCA 31 esp at [32].
[12] See the discussion in L v The State of South Australia [2017] SASCFC 133; (2017) 129 SASR 180 [107] - [115].
[13] Plaintiff S157/2002 v Commonwealth [2003] HCA 2; (2003) 211 CLR 476 [98].
[15] See Patole v Child & Adolescent Health Service [2022] WASC 401 (primary decision) [165] - [172]; appellant's submissions pars 9 - 10, 35 (White AB 9 - 10, 16); first respondent's submissions pars 9 - 12 (White AB 33 - 34).
[16] Chief Executive Officer, Aboriginal Areas Protection Authority v Director of National Parks [2024] HCA 16; (2024) 98 ALJR 655 [9].
[17] Crouch v Commissioner of Railways (Qld) (1985) 159 CLR 22, 32 - 33, 38; Deputy Commissioner of Taxation (Cth) v State Bank of New South Wales [1992] HCA 6; (1992) 174 CLR 219, 229 - 231.
[18] The State of New South Wales v Bardolph [1934] HCA 74; (1934) 52 CLR 455, 496.
[19] See PSM Act s 3(1) (definitions of 'agency', 'department', 'Public Sector' and 'SES organisation').
[22] See PSM Act s 45(2), s 53(2), s 56 and s 57.
[26] See primary decision [166] - [167]; appeal ts 5 - 6, 8 - 9; first respondent's submissions par 6 (White AB 33).
[28] See Jarratt [85] and cases there cited.
[30] Disorganised Developments Pty Ltd v The State of South Australia [2023] HCA 22; (2023) 97 ALJR 575 [33] - [34].
[31] King v Ombudsman [2020] SASCFC 90; (2020) 137 SASR 18 [93].
[32] Primary decision [164] - [166].
[34] Director General, Department of Justice v Civil Service Association of Western Australia (Inc) [2005] WASCA 244; (2005) 149 IR 160 [39].
[35] Section 97(1)(a) read with s 98(a) of the PSM Act.
[36] Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 [91] (McHugh, Gummow, Kirby & Hayne JJ), affirmed in subsequent cases including Forrest & Forrest Pty Ltd v Wilson [2017] HCA 30; (2017) 262 CLR 510 [61].
[38] Primary decision [214], [218].
[41] See, for example, Re Carey; Ex parte Exclude Holdings Pty Ltd [2006] WASCA 219; (2006) 32 WAR 501 [133] - [140] (Martin CJ, Wheeler JA agreeing).
[42] See the discussion of relief at primary decision [235] - [247].
[43] Patole v Child & Adolescent Health Service [2022] WASC 401 (primary reasons).
[44] Section 140 was amended with effect from 1 July 2023. I have reproduced s 140 as in force as at 3 December 2020.
[45] Primary reasons [166] - [167].
[46] Appeal ts 5 - 6, 8 - 9 (on behalf of the appellant); appeal ts 38 - 39 (on behalf of the CAHS).
[49] The Employment Standard is described in more detail in Director General, Department of Education v State School Teachers' Union [2021] WASCA 14 [37] - [40].
[54] Griffith University v Tang [2005] HCA 7; (2005) 221 CLR 99.
[55] Australian National University v Burns [1982] FCA 191; (1982) 43 ALR 25.
[56] Australian National University v Lewins (1996) 68 FCR 87.
[57] Saira v Northern Territory University [1992] NTSC 49; (1992) 109 FLR 46.
[58] Acquista Investments Pty Ltd v Urban Renewal Authority [2015] SASCFC 91; (2015) 123 SASR 147.
[60] Williams v The Commonwealth of Australia [2012] HCA 23; (2012) 248 CLR 156 [21], [204]. See also [38], [215] ‑ [217], [518], [577], [595]. While Williams did not address the question of State executive power to contract the decision has apparent implications for the conception of State executive power: Jacobi C and O'Leary D, 'Future Directions in the Non-Statutory Power of the Executive Government to Contract and Spend' in Hinton et al (eds) The Crown (2018) 279, 291.
[61] Williams v The Commonwealth of Australia [22].
[62] See Re KL Tractors Ltd [1961] HCA 8; (1961) 106 CLR 318, 335 (as referred to by French CJ in Williams v The Commonwealth of Australia fn 71).
[63] Williams v The Commonwealth of Australia [212].
[64] The State of New South Wales v Bardolph [1934] HCA 74; (1934) 52 CLR 455, 508.
[65] Minister for Immigration and Border Protection v SZSSJ [2016] HCA 29; (2016) 259 CLR 180 [75].
[66] Acquista Investments Pty Ltd v Urban Renewal Authority [98].
[67] L v The State of South Australia [2017] SASCFC 133; (2017) 129 SASR 180L v South Australia [2017] SASCFC 133; (2017) 129 SASR 180Error! [153].
[68] The State of Victoria v Master Builders' Association of Victoria [1995] VicRp 47; [1995] 2 VR 121State of Victoria v Master Builders' Association of Victoria [1995] VicRp 47; [1995] 2 VR 121Error!.
[69] L v The State of South Australia [153] (referring to The State of Victoria v Master Builders' Association of Victoria (137)).
[70] L v The State of South Australia [153].
[71] See eg Xenophon v State of South Australia [2000] SASC 327; (2000) 78 SASR 251 [8], [59]; Khuu & Lee Pty Ltd v Corporation of the City of Adelaide [2011] SASCFC 70; (2011) 110 SASR 235 [17], [19]; King v Ombudsman [2020] SASCFC 90; (2020) 137 SASR 18 [93].
[72] R v British Broadcasting Corporation; Ex parte Lavelle [1983] 1 WLR 23, 30.
[73] Primary reasons [166]. The primary judge also referred to Acquista Investments Pty Ltd v Urban Renewal Authority in other aspects that were relevant to the primary proceedings but which are no longer relevant on appeal: primary reasons [90] ‑ [95], [107].
[74] Acquista Investments Pty Ltd v Urban Renewal Authority [101].
[75] Acquista Investments Pty Ltd v Urban Renewal Authority [11]. See also [52] ‑ [55], [92].
[76] Acquista Investments Pty Ltd v Urban Renewal Authority [239] ‑ [241], [247].
[77] Acquista Investments Pty Ltd v Urban Renewal Authority [11], [56].
[78] Acquista Investments Pty Ltd v Urban Renewal Authority [12]. See also [79] ‑ [88], [92] ‑ [93].
[79] Acquista Investments Pty Ltd v Urban Renewal Authority [349] ‑ [380].
[80] Acquista Investments Pty Ltd v Urban Renewal Authority [14]. See also [98], [102] ‑ [103].
[81] Acquista Investments Pty Ltd v Urban Renewal Authority [98].
[82] Acquista Investments Pty Ltd v Urban Renewal Authority [15]. See also [97].
[84] Griffith University v Tang [3], [41] ‑ [42], [48]. See also [78] ‑ [89], [96].
[85] Attorney-General (New South Wales) v Quin [1990] HCA 21; (1990) 170 CLR 1, 58. See also (59).
[86] Saira v Northern Territory University (54 ‑ 55).
[87] Saira v Northern Territory University (51 ‑ 52).
[88] Saira v Northern Territory University (50 ‑ 51).
[92] Director General, Department of Justice v Civil Service Association of Western Australia (Inc) [2005] WASCA 244; (2005) 149 IR 160.
[93] Director General Department of Justice v Civil Service Association of Western Australia Inc [38].
[94] Director General Department of Justice v Civil Service Association of Western Australia Inc [39].
[95] Director General Department of Justice v Civil Service Association of Western Australia Inc [40].
[96] Director General Department of Justice v Civil Service Association of Western Australia Inc [42].
[97] Director General Department of Justice v Civil Service Association of Western Australia Inc [142].
[98] Director General Department of Justice v Civil Service Association of Western Australia Inc [145].
[100] Public Sector Management Act s 9(a)(ii); Health Services Act s 27(1) (so far as the Recruitment, Selection and Appointment Policy incorporated the Employment Standard - see [80] above).
[101] Here intending to refer to the Public Sector Management Act as encompassing not only the Act itself but also the Regulations and the Employment Standard as take force through the Act.
(2000) 204 CLR 82
(2010) 239 CLR 531
(2017) 51 WAR 425
(2024) 98 ALJR 610
(2012) 246 CLR 636
(2005) 224 CLR 44
(1904) 2 CLR 139
(2012) 248 CLR 156
(2014) 252 CLR 416
(2000) 206 FLR 120
(2023) 97 ALJR 214
(2017) 129 SASR 180
(2003) 211 CLR 476
(2024) 98 ALJR 655
(1985) 159 CLR 22
(1992) 174 CLR 219
(1934) 52 CLR 455
(2023) 97 ALJR 575
(2020) 137 SASR 18
(2005) 149 IR 160
(1998) 194 CLR 355
(2017) 262 CLR 510
(2006) 32 WAR 501
(2005) 221 CLR 99
(1982) 43 ALR 25
(1996) 68 FCR 87
(1992) 109 FLR 46
(2015) 123 SASR 147
(1961) 106 CLR 318
(2016) 259 CLR 180
(2000) 78 SASR 251
(2011) 110 SASR 235
(1990) 170 CLR 1