When legislation creates a power or discretion, by whom should it be exercised?
It is not always practicable for the person or body in whom a statutory power is vested to exercise the power personally. This is especially the case where busy ministers or agency heads are entrusted with a range of statutory functions.
As we said in our 2019 paper, there are several ways in which a statutory power may validly be exercised by someone other than the repository of power, including:
- Where the statute contains an express power to delegate or authorise a particular statutory power to be exercised by someone else; and
- When there is no such express power but where, as a matter of statutory construction, there is an implied power to either delegate or authorise another person to exercise the power.
Determining the existence of an implied power to delegate can be a complex question of statutory interpretation. In Northern Land Council v Quall [2020] HCA 33 (NLC v Quall) the High Court offered guidance on how this process can play out in the context of a statutory corporation.
What happened in NLC v Quall?
NLC v Quall saw the High Court adopting a pragmatic approach to determining that there was an implied power to delegate statutory functions, taking into account the realities of management and organisational structures.
The Native Title Act 1993 (Cth) (Native Title Act) conferred a power on the Northern Land Council (NLC) to certify indigenous land use agreements (ILUA) (the ‘certification function’). The NLC was incorporated under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) (ALR Act).
In 2017, the CEO of the NLC, purporting to act as a delegate of the NLC, signed a certificate of registration stating that the ‘the NLC hereby certifies’ the application for registration of an ILUA. In the Federal Court, Mr Quall alleged that the NLC’s certification function was not delegable or, if delegable, was not validly delegated by the NLC to the CEO.
The Full Federal Court concluded that the certification function was incapable of delegation. Relevantly, the Full Court considered that although there was an explicit power of delegation under the ALR Act, this could not separately permit the delegation of functions under the Native Title Act, and that the power in the Native Title Act to do ‘all things necessary or convenient’ for the performance of the NLC’s functions was a strictly ancillary power. The effect was that certification should be carried out by the NLC itself and not by the CEO as its purported delegate.
On appeal, Kiefel CJ, Gageler and Keane JJ (Nettle and Edelman JJ agreeing with the final orders for different reasons) determined that there was an implied power to delegate the certification function. To reach that conclusion, their Honours considered two issues. First was the extent to which any delegation of the certification function was compatible with the overarching scheme of the Native Title Act. Their Honours reasoned that delegation was compatible with the statutory scheme, and observed that:
- Representative bodies under the Native Title Act are corporations, and the Act specifically recognised that such bodies would maintain ‘organisational structures and administrative processes’, through which they would carry out their functions. Their Honours considered that these structures and processes were what enabled natural persons to perform the functions of the NLC (at [29]);
- The Native Title Act guided the performance of the Northern Land Council’s functions in a manner which ‘told in favour’ of those functions being able to be performed by persons or groups at other levels within its organisational structure, not just by the NLC’s membership or its governing body (at [30]);
- Accordingly, the statutory prohibition against the NLC entering into an ‘arrangement with another person’ for that person to perform the NLC’s functions was not intended to preclude the performance of functions by a member of the NLC’s executive or management, but rather to preclude only the performance of functions by persons wholly external to the NLC (at [31]-[32]); and
- Their Honours rejected the idea that some ‘special feature’ of the certification function required that function to be exercised by the membership or governing body of the NLC (at [52]).
Having found that delegation of the certification function was compatible with the statutory scheme, the second issue was whether there was a source of power to delegate the certification function to the CEO.
Rather than looking for the source of any such power in the Native Title Act, Kiefel CJ, Gageler and Keane JJ turned to examine the ALR Act as the NLC’s ‘constating statute’. Their Honours concluded that the power in the ALR Act to do all things ‘necessary or convenient’ for the performance of the NLC’s functions included the power to delegate statutory powers conferred on the NLC by other Commonwealth Acts (such as the Native Title Act), notwithstanding a subsequent provision in the ALR Act explicitly providing for delegation ‘of any of the Council’s functions or powers under this Act’, being the ALR Act. The ‘all things necessary or convenient’ provision in the ALR Act permitted the NLC to delegate the certification function to the CEO so long as delegation was conducive to ‘the more effective administration of that function or other functions’ (at [66]).
Nevertheless, Kiefel CJ, Gageler and Keane JJ made clear that the question of whether delegation was necessary or convenient for the performance of the NLC’s functions was an objective question of fact and degree. The High Court accordingly remitted the matter to the Full Federal Court to determine whether the certification function had been ‘duly delegated’ to the CEO pursuant to the ALR Act: see Northern Land Council v Quall (No 3) [2021] FCAFC 2.
What NLC v Quall means for you
NLC v Quall offers guidance for statutory corporations tasked with determining who may validly exercise particular functions. In the context of the Native Title Act and the ALR Act, the High Court was prepared to find that statutory functions vested in a corporation could be delegated to the corporation’s management and executive officers rather than being limited to the corporation itself. In reaching that conclusion, Kiefel CJ, Gageler and Keane JJ looked to the organisational structures and administrative processes of the NLC, and the manner in which the statutory scheme directed the NLC to carry out its functions having regard to those structures and processes.
Decision-makers should remain careful to identify the source of any power to delegate a statutory function – particularly if the source of power is implied rather than explicit. As was the case in NLC v Quall, a power to delegate might be found in the legislation under which a corporation is incorporated, even if the function being delegated is conferred by a different piece of legislation.
NLC v Quall will also be relevant for anyone construing a statute that confers power on an agency to do ‘all things necessary or convenient’ for the performance of the agency’s functions. When seeking to rely on such a provision, decision-makers should always construe the ‘all things necessary or convenient’ power consistently with surrounding provisions that establish the agency’s functions and management structures.
This article was written by Will Sharpe, Partner, Michael Palfrey, Partner and Neil Cuthbert, Senior Associate.
