CATCHYORDS Administrative Law - Judicial Review - petrcleum products - tied grant of financiel assistance by Conunmonwealth to State - Commonwealth Scheme instrument under Commonwealth Act ~- State Act implementing Commonwealth Scheme - amounts payable under State Act ascertazned in accordance with Scheme ~- certificate issued under State Act that amount repayable - whether 'decision' made 'under an enactment' - objection to competency. State Grants (Petroleum Preducts) Act 1965 (Cth. ) Administrative Decisions (Judicial Review) Act 1977 (Cth.) Petroleum Products Subsidy Act 1965 (NSW) PARKES RURAL DISTRIBUTIONS PTY. LIMITED v. EDWARD JOHN GLASSON NSW No. G262 of 1982 Bowen C.J., Northrop and Neaves Jd. 21July 1983 Sydney IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSW No. G262 of 1982 GENERAL DIVISION ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN: PARKES RURAL DISTRIBUTIONS . PTY. LIMITED Appellant (Applicant) and - EDWARD JOHN GLASSON Respondent (Respondent ) CORAM: Bowen C.J., Northrop and Neaves JJ. DATE: 2lJuly 1983 WHERE MADE: Sydney ORDER THE COURT ORDERS THAT: ls The appeal be allowed. 000000000 0 2 2 2 2 2 2. The order of the Court made on 10 December 1982 be set aside. 3. The respondent pay the appellant's costs of the appeal and 1ts costs of the opjection to competency. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSW No. G262 of 1982 er ee we GENERAL DIVISION ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN: — PARKES RURAL DISTRIBUTIGNS PTY. LIMITED Appellant (Applicant) . and EDWARD JOHN GLASSON Respondent (Respondent) CORAM: Bowen C.J., Northrop and Neaves Jud.DATE: 21 duly 1983 BOWEN C.J. and NORTHROP J. REASONS FOR JUDGMENT At all material times Parkes Rural Distributions Pty. Ltd., "the appellant", was a direct purchase distributor under the "States Grants (Petroleum Products) Act 1965 Scheme In Relation To The Provision of Financial Assistance To The State Of New South Wales", "the Scheme". On 2 February 15982 Edward John Glasson, "the respondent", issued a certificate as follows - "PETROLEUM PRODUCTS SUBSIDY ACT, 1965 (N.S.W.) CERTIFICATE UNDER SECTION 8 I, EDWARD JOHN GLASSCN, an authorised officer under section 8 of the Petroleum Products Subsidy Act, 1965 (N.S.W.) am satisfied that the amounts paid to Parkes Rural Distributions Pty. Limited under the said Act in respect of claims made for the months cf aApril 1980 to June 1981 anclusive exceeded the amount that was payable to Parkes Rural Distributions Pty. Limited by One hundred and fifty two thousand three hundred and seventeen doilars and seventy cents ($152,317.70) AND I HEREBY CERTIFY that the amount of $152,317.70 is repayable by Parkes Rurai Distributions Pty. Limited to the State of New South Wales. DATED the 2nd day of February 1982. (Signed E. Glasson) Ce Authorised Officer" On 17 September 1982 the appellant madeé application under the Administrative Decisions (Judatial Review) Act 1977 (Cth.), "the Judicial Review Act", for an order of review of decisions evidenced by that certificate. The identification of those decisions will be considered later in these reasons. The delay between the date of the certificate, 2 February 1982, and the date of the application, 17 September 1982, is not explained by the material before the Court; see s.li Jadicial Review Act, but on this appeal, nothing turns upon that fact. On 27 September 1982 the respondent gave notice of objection to competency of the application on the grounds that - 'e "The applicant was not a person who was entitled to apply to the Court under Section 5 of the Act, because the decisions referred to in the Application for an Order of Review herein were not decisions to which the Act applied as the said decisions were made under the Petroleum Products Subsidy Act, 1965, an Act of the State cf New South Wales which was not an 'enactment' for the purposes of the Act." By a judgment given on 10 December 1982, the Court constituted by a single Judge, upheld the objection to competency. The appellant appeals from that judgment. The issue raised by the appeal is within small compass but of large import. The issue is whether the decisions, which admittedly were of an administrative character, were made "under an enactment"; see definition of "decision to which this Act applies" appearing in s.3(1) of the Judicial Review Act. In that Act, "enactment" means an Act of the Parliament of the Commonwealth of Australia or an instrument made under such an Act. In the present case, broadly speaking, it "can be said -that the decisions were made under such enactments, namely the States Grants (Petroleum Products) Act 1965, "the Commonwealth Act", and the Scheme being an instrument made under the Commonwealth Act. "AL the same time, broadly speaking, it can be said with equal truth that the certificate was given under an Act made by the Parliament of the State of New South Wales, namely the Petroleum Products Subsidy Act 1965, "the State Act". The learned trial Judge, in his reasons for judgment, said —- "In my opinion, any decision which is evidenced by the relevant certificate is not one made under an enactment within the meaning of s.3 of the Judicial Review Act. Further, though it 1s not necessary to say so, i1t was made under a State Statute, viz. the Subsidy Act." . The Commonwealth Act and the Scheme constitute but one of the many instances where the Parliament of the Commonweaith has exercised the power conferred by s.96 of the Constitution. That section reads - "During . period of ten years after the establishment of the Commonwealth and thereafter until the Parliament otherwise provides, the Parliament may grant financial assistance to any State on such terms and conditions as the Parliament thinks fit." The nature of that power is discussed 1n Attorney-General for the State of Victoria (Ex rel. Black) Vv. The Commonwealth (1981) 55 A.L.J-R. 155. The matter was discussed by Gibbs J. at pp.162-3, by Stephen J. at pp-.170-1, by Mason J. at p.173 and by Wilson J. at pp.189-90. For present purposes it is 'sufficient to quote part of the judgment of Mason J. at pil73 - "But the course of judicial decision in this Court establishes that the Cammonwealth may condition its grant under s.96 so as to make the State a conduit pipe in channelling the fund to the intended recipient. As early as 1926, in The State of Victoria ve The Commonwealth (1926), 38 C.L.R. 399, the Federal Aid Roads Act 1926 was upheld, notwithstanding that it bound the State to apply money to an object selected by the Commonwealth, that the object was outside Commonwealth legislative power and that the amount of the payments was to be fixed by a Commonwealth Minister. Subsequently, in The State of South Australia v. The Commonwealth (the first Uniform Tax Case) (1942), 65 C.L-R. 373, the Commonwealth legislation introducing uniform taxation was upheld. A central element in that legislation was a provision in the States Grants (Income Tax Reimbursement ) Act 1942 (s.4) which provided for the giving of financial assistance to a State on conditicn that the State did not impose a tax on incomes in the relevant financial year. Latham C.J., Rich, McTiernan and Williams JJ. (Starke J. dissenting) held that the Act was not directed towards destroying or weakening the constitutional functions or capacities of the States and was therefore not invalid on that ground. The Court drew a distinction between a law which offers an inducement to a State not to exercise its powers and a law which creates or attempts to create a legal compulsion to do so (see pp.417, 464). Later, in The State of Victoria v. The Commonwealth (the second Uniform Tax Case) (1957), 99 C.L.R. 575, Dixon C.d., who had not participated in the first Uniform Tax Case, though suggesting that there was support for a more limited construction of s.96, went on to say (at p.609), 'the course of judicial decision has put any such limited interpretation of s.96 out of consideration' In the present case the grant of financial assistance to the State of New South Wales is made pursuant to s.3 of the Commonwealth Act. That section reads — "3. There are payable to each State, by way of financial assistance, amounts equal to the amounts expended by that State in making payments to distributors of eligible petroleum products in accordance with a scheme formulated by the Minister 1n relation to that State for the purposes of this Act." The necessary appropriation of monies involved is provided for in s.13 of that Act. ; The policy of the Commonwealth Act is to enable users of specified petroleum products to purchase those products in outlying areas of the State at prices comparable to those charged in the capital cities of the States. The policy is implemented by the payment of subsidies to the distributors of those products .in the outlying areas. The Commonwealth is unable to amplement that policy directly, but does so indirectly by granting financial assistance to the States on specified terms and conditions. In the State of New South Wales the terms and conditions are specific and of minute detail and are contained in the Scheme. The Scheme is administered by officers of the Commonwealth Public Service. Complementary State legislation is necessary to make the Scheme effective legally. The State Act is the complementary legislation giving efficacy to the Scheme in its application within the State of New South Wales. Under the Scheme the State of New South Wales does not incur any expense nor can it receive any financial benefit. In truth, under the Scheme, the State of New South Wales constitutes a conduit pipe for the purpose of channelling the subsidies, the amounts of which are determined by the Commonwealth, to the recipients, who also are determined by the Commonwealth. In order to determine the issue raised by this appeal and to understand the Scheme, it is necessary to make reference to the Commonwealth Act, the Scheme and the State Act. The long title of the Commonwealth Act is - "An Act to grant Financial Assistance to the States in connexion with the Prices of certain Petroleum Products" The long title of the State Act is - "An Act to subsidize the distribution of certain petroleum products in certain country areas; and for purposes connected therewith." Each Act defines the phrase "eligible petroleum product" in identical terms, and the financial assistance is directed to the sales or consumption of those products. Section 4 of the Commonwealth Act empowers the relevant Commonwealth Minister to formulate a scheme in relation to a State for the purposes of that Act. The Scheme was formulated in relation to the State of New South Wales. Section 5 of the Commonwealth Act contains a number of provisions relating to schemes generally. A scheme must contain a provision authorizing tne Minister or his delegate to register persons as distributors of eligible petroleum products for the purposes of the scheme and to revoke the registraticn, and each scheme must contain a provision that the person to whom payments may be made by the State shall be persons so registered. An application may be made to the Administrative Appeals Tribunal for a review of a refusal by the Minister to grant, or a revocation of, the registration of a person as a distributor of eligible petroleum products. In this respect the Federal Court in an appeal from the Tribunal may be called upon to rule on questions of law arising in respect of those decisions under the Scheme which are referred to in s.5(3A)(a) and (b). A person cannot be registered as a distributor of eligible petroleum products unless he has entered into an agreement in writing with the Commonwealth and State, or has given an undertaking in writing to the Commonwealth to the effect that he will sell any eligible petroleum product at a price that gives to the purchaser the benefit of any subsidy received or to be received by the distributor in respect of the sale, and that he will not make a claim for payment of the subsidy from the State in respect of a sale unless he sold the product at a price that gave to the purchaser the benefit of the subsidy the distributor claims in respect of that sale. The Scheme must provide for the payment by the State to registered distributors of eligible petroleum products of amounts ascertained in accordance with the Scheme and may provide for the payment of other moneys. The Scheme must contain a schedule specifying the places and the rates of payment in respect of products in respect of those places. A copy of the schedule and of each amendment must be published in the Commonwealth Gazette, s.7; and the rates may be disallowed by the Commonwealth Parliament, s.7A. A scheme is deemed to be an order made by a Minaster within the meaning of s.5 Evidence Act 1905 (C'th.); s.8. In order to be entitled to a payment of the grant, a State must furnish to the Minister the financial statements specified in s.9, but the Minister may make advances on account .of an amount that may become payable but any advances which constitute overpayments must be repaid by the State; s.11. . Under s.12, the Commonwealth is required to andemnify the State with respect to any financial liability arising from the implementation of the policy. The Scheme has been formulated by the Minister pursuant to the Commonwealth Act. It is an instrument within the Judicial Review Act. It is a lengthy instrument containing many detailed provisions including the provisions required to be included under s.5 of the Commonwealth Act. It is not necessary to refer to all of the provisions-.of the Scheme. In the Scheme, the words "authorised officer" mean an officer of the Commonwealth Public Service who is authorized in the relevant behalf "by or under" the State Act; cl.A3. Part C of the Scheme contains provisions relating to the registration of direct purchase distributors -" -10- and the revocation of a registration. In the Scheme the words "registered distributor" include a person registered as a "direct purchase distributor". Part D of the Scheme contains provisions relating to claims by registered distributors for payment of the subsidy from the State of New South Wales. A claim 1s to be made in such manner and form as 1s prescribed by or under the State Act and the amount of the claim is to be calculated in accordance with the provisions of the schedule to the Scheme. Part E contains provisions relating to payments of the subsidy by the State. Sub-clause El-(1) provides: "Fl. = (1) A claim shall be examined by an authorized officer whose function will be to give a certificate stating the amount that in his.opinion is payable to the registered distributor in connexion with the claim." Sub-clause E1l-(2) contains provisions relating to how the amount is to be calculated. Sub-clause E2-(1) provides that the giving of a certificate under Clause El is not final and each claim is subject to further examination and any adjustments resulting therefrom shall "be payable by the State to the registered distributor or be recoverable by the State from the registered distributor, as the case may require". In the absence of the application of sub-clause E2-(3) and (4), when on a re-examination an adjustment is to be made, "an authorized officer shall give a certificate stating that in his opinion the amount or the amount of the - ll - balance, plus any amount for administrative costs calculated as provided in clause E5, 1s so payable or recoverable as the case may be"; see sub-clause E2-(5). Clause E3 provides: "E3. Subject to the provisons of this scheme, the registered distributor named in a certificate given in accordance with clause El or clause E2 as the person to whom an amount is payable shall be entitled to be paid by the ' State the amount stated in the certificate as payable thereunder to the registered - distributor." - Clause Fl provides: "FL. The, documents and records relating to the exercise by authorized officers of their functions under the scheme shall be subject to audit by the Auditor-General of the Commonwealth." The State Act contain provisions complementary to the Commonweaith Act and the Scheme. Section 4 provides: "A, There are payable, in accordance with this Act, to registered distributors of eligible petroleum products, amounts ascertained in accordance with the scheme." wee Definitions are contained in s.3 of the State Act and these are consistent with the provisions of the Commonwealth Act and the Scheme. In the State Act the words "authorized officer" mean "a person appointed to be an authorized officer under section 6"; s.3(1). Section 6 provides: "6.(1) The Minister may appoint persons to be authorized officers for the purposes of this Act. (2) A person may be appointed to be such an authorized officer notwithstanding that he is an officer of the Commonwealth." The State Minister by instrument has delegated the power of appointment to the Collector of Customs for New South Wales, an officer of the Commonwealth. That delegation is authorized by s.16 of the State Act. In the exercise of that delegated power, the Collector of Customs for New South Wales has appointed the respondent, an officer of the Commonwealth, a "senior authorised officer". It will be recalled that pursuant to the Scheme and as a result of that appointment the respondent is an authorised officer under the Scheme. Claims for payment of the subsidy by registered distributors are to be made to an authorized officer "in accordance with the regulations made under this Act"; s.7. The regulations provide that the claim shall."be on a form made available by an authorised officer for the purpose", and shall be lodged with the authorised officer at the Department of Customs and Excise in Sydney. Section 8 contains provisions relating to certificates. Parts of that section are set out: "B.(1) An authorized officer shall examine each claim for a payment under this Act made to him and shall, if be is satisfied that an amount 1S payable to the claimant, give 4a certificate in writing to that effect. (3) Where an authorized officer is satisfied that an amount paid to a person under this Act (21ncluding an amount paid by way of an advance) was not payable to that person or exceeded the amount that was payable to that person, he may give a certificate in writing that the amount paid or the amount of the excess, as the case may be, is repayable by that person to the State. - (4) The Auditor-General [N.S.W.] shall " treat a certificate under this section as correct in all respects. (5) For the purposes of this Act, a document purporting to be a certificate referred to in this section shall, unless the contrary is proved, be deemed to be such a certificate and to have been duly given. (6} Where a certificate has been given under subsection (1) the certification prescribed by section 41(3) of the Audit Act, 1902, shall not be necessary." Section 10 provides: "10. Where an authorized officer gives a certificate under section 8(3) that an amount is-repayable by a person to the State, the person is_liable to repay that amount to the State and such amount may be recovered in a court of competent jurisdiction as a debt due to the State." It is not necessary to refer to the other provisions of the State Act. The certificate dated 2 February 1982 given by the respondent has been set out in full. It was given pursuant to the power conferred by s.8(3) of the State Act. The Peal . ~ 14 - consequences that follow the giving of the certificate are set out in s.10 of the State Act, namely the appellant, being a registered distributor, 1s liable to repay the amount specified in the certificare to the State of New South Wales and that amount may be recovered in a court of competent jurisdiction as a debt. due, to the State. The provisions contained in s.8 and s.10 of the State Act constitute provisions to make effective the provisions of the Commonwealth Act and the Scheme. The appellant made application under the Judicial Review Act for an order of review of decisions evidenced by the certificate dated 2 February 1982. In that application, the appellant identified the decisions as follows: ",.. the decision of the Respondent dated the 2nd February, 1982 that he was satisfied that the amounts paid to the Applicant under the Petroleum Products Subsidy Act 1965 (N.S.W.) in respect of claims made for the months of April, 1980 to June, 1981 inclusive exceeded the amount that was payable to the Applicant by $152,317.70 and also the decision of the same date to certify that the amount of $152,317.70 is repayable by the Applicant to the State of New South Wales." The meaning to be given to the word "decision" in the Judicial Review Act has been considered in a number of cases. Some of those cases are referred to by Northrop J. in Ricegrowers Co-operative Mills Ltd. v. Bannerman (i981) 56 F.L.R. 443 at pp.451-453. At p.453 his Honour said: & abe "In the present case, I do not find it necessary to give any definitive meaning to the word 'decision' appearing in s.13{(1) of the Judicial Review Act. The mere thought processes taking place in the mind of the person when considering whether or how to exercise a power or to perform a duty of an administrative character under an enactment do not, in my opinion, constitute a decision. In addition to thought processes, there must be some overt act by which the conclusions _ reached as a result of those thought processes are manifested. The manifestation may take many different forms. It may take the form of a verbal or written communication of the conclusion to the person affected. Tt may take the form of action taken to give effect to the conclusion. It may take the form of no action being taken when otherwise a definite action would have been taken." See also Powell v. Ioannou (1982) 45 A.L.R. 491 per Bowen C.J. and Northrop J. at pp.499-500 and 504-5. Distributors are registered under the Commonwealth Act. The amount of the subsidies to be paid is determined under the Scheme. Authorised officers are empowered to determine the amounts payable by the State by way of subsidy to registered distributors and the amount recoverable by the State on any re-examination of claims made by registered distributors. On this latter aspect see clauses El and~E2 of the Scheme. Under those provisions an authorised officer is empowered to examine and re-examine claims and to determine the amounts payable by the State to registered distributors and to determine the amounts recoverable by the State from registered distributors. Any determznaticn made is to be expressed or published by the authorised officer. Determinations made by authorised officers are subject to audit by the Auditor-General of the Commonwealth. The provisions to give legal efficacy to the payment of the subsidy to registered distributors are contained in the State Act. Under that Act authorized officers are empowered to give certificates which then form the basis for subsequent action; see sections 8, 9% and 10 of the State Act, but the amounts expressed in those certificates are to be ascertained un accordance with the Scheme; see s.4 of the State Act. In giving a certificate, whether under the State Act or the Scheme, an authorized officer engages in an overt act by which the conclusions reached as a result of examining or re-examining claims made by a registered distributor are made manifest. Legal consequences flow from the giving of a certificate, but the certificate constitutes evidence of the determination of amounts calculated by an authorised officer. It is that determination which constitutes the decision which is sought to be challenged in the present proceedings. That decision is the determination by the respondent that "the 'amounts paid to Parkes Rural Distributions Pty. Limited under the said Act [the State Act] in respect of claims made for the months of April 1980 to June 1981 inclusive exceeded the amount that was payable to Parkes Rural. Distributions Pty. Limited by One hundred and fifty two thousand three hundred and seventeen dollars and seventy cents ($152,317.70)". That ~ vs -i7- decision was made in pursuance of the terms of cl.E2, and in particular sub-clauses E2(2) and (5) of the Scheme. The issue raised by this appeal 1s whether or not that decision was made under the Commonwealth Act or the Scheme or under the State Act. In s.5 Judicial Review Act the word "under" when used in the phrase "under an enactment" connotes in pursuance of" or "under the authority of"; Australian National University v. Burns (1982) 43 A.L.R. 25 per Bowen C.d. and Lockhart J. at p.3l. On the facts of the present case, the decision of the respondent was made under the Commonwealth Act and the Scheme and thus was made under an enactment within the Judicial Review Act. In making the decision the respondent acted in pursuance of the Scheme which had been formulated by the Minister pursuant to the Commonwealth Act. It is true that the respondent was authorized by an appointment under the State Act, but that is beside the point. The respondent was acting in pursuance of the Scheme being an instrument under the Judicial Review Act. The power conferred by the - State Act was a necessary power in order to implement the Commonwealth Act. To say that the decision was also made under the Petroleum Products Subsidy Act 1965 (N.S.W.) would not be to deny these propositions. -18 - A related question is whether the appellant is a "person who 1s aggrieved" within s.5 Judicial Review Act. In Ricegrowers Co-operative Mills Ltd. v. Bannerman, supra, Bowen C.J. and Franki J. at p.447 said: «-. we are of opinion that the words a person who is aggrieved' in s.5 of the Judicial Review Act are not to be confined to those who can establish that they have a legal interest at stake in the making of- the decision. In our view they cover a person who can show a grievance which will be suffered as a result of the decision beyond that of an ordinary member of the public (see Tooheys Ltd v. Manister for Business and Consumer Affairs (1981) 36 ALR 64 per Ellicott J at 79)."" In the present case the appellant is a "person who is aggrieved". The respondent has made a decision and as a result an amount of $152,317.70 is repayable by the appellant to the State of New South Wales acting as a conduit pipe in channelling monies payable to and recoverable from registered distributors under the Commonwealth Act and Scheme. The appellant has shown a grievance which he has suffered as a result of that decision, a grievance beyond that of an ordinary member of the public. It is not to the point that the certificate has been given under the State Act. The ~~ - State Act is complementary to the Commonwealth Act and the Scheme. Under the State Act, the State may recover by legal process the amount specified in the certificate, but -~ 1s - that does not detract from the conclusion that the decision by which that amount was determined was made under the Commonwealth Act and ths Scheme. In Australian National University v. Burns, supra, the issue before the court was whether a decision to dismiss a professor employed by the University, pursuant to a contract of employment, was made under Commonwealth legislation which constituted the University and empowered its council to appoint professors and to have the entire control and management of the affairs and concerns of the University. The professor contended that the fact that the contract of service existed did not deprive the decision of its true character as a decision under Commonwealth legislation. "This aspect was considered by Bowen C.J. and Lockhart J. commencing at p.29. Their Honours noted that the University had made no statute pursuant to powers conferred by the Commonwealth legislation relating to the manner of appointment and dismissal of professors. At pp.31-2 their Honours said: "In one sense every decision of the Council - may be said to be made 'under' the University Act namely, in the sense of in pursuance of or under its authority. Section 23 is, in effect, the charter of the Council. It confers the widest powers upon the Council including the power of appointing professors and other University staff... Plainly s.23 is the source of the Council's power to enter into contracts of engagement with professors and other University staff. If the Council makes statutes with respect to the 'manner of - 20 - appointment and dismissal' of professors (s.27(1)(g)) those statutes arguably may also constitute a source of the Council's authority to engage and dismiss professors; but as no such by-laws have yet been made we need not pause to consider that provision further on this point. Although s.23 confers no power in express terms to remove or suspend professors and others, such power arises from the more general powers conferred by the section on the Council after the express reference to the powers of appointment. In our opinion the control and management of the affairs of the appellant must include the suspension or removal of the deans, professors and others. Notwithstanding that s.23 was the source of the Council's power to appoint and dismiss the respondent in 1966, it does not follow that the decisicn to dismiss him was made under the University Act. The answer to the question lies in the true characterization of the decision itself. It was not a decision to dismiss the respondent simpliciter. It was a decision to dismiss him on a particular ground namely, that he had become permanently incapacitated from performing the duties of his office. This was one of the grounds expressly provided for in condition 2(b) (ii) of the conditions of appointment which formed part of the respondent's contract of engagement. The University Act prescribes no essential procedural requirements to be observed before a professor is dismissed and lays down no incidents of a professor's employment. " In the present case consideration has been given to the true characterization of the decision challenged. "Tt us a Gecision made under an enactment within the meaning of that word in the Judicial Review Act. The true characterization of the decision cannot be removed by reason of a State Act which operates upon that decision in a manner that enables - 21 - the Commonwealth to obtain the financial benefit of money recovered by the State from the recipient of a subsidy which had been received from monies granted by the Commonwealth. The appeal should be allowed, the order appealed from should be set aside and the objection to competency should be dismissed. The respondent should pay the appellant's costs of the appeal and its costs of the objection to competency. [+ cortury atime I certify that this enct.e (22> Preceding pages are a tie co: $5 « "ure agasons for Judsme:t le . c* 3 oul =F wh ee OUD" eg ieee Dated :2/ Torley 193, ft IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSW No.G262 of 1982 GENERAL DIVISION BETWEEN: PARKES RURAL DISTRIBUTIONS PTY. LIMITED Appellant (Applicant) AND: EDWARD JOHN GLASSON Respondent (Respondent) CORAM: Bowen CJ., Northrop and Neaves JJ. DATE: 21 July 1983 REASONS FOR JUDGMENT NEAVES J: This is an appeal from an order made in the exercise of the original jurisdiction of this Court upholding an objection to the competency of an application made by the present appellant under the Administrative Decisions (Judicial Review) Act 1977 To understand the point that arises for decision it is necessary to refer to the provisions of the States Grants (Petroleum Products) Act 1965 of the Commonwealth and the Petroleum Products Subsidy Act, 1965 of the State of New South Wales. I shall refer to these statutes respectively as "the Commonwealth Act" and "the State Act". "s The long title of the Commonwealth Act describes the statute as "An Act to grant Financial Assistance to the States in connexion with the Prices of certain Petroleum Products". By virtue of s. 3 there are payable to each State, by way of financial assistance, amounts equal to the amounts expended by that State in making payments to distributors of eligible petroleum products in accordance with a scheme formulated by the Minister in relation to that State for the purposes of the Act. "Eligible petroleum product" is defined in s, 2 to mean motor spirit, power kerosene, automotive distillate, aviation gasoline or aviation turbine fuels. The Minister is empowered by s. 5, by writing under his hand, to formulate a scheme in relation to a State for the purposes of the Act. A scheme so formulated is to comply with the provisions set out in s. 5. In particular it is to contain a provision authorising the Minister, or an officer of the Australian Public Service appointed by the Minister,, to direct that particular goods shail not be treated for the purposes of the scheme and the Commonwealth Act as goods falling within the definition of "eligible petroleum product" (sub-s. 5(2)). The scheme must also contain a provision that the persons towhom payments may be made by the State wumder the scheme are distributors of eligible petroleum products registered under the scheme: registration is to be effected by the Minister or an officer of the Australian Public Service authorised by him (sub-s. 5(3)). By sub-s. 5(4) the scheme is not to permit the registration under the scheme of a distributor of eligible petroleum products unless he has & Iv, "3 entered into an agreement in writing with the Commonwealth and the State, or given an undertaking in writing to the Commonwealth, to the effect that - "(a) he will sell any eligible petroleum product at a price that gives to the purchaser the benefit of any payment received or to be received by the distrib- utor in respect of the sale; and (b) he will not make a claim for a payment from the State in respect of a sale of any eligible petroleum product unless he sold the product at a price that gave to the: purchaser the benefit of the payment that the distributor claims to receive in respect of the sale." The scheme is to contain a schedule specifying places in the Commonwealth and rates of payment in respect of eligible petroleum products in relation to those places (sub-s. 5(6)). It is to provide for the payment by the State to registered distributors, in respect of the sale by them at places to which the scheme applies of eligible petroleum products, of amounts ascertained in accordance with the scheme and may provide for payments by the State to registered distributors in respect of eligible petroleum products applied to their own use and in respect of expenses incurred by them in connection with the scheme (sub-s. 5(5)). By virtue of sub-s. 5(3A) an application may be made to the Administrative Appeals Tribunal for review of a direction by the Minister or an authorised officer under a provision contained in a scheme in accordance with sub-s. 5(2) or a decision by the Minister or an "7 officer to refuse to grant, or to revoke, registration under a provision contained in a scheme. A State is not entitled to a payment under the Commonwealth Act unless the State furnishes to the Minister of State for Finance an audited statement of the amounts expended in making payments in accordance with the scheme and such further information, if any, as the Minister requires in respect of those amounts (s. 9). Advances may be made to a State on account of an amount that may become payable under the Commonwealth Act to that State (s. 10). Section 11 provides:- "Payment to a State under this Act of any amount (including an advance) is subject to the condition that the State will repay to the Commonwealth, on demand by the Minister of State for Finance, the amount by which, at the time of the demand, the total of the amounts (including advances) paid to the State under this Act exceeds the total of the amounts that have become payable to the State under section 3 of this Act." Payments under the Commonwealth Act are payable out of the Consolidated Revenue Fund, which is appropriated accordingly (s. 13)5 Pursuant to s. 4 of the Commonwealth Act, the Minister formulated a scheme in relation to the State of New South Wales for the purposes of that Act. Before referring to the terms of that scheme it will be convenient to refer to the State Act. > mm, ' & The State Act which according to its long title is an Act "to subsidize the distribution of certain petroleum products in certain country areas; and for purposes connected therewith", applies to sales or consumption of petroleum products by registered distributors to which "the scheme" applies (s. 2). The expression "the scheme" is defined in sub-s. 3(1) to mean the scheme, as in force from time to time, formulated in relation to the State for the purposes of the Commonwealth Act as amended from time to time, or any Commonwealth Act passed in substitution for it. Where by or in accordance with the scheme it is directed that any goods are or are not to be treated as motor spirit, power kerosene, automotive distillate, aviation gasoline or aviation turbine fuel those goods are or are not, as the case may be, to be so treated for the purposes of the State Act (sub-s. 3(2)). Section 4 provides:- "There are payable, in accordance with this Act, to registered distributors of eligible petroleum products, amounts ascertained in accordance with the scheme." The Minister administering the State Act may appoint persons to be authorised officers for the purposes of the State Act and a person may be so appointed notwithstanding that he is an officer of the Commonwealth (s. 6). The power to appoint may be delegated (s. 16). Sections 7, 8, 9 and 10 of the State Act should be set out in full. They provide:- "7. A claim by a registered distributor of eligible petroleum products for a payment under this Act shall be made to an authorized officer and in accordance with the regulations made under this Act. '"g, (1) An authorized officer shall examine each claim for a payment under this Act made to him and shall, if he is satisfied that an amount is payable to the claimant, give a certificate in writing to that effect. (2) An authorized officer who is examining a claim for a payment under this Act may give a certificate in writing that a sale or use of a specified quantity of an eligible petroleum product by a specified person took place at a specified date and place. (3) Where an authorized officer is satisfied that an amount paid to a person under this Act (including an amount paid by way of an advance) was not payable to that person or exceeded the amount that was payable to that person, he may give a certificate in writing that the amount paid or the amount of the excess, as the case may be, is repayable by that person to the State. (4) The Auditor-General shall treat a certificate under this section as correct in all respects. (5) For the purposes of this Act, a document purporting to be a certificate referred to in this. section shall, unless the contrary is proved, be deemed to be such a certificate and to have been duly given. (6) Where a certificate has been given under subsection (1) the certification prescribed by section 41(3) of the Audit Act, 1902, shall not be necessary. "9. Where a certificate is given under section 8(1), the Minister shall authorise an amount equal to the amount specified in the certificate to be paid to the person in respect of whom the certificate was given. "10. Where an authorized officer gives a certificate under section 8(3) that an amount is repayable by a person to the State, the person is liable to repay that amount to the State and such amount may be recovered in a court of competent jurisdiction as a debt due to the State." The State Act goes on to require the preservation of accounts, books and documents by persons who receive payments under the State Act (s. 11), to provide for authorised officers to enter premises for the purpose of stocktaking and inspection of accounts (s. 12) and to require persons to answer questions and produce documents (s. 13) and for this purpose to permit an authorised officer to administer an oath (s. 14). Section 15 prescribes offences against the State Act and provides that a court convicting a person of such an offence may order the person to refund to the State the amount of any payment under the State Act wrongfully obtained by that person. _ _ The general policy underlying the scheme formulated by the Commonwealth Minister under the Commonwealth Act in relation to the State of New South Wales is to enable users of specified petroleum products to purchase those products at outlying places within the State at prices comparable to those charged at terminal ports such as Sydney. The scheme ' envisages the making of payments to distributors of such petroleum products, the payments being made by the State and the State receiving from the Commonwealth amounts by way of financial assistance equal to the amounts so expended by the State. Its purpose as expressed in clause D2 is to ensure that payment is only made in respect of the sale of an eligible petroleum product at a place where the freight differential component (being the component of the sale price per litre of the petroleum product at the place which is attributable to the cost of transporting a litre of the product from the place at which the product was landed to that place) is equal to or exceeds a specified amount. The scheme descends to considerable detail. It consists of six parts. Part A is headed "Preliminary" and, apart from defining various expressions used in the scheme, provides in clause A2 that "the making by the Commonwealth of payments by way of financial assistance under the Act (i.e. the Commonwealth Act) shall be subject to there being in force in the State legislation of the State by which payments by the Commonwealth in accordance with this scheme are authorised and provided for". Reference should be made to the definition of "authorised officer", an expression which in the scheme, unless the contrary intention appears, is to mean "an officer of the Department of Business and Consumer Affairs of the Commonwealth or of any other Department of the Commonwealth whose Minister from time to time is responsible for the administration of the Act (i.e. the Commonwealth Act) and who is authorised in the relevant behalf by or under the State legislation or otherwise under State law". The expression "the State legislation" means the legislation of the Parliament of the State referred to in clause A2. Part B of the scheme specifies the classes of petroleum products to which the scheme is to apply and provides for the Commonwealth Minister to give directions that any particular goods shall, or shall not, be treated as eligible petroleum products for the purposes of the scheme and the Commonwealth Act. Part C deals with the Registration of distributors of petroleum products for the purposes of the scheme and contains provisions of the kind that sub-s. 5(4) of the Commonwealth Act requires. The person seeking registration applies to the Commonwealth Minister who is to make a decision on the application within 28 days from the date on which the application is received and to record his decision in writing and set it out in a document a copy of which is to be furnished to the person making the application. Provisions are made for the suspension and revocation of the registration of a person. Part D is headed "Claims by Registered Distributors". It provides that a registered distributor may claim from the State payments in accordance with the scheme in respect of sales of eligible petroleum products by the registered distributor to which the scheme relates, other than sales for export from the Commonwealth. Thereafter are set out the circumstances in which a payment will be made and the method of calculating the amount payable. Part E is headed "Payments by the State". Clause El provides for a claim to be examined by an authorised officer whose function it is to give a certificate stating the amount that in his opinion is payable to the registered distributor in connection with the scheme. The giving of a certificate is not to be taken as finally disposing of a claim and each claim is subject to further examination. If upon further examination of a claim an authorised officer is satisfied that the amount the registered distributor is entitled to in connection with the claim differs from the amount specified as payable in the certificate relating to the claim, the difference is, after allowance is made for any previous adjustments under the clause, to be payable by the State to the registered distributor or to be recoverable by the State from the registered distributor, as the case may require (sub- clauses E2(1) and (2)). Where an amount or the balance of an amount is payable by the State to a registered distributor or is recoverable by the State from a registered distributor and is not adjusted by being added to, or deducted from, an amount otherwise payable to the registered distributor, an authorised officer is required. to give a certificate stating that in his opinion the amount or the amount of the balance is so payable or recoverable as the case may be (sub-clause E2(5)). Subject to the provisions of the scheme, the registered distributor named in a certificate given in accordance with clause El or clause E2 as the person to whom an amount is payable is to be entitled to be paid by the State the amount stated in the certificate as payable thereunder to the registered distributor. 10. Ge. Clause E4 provides for advances to be made by the State to a registered oil company on account of amounts the oil company may claim under the scheme. Clause E7 provides:- "Payments by the State to a registered distributor of amounts to which the registered distributor is entitled under clause E3 and of amounts provided for by clause E4 shall, as between the Commonwealth and the State, be payments by the State in accord- ance with this scheme provided that, in ascertain- ing the total of the payments by the State, any amounts recovered by the State from the registered distributor or refunded to the State by the reg- istered distributor as contemplated in this Part shall for the purposes of this scheme be brought into account as deductions." Part F provides for miscellaneous matters including a provision for the documents and records relating to the exercise by authorised officers of their functions under the scheme to be subject to audit by the Auditor-General of the Commonwealth. The appellant, Parkes Rural Distributions Pty. Limited, has at all material times been registered as a registered distributor in connection with the scheme. As such, the appellant from time to time submitted claims for payments under the scheme in respect of the sale by it of eligible petroleum products. These were examined by an authorised officer and payments were made to the appellant by the State pursuant to certificates granted under s. 8 of the State Act. The respondent, Edward John Glasson, has at all material times been an officer of the Australian Public Service employed in the Department of the Commonwealth whose Minister is 11. responsible for the administration of the Commonwealth Act. On 23 March 1981 he was appointed under s. 6 of the State Act to be, and at all material times has remained, an officer authorised for the purposes of that Act. The respondent, as a result of a further examination of the claims made by the appellant, concluded that the amounts previously paid to the appellant under the State Act exceeded by $152,317.70 the amounts that were properly payable under the scheme. The respondent also concluded that that amount should be recovered from the appellant. On 2 February 1982 he signed a certificate in the following terms: - "PETROLEUM PRODUCTS SUBSIDY ACT, 1965 (N.S.W.) CERTIFICATE UNDER SECTION 8 I, EDWARD JOHN GLASSON, an authorised officer under section 6 of the Petroleum Products Subsidy Act, 1965 (N.S.W.) am satisfied that the amounts paid to Parkes Rural Distributions Pty Limited. umder the said Act in respect of claims made for the months of April 1980 to June 1981 inclusive exceeded the amount that was payable to .Parkes Rural Distributions Pty Limited by One_hundred and fifty two thousand three hundred and seventeen dollars and seventy cents ($152,317.70) AND I HEREBY CERTIFY that the amount of $152,317.70 is repayable by Parkes Rural Distributions Pty Limited to the State of New South Wales. DATED the 2nd day of February 1982. (Sgd.) E.J. Glasson Authorised Officer." 12. The appellant applied to the Court under the Administrative Decisions (Judicial Review) Act 1977 for an order to review the decisions embodied in that certificate. The respondent lodged an objection to the competency of the application and that objection was upheld after a hearing by a single judge of the Court. From that decision this appeal is brought. The question argued before the Court is whether the decisions embodied in the certificate referred to are decisions under an enactment within the meaning of that expression in the Administrative Decisions (Judical Review Act 1977. It was submitted by counsel for the appellant that the decisions were made by an authorised officer under the scheme, that the scheme is an instrument under the Commonwealth Act and that, it being conceded that the decisions are of an administrative character, the objection to the competency of the application to review those decisions should not have been upheld. The Commonwealth Act, in point of validity, is an exercise of the power conferred upon the Parliament of the Commonwealth by s. 96 of the Constitution to grant financial assistance to any State on such terms and conditions as the Parliament thinks fit. The provisions of that section have been the subject of judicial consideration. It is established by authority that the section confers a power 13. of very wide amplitude of appropriating money for a purpose or object the achievement of which might otherwise be outside Commonwealth legislative or executive power and of imposing conditions on the payment to the State of the moneys so appropriated. The conditions may be such that the State will, if it accepts the grant, be required to pay over an amount equal to that received from the Common- wealth to a person or class of persons in or connected with the State in order to fulfil the purpose or object being pursued by the Commonwealth. What the State does in achieving the object or purpose may be made subject to the control or approval of the Commonwealth. The State may be placed in the position of being a mere conduit pipe or agency for the distribution of the maoneys. But the power is a bare power of appropriating money and imposing con- ditions. The Commonwealth Parliament can, under s. 96, go no further. There is no power to compel acceptance of —_- the grant and with it the accompanying terms or conditions. The State must be left free to accept or reject the grant but if it accepts it will be bound by the terms and conditions upon which the grant is made. To support these propositions it is sufficient to refer to The State of Victoria v. The Commonwealth (1957) 99 C.L.R. 575; The State of Victoria v. The Commonwealth and Hayden (1975) 134 C.L.R. 338; and Attorney-General for Victoria (Ex rel. Black v. The Commonwealth (1981) 33 A.L.R. 321. 14. We are not here concerned, however, with the validity of the Commonwealth Act but with the carrying into effect of the scheme which has been formulated under it. That scheme makes specific provisions as to the products in respect of the sales of which financial assistance may be available, the persons who are to be the intermediate and the ultimate recipients of the benefit of the subvention and the circumstances in which the subsidy is to be payable. It may be said to constitute an extreme example of the intrusion by the Commonwealth, through the machinery of s. 96 of the Constitution as interpreted by the High Court, in point of policy and perhaps of administration into areas outside Commonwealth legislative competence to which Barwick C.J. referred in The State of Victoria v. The Commonwealth and Hayden (1975) 134 C.L.R. 338, at p. 357. But the scheme is not, to my mind, as extreme an example of this as was that set out in the States Grants (Schools Assistance) Act 1978 considered by the High Court in Attorney-General for Victoria (Ex rel. Black) v. The Commonwealth (1981) 33 A.L.R. 321 (see per Murphy J. at p. 390). While many of the provisions set out in the scheme formulated under the Commonwealth Act are couched in language which in other circumstances would be apt to create rights in, and impose duties and obligations upon, distributors of petroleum products as defined, they must in their context be read as nothing more than the expression 15. of the terms and conditions upon the fulfilment of which the Commonwealth will pay moneys to the State by way of financial assistance. The scheme, considered as a scheme formulated under the Commonwealth Act, canhave no operation, whatever may be its legal nature as between the Commonwealth and the State, to affect private rights. It does not itself directly regulate the relations between a distributor of petroleum products and any government either Commonwealth or State. It is only when the State legislates to the effect provided for in clause A2 of the scheme and enters into a transaction with the distributor of petroleum products in accordance with the scheme that the distributor derives legal rights and becomes subject to legal obligations. It is by virtue of ss. 4 and 8 of the State Act that a distributor becomes entitled to a payment although, because the State is required to pay an amount "ascertained in accordance with the scheme", it can be said that what is contained in the scheme indirectly governs the rights of the distributor. Similarly it is sub-s. 8(3) of the State Act that provides for. a certificate to be given in appropriate circumstances that an excess payment has been made and imposes an obligation on the distributor to repay the amount so certified to the State. It does not necessarily follow from what I have said that a decision that a payment has been made by the State to a distributor of an amount exceeding the amount properly 16. ~ te payable in accordance with the scheme may not be described as a "decision made under an enactment" within the meaning of that expression in the Administrative Decisions (Judicial Review) Act 1977. But there are, in addition, other relevant considerations. There is to my mind a marked contrast between the manner in which the Commonwealth and State Acts and the scheme deal with the decision making process in relation to the eligibility of petroleum products and the registration of distributors of such products on the one hand and in relation to the making of payments and the recovery of overpayments on the other. In the case of the former the Commonwealth Act requires that decisions be made by the Minister or an officer of the Australian Public Service appointed by the Minister for that purpose, the scheme so provides and the State Act picks up and gives effect to the decisions so made. Such decisions are subject to review on the merits. by the Administrative Appeals Tribunal. In contrast the Commonwealth Act is silent as to the identity of those charged with the duty of determining the payments to be made and whether overpayments are to be recovered except insofar as it provides for the Common- wealth to reimburse the State for moneys expended by the State in accordance with the scheme. But both the State Act and the scheme require that the relevant decisions be made by an officer appointed for that purpose under the State Act 17. and it is from the State Act that the decision maker derives his authority. Whatever then may be the position in relation to decisions of the former kind, as to which I need express no opinion, decisions of the latter kind are, in my view, not properly characterised as decisions "under an enactment" within the meaning of that expression in the Administrative Decisions (Judicial Review) Act 1977. For these reasons I would dismiss the appeal. NC RP a A REE MER TOS aa RET, ~~" a I certify thet this and the Acne. awn (19) prececing p2ges 2re a trv'e cen; of the Reasons for Judgment herein o7 his Honour Mr. Justice Neaves { . O° CHWs Associate Dated: 21 guly 1983 18.