wr ~~ JUDGMENT No. 988.31. CATCHWORDS Administrative law - Delegated authority - Instrument of delegation subject to policies and guidelines - Whether policies and guidelines mandatory or directory - Whether decision ultra vires. Practice and procedure - Application for review - Standing - Loss of entitlements - Who 1s a person aggrieved. Administrative Decisions (Judicial Review) Act 1977 (Cth), s.5. Postal Services Act 1975 (Cth), ss.6, 7, 9, 36. W.H. BROADBRIDGE & ANOR v. MALCOLM BARRY STAMMERS No. 152 of 1987 Bowen C.J., Beaumont and Gummow JJ. 4 November 1987 Sydney IN_THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. 152 of 1987 ) GENERAL DIVISION ) ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: W.H. BROADBRIDGE First Appellant AND: AUSTRALIAN POSTAL COMMISSION Second Appellant AND: MALCOLM BARRY STAMMERS Respondent MINUTES OF ORDER Court: Bowen C.J., Beaumont and Gummow JJ. Date order made: 4 November 1987 Where made: Sydney THE COURT ORDERS: 1. Appeal allowed in part. 2. Set aside orders 2, 3 and 4 made on 1 April 1987; in lieu thereof order that the application for an order of review be dismissed with no order as to costs. 3. Make no order as to the costs of the appeal. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. 152 of 1987 ) GENERAL DIVISION ) ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: W.H. BROADBRIDGE First Appellant AND: AUSTRALIAN POSTAL COMMISSION Second Appellant AND: MALCOLM BARRY STAMMERS Respondent CORAM: Bowen C.J., Beaumont and Gummow JJ. DATED: 4 November 1987 REASONS FOR JUDGMENT THE COURT: In November 1986, Mr. W.H. Broadbridge, the first appellant, acting as the Deputy State Manager (Metropolitan Services) and Chief Manager, Operations, of the Australian Postal Commission, the second appellant, decided to close the post office at Watsons Bay, N.S.W. The respondent, Mr. M.B. Stammers, challenged this decision in proceedings brought in the Court pursuant to the Administrative Decisions (Judicial Review) Act 1977 ("the Judicial Review Act"). A number of grounds were relied on by the respondent. He said that the exercise of the power to close the post office was improper for several reasons. He also claimed that the first appellant's decision was made under a delegated authority and that the decision exceeded that authority and was therefore beyond power and unlawful. Although it was common ground between the parties that, for the purposes of s.3(l1) of the Judicial Review Act, the decision challenged was "a decision of an administrative character...made under an enactment", viz., the Postal Services Act 1975 ("the Act"), the appellants challenged the respondent's standing to sue. They objected to the competency of the proceedings, contending that the respondent was not a person "aggrieved" within the meaning of s.5(1) of the Judicial Review Act. A Judge of the Court overruled the objection to competency and also held that the decision challenged was invalid because it went beyond the first appellant's delegated authority. The Judge quashed the decision and enjoined the appellants from implementing it (see (1987) 73 A.L.R. 523). The appellants now appeal from these orders. The respondent has been the Postmaster at Watsons Bay since August 1976. He and his wife, who works there as a part time postal officer, live in accommodation attached to the post office. In a letter to the respondent dated 21 November 1986, the first appellant communicated his decision to close the post office and said: "Arrangements would be made for you to be placed on the unattached list. In this regard I understand you would wish to remain in the area. Instructions would therefore be given for you to be able to remain in the Sydney City Division until you are placed in a Suitable position. Closure of Watsons Bay will require you to vacate the Postmasters residence. To minimise any hardship which may occur as a result of the short notice of closure, approval would be given for you to occupy the Postmasters residence at Woollahra for a period of two years with an option of extension for a further two years. Should you wish to avail of this accommodation proposal please advise the Divisional Manager, Sydney City Division by early December 1986, so that arrangements can be made for you to occupy the Woollahra residence." The primary Judge was of the opinion that the decision under challenge would, if valid, deprive the respondent of two "entitlements": (1) the opportunity to continue in his post and (2) the right to reside indefinitely in his present accommodation. Applying the reasoning in Robinson v. The Western Australian Museum (1977) 138 C.L.R. 283 and Ogle v. Strickland (1987) 71 A.L.R. 41, his Honour held that the respondent had standing to sue because, if the litigation ended in his favour, he would "derive some benefit or advantage over and above that to be derived by the ordinary citizen" (per Mason J. in Robinson's Case at p.327). In our opinion, the Judge correctly overruled the objection to competency. The respondent had an obvious interest in the outcome of the claim for relief which differed from the interests of other citizens. As a practical matter, the closure of the office meant that the respondent lost his position at Watsons Bay and his accommodation there. Whether it was strictly accurate to describe these as "entitlements" 1s not to the point. To adopt the language of Gummow J. in Australian Institute of Marine and Power Engineers v. Secretary, Department of Transport (1986) 71 A.L.R. 73 at p.82 : ",..there flows from the decision...a danger and peril to the interests of the [respondent] that 1s clear and imminent rather than remote, indirect or fanciful, and the [respondent] has an interest 1n the matter of an intensity and degree well above that of an ordinary member of the public." We turn next to the merits of the appeal. As has been said, the Judge guashed the decision by the first appellant made on or about 21 November, 1986 to close the post office with effect from 30 January 1987. He did so by construing an instrument of delegation of powers by the Commission in favour of the first appellant as conferring only a limited power on the first appellant to close a post office; his Honour held that, in making his decision, the first appellant had acted outside or beyond the terms of the delegation with the consequence that his decision was invalid. The Commission has various powers conferred upon it by the Act including the power conferred by s.9(1) to do "all things necessary or convenient to be done for or in connexion with, or as incidental to, the performance of its functions under this Act". Its duties are set forth in s.7 of the Act; they include an obligation, so far as it is, in 1ts opinion, reasonably practicable to do so, to make its postal services available throughout Australia for all people who reasonably require those services. There is no question that the Commission has power to open or close a local post office. The only issue is as to the extent of the first appellant's power to close one. The constitution and meetings of the Commission are dealt with by Part IV of the Act. In that Part, ss.35 and 36 provide: "Duties of the Managing Director 35. (1) The affairs of the Commission, to the extent determined by the Commission, shall be managed by the Managing Director. (2) The Managing Director shall, in managing any of the affairs of the Commission, act in accordance with the policy of, and any directions given by, the Commission. Delegation 36. (1) The Commission may, by instrument under 1ts seal, delegate to a Commissioner, to the Chief General Manager or to an officer or employee, either generally or otherwise as provided by the instrument of delegation, all or any of 1ts powers under this Act (except this power of delegation). (2) A delegation under this section is revocable at will and does not prevent the exercise of a power by the Commission." On 15 March 1984, the Commission executed a Delegation of Power to specified officers in the service of the Commission, New South Wales. The material parts of the instrument of delegation are as follows: "In pursuance of the powers conferred on it by section 36 of the Postal Services Act 1975, the Australian Postal Commission under its seal hereby delegates to the officers in the Service of the Commission occupying for the time being the positions of Chief Manager, Operations and Chief Manager, Planning and Development, New South Wales, all of the powers that have been delegated directly or indirectly to the occupant of the office of State Manager, New South Wales. Exercise of these powers 1S subject to:- i. any direction which may be issued from time to time by the Commission or by the Managing Director, the Chief General Manager or the State Manager, New South Wales; il. funds availability from within the delegate's approved budget; and iii. assocrated policies, procedures and guidelines which unclude quotation, order, tender and contract procedures." The first question which arises under the terms of this instrument 1s to determine what are the powers which have been delegated directly or indirectly to the occupant of office of State Manager, New South Wales because it is these powers which are delegated to the first appellant. Unfortunately no evidence of the delegation, direct or indirect, to the State Manager was given. However, both parties agreed that all the relevant powers of the Commission relating to the subject matter in this case were within that delegation and were therefore passed on in terms of the instrument quoted above to the first appellant. The next question which arises is to determine the extent of the qualification of this delegation to be found in the operation of the delegation which commences with the words "Exercise of these powers is subject to ... 111. associated policies ..." Part 4 of a Field Management Manual headed "Facilites & Services", issued by the Commission, was tendered in evidence. It contains a Foreword dated November 1986 which states: "This manual presents Australia Post's policy ona number of facilities and services the enterprise provides. It should be read in conjunction with other relevant operational manuals and instructions." Later in the Foreword it is stated: "It is not intended that the manual serves as a comprehensive working document or job description. It does not contain the step by step actions necessary to implement the delegate's decision. Where appropriate, agreed local management procedures and action plans can be developed as a supplement to the manual." The primary Judge treated the manual as laying down policies and treated the delegation as being subject to compliance with the policies so laid down. This approach involved him in considering the detailed provisions of the manual and putting a construction on such phrases as "clearly defensible and approved local group restructuring program" (see Section 4) and answering the question whether in a particular case of a nost office alternative facilities are "reasonably accessible" (see Section 4 in conjunction with Section 1) and the application of such provisions in the manual to the circumstances disclosed in the evidence in relation to Watsons Bay Post Office. In our opinion, it 1s necessary first to come to a conclusion as to the construction and operation of the delegation which has been set out above. The phrase "associated policies" is an awkward one because it is not clear in the context with what the policies have to be associated. An easier phrase might have been "policies relevant to the delegation". Assuming, however, that the manual is a statement of policies within the wording and that the exercise of powers by the first appellant is "subject to" those policies, the question remains how far this required strict compliance by him with policies so stated. The manual requires decisions upon many discretionary matters and matters of judgment. It 1S not cast with the precision of a statute. Clearly this is an area in which guidelines may be useful and necessary. Much has to be left to the person selected as the delegate to give effect to them. It 1s an administrative area where one would expect that the delegate would have to direct his mind to the matters laid down in the policy but where he would not be bound, in the strict legal sense, by every word in the policy manual. Rather one would expect he would be open to correction or discipline by the Commission should he depart in material respects from it (cf. Minister for Industry and Commerce v. East West Trading Co. Pty. Ltd. (1986) 64 A.L.R. 466 at pp.470, 479-480; Minister for Immigration and Ethnic Affairs v. Conyngham (1986) 68 A.L.R. 441 at pp.452, 453; Gunaleela v. The Minister for Immigration and Ethnic Affairs (Full Court, 21 August 1987, unreported, at pp-35-37); Simon Lee, Circular Arguments, (1985) 101 L.O.R. 311; Robert Baldwin and John Houghton, "Circular Arguments: The Status and Legitimacy of Administrative Rules" (1986) Public Law 239). In other words, to our minds, failure to observe strict compliance with the manual would be a matter not so much of absence of power in the delegate as a failure by the delegate to carry out his duties under the delegation in the manner required by the Commission. It appears to us that, in stating that the exercise of his delegated powers is "Subject to" the matters stated in the delegation, the Commission is indicating those matters to which he must have regard and with which, in general, he must comply. We do not think that the Commission is laying down a set of pre-conditions which, if not strictly observed, will result in an absence of power in the delegate. Put differently, the paragraphs following the words "subject to", deal with matters of an essentially administrative character; as such, they should be seen as directory rather than mandatory. In our opinion, the decision made by the first appellant was not beyond power. Having regard to the general area of administration into which it is necessary to enter 1f£ one adopts the interpretation of the delegation which treats the requirements regarding policy as pre-conditions, it 1s useful to bear in mind the words of Lord Brightman in Puhlhofer v. Hillingdon L.B.C. [1986] 1 A.C. 484 at p.518s "Where the existence or non-existence of a fact is left to the judgment and discretion of a public body and that fact involves a broad spectrum ranging from the obvious to the debatable to the just conceivable, it is the duty of the court to leave the decision of that fact to the public body to whom Parliament has entrusted the decision-making power save in a case where it 1s obvious that the public. body, consciously or unconsciously, are acting perversely." One curious fact here 1s that the Commission has been a party to the proceedings both before the learned trial Judge and before our Court. It has strenuously supported the decision which the first appellant had made. The Commission itself, of course, has never had any restriction on its powers such as has been found by the trial Judge to be inherent in the delegation. It follows that the Commission could immediately have made the same decision at any stage and could still do so. In a sense it might be said that the presence and the active part taken by the Commission constitute a ratification of the decision which has been made since the proceedings commenced. However that may be, 1t seems that, in the light of the Commission's role and attitude, 1t would have served no useful purpose to set aside the decision in question even if we had otherwise been minded to do so. It follows that we would allow the appeal in part and set aside orders 2, 3 and 4 made on 1 April 1987. Since the respondent succeeded on the question of standing but failed on the substantive question, it is appropriate that there be no order for costs both at first instance and on the appeal. I certify that this and the preceding 7e (7) pages are a true copy of the Reasons for Judgment herein of the Court. Li Vible Associate Dated: 4 November 1987 Counsel and Solicitors D.E. Grieve Q.C. with for Appellants: D.K. Catterns instructed by Australian Government Solicitor Counsel and Solicitors A.P. Whitlam 0.C. with for Respondent: P.P. Costello instructed by R.F. Giles, Payne & Co. Date of hearing: 28 October 1987 Date Judgment Delivered: 4 November 1987