Legal Practice Briefing No. 24

Number 24

24 April 1996

DEVOLUTION OF POWER WITHIN
GOVERNMENT

Delegations, Authorisations and the Carltona Principle

This briefing examines the nature of powers of delegation
and authorisation and sets out legal principles relevant
to them. It also discusses the effect which an election
and change of government has on the continued operation
of instruments of delegation and authorisation.

When Parliament creates a statutory power it vests that
power in some individual or body who is then able to exercise
it. In Commonwealth legislation, this vesting of power
is most commonly effected in one of the following three
ways.

  • Power is vested in a person holding an existing office
    in the executive government, for example, the Governor-General,
    a Minister or the Secretary to a Minister's Department.
  • Power is vested in an office or body created to exercise
    particular statutory powers.
  • Power is vested in a person 'appointed' or 'authorised'
    by a particular person for the purpose of exercising
    the power.

It is a fundamental principle of administrative law that
when Parliament vests power in a person that person is prima
facie required to exercise the power personally. The
principle is expressed in the maxim 'delegatus non potest
delegare', that is, a delegate may not delegate to another
person the power which has been delegated to him or her.
The exercise of the power by another person will be invalid
if the person in whom the power is vested is held to have
improperly abdicated the exercise of the power to that
other person.

The maxim is not, however, absolute.1 The
maxim does not apply if, in a particular case, the person
in whom, or body in which, Parliament directly vests a
power can designate another person to exercise that power.
There are two possible ways in which this can be achieved.

  • An express power to delegate. Legislation may
    provide a statutory procedure for the designation of
    a person who may exercise a power. This most commonly
    takes the form of an express power of delegation, but
    sometimes takes other forms, for example, the appointment
    of a person as an 'authorised officer'.
  • An implied power to authorise. A person in whom
    a statutory power is vested may, in some circumstances,
    whether an express power of delegation is available or
    not, be able to rely on an implied power to authorise
    an official to exercise the statutory power on the person's
    behalf. Such a power is most commonly referred to as
    an implied power to authorise. However, it is also variously
    referred to as the 'alter ego' principle, the 'Carltona'
    principle, or an implied power to delegate.

While this briefing refers primarily to the devolution
of powers, the principles it sets out apply equally
to the devolution of functions.

Express Powers of Delegation

Most of the common law principles relating to the delegation
of power under an express power of delegation have been
codified in sections 34A, 34AA and 34AB of the Acts
Interpretation Act 1901. The sections also establish
relevant principles which are set out below by reference
to the provisions of the Act.

Delegates must Exercise their Own Discretion

Section 34A of the Acts Interpretation Act provides:

'Where, under any Act, the exercise of a power or function
by a person is dependent upon the opinion, belief or
state of mind of that person in relation to a matter
and that power or function has been delegated in pursuance
of that or any other Act, that power or function may
be exercised by the delegate upon the opinion, belief
or state of mind of the delegate in relation to that
matter.'

Section 34A expresses the fundamental effect of a delegation
of a power made pursuant to an express power of delegation,
that is, a person to whom a power is delegated in pursuance
of an express power of delegation must exercise the delegated
power by applying their own discretion.

As a corollary to that, the exercise by a delegate of
a delegated power is, as a matter of law, an act of the
delegate. It is not an act of the person who delegated
the power to the delegate. The fact that a delegate exercises
a delegated power by applying their own discretion and,
at law, acts in their own capacity, means that the person
who delegates the power cannot either:

  • direct the delegate in the exercise of the delegate's
    discretion; or
  • make the exercise by the delegate of the power conditional
    on certain events occurring, or on the delegate taking
    certain action, for example, consulting another person.

This general position is subject to alteration by Parliament
which can, in particular cases, provide that a delegate is,
in the exercise of a delegated power, subject to the directions
of, or conditions imposed by, the person who delegates the
power.2

While a delegate's exercise of a delegated power cannot generally be subject
to direction or conditions imposed by the person who delegates the power, that
person can issue non-binding guidelines which a delegate is to have regard
to in the exercise of a power. Such guidelines cannot, however, require a decision-maker
not to exercise a discretion. Failure to comply with guidelines would not,
of itself, invalidate a delegate's exercise of power.

General Principles

Section 34AB of the Acts Interpretation Act sets out a number of more general
principles related to the exercise of an express power of delegation. Section
34AB relevantly provides:

'Where an Act confers power on a person or body (in this section called the "authority")
to delegate a function or power:

(a) the delegation may be made either generally or as otherwise provided
by the instrument of delegation;
(b) the powers that may be delegated do not include that power to delegate;
(c) a function or power so delegated, when performed or exercised by the delegate,
shall, for the purposes of the Act, be deemed to have been performed or exercised
by the authority;
(d) a delegation by the authority does not prevent the performance or exercise
of a function or power by the authority; '

A delegation made generally or as otherwise provided

Paragraph 34AB(a) of the Act does not alter the fundamental effect of a delegation
of power which is expressed above, that is, that delegates must exercise their
own discretion and are not subject to direction or conditions imposed by the
person who delegates the power. Rather, it is concerned with the extent to
which a power may be delegated. Some statutory powers may be exercised with
respect to a number of different matters, or classes of matters, and are capable
of division into parts.3 Paragraph
34AB(a) recognises that a person in whom a power is vested may, in pursuance
of an express power of delegation, delegate part of that power, that is, the
power so far as it relates to particular matters or classes of matters.

For example, the Migration Act 1958 confers on the Minister for Immigration
and Multicultural Affairs the power to grant to non-citizens visas of classes
prescribed by the Migration Regulations. Section 496 of the Act provides that
the Minister can delegate that power to 'a person'. In some cases it is possible
for non-citizens from a broad range of countries to apply for a particular
class of visa. Para 34AB(a) makes it clear that the Minister can either:

  • delegate the power to grant a particular class of visa to non-citizens,
    whatever country they come from; or
  • delegate the power to grant that class of visa only to non-citizens who
    come from a particular country or countries.

In the latter case, care would need to be exercised to ensure that the delegation
did not purport to impose a condition on the delegate. That is, the delegation
would need to take the form of a delegation of power to issue visas of a specified
class to non-citizens who come from particular countries, rather than a delegation
of power to issue visas within that class, subject to a condition that they
only be issued to non-citizens from particular countries.

The power to delegate cannot be delegated

Paragraph 34AB(b) ensures that if Parliament vests power in a particular
person, it is for that person to exercise the power or, if there is an express
power of delegation, it is for that person to choose which other persons may
exercise the power. In other words, the person nominated by Parliament to exercise
the power will always retain control over the class of persons who are designated
to exercise the power. As a general rule, the person making the delegation
may revoke it at a future date, if that is desired.4 If
the power to delegate could itself be delegated there would be no effective
control over the class of persons who could be designated to exercise the relevant
power.

The performance or exercise of a function or power by a delegate is,
for the purposes of the Act under which the function or power is delegated,
deemed to be performance or exercise by the person or body who delegated
the function or power.

The Attorney-General's Legal Practice takes the view that paragraph 34AB(c)
is intended to preclude a recipient of a delegate's decision appealing to the
person who delegated the power to make the decision (the delegator) and requesting
the delegator to make a further decision him or herself.

The delegator can still perform a function or exercise a power which
has been delegated.

Paragraph 34AB(d) recognises that delegation pursuant to an express power
of delegation, while enabling delegates to exercise powers in their own right,
does not result in the power being removed from the delegator. The delegator
can still exercise the powers as necessary.5

Form of Instruments of Delegation

Legislation which confers an express power of delegation on a person usually
requires that power to be exercised in writing, that is, by making a written
instrument. An instrument of delegation most commonly specifies classes of
office-holders to whom powers are delegated, removing the need to make a separate
instrument for each and every person to whom those powers are delegated.

Delegation to classes of offices

Section 34AA of the Acts Interpretation Act provides:

'Where an Act confers power to delegate a function or power, then, unless
the contrary intention appears, the power of delegation shall not be construed
as being limited to delegating the function or power to a specified person
but shall be construed as including a power to delegate the function or power
to any person from time to time holding, occupying, or performing the duties
of, a specified office or position, even if the office or position does not
come into existence until after the delegation is given.'

The purpose of this provision is to make it clear that an express power of
delegation does not have to be exercised in favour of a nominated individual.
Rather, it may be exercised by reference to a person or persons from time to
time holding, occupying or performing the duties of, a specified office or
offices.6

A delegation to persons holding, occupying or performing the duties of specified
offices may take the form of a delegation to persons holding offices within
a specified class, or specified classes, of offices.7 For
example, a delegation may be made in favour of 'all persons from time to time
holding ASO 5 offices in the ABC Division of XYZ Department'.

Delegating to future offices

Section 34AA extends the common law in one important respect. It is not possible
at common law to delegate powers to the holder of an office which has not come
into existence at the time a delegation is made.8 Section
34AA, however, provides that a power of delegation can be exercised in favour
of a person holding, occupying or performing the duties of a specified office
or position, 'even if the office or position does not come into existence until
after the delegation is given'.9 Those
words make it clear that, if a delegation is made to persons holding an office
in a class of offices, the delegation will operate in relation to offices falling
within the relevant class and which are created after the delegation is made.

Change in the Person Holding the Office

Where legislation confers on a person holding a specified office the power
to delegate a power vested in them as the holder of that office, a change in
the person holding the office will not result in an instrument of delegation
executed by a person who formerly held the office ceasing to have effect. This
issue has been considered by the Federal Court of Australia. In Kelly v
Watson,10 Neaves J
held that there was nothing in the relationship between a delegator and a delegate
which required that a delegation cease to have any valid operation upon the
delegator ceasing to hold office.11

Statutory Authorisations

What is said above in relation to delegations applies also to what are termed
'statutory authorisations'. Some legislation provides for the appointment of
'authorised officers', or the authorisation of persons, to exercise specified
statutory powers.

For example, s.20 of the Export Control Act 1982 provides:

'The Secretary may, by instrument signed by the Secretary, appoint a person,
or persons included in a class of persons, to be an authorized officer or
authorized officers, as the case may be, for the purpose of the exercise
by that person or those persons of the powers of an authorized officer under
this Act or of such of those powers as are specified in the instrument.'

The Act confers particular functions and powers on 'authorized officers'.

In such a case the authorised officer or person exercises the power in their
own right. Accordingly, the principles relating to delegates exercising their
own discretion, the form of instruments of delegation,12 and
the effect of a change of person holding the office of delegator apply equally
to statutory authorisations.13

Implied Powers to Authorise

The General Principle

In some circumstances a person in whom a power is vested can authorise another
person to exercise that power for and on his or her behalf. It is essential
to note at the outset that a person exercising a power for and on behalf of
another does so as the 'agent' or 'alter ego' of the person in whom the power
is vested. That is, the act of the authorised person is, at law, the act of
the person in whom the power is vested. This is fundamentally different to
the act of a delegate which, at law, is the delegate's, and not the delegator's,
act.

The case most often relied on as authority for the proposition that a person
may authorise another to exercise a power for and on his or her behalf is Carltona
Ltd v Commissioners of Works,14 which
has been expressly approved in Australia.15 In Carltona,
the English Court of Appeal considered whether a Minister had to exercise personally
a power to take possession of land, or whether the power could be exercised
by one of the Minister's departmental officials for and on behalf of the Minister.

The court concluded that the power in question could be exercised by a departmental
official for and on behalf of the Minister. The court's reasoning indicates
that there are two grounds which justify a Minister being able to authorise
an officer to exercise a power vested in the Minister:

  • the Minister is ultimately responsible to the Parliament for the decision
    of an authorised officer; and
  • in modern government, Ministers have so many functions and powers, administrative
    necessity dictates that they act through duly authorised officers.16

In Australia, the decision in Carltona has been applied to enable
senior government officers in whom powers are vested, for example, departmental
Secretaries, to authorise more junior officers to exercise those powers for
and on their behalf.

In O'Reilly v State Bank of Victoria Commissioners,17 the
High Court was concerned with a purported exercise of power under s.264 of
the Income Tax Assessment Act 1936. Section 264 conferred on the Commissioner
of Taxation the power to issue notices to persons requiring them to furnish
information, give evidence, or produce books, documents and other papers in
their custody or control. The Court, by majority, considered that the Commissioner
did not personally have to exercise the power to issue relevant notices, but
could act through a duly authorised officer. Gibbs CJ and Wilson J, representing
the majority, based this conclusion solely on the kinds of administrative necessity
arguments referred to in Carltona.18

Circumstances in which the General Principle Applies

Whether the principle expressed in Carltona and O'Reilly applies
so that a power to authorise a person to exercise a power for and on behalf
of another can be implied is a matter of statutory interpretation. A power
to authorise cannot be implied where Parliament intends a power be exercised
personally. Whether a power is to be exercised personally is determined by
looking at the nature, scope and purpose of the power.19 Most
routine administrative powers would not require personal exercise. The Attorney-General's
Legal Practice takes the view that powers requiring personal exercise are the
exception rather than the rule. By way of example, the courts have held that
a power to authorise cannot be implied where the Minister's power is by way
of review of their departmental Secretary,20 or
where the Minister's function under the legislative provision 'is a central
feature of the legislative scheme'.21

Presence or Absence of an Express Power

Difficulties in applying the general principle commonly arise when consideration
is given to the presence in or absence from the relevant legislation of an
express power of delegation.

Where there is an express power of delegation

The authorities do not state clearly how the presence in legislation of an
express power of delegation affects the ability of a person in whom a relevant
power is vested to authorise another person to exercise the power for or on
behalf of the first person.

There is some authority for the proposition that the presence in legislation
of an express power of delegation removes the practical administrative necessity
for a person to exercise their power through an authorised agent.22 However,
the better view, following the High Court's decision in O'Reilly, is
that the presence in legislation of an express power of delegation does not
necessarily mean a power to authorise cannot be implied.23 Whether
a power to authorise can be implied will always be a matter of statutory construction,
having regard to the nature, scope and purpose of the relevant power.24 The
decision in O'Reilly indicates that a power to authorise can be implied
where it is not administratively practicable to exercise an express power of
delegation. It may also be possible to imply a power to authorise where the
express power of delegation is limited. For example, where a Minister is given
an express power to delegate to a departmental Secretary and no-one else, it
may be possible to imply in the Secretary a power to authorise officers to
exercise the Secretary's delegated power for and on the Secretary's behalf.
On the other hand, it may be apparent from the nature of the power that Parliament
intended that it only be devolved to the Secretary and no further.

Where there is no express power of delegation

The absence altogether of an express power of delegation does not give rise
to any necessary implication that a power to authorise cannot be implied. Indeed,
the need to imply a power to authorise may be greatest where there is no express
power of delegation. Again, whether a power is to be implied depends on Parliament's
intention as to the manner of its exercise.

Need for Instruments of Authorisation

As a general rule, it is sensible to execute an instrument of authorisation
when relying on an implied power to authorise. In some cases, the nature and
level of an office held by a person who exercises a particular power for and
on behalf of another may, of itself, give rise to an inference that the office-holder
is authorised to exercise the relevant power. The higher the level, and the
more important the nature of the office, the easier it will be to make such
an inference. For example, it may be relatively easy in some circumstances
to infer that a departmental Secretary is authorised to exercise particular
powers for and on behalf of his or her Minister, notwithstanding the absence
of an express authorisation. It would be more difficult, however, to infer
that an administrative officer is also authorised to exercise the powers. The
execution of an express instrument of authorisation in all cases removes the
need to infer an authorisation and should always be given due consideration.

Change in Person Holding Office

As noted above, in Kelly v Watson, the Federal Court held that a delegation
continued to operate even though there had been a change in the person holding
the office under which the delegation was made. In arriving at that conclusion,
Neaves J stated that:

'There is nothing in the relationship between the person delegating the
power and the delegate, as there would be if the relationship was one
of principal and agent, which would require that the delegation should
cease to have any valid operation upon the delegator ceasing to hold office.'25 (Emphasis
added)

It follows from this statement that an authorisation, which effects a principal
and agent relationship, ceases to have effect when the person who gives the
authorisation ceases to hold office.

Authorisations given under some statutory provisions, for example, s.19 of
the Acts Interpretation Act, also cease to have effect when the person who
gives such an authorisation ceases to hold office. Those authorisations are
not 'statutory authorisations' in the sense described above, but rather authorisations
given under specific legislative provisions to exercise powers for and on behalf
of the person giving the authorisation.

After the Election

Instruments of Delegation

Departments should review all instruments of delegation and authorisation
following the recent election and the changes in the administrative arrangements
made by the new Government.

An instrument of delegation made by a Minister or a Secretary will continue
to have effect if, following the changes in the administrative arrangements,
the only substantive change is that the person who holds the office of Minister
or Secretary to the Department has changed.26 Similarly,
a delegation continues in effect where there has simply been a change in the
designation of a Minister, Secretary or Department. However, in both cases,
it is clearly good administrative practice to provide new office-holders with
the opportunity to reconsider arrangements for delegated decision-making, and
issue new instruments of delegation.

In the case of a transfer of functions from one department (the originating
department) to another (the receiving department), delegations of power to
officers within the originating department who are responsible for performing
those functions will cease to have effect at the time the functions, together
with relevant staff, are transferred. That is because the offices held by the
relevant officers within the originating department are abolished and corresponding
offices are created in the receiving department at the time the functions are
transferred. New delegations will need to be made in favour of persons holding
relevant corresponding offices in the receiving department. Those new delegations
should be made without delay after the creation of the corresponding offices.

Similar considerations apply in the case of departments which are abolished.
Delegations of power to officers of that department will cease to have effect
at the time of the department's abolition. If the functions performed by the
abolished department are transferred to another department (the receiving department)
the usual course is to create offices in the receiving department corresponding
to the offices in the abolished department. New instruments of delegation should
be made without delay in favour of persons holding relevant corresponding offices
in the receiving department.

What is said in relation to delegations applies equally to statutory authorisations.

Instruments of Authorisation

The position is different in relation to instruments of authorisation which
provide for specified persons to exercise relevant powers for and on behalf
of an office-holder, that is, which are made in the exercise of an implied
power to authorise or under a relevant statutory power to authorise. All authorisations
of that kind cease to have effect when the person holding the relevant office
changes. Accordingly, all such instruments of authorisation should be re-made
without delay where the person holding the relevant office has changed as a
result of the election and the changes in the administrative arrangements.

1 See Ex parte Forster;
Re University of Sydney [1963] SR (NSW) 723 at 733.

2 See, for example, s.26(3)(a)
and (3A) of the Public Service Act 1922.

3 A power will not always
be capable of division see, for example, Singh v Minister for Immigration,
Local Government and Ethnic Affairs (1989) 90 ALR 397
.

4 See s.33(3) of the Acts
Interpretation Act.

5 See also Huth v Clarke (1890)
25 QBD 391 at 395 per Wills J.

6 The references in s.34AA
to 'person', 'office' and 'position' include 'persons', 'offices' and 'positions'
see paragraph 23(b) of the Acts Interpretation Act.

7 See s.46(2) of the
Acts Interpretation Act.

8 An instrument of delegation
speaks at the time it is made see Australian Chemical Refiners Pty Ltd
v Bradwell (1986) 10 ALN at N96
.

9 Section 34AA was amended
to include these words by the Law and Justice Legislation Amendment Act
1994.

10 (1985) 10 FCR 305

11 This aspect of the
decision in Kelly v Watson was affirmed by the full Federal Court
in Aban v Minister for Immigration, Local Government and Ethnic Affairs (1991)
31 FCR 93 at 9899.

12 There is one exception.
Section 34AA of the Acts Interpretation Act does not apply here and it is
therefore not possible to appoint the holder of a future office.

13 As to the application
of the latter two principles to statutory authorisations see Barton v
Croner Trading Pty Ltd (1984) 54 ALR 541; and Benwell v Gottwald (1978)
VR 253 cited with approval by Neaves J in Kelly v Watson (1985) 10
FCR at 319.

14 [1943] 2 All
ER 560

15 See Re Reference
Under Section 11 of Ombudsman Act 1976 (1979) 2 ALD 86; O'Reilly
v State Bank of Victoria Commissioners (1983) 153 CLR 1.

16 [1943] 2 All ER
at 563

17 (1983) 153
CLR 1

18 153 CLR at 1112
per Gibbs CJ and 31 per Wilson J

19 Minister
for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 38,
per Mason J

20 Sean Investments
Pty Ltd v Mackellar (1981) 38 ALR 363

21 Peko-Wallsend,
162 CLR at 38

22 See Re Reference
Under Section 11 of the Ombudsman Act (1979) 2 ALD 86 at 94 per BrennanJ.

23 153 CLR at 1213
per Gibbs CJ and 32 per Wilson J

24 Peko-Wallsend,
162 CLR at 38

25 10 FCR at 318

26 Kelly v Watson (1985)
10 FCR 305

Further reading

The Delegated Authority Handbook, a joint publication of the Management
Advisory Board and its Management Improvement Advisory Committee (No. 13, October
1994) is available from Government Info Shops (AGPS Cat. No. 94 2629 3).

For enquiries regarding supply of issues of the Briefing, change of address
details etc, contact the Office of Legal Information and Publishing on Tel:
(06) 250 5851 or Fax: (06) 250 5963.

ISSN 1448-4803 (Print)
ISSN 2204-6283 (Online)

The material in this briefing is provided
for general information only and should not be relied
upon for the purpose of a particular matter. Please contact
the Legal Practice before any action or decision is taken
on the basis of any of the material in this briefing.

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