Legal Practice Briefing
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.
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.
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
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.
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.
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).
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ISSN 1448-4803 (Print)
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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.