(3) LAW, POLICY & DISCRETION
Tension between Executive & Court
Discretion  The Exec wants overall efficiency ( implements its
 “Discretion” is a choice given to Executive decision-makers
as to the way they exercise power.
 Advantage: Provides flexibility to achieve the best
decision in an individual case.
 Disadvantage: Decisions can be inconsistent, arbitrary &
unjust  against rule of law.  Who is charged with striking the balance?
 Rule of law: Exercises of power must have a source of
authority  discretionary powers be legally checked &
controlled.
 Courts take a balanced approach to control of discretion:
 Our grounds of review confine discretion:
 Procedural fairness
 Relevant/irrelevant considerations (eg. Roberts)
 Unreasonableness (eg. Roberts)
 Statutory interpretation (eg. Shopping hours case)
No such thing as “absolute” discretions (Padfield) 
Courts imply limits on discretions.
 But our grounds of review also preserve discretion (eg.
ALS v Minister).
 Policy controls the exercise of discretion by decision-makers.
Policy
 2 types of policy: broad level (overall govt aims & objectives)
& lower level* (govt’s interpretation of statute; directions on
how to exercise discretion under specific legislation).
 Policies are desirable because they:
 Improve consistency;
 Improve fairness to individuals;
 Achieve the purpose of the power;
 Minimise unnecessary inconvenience;
 Give upper Exec control over lower Exec.
 Admin law comes into play when government implements its
policy in individual instances.
Executive & Judicial control of policy (a dynamic relationship)
 How the Executive controls policy:
 Policy manuals;
 Ministerial statements of policy;
 Unwritten policy: day-to-day practice.
 How the Judiciary controls policy (its rules):
 Policy must be consistent with the statute;
 Policy cannot be applied inflexibly to all cases – must
consider whether there is anything special about the
particular case which warrants a departure from the
general rule. The consideration need not be long/detailed,
but must exist. (eg. Green v Daniels: no consideration of
departure from general rule in particular cases  invalid)
 Policy is not binding on government (no estoppel).
 Executive’s response to courts frustrating policy by review:
 Putting/clarifying policy in the Act (eg. Social Security;
Tax);
 Changing discretions into rules (eg. Migration Act);
 Immunising policy from review;
 Statutory powers to issue policy guidelines & directions
 gives policy statutory force (eg. ADC v Hand, ALS v
Min);
 Shift of use from statutory power to contractual power
(because courts scrutinise common law powers much
less, & privity limits range of ppl who can pursue a
contractual remedy).
policies), but the Courts want to protect individual liberties
( frustrates some of Exec’s policies).
 Ie. Conflict = Effective implementation of public policy
(ie. needs of the many) v Preservation of individual
rights, freedoms & liberties (ie. needs of the one).
 Executive government thinks that they set the balance,
because an elected govt claims a mandate for their policy
program (or even a general right to govern in anyway
they want). [If this view is accepted, admin law has no
role.]
 Under the “transmission belt” theory, Parliament enacts
the law, and then the Executive faithfully carries it out.
But in reality, it is the Executive which decides on
legislative changes (since the government has majority in
the Lower House).
 In fact, the Judiciary has the final say on the balance. It
upholds the rule of law.
CASES
Judicial attitudes to policy & the relationship between them and
the retention of discretion.
Green v Daniels
Policy contradictory to statute (invalid).
 *s 107: A person is qualified to receive an unemployment
benefit if he :
 (a) is 16;
 (b) is residing in Australia, and satisfies the Director-
General that he is likely to remain permanently;
 (c) satisfies the DG that he:
 (i) is unemployed;
 (ii) is capable & willing to undertake work which, in
the DG’s opinion, is suitable to that person;
 (iii) has taken reasonable steps to obtain such work.
 *Pl registered for employment at the CES a day before she
finished her final school year, and returned a month later to be
told that she could not receive unemployment benefits until
the end of the vacation, 22 Feb.
 *ss107(a) & (b) are not disputed.
 *Policy manual stated that “as a general rule, school leavers
do not satisfy the eligibility conditions [(i) & (iii)] for
unemployment benefits until the end of the school vacation.
 Preliminary matters:
 Despite the phrase “as a general rule”, the policy was
applied as an inflexible rule (which prevented the Pl &
others like her from being considered for employment
benefits before 22 Feb).
 The policy did not introduce irrelevant factors into the
decision-making process, because the fact that a school
leaver applies during holidays will bear upon the question
of whether he is truly an intending entrant into the
workforce.
 The DG can provide guidelines indicating how he will be
“satisfied”. However, they must not be inconsistent with the
statutory criteria.
 Are the statutory criteria + instructions inconsistent? Yes. The
policy requirement prevented school leavers who satisfy all
criteria in s 107 from getting unemployment benefits during
the school holidays. The requirement is not, in truth,
concerned with satisfying the DG; rather, it was designed to
cure a particular abuse.
 (3) LAW, POLICY & DISCRETION
 In relation to criterion (i): The instruction makes sure that
the applying school leaver has no intention of returning
and is thus “unemployed”, by waiting until the end of the
holidays. But this is done at the cost of being wrong in
the case of all applicants who actually have no intention
to return. Any method producing erroneous results of this
magnitude is clearly unacceptable as a way to satisfy the
DG.
 Also, there are better ways of learning the applicant’s
intention to satisfy the DG (eg. applicant making a
declaration of intent).
 In relation to criterion (iii): The instruction as to what
involves “reasonable steps” cannot impose an arbitrary
time before the criterion is to be regarded as satisfied, in
the case of only one class of applicants (ie. school
leavers). [ie. “reasonable steps” should not be determined
with respect to an arbitrary time]
The desire to prevent abuse by dishonest school leavers
cannot override the statutory criteria of eligibility in favour of
a requirement that finds no place in the legislation, and that
denies benefits to the great body of honest school leavers 
the instruction was erroneous.
 The DG (by his delegate) applied the erroneous test to
determine Pl’s eligibility during the holidays  Remedy =
declaration that the DG should have considered all the
circumstances of the Pl’s claim.
 Cannot give declaration that she was entitled to the
unemployment benefits during the school holiday period,
because that would be the court usurping the DG’s power
of attaining satisfaction. [ie. reviewing merits]
Analysis
 The court is preserving some discretion (ie. policy instructions
cannot confine discretion as to DG’s satisfaction in a way that
is inconsistent with the statutory discretion given).
 Actually, there is no strict inconsistency between policy &
statute in this case, because the policy says “as a general rule”.
Instead, the administrator (DG’s delegates) simply did not
consider the statutory criteria as required  ground of review
is “inflexible application of policy”.
 The court will look at the substance of the policy (ie. even
though the policy said “as a general rule”, the court treated it
as an inflexible rule because it was applied that way)
Aboriginal Development Commission v Hand
General Directions (valid).
 *Discretionary Power: s 9(1): The Commission has power
to:
 (c) co-operate with [government bodies] and with other
persons & organisations concerned with Aboriginal
development;
 (d) collect … information relating to the performance of
the Commission’s functions.
 *Power to give directions: s 11(1): The Commission shall …
exercise its powers in accordance with general directions
given by the Minister.
 *s 11(2): The Minister cannot give directions relating to the
content of any advice, information or recommendation that the
Commission may give to a Minister, Dept or [govt] authority.
 *Directions: The Minister gave directions pursuant to s 11,
that:
 1) The Commission shall co-operate with the Minister “in
relation to the proposed reorganisation of the Dept &
other bodies … required to facilitate the formation of the
ATSIC”.
 2) The Commission shall provide information to the
Minister as they may reasonably require from the
Commission;
 3) The Commission’s representatives must attend certain
meetings to discuss … the reorganisation of the Dept &
other bodies … required for the formation of the ATSIC.
 *The Commission sought a declaration that the directions
were invalid (ie. Ultra vires).
Were the directions ultra vires?
 The adjective “general” indicates that the direction must not
be directed to a particular case, but applied generally.
 A general direction is similar to a binding guideline.
 It sets the structure of activity or decision-making.
 It may require the Commission to undertake an activity of
a specified character.
 It may not direct its attention to a specific case arising for
decision before the Commission.
 Directions 1,2,3 were “general”, because they were not
directed to a particular case or even to the content of views
expressed by the Commission. They were just directions as to
courses of activity empowered by s 9.
 Do the directions infringe the limitation imposed by s 11(2)?
(ie. did they direct the content of any advice, information or
recommendation given by the Commission to the Minister?)
No, because on construction, the directions did not make the
Commission agree with the Minister’s views in its
advice/recommendation (ie. The Commission was allowed to
express its own views).
 In Directions 1 & 3, if the words “required to facilitate
the formation of the ATSIC” were read as requiring the
Commission to positively facilitate and promote the
reorganisation, then they necessarily require the
Commission to give certain advice to the Minister  they
breach s 11(2)  invalid. BUT the judge chose to
interpret Directions 1 & 3 as requiring the Commission to
only co-operate & give information  they did not
infringe s 11(2).
 Also, “co-operate” could be interpreted to mean
positively giving advice and recommendations in favour
of forming the ATSIC, which would breach s 11(2). BUT
it was in fact interpreted loosely, so as to not require a
particular advice/recommendation  no breach of s
11(2).
 The Directions should be read in such a manner as to maintain
their validity. To so read them is merely to read them in
context.
ALS v Minister for Aboriginal Affairs
Directions determining outcome of particular cases (invalid).
 *s 14: ATSIC has power to make grants & loans for the
Aborigines’ interests.
 *s 12(1): The Commissioner shall … exercise its powers in
accordance with general directions given by the Minister.
 *The Minister gave directions to ATSIC under s 12(1) that:
 1) ATSIC was not to make a grant/loan unless it has
made available certain financial information to the
Special Auditor (appointed by the Minister), and 3 weeks
has elapsed;
 2) ATSIC was not to make a grant/loan if the Special
Auditor notifies both the Commission & the Minister that
the receiving body is not a fit & proper body to receive
public money – unless the Minister notifies the
Commission that the grant/loan should be made anyway.
 3) If the Special Auditor notifies ATSIC & the Minister
that the issue requires further consideration, then the
making of the grant is stayed.
 (3) LAW, POLICY & DISCRETION
 Direction 2 was not “general” & so was invalid, because the
direction went beyond setting up a general process, and
conferred power & discretion on the Special Auditor to
override ATSIC’s discretion in respect of particular
applicants.
 It allowed the Special Auditor to effectively veto
ATSIC’s grant in particular cases  It takes away
discretion conferred to the Commission, and gives it to
someone Parliament has not conferred the power on.
 It did not require ATSIC to merely follow objective
guidelines; rather, it required ATSIC to follow what the
Special Auditor subjectively considers is not a fit/proper Analysis
body.
 Directions 1 & 3 are subsidiary to Direction 2  the other
directions are beyond power.
 Remedy = declaration that the directions were not “general”,
and are of no effect.
 Under s 12, the Minister could set up a procedural process,
and give directions as to priorities to apply. But the Minister
cannot command ATSIC how to determine the outcome of its
decision to grant.
Padfield v Minister of Agriculture
 If Parliament confers discretion, it must have intended the
discretion to be used to promote the policy & objects of the
Act. The policy & objects are determined by construing the
Act as a whole by the courts.
 no unfettered discretion.
ARTICLES
Davis
He argues: There is too much discretion.
 Reasons for the continued increase of discretion?
 Legislatures are not experts  do not know what the
standards are  best way is to allow the administrators to
invent answers as they are confronted by each concrete
case  they don’t advance rules.
 Discretion is desirable for individualised justice.
 Discretion  Flexibility  Ability to respond to
individual cases & complexities of modern govt.
 We have allowed discretionary power to grow beyond what is
necessary. Too much discretion.
 We need to eliminate unnecessary discretion & find the
optimum degree of control.
 Ways to achieve the optimum degree:
 Eliminate unnecessary discretionary power:
 By: fixing the boundaries of discretion.
 Better control of necessary discretionary power:
 By: structuring (eg. plans, policy statements, rules,
open findings/rules/precedents) & checking (both
admin & judicial supervision & review).
 [structuring = preventative, checking = corrective]
Analysis
 Can criticise that Davis did not define the optimum amount of
discretion, as he spoke of it in general terms (a bit circular too:
optimum amount = when there’s no unnecessary discretion).
Instead, in reality, the optimum amount of discretion is
defined by the statute. Davis overlooks this.
Hawkins
He argues: There is not too much discretion.
 Discretion is constrained by explicit/implicit organisational
rules [eg. policies, quotas, time limits]. Such rules are
imposed by organisations b/c:
 they promote consistency  minimise criticism from
superiors.
 decision-making procedures make staff more
accountable.
 rules offer guidance  important for efficiency.
 they permit ready repetition of the decision process
without deciding a new case afresh.
 Hawkins’ view diminishes Davis’ argument that discretion
threatens the rule of law. When Davis said there was too much
discretion, he was looking from a lawyer’s viewpoint.
Hawkins thinks that in the real world, the constraints on
discretion are not just legal ones – there are also
organisational constraints  discretion is actually much more
constrained.
Altman
He argues that currently, discretion is inconsistent with the
rule of law.
 Rule of Law has 2 important elements:
 Fair notice: State must establish a well-defined zone of
freedom. [no retrospective law]
 Legal accountability: Any exercise of power by state
must be authorised by a pre-existing system of
authoritative legal norms. [Govt has to show some source
of legal authority for all its actions]
 These 2 principles are important because they secure
individual freedom, by preventing illegitimate use of power.
Is discretion inconsistent with the Rule of Law?
 Currently:
 Admin decision makers exercise extensive discretionary
powers, guided by the vaguest of standards.
 Judicial review is relaxed: substantial deference is
accorded to the judgments of administrators, on grounds
of their alleged expertise.
 People can be deprived of property/liberty by
administrator without court hearing.
 These developments make nonsense of the idea that the state
is legally accountable for its actions.
 So: Too much discretion  arbitrariness, uncertainty, no fair
notice of what to expect  against rule of law.
Does admin law provide a response to the threat of discretion
to the rule of law?
 Much of the state’s activity in denying liberty & property
remains subject to due-process guarantees.
 The vague standards that guide administrators still operate
within a broader framework of rules that constrain the
administrators’ powers.
 Although judicial review is relaxed, it still constrains state
power.