Williams

'The Executive Power of the Commonwealth of Australia' article by Peter Gerangelos noted in the preceding post features a supplementary note on Williams v Commonwealth [2012] HCA 23 -

The decision of the High Court in Williams v Cth is the most recent case on executive power. This supplementary note will refer to those aspects of the decision most relevant to the principal concerns of this article. The case no doubt will be the subject of further detailed analysis. 

The decision affirmed, inter alia, the following aspects of Pape: An appropriation pursuant to s. 81 is not a source of spending power; and s. 61 is a source of inherent executive power based on ‘nationhood’ considerations beyond what may be permitted by those executive powers (both ‘prerogative’ — in the narrow sense — and ‘capacities’) recognized by the common law. The discussion in this article relating to the principal issue of inherent content to s. 61 remains unaffected, except in the aspects discussed below. 

The precise issue raised by the facts was the extent to which the Commonwealth, absent statutory authorization, could enter into contracts and to spend moneys in performance thereof; in this case entering an agreement to fund chaplaincy services in State schools. The agreement and spending in issue were held to be invalid. The ambit of the prerogative, in the narrow sense, was not in issue. A majority (French CJ, Gummow, Bell and Crennan JJ) held that s 61 permitted Commonwealth contracting and spending without statutory authorization (subject to appropriation) only in the following circumstances: when it is a) reasonably necessary for the execution and maintenance of the provisions of the Constitution and valid laws made thereunder; b) in the exercise of the Commonwealth’s prerogative powers (in the narrow sense); c) in the exercise of those powers which derive from the inherent executive nationhood power (which is not amendable to exhaustive definition); and d) in the ordinary course of administering a recognized part of the Commonwealth government, carrying out recognized functions of government, which is analogous to the power to administer government departments pursuant to s 64 of the Constitution. Excepting these circumstances (hereinafter ‘the recognized exceptions’), the Commonwealth could not validly contract and spend unless authorized by legislation. As the impugned funding agreement did not come within these ‘recognized exceptions’, it was held invalid. 

Although the facts related more precisely to executive ‘capacities’, the reasoning of these majority judges manifested a move away from previous understandings and assumptions relating to s 61, the full implications of which may not become apparent until further cases are brought. This is revealed most clearly by contrasting the approach of this majority in Williams with the general approach based on breadth/depth analysis, previously dominant despite differing views as to the existence and ambit of inherent content based on ‘nationhood’. Applying the latter approach, the funding agreement would be regarded as an exercise of that executive capacity shared with natural persons, recognized by the common law and incorporated by s. 61, to enter into contracts. It clearly thus fell within the depth component of Commonwealth executive power, satisfying the first step for constitutional validity. It was then necessary to determine whether the terms of the contract, the matters it provided for, satisfied the breadth requirement; that is, whether they were within the permissible sphere of Commonwealth executive power determined by reference to the ambit of Commonwealth legislative competence, express and implied. If they were, then no further statutory authorization was required (subject to appropriation). 

Heydon J (in dissent) came closest to this approach, commending Winterton’s breadth/depth distinction as ‘not only neat but illuminating’. The depth requirement was met because the act of contracting and spending was a recognized executive capacity authorized by s 61, albeit one not unique to the Commonwealth. The breadth requirement was satisfied by s 51 (xxiiiA) which provided, inter alia, that the Parliament could make laws “with respect to ... benefits to students”, adopting a broad interpretation thereof to included the provision of chaplaincy services. 

This approach does not suggest that the Executive Government of the Commonwealth could do anything in relation to which the Parliament of the Commonwealth could make a valid law. The breadth/depth approach would say rather that the government can only do those things, engage in those activities, encompassed by the executive prerogatives and capacities at common law, and — following Pape — by the ‘nationhood’ executive power, and then, only within the sphere defined by Commonwealth legislative competence, express and implied. 

None of the majority judges adopted this approach. Rather, they appear to have considered first the ambit of s 61 executive power; and in relation to which they eschewed an exhaustive definition. They proceeded to determine (without reliance on breadth/depth) whether the funding agreement in issue was a valid exercise of s 61 power. Applying the holding in Pape — that s 81 is not a spending power — they proposed that, prima facie as a general rule, the Commonwealth does not have power to contract and spend without prior statutory authorization. The next step was to determine whether the executive action in issue came within one of ‘the recognized exceptions’ above-mentioned. None of these, however, gave implicit recognition to a general executive capacity, at common law and incorporated by s. 61, to contract and spend. That is, the majority appear not to have given explicit recognition to a general capacity (shared with natural persons) to contract and spend (depth) so long as this was exercised within the sphere of Commonwealth legislative competence (breadth). Of course, if the Commonwealth were not a federation, and its Parliament had plenary legislative competence, there would be no need to consider the element of breadth. Validity would simply be determined by the question of depth. Indeed, they appear almost to be rejecting that there is an executive ‘capacity’ to contract and spend, based on the character of the Commonwealth as a juristic person and recognized at common law. Instead the focus appears to have shifted to the ‘recognized exceptions’ as restraints on that capacity. Under the previous approach, apart from meeting the breadth requirement, this capacity may have been restrained by considerations relating to the requirement that its exercise be subject to the general law, that it not impinge on the rights of others, that it not involve coercion, and by a certain sensitivity relating to the different quality attached to a ‘capacity’ when exercised by government as opposed to the private citizen (eg, secret government telecommunications surveillance being quite different to private eavesdropping.) However, following the majority reasoning, a general power to contract and spend which does not come within these exceptions now requires statutory authorization, and is thereby no longer an executive ‘capacity’ at all. Will this approach be extended to include, and thus limit, what were hitherto regarded as ‘capacities’ beyond the power to contract and spend? Is there potential for this approach be extended to limit the ‘prerogatives’ in the narrow sense? Future cases will need to clarify this. 

The new criteria for determining the ambit of these capacities, as reflected in the nature of the ‘recognized exceptions’ (especially the last one) would appear to be based on issues of accountability (requiring legislation for the exercise of any former ‘capacity’ implementing new policy beyond the recognised functions of government) and a more vigorously asserted need to protect State executive power from federal encroachment. 

There were some further specific instances of disenchantment with the breadth/depth approach, possibly based on a misunderstanding thereof. Gummow and Bell JJ  focussed on a broad proposition, which they rejected, that the executive might do anything which Parliament might do by an enactment; and yet seem not to have distinguished this from the breadth/depth approach. The latter approach does not suggest that the executive may do anything at all which could be permitted by legislation. Rather, it stands for the proposition that whatever the prerogatives and capacities recognized at common law, as well as (post-Pape) the inherent executive nationhood power, may permit the Commonwealth to do (depth), it may only take that permitted action within the sphere of Commonwealth legislative competence (breadth). And yet French CJ queried the usefulness of the concept of breadth:

The subject matters of legislative power are specified for that purpose [to determine the validity of legislation], not to give content to the executive power. Executive action, except in the exercise of delegated legislative authority, is qualitatively different from legislative action.

The meaning of ‘not giving content’ is difficult to determine. For the concept of the content of executive power is more meaningfully applied when examining depth. Reference to subject matters of legislative competence merely determines the sphere in which the content of the executive power may operate. Executive action is, in the main, qualitatively different to legislative action and it is for this reason that a determination of its constitutional validity it is not as straightforward as determining the validity of legislation. But this does not justify impugning the concept of breadth. On the contrary, this difference explains and justifies the discrete method applied by breadth/depth analysis, properly understood, to executive action, distinguishing it from that applied to the determination of the validity of legislation pursuant to the Constitution. 

The above would indicate that there has been a further shift away from existing approaches and principles in relation to executive power. There is a possibility that the above issues may be re-examined and amended when revisited by the Court. This potential for reconsideration is reinforced by the view of at least one the justices, due to a significant shift of the position of some of the parties on a fundamental legal issue after the hearing had commenced, that the fullest consideration of that issue may have been hindered. That issue, referred to as the ‘common assumption’, was ‘that the executive power of the Commonwealth included a power to enter contracts without statutory authority as long as the Commonwealth had legislative power to give it statutory authority.’ This is broadly in conformity with the orthodox breadth/depth analysis. Heydon J was concerned by the rejection of this common assumption by the plaintiff after oral argument had commenced, ‘raising the possibility that the case may not have been argued and considered with the degree of thoroughness that no doubt would have been applied to it if the common assumption had been clearly impugned by the plaintiff from the very outset.’ After referring to other vicissitudes of litigation which hindered a fuller examination of this fundamental question, his Honour concluded:

This case is not an appropriate one in which that question should be answered. ... It is important that points of fundamental significance such as the one that this case belatedly raised be pondered by counsel for years – as they often are when appeals come to this Court – or at least for months – as is usual when matters in the original jurisdiction are brought to the Full Court. Above all, they need to be considered calmly. Radical changes in the construction of the Constitution should not be made without better assistance than the unpredicted conspiracy of circumstances permitted counsel to provide in this case.

The final episode relating to these questions may thus yet to be played out.