Australia: Back to the future: High Court decisions confirm a more literal approach to statutory interpretation

Last Updated: 2 August 2013
Article by Cain Sibley

Key Points:

The task of statutory construction must begin with close consideration of the text itself, free from policy considerations.

In a series of recent decisions, the High Court has highlighted the primacy of the text in statutory interpretation and cautioned against placing reliance on extrinsic materials.

Start with the text

In several decisions the High Court has confirmed that the task of statutory interpretation "must begin with a consideration of the text itself" (see, for example, Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at [47]).

The primacy of the statutory text was emphasised in Australian Education Union v Department of Education and Children's Services [2012] HCA 3, where the High Court emphasised that purpose must be derived from the text of legislation, and not superimposed at the expense of the text. The case concerned a long-running dispute between the Australian Education Union and the Department regarding the entitlements of contract teachers.

At the heart of the issue was whether the Minister was entitled to employ contract teachers pursuant to a statutory power to "appoint such officers and employees ... as he considers necessary for the proper administration of this Act", or whether the Minister must employ those teachers as members of the teaching service under a provision which provided, "the Minister may appoint such teachers to be officers of the teaching service as he thinks fit."

The Industrial Relations Commission of South Australia found that the Minister could employ casual teachers pursuant to the general power to appoint officers and employees. Of the IRC's reasoning, the High Court (Chief Justice French and Justices Hayne, Heydon, Kiefel and Bell) said (at [28]):

"The reasoning in the IRC was informed by the view that it was desirable that the Minister have flexibility in appointment of teachers and that [the provisions dealing with the teaching service] might be "unnecessarily prescriptive in its application to the ad job appointments of relief teachers in diverse circumstances. This approach, with respect, emphasised a judicially constructed policy at the expense of the requisite consideration of the statutory text and its relatively clear purpose. In construing a statute it is not for a court to construct its own idea of a desirable policy, impute it to the legislative, and then characterise it as a statutory purpose."

The Full Court of the Supreme Court of South Australia received a similar lecture (at [29]).

The High Court emphasised that the general power to appoint officers and employees was directed to the general administration of the Act, whereas the power to appoint teachers occurred in the statutory context of the "administration and control of the teaching service" (at [30]). Therefore, they found that the Minister had no power to appoint a casual teacher pursuant to the general power to appoint officers and employees.

The High Court also emphasised that Ministerial statements about the effect of laws have no utility in construing those laws. The Solicitor-General for South Australia submitted that the Court should have regard to a statement made by the Minister in a second reading speech where the Minister said that casual teachers, unlike permanent members of the teaching service, are engaged under contracts of service pursuant to the general power to appoint officers and employees. The High Court dismissed this submission, saying (at [33]):

"There is no basis at common law or otherwise for resorting to a ministerial statement, about the effect of a law in force at the time of the statement, as an aid to the interpretation of that law."

A similar example is Commissioner of Taxation v Multiflex Pty Ltd [2011] FCAFC 142, where the Full Federal Court considered the interpretation of refund provisions in GST legislation. The Commissioner urged an interpretation where a refund could be paid after a reasonable period to allow for investigations about whether taxation liabilities should be recalculated. In a joint judgment by Justices Stone, Edmonds and Logan, the Full Federal Court dismissed any such implication from the legislation. While the Commissioner urged an interpretation which did not promote inconvenience, and one which recognised he commercial realities within which the GST scheme operates, the Court held that any such interpretation would be antagonistic to the terms of the legislation.

The High Court subsequently refused the Commissioner's application for special leave to appeal against the decision of the Full Federal Court.

Resort to broader notions of context only when text is "doubtful"

In Saeed v Minister for Immigration and Citizenship [2010] HCA 23, the High Court considered an amendment to the Migration Act 1958 (Cth) which sought to make the statutory code of procedure in the Migration Act exclusive (that is, to displace the operation of the common law rules of natural justice).

The relevant amendment inserted a provision (section 51A) to the effect that the statutory code was "an exhaustive statement of the requirements of the natural justice hearing rule in relation to the matters it deals with". Section 51A was undoubtedly inserted to overcome a previous decision of the High Court (the decision in Ex parte Miah) in which the Court held that the insertion of a statutory code of procedure was not effective to oust the common law rules of natural justice.

The Full Federal Court said (at [28] of the High Court's reasons) of section51A, '[w]e agree with the observation ... that the drafters of the Explanatory Statement and the Minister could hardly have made the intention of the 2002 amendments any clearer'.

Notwithstanding the clear and obvious parliamentary intention, the High Court held section 51A, on its terms, did not oust the operation of the common law rules of natural justice in the case of offshore protection visa applicants. The Court held that (at [34]):

"The question whether s 51A in its operation has the effect contended for, of excluding the natural justice hearing rule, is to be answered by having regard, in the first place, to the text of s 51A and the provisions with which it interacts. The questions which, in turn, are raised about the operation of s 51A, it will be seen, are not answered by anything said in the extrinsic materials."

The rule the Court relied on was that resort to broader contextual materials could only be had when the "ordinary" rules of statutory construction had been exhausted. That rule finds its foundation in Catlow v Accident Compensation Commission (1989) 167 CLR 543, where Justices Brennan and Gaudron held (at 550):

"If the meaning which would otherwise be attributed to the statutory text is plain, extrinsic material cannot alter it. It is only when the meaning of the text is doubtful..., that consideration of extrinsic material might be of assistance. It follows that it would be erroneous to look to the extrinsic material before exhausting the application of the ordinary rules of statutory construction. If, when that is done, the meaning of the statutory text is not doubtful, there is no occasion to look at the extrinsic material."

How the High Court's approach affects development and administration of legislation

The recent decisions of the High Court do emphasise that clear and careful attention needs to be given to the words of any proposed new legislation to ensure the words themselves are accurate to achieve the policy intention. In particular, the High Court's decisions warn against plugging gaps in statutory language with statements in explanatory statements or second reading speeches.

For lawyers advising on the administration of schemes, the approach of the High Court means that the task of statutory construction must begin with close consideration of the text itself, free from policy considerations regarding what was intended at the time the legislation was developed.

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

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