Australia: The importance of jurisdictional facts for administrative decision-makers

Last Updated: 19 February 2018
Article by Chris Boge and Daniel Maroske

If a jurisdictional fact must objectively exist before a statutory power can be exercised, a decision-maker's mere subjective belief or value judgment will not be enough.

Before an administrative decision-maker can exercise a statutory power to make a decision, he or she must properly identify and consider the possibility that it may involve a jurisdictional fact. The recent Supreme Court of Queensland decision of Inkerman Station Pty Ltd as Trustee for the Inkerman Station Trust v Allan (No 2) [2017] QSC 243 is a timely warning of what can happen when this important rule is not followed.

What are jurisdictional facts and why are they important?

Put simply, jurisdictional facts are facts which must objectively exist before a statutory power can be exercised by a decision-maker. They should not be confused with other discretionary powers given to decision-makers where a mere subjective belief or value judgment as to a state of facts is all that is required before a decision can be made.

Ordinarily, without a glaring error, courts are generally reluctant to judicially review the subjective decision of a decision-maker, providing the decision is made according to law. However, the judicial review of a jurisdictional fact, being objective by necessity, allows for a normally impermissible merits review of a decision. In such a case evidence not before the original decision-maker can be considered by the court.

The failure to recognise the existence of a jurisdictional fact

In Inkerman Station, the applicant sought judicial review of a decision purportedly made under section 154 of the Land Act 1994 (Qld) to approve an additional purpose of low-key tourism being added to the purpose of a neighbouring pastoral (grazing) lease at Dinah Island in the Gulf of Carpentaria. In this instance, the additional purpose sought was for low-key tourism to be operated on the lease land. Road access to the pastoral lessee's lease land was only possible by crossing the applicant's land; the applicant sought the review as an affected party.

It was clear from the reasons of the original decision-maker that internal policies and guidelines issued by the administering department, the Department of Natural Resources and Mines, were persuasive to the decision-maker in his ultimately deciding to approve the additional purpose. The applicant sought to review this decision on the basis that the test under the Act required the existence of a jurisdictional fact, as opposed to a subjective interpretation of departmental policy, before the decision-maker could approve the additional purpose. Specifically, under section 154(2)(a) of the Act the Minister may approve an application by a lessee that a lease be used for an additional purpose only if the additional purpose is "complementary to, and does not interfere with, the purpose for which the lease was originally issued." The applicant argued that this jurisdictional fact did not exist at the time of making the decision.

The Court was first required to consider whether or not section 154(2)(a) referred to a jurisdictional fact. In an earlier ex tempore judgment Justice Henry held that the question whether the additional purpose applied for was complementary to and does not interfere with the purpose for which the lease was originally issued was indeed a question of jurisdictional fact.

As a result of this finding, the applicant was permitted to lead evidence that was not before the original decision-maker to support its contention that the tourism operation on Dinah Island was not complementary to the purpose for which the lease was originally issued, being cattle grazing on the lessee's lease land.

The statutory test in the Land Act

Justice Henry observed that section 154 of the Act gives an existing lessee the considerable advantage of being able to secure approval for an additional purpose being added to the original purpose of a lease without the lessee's having to apply for a new lease under a public competitive process. The quid pro quo for the conferral of that advantage, however, is section 154(2)'s threshold restriction on the nature of the additional purpose, particularly the requirement that "the additional purpose is complementary to, and does not interfere with" the lease's original purpose. He went on to observe that:

"The context in which s 154(2)(a)'s interpretation falls to be considered, namely a statutory threshold which if crossed confers a significant potential advantage on the applicant, suggests the effects of the additional purpose to which its words refer should have substance. It is possible to conjure up quite superficial or frivolous alleged effects of purposes which in truth would merely co-exist in order to assert that one will have some positive effect upon the other. The statutory context of the words "complementary to" imports a need for the positive effect required by those words to be of some substance, that is, it should be a material, not superficial or frivolous, positive effect. Were it otherwise s 154(2)(a) would be an illusory threshold, readily crossed with the exercise of a little imagination in identifying inconsequential or trivial effects."

Is low-key tourism "complementary to, and does not interfere with" cattle grazing?

In applying the statutory test under the Act to the circumstances of the application, the court considered a number of pieces of new evidence including subpoenaed financial records of the lessee, historical livestock records for Dinah Island, and oral evidence given at the hearing by the lessee. This evidence demonstrated that the herd size on Dinah Island was understocked and had not increased over a period of five years, whereas significant expenditure had been made towards the tourism operation. The applicant argued that such evidence tended to support a contention that the tourism operation in fact interfered with cattle grazing on the lessee's lease land.

Justice Henry ultimately found that the additional purpose of low-key tourism was not complementary to the lease's original purpose of cattle grazing and therefore the threshold jurisdictional fact required for the additional purpose to be granted never existed. In coming to this conclusion, he observed that an additional purpose that generates funds which will be applied to sustain an original purpose would have a positive material effect on the original purpose, making the additional purpose complementary to the original purpose. However, taking into account the historic conduct of the lessee, Justice Henry held that the lessee's evidence of future intention was not credible in light of the prolonged period of near dormancy in grazing recovery and did not accept that funds generated by the proposed additional tourism purpose on Dinah Island would be applied to sustain the original cattle grazing purpose.

Having determined that the threshold jurisdictional fact required for the additional purpose to be granted did not exist, he set aside the original decision approving the additional purpose of low-key tourism.

What does this mean for administrative decision-makers?

The Inkerman Station decision provides a timely reminder to administrative decision-makers of the consequences of failing to identify when a jurisdictional fact is objectively required to exist before a statutory power can be exercised. Decision-makers should be aware that a mere subjective belief or value judgment is not sufficient in such circumstances and may result, if reviewed, in the court's determining the factual issue for itself and potentially setting aside the original decision.

The temptation to interpret this decision as confined to its facts ought to be resisted. There are provisions in the Act beyond section 154(2) which would apparently also require the existence of a jurisdictional fact before a decision can be made by a relevant decision-maker (for example, under section 59 which relates to the circumstances in which the Minister may approve a trustee lease of trust land).

More broadly, government agencies must check whether their existing decision-making policies align with the requirements of the relevant decision-making authorisation under an Act. A policy which directs or encourages a decision-maker to make a decision according to his or her own subjective or value judgment of the evidence before him or her may be leading the decision-maker down the wrong path if the relevant Act requires a fact to first be objectively established before the decision-maker has any jurisdiction to decide the matter.

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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