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Judicial Review of Act of Grace Payments for Legal Expenses

The Meaning of Ashby v Commonwealth of Australia [2021] FCA 40

Under section 65 of the Public Governance, Performance and Accountability Act 2013 (Cth) (PGPA Act), the Finance Minister may, on behalf of the Commonwealth, authorise in writing, one or more payments to be made to a person if the Finance Minister considers it appropriate to do so because of special circumstances.

These payments are known as ‘act of grace’ payments.

A payment may be authorised even though the payment or payments would not otherwise be authorised by law or required to meet a legal liability.

Ashby v Commonwealth of Australia [2021] FCA 40 (“Ashby”) involves an act of grace payment application that was made by James Ashby that was refused.

Mr Ashby was employed for the then Speaker of the House of Representatives, Mr Peter Slipper MP.  On 20 April 2012, Mr Ashby brought proceedings against Mr Slipper and the Commonwealth, alleging sexual harassment and misuse of parliamentary entitlement, and seeking relief under the Fair Work Act 2009 (Cth) and at common law.

In July 2013, Mr Slipper was granted an act of grace payment in respect of the proceedings.

In June 2014, Mr Ashby withdrew the action against Mr Slipper before a trial could take place due to the high continued cost of the proceedings.

In 2018, Mr Ashby sought an act of grace payment under section 65 of the PGPA Act for $4,537,000, to redress an asserted injustice in relation to the proceeding he brought against Mr Slipper and the Commonwealth. This application was referred to a delegate, who did not authorise the application.

Mr Ashby then commenced the present proceedings against the Commonwealth of Australia and the Minister for Finance:

  1. seeking judicial review of the Minister’s delegate’s refusal to make the act of grace payment; and
  2. claiming that this refusal was adverse action contrary to the Fair Work Act 2009 (Cth).

Although the judicial review aspect of Mr Ashby’s proceedings had five grounds of review, it had two areas of focus:

  1. he was a whistle-blower and had sought to achieve a desirable public objective in the exposure and prevention of sexual harassment and misuse of parliamentary entitlements by a senior Commonwealth officeholder; and
  2. the inequitable treatment he received since he was refused an act of grace payment when Mr Slipper had in contrast received an act of grace payment by the Commonwealth. This was in circumstances where Mr Slipper already had greater resources than Mr Ashby and was the alleged wrongdoer in accordance with Mr Ashby.

On 29 January 2021, Bromwich J delivered judgment in Ashby. The judicial review application addressed three grounds of review and was refused. The other grounds are to be heard with the remainder of the proceedings.

In the course of the judgment, Bromwich J:

  1. confirmed that where a decision maker does not expressly refer to a topic in their reasons, this does not mean that no consideration had been given to that topic. The delegate, in this case, had stated that he had taken into account all material advanced in support of Mr Ashby’s application. Bromwich J found there was no proper reason for not taking the delegate at his express word;
  2. found that there was no previous positive finding by the Full Court in prior proceedings that Mr Ashby’s motivations for commencing the proceedings were those he contended;
  3. did not accept that Mr Ashby had no choice but to commence proceedings in the Federal Court of Australia (and incur legal costs). Bromwich J confirmed that the delegate made no error in stating that there were counselling services, complaints resolution processes and compensation schemes under statute available to Mr Ashby who did not pursue these avenues and instead commenced legal proceedings;
  4. did not impugn the delegate’s finding that there is a distinction between having to defend proceedings and bringing them;
  5. did not accept that the delegate’s decision was irrational for failing to accept that the act of grace payment in favour of Mr Slipper was highly political and had influenced the proceedings brought by Mr Ashby. Bromwich J found that the act of grace payment to Mr Slipper was made after Mr Ashby’s appeal to the Full Court was heard in 2013 (albeit before judgment, although in this regard Bromwich J found there was no identification or evidence that any party could have exerted influence over the ligation during this period). Therefore, there was no basis for the argument that the act of grace payment would have influenced the course of litigation and no error by the delegate;
  6. did not find that there was an error in the delegation of authority to the delegate. Mr Ashby had contended that due to the size of Mr Ashby’s claim, the delegate did not have authority to refuse his claim (only having authority to authorise and, therefore, refuse any claim up to $50,000). Bromwich J confirmed that there are two steps for an application under section 65(1) of the PGPA: first to consider whether it was appropriate to make an act of grace payment by reason of special circumstances and, second, to decide whether to authorise the making of the payment. Bromwich J, referring to High Court authority, confirmed that these functions can be carried out by different people, in this instance, being the delegate and the Minister respectively.

Accordingly, all three grounds for judicial review did not succeed.

This case confirms several propositions at law:

  1. where relevant considerations are not specified in relation to the exercise of an executive power, it is largely for the decision maker, in light of the material furnished, to decide relevance and comparative importance;
  2. merely declining to give a particular claim or a part of a claim in support of an act of grace payment weight or significance does not, without more, demonstrate a vitiating deficiency in the decision-making process. This includes by way of making findings on material questions of fact and in reaching determinative conclusions;
  3. in relation to legal costs, where any public interest motivations or whistle-blowing motivations are involved, a material consideration is whether these motivations could have been advanced without court proceedings;
  4. at least for the purposes of section 65(1) of the PGPA, there are two steps for an act of grace payment to be made – whether it is appropriate to make the act of grace payment by reason of special circumstances, and if so, whether to authorise the payment;
  5. the general rule of administrative functions being indivisible does not apply to section 65(1) of the PGPA as this is a very different statute from those that the general rule applies.

This case emphasises the importance of supplying all of the evidence required for making out a characterisation, and the need to negative all other possible outcomes using evidence where the submission relies upon this to be established.

With respect to legal costs, whether there are other avenues reasonably open to the applicant for an act of grace payment may be an important consideration.

 

The content of this article is intended to provide a general guide to the subject matter. Specific advice should be sought about your specific circumstances.

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