On 7 October the High Court delivered its judgment in Northern Land Council v Quall  HCA 33 (NLC v Quall). On its face, the decision is about whether or not certain functions of Aboriginal and Torres Strait Islander representative bodies can be delegated. That description belies the decision’s broader significance – namely, that it provides useful guidance on whether, and how, corporations may exercise their statutory powers through other legal persons, including their employees. The decision will be of interest to public lawyers, given the plethora of corporations that exercise public functions under statute (e.g. the National Library of Australia, the Australian Broadcasting Corporation and Airservices Australia; see generally Department of Finance, ‘Types of Australian Government Bodies’).
In this post we briefly summarise the Court’s reasons (including the reasons of the minority, Nettle and Edelman JJ) before considering the broader guidance provided by the decision for corporations that exercise statutory powers. As will be shown, in our view the decision demonstrates that an approach of agency, rather than delegation, is likely to be more attractive for corporations that wish to have others exercise statutory functions conferred upon the corporation.
Background to the decision
For acts to be done in relation to land or waters the subject of a determination of native title (or a registered claim), it will ordinarily be necessary that there be an Indigenous Land Use Agreement (ILUA) with the native title holders (s 24AA(3) of the Native Title Act 1993 (Cth) (NTA)). To be binding, the ILUA must be registered with the National Native Title Tribunal. One manner in which this can be achieved requires an Aboriginal and Torres Strait Islander representative body for the relevant areas to certify that all reasonable efforts have been made to ensure that all persons who hold native title have been identified and have authorised the ILUA (per s 203BE(5) of the NTA).
So it was that in March 2017 the CEO of the Northern Land Council (NLC) signed a certification certificate in relation to an ILUA over land and waters in the Cox Peninsula near Darwin (NLC v Quall -). The certification function under s 203BE(5) of the NTA was reposed in the NLC itself, but “the decision to issue the certificate was in fact made by the CEO alone and the opinion set out in the certificate was in fact formed by the CEO alone” (). This feature set the scene for the judicial review proceedings that followed.
At first instance two individuals sought to challenge the efficacy of the certificate on the grounds that either: (1) the NLC’s certification function could not be delegated; or (2) if delegable, the function had not been validly delegated to the CEO in the circumstances (). The primary Judge rejected the first ground but accepted the second (). On appeal, the Full Federal Court accepted the first ground and found it unnecessary to consider the second ground as a result (). Following a grant of special leave, the High Court heard arguments and delivered judgment in relation to the first ground alone ().
The High Court’s judgment was keenly anticipated by representative bodies and native title lawyers because “anecdotally” it was common practice for representative bodies to task their CEOs with the certification of ILUAs. Had the High Court upheld the Full Federal Court’s judgment, the validity of numerous ILUAs would have been in doubt.
The majority’s reasons
The majority (Kiefel CJ, Gageler and Keane JJ) sought to address two key issues: first, is delegation of the certification function compatible with the scheme of the NTA? Second, if it is, what is the source of any power the NLC may have to delegate the certification function?
In relation to the first issue, the Full Federal Court had considered that delegation of the certification function was incompatible with the NTA for two key reasons. The first reason was that a particular provision (s 203B(3)) provided that “a representative body must not enter into an arrangement with another person under which the person is to perform the functions of the representative body” (-, emphasis added). The second reason was that, in the Full Court’s view, the certification function was “peculiarly adapted to performance by the members of a representative body in plenary session” (rather than the CEO alone) because of the representative nature of its membership ().
The High Court majority disagreed with the Full Federal Court’s analysis, concluding that the NTA did not preclude delegation of the certification function (-, ). In relation to the presumed prohibition on delegation in s 203B(3), the majority considered that this prohibition was only directed at persons who were “external to the organisational structures and administrative processes” of the NLC, as established by its constitutive statute (). Accordingly, s 203B(3) did not prohibit delegation to the CEO. In relation to the Full Court’s view that certification was peculiarly adapted to performance by a representative body in plenary session, the High Court majority reached the opposite view: that the question of fact required to be formed prior to certification – that reasonable efforts had been made to identify the native title holders, and that they had assented to the ILUA – may be “peculiarly ill-adapted to determination” in plenary session. In reaching that conclusion, their Honours emphasised that the task required receiving and assessing “extensive and potentially contentious evidence”, and that there would be a greater potential for conflicts of interest in a plenary session ().
Having reached the view that the NTA did not prevent delegation of the certification function, the second issue remaining was as to where – if at all – a power to delegate could be located. Axiomatically, their Honours said, a statutory corporation’s powers must be found in its “constating” (i.e. constitutive) statute, in what it “expressly provides” or “inferentially provides as a matter of necessary implication” (, , quoting from Kathleen Investments (Australia) Ltd v Australian Atomic Energy). For the NLC, that statute is the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) (ALR Act) ().
The majority held that a power for the NLC to delegate its certification function to its CEO may be sourced in s 27(1) of the ALR Act, which empowered it to “do all things necessary or convenient to be done for or in connexion with the performance of its functions”. Notably, their Honours reasoned that this conclusion was not foreclosed by the existence of a subsequent provision (s 28), which contained an express power of delegation “of any of the Council’s functions or powers under this Act [i.e. the ALR Act]” (, emphasis added). Their Honours said that while s 28 limited delegation under the ALR Act to the circumstances expressly authorised, s 27 was to be read as permitting delegation of functions conferred under other legislation, including the certification function under the NTA ().
In conclusion, the High Court majority ultimately found that the NTA did not prevent delegation of certification functions to the CEO of the NLC. Further, the majority found that s 27(1) of the ALR Act may have authorised delegation in the relevant factual circumstances. However, the majority did not finally resolve that issue, because whether or not the power was enlivened in the circumstances was a “question of fact and degree” which was “beyond the scope of the issues raised in the appeal” (). If the power to delegate the function had been available in the circumstances, then their Honours said that ss 34AB and 34A of the Acts Interpretation Act 1901 (Cth) would have the effect that a function performed by the CEO would be deemed to be a decision of the NLC, and that any opinion required to be formed by the NLC could be formed by the CEO instead ().
The minority’s reasons
The minority judges (Nettle and Edelman JJ) expressed a directly contrary view to the majority on almost every issue of statutory construction. For example, their Honours characterised s 203B(3) of the NTA as an express prohibition on delegation of functions (). Their Honours considered that the prohibition would otherwise have been implied from both the NTA and the ALR Act (). Further, their Honours considered that the express inclusion of a limited power of delegation in s 28 of the ALR Act meant that s 27 could not be read as providing a more general power of delegation for functions under the NTA (including the certification function) (). Despite these views, however, their Honours agreed with the majority that the certification function vested in the NLC could, in theory, be exercised by the CEO of the NLC ().
The reason for this conclusion was their Honours’ view that the proper analysis involved the concept of agency, rather than delegation. Their Honours noted an earlier observation of Brennan J, who had said that the terms had a “confusing similarity”, but that to use them interchangeably was “radically mistaken” ( quoting Re Reference Under Section 11 of the Ombudsman Act 1976 for an Advisory Opinion; Ex parte Director-General of Social Services (1979)). Properly understood, an agent acts on behalf of another (the principal) and “generally in the name of that other”. In comparison, a delegate “acts on their own behalf and generally in their own name”.
According to their Honours, s 203FH of the NTA – which deems conduct engaged in by an agent (and some others) acting within the scope of their actual or apparent authority to have been engaged in by a body corporate (subject to some exceptions) – provided a clear basis for the CEO’s decision to be imputed to the NLC (, ). Their Honours considered that the CEO had in fact purported to act as an agent for the NLC, and to exercise powers on its behalf, rather than as a “delegate” to whom the function had been delegated. Notably, the relevant certificate stated that it was “the certification by the Northern Land Council” and that the “NLC hereby certifies” the matters contained therein (). Consistently with this, the minority noted, any liability that arose by operation of provision such as s 204FH of the NTA “is primary, rather than derivative or vicarious”, as the agent acts as the representative body ().
Observations and implications
In our view, there is one key observation to be made about the High Court’s decision, and one key implication for corporations that exercise statutory functions.
The key observation concerns the principle of delegatus non potest delegare (that a statutory function may only be performed by the statutory repository of the function) (delegatus principle). The only reference to that principle by the majority came when their Honours said that it must yield to “any contrary implications found in the language, scope or object of the statute” (, quoting Willis, ‘Delegatus Non Potest Delegare’, 259). What is surprising is how easily, on their Honours’ view, the principle may be avoided by implication. All that their Honours found necessary was the existence of the general power under s 27 of the ALR Act to do “all things necessary or convenient to be done”. If that is the right analysis, the delegatus principle is an extremely weak presumption; far weaker, for example, than the principle of legality (according to which an intention to override fundamental rights or principles “will not ordinarily be ascribed to general words”, requiring instead that the intention be “unmistakable and unambiguous” – see e.g. Ex Parte Walsh and Johnson; In Re Yates (1925); Coco v R (1994)).
It may be wondered whether the High Court’s judgment is further indication that the delegatus principle is headed for irrelevancy (or, at least, a very constrained operation). As long ago as 1985, Gibbs CJ said in Dainford Ltd v Smith that he was “not convinced that recourse to the maxim delegatus non potest delegare is of much assistance in deciding upon the validity of an exercise of statutory powers”. More recently, in 2002, Mason P of the NSW Court of Appeal wrote in Minister for Local Government v South Sydney City Council that “[i]t is inappropriate to start with some overarching theory about the impropriety of delegation”.
The key implication of the decision concerns the usefulness of agency. As the High Court’s judgment shows, the ability to establish a power to delegate may be vexed, including because of the headwind provided by the delegatus principle. For corporations that exercise statutory functions, the High Court’s judgment can provide little comfort about the ability to delegate, because the issue turns on the construction of a corporation’s constitutive statute(s). In the absence of an express provision, establishing the existence of a power to delegate may be difficult. In comparison, establishing that a person is empowered to act as an agent is a lower hurdle. The appointment of an agent to exercise a statutory function is not restricted by the delegatus principle because the corporation is still the repository of the statutory function being exercised in such a scenario. Further, even in the absence of any express power to appoint an agent, the general principle is that a corporation will have such a power (see the judgment of Gibbs CJ in O’Reilly v Commissioner of State Bank of Victoria (1982), quoting In re Whitley Partners Ltd (1886)). Absent statutory indication that a decision by an agent is prohibited, it is presumed to be permitted, subject to the requirements and limits “set by or under the constating statute of the corporation” (NLC v Quall ). In this sense, agency has the benefit of a presumption that is the inverse of the delegatus principle. This ability to appoint agents is critical to any notion of corporate action. After all, a corporation is, as Edelman J has observed, a legal “construct” , and “being fictional persons, [corporations] have of course to act through the medium of real human beings” (Daiwa Capital Markets Europe Ltd v Singularis Holdings Ltd (2019) . See also Northside Developments Pty Ltd v Registrar-General (1990), cited in NLC v Quall ).
It may be that agency undergirds the so-called Carltona principle, by which statutory functions may be exercised by persons other than those in whom the function has been statutorily reposed, on account of administrative necessity (Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) per Mason J). As a unanimous High Court wrote in Plaintiff M61/2010E v Commonwealth (2010), “[t]he Carltona principle has been described as a principle of agency, distinct from a delegation of power, which allows an agent to act in the principal’s name and use all of the principal’s power.” This coheres with other “direct” models of corporate attribution used for other purposes in Australian law (see, for example, Meridian Global Funds Management Asia Ltd v Securities Commission (1995); Competition and Consumer Act 2010 (Cth) s 84. Lastly, it may be observed that nothing in the majority’s reasons in NLC v Quall limits the availability of agency when a corporation wishes to have another person exercise its statutory functions, as was recognised in some references to agents by their Honours (, ).
In summary, NLC v Quall highlights two different ways in which a corporation may have its statutory functions performed by other persons (including its employees). One approach is to appoint a delegate – a path that is potentially fraught, including because delegation must be established in the face of a presumption that it is not permitted (the delegatus principle). The other approach is to prove a relationship of agency – an approach that finds a sound legal footing, and which will likely be easier to prove (including because it has the benefit of a presumption that it is permitted, absent statutory indication to the contrary). In short, corporations with statutory functions may find agency to be more attractive than delegation. If nothing else, the High Court’s judgment is a timely reminder for corporations that it pays to consider the basis upon which other persons perform, or assist them to perform, their statutory functions.
The views expressed in this article are personal to the authors and do not reflect those of their employers.
William Isdale is a lawyer with MinterEllison in Brisbane and a PhD student at the University of Queensland. Samuel Walpole is a Legal Officer at the Australian Law Reform Commission and a Sessional Lecturer at the University of Queensland.
Suggested citation: William Isdale and Samuel Walpole, ‘Northern Land Council v Quall – implications for the exercise of statutory functions by corporations’ on AUSPUBLAW (11 November 2020) <https://auspublaw.org/2020/11/northern-land-council-v-quall>