VCAT vs the conduct mandate

Deputy President McKenzie’s judgment in BAE Systems Australia Ltd [2008] VCAT 1799 is significant as the first judgment on  the definition of a public authority  the Charter s. 38(2) defence to the conduct mandate and the scope of Charter s. 39, all issues dear to my heart.

Interestingly, the issue of the applicability of the conduct mandate seems to have been raised by BAE itself (with VEOHRC, it seems, missing in action on this point.):

BAE also made submissions about whether it might be a ‘public authority’ within the meaning of the Charter. In summary, and with certain exceptions, s38 of the Charter makes it unlawful for a public authority to act in a way incompatible with a human right or, in making a decision, not to give proper consideration to a relevant human right. Assuming (without deciding) that BAE is a public authority, this exemption would apply to BAE’s conduct from the date on which the exemption was published in the Government Gazette until the exemption expires. I have considered whether BAE, when it acts as the exemption permits it to do, would be acting incompatibly with a human right and in breach of s38 of the Charter.

Despite having dubiously held that neither the interpretation nor conduct mandates applied to herself, by virtue of BAE’s Christmas Eve application, McKenzie thought that the possible application of the conduct mandate to BAE might affect whether or not she should grant an exemption:

I do not accept BAE’s submission that I cannot consider whether BAE is a public authority until it acts under the exemption and someone raises that conduct under s39 of the Charter. It is clearly relevant, in considering whether or not to grant this exemption, to consider whether the Charter would apply to the conduct which BAE seeks to be exempt from the EO Act, and whether, if it is a public authority in respect of that conduct and obliged to act compatibly with human rights, it would be inconsistent with that obligation and the Charter to grant the exemption. I do not consider that the Charter affects the determination of this proceeding or the operation of any exemption granted.

At least, I think that’s what she held. Who knows where that last sentence fits in? The more I contemplate it, the less McKenize’s approach to Charter s. 2 makes sense to me. Anyway. BAE’s argument about Charter s. 39 seems to take the approach that that section is the exclusive means by which Charter s. 38 operates. McKenzie’s view appears to be that Charter s. 39 only governs when someone (e.g. a BAE employee with an unlucky nationality) can seek a ‘relief or remedy’ for a Charter s. 38 breach. See my discussion of this tricky and highly ambiguous issue here.

Now, onto the question of whether BAE, a private defence company, is a public authority. Here’s the definition of public authority:

4(1) For the purposes of this Charter a public authority is-

(a) a public official within the meaning of the Public Administration Act 2004; or

(b) an entity established by a statutory provision that has functions of a public nature; or

(c) an entity whose functions are or include functions of a public nature, when it is exercising those functions on behalf of the State or a public authority (whether under contract or otherwise); or…

The rest of the list are named  entities (and not BAE.) Obviously, the only one that BAE could fall within is Charter s. 4(1)(c). Here’s McKenzie’s analysis:

It should not be assumed that I agree with BAE’s submission that it is merely a commercial supplier of goods and services to the Australian Department of Defence and so not a ‘public authority’ within the meaning of s4 of the Charter. In my view, it is arguable that what BAE does in providing services and designing, producing and maintaining land, air, space and sea defence systems for that Department might be a function of a public nature performed on behalf of the Commonwealth. It might be characterised as a function connected to or generally identified with functions of government.

A bold argument, but totally wrong. It may well be that defence contracting is a ‘function of a public nature’. And it may also well be that BAE exercises those functions on behalf of the Commonwealth. But the Commonwealth is not ‘the State’, nor is the ‘Australian Department of Defence’ a ‘public authority.’ ‘State’ is defined in the Interpretation of Legislaiton Act 1984 as follows:

38 In all Acts and subordinate instruments, unless the contrary intention appears-… State means the State of Victoria

And Commonwealth Departments don’t fall within any of the categories in Charter s. 4(1) (assuming they don’t exercise their functions on behalf of Victoria.) Indeed, I imagine that any attempt by Victoria to bind Commonwealth departments (or those who work for them) with the conduct mandate would face some serious constitutional problems. Regardless, the text of the Charter unambiguously settles the issue. Next time, Deputy President McKenzie (and BAE’s lawyers Blake Dawson!), read the statute(s)!

Regardless, McKenzie saved BAE another way:

In my opinion, it would not be acting in breach of s38 for these reasons.  First, BAE acts in accordance with an exemption granted by VCAT. This is not conduct which it chooses to undertake, without exemption, and ignoring the prohibitions of the EO Act. Second, the EO Act itself recognises that the granting of an exemption by VCAT takes the relevant conduct out of the prohibitions of the EO Act. Third, the exemption only applies to conduct required to enable BAE to comply with certain Australian and US security requirements. BAE is in the unfortunate position of either breaching those requirements and complying with the EO Act, or complying with those requirements and breaching the EO Act. In these circumstances, it is my view that it can be said that BAE ‘as a result of a statutory provision or a provision made by or under an Act of the Commonwealth or otherwise under law… could not reasonably have acted differently’ within the terms of s38(2) of the Charter.

Now, while I’m thrilled that someone is at last paying attention to Charter s. 38(2) (though alas with no analysis of pertinent authorities), I am unconvinced by this analysis. McKenzie correctly states that s. 83 of the EOA operates to exempt an entity from ‘any of the provisions of this Act’. But it’s equally clear that s. 83 doesn’t exempt anyone from any other statute (including the Charter and, especially, Charter s. 38.) Indeed, it’s well known that entities that get exemptions from state anti-discrimination laws may also have to seek exemptions from Commonwealth ones (but not BAE, because the Commonwealth law doesn’t ban nationality discrimination.)

So, the issue comes down to Charter s. 38(2):

38(2) Subsection (1) does not apply if, as a result of a statutory provision or a provision made by or under an Act of the Commonwealth or otherwise under law, the public authority could not reasonably have acted differently or made a different decision.

Example Where the public authority is acting to give effect to a statutory provision that is incompatible with a human right.

Now, s. 83 is merely an exemption from the EOA, not a positive authorisation to discriminate. Public authorities, it seems to me, are still bound by every other law that applies to them, including the Charter. It strikes me as quite a stretch to say that, just because a public authority has an exemption from the EOA, it could not reasonably do anything but discriminate in accordance with the exemption. Nor does it seem to me that a public authority, by discriminating, is giving effect to s. 83 of the EOA. (VCAT, if it’s a public authority, would presumably have that defence.) So, it may well be that, becaues of the Charter, public authorities cannot typically discriminate, whether they have an exemption or not. This shouldn’t be so shocking, because – I imagine – s. 83 is usually utilised only by private entities, because public entities can typically rely on this provision:

69(1) A person may discriminate if the discrimination is necessary to comply with, or is authorised by, a provision of- (a) an Act, other than this Act; (b) an enactment, other than an enactment under this Act.

When this section applies, clearly the public authority will also have a defence under Charter s. 38(2).

McKenzie correctly states that BAE isn’t acting of its own accord. Rather, its hands are forced by the US’s nasty requirement of nationality discrimination. But that isn’t a Victorian or Commonwealth law, but rather a US one. So, McKenzie’s argument depends on the bold claim that ‘otherwise under law’ refers to US laws, as they apply to private entities who deal with the US! While the term ‘law’ would seem broad enough to cover US laws (and, say, Iraqi and North Korean laws too, I guess), I think that there’s every reason to think that it should only extend to Australian laws. Its purpose, after all, is to preserve parliamentary sovereignty, meaning Victoria’s parliament (and, maybe, other Australian ones.) Allowing Victorian public authorities to escape a Victorian human rights law just because of the laws of foreign countries seems a bit extreme, I reckon!

So, all up, McKenzie wrongly kept her mind open to BAE being a public authority and wrongly exempted BAE (and everyone else who gets an EOA s. 83 exemption) from the conduct mandate. Win some, lose some, I guess. Or, for people who want the Charter correctly applied, lose some, lose some. It’s great that McKenzie actually paid attention to the relevant provisions of the Charter. But it’s a pity that she gave them a poor interpretation. When will a Victorian court or tribunal get things right?

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