Administrative Law Semester 1 2001 – Question 3- Mark 75
Are the Regulations Valid?
Firstly, it is important to note that subordinate legislation, i.e. regulations cannot be challenged under the ADJR Act as it is not ‘of an administrative character’ as required by s3(1) ADJR. Hence the validity of the regulation has to be challenged under the common law.
The validity of reg 3
Clear statutory language is required to impose a penalty (Amalgamated TV Services v ABT). Here, the Act does not provide for such a penalty to be imposed by the regulations, hence regulation 3, which seeks to impose a 10% rate on a grant to be paid to the employees is arguably a penalty and therefore invalid.
The validity of reg 1
In determining this, it is appropriate to apply the 3 stage test of identifying whether there is statutory authority for the regulations (developed in McEldowney, applied In the Australian cases of BradburyTurner).
First step. In determining the scope, purpose and object of the Act, one looks to the parent Act. Here, the authorising section (s4) uses the words “necessary or convenient”. This is similar to the words used in Shanahan, which was interpreted as being a general enabling power, though limited to activities complementary to the purposes of the Act and not supplementary. Other sections of the Act, such as s1, which seeks to ‘promote …encourage … activities’ indicate a broad power to achieve the purposes of the Act.
In Swan Hill Corp v Bradbury, the court looked at the nature of the subject matter in determining whether the parent Act had a broad prohibiting power. in applying the principles there, the regulation of an evil may be broadly construed. However, here, the Act aims to encourage R& D that promote innovation or experimentation, arguably regulating a ‘good’ as opposed to an evil. Hence, the Act should not be broadly construed to include prohibition.
Stage 2. The operation and legal effect of s2 of the regulation is to prohibit the conduction of ‘experiments on human beings, animals or any living creature’ (reg 1).
Stage 3. The proportionality test (SA v Tanner) may be used where the power is purposive in nature, which appears to be the case here (i.e. s1 of the Act states ‘The object of this Act’). The test is whether the regulation is a reasonably proportionate means of achieving an end. Not only does reg 1 appear to defeat the purpose of ss1 & 4 in the parent Act, but it appears that because the parent Act falls short of prohibiting activities, that reg 1 is invalid as it essentially prohibits certain activities.
As for reg 2, applying the same test in Meldowney, no where in the provided section of the parent Act does it state that reg 2 is permitted. Hence, reg 2 is likely to be invalid.
Grounds for an appeal to the Fed Mag Ct
An appeal will only be successful if the court dins that there has been an error of law (EOL) by the Board (original decision-maker). Cts always confess difficulty in distinguishing EOL and errors of fact (EOF). However, there has been a 3 stage test formulated.
- Stage Finding
- Rule Stating
- Rule Application
Not all will be relevant to each fact and these will be discussed in determining if the company has a right of appeal.
The first reason of refusing the grant was the uncertainty in predicting the effects of the products. This is arguably the application s1 of the Act to the facts in determining if the possibility of adverse side effects fit within “innovation or experiment” in s1 of the Act. (Pozzolanic) It appears that “experiments” can be provided a few meanings and are arguably not ordinary Eng words such that their interpretation in rule application is a question of law (Hope; Pozzolanic). The hesitation of the Board in granting the application becauise of a fear of adverse side effects appears to defeat the purpose of ‘innovation’, which indicates the desire of the Act to take risks through ‘experiment’.
Hence, the company may appeal to the Fed Mag Ct on this possible EOL.
The second reason provided by the board was that because the company was based in the Uni of Cooma, that it breached reg 2. Assuming that reg 2 is valid, the interpretation of whether “free of rental” constitutes an “industry development grant” under reg 2 is one that requires interpretation under Stage 2, i.e. rule stating.
The law states that an error in ascertaining the meaning of an ordinary or non-technical words/phrases is an EOF, whose terms can be resolved by looking at ordinary dictionaries (Lombardo; Pozzalanic). Coversely, if it is a specialist word, requiring special skill and expert evidence to interpret, it is a QOL (TNT).
Here, the term ‘industry development grant’ seems to indicate actual financial assistance given to a body – it may be interpreted as an ordinary Eng word. As such though ‘free of rental’ may not fall into the terms of reg 2, this merely constitutes an EOF and is not appealable.
As for whether ‘tea tree oil’ falls under ‘any living creature’ in reg 1 – this is not a contested point as it was not one of the reasons provided for not granting the application.
The third reason provided by the Board was the assumption that the company will not be able to fulfill reg 3, as reg 3 is probably invalid, compliance with it is unnecessary and hence this third reason may constitute an EOL.
If an appeal to the ct is successful, a court may grant certiorari, providing that there was an EOL on the face of the record. This may be problematic as reasons are not ‘on the face of the record’ (Craig v SA).
However, a mandamus may be sought ordering that the grant application be provided by the Board, or perhaps just to compel the power to be exercised lawfully, and the previous decision declared a nullity.