Society of Trust and Estate Practitioners The Interface between Equitable Principles and Public Law

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______________________Society of Trust and Estate Practitioners

The Interface between Equitable Principles
and Public Law

Chief Justice Robert French
29 October 2010, Sydney

Equity and Administrative Justice

The ordinary English meaning of the word 'equity' defined in terms of equality of treatment, fairness, impartiality or even-handedness, embodies concepts which inform long-established understandings of administrative justice whereby official power is to be exercised, in the words of Lord Halsbury:

… according to the rules of reason and justice, not according to private opinion: … not arbitrary, vague, and fanciful, but legal and regular.1

The application of the concept of trusteeship to the exercise of public power is longstanding and persistent:

The powers of public officials are regarded as being held on trust for the public who granted them. They cannot lawfully be exercised for personal gain or motive or irrationally or for purposes which exceed the reasons for their conferral.2

Contemporary notions of administrative justice require that a decision involving the exercise of public power and affecting the subject whether natural person or corporation, will be:

  1. In accordance with law.

  2. Rational, in the minimal sense that the decision is logically open on information properly before the decision-maker having regard to the law which must be applied.

  3. Fair, so that the decision-maker is not distracted or hampered in fact finding by bias or prejudice or the absence of relevant information able to be provided by the person affected by the decision being made.

  4. Intelligible, by the provision of reasons so that the person affected, and perhaps the wider community, will know why the decision has been made (albeit in the present state of authority in the High Court there is no common law obligation to provide reasons for administrative decisions).3

That understanding of administrative justice and the trusteeship analogy is consistent with a characterisation of public power as fiduciary in nature. There is a kind of irrationality that can lead to an exercise of power being vitiated on the basis that it is so unreasonable that no reasonable person could have so exercised it.4 Paradigm cases of that kind of irrationality have been identified as follows:5

  1. The capricious selection of one of a number of powers open to an administrator in a given situation to achieve a desired objective, the choice being capricious or inappropriate in that the exercise of the power chosen involves an invasion of the common law rights of the citizen, whereas the other powers would not.

  1. Discrimination without justification, a benefit or detriment being distributed unequally among the class of persons who are the objects of the power.

  2. An exercise of power out of proportion in relation to the scope of the power.

Of these Gummow J said:

All of them are consistent with a view of Lord Greene's 'doctrine' as rooted in the law as to misuse of fiduciary powers: see Grubb, Powers, Trusts and Classes of Objects [1982] 46 Conv 432 at 438.6

Equity in its wide ordinary sense implies equality of treatment which is a principle of lawful administration.7 Unjustified discrimination may be an abuse which vitiates the exercise of official power.8 Equity in its ordinary non-technical sense lies at the heart of a contemporary understanding of administrative justice. It also has a long history of use in statutes requiring certain classes of decision to be made according to 'equity and good conscience'.9

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