Australia: Economic interests can give right to challenge administrative decisions, says High Court

Economic interests can be enough to make people, companies and organisations a "person aggrieved" and give them the right to challenge an administrative decision, after the High Court's decision this morning in Argos Pty Ltd v Corbell, Minister for the Environment and Sustainable Development [2014] HCA 50.

The Argos decision turned on the ACT's Administrative Decisions (Judicial Review) Act 1989, but as it is based on the Commonwealth's Administrative Decisions (Judicial Review) Act 1977, it's relevant to Commonwealth decision-makers too. In this Alert we'll refer to both Acts as the ADJR Act.

The economic interests in the Argos case

The ACT Minister for the Environment and Sustainable Development approved a proposed commercial development in the suburb of Giralang. This included a new supermarket.

The owners of supermarkets in Evatt and Kaleen, which are on either side of Giralang, said that this would make their own businesses less profitable; the landlord of the Kaleen supermarket said the new supermarket could even force the Kaleen supermarket to close, which would affect it.

Broad standing under the Administrative Decisions (Judicial Review) Act

A person can challenge an administrative decision if he, she or it is a "person aggrieved", which the Act says includes "a person whose interests are adversely affected by the decision" (section 3B(1)(a) in the ACT ADJR Act; section 3(4) in the Commonwealth ADJR Act).

When a person is challenging a decision made under a particular statute, that statute's scope or purpose does not limit or alter the test for standing. That means that it doesn't matter if the person's interests themselves are not within the scope or purpose of the particular statute. For the majority of the High Court, any attempt to limit the test in this way would undermine the ADJR Act's purpose or even make the ADJR self-defeating. The Planning Act is concerned with the general commercial health of the Territory. However, in this case, it was not necessary to prove that a trader's desire to be protected from competition was directly relevant to the decision being made under the Planning Act or the Territory Plan.

The particular statute's scope or purpose can be relevant to standing, however, if they help the court to understand what those interests are and how those interests are affected by the decision that's being challenged.

Why these economic interests were enough

First, the High Court held that there is no general rule that detriment to the economic interests of a business cannot satisfy the statutory test of "person aggrieved". The High Court confirmed that a "person aggrieved" should not be read restrictively.

The next question is what sort of economic interests would be enough. The High Court did not set out a simple test; it said this will be a question of fact and degree, looking at issues such as whether the effect is direct or indirect. Clearly, however, mere speculation will not be enough. The more direct, or proximate, the effect of a decision on a person's interests, the more likely it is that the person will be a "person aggrieved".

In this case, the majority accepted that the interests of the companies which ran the supermarkets were enough to make them "persons aggrieved". It was enough to show that there was a real risk that their turnover would be adversely affected by the proposed development. The landlord's interest, however, was based on speculation that its tenant's business would fail, leading to a loss of rental income. There was no evidence of how likely the business failure would be, and thus of how likely it was to lose rent. The landlord's interest was held to be too remote to give it standing under the ADJR Act.

A wider range of interests, a wider pool of potential challengers of an administrative decision

The High Court has given a resounding affirmation of the ADJR Act and the role it plays. It rejected taking a narrow interpretation that would limit the right of a person to challenge an administrative decision. It does however require the interest in the decision to be more than speculative or an apprehension of impact.

The decision is a reminder that in making administrative decisions for government decision-makers to broadly consider the effect of their decisions – and the prudent approach is to document that, including in any written reasons.

Down the track, decision-makers may need to brace themselves for potentially more challenges.

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.