Are decisions of government contracted service providers subject to judicial review? Durney v Unison Housing Ltd

Background

This case dealt with whether a non-profit company (a private entity) can be subject to judicial review when they are providing services on behalf of government.

Judicial review is a process of a Court reviewing a decision made by the government or a public entity exercising a statutory power (a power granted to a body through legislation). This is undertaken to ensure that they abide by the law and make fair decisions according to due process. There has been speculation that such remedies may apply to private bodies contracted to provide services to the public by government.

The Law

This speculation has arisen after the Datafin case^[1] was decided in the UK. The English Court of Appeal decided that a decision of a private body which was not made in the exercise of a statutory power, may be amenable to judicial review if the decision is in a practical sense:

• made in the performance of a ‘public duty’; or
• in the exercise of a power which has a ‘public element’.

In Datafin, the private body in question exercised ‘immense power’ and had ‘enormously wide discretion’.

The Australian High Court has not taken a position on this issue. High Court judges have recommended that courts should not consider the application of the Datafin principle until it is absolutely necessary.

The Issues

In the current case, the defendant, Unison Housing Limited (Unison), is a company limited by guarantee which provides social and affordable housing on a non-profit basis.

The plaintiff is a tenant of Unison (Tenant), under a residential tenancy agreement.

Unison gave the plaintiff a 120-day notice to vacate. The notice to vacate was accompanied by a letter signed the Chief Executive Officer of Unison. The letter referred to what it described as ‘ongoing unacceptable behaviour’ by the Tenant.  The CEO advised the Tenant that all communication with Unison was to be in the form of email only.  He was not to contact any of the Unison offices by telephone or in person (contact decision).

Some little time later, Unison withdrew the notice to vacate. It has not subsequently served any further notices on the Tenant.  However, the contact decision was not withdrawn.

The Tenant sought declarations that the notice to vacate decision and the contact decision were invalid. He sought to restrain Unison from issuing any further notices to vacate, or from restricting his contact with Unison staff in relation to tenancy matters. He also claimed that Unison is in breach of its obligation to him of quiet enjoyment and sought orders in the nature of mandamus, compensation and damages.

Unison is not a public body, so the key question was whether its decisions to give a notice to vacate, and to restrict the means of contact by the Tenant with its staff are amenable to judicial review.

Was Unison exercising a ‘public duty or a function involving a public element’, such that the Datafin principle might apply? The Court held that it was not (at [65]):

“I am of the view that Unison’s decisions to give the plaintiff a notice to vacate and to restrict his contact with Unison staff to communications by way of email were not decisions amenable to judicial review for the following reasons:

(a) Unison is a private body, and was not acting under any statutory power;

(b) Neither decision was made in the performance of a public duty, or in the exercise of a power that had a public element or public law consequences;

(c) The decision to serve a notice to vacate under the RT Act is a decision to take the first step towards the recovery of possession of rented premises under the RT Act;

(d) A right to obtain possession of premises under the RT Act is a private property right, arising from the tenancy agreement; and

(e)  Likewise, a decision to restrict the manner in which the plaintiff can contact Unison staff for security and safety reasons, is a private decision by an employer in the discharge of its duty to provide a safe workplace.”

The Court said that if this is wrong, then the Tenant should fail for other reasons founded in the provisions of the Residential Tenancies Act 1997 (Vic) (RT Act). Section 263 of the RT Act permits a landlord to give a notice to vacate without specifying a reason for the giving of the notice. The Court held that Unison continued to be able to issue a notice to vacate if it so chose. Therefore, the Tenant’s contention that he should never be granted a notice to vacate could not be sustained.

On the non-contact decision, the Court accepted that there was considerable evidence that the Tenant had behaved violently and abusively toward Unison staff.

There was no issue of procedural fairness arising because the contact decision did not affect any ‘right or interest’ of the Tenant, who has not suffered any ‘practical injustice’ arising from that decision. He retained all of his rights to make complaints under the Housing Act, and all of his rights under the RT Act and the tenancy agreement.

It is not clear to us why the Victorian Charter of Human Rights was not considered, as there is a freedom of expression and communication provision which may have applied to the no contact decision made by Unison. Similar issues arose in Victorian Legal Aid case study:

“Victoria Legal Aid helped a man who was an inpatient whose authorised psychiatrist determined that he was making nuisance calls to government agencies including 000. The psychiatrist ordered that the man be limited to one phone call a day including to his lawyers and ordered that his calls be monitored to determine whether they were causing nuisance.

Victoria Legal Aid advocated to the psychiatrist that this restriction unjustifiably limited the man’s freedom of expression. In response, the psychiatrist agreed to lift the ban on contacting his lawyers and put in place a review period after which the ban on calling other agencies would be reviewed.^[2]”

Conclusion

As governments increasingly turn to not-for-profits to deliver services that would previously have been provided directly by the State, citizen recipients are wanting the same redress against private companies in such roles as they have against the government.

This trend raises difficult questions. Where a service is delivered by the State there are multiple and well-established mechanisms of public law accountability such as:

• merits review through tribunals;
• judicial review through the Courts; and
• the jurisdiction of ombudsmen.

At present, these do not reach private organisations (such as not-for-profits) without clear legislative provisions.  The issue is whether the Courts will hold private organisations to government-based remedies.

However, Human Rights Acts are being considered or adopted by various State governments across the country. Generally, the Human Rights Acts apply to:

• government decision making; and
• certain private bodies making public decisions.

Queensland is well advanced to adopting such legislation.

Despite this case not establishing a right of judicial review for the Tenant, this is a space to watch for not-for-profits. Where there is an increase of the power and the impact in the decisions made by government contracted service providers (i.e. more traditional government roles being outsourced to private companies), the more likely that some sort of regulatory oversight is introduced by the Courts or via legislation.

[1] R v Panel on Take-overs & Mergers; ex parte Datafin plc [1986] EWCA Civ 8

[2] Protecting human rights for Victorians who have a mental illness using Victoria’s Human Rights Charter: Your advocacy, Human Rights Law Centre, p. 6, https://static1.squarespace.com/static/580025f66b8f5b2dabbe4291/t/5ba341e621c67c17823378d9/1537425902196/Your+advocacy+guide_Victorians+with+mental+illness.pdf