On the Case: Issue 6

Commonwealth funding arrangements for school chaplaincy services
found to be unconstitutional by the High Court of Australia

In this sixth edition of On the Case Professor Michael Quinlan, Dean of the University of Notre Dame Australia, School of Law, Sydney discusses the High Court of Australia's recent decision on the Constitutional validity of the Federal government's regime for funding of school chaplaincy services1.

Introduction

This is the second time the High Court2 has considered Federal funding of school chaplaincy services. In 2012 the Court found that section 61 of the Constitution3 did not provide a Constitutional foundation for an agreement which the Commonwealth had made to fund those services or for the payments which it had made for them4. Following that decision, the Commonwealth Parliament passed legislation which was designed to remedy these defects and to provide a sound Constitutional platform for Federal government funding of school chaplaincy services (the Remedial Act)5. This case considers the Constitutional validity of agreements entered into and payments made under the Remedial Act.

In Brief

The High Court found that the agreements and payments made pursuant to the Remedial Act were unconstitutional because the specific Constitutional powers relied upon by the Commonwealth were found not to apply. Whilst the case did not specifically consider issues such as the separation of Church and State6, key to the majority's decision was a finding that the chaplaincy services did "not provide material aid to provide for the human wants of students."7

The Facts

Since 1997 the Federal Government has directly funded chaplains for those schools which elect to employ a chaplain. The Commonwealth has entered into funding agreements with providers of such services. The objectives of the programme are to assist school communities by supporting "the wellbeing of their students, including by strengthening values, providing pastoral care and enhancing engagement with the broader community."8

The Issues

The Commonwealth sought to justify the Remedial Act, as a law with respect to the provision of benefits to students and as a law with respect to corporations, relying on the powers of the Commonwealth granted by section 51(xxiiiA) and 51(xx) of the Constitution respectively,9 and on several additional grounds. A joint judgment was delivered by Chief Justice French and by Justices Hayne, Kiefel, Bell and Keane. Justice Crennan delivered a separate judgment agreeing with the conclusions of the joint judgment but expressing some reservations in relation to s51(xxiiiA).

The Decision

Section 51(xxiiiA)

The majority accepted that all students might use the chaplaincy services if they were offered at their school and, also accepted for the purposes of argument, that "some students would derive advantage from using the services and, in that sense, should do so." The majority also accepted that those students would be provided with an advantage or a good and so receive a "benefit."10 The majority also accepted that "benefits" in s51(xxiiiA) meant "material aid given pursuant to a scheme to provide for human wants...under legislation designed to promote social welfare or security" 11 which could encompass grants of money and the provision of services.12

Whilst specifically eschewing any attempt to comprehensively define "benefits" or "benefits to students" the majority nevertheless found that the programme funding chaplaincy services was not providing "benefits to students" as that expression is used in s51(xxiiiA). For the majority, the expression "benefits to students" had to be considered in its totality and not broken up into its constituent parts – the question to be asked was not whether there were "benefits" and then whether they were provided to or for "students" but rather whether there were "benefits to students." The majority found that this required material aid to be provided to identifiable students and that that aid must satisfy a want arising because of the fact that the recipient was a student.13 As the majority put it:

Providing those services [of a chaplain or welfare worker] does not provide material aid to provide for the human wants of students. It does not provide material aid in the form of any service rendered or to be rendered to or for any identified or identifiable student. There is no payment of money by the Commonwealth for or on behalf of any identified or identifiable student. And the service which is provided is not directed to the consequences of being a student. There is no more than the payment of an amount (in this case to an intermediary) to be applied in payment of the wages of a person to "support the wellbeing" of a particular group of children: those who attend an identified school. And the only description of how the "support" is to be given is that is includes "strengthening values, providing pastoral care and enhancing engagement with the broader community." These are desirable ends. But seeking to achieve them in the course of the school day does not give the payments which are made the quality of being benefits to students.

Providing money to pay persons to provide such services at a school is not to provide benefits which are directed to the consequences of being a student. It is not a provision of benefits to students within the meaning of s51(xxiiiA).14

Justice Crennan found that the grant of power in s51(xxiiiA) should be broadly construed15 but that the fact that the programme did not provide government assistance to prescribed and identifiable beneficiaries excluded reliance on s51(xxiiiA).16 For Crennan J for benefits to fall within this power they "must relate to education services provided to real or actual persons as prescribed recipients or beneficiaries entitled to those education services."17 For Crennan J the fact that the programme did not require any student to be identified made the Remedial Act unconstitutional and it was unnecessary to conclude or to imply that the services of student welfare workers or counsellors could not be within the scope of s51(xxiiiA).18

Section 51(xx)

For the purposes of considering this argument the Court was prepared to assume that the parties entering into the relevant agreements with the Commonwealth and receiving payments from the Commonwealth were trading or financial corporations. The Court did not consider this to be sufficient to bring such agreements within power. Whilst the Court again eschewed any general examination of the limits of this power, it found that the Remedial Act was not within power because it made "no provision regulating or permitting any act by or on behalf of any corporation."19

Other issues

The Commonwealth sought to rely on the fact that it had passed Appropriation Acts which included amounts for the relevant programme. The High Court found that it was not necessary for it to consider this argument.20 The Commonwealth also unsuccessfully argued that the previous decision on the funding of chaplaincy services21 should be re-opened.22 Finally the Commonwealth unsuccessfully sought to rely on the incidental power in s51(xxxix).23 This argument largely failed with the failure of the arguments relying on s51(xx) and s51(xxiiiA). The Court also specifically rejected the argument that the Remedial Act was a law incidental to the appropriate power or the executive power.24

Some comments on the Court's reasoning

On The Case is not the place for a detailed critique of the High Court's reasoning but some brief observations are irresistible. The finding that s51(xxiiiA) requires "benefits" to be made for or on behalf of identifiable beneficiaries is consistent with previous decisions on the subsection. 25 Were this the only finding of the Court on this provision, it is a construction which the Commonwealth might fairly readily overcome if it wished to continue to contract directly with suppliers. In this case remedial legislation might provide a mechanism by which payments were made by reference to the numbers of students availing themselves of the service of identified by a school as requiring or desiring such access.

The majority's view that chaplaincy services do not provide "benefits to students" because they are "not directed to the consequences of being a student"26 is more problematic. This view must be considered against the fact that individual schools have elected to participate in the programme. It seems fair to assume that those schools which have elected to join the programme see "strengthening values, providing pastoral care and enhancing engagement with the broader community"27 as part of the needs of their students as school students and that the provision of these services is seen by them as part of their role as schools. 28

Why this Case Is Important

This case means that the particular mechanism for Federal funding of the school chaplaincy programme established by the Remedial Act is unconstitutional. The decision confirms that a specific head of Commonwealth power is required, as a Constitutional foundation, for Federal government expenditure.29 As some commentators have observed, this may have implications for other Federally funded initiatives.30 The immediate consequences of the decision have been that the Federal government no longer has the power to supervise or control the current chaplaincy programme and that it has waived its entitlement to recover any payments already made under the programme.31 The Federal government is considering other funding mechanisms as it allocated $243.8 million over four years in the 2014-15 Federal Budget to fund the programme.32 A mechanism in which the Commonwealth provides financial assistance to the States and Territories rather than the Commonwealth directly contracting with the providers of such services is a possible outcome.33 We will need to wait to see what arrangements are developed if the school chaplaincy programme is to continue to be funded directly or indirectly by the Commonwealth and if so whether the High Court is invited to considered the Constitutional validity of those future arrnagements.

1 Ronald Williams v Commonwealth of Australia & Ors [2014] HCA 23 (Williams (No 2))
2 The High Court is Australia's highest Court
3 Section 61 of the Constitution establishes the power of the executive branch of the Federal government and provides as follows: 
The executive power of the Commonwealth is vested in the Queen and is exercisable by the Governor-General as the Queen's representative, and extends to the execution and maintenance of this Constitution, and of the laws of the Commonwealth.4 Williams v Commonwealth of Australia & Ors (2012) 248 CLR 156; [2012] HCA 23 (Williams (No 1)).
5 the Financial Framework Legislation Amendment Act (No 3) 2012 (Cth) 
6 In particular s116 of the Constitution did not feature. Section 116 provides that: The Commonwealth shall make no law for establishing any religion, or for imposing any religious observance, or for prohibiting the free exercise of any religion, and no religious test shall be required as a qualification for any office or public trust under the Commonwealth.
7 Williams (No 2) [47]
8 these are the objectives of the National School Chaplaincy and Student Welfare Program quoted by Crennan J Williams (No 2) [100].
9 These provisions read as follows:
51.The parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to (xx) foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth;: (xxiiiA) the provision of maternity allowances, widows' pensions, child endowment, unemployment, pharmaceutical, sickness and hospital benefits, medical and dental services (but not so as to authorize any form of civil conscription), benefits to students and family allowances.10 Within sense 3a of The Oxford English Dictionary, 2nd ed (1989, Vol II 111: 43 fn 18
11 Williams (No 2) [43] quoting from British Medical Association v The Commonwealth (1949) 79 CLR 201 (BMA) at 279
12 Williams (No 2) [44] relying on BMA 279 and Alexandra Private Geriatric Hospital Pty Ltd v The Commonwealth (1987) 162 CLR 271 ( Alexandra Hospital ) 280
13 Williams (No 2) [47]-[48] 14 ibid
15Williams (No 2) [107]
16 Williams (No 2) [102], [107-[109]]. She felt that this result was compelled by the decisions in BMA and Alexandra Hospital.
17 Williams (No 2) [109] cf fn 62
18 Williams (No 2) [111]
19 Williams (No 2) [50]
20 Williams (No 2) [55]
21 Williams (No 1)
22 Williams (No 2) [66]
23 This provisions reads as follows:
51.The parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to
(xxxix) matters incidental to the execution of any power vested by this Constitution in the parliament or in either House thereof, or in the Government of the Commonwealth, or in the Federal Judicature, or in any department or officer of the Commonwealth.24 The Court said at [86] that to hold otherwise would be contrary to its decision in Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 (Pape)
25 BMA and Alexandra Hospital and it consistent with a ejusdem generis reading of the sub-section 
26 Williams No 2 [47]
27 The description of the "support" to be given by the programme quoted in Williams (No 2) [47]
28 Schools are not simply places in which students are taught to read and write. As the Congregation for Catholic Education (for Educational Institutions) recently noted in its Instrumentum laboris "Educating Today and Tomorrow: A Renewing Passion" [II]:http://www.vatican.va/roman_curia/congregations/ccatheduc/documents/rc_con_ccatheduc_doc_20140407_educare-oggi-e-domani_en.html:
Schools and universities are places where people learn how to live their lives, achieve cultural growth, receive vocational training and engage in the pursuit of the common good; they provide the occasion and opportunity to understand the present time and imagine the future of society and mankind.29 Following Pape and Williams (No 1).
30 e.g. Professor George Willams has identified areas such as drought assistance, local government, community legal centres, energy efficiency, community safety, affordable housing, sport and the arts: Professor George Williams, "George Brandis ignores his own insights into chaplains ruling" The Age, 30 June 2014. www.theage.com.au/comment/george-brandis-ignores-his-own-insights-into-chaplains-ruling-20140630-zsqnr.html
31 Australian Government Department of Education. " National School Chaplaincy and Student Welfare Program"www.education.gov.au/national-school-chaplaincy-and-student-welfare-program
32 Australian Government Department of Education. " National School Chaplaincy and Student Welfare Program"www.education.gov.au/national-school-chaplaincy-and-student-welfare-program
33 Section 96 of the Constitution provides that "the Parliament may grant financial assistance to any State on such terms and conditions as the Parliament thinks fit" and this mechanism has survived Constitutional challenge in the past, for example, in Pye v Renshaw (1951) 84 CLR 58.