Judicial Review of Refusals to Make Act of Grace Payments: When is it Possible?

While the making of act of grace payments is within the absolute discretion of the Minister for Finance, refusals to make payments may be the subject of judicial review proceedings and, in some cases, the decision may be successfully challenged.

There have been few cases considering the operation of the act of grace provision in section 33 of the Financial Management and Accountability Act 1997 (Cth). That provision authorises the Minister for Finance to make an act of grace payment where it is appropriate to do so because of special circumstances. This article will consider two recent cases dealing with the judicial review of decisions to refuse requests for such payments. These cases demonstrate that decisions to refuse act of grace payments can be judicially reviewed and, at least in some circumstances, these proceedings may be successful.

Clement v Minister for Finance and Deregulation [2009] FMCA 43

In Clement v Minister for Finance and Deregulation [2009] FMCA 43, proceedings, described as vexatious by Neville FM, were instituted under section 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) to review a rejected claim for an act of grace payment. The applicant was self-represented before the Federal Magistrates Court and the arguments for relief under the ADJR Act were not entirely clear. The Minister conceded that the decision to refuse an act of grace payment was reviewable under the ADJR Act, but argued against the establishment of any grounds of review. All claims for relief were rejected by Federal Magistrate Neville, who, in the course of dismissing the proceeding, reiterated some useful observations about the nature of the power under section 33 of the FMA Act.

Federal Magistrate Neville said that the fundamental premises of section 33 are threefold:

first, that "there are no other remedies available"; secondly, that "essentially as a matter of moral responsibility or obligation, the Minister chooses to act so as to remedy an injustice that otherwise remains incapable of repair or solution through the ordinary or usual processes of the law"; and thirdly, "that such a payment is ultimately a matter that rests or reposes, as a matter of discretion, in the Minister" (in other words, "there is never any formal duty or compulsion on the part of the Minister to authorise a payment under section 33 of the Act even if, as section 33 requires, there exist 'special circumstances'"). The moral responsibility imposed on...