HL Deb 14 May 1878 vol 239 cc1867-80

, in rising to put the Question of which he had given Notice to his noble Friend the Under Secretary of State for the Colonies, could assure their Lordships that, upon the present occasion, he did not intend to invite them to discuss upon their merits the differences which had lately arisen in the Colony of Victoria. But a question of wide constitutional importance, not confined to a single Colony, had been raised in the course of them—by no means for the first time—namely, when the public money was "legally available." The Constitution Acts of both New South Wales and Victoria, which instituted Responsible Government, and two Houses of Legislature, were passed in 1855. Public money was issued upon the warrant of the Governor. Therefore, Colonial precedents prior to 1855 were irrelevant. On the 18th December, 1857, the Commissioners of Audit in Victoria, having reason to believe that the Annual Appropriation Act would not have become law before claims upon the Treasury for 1858 would have become due and payable, requested the Colonial Treasurer to submit the following case for the opinion of the Law Officers, in order to satisfy their doubts upon the subject of their duty in the matter:— The Audit Act, 21 Vic. No. 24, provides (Clauses 17, 18, 19) that no moneys, shall after the 1st January next, be issued from the Treasury, until the Commissioners of Audit or two of them, shall have countersigned a warrant addressed to the Treasurer. Before signing the warrant, the Commissioners are to ascertain that the sums included in it are legally available for, and applicable to, the service or purpose mentioned; they cannot sign unless such be the case; and without their signatures the moneys may not be issued. No moneys, therefore, are to be issued from the Treasury until the same are legally available. The question arises, whether the words 'legally available' imply, as would seem to be the case, that the Appropriation Act must have passed both Houses, and have become law; or, whether, on the ground of custom and precedent, the resolutions of the Assembly, duly agreed to by the House, but without the consent of the other branches of the Legislature, may be considered as making the money legally available for issue. Of course, the Governor's signature was finally necessary. At first, the Solicitor General (afterwards Mr. Justice Fellowes) was of opinion that the House should be consulted; but, on the 11th January, 1858, he gave a second opinion as follows:— I think the resolutions of a Committee of Supply reported to, and adopted by, the House, make the amount 'legally available.' In point of fact, Votes of Credit were passed, and moneys issued on them in 1857, when changes of Ministers took place, and which, have never been questioned. It is, moreover, in accordance with the practice of the House of Commons. In the year 1858, the Commissioners of Audit submitted a case to the Attorney General; and it was out of this case, that his (the Earl of Belmore's) question arose. The Commissioners say— The Commissioners of Audit are required, before certifying the warrants for the issue of money, to ascertain whether it is legally available. It has been the practice both in England and in this Colony, to issue money from the Treasury during the Session of the Legislature in payment for services voted in Committee of Supply, and agreed to by the House, the subsequent passing of an Appropriation Act in the same Session, making the supplies ex post facto, the Supplies authorized by law. The Commissioners were doubtful in how far this custom, which in England had prevailed for some centuries, had the force of law here. On consulting the Law Officers, they had received an affirmative reply as to the legality of the practice, and it had been continued. A further question had arisen as to Votes taken too late to be included in the Appropriation Act of the year, and upon this they required advice. The Attorney General (Mr. Chapman) admitted that in principle no grant of the Commons in England was effectual without an Appropriation Act. He said— But in practice the rule was not observed; and if it were, the public service could not be carried on without a number of Appropriation Acts; And, after some further remarks, and alluding to the case of the Dissolution of 1831, ended his opinion as follows:— I suggest, therefore, to the Commissioners of Audit, that the rule observed in England in 1831 should, ex necessitate, be observed here. The greatest inconvenience to the public service, and oven a fatal disturbance to the public credit, might be the consequence of any other course. The Commissioners did not appear to have been quite satisfied with this opinion, or the one given in the same year by Mr. Fellowes, and the Solicitor General before quoted. They submitted a further case, based upon a memorandum by one of their number (Mr. Agg), who had observed that in England it was the custom to pass during the Session Consolidated Fund Bills and Exchequer Bond Bills, which contained a clause authorizing the issue and application of moneys. Mr. Agg could only find one case, and that so far back as 1784, in which money was issued without such an Act. The Commissioners, therefore, seemed to have come to the conclusion that in England the public money was issued only by express legislative sanction. The Attorney General, in his final opinion, took a different view of the nature and extent of the English Bills alluded to, and adhered to his former opinion. In March, 1859, Mr. Chapman gave an opinion in view of the possibility of Parliament separating without first passing an Appropriation Act, in which the following sentence occurs:— In like manner, I think any sums voted in Committee of Supply and duly reported, may be paid according to the practice of Parliament, but they must be re-voted. This opinion was based on an English precedent, which occurred after the sudden Dissolution of Parliament in April, 1831. These opinions were apparently taken as unquestionable law in Victoria, until the year 1862. In the latter year, the Under Treasurer informed the Audit Commissioners, that in future it was intended to abandon this practice, and to pass, from time to time, Bills to legalize urgent expenditure in anticipation of the Appropriation Act; that an Act then before Parliament could not be passed in time to legalize some then pressing payments for which a warrant was inclosed, and that the warrant would be the last under the old practice. No further reason was given for this, than that the matter had been discussed in the House. The Auditors, in a reply of some length on the 29th January, 1862, stated that— Hitherto guided by the decisions of the Law Officers of the Crown, we have considered money to be legally available when voted in a Committee of Supply, and duly reported to the Legislative Assembly; and, so far as our information extends, nothing has yet occurred to alter either the legal aspect of the question or our views in regard to it, and, consequently, it is not, as we conceive, competent for us to stop the practice hitherto in force. You will probably recollect that, in bringing this question under the notice of Parliament in our last annual Report, we stated our opinion that nothing less than the direct action of one or both Houses could alter the then existing practice; and we have reason to believe that that opinion was very generally concurred in by both the Legislature and the Government. After some further remarks, the Audit Commissioners said— It is necessary, however, that we should state, in reference to the introduction of a Bill upon the present subject, as mentioned by the Under Treasurer, that the passing of the first Act, other than the usual Appropriation Act for giving validity to the Supply Votes of the Assembly, will, so far as we are concerned, settle the practice for the future; for such an Act will be a distinct declaration by Parliament that the money is not legally available for issue without the concurrence of both Houses of Parliament. The Commissioners, however, suggested that it would be well to ascertain if the public service could not be carried on without using the warrant in question; or whether the Legislative Council (the Upper House) could not be called together for the purpose of passing the Bill before the payments had to be made? In the following year a difficulty arose. Parliament had separated before the Governor had given the Royal Assent to a Bill legalizing certain expenditure. It appeared that in Victoria, unlike New South Wales, it was the custom for the Governor never to assent to a Bill except in the Parliament Buildings. Under these circumstances, the Audit Commissioners were requested to countersign a warrant drawn under authority of the Bill which had passed both Houses, but in anticipation of the Governor's assent. In a long paper, dated 6th July, 1863, they raised difficulties as to giving a certificate that the moneys were "legally available" for, or "applicable" to, the services in question. They thought they were not. As, however, they saw that the Treasurer, who was equally with themselves bound by the Audit Act, had signed the warrant, they asked, before coming to a final determination, to be further informed upon what grounds the money was considered issuable? They thought that — Reliance should not be placed upon the English practice, as the form of the Appropriation Act shows that the Commons grant, and the Lords assent, to that measure; the concurrence of the Sovereign being also expressed in a form of words different from that in use on other occasions. But, under the written constitution of this Colony (Victoria), all three branches of the Legislature must unite in passing an Appropriation or other Money Bill, in the same manner as in the making of laws in general. They went on to give other reasons, and they even suggested the advisability of calling Parliament together in order that the Governor's assent might be given in what was held to be due form. It appeared, from a letter dated 6th August, 1863 (on page 12 of the Correspondence), and also from an extract from Report of Commissioners of Audit for that year, that the latter did not, in the event, countersign the warrant until after the Bill had duly received the Governor's assent. In the year 1865, Governor Sir Charles Darling asked the Law Officers the following questions:— Is not the 45th section of the Constitution Act in effect an appropriation of the amount of all coats, charges, and expenses incident to the collection, management, and receipt of the Revenue, such expenditure to be reviewed and audited as directed by the Legislature? And, further on— Is there any practical or legal difference between the words 'The Consolidated Revenue of Victoria shall be permanently charged,' and the words 'There shall be payable every year out of the Consolidated Revenue of Victoria?' Sir Charles Darling, also, appeared to think that the 6th clause of the Civil Service Act had the effect of appropriating salaries. The Law Officers, Messrs. Higinbotham and Michie, in a long opinion, seem to have given an affirmative answer to the Governor; but they concluded it as follows:— The above opinion is independent of, and does not dispose of the question, as to whether moneys to the credit of the public account are legally available to satisfy Votes of the Assembly prior to the passing of the Appropriation Act. We are of opinion that such moneys are 'legally available,' and they were always so treated till the Audit Commissioners, some time back, expressed an opinion that such Votes should receive, before being acted upon, the sanction of the entire Legislature; since which opinion of the Commissioners, the practice has been—but unnecessarily, as we think—to refrain from acting on these Votes until an Appropriation Act confirming them was passed. The present Attorney General of Victoria (Mr. Le Poer Trench), in an opinion, dated 24th January, 1878 (on page 5), states that he "concurs in the views of his predecessors as to when public money is legally available." He now must draw their Lordships' attention to what had taken place with reference to this matter in New South Wales, where he might say that this question was settled by the noble Earl opposite the late Foreign Secretary (Earl Granville) in a contrary sense to that contended for in Victoria; which ruling had, so far as he knew, been held to be decisive to this day. It appeared, that in the year 1860, the Legislative Council of New South Wales took objection to payments being made in anticipation of the Appropriation Act, and submitted to the Governor (Sir William Denison) the following Resolutions:— (1.) That this Council proceeds to the Order of the Day for the third reading of the Appropriation Bill, upon the full understanding that this measure will not of itself involve a sanction or indemnity with regard to any portion of the illegal expenditure of public moneys which has avowedly been made by the Government since the passing of the last Appropriation Act. (2.) That the mere coincidence of any items in the Appropriation Act with an antecedent unauthorized expenditure, is not alone in the opinion of this Council any ground of immunity to the persons concerned in thus violating the Law and the Constitution; and that even in cases where great public emergency can be pleaded in excuse, the illegality can only be properly condoned by a distinct Act of Indemnity, passed in due form by all branches of the Legislature. (3.) That this Council, in further assertions of its undoubted rights as a branch of the Legislature, resolves, that for any person or persons whatsoever employed in the payment of public money, to pay or cause to be paid any sum or sums of money for or towards the support of Services, whether voted in any Session of Parliament or not, before the same be included in an Act of the Legislature, duly passed according to law, is derogatory to the Privileges of Parliament, and subversive of the Constitution. The 4th and 5th Resolutions were for an Address to the Governor, and for transmission of the Resolutions to the Secretary of State. Sir William Denison, in forwarding these Resolutions, pointed out that the principle affirmed in them was at variance with the practice which had prevailed in the Colonies. The Duke of Newcastle did not appear himself to have given any specific instructions; but he forwarded a copy of a correspondence with the Governor of New Zealand for the information of the Officer administering the Government—Sir William Denison having been on the point of leaving when he wrote his despatch. The only portion of this correspondence to which he had access did not bear upon the subject. The Duke of Newcastle trusted that the moderation and prudence of both branches of the Legislature would prevent a recurrence of the difficulty. When he (the Earl of Belmore) arrived in New South Wales, in 1868, he found that, although it was not then the custom to pay money upon the authority of Votes in Supply, but to pass temporary Appropriation Acts, as was done in Victoria from 1862, yet that the Votes of the Assembly itself were constantly being anticipated by Orders in Council. This seemed to him to be a very irregular practice; and the whole system which regulated public issues in New South Wales cast so much responsibility upon the Governor, without, at the same time, giving him an effective control, that he thought it advisable to ask the Duke of Buckingham to give him specific instructions in the matter. The Colonial Treasurer, although he claimed a constitutional right for the existing system, admitted that it was one that could not be maintained in a Court of Law. The Duke of Buckingham, in a despatch which was subsequently permitted to be published, instructed him, in effect, that such expenditure as he had called his attention to was illegal. But he thought that it might be justifiable on these grounds—namely, firstly, necessity; and, secondly, on the ground that it was sure to be subsequently sanctioned, joined to strong grounds of expediency, even though short of actual necessity. Not long after he received these instructions, a case occurred in which, owing to a pure accident, the Legislative Council adjourned to the 3rd of the following month, before a temporary Appropriation Bill for the payments due on the 1st of the month had reached it. He considered this just such a case as the instructions applied to, and he himself called the attention of the Executive Council to the matter; and, by their advice, issued his warrant as usual. He knew that the inconvenience to the Civil servants in not receiving their salaries would be great. Unfortunately, the Legislative Council took a different view of the matter from what he did, and they—in an Amendment to a Motion submitted to them—expressed their regret that such an irregularity had been permitted, and reaffirmed, and sent him their Resolutions of 1860. This, he believed, was the first he had heard of the Resolutions of 1860. He drew the noble Earl's (Earl Granville's) attention to the matter, which he explained to him. He told him that, as he read the Constitution Act, an Appropriation Act was not required to authorize the Governor to sign any Warrant, but to authorize the Treasurer to act upon it; and he asked for his correction, if this view was wrong. He explained the peculiar financial system which then prevailed in the Colony, and he concluded by justifying his action by a reference from the Duke of Buckingham's instructions. The noble Earl, in his reply, did not concur in his reading of the Constitution Act. In this, he (the Earl of Belmore) now entirely concurred. Having reference to the Duke of Buckingham's despatch, Lord Granville "was not prepared to disapprove the course" he (the Earl of Belmore) had adopted. At the same time, he thought he had somewhat misunderstood the spirit of the instructions—that a temporary inconvenience to a number of public officers could not be viewed as an unforeseen emergency, as it must always result from a delay in passing an Appropriation Act; nor was it such a case of expediency as would justify a violation of the law. The noble Earl concluded as follows:— But, independently of these considerations, the question is settled prospectively by the action of the Legislative Council; as I consider it clear that, except in case of absolute and immediate necessity—such as, e.g., the preservation of life—no expenditure of public money should be incurred without sanction of law, unless it may be presumed not only that both branches of the Legislature will hold the expenditure itself unobjectionable, but also that they will approve of that expenditure being made in anticipation of their consent. Your Lordship will not, therefore, be at liberty on any future occasion to repeat the step you have adopted in this case. He referred these instructions to his Ministers, and, at their request, transmitted a protest from them, drawn up by the Treasurer, against the instructions. At present, he need only refer to one point in this document, where the 14th section of the 29 & 30 Vict. c. 39 was referred to. In this country, of late years, the practice which prevailed here was expressly authorized by that Act, and there was no need to wait for the passing of the Appropriation Act. The noble Earl, on receipt of this protest, sent him, in reply, a despatch dated 7th January, 1870, which their Lordships would find referred to by the Prime Minister of Victoria, on page 39 in a Memorandum addressed to Sir George Bowen on the 31st of December last. This despatch had, since it was passed, to the best of his knowledge, ruled the practice in New South Wales; and he must presently return for a few moments to Mr. Berry's reference to it; because, if that gentleman's view of it were accepted, all the good done by it in curing a faulty system in New South Wales was placed, in his view, in danger of being undone. The noble Earl, in his despatch, after referring to one of the preceding parts of the New South Wales Minister's Memorandum, continues thus— The Paper concludes as follows:—'Under these circumstances, I advise my Colleagues to join with me in an expression of opinion against the instructions lately issued by the right hon. the Secretary of State for the Colonies to his Excellency the Governor, as amounting to an interference in matters of local government, with our responsibility as Ministers of the Crown and Representatives of the Parliament and people of this Colony, upon a matter entirely unconnected with Imperial interests.' The noble Earl continued— So formal a protest from your Ministers against the unconstitutional character of the instructions sent out to you, renders it my duty to explain fully to them and to the people of New South Wales the position adopted in this matter by Her Majesty's Government, and the considerations by which they are led to it. I begin by admitting unreservedly that the matter now in hand is one of purely local interest, in respect to which Her Majesty's Government only desire that you should conform your conduct to the wishes of the Colony when constitutionally ascertained. The noble Earl then went into the question in an exhaustive manner, and, after telling him that in ordinary cases, if the law required him to do one thing, and the Executive Council advised another, it would be his duty to obey the law, he, after referring to the Constitution Act as bearing on the matter, said— On the Governor, therefore, is imposed the duty of seeing that no breach of the law is committed. He remarked that the Legislature might have made a different arrangement as regarded finance, and he said— Instead of doing this, they have made the Governor responsible for the execution, and, therefore, for every violation of the law. That responsibility is, in the opinion of Her Majesty's Government, a personal one. Further on, he said— I am unable, therefore, to recall the instructions already communicated to you. You are to consider the Legislature as the most authoritative exponent of the will of the Colony. When the Legislature has enacted a law, you are not to transgress that law, unless upon a reasonable conviction that the Legislature would itself approve of your doing so. But you are justified in assuming such an approval under the pressure of one of those overwhelming emergencies—dangerous to anticipate or define—which dispense with all rule, or in cases of less moment when there are specific reasons for presuming that the Legislature will sanction a certain specific expenditure, and will desire its sanction to be anticipated. The noble Earl hoped that there would be little chance of these instructions bringing him into collision with his Ministers, as had been apprehended; if it did, it would be necessary to ascertain the wishes of the Colony, and defer to them. Should the Colony decide in favour of a change, the most satisfactory course would be to carry it out by Statute. With regard to this, he said— If, however, the passing of such an Act is likely to raise any collateral issues, or otherwise to be attended with difficulty or delay, I think that in the present case, which is rather constitutional than legal, the desire of the community would be sufficiently expressed by an Address from both branches of the Legislature. If, therefore, the Council and Assembly should request you to be hereafter guided by the advice of your Ministers, in the execution of the duties imposed on you by the 55th section of the Constitution Act, Her Majesty authorizes you to accede to that request, and will then hold you relieved from the personal responsibility which now attaches to you. He concluded his despatch with these words— But they—i.e., Her Majesty's subjects in New South Wales—must remember, that whatever trust they impose on him—i.e., the Governor—it is his duty to execute it punctually, and theirs to support him in doing so. He (the Earl of Belmore) knew that the existing system of finance in the Colony was quite incompatible with the due carrying out by him of these instructions. He felt sure, moreover, that the Legislative Council would not pass such an Address. He referred, therefore, the despatch to his Ministers, with a Minute entering fully into the matter, and urging an amendment of law and the providing an Emergency Fund; which, he was glad to say, was carried out during the then Session. The financial system had been, as far as he knew, strictly carried out as regarded issuing Warrants in accordance with the noble Earl's instructions, since the amendment of the Law in 1870. On one occasion, on an emergency caused by a Dissolution without Supply in 1872, an arrangement, confessedly ultra vires, was made soon after he had left the Colony, between the Executive and the Bank; but no Warrant was issued, he believed, to cover this arrangement till after Parliament had passed an Act authorizing the payments made. Mr. Berry appeared to put a totally different construction on these instructions. He told Sir George Bowen, referring to the noble Earl's despatch— Earl Granville intimated on January 7th, 1870, that the Governor would be relieved from all personal responsibility, and that he might, in cases of emergency, sign Warrants for the issue of public money, though without the previous sanction of Statute Law, provided that there was sufficient evidence that the Legislature desired him to adopt that course at the instance of his Responsible Advisers. Ministers believe that a great emergency, far more critical than any foreseen by Earl Granville, has now arisen in Victoria. The Legislative Council has rejected on merely technical grounds of privilege, the General Appropriation Bill of the year; and so on. He (the Earl of Belmore) apprehended that the noble Earl would hardly agree with that interpretation of his instructions. He must apologize for the length at which he had gone into the matter. In England, the law has guarded, by the 14th section of the 29 & 30 Vict. c. 39, and by providing an Emergency Fund, and by allowing the transference, temporarily, of money voted for one branch of Army Services or Navy Services, as the case may be, to another with the consent of the Treasury—against any probable inconvenience. What the practice was before the passing of that Act he did not know. It, at any rate, appeared to have been relied on in Victoria in former years, and it was taken for granted that it was authorized by custom and precedent. The English Act did not extend to the Australian Colonies, having been passed since their Constitutions were granted. He, therefore, asked the Under Secretary of State for the Colonies, If he can state under what circumstances the 14th section of the Imperial Act 29th and 30th Vict., chap. 39, was passed; also, what was the practice and the authority for such practice prior to the passing of that Act as regarded the issuing of money out of the Consolidated Fund in this country? He begged further to move an Address for— Copies or extracts of correspondence between the Secretary of State for the Colonies and the Governor of New South Wales in the years 1868, 1869, or 1870, relative to the issue of public money under the Governor's warrant, including particularly the despatch No. 1 of 7th January 1870, from the Earl Granville to the Earl of Belmore.


said, the noble Earl (the Earl of Belmore) had given a perfectly correct version of the question in dispute in the Colony of Victoria. Sir George Bowen, having been advised by his Ministers that it was within his power to sign Warrants for money not granted by an Act passed by both Houses, referred the matter first to the Law Officers in Victoria, and since then to the Home Government. The question had now been referred to the Law Officers of the Crown, and, it being still sub judice, it would not be convenient that he should offer any opinion on the subject. It was not necessary he should say more on the whole subject than that, generally speaking, the Colonial Office was still prepared to adhere to the views embodied in the despatch of the noble Earl opposite (Earl Granville) of January, 1870. The Act of Parliament alluded to in the Question was merely a re-enactment of a previous Act—William IV. c. 15—which altered in detail but not in principle the practice it continued. This was that the House of Commons resolved itself into Committee of Supply on Estimates; and the Resolutions passed, limited to one year, being reported and confirmed, the House resolved itself into a Committee of Ways and Means. The Resolutions of the Committee of Ways and Means, being reported and confirmed, were embodied in a Bill which passed through both Houses; and no money could be paid to the credit of the Consolidated Fund until a Bill had been passed, when the Controller and Auditor General could obtain the money at the Bank and authorize the Treasury to draw from the Consolidated Fund such moneys as might be required. When a Bill had been passed, it was possible to obtain money for Services which were the subject of Resolutions subsequent to a Bill. This year, for instance, on the 14th and 15th of March, £12,000,000 were granted for the Army and Navy Services; and, on the 19th of March, the Resolutions were embodied in a Bill which received the Royal Assent on the 28th. The money was now being used for other purposes connected with the Civil Services under Resolutions which had been passed since. The noble Earl (the Earl of Belmore) had been placed in some difficulty in his reading of the Act; because there was an imperfect quotation of it in the Memorandum sent out to him from the Treasury. The 14th section authorized Her Majesty, under the Royal Sign Manual, to require the Treasury to make issues, "as hereinafter provided," in the 15th section, which began by saying—"When any Ways and Means shall have been granted by Parliament;" but this clause, and the reference to it in the 14th, were omitted in the Memorandum. If the noble Earl would read the two clauses, he would find that they did not bear out the construction he had put upon the Act. Those who drew up the case for an opinion, which had been quoted from the Victoria papers, were clearly in error as far as the practice in England was concerned. But, whatever interpretation was put upon Acts and practice as far as the United Kingdom was concerned, it did not follow that the same practice need prevail in the Colonies. No doubt, there was an analogy, and perhaps the noble Earl was justified in citing the practice of Parliament in England in explanation of the practice in New South Wales and Victoria; but it did not follow that the Colonies were bound by our practice. He could only give this information at present, and add that the Motion for Papers would be assented to.

THE EARL OF BELMORE (speaking from what he then remembered)

, said, that in the Colony he had not the Statutes to refer to, and naturally assumed that the quotation made in the Memorandum was correct.

Motion agreed to.

House adjourned at a quarter past Seven o'clock, to Thursday next, half past Ten o'clock.