Overview

This article considers the recent judgment in Badari v Minister for Territory Families and Urban Housing [2025] HCA 47, in which the High Court considered the duty of the Minister to provide procedural fairness under s23 of the Housing Act 1982 (NT) to tenants in making determinations relating to the way in which rent is to be determined for dwellings leased from the Chief Executive Officer (Housing) (CEOH) in the Northern Territory.

Key Takeaways

The High Court judgment is a timely reminder that decision-makers should always consider the implication of the exercise of their statutory power because it may attract the obligation to afford natural justice. In particular, decision-makers should consider:

• Whether the exercise of power is capable of having an adverse effect on legally recognised rights or interests of individuals
• Whether the decision-maker is bound or entitled to have regard to the interests of individuals before they exercise the power
• Whether the exercise of the power will affect an individual or the public at large
• Whether the statutory provision conferring that power expressly excludes the duty to afford procedural fairness or natural justice.

If the provision conferring a power does not expressly exclude the obligation to afford procedural fairness, there is a strong common law presumption that the exercise of the power is impliedly conditioned on the observance of procedural fairness.

Finally, there is a distinction between the formulation of a policy and the application of such policy to individuals.

Standing Principles of Procedural Fairness

The High Court’s unanimous judgment in Badari reiterates the importance of looking at the statute in ascertaining whether the exercise of a statutory power is conditioned by a duty to accord procedural fairness and, if so, its content. Where such exercise is capable of having an adverse effect on legally recognised rights or interests of individuals, there is a strong common law presumption that the exercise of that power is impliedly conditioned on affording those individuals with procedural fairness (at [17]).

The Minister in Badari made a number of determinations under s23 of the Act in determining the rate of rent tenants were to pay the CEOH. Under these determinations, rent is payable by reference to the number of bedrooms a dwelling has, which differed significantly from the previous regime. The determinations affected a number of remote communities in the Northern Territory but provided a ‘safety net’ under which rent is capped at 25% of total household income.

It was common ground between the parties that the Minister was required to afford procedural fairness to persons affected when making the determinations, but the parties disagreed as to what was required to be done in the particular circumstances. The appellants contended that such duty requires the giving of effective and reasonable notice of the content of each proposed determination to all tenants, and a reasonable opportunity to be heard. The Minister contended that the determinations were an expression of a policy decision, thus within the ‘political field’, and did not turn upon the individual circumstances of any given tenant. 

The High Court accepted the appellants’ argument, noting:

• What procedural fairness requires is variable and can extend from ‘a need for a full hearing’ to ‘nothingness’, although the latter will be ‘exceptional’
• The nature of the power, the interests of the individuals affected, and the interests and purposes which the statute seek to advance or protect, will all inform the content of the procedural fairness or natural justice obligation
• Where the exercise of statutory power affects the interests of an individual in a way that is substantially different to the interests of the public, it will require the decision maker to have regard to the interests of that individual
• The duty will apply when the decision-maker is not only bound to consider the interests of an individual but also when the decision-maker is entitled to take those interests into account (at [36]).

The High Court found that s23 of the Act permitted the Minister to consider matters of policy, including what is in the public interest. However, a distinction was drawn between the formulation of the general policy, under which no procedural fairness obligation arose, and the application of the policy (at [42]). The determinations assumed the characteristics of the latter. The determinations directly and differentially affected the interests of tenants in the amount of rents payable. Considering the purpose of the Act, which included that rent payable must be ‘fair rent’ or be ‘affordable’, procedural fairness at least required the tenants to be given reasonable notice of the content of the determinations, and an opportunity to be heard (at [43]).

Conclusion

What is left unsaid by the High Court is what constitutes the ‘public at large’. Here, the Minister’s determination affected over 5,000 dwellings, which is not insignificant. Applying Badari, it appears that it would be sufficient to attract the duty to afford procedural fairness if any decision or determination affects a cohort of people who share some characteristics that distinguish them from the ‘public at large’.

It is important for agencies and departments to review any decisions or determinations which were thought to be made solely in ‘the political field’, because they could be affected by jurisdictional errors.

Please contact Max Gao, Partner and Tegan Weir, Special Counsel, or your usual contact at Moray & Agnew for further information.