Public Law Essentials: The struggle for meaning: What is statutory interpretation?

Statutory interpretation is the process by which the courts interpret and apply legislation. This process can be difficult for any interpreter of legislation due to the imprecise and uncertain nature of written words and the limited ability for the drafter of legislation to capture and foresee all possible eventualities.

However, with the continued expansion of Australia’s written laws in statutes, regulations, rules, determinations and all other ways in which the written law appears, it is a difficulty with which we all must continue to grapple.

This chapter discusses the different approaches to, and difficulties of, statutory interpretation, including:

• the key principles and limitations of the three prominent theories of statutory interpretation, being literalism, legislative intention and purposivism;
• recent commentary and case law on the court’s approach to statutory interpretation; and
• recommendations and a proposed “practical approach” for interpreters of statutory text.

The three schools of statutory interpretation: Literalism, legislative intention and purposive

There are three prominent theories which may assist in undertaking the exercise of statutory interpretation:

1. literalism (what do the words literally mean?);
2. legislative intention (what did Parliament intend by the words used?) and
3. purposive (what was the purpose of the legislation?). Federally, the Acts Interpretation Act also provides guidance as to how legislation is to be interpreted.

1. Literalism

The literal approach to interpretation focuses on the ordinary and natural meaning of the actual words used in the statute. As explained in Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129:

“The question is, what does the language mean: and when we find what that the language means, in its ordinary and natural sense, it is our duty to obey that meaning, even if we think the result to be inconvenient or impolitic or improbable.”

More recently, the literalist approach to interpretation has also recognised the importance of context. “Context”, in the literal approach, means the context of the text as a whole (and not context relating to the purpose of the legislation). The former Chief Justice of NSW, writing extra-judicially, illustrated the importance of context in this example: “Context is always important. Take the statement: ‘The chicken is ready to eat’. This can either refer to a cooked chicken or a hungry chicken. The context alone will determine the meaning.”

There are a number of difficulties with the literal theory of statutory interpretation. One obvious difficulty is that words and language are not determinate and can have numerous meanings. Another is that literally interpreting a statute can produce absurd results – however, this difficulty is addressed by what is sometimes called the “Golden Rule”.

According to the Golden Rule, the ordinary (and literal) sense of the words in a statute are to be adhered to, unless that would produce an absurdity or inconsistency with the rest of the statute. This means the interpreter is allowed to stray beyond the legislative text in the event of absurdity or inconsistency, but leaves unanswered the question of where the interpreter should go.

2. Legislative intention

The “legislative intention” approach to interpretation focuses on determining Parliament’s original intention behind the statute. Perhaps the greatest difficulty with this approach is captured in a single question; how does one determine the original intent of Parliament?

Extrinsic materials (such as explanatory memoranda and second reading speeches) are often said to express the intentions of Parliament even if they are not representative of the Parliament as a whole. However, resorting to extrinsic materials to determine parliamentary intention is frowned upon by courts in Australia.

For example, in Plaintiff M70/2011 v Minister for Immigration and Citizenship [2011] HCA 32, the Commonwealth argued that words used in amending legislation should have the meaning described in the explanatory memorandum. This was not accepted by the court, with French CJ stating that the words “plainly do not and cannot bear” the meaning given in the explanatory memorandum. Similarly, in Re Bolton; Ex parte Beane (1987) 162 CLR 514 Gummow J emphasised that “[t]he words of a Minister must not be substituted for the text of the law”.

Section 15AB of the Acts Interpretation Act also provides that extrinsic materials should only be used to aide in construction of a provision in the following circumstances:

1. “to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act; or
2. to determine the meaning of the provision when:
   1. the provision is ambiguous or obscure; or
   2. the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act leads to a result that is manifestly absurd or is unreasonable”.

Instead of looking to extrinsic materials to determine intention, those who favour a legislative intention approach to statutory interpretation say that courts look to the words used to determine Parliament’s intention.

In Saeed v Minister for Immigration and Citizenship [2010] HCA 23, the majority held:

“[I]t is necessary to keep in mind that when it is said the legislative intention is to be ascertained, what is involved is the ‘intention manifested’ by the legislation. Statements as to legislative intention made in explanatory memoranda or by Ministers, however clear or emphatic, cannot overcome the need to carefully consider the words of the statute to ascertain its meaning.”

So, the real problem for a legislative intention approach to statutory interpretation is that it does not take us much beyond the text of the statute…

3. Purposive

The purposive approach to statutory interpretation focuses on interpreting the statute within the context of the law’s purpose. It has long been thought that this approach arose out of frustration over the limitations of the theories of literalism and legislative intention. Against this background, the key question for the courts is less, “What does the provision mean?” and rather, “What does the language of the statute mean having regard to the purpose or ‘mischief’ to which the statute was directed?”

The purposive approach was, for a long time, seen as the dominant theory of statutory interpretation, being variously described by the courts as “modern”, “superior” and “correct”. The approach also has legislative support, in section 15AA of the Acts Interpretation Act:

“In the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying the Act (whether that purpose or object is expressly stated in the Act or not) shall be preferred to a construction that would not promote that purpose or object.”

However, the purposive approach is not without its problems. In particular, difficulty will likely arise where a statutory provision seeks to strike a balance between competing interests. As was recognised by Gleeson CJ in Carr v Western Australia (2007) 232 CLR 138, legislation rarely pursues a single purpose at all costs and where there is doubt about the extent to which the legislation pursues a particular purpose, stating that purpose is unlikely to fix the problem.

For example, in Stevens v Kabushiki Kaisha Sony Computer Entertainment (2005) 224 CLR 193, the High Court considered the meaning of the phrase “technological protection measure” in the Copyright Act 1968 (Cth) in the context of litigation concerning the sale of “mod chips” for Sony PlayStation consoles. Sony alleged that the “mod chips”, which allowed unauthorised copies of games to be played on the Sony PlayStation consoles, infringed the restrictions in the Copyright Act relating to circumvention of technological protection measures.

Gleeson CJ and Gummow, Hayne and Heydon JJ discussed the application of the purposive approach to interpreting the phrase “technological protection measure”, stating:

“Indeed, the very range of the extrinsic materials, with shifting and contradictory positions taken by a range of interest holders in the legislative outcome, suggests that the legislative purpose was to express an inarticulate (or at least not publicly disclosed) compromise…”

The result is that in the present case to fix upon one “purpose” and then bend the terms of the definition to that end risks picking a winner where the legislature has stayed its hand from doing so. In the selection of a sole or dominant “purpose”, there is a risk of unintended consequences, particularly where, as here, the substratum of the legislation is constantly changing technologies.

Horses for courses?

The other way to look at the application of the principles or theories of statutory interpretation is that they represent a spectrum from strict literalism at one end to broad purposiveness at the other. As the former Chief Justice of NSW, the Hon James Spigelman wrote:

“That such a spectrum exists, and that it is a wide spectrum, reflects the fact that there are a number of well established principles – like the literal rule, the golden rule and the mischief rule – which do not necessarily point in the same direction. The process of selecting which principle or rule should be given salience in a particular case is a matter of judgment about which reasonable minds can differ. Indeed, few judges will be found to always give salience to one or another principle or rule.”

A practical approach to statutory interpretation

So where does all of this leave the interpreter? How does one even begin to interpret a statute?

Step 1: Start with the text

The High Court has, in recent decisions, affirmed the primacy of the statutory text, saying that the task of statutory interpretation “must begin with a consideration of the text itself”.

For example, in Australian Education Union v Department of Education and Children’s Services [2012] HCA 3, the High Court emphasised that “purpose” must be derived from the actual text of the legislation, and not superimposed at the expense of the text. This case concerned whether the Minister was entitled to employ casual teachers pursuant to a general statutory power to “appoint such officers and employees … as he considers necessary for the proper administration of this Act”, or whether the Minister must employ those teachers as members of the teaching service under a separate provision of the Act.

At first instance, the Industrial Relations Commission (IRC) of South Australia found that the Minister could employ casual teachers pursuant to the general power to appoint officers and employees. However, the High Court (French CJ and Hayne, Heydon, Kiefel and Bell JJ) criticised the IRC’s reasoning, stating:

“The reasoning in the IRC was informed by the view that it was desirable that the Minister have flexibility in appointment of teachers and that [the provisions dealing with the teaching service] might be ‘unnecessarily prescriptive’ in its application to the ad job appointments of relief teachers in diverse circumstances.

This approach, with respect, emphasised a judicially constructed policy at the expense of the requisite consideration of the statutory text and its relatively clear purpose. In construing a statute it is not for a court to construct its own idea of a desirable policy, impute it to the legislative, and then characterise it as a statutory purpose.”

The High Court emphasised that the general power to appoint officers and employees was directed to the general administration of the Act, whereas the power to appoint teachers occurred in the statutory context of the “administration and control of the teaching service”. The Minister had no power to appoint a casual teacher pursuant to the general power to appoint officers and employees.

The High Court also emphasised that Ministerial statements about the effect of laws will not assist in interpreting those laws. The High Court dismissed an argument of the Solicitor-General for South Australia which relied on statements made by the Minister in a second reading speech, stating:

“There is no basis at common law or otherwise for resorting to a ministerial statement, about the effect of a law in force at the time of the statement, as an aid to the interpretation of that law.”

Another good summary of the relevant principles can be found in Uber B.V. v Commissioner of Taxation [2017] FCA 110, where Griffiths J considered whether persons who are Uber drivers are required to be registered for GST purposes. Section 144-5 of the A New Tax System (Goods and Services Tax) Act 1999 (Cth) required taxi and limousine operators to be registered, regardless of turnover. Griffiths J summarised the relevant issue as follows:

“That provision requires a person who is carrying on an enterprise to be registered for GST purposes “if, in carrying on your enterprise, you supply taxi travel” (s 144-5(1)). The phrase “taxi travel” is defined in s 195-1 of the GST Act as meaning “travel that involves transporting passengers, by taxi or limousine, for fares”. In simple terms, the core issue is whether, in carrying on the enterprise of providing uberX services to passengers, uberX drivers supply “taxi travel” as defined. If so, they must register for GST purposes.”

His Honour found:

“Finally, I consider that some limited assistance is obtained from the mischief identified in the Explanatory Memorandum for inserting Div 144. I accept the Commissioner’s submission that this mischief or purpose supports a broad construction of the relevant provisions, however, it does not dictate the resolution of the task of construction. Broadly construed, and having regard to other relevant matters of construction, I consider that the word “taxi” is sufficiently broad in its ordinary meaning to encompass the uberX service supplied by Mr Fine on 11 September 2015.” [emphasis added]

Step 2: Resort to broader notions of context only when the “ordinary” rules of statutory construction have been exhausted and the text is “doubtful”

Where the “ordinary” rules of statutory construction have been exhausted and the statutory text remains doubtful, an interpreter may then resort to consideration of broader contextual materials, such as the statute’s legislative history, purpose, objects and parliamentary intention.

This rule finds its foundations in Catlow v Accident Compensation Commission (1989) 167 CLR 543, where Brennan and Gaudron JJ held:

“If the meaning which would otherwise be attributed to the statutory text is plain, extrinsic material cannot alter it. It is only when the meaning of the text is doubtful… that consideration of extrinsic material might be of assistance. It follows that it would be erroneous to look to the extrinsic material before exhausting the application of the ordinary rules of statutory construction. If, when that is done, the meaning of the statutory text is not doubtful, there is no occasion to look at the extrinsic material.”

The operation of this rule in practice can be seen in the High Court’s decision in Saeed v Minister for Immigration and Citizenship [2010] HCA 23. The case concerned the insertion of a provision (section 51A) into the Migration Act 1958 (Cth) which tried to displace the common law rules of natural justice. The Full Federal Court said of section 51A, “... the drafters of the Explanatory Statement and the Minister could hardly have made the intention of the 2002 amendments any clearer”.

Notwithstanding this clear and obvious parliamentary intention, the High Court held that section 51A did not operate to oust the common law rules of natural justice because resort to broader contextual materials, such as the explanatory memoranda, could only occur once the “ordinary” rules of statutory construction had been exhausted and this had not yet occurred.

Case law: Recent statutory interpretation in the courts

The courts have continued to grapple with understanding, and identifying the best approach to undertaking, statutory interpretation. Recent case law has highlighted several principles which provide more targeted guidance on specific issues which may arise when interpreting legislation.

For example:

• in Sydney Seaplane Ltd v Page (2021) 106 NSWLR 1, the court held that the extrinsic material (including the explanatory memorandum, second reading speech and context in which it was passed, being in response to an earlier High Court decision) indicated that the words of the statutory text should be given a narrower meaning than that afforded on a literal approach. Interestingly, the court placed considerable weight on the characterisation of the legislation given by the Attorney-General in parliamentary debate;
• in Singh v Lynch (2020) 103 NSWLR 568, the court reminded interpreters of statutory text of the importance of first considering the actual words of the statutory text, including any definitions in that text. In that case, the court rejected the appellant’s arguments that the phrase “recreational activity” under the Civil Liability Act 2002 (NSW) was limited to its ordinary meaning, being activities voluntarily undertaken by persons for enjoyment or leisure, finding that the definition of “recreational activity” under the Act expanded the ordinary meaning of the term such that “professional sport” was properly captured within its scope;
• in SAS Trustee Corporation v Miles (2018) 265 CLR 137, the court emphasised the importance of considering the consistency of any proposed interpretation against the operation and intent of the legislative scheme as a whole. In that case, the court preferred an interpretation of the expression “incapacity for work outside the police force” which meant incapacity for work due to an injury caused while on duty in the police force (and not incapacity howsoever caused). A factor supporting this interpretation was the inherent unlikelihood that the legislative purpose of the Act, having regard to other relevant provisions, would be to provide for additional monetary amounts by reference to risks that played no role in rendering the person incapable of work;
• in Chen v Minister for Immigration and Border Protection [2013] FCAFC 133, the court observed that the impact on administrative efficiency will usually not be a persuasive argument for or against a particular statutory interpretation. In that case, the court rejected the arguments of the Minister which were based on administrative efficiency, in holding that receipt of an application in the Department’s GPO Box met the definition of “an office of immigration in Australia”;
• in Palmanova Pty Ltd v Commonwealth of Australia [2023] FCA 1391 the applicant purchased an archaeological artefact from a US gallery, which as intercepted by customs officials, and then seized by the Minister under section 14 of the Protection of Movable Cultural Heritage Act 1986 (Cth). The Minister concluded that the artefact is part of the moveable cultural heritage of Bolivia, and therefore was liable to forfeiture under section 14. The Federal Court accepted that the artefact is part of the cultural heritage of Bolivia, but otherwise concluded that section 14 did not authorize its seizure by the Minister. However, the Court nevertheless decided that section 14 did not apply to the artefact, because of the grammatical structure of section 14. Because section 14 applies where an artefact “has been exported” from a foreign country (an expression using the present perfect tense rather than the past tense), the Court found that section 14 could only apply where the importation occurred after the Act came into force. Because the artefact in this case was removed from Bolivia either in 1906 or 1950, it could therefore not be forfeited under section 14.