Opinion Number. 1524


garnishment of wages garnishment of moneys payable by the crown: wages of persons paid by municipal council from funds provided by commonwealth For relief of unemployment: whether moneys payable by the crown: whether same may be garnisheed: power of commonwealth or state to protect wages from garnishment

Key Legislation

loan (unemployment relief works) act 1932 s 5: loan (unemployment relief works) act (No. 2) 1932: LOCAL GOVERNMENT ACT 1919 (NSW)

The Secretary, Department of the Treasury

The Secretary, Department of the Treasury has forwarded to me for advice the following communication:

I refer to a copy of a letter of the 23rd August addressed by Mr. J. H. Gander M.P.,(1) to the Prime Minister in connection with the garnisheeing of the wages of a person engaged on relief works.

Will you kindly advise whether the Commonwealth Government has any power to prevent the garnisheeing of wages paid in connection with works carried out under the Loan (Unemployment Relief Works) Acts 1932.

The letter from Mr. Gander, M.P., encloses a letter received by him from the Town Clerk of the Municipality of Bankstown which reads as follows:

My Council desires me to bring under your notice what it considers to be an unnecessary hardship inflicted on persons being temporarily engaged on relief works after periods of unemployment.

Quite recently the wages of a person engaged by this Council for a period of three weeks, in connection with the expenditure of a relief grant, were garnisheed in connection with arrears of rent and my Council considers that a recurrence of incidents of this nature should be prevented.

It therefore requests that you please make strong representations to the Government in connection with this matter.

Except as provided by statute, moneys payable by the Crown are not liable to be attached by way of garnishee proceedings. See R v. Justices of Brisbane, Ex parte The Treasurer of Queensland, Queensland Law Journal Reports, Volume 11, page 77 and cases cited therein.

I assume that the relief works referred to in the letter from the Town Clerk are relief works carried out under the Loan (Unemployment Relief Works) Acts 1932. It is provided in that Act that the Treasurer of the Commonwealth may borrow moneys for the purpose of expenditure to provide relief to persons out of employment.

For the relief of unemployment in New South Wales, section 5 of the Act provides that the Commonwealth may expend or make available by way of loan the sum of £600,000 on approved works in that State. An Employment Council consisting of members appointed by the Governor-General is established, and no amount is to be expended under the section except on works recommended by the Council and approved by the Treasurer. The Treasurer is to publish in the Commonwealth Gazette particulars of the works which are from time to time approved under the section.

It would appear that some of the moneys to be spent on relief work have been paid to the Council of the Municipality of Bankstown to be used by it in the payment of wages etc. on works recommended and approved in accordance with the provisions of the above Act. It would appear, furthermore, that these moneys are paid out by the proper officer or officers of the Municipality to the persons engaged in such relief work.

I do not think that these moneys are to be regarded as moneys belonging to or payable by the Crown. A municipal authority cannot be regarded as an executive Department of the Crown with respect to immunity from legal proceedings. See Public Authorities and Legal Liability (Robinson)(2) at pages 17 and 24 et seq. I can find no provision in the Local Government Act 1919 of New South Wales which would exempt any Council or municipality from the operation of the general law, as being a servant or authority of the Crown. It would appear, therefore, that municipal councils constituted under the above Act and their funds are subject to the same liabilities as those imposed on private persons–Mersey Docks Trustees v. Cameron 11 H.L.C., page 443.(3)

In my opinion, it would be competent for a Court to make an order attaching moneys payable by a municipal council or authority as wages to persons engaged on relief work where such moneys constituted grants or loans made in accordance with the Loan (Unemployment Relief Works) Acts 1932.

I do not think the Loan (Unemployment Relief Works) Acts 1932 could be amended by the insertion of a provision to the effect that the wages of persons engaged on relief work be not attached by a garnishee order.

In my opinion, once the money to be spent or loaned in accordance with the provisions of the Act is paid to any authority such as a Municipal Council, the money would be liable to garnishee in a similar manner to other moneys in the control of the Municipal Council. The Commonwealth could not, I think, pass any legislation relating to the garnishee of such wages when paid by a State authority.

The question of exempting the wages of persons engaged in relief work from garnishee proceedings would appear to be a matter to be dealt with by the State of New South Wales. If it were considered desirable that provision be made for such exemption, the Government of the State might be approached with a request that appropriate legislation be passed.

[Vol. 25, p. 962]

(1) Joseph Herbert Gander (1888–1954). Federal Member for Reid (Lang Labor) 1931–1940.

(2) Robinson, GE 1925, Public authorities and legal liability, London University Press, London.

(3) (1865) XI House of Lords Cases (Clark’s) 443; 11 ER 1405.