Botany Bay City Council v Minister for Local Government

[2016] NSWCA 74

Court of Appeal

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:

Botany Bay City Council v Minister for Local Government [2016] NSWCA 74

Hearing dates:

11 April 2016

Decision date:

15 April 2016

Before:

Bathurst CJ;
Beazley P;
Ward JA

Decision:

Appeal dismissed with costs.

Catchwords:

JUDICIAL REVIEW – grounds of review – mandatory relevant considerations in the examination and report of proposal for amalgamation of councils under the Local Government Act 1993 (NSW), ss 218F and 263 – whether Council proposal made under s 218F constituted a mandatory relevant consideration

 

JUDICIAL REVIEW – grounds of review – procedural fairness in the examination and report of proposal for amalgamation of councils under the Local Government Act 1993 (NSW), ss 218F and 263 – whether denial of procedural fairness in Council proposal not being taken into account

LOCAL GOVERNMENT – proposal for amalgamation of councils under the Local Government Act 1993 (NSW), ss 218D-218F – examination and report of proposal under ss 217F(2) and 263 – proper construction of s 263

Legislation Cited:

Local Government Act 1993 (NSW), ss 218A, 218B, 218D, 218E, 218F, 220, 263, 745

Cases Cited:

Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41
Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; 162 CLR 24
Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; 206 CLR 323
Powers v Maher [1959] HCA 52; 103 CLR 478
Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355

Category:

Principal judgment

Parties:

Botany Bay City Council (Appellant)
Minister for Local Government (First Respondent)
Local Government Boundaries Commission (Second Respondent)
Chief Executive of the Office of Local Government (Third Respondent)
Rod Nockles (Fourth Respondent)

Representation:

Counsel:
M Robinson SC; A Poljak (Appellant)
N Williams SC; M Ellicott (Respondents)

  Solicitors:
Houston Dearn O’Connor (Appellant)
Office of the Crown Solicitor (Respondents)

File Number(s):

2016/107478

 Decision under appeal 

Court or tribunal:

Land and Environment Court

Jurisdiction:

Class 4

Citation:

Botany Bay City Council v Minister for Local Government [2016] NSWLEC 35

Date of Decision:

7 April 2016

Before:

Pain J

File Number(s):

40261 of 2016

Headnote

[This headnote is not to be read as part of the judgment]

On 6 January 2016, the first respondent, the Minister for Local Government (the Minister), initiated a proposal for the amalgamation of the appellant, Botany Bay City Council (the Council) with Rockdale City Council.

As required by s 218F of the Local Government Act 1993 (NSW), the Minister’s proposal was referred to the third respondent, the Chief Executive of the Office of Local Government (the Departmental Chief Executive), for examination and report. The Departmental Chief Executive made a delegation of functions to the fourth respondent (the Delegate).

The Delegate invited submissions by, and discussions with, the Council in relation to the Minister’s proposal. On 28 February 2016, the Council made a submission to the Delegate, with an addendum provided on 3 March 2016.

On 11 March 2016, the Council lodged its own proposal with the Minister pursuant to s 218F and requested that it be urgently referred to the Delegate. On 18 March 2016 the Council was advised that its proposal had been referred to the Department Chief Executive.

On 21 March 2016, the Council’s legal representatives sought confirmation from the Departmental Chief Executive that the Council proposal had been referred to the Delegate. The Council also sent the Council proposal directly to the Delegate.

By summons filed in the Land and Environment on 23 March 2016, the Council commenced judicial review proceedings in relation to the examination and reporting process being undertaken by the Delegate and the Departmental Chief Executive in relation to the Minister’s proposal. The Council sought declaratory and other relief to the effect that the Delegate and Departmental Chief Executive were required to have regard to the Council proposal in the examination and report of the Minister’s proposal.

Pain J of the Land and Environment Court dismissed the Council’s summons. On the appeal, the Council contended (1) that the Council proposal was a mandatory relevant consideration; and (2) that there was, or would be, a denial of procedural fairness.

Per the Court:

(1) Pursuant to s 218E of the Local Government Act, a proposal for amalgamation or boundary alteration may be made by the Minister or may be made by an affected council or an appropriate minimum number of electors. [22]

(2)   On making or receiving a proposal, the Minister must refer it for examination and report to the Boundaries Commission or the Department Chief Executive: Local Government Act, s 218F(1). In the examination and report of a proposal, the Department Chief Executive is subject to the same requirements as the Boundaries Commission: Local Government Act, ss 218F(2), 263-265. [23]-[24]

(3)   The Local Government Act, s 263(1) requires the Boundaries Commission or the Departmental Chief Executive, as the case may be, “to examine and report on any matter with respect to the boundaries of [councils] which may be referred to it by the Minister”. [37]

(4) The words “any matter” in s 263(1) are not completely at large. Although the phrase “with respect to” in the section is one of wide import, on the express words of the subsection, “any matter” is controlled by the phrase “which may be referred to it by the Minister” and any such matter must be “with respect to the boundaries of [councils]”. [37]

(5)   The Local Government Act, s 263(3) provides that when “considering any matter referred to it that relates to the boundaries”, the factors specified in (a)-(f) inclusive must be considered. The reference in subs (3) to “any matter referred” is a reference to that which was referred pursuant to subs (1). [38]

(6)   The reference in the Local Government Act, s 263(3) paragraphs (e1) to (e2) to the “impact of any relevant proposal” is a reference to the proposal that has been referred by the Minister in accordance with s 263(1). The reference to the “councils of the area concerned” relates to the proposal that has been referred for examination and report pursuant to s 263(1). [39]-[41]

Judgment

1. THE COURT: The appellant, Botany Bay City Council (the Council), has appealed against the dismissal by Pain J in the Land and Environment Court of New South Wales of its summons seeking declaratory and other relief relating to the New South Wales Government proposal for the merger of the Council with Rockdale City Council: Botany Bay City Council v Minister for Local Government [2016] NSWLEC 35.

2. The background to these proceedings is the proposed amalgamation of local government areas in New South Wales, of which the proposal to amalgamate the Botany Bay and Rockdale City Councils forms part. By class 4 proceedings in the Land and Environment Court, the Council sought relief by way of judicial review in respect of the examination and reporting process being undertaken by the fourth respondent (the Delegate), as delegate of the third respondent, the Chief Executive of the Office of Local Government (the Departmental Chief Executive), prior to the submission of a report to the Minister for Local Government (the Minister) for the amalgamation of the Council with Rockdale City Council.

3. The Council’s primary complaint in relation to that process was its concern that there was to be no consideration in the process adopted by the Chief Executive and the Delegate of its alternative proposal, lodged with the Minister pursuant to the Local Government Act 1993 (NSW), s 218E(1) on 11 March 2016 (the Council proposal). Pain J heard the proceedings on 31 March 2016 and gave judgment on 7 April 2016, dismissing the Council’s summons. The precise nature of the relief sought by the Council in the proceeding before her Honour is relevant to the issues on the appeal as is described more fully below.

4. The appeal, which was filed on 8 April 2016, was heard by way of an expedited hearing by the Court on 11 April 2016. In the meantime, the respondent Minister gave an undertaking to the Court not to make a recommendation to the government pursuant to the Local Government Act, s 218F(7) concerning the Minister’s proposal prior to 5 pm on 15 April 2016. The second, third and fourth respondents are the Boundaries Commission, the Departmental Chief Executive and the Departmental Chief Executive’s delegate respectively.

5. For the reasons which follow, the Court considers that the appeal should be dismissed.

Issues on the appeal

6. The Council’s notice of appeal identified seven grounds of alleged error on the part of her Honour below. In essence, these grounds reflect five issues for determination on the appeal:

1. Whether her Honour erred in finding, at [23], that the Delegate was not authorised to consider other amalgamation proposals: ground 1;

2. Whether her Honour erred, at [32]-[36], in her construction of s 263 of the Local Government Act: grounds 2-4;

3. Whether her Honour erred, at [37], in finding that there was no denial of procedural fairness in the process adopted by the Delegate: ground 5;

4. Whether her Honour erred, at [41], in finding that the Council’s complaints against the Departmental Chief Executive concerning the Council proposal were not justified: ground 6;

5. Whether her Honour erred, at [42], in finding that there was no breach or apprehended breach of the Local Government Act: ground 7.

7. In the manner in which the appeal was argued, there was introduced a further allegation relating to the Council’s formal submission to the Delegate as part of the inquiry process initiated by the Delegate in his examination of the Minister’s proposal. Whether that question was before her Honour is dealt with below. In essence, including the further allegation, the Council’s appeal can be condensed to two principal contentions:

1. That the Council’s submission to the Delegate on 28 February 2016 and the addendum of 3 March 2016 as well as the Council proposal lodged with the Minister on 11 March 2016 pursuant to s 218F were a mandatory relevant consideration that the Delegate was required to take into consideration;

2. That there was a denial of procedural fairness.

The statutory scheme

8. The following definitions, contained in the Dictionary to the Local Government Act, are relevant to the legislative provisions which are in issue in these proceedings:

“area means an area as constituted under Division 1 of Part 1 of Chapter 9.

…

council … means the council of an area, and includes an administrator …

…

Departmental Chief Executive means the Chief Executive of the Office of Local Government.”

9. Pursuant to s 220, a council is a body politic of the State with perpetual succession and the legal capacity and powers of an individual, both inside and outside the State. It is not a body corporate.

10. The following provisions of the Act are relevant:

“Chapter 9   How are councils established?

…

Part 1 Areas

…

Division 2A   How are areas amalgamated or their boundaries altered?

218A   Amalgamation of areas

(1)   The Governor may, by proclamation, amalgamate two or more areas into one or more new areas.

(2)   On the date specified in the proclamation as the date on which the areas are to be amalgamated:

(a)   the areas are dissolved, and

(b)   the new area or new areas are constituted, and

(c)   subject to section 218C, the councillors of the former areas cease to hold office.

(3)   Divisions 1 and 2 apply to a new area constituted by a proclamation under this section in the same way as they apply to an area constituted by a proclamation under section 204.

(4)   Section 212 (2) does not apply to the dissolution of a former area by a proclamation under this section.

218B   Alteration of boundaries of areas

The Governor may, by proclamation, alter the boundaries of one or more areas.

…

Division 2B   What must be done before areas can be amalgamated or their boundaries altered?

218D Exercise of functions under secs 218A and 218B

A function under section 218A or 218B may be exercised only after a proposal for the exercise of the function is dealt with under this Division.

218E   Who may initiate a proposal?

(1)   A proposal may be made by the Minister or it may be made to the Minister by a council affected by the proposal or by an appropriate minimum number of electors.

…

218F   Referral of proposal for examination and report

(1)   On making or receiving a proposal, the Minister must refer it for examination and report to the Boundaries Commission or to the Departmental Chief Executive.

(2) Sections 263, 264 and 265 apply to the examination of a proposal by the Departmental Chief Executive in the same way as they apply to the examination of a proposal by the Boundaries Commission.

(3) For the purpose of examining a joint proposal of 2 or more councils for the amalgamation of two or more areas under section 218A, the Boundaries Commission or Departmental Chief Executive, as the case requires, must seek the views of electors of each of those areas:

(a)   by means of:

(i)   advertised public meetings, and

(ii)   invitations for public submissions, and

(iii)   postal surveys or opinion polls, in which reply-paid questionnaires are distributed to all electors, or

(b)   by means of formal polls.

(4)   The period over which the views of electors are to be sought as referred to in subsection (3) must be a period of at least 40 days.

(5)   Part 3 of Chapter 4 applies to a formal poll taken by the Boundaries Commission or Departmental Chief Executive in the same way as it applies to a council poll referred to in that Part.

(6)   If a proposal that is not supported by one or more of the councils affected by it, or that is an amalgamation proposal, has been referred to the Departmental Chief Executive under subsection (1):

(a)   the Departmental Chief Executive must furnish the Departmental Chief Executive’s report to the Boundaries Commission for review and comment, and

(b)   the Boundaries Commission must review the report and send its comments to the Minister.

(7) The Minister may recommend to the Governor that the proposal be implemented:

(a)   with such modifications as arise out of:

(i)   the Boundaries Commission’s report, or

(ii)   the Departmental Chief Executive’s report (and, if applicable, the Boundaries Commission’s comments on that report), and

(b)   with such other modifications as the Minister determines,

but may not do so if of the opinion that the modifications constitute a new proposal.

(8) The Minister may decline to recommend to the Governor that the proposal be implemented.

…

Part 3   Local Government Boundaries Commission

…

263   Functions of the Boundaries Commission

(1)   The Boundaries Commission is required to examine and report on any matter with respect to the boundaries of areas and the areas of operation of county councils which may be referred to it by the Minister.

(2)   For the purpose of exercising its functions, the Boundaries Commission:

(a)   may hold an inquiry if the Minister so approves, and

(b)   must hold an inquiry if the Minister so directs,

but may not hold an inquiry otherwise than as referred to in paragraph (a) or (b).

(2A) Despite subsection (2), the Boundaries Commission must hold an inquiry for the purpose of exercising its functions in relation to a proposal for the amalgamation of two or more areas that has been referred to it in accordance with section 218F.

(2B)   Reasonable public notice must be given of the holding of an inquiry under this section.

(3)   When considering any matter referred to it that relates to the boundaries of areas or the areas of operations of county councils, the Boundaries Commission is required to have regard to the following factors:

(a)   the financial advantages or disadvantages (including the economies or diseconomies of scale) of any relevant proposal to the residents and ratepayers of the areas concerned,

(b)   the community of interest and geographic cohesion in the existing areas and in any proposed new area,

(c)   the existing historical and traditional values in the existing areas and the impact of change on them,

(d)   the attitude of the residents and ratepayers of the areas concerned,

(e)   the requirements of the area concerned in relation to elected representation for residents and ratepayers at the local level, the desirable and appropriate relationship between elected representatives and ratepayers and residents and such other matters as it considers relevant in relation to the past and future patterns of elected representation for that area,

(e1)   the impact of any relevant proposal on the ability of the councils of the areas concerned to provide adequate, equitable and appropriate services and facilities,

(e2)   the impact of any relevant proposal on the employment of the staff by the councils of the areas concerned,

(e3)   the impact of any relevant proposal on rural communities in the areas concerned,

(e4)   in the case of a proposal for the amalgamation of two or more areas, the desirability (or otherwise) of dividing the resulting area or areas into wards,

(e5)   in the case of a proposal for the amalgamation of two or more areas, the need to ensure that the opinions of each of the diverse communities of the resulting area or areas are effectively represented,

(f)   such other factors as it considers relevant to the provision of efficient and effective local government in the existing and proposed new areas.

(4)   The Boundaries Commission is not entitled to examine or report on any matter relating to the area of operations of a county council constituted or proposed to be constituted for the supply of electricity.

(5)   The Boundaries Commission must allow members of the public to attend any inquiry held by the Commission under this section.

(6)   The Boundaries Commission may continue with an examination or inquiry even though a commissioner or acting commissioner replaces another commissioner during the course of the examination or inquiry.

(7)   The Supreme Court may not make an order in the nature of prohibition in respect of, or an order for removing to the Court or quashing, any decision or proceeding made or conducted by the Boundaries Commission in connection with the exercise of its functions.

…

745   Delegation of functions by the Departmental Chief Executive

(1)   The Departmental Chief Executive may delegate to any person any of the Departmental Chief Executive’s functions under this Act, other than this power of delegation …”

The relevant background

11. In light of the agreed chronology of events set out by her Honour in the primary judgment, at [7], the relevant background can be briefly stated. The Council was first informed by the Minister of the proposed amalgamation with Rockdale City Council on 18 December 2015 (the Minister’s proposal). Pursuant to the statutory scheme, which is considered below, on 6 January 2016, the Minister’s proposal was referred by the Minister to the Departmental Chief Executive for examination and report and, on the same day, the Chief Executive delegated his functions to the Delegate.

12. On 7 January 2016, the Delegate formally notified the Council of the Minister’s proposal and of his appointment to examine that proposal. The Delegate invited representatives of the Council to meet and discuss the Minister’s proposal and any relevant information relating to that proposal. The Delegate encouraged the Council to make a submission in respect of the Minister’s proposal before 28 February 2016, which was the date set by the Delegate for the filing of submissions in respect of the Minister’s proposal and invited Council representatives to speak at a public inquiry that was to be held in relation to the Minister’s proposal.

13. The Council provided its submission to the Delegate on 28 February 2016. An addendum was provided on 3 March 2016, the Delegate having previously agreed to receive that addendum. We will refer to the submission and addendum as the Council submission to the Delegate. The Council submission to the Delegate was an abbreviated form of the Council proposal which would later be lodged with the Minister pursuant to s 218E on 11 March 2016, although the Council submitted that it did not contain a completely different proposal from the Minister’s proposal. The Council proposal was that Botany Bay City Council be amalgamated with only particular parts of Rockdale Council and with parts of Randwick Council and Sydney City Council.

11. In an update on the proposed amalgamations, the Minister, in a memorandum of 7 March 2016, noted that a number of councils had made their own proposals and that those proposals had been referred to the Departmental Chief Executive for examination and report in the same way as the Government’s own proposals. The Minister indicated that the Government would assess whether further proposals constituted “proposals” under the Local Government Act and if they did, the proposals would be referred for examination and report as required by the Act. The Council proposal was not amongst those to which the Minister made reference, his letter antedating the lodgement of the Council proposal.

12. However, when on 11 March 2016, the Council lodged the Council proposal with the Minister, it requested in a cover letter that the Council proposal be urgently referred to the Delegate in light of s 263(3) paras (a), (e1) and (e2) of the Local Government Act. On 18 March 2016, a representative of the Minister informed the Council that the proposal had been referred to the Chief Executive.

13. On 21 March 2016, the Council’s legal representatives wrote to the Delegate, enclosing both the Council’s original letter to the Minister and the Council proposal. On the same day, the Council’s legal representatives wrote to the Chief Executive seeking confirmation that the proposal had been referred to the Delegate. On 22 March 2016, the Crown Solicitor’s Office responded to that letter, stating, inter alia, that the Delegate would consider all relevant information provided by the Council under the submission process and further informing the Council that:

“… the decision to review or select a delegate to undertake a review of any alternative proposal referred to Departmental Chief Executive under s 218F … is a matter for the Acting Chief Executive ...”.

17. The reference to the alternative proposal was a reference to the Council proposal lodged on 11 March 2016.

18. It was common ground amongst the parties, both at the hearing before the primary judge and on the appeal, that the Council proposal has not been incorporated into that aspect of the Delegate’s examination which relates to Botany and Rockdale Councils. It was also common ground that examination and report of the Council proposal has not been the subject of a specific delegation under s 745(1) of the Local Government Act. However, the Council submitted that under the terms of the instrument of delegation, para 4(2), the Delegate was delegated “any function that is incidental to the function of examining and reporting on proposals under s 218F”. We return to this below.

Primary judge’s reasons

19. The primary judge’s reasons which are the subject of challenge by the Council are to be found at [23], [32]-[37], [41] and [42]. Paragraph [31] was also the subject of argument. As those paragraphs are in reasonably short compass it is convenient to set them out in full in these reasons. Before doing so, however, reference needs to be made to the relief sought by the appellant in its summons, which was as follows:

“1. A declaration that the third respondent by his delegate, the fourth respondent, when considering the merger proposal made by the first respondent dated January 2016 for the proposed merger of Rockdale City Council and Botany Bay City Council (‘the Minister's Proposal’) must have regard to [the appellant’s] proposal made to the first respondent pursuant to section 218E(1) of the Local Government Act 1993 (NSW) (‘Act’) for the merger of the Council of the City of Botany Bay with parts of Randwick City Council and Sydney City Council and Marrickville Council and Rockdale City Council local government areas ([the Council proposal]), which is a relevant matter or proposal for the purposes of section 263 of the Act.

2.   An order in the nature of mandamus or, alternatively, a mandatory injunction, that the third respondent refer to or delegate to the fourth respondent [the Council proposal] so that the fourth respondent may properly have regard to [the Council proposal] as part of his consideration of the Minister’s proposal.

3.   An order in the nature of prohibition or alternatively, a mandatory injunction, that the second respondent be prohibited from reviewing and/or commenting on any report received by it from the fourth defendant concerning the Minister’s proposal unless [the Council proposal] has been first considered by the fourth respondent.

4.   An order in the nature of prohibition or alternatively, a mandatory injunction, that the first respondent be prohibited from considering and/or recommending to the Governor of NSW the Minister’s proposal, or any modified version of it unless [the Council proposal] has been first considered by the fourth respondent.

5.   …”

20. It is apparent that in the summons, relief was sought only in respect of the Council proposal, that is, the proposal that the Council initiated under s 218E lodged with the Minister on 11 March 2016. No relief was sought in respect of the Council submission to the Delegate. Secondly, the relief sought was directed to requiring that the Council proposal be considered by the Delegate as part of the Delegates’ consideration of the Minister’s proposal. Her Honour’s reasons are to be understood in the context of the relief sought.

21. The relevant paragraphs of her Honour’s judgment are as follows:

“23 Before turning to the statutory construction issues raised by the Council’s case, the most obvious difficulty with the relief sought in prayers one and two is that the delegate was authorised by the Chief Executive on 6 January 2016 to consider the Minister’s proposal for the amalgamation of the Council and Rockdale City Council and matters relevant to that … The delegate is not presently authorised to consider other proposals which can be made under s 218E(1) by a council (or by a minimum number of electors). The delegate does not have the relevant delegated authority to consider the Council’s proposal.

…

31 My construction of s 218F(7) means that it is beyond the Minister’s power to consider modifying his proposal to that proposed by the Council in the current process as the Council’s proposal is new. Essentially the LG Act operates so that a new proposal must be considered separately as required in the mandatory processes specified in s 218F(2). This construction does not render s 218F(8) otiose, contrary to the Council’s submission.

32 That construction of s 218F(7) informs understanding of the operation of s 263, and vice versa. At issue in relation to s 263 is whether the matter referred to in s 263(1), here the Minister’s proposal, is the matter referred to throughout the rest of the section, as the Respondents submit. The Council submits its proposal can and should be considered with the Minister’s proposal in the same process as this is a matter of the kind which s 263 provides for. I agree with and adopt the Respondents’ submissions on the scope of s 263. Subsection (1) requires the Chief Executive/delegate to examine and report on any matter with respect to the boundaries of areas which may be referred to him or her by the Minister. Subsection (1) informs the numerous subsections in subsection (3) which specify the matters the Chief Executive/delegate must have regard to in this case. Subsection (3) also reinforces the limitation in subsection (1) of a matter being referred by the Minister as it states ‘when considering any matter referred to it [I infer, by the Minister] that relates to the boundaries of areas…’ Subsection (e1) refers to the impact of any relevant proposal, which must be a reference to the Minister’s proposal. Subsection (e2) and (e3) refer to ‘... in the areas concerned…’ which means by inference the areas the subject of the matter referred by the Minister. Subsection (e5) refers to a proposal to amalgamate two or more areas, which must be the Minister’s proposal in this context. This construction which the Respondents contended for suggests that the Council’s construction is incorrect. Section 263 does not support as a discretionary matter, let alone as a mandatory matter, the Council’s proposal being inserted into the current process considering the Minister’s proposal as the summons seeks to do. That construction of s 263 means that the Council’s argument that its proposal is a mandatory relevant matter which the delegate must consider cannot succeed.

33   The Council relied on the Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 (‘Peko’) as authority for the argument that a decision must be set aside if the decision-maker does not consider submissions that go to a material fact that is not insignificant or insubstantial and that the decision-maker is bound to take into account (per Gibbs CJ at pp 30-31 and Mason J at pp 39-43). The Council argues that the statutory process in place under the LG Act requires that the delegate consider the Council’s proposal as the Minister for Aboriginal Affairs was bound to consider the mining company’s submission in Peko. As the Respondents correctly submitted, Peko is not authority that any submission about the Council’s boundaries is a mandatory relevant consideration in this statutory context. For the reasons already stated above in the context of this statutory scheme the Council’s proposal is not a mandatory relevant consideration for the delegate.

34 Contrary to the Council’s submissions in reply there is no statutory basis for suggesting that the delegate must take into account other new proposals when he is considering the Minister’s proposal. Given that s 218F(7) contemplates modification by the Minister where these arise out of the Boundaries Commission’s or the Chief Executive’s report (subs (a)) or otherwise (subs (b)) there is scope for the delegate to consider some variations of the Minister’s proposal but not a completely different proposal. That the Council’s proposal has been referred by the Minister to the Chief Executive as he must under s 218F(1) provides that proposal with no legal status in the current process.

35 I agree with the Respondents’ submission that the Council’s construction of ss 218F and 263 has the result that if a council or a number of electors made a new proposal pursuant to s 218E anytime up to the Minister referring a proposal to the Governor under s 218F(7) the process would have to be halted because such a proposal would be a mandatory relevant consideration. Where that would leave the mandatory processes under s 263 particularly where public consultation had already occurred is unclear. That construction does not give rise to a coherent or timely statutory scheme. As identified in the extract of the letter from the Minister to the Council with an update on progress of 7 March 2016 … a number of councils made their own proposals under the LG Act which were referred to the Chief Executive for examination and report. Had the Council put in its proposal earlier than 11 March 2016 the proposal could have been considered earlier.

36 The Council submitted that the modification provision in s 218F(7) could only be meaningful if the delegate’s inquiry could range widely to include consideration of new proposals so that a better way identified could be considered by the delegate. The consideration of proposals for amalgamation in Ch 9 Pt 2 Divs 2A and 2B and Pt 3 of the LG Act does not support that submission. Contrary to the Council’s submissions the two proposals are not inextricably linked as a matter of law.

37   Turning to the second ground of review … there has been no denial of procedural fairness to the Council in the process adopted by the delegate in relation to the Minister’s proposal.

…

41   The Council’s complaint that its proposal languishes on the Chief Executive’s desk is not justified. The proposal sent to the Minister was dated 11 March 2016 and the Minister informed the Council seven days later on 18 March 2016 that it had been sent to the Chief Executive. In a letter dated 22 March 2016 only four days later the Respondents’ solicitor stated that no decision had yet been made by the Chief Executive about whether the proposal would be sent to a delegate and if so who. The Council commenced these proceedings the next day, 23 March 2016. These timeframes are very short on any view.

42   The Council has not established any breach or apprehension of breach of the LG Act and its summons should be dismissed.”

Proposals for amalgamation and scope of the Delegate’s authority

22. Section 218E provides that the Minister may initiate a proposal for amalgamation, as occurred in this case. The section further provides that a council affected by the proposal of the Minister may initiate a proposal by forwarding its proposal to the Minister. This is what occurred on 11 March 2016, when the Council forwarded the Council proposal to the Minister.

23. Section 218F provides that on making or receiving a proposal the Minister must refer the proposal for examination and report to the Boundaries Commission or to the Departmental Chief Executive. There is no time limit specified for the marking of the referral, but no complaint was made by the Council that the Council proposal was not referred to the Departmental Chief Executive promptly, namely, one week after it was lodged with the Minister. There was a complaint that the Council proposal is not presently being dealt with, although the Council did not seek any relief in its summons in that regard. Rather, as indicated, the Council sought relief on the basis of and continued to contend that the Council proposal was a relevant consideration in the examination and report of the Minister’s proposal.

24. Irrespective whether the examination and report is undertaken by the Departmental Chief Executive rather than by the Boundaries Commission, s 263 nonetheless applies to the examination of the proposal: s 218F(2). In this case, both the Minister’s proposal and the Council proposal were referred to the Departmental Chief Executive. Accordingly, s 263 applies to the examination and report of each proposal. At the present time, as the Council proposal has not been the subject of consideration, it is only the proper consideration and application of s 263 to the Minister’s proposal that is in issue.

25. Section 218F(3) requires that the views of the electors of each of the areas the subject of a proposal must be sought including by means of public meetings and invitations for submission and that a period of at least 40 days must be allowed for this process. There was no complaint of a breach of either of these provisions.

The proper construction of s 263 of the Local Government Act

26. The Council’s submissions

27. The Council submitted that the primary judge erred in her construction of s 263 in finding that the Departmental Chief Executive or his delegate cannot consider any matter that does not directly go to the precise terms of the original initiating proposal, in this case the Minister’s proposal. The Council submitted that that could not be correct and that it would mean, inter alia, that the Council submission to the Delegate could not be taken into account.

28. If that was the proper understanding of her Honour’s reasons, the Council’s submission may have had merit. As we explain, however, the primary judge did not engage in the reasoning sought to be characterised as erroneous.

29. It is first necessary to consider the construction of s 263 that was advanced by the Council. The Council focussed on the words in s 263(1), that the Departmental Chief Executive “is required to examine and report on any matter with respect to the boundaries of [councils]” (this Court’s emphasis), submitting that the emphasised words are of the widest import. Authority is scarcely necessary for that proposition, however, see, for example, Kitto J in Powers v Maher [1959] HCA 52; 103 CLR 478 at 484-485. The Council submitted that in consequence, the matters that were relevant under the section were not confined to the “four walls of the initiating proposal”.

30. In support of this submission, the Council referred to s 218F(7) which permits the Minister to make a recommendation to the Governor that the proposal examined and reported on be implemented with modification. However, s 218F(7) also expressly provides that the Minister may not recommend implementation, “if of the opinion that the modifications constitute a new proposal”. The Council’s contention was that this must mean that a submission could be made to the Chief Executive or Delegate as part of the inquiry process that proposed a different outcome to that contained in the proposal under examination. The Minister could recommend that the proposal with that difference, that is, as modified, be implemented. However, if the ‘modification’ amounted to a new proposal, it could not be recommended for implementation.

31. As we understand the Council’s submission, this meant that a fresh examination and reporting process of that new proposal would have to be undertaken. The Council suggested that this could be done by imposing “a few weeks deadline for submissions”. We do not accept that submission in the unqualified terms in which it was made. Any ‘new proposal’ that arose out of the initial proposal that had been referred to the Boundaries Commission or Departmental Chief Executive would need to be initiated and referred for examination and report pursuant to ss 218E and 218F. This would require, as provided by s 218F(4), that the views of electors were to be sought over a period of at least 40 days.

32. However, that matter was in not in issue in the present proceedings. What was in issue was the Council’s submission that pursuant to s 263, the matters that the Departmental Chief Executive or his delegate were to examine are not constrained by the proposal referred by the Minister. The Council sought further to support this submission by reference to the mandatory considerations specified in s 263(3) and, in particular, the reference in s 263(3) paras (a), (e1), (e2) and (e3) to “any relevant proposal”, and the requirement in para (f) that the Delegate consider “such other factors as it considers relevant”. The Council submitted that the phrase “any relevant proposal” was also of wide import and must mean any other proposal that might fairly be considered relevant to a consideration of the proposal that had already been referred, which, here, was the Minister’s proposal.

33. The Council submitted that the Council submission to the Delegate as well as the Council proposal concerned the “areas” in the Minister’s proposal referred to the Delegate for consideration. It submitted that the primary judge erred in determining therefore that both the Council submission to the Delegate and the Council proposal were irrelevant to the Delegate’s examination and report.

34. The Council also submitted that having regard to the terms of the instrument of delegation under which there was a delegation of functions “incidental to the function of examining of and reporting on proposals under s 218F”, the Delegate was authorised to consider other proposals, including the Council proposal and that the Council proposal was a relevant matter that fell within s 263(3)(f).

35. As is apparent from a review of the Council’s submissions above, there has been a conflation on its part of the proper construction of s 263 and a proper understanding of the primary judge’s reasons. We do not agree with the fundamental premise of the Council’s construction of s 263(1) that the words “any matter with respect to” are not governed by that which is referred to the Boundaries Commission, Departmental Chief Executive or Delegate as the case may be. Nor do we agree with the Council’s construction of the phrase “any relevant proposal” in s 263(3).

36. It is therefore appropriate that we state what we consider to be the proper construction of s 263. Before doing so, we should first confirm, what we understand not to be contentious, that pursuant to s 218F, the Council proposal was a new proposal in that it proposed more than mere modification of the Minister’s proposal and that the Council proposal has been referred to the Departmental Chief Executive in accordance with s 218F of the Act and is thus to be the subject of inquiry and report. It is also not contentious that, as the words of s 218F(7) plainly state, the Minister may recommend to the Governor that the proposal that has been referred under the section to, relevantly, the Departmental Chief Executive be implemented with modifications but not if the modifications “constitute a new proposal”. The Minister may also decline to recommend that the proposal be implemented: s 218F(8).

Construction of s 263

37. The principles of statutory construction are well settled: “the task of statutory construction must begin with a consideration of the text [of the legislation]”: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41 at [47]. The meaning of text may require consideration of its context, which includes the general purpose and policy of a provision: Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355.

38. Section 263(1) requires the Boundaries Commission or the Departmental Chief Executive, as the case may be, “to examine and report on any matter with respect to the boundaries of [councils] which may be referred to it by the Minister”. The phrase “any matter” is not defined and of itself may be taken to be of wide import. Likewise, the phrase “with respect to” is of wide import. However, there are two indications in subs (1) itself that its meaning is more confined. First, and most importantly, on the express words of the subsection, “any matter” is controlled by the phrase “which may be referred to it by the Minister”. Secondly, any such matter must be “with respect to the boundaries of [councils]”. Accordingly, what falls within s 263 for examination and report is any matter with respect to boundaries that is referred by the Minister. In this case, that was the Minister’s proposal.

39. Section 263(3) then provides that when “considering any matter referred to it that relates to the boundaries”, the factors specified in (a)-(f) inclusive must be considered. The reference in subs (3) to “any matter referred” is a reference to that which was referred pursuant to subs (1). The matters that must be considered include under para (d) the attitude of the residents and ratepayers of the areas concerned. In this case, the views of some at least of the residents and ratepayers of the Council were contained in the addendum submission filed with the Delegate on 3 March 2016 and which the Delegate has stated will be considered.

40. Relevant matters that must be considered are also the matters specified in paras (e1)-(e3) being the “impact of any relevant proposal” on “the councils of the areas concerned” in respect of the matters specified in those paragraphs. Again, on the plain construction of the section, that must mean the proposal that has been referred by the Minister in accordance with s 263(1). Otherwise, the word “relevant”’ would be superfluous in the phrase “relevant proposal”. Similarly, the reference to the “councils of the area concerned” must relate to the proposal that has been referred pursuant to s 263(1). Further support for this construction is found in s 263(3)(e5), which refers to “a proposal for amalgamation of two or more [councils]”. In the context of this case, that must be a reference to the Minister’s proposal.

41. Having regard to the provisions of Ch 9 of the Act, which governs how councils are established and in which s 263 falls, it is unclear whether the legislature, by using the phrase “any matter” in subs (1) and (3), had anything in mind other than a proposal under s 281F that had been referred by the Minister. Thus, Div 2A deals with the amalgamation of councils or the alteration of the boundaries of councils. For either process to occur, it must be initiated by a proposal: Div 2B, s 218D. When regard is had to the controlling words of s 263(1), viz “any matter … which may be referred by the Minister”, it may be that the phrase “any matter”, was intended to refer to one or other of the forms of proposal that can be made under Ch 9, Div 2.

42. This possible construction gains some support from s 263(2A) which requires that an enquiry be held in relation to a proposal for the amalgamation of councils. In other words, when the legislature intended to refer to one form of proposal, for amalgamation in the case of s 263(2A), it said so in express words, whereas when the section was directed to both forms of proposal, that is, for amalgamation or for alteration of boundaries, it used the word “matter”. It may also be that under s 263(1), “any matter” referred might include both types of proposals to be considered simultaneously.

43. However, the precise meaning of the word “matter” does not have to be determined for present purposes, as s 263(1) is, as already explained, clear on its terms that an examination and report is only in respect of any matter referred to the Boundaries Commissioner or the Departmental Chief Executive.

44. In our opinion, the reasons of the primary judge in relation to s 263 accord with this construction.

The Council’s additional concerns

45. There were a number of other arguments that the Council raised in its submissions that need to be dealt with. The first related to the scope and extent of the delegation. The Council’s submission is set out above at [33]. We do not accept that the reference in para 4(2) of the delegation bears the meaning for which the Council contended. The functions of the Departmental Chief Executive must be incidental to the examination and reporting function. It would be contrary to the plain language and intended operation of s 218F, which requires a proposal initiated under s 218E to be referred for investigation and report, for any such proposal to be considered as an incidental aspect of a proposal that has already been referred. That would be quite a different process from the contemporaneous examination and reporting of two or more formal proposals in accordance with the terms of the Act.

46. Even if the Council’s submission referred to in the previous paragraph were accepted, that would not make the Council proposal a mandatory consideration under s 263(3)(f) which provides that it is a matter for the Delegate to determine what other factors are relevant. There was no argument advanced that a refusal to examine any such proposal lodged under s 218E, in the way suggested by the Council, was unreasonable. Rather, the Council’s submission was premised on the Council proposal being encompassed within the terms of the delegation to the Delegate. For the reasons given, that is not and could not reasonably be understood to be the case.

47. A further matter related to the additional argument raised by the Council to which we have referred above at [6], namely, that her Honour erred in concluding that the Council submission to the Delegate was not a relevant consideration for the purposes of s 263. This complaint is focused in particular upon her Honour’s comments in [32] that s 263 does not support, either as a discretionary or mandatory consideration the Council proposal being inserted into the process of examination and report presently underway in respect of the Minister’s proposal. The submission was that the reference by her Honour to the Council’s proposal extended to the Council’s submission to the Delegate.

48. We do not accept that that is an available reading of the primary judge’s reasons. The Council’s summons expressly identified that the proposal in respect of which it sought relief was the:

“… proposal made to [the Minister] pursuant to section 218E(1) … for the merger of the Council of the City of Botany Bay with parts of Randwick City Council and Sydney City Council and Marrickville Council and Rockdale City Council local government areas ([Council] Proposal) …”

49. There is nothing in her Honour’s reasons to suggest that in determining whether the Council was entitled to relief she dealt with anything other than the Council proposal. In particular, there is nothing in her Honour’s reasons that can be read as a reference to the Council’s submission to the Delegate such that her Honour should be understood as stating that the submission could not be taken into account on the examination and report to the Minister. Nor is there anything in her Honour’s reasons to the effect that the Delegate could not consider a submission that proposed some alternative arrangement in relation to the boundaries of the councils subject of the Minister’s proposal.

50. The Council nonetheless submitted on the appeal that it was possible that her Honour’s reasons might be read in that way by the respondents. These reasons should dispel any such suggestion. Further, the Minister’s Senior Counsel was expressly asked whether, provided a submission was made within the time frame specified by the Delegate for the making of submissions, any submission or proposal that argued for different boundaries from those subject of the Minister’s proposal, would be taken into account by the Delegate in determining whether or not to recommend the proposal he had been delegated to consider. The Minister’s Senior Counsel responded:

“If an alternative possibility, if I can use neutral terms, as to areas for amalgamation is put forward in submissions within time, that is a matter that the delegate can consider when examining and reporting on the minister’s proposal.

…

The delegate cannot examine and report on the new proposal but the delegate can consider the alternative formulation of boundaries, to use a neutral term, when examining and reporting on the minister’s proposal.

The delegate might say and I think this was within your Honour the Chief Justice’s example to my friend, ‘I’ve seen in the submissions that Botany Council lodged on 28 February that they have a different possibility in mind, a different option, for amalgamation or extension of areas to that which the minister has put forward. I am unable to examine and report on that but it is an alternative which has merit and which the minister should consider before making a recommendation to the governor’.”

Procedural fairness

51. The Council contended that it had been or would be denied procedural fairness if the Delegate failed to take into account a relevant consideration in its examination and report: see Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; 162 CLR 24 at 39-40 and 44-46; and Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; 206 CLR 323 at [82]-[84]. The Council also submitted that such a failure to take into account a relevant consideration would constitute jurisdictional error. The argument was premised on two matters. The first was that the consideration of the Council proposal was a mandatory consideration under s 263(3). For the reasons we have given, the Council proposal was not relevantly before the Delegate. It had been lodged by way of a submission to the Delegate within the timeframe for submissions.

52. The second premise upon which the argument was adduced was that in her reasons, the primary judge had determined that the Delegate could not permissibly consider the Council submission to the Delegate. The Council submitted that its submission to the Delegate did not contain a completely different proposal to that of the Minister’s proposal. Rather, the Council contended that it was a modified proposal only and was distinguishable from the Council proposal lodged with the Minister on 11 March 2016.

53. The factual question as to whether the Council submission to the Delegate was a modified or new proposal is not a matter for this Court’s determination. The answer to the Council’s allegation of lack of procedural fairness, however, is that the proceedings before her Honour did not concern the Council submission to the Delegate and in any event, the Delegate informed the Council he would consider it.

Additional arguments

54. In the course of oral argument, as was the position before the primary judge, the Council complained that the Council proposal had been referred to the Departmental Chief Executive but was not otherwise being processed. There are two answers to this complaint. First, we do not read the correspondence from the Crown Solicitor’s Office of 22 March 2016 in the same way as did her Honour. In the course of setting out the agreed chronology in the matter, her Honour, at [7](22), referred to this letter as containing a statement that “the Chief Executive had not yet decided whether and if so to whom he would be referring the Council’s proposal”. The precise terms of the relevant passage in the letter are set out above at [16].

55. The letter appears to indicate that the decision which remained outstanding was whether the Departmental Chief Executive would undertake the review himself, or whether the matter would be referred to a delegate and if so which delegate. It is also possible that the letter was phrased as it was so as to take into account the possibility that the process of examination and report of the Minister’s proposal and any subsequent recommendation to the Governor would be complete prior to the time at which a report and examination could be undertaken in respect of the Council proposal.

56. Should that occur, the Council would be correct in pointing out that it is unlikely to exist as a body politic if the Minister recommends and the Governor proclaims the amalgamation of its local government area with that of Rockdale City Council. However, that is a matter of speculation and as we have indicated, the Council has not sought any relief independent of its claim that the Council proposal should be considered by the Delegate as part of its examination and report of the Minister’s proposal.

Conclusion

57. For the reasons we have given, the appeal is dismissed with costs.

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Decision last updated: 15 April 2016