Kinchington Estate Pty Ltd v Wodonga City Council

[2019] VSC 745

59 VR 443

KINCHINGTON ESTATE PTY LTD v WODONGA CITY COUNCIL Supreme Court of VictoriaQuigley J 27 August, 18 November 2019[2019] VSC 745Administrative law — Judicial review — Decisions of municipal council – Nature of council’s decisions — Whether decisions made in exercise of statutory power — Whether council acting as a tribunal when decisions made — Meaning of tribunal — Administrative Law Act 1978 (Vic), ss 2, 8(1).Town and country planning — Planning scheme — Agreement between responsible authority and land owner — Application to amend agreement — Refusal of application — Refusal to furnish reasons — Whether requirement to furnish reasons — Whether rules of natural justice apply — Planning and Environment Act 1987 (Vic), ss 173, 178, 178A.

The plaintiff was registered proprietor of land in Leneva. The land was subject to an agreement between the plaintiff’s predecessor in title and the defendant municipal council, under s 173 of the Planning and Environment Act 1987 (Vic) (P&E Act). Under the terms of that section, the plaintiff as successor in title replaced the previous registered proprietor as a party to the agreement.

The plaintiff and defendant sought to negotiate amendments to the agreement and, in December 2018, the plaintiff made two applications to the defendant under s 178A(1)(a) of the P&E Act seeking approval of the amendments.

In February 2019, the defendant notified the plaintiff of its refusal to agree in principle to the applications (Refusals). Subsequently, the plaintiff requested the defendant furnish a statement of reasons for its decision under s 8 of the Administrative Law Act 1978 (Vic) (AL Act). The defendant declined to provide reasons for the Refusals. Section 2 of the AL relevantly provided:

In this Act unless the context or subject matter otherwise requires—

decision means a decision operating in law to determine a question affecting the rights of any person or to grant, deny, terminate, suspend or alter a privilege or license and includes a refusal or failure to perform a duty or to exercise power to make such a decision;

...

tribunal means a person or body of persons who, in arriving at the decision in question, is or are by law required, whether by express direction or not, to act in a judicial manner to the extent of observing one or more of the rules of natural justice.

The plaintiff applied to the Court for judicial review of the Refusals and for an order directing the defendant to provide a statement of reasons.

Held, granting the application:

• (1)

  The Refusals were ‘decisions’ for the purposes of the AL Act.

  • (a)

    The Refusals were made in the exercise of a statutory power given to it as the responsible authority pursuant to s 178 to make the decision in accordance with the provisions of the P&E Act. The Refusals were not simply due to the defendant’s status as a party to the s 173 agreement.

  • (b)

    The Refusals operated in law to determine a question affecting the rights of the applicant in respect of the s 173 agreement.

doi: 10.25291/VR/59-VR-44359 VR 444

• • (c)

    The Refusals affected the rights of the plaintiff with respect to the s 173 agreement as well as the plaintiff’s ‘privilege or licence’ (for the purposes of the definition of a ‘decision’ in s 2 of the AL Act) which the plaintiff held under the agreement.

  • (d)

    Given the statutory definition of decision, there was no distinction between a decision to agree in principle and a decision to refuse to do so.

  [48]–[52], [56]–[59], [61], [81].

  By Quigley J. There are at least two decisions involved in the exercise of the power to amend or end a s 173 agreement pursuant to s 178A: first, a decision in principle under s 178A(3) of the P&E Act; secondly consideration of third parties’ objections under s 178. [53].

• (2)

  In making the Refusals the defendant was acting as a ‘tribunal’ within the meaning of the AL Act.

  • (a)

    In the absence of clear legislative intent to the contrary, the defendant’s exercise of statutory power in making the Refusals attracted the requirements of procedural fairness.

  • (b)

    The plaintiff’s interests were affected in a way that attracted the presumption that the rules of procedural fairness would apply.

  • (c)

    The absence of any mechanism for merits review strengthened rather than undermined the application of the requirements of procedural fairness to the making of the council’s decision under s 178A(3).

  • (d)

    Parliamentary materials were inconclusive and did not require an alternative conclusion.

  [48], [64]–[77], [81].

  Masters v McCubbery [1996] 1 VR 635; No 2 Pitt Street Pty Ltd v Wodonga City Council (No 3) [1999] 3 VR 439, 458[59], 459[61]; Muldoon v Melbourne City Council (2013) 217 FCR 450, 531[398], 532[404] applied.Simjase Pty Ltd v City of Melbourne [1990] VR 350 distinguished.Commissioner of Police v Tanos (1958) 98 CLR 383, 396; Kioa v West (1985) 159 CLR 550, 609, 612, 619; Annetts v McCann (1990) 170 CLR 596, 598; Saeed v Minister for Immigration and Citizenship (2010) 241 CLR 252, 277[73] referred to.

Application for judicial review

This was an application for judicial review under o 56 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic). The facts are stated in the judgment.

Reserved judgmentR Chaile for the plaintiff. R Appudurai for the defendant. 59 VR 445QUIGLEY J

Background

1In July 2016, Kinchington Estate Pty Ltd (Kinchington) became the registered proprietor of undeveloped residentially zoned land situated at 115 Kinchington Road, Leneva (the Land). At the time Kinchington became registered proprietor of the Land there was an agreement in existence made under s 173 of the Planning and Environment Act 1987 (Vic) (the P&E Act) between the Wodonga City Council (Council) and the former registered proprietor of the Land, Middle Creek Properties Pty Ltd (the s 173 agreement). As successor in title, Kinchington replaced the former registered proprietor as a party to the s 173 agreement.2Prior to Kinchington becoming the registered proprietor, the former owner applied to the Council to end the s 173 agreement and replace it with a new one. The Council acknowledged a number of provisions in the s 173 agreement were no longer relevant or appropriate by letter in July 2014.3Following Kinchington’s replacement as a party to the s 173 agreement, the Council amongst other things, reiterated the view expressed in its letter of July 2014 by further correspondence on 30 November 2016 to Kinchington that the s 173 agreement was out of date and no longer relevant in several respects.4After a mediation in October 2017, Kinchington provided the Council with a submission and documentation supporting the amendments it sought to the s 173 agreement.5By Council resolution dated 11 December 2017, the Council agreed to some of the amendments sought by Kinchington but relevantly determined that a number of clauses be retained including:

• (a)

  clause 7.4.2 which provides:

  The apportioned contribution per lot for the duplication of Beechworth Road from the intersection of Yarralumla Drive/Street’s Road through to Huon Creek Road as detailed in information provided with Schedule B, is $898.22 and is required to be paid prior to the issue of a statement of compliance in respect to any subdivision of the land into developed lots; and

• (b)

  clause 7.6 which provides:

  The apportioned contribution for the purchase of land and development of playing fields for the North Leneva area by the Council has been calculated on a per lot basis. As shown on the plan in Schedule D, the per lot contribution for the provision of a single playing field at North Leneva is $600.83/lot, and is required to be paid prior to the issue of a statement of compliance in respect of any subdivision of the land into developed lots.

6In February 2018, the Council wrote to Kinchington to progress the finalisation of the amended s 173 agreement in accordance with the Council 59 VR 446resolution.7In May 2018, Kinchington made a submission to the Council submitting amongst other things, that the change of circumstances since the registration of the s 173 agreement in 2007 demonstrated that cls 7.4.2 and 7.6 were no longer required.8I state these matters by way of background as there was a dispute between the parties as to whether the s 173 agreement was obsolete in material respects. However, despite this disagreement between the parties, the history as set out above is apparent from the material before the Court.9Subsequently, Kinchington applied to the Victorian Civil and Administrative Tribunal pursuant to s 184A(2)(b) of the P&E Act for review of the Council’s alleged failure to make a decision in relation to its request to amend the s 173 agreement. The parties entered into Heads of Agreement which recorded the parties’ agreement that there would be no prejudice to Kinchington’s right to seek a further variation of the s 173 agreement to vary or remove cls 7.4.2 and 7.6.10On 7 December 2018, Kinchington made two applications to the Council under s 178A(1)(a) of the P&E Act seeking the Council’s agreement to the respective deletions of cl 7.4.2 and sch B and cl 7.6 and sch D to the s 173 agreement.111On 19 February 2019, the Council notified Kinchington that under s 178A(3) of the P&E Act it did not agree in principle to the requests made by Kinchington on 7 December 2018 (the Refusal Decisions).12On 20 February 2019, Kinchington by its solicitors requested that the Council furnish a statement of reasons in accordance with s 8 of the Administrative Law Act 1978 (Vic) (the AL Act).13On 14 March 2019, the Council by its solicitors refused to furnish a statement of reasons. In its correspondence, the Council reasoned that:

In light of the legislation and the relevant authorities that the Council’s decision (notice of which was given in the Council’s letter dated 19 February 2019) was not, relevantly, a ‘decision’ for the purposes of the [AL Act]; primarily because the Council (when it decided not to ‘agree in principle’ to the proposal) was not then acting as a ‘Tribunal’ (as defined in the [AL Act]).

Accordingly, there is no obligation on the Council, under the [AL Act], to provide reasons for its decision.

14On request by Kinchington for specification of the authorities upon which the Council premised this conclusion, the Council cited Simjase Pty Ltd v City of Melbourne 2 and Nicol v Attorney-General for Victoria 31

These applications were made without prejudice to Kinchington’s position in the VCAT proceeding.

2

[1990] VR 350 (Simjase).

3

[1982] VR 353 (Nicol).

59 VR 44715Kinchington now seeks:

• (a)

  a declaration that the Council is a ‘tribunal’ within the meaning of the AL Act; and

• (b)

  an order in the nature of mandamus directing the Council to furnish a statement of reasons in accordance with s 8 of the AL Act in relation to each of the Council’s decisions made on 19 February 2019 to refuse to agree in principle to the applications made under s 178A(1)(a) of the P&E Act.

The Administrative Law Act

16Section 8(1) of the AL Act provides:

A Tribunal shall, if requested to do so by any person affected by a decision made or to be made by, furnish him with a statement of its reasons for the decision.

17Section 2 of the AL Act defines ‘tribunal’ and ‘decision’ for the purposes of s 8:

In this Act unless the context or subject matter otherwise requires—

decision means a decision operating in law to determine a question affecting the rights of any person or to grant, deny, terminate, suspend or alter a privilege or license and includes a refusal or failure to perform a duty or to exercise power to make such a decision;

...

tribunal means a person or body of persons who, in arriving at the decision in question, is or are by law required, whether by express direction or not, to act in a judicial manner to the extent of observing one or more of the rules of natural justice, but does not include—

• (a)

  a court of law or a tribunal constituted or presided over by a Judge of the Supreme Court; or

• (b)

  a Royal Commission, Board of Inquiry or Formal Review within the meaning of the Inquiries Act 2014.

18The statutory concepts of ‘decision’ and ‘tribunal’ direct attention to the statutory scheme under which the relevant decision is made. It is therefore necessary to discuss the P&E Act, in particular those provisions dealing with the making, amending and ending of s 173 agreements.

Nature of a s 173 agreement

19A s 173 agreement is one of a number of instruments available for achieving the objectives of planning in Victoria.4 Such agreements are made between a responsible authority (as defined in s 13 of the P&E Act, usually the municipal council) and the owner of land covered by that municipal council’s planning scheme. The agreement can provide for the prohibition, restriction or regulation of the use and development of the land, the conditions upon which 4

TPSC Pty Ltd v Kingston City Council[2018] VSC 313[53]; cited with approval in TPSC Pty Ltd v Kingston City Council [2019] VSCA 204[26].

59 VR 448the land may be used or developed and may include any matter intended to achieve or advance the objectives of a planning scheme or of planning in Victoria or matters incidental to these matters.520Section 173 agreements have a number of features that are pertinent to understanding the statutory regime by which they are amended or ended:

• (a)

  First, they are a planning tool or mechanism which allows for the use and development of land in a manner and direction which is consistent with the objectives of planning in Victoria and the relevant planning scheme but can provide for terms or conditions which are not appropriate or easily included in a planning permit or other approval.

• (b)

  Secondly, the responsible authority (usually the municipal council) is always a party to a s 173 agreement.

• (c)

  Thirdly, s 173 agreements can be registered on title so that they are enforceable against subsequent owners.

• (d)

  Fourthly, s 173 agreements may be enforced under s 114 of the P&E Act with aspects of their enforceability and interpretation being reviewable pursuant to ss 149 and 149A of the P&E Act.

The legislative scheme for amending or ending s 173 agreements

21The ending of a s 173 agreement in whole or in part, or as to any part of the land is provided for in s 177. This section provides that an agreement may specify its ending on the occurrence of a specified event or time, or the cessation of the use or development of the land for a specified purpose.6 An agreement may be ended or amended by agreement between the responsible authority and all persons bound by the agreement, or otherwise in accordance with the Division.722The provision under which Kinchington applied for, and the Council refused, agreement in principle to the proposal to delete cls 7.4.2 and 7.6 of the s 173 agreement is s 178A of the P&E Act. This provision relevantly allows an owner of land to apply to a responsible authority for agreement to a proposal to amend a s 173 agreement or end a s 173 agreement wholly or in part or as to any part of that land. This is to be done in accordance with the requirements of the P&E Act and the Planning and Environment Regulations 2015 (Vic).23Section 178A forms part of pt 9 div 2 subdiv 2 of the P&E Act (Ending and amending of agreements). In summary, subdiv 2:

• (a)

  provides that an agreement made under s 173 may only be amended with the agreement of the responsible authority (in this case, the

5

Planning and Environment Act 1987 (Vic), s 174 (P&E Act).

6

Ibid s 177(1).

7

Ibid ss 177(2), 178.

59 VR 449

• (a)

  Council) and any party bound by a covenant in the agreement and, failing agreement otherwise in accordance with pt 9 div 2 of the P&E Act (of which s 178A forms a part);

• (b)

  sets out the matters to which the responsible authority must have regard when considering a proposal to amend an agreement under the P&E Act.8These mandatory considerations include:

  • •

    the purpose of the agreement; and

  • •

    the purpose of the amendment; and

  • •

    whether any change in circumstances necessitates the amendment; and

  • •

    whether the amendment would disadvantage any person, whether or not a party to the agreement; and

  • •

    the reasons why the responsible authority entered into the agreement; and

  • •

    if the amendment is to remove land from the application of the agreement, whether the land is subject to any further liability under the agreement; and

  • •

    any relevant permit or other requirements the land is subject to under the Subdivision Act 1988 (Vic); and

  • •

    any other prescribed matter;

• (c)

  deals with the provision of notice to parties to the agreement, and other parties the responsible authority considers may suffer material detriment as a result of a decision to amend or end an agreement under the P&E Act;9

• (d)

  provides any person ‘who was given, or ought to have been given’ notice under s 178C with a right to object to, or make submissions in relation to, the proposal to amend or end the agreement;10

• (e)

  empowers the responsible authority to make a decision after considering any objections, submissions and other matters in s 178B to amend or in the agreement in accordance with the proposal made under s 178A(1) or in a manner that is not substantively different from the proposal, refuse to amend or end the agreement, or propose that the agreement be amended or ended in a manner that is substantively different from the proposal;11

• (f)

  requires the responsible authority to give notice to affected parties

8

Ibid s 178B.

9

Ibid s 178C.

10

Ibid s 178D.

11

Ibid s 178E.

59 VR 450

• (f)

  and objectors of a decision to amend or end the agreement;12

• (g)

  requires the responsible authority sign and provide a copy of the amended agreement to each party to the agreement without delay;13 and

• (h)

  permits the responsible authority to require a person who has applied under subdiv 2 to meet the costs of giving notice under s 178C and preparing the amended agreement.14

Submissions of the parties

Kinchington’s submissions

24Kinchington argued that the Council was acting as a ‘tribunal’ when the Refusal Decisions were made as that term is encapsulated in the AL Act. In support of this conclusion, Kinchington relied upon three propositions:

• (a)

  First, modern authorities have confirmed that a local council making decisions under the P&E Act may be acting as a ‘tribunal’ for the purposes of the AL Act. The question of whether the Council was acting as a ‘tribunal’ is answered by ascertaining whether in the making of the decision to refuse to agree in principle the Council was required to act fairly.15

• (b)

  Secondly, nothing in the legislative scheme of the P&E Act evinces an intention by Parliament to exclude the requirements of procedural fairness in the making of the decision to refuse to agree in principle. In the absence of a clear intention of that kind, the Council was obliged to act fairly in making that decision.

• (c)

  Thirdly, the authorities upon which the Council relied, namely Simjase and Nicol, are inapt and irrelevant to the determination of the question before the Court, particularly as more recent authorities have discarded their reasoning.

25As to the first proposition, Kinchington highlighted the effect of No 2 Pitt Street Pty Ltd v Wodonga City Council (No 3)16 and Muldoon v Melbourne City Council,17 for which it was contended makes clear that the Council may properly be characterised as a tribunal for the purposes of AL Act when it exercises statutory power that is apt to affect a person’s interests, unless it can be shown that there is a clear intention within the relevant statute to exclude the requirements of procedural fairness in respect of that exercise of 12

Ibid s 178F.

13

Ibid s 178G.

14

Ibid s 178H.

15

The requirement to act fairly is used as a shorthand for the phrase ‘the requirement to comply with the rules of natural justice’.

16

[1999] 3 VR 439 (No 2 Pitt Street Pty Ltd).

17

(2013) 217 FCR 450(Muldoon).

59 VR 451power. The starting point for this analysis, as it was in those cases, was said to be found in the statement of principle in Annetts v McCann,18that natural justice will regulate the exercise of a statutory power which may destroy or prejudice a person’s rights or interests.19 In this way the implication of the principles of natural justice in a statute is therefore arrived at by a process of construction.20 This process proceeds on the assumption that the legislature, being aware of the common law principles, would have intended that they apply to the exercise of a power of the kind referred to in Annetts v McCann.21 Thus, the starting point is that the Council’s exercise of statutory power must be taken to be conditioned by and subject to the requirements of procedural fairness unless it can be shown to the contrary.

26Kinchington submitted that the requirements of procedural fairness can only be excluded by ‘plain words of necessary intendment’.22 Such an intention will not be assumed or spelled-out from ‘indirect references, uncertain inferences or equivocal considerations’23 or inferred from the mere presence in the statute of rights inconsistent with some natural justice principles. This is because there is an analogy between the presumption underlying requirements of procedural fairness and the presumption underlying the principle of legality.2427Consistent with these principles, Kinchington argued that there is nothing in the scheme established by ss 178A–178I of the P&E Act that is incompatible with, or otherwise militates against, the requirements of procedural fairness applying at the time that a responsible authority is called upon to decide whether to grant in principle approval under s 178A. Kinchington submitted that it was plainly apparent from the legislative scheme for ending or amending a s 173 agreement established by ss 178A–178I that there was no express ouster of the requirements of procedural fairness. Further, there is no reason for concluding that those requirements have necessarily or impliedly been excluded. It argued that the fact that ss 178C and 178D set out a statutory regime for the giving of notice and the making of submissions after in principle approval is granted is insufficient to displace or show the requirements of procedural fairness have been excluded.28Kinchington noted that there is no provision for merits review at the in principle decision stage and that the absence of any mechanism for merits review strengthens rather than undermines the application of the requirements of procedural fairness to the making of the Council’s Refusal Decisions under 18

(1990) 170 CLR 596.

19

Ibid 598 (Mason CJ, Deane and McHugh JJ).

20

Saeed v Minister for Immigration and Citizenship (2010) 241 CLR 252, 258[12] (French CJ, Gummow, Hayne, Crennan and Kiefel JJ) (Saeed).

21

Ibid.

22

Annetts v McCann(1990) 170 CLR 596, 598 (Mason CJ, Deane and McHugh JJ).

23

Commissioner of Police v Tanos(1958) 98 CLR 383, 396 (Dixon CJ and Webb J) (Tanos). See also Saeed(2010) 241 CLR 252, 259[15].

24

Saeed (2010) 241 CLR 252, 259[14]–[15]; Annetts v McCann(1990) 170 CLR 596, 598.

59 VR 452s 178A(3).2529Finally, it argued contrary to the Council’s position, neither Simjase nor Nicol support any alternative conclusion.30In Simjase, McGarvie J determined that the relevant council was not acting as a ‘tribunal’ for the purposes of the AL Act in refusing a permit application because the plaintiff had an insufficient interest in the nature of the decision to attract the requirements of procedural fairness. His Honour characterised the interest as one in obtaining a privilege which it did not then enjoy, rather than an interest in retaining or renewing a privilege which it already enjoyed.26 Accordingly, the council was not required to act in a judicial manner.31Kinchington stated that the reasoning adopted in Simjase ‘has been diminished if not overwhelmed’ by the judgments in No 2 Pitt Street Pty Ltd and Muldoon.32It was said that it must be taken that at least since No 2 Pitt Street Pty Ltd, a council may be properly characterised as a ‘tribunal’ for the purposes of the AL Act unless it can be shown that there is a clear intention to exclude the requirements of procedural fairness in respect of the statutory power being exercised by the council.33Kinchington also briefly argued that the authority of Nicol — upon which the Council had relied to deny that it was a ‘tribunal’ — was distinguishable and irrelevant, as that case concerned itself with the fundamental proposition of whether expiry of a time limit for instituting prosecution without ministerial consent amounts to an acquisition of a legitimate expectation of not being prosecuted.

The Council’s submissions

34The Council contended that it was not required to provide reasons on request under the AL Act in respect of the Refusal Decisions because:

• (a)

  a refusal in principle under s 178A of the P&E Act is not a decision made in the exercise of statutory power but rather in the exercise of contractual rights under the s 173 agreement; and

• (b)

  in the alternative, that power is not one conditioned by the operation of the rules of natural justice.

35The Council conceded that an exercise of statutory power that is apt to affect someone’s interest will be subject to the requirements of procedural fairness unless there is express or clear implication to the contrary. However, its argument was that there was no exercise of statutory power and no effect on interests when making the Refusal Decisions.25

Relying on Saeed (2010) 241 CLR 252, 277[73] (Heydon J).

26

Simjase[1990] VR 350, 353.

59 VR 45336The Council articulated the difference between the parties’ positions as follows:

The question really in this case is, when you look at the authorities, considering the statutory scheme, the question is: is it an exercise of statutory power under s 178A? And, if it is, is it an exercise of statutory power that defeats, destroys or affects the rights of a person the subject of the decision?

Only if the answer to both those limbs is yes do we then get to the question of asking whether or not the scheme evinces Parliament’s intention that the rules of procedural fairness are not to apply. And that’s the real distinction between the case for the plaintiff and the case for the council.

37In summary, the Council’s submissions suggest that the following questions arise when assessing whether the Refusal Decisions were made in the exercise of a power conditioned by the rules of natural justice:

• (a)

  Were the Refusal Decisions made in the exercise of statutory power?

• (b)

  If yes, was that statutory power one that ‘defeats, destroys or affects the rights of a person’?

• (c)

  If yes, does the statute exclude the operation of the rules of procedural fairness expressly or by clear implication?

38The Council’s submissions were primarily directed to the first two questions above, but also addressed the third.39The starting point of the Council’s argument was that the power to make the Refusal Decisions was contractual, not statutory, and not conditioned by the rules of natural justice. This argument proceeded on the basis that the P&E Act provides that a s 173 agreement is an agreement entered into under seal27 and that the Council exercised power in its capacity as a party to the agreement; as a party invested under the agreement with the power to enforce the covenant and, as the responsible authority, best placed to assess whether the obligations of the owner under any covenants in the agreement continue to be required. It was said that this capacity was identical to the Council’s capacity under ss 177 and 178.40During the course of oral argument, and in response to a question from the Court, the Council appeared to concede that the decision to grant or refuse in principle approval was a decision that had to be reached with regard to the mandatory considerations set out in s 178B. It was said:

Well, the question firstly is if we assume that those criteria only apply to a decision to agree in principle then clearly, they will be held to account under that scheme. But I accept that those criteria would, in ordinary course, be considered in coming to a view about not agree in principle.

41However, the Council submitted that s 178B, properly construed, does not require consideration to be given to any potential disadvantage flowing to 27

P&E Act, s 174.

59 VR 454the applicant under s 178A. Rather:

The focus of s 178B(1) and (2), properly construed, is upon the effect of a council’s agreement in principle by reason of which ‘conditions subject to which the land may be used or developed for specific purposes’ contained in a s 173 agreement might be reduced or removed entirely. The focus, in that event, would be on whether agreement in principle to a proposed amendment would relevantly properly achieve the advancement of ‘the objectives of planning in Victoria’.

42The implications of this construction were said to take on importance in light of the following words of Brennan J in Kioa v West:

If a power is apt to affect the interests of an individual in a way that is substantially different from the way in which it is apt to affect the interests of the public at large, the repository of the power will ordinarily be bound or entitled to have regard to the interests of the individual before he exercises the power. No doubt the matters to which the repository is bound or is entitled to have regard depend on the terms of the particular statute and, if there be no positive indications in its text, the subject-matter, scope and purpose of the statute must be looked at to determine whether the repository is bound or is entitled to have regard to individual interests ... When the repository is bound or is entitled to have regard to the interests of an individual, it may be presumed that observance of the principles of natural justice conditions the exercise of the power, for the legislature can be presumed to intend that an individual whose interests are to be regarded should be heard before the power is exercised.28

The construction contended for by the Council was said to indicate that Parliament had turned its mind to what it considered needed protection, that there was no requirement for the responsible authority to consider any disadvantage to any person by refusing to agree in principle and that Parliament had intended that a refusal under s 178A(3) not be a decision that affects rights or interests.

43The Council argued that even if the Refusal Decisions were an exercise of statutory power under s 178A, the effect of the decisions did nothing more than maintain the status quo arising from the s 173 agreement. It argued that the application made by Kinchington was in the nature of a mere hope that it would obtain or continue to enjoy a benefit or privilege and not one which gave rise to a legitimate expectation sufficient to attract the rules of natural justice. It was not of the nature of a decision which affected rights of the person the subject of the decision.44Finally, the Council referred to the Explanatory Memorandum to the Planning and Environment Amendment (General) Bill 2012 (Vic) (the Bill), which introduced s 178A and its associated provisions into the P&E Act. Clause 49 of the Explanatory Memorandum states in the context of explaining the amended process for amending or ending a s 173 agreement:

If the responsible authority decides that it does not agree in principle to the proposal then that is the end of the matter.

28

(1985) 159 CLR 550, 619 (Brennan J) (Kioa).

59 VR 45545These words, and similar ones in the Second Reading Speech to the Bill,29 were said to support a construction of s 178A that excludes the requirements of natural justice. While this submission was described as being consistent with the position that ‘a refusal maintains the status quo’, it also appears to comprise a submission that ss 178A to 178I of the P&E Act evince an intention to exclude the rules of procedural fairness in relation to a decision under s 178A(3) if the Court found that Kinchington’s interests were affected in the necessary way.46In this Court, the Council continued to rely on the authorities cited in its correspondence of 14 March 2019, Simjase and Nicol. It argued that the cases cited by Kinchington — No 2 Pitt Street Pty Ltd and Muldoon — were distinguishable. It argued that the former concerned a decision to reject an objection made by a party under s 57(2B) of the P&E Act. In relation to the latter, there was no occasion for the Court to consider whether a council was a ‘tribunal’ in the AL Act sense because it was common ground before the Court in that case that the relevant council was a ‘tribunal’.

Analysis

47The issues for determination by the Court are:

• (1)

  Were the decisions of the Council to refuse in principle to amend the s 173 agreement ‘decisions’ for the purposes of the AL Act?

• (2)

  Was the Council acting as a ‘tribunal’ when it made these decisions?

48For the reasons which follow, I have determined that the Council’s Refusal Decisions are ‘decisions’ within the meaning of the AL Act and that in making those decisions the Council was acting as a ‘tribunal’. Consequently, I will direct that the Council furnish a statement of reasons in accordance with s 8 of the AL Act.

Were the Refusal Decisions an exercise of statutory power?

49The Council’s argument that the Refusal Decisions were not made in the exercise of statutory power is rejected. I do not accept the Council’s attempt to alternatively characterise the source of the power to make the Refusal Decisions as arising from its status as a counterparty to the s 173 agreement.50The s 173 agreement cannot confer any power on the Council that it does not enjoy under statute. The power exercised by the Council in making the Refusal Decisions must have a statutory basis. That statutory basis plainly arises from s 178A of the P&E Act. It is clear to me that the Council in considering a request to amend a s 173 agreement is acting in its capacity as a responsible authority. The scheme establishes a statutory process for a formal application to be made to the responsible authority, with attendant 29

Victoria, Parliamentary Debates, Legislative Assembly, 30 August 2012, 3891 (Robert Clark, Attorney-General).

59 VR 456parameters as to what the responsible authority must consider and the procedures it must follow in assessing such an application. A s 173 agreement can therefore only be amended or ended consistent with the provisions of the P&E Act.51It follows then that it would be nonsensical to argue that the Refusal Decisions were not confined by the terms of the statute, which is the implication inherent in the argument of the Council. It could not be validly argued that, for example, the Refusal Decisions were based on factors other than those set out in s 178B, notwithstanding these are also the factors to which the Council must turn its mind in the final decision to amend or end a s 173 agreement. Indeed, the Council conceded that in making the decision to agree in principle or otherwise, it is required to take into account the mandatory considerations set out in s 178B.52I therefore agree with Kinchington’s criticism of the Council’s argument that it was not exercising statutory power when it determined to refuse to amend the statutory agreement under s 178A(3). I consider that this is not because the Council itself is a creature of statute with no inherent, ancillary or common-law power as Kinchington argued but rather because the Council has the statutory power given to it as the responsible authority pursuant to s 178 to make the decision in accordance with the provisions of the P&E Act.

Were the Refusal Decisions ‘decisions’ under the AL Act?

53In my view, there are at least two decisions involved in the exercise of the power to amend or end a s 173 agreement pursuant to s 178A. The first decision for the Council to make is a decision in principle30 and the second being a decision which included consideration of third parties’ objections.3154The first question under the AL Act is whether the decision in principle is a ‘decision’ within the meaning of the AL Act. As noted above, s 2 of the AL Act defines a ‘decision’ as:

a decision operating in law to determine a question affecting the rights of any person or to grant, deny, terminate, suspend or alter a privilege or licence and includes a refusal or failure to perform a duty or to exercise a power to make such a decision;

55Whether the Refusal Decisions were ‘decisions’ in this sense was not directly addressed by the parties. Instead, the focus was upon whether the P&E Act required them to be reached in accordance with the rules of natural justice. This was perhaps unsurprising given the Council’s position in its correspondence of 14 March 2019 that it was not obliged to give reasons because it was not a ‘tribunal’ and therefore did not make a ‘decision’. However, the concepts of ‘decision’ and ‘tribunal’ are treated distinctly by the AL Act. Nevertheless, Kinchington’s submissions apparently proceeded on 30

Under s 178A(3) of the P&E Act.

31

Under s 178E of the P&E Act.

59 VR 457the assumption that the Refusal Decisions were ‘decisions’. For its part, the Council denied that this was so because a refusal of in principle agreement maintained the status quo.56In my view, the Refusal Decisions were ‘decisions’ in the AL Act sense.57I am satisfied that a decision made under s 178A(3) operates in law to determine a question affecting the rights of the applicant in respect of the s 173 agreement; namely the conditions on which it may use or develop the Land.58I am also satisfied that the decision to refuse in principle is one which affects the ‘privilege or licence’ held by Kinchington pursuant to the s 173 agreement. Kinchington has both benefits and obligations under the s 173 agreement. The P&E Act provides for a mechanism to end or amend it. The Refusal Decisions end any opportunity for Kinchington to amend the s 173 agreement at all.59The fact that there is a further decision to be made after the agreement in principle decision is made which includes third parties and requires other notice and the receiving of objections to be made does not alter the fact that this first decision, being an agreement in principle, is a decision which affects the rights and/or alters a right to use and develop the land held by the applicant.60Further, I do not consider the fact that the latter decision has the ability expressly to be reviewed pursuant to the P&E Act as being a matter which ought to be regarded as definitive of whether an agreement in principle is a ‘decision’ is pursuant to the AL Act. Rather this goes to whether the rules of natural justice apply to the making of a decision to grant or refuse in principle approval.61I note also that the definition of ‘decision’ includes a refusal to exercise power to make such a decision. As such, I do not consider that there is any distinction between a decision to agree in principle or to refuse to do so.32

Was the Council acting as a ‘tribunal’?

62The question of whether the Council was acting as a tribunal at the time the Refusal Decisions were made is answered by reference to whether procedural fairness was due to be afforded. This is plainly evident by the definition of tribunal contained in the AL Act:

tribunal means a person or body of persons who, in arriving at the decision in question, is or are by law required, whether by express direction or not, to act in a judicial manner to the extent of observing one or more of the rules of natural justice ...33

63The modern approach to determining whether or not one or more of the 32

As appears to be suggested in the Council’s submissions.

33

AL Act, s 2.

59 VR 458rules of natural justice apply is set out in Masters v McCubbery:

Where in the statute it confers power on a statutory body to destroy, defeat or prejudice a person’s rights, interests or legitimate expectations, there is a presumption that the rules of natural justice will apply unless they are excluded by plain words or necessary intendment.34

64In No 2 Pitt Street Pty Ltd Balmford J found that a council was a ‘tribunal’ for the purposes of the AL Act. Her Honour summarised the statements of principle referred to in Keller v Bayside City Council35 where Batt J said:

The law in Australia now is ... that there is a strong presumption that an administrative or executive decision-maker, the repository of a statutory power, owes a duty to accord procedural fairness, and in particular a ‘hearing’ in some form or other, to any person affected or likely to be affected by the decision, and not merely in respect of a legal or proprietary interest, even though that person is not directly involved in the decision-maker’s proceedings; and a clear contrary legislative intent is required to rebut the presumption.36

65In that case, her Honour observed that the council was exercising a statutory power and that the plaintiff was a ‘person affected’ by the exercise of that power. The council submitted that the statutory scheme had made express provision for a person whose objection had been rejected to be heard and for the type of hearing to be given so as to exclude any common law requirement to act fairly prior to the rejection.37 In rejecting this submission, her Honour stated she could not find that the provision referred to demonstrated a clear legislative intent to rebut the presumption that a person who had lodged an objection against the grant of a permit should be given the opportunity to be heard by the council before it rejected the objection.38 Accordingly, the council was in this context a ‘tribunal’ for the purposes of the AL Act and bound to give the plaintiff an opportunity to be heard.3966Kinchington relied on the analysis of Balmford J in No 2 Pitt Street Pty Ltd to suggest that a council may properly be characterised as a tribunal for the purposes of the AL Act unless it can be shown that there is a clear intention to exclude the requirements of procedural fairness in respect of the statutory power being exercised by the Council. I agree with this analysis.67In Muldoon, North J expressly preferred the reasoning of Balmford J over the reasoning in Simjase, which was the authority upon which the Council relied in refusing to provide the reasons requested by Kinchington. North J observed that ‘since at least Annetts v McCann ... the focus has been directed to the question whether the law provides a clear indication that the requirements of natural justice are excluded’.4034

[1996] 1 VR 635 (Masters).

35

[1996] 1 VR 356.

36

Ibid 378.

37

No 2 Pitt Street Pty Ltd[1999] 3 VR 439, 457[53].

38

Ibid 458[59].

39

Ibid 459[61].

40

Muldoon (2013) 217 FCR 450, 531[398].

59 VR 45968His Honour noted the following passage from Kioa v West by Brennan J that:

It is seldom possible to say that the legislature intends to exclude observance of the principles of natural justice in the exercise of a statutory power which is apt to affect individual interests and the more difficult and more frequently addressed question is what the principles of natural justice require in the particular circumstances.41

69North J referred to the definition of ‘decision’ in s 2 of the AL Act and noted that taken together the statutory definitions of ‘decision’ and ‘tribunal’ established that the AL Act ‘contemplates that some decisions to grant a privilege will be subject to the rules of natural justice’.4270When the statute does not expressly require that the principles of natural justice be observed, the Court construes the statute on the footing that ‘the justice of the common law will supply the omission of the legislature’.43 As was submitted on behalf of Kinchington, the starting point for the analysis is that the Council’s exercise of statutory power must be taken to be conditioned by, and subject to the requirements of procedural fairness unless this can be shown to the contrary. The contrary position must be shown by ‘plain words of necessary intendment’44 and will not be assumed or spelled-out from ‘indirect references, uncertain inferences or equivocal considerations’.45 Such an intention is not to be inferred from the mere presence in the statute of rights inconsistent with some natural justice principles.4671When the decision in question is one which provision is made by statute, the application and content of the doctrine of natural justice depends to a large extent of the construction of the statute.72What is appropriate in terms of natural justice depends on the circumstances of the case and will include the nature of the enquiry and the subject matter of the rules under which the decision-maker is acting.73Considering the above principles, the Council must satisfy the Court that the requirements of natural justice are necessarily excluded in relation to the Refusal Decisions. I am not convinced on a proper analysis that the statutory scheme excludes expressly or impliedly the requirements of procedural fairness.74I also reject the Council’s argument that the Refusal Decisions are not decisions which might destroy, defeat or prejudice a person’s rights, interests or legitimate expectations. For the reasons given in my discussion of whether the Refusal Decisions are ‘decisions’ within the meaning of the AL Act, I 41

Kioa(1985) 159 CLR 550, 612 (Brennan J).

42

Muldoon(2013) 217 FCR 450, 532[404].

43

Kioa(1985) 159 CLR 550, 609 (Brennan J), citing Cooper v Wandsworth Board of Works(1863) 14 CB (NS) 180, 194 (Byles J).

44

Annetts v McCann(1990) 170 CLR 596, 598.

45

Tanos(1958) 98 CLR 383, 396.

46

Annetts v McCann(1990) 170 CLR 596, 598; Electrolux Home Products Pty Ltd v Australian Workers Union(2004) 221 CLR 309, 329[21] (Gleeson CJ).

59 VR 460am satisfied that Kinchington’s interests were affected in a way that attracts the presumption that the rules of procedural fairness would apply. I agree with the submissions made on the half of Kinchington that the Council misunderstands the correct analytical approach.75It is now well established that the exercise of statutory administrative power tracks the common law duty to act fairly, in the sense of according procedural fairness, unless there is a clear manifestation of a contrary statutory intention. A legislative intention to exclude the rules of procedural fairness will not be assumed or spelled-out from indirect references, uncertain inferences or equivocal considerations. The starting point is therefore that the Council’s exercise of that statutory power to refuse to agree in principle must be taken to attract the requirements of procedural fairness unless it can be shown that the legislation clearly manifests a contrary statutory intention. I am not persuaded that the Council has demonstrated that the legislation evinces a clear intention to exclude those requirements.76That third-party consultation processes and rights of review are available under the other provisions of pt 9 div 2 sub-div 2 of the P&E Act is not inconsistent with this conclusion. A similar argument was raised before the Court in No 2 Pitt Street Pty Ltd, and as Balmford J observed, the fact that a statute provides a right of hearing to a category of persons does not undermine, nor cut across, the application of the requirements of procedural fairness. Further, the absence of any mechanism for merits review can be said to strengthen rather than undermine the application of the requirements of procedural fairness to the making of the council’s decision under s 178A(3).4777Otherwise, there is nothing in the legislative scheme established by ss 178A–178I that expressly excludes or ousts the requirements of procedural fairness.78It is also necessary to say something about the statements in the Second Reading Speech and Explanatory Memorandum to the effect that a decision to refuse in principle agreement is ‘final’, ‘not subject to review’ and ‘the end of the matter’.48 While recourse to such statements is permissible under s 35 of the Interpretation of Legislation Act 1984 (Vic), ‘the court needs to be careful not to permit recourse to this section to undermine its primary function of seeking to ascertain the intention of the legislation from the content of the Act itself’.49 To rely on inconclusive comments in the Second Reading Speech and Explanatory Memorandum would be the wrong approach to construction of these provisions and would be inconsistent with the authorities referred to above, in particular the High Court’s comments in Annetts v McCann and in Tanos(1958) 98 CLR 383.47

Saeed (2010) 241 CLR 252, 277[73] (Heydon J).

48

Victoria, Parliamentary Debates, Legislative Assembly, 30 August 2012, 3891 (Robert Clark, Attorney-General); Explanatory Memorandum, Planning and Environment Amendment (General) Bill 2012 17.

49

Masters [1996] 1 VR 635, 646 (Winneke P); see also Re Bolton; Ex parte Beane(1987) 162 CLR 514, 517–18.

59 VR 46179Further, the extracts from the Explanatory Memorandum and Second Reading Speech upon which the Council relies are in any event inconclusive as to a legislative intention that a decision to refuse to agree in principle cannot be subject to judicial or administrative law review. Rather, it is open to conclude that what is suggested demonstrates a refusal to agree in principle should not be the subject of further merits review. The Explanatory Memorandum suggests that the statutory scheme established by ss 178A–178F should be treated as being akin to an application for a planning permit amendment. By analogy, is difficult to deny that a Council would be required to act other than in accordance with the procedural fairness requirements in that context.80Accordingly, the Second Reading Speech and Explanatory Memorandum to the Bill do not persuade me that the rules of natural justice are not to apply in this case.

Conclusion

81In view of the above analysis, I have determined for the purposes of the AL Act that the Council is a ‘tribunal’ and the decisions made by it on 19 February 2019 to refuse to agree in principle to the amendments to Kinchington’s s 173 agreement were relevant ‘decisions’ such that Kinchington has a right to a written statement of reasons in accordance with s 8 of that Act.82I am prepared to make the orders sought in the Originating Motion for Judicial Review as follows:

• 1.

  When making its decisions of 19 February 2019 to refuse to agree in principle to the applications made by Kinchington Estate Pty Ltd under s 178A(1)(a) of the Planning and Environment Act 1987 (Vic), Wodonga City Council was a ‘tribunal’ within the meaning of s 8 of the Administrative Law Act 1978 (Vic).

• 2.

  Wodonga City Council must furnish a statement of reasons in accordance with s 8 of the Administrative Law Act 1978 (Vic)in relation to each of its decisions made on 19 February 2019 to refuse to agree in principle to the applications made by Kinchington Estate Pty Ltd under s 178A(1)(a) of the Planning and Environment Act 1987 (Vic).

Orders accordingly. Solicitors for the plaintiff: Best Hooper. Solicitors for the defendant: Russell Kennedy. C J CHARNLEYBARRISTER-AT-LAW