Lane v Atkin

[1922] HCA 14

30 CLR 437

ATKIN AND ANOTHER

RESPONDENTS.

ON APPEAL FROM THE SUPREME COURT OF

NEW SOUTH WALES. Local Government-Councillor-Disqualification-Interest in contract with council

Acting in office while disqualified-Interest terminated at time of acting in office- Local Government Act 1919 (N.S.W.) (No. 41 of 1919), secs. 4, 30, 31, 33, 35.

Sec. 30 of the Local Government Act 1919 (N.S.W.) provides that " (1) Unless disqualified by this Act every person whose name is on a roll of electors compiled under this Act shall be qualified for a civic office " (which term is defined in sec. 4 as meaning the office of, among others, councillor). "(2) A person shall be disqualified for a civic office if

(i) he is subject to a special disqualification within the meaning of this Act &. (3) A person is subject to a special disqualification within the meaning of this Act if (b) he has

any direct or indirect pecuniary interest in any agreement or trading with the council." Sec. 31 provides (inter alia) that "(1) A person disqualified for a civic office shall not be entitled or to act therein," &. "(2) If a person acts in a civic office while disqualified therefor, he shall be liable to a penalty not exceeding one hundred pounds. (3) If a person is convicted of acting in a civic office while subject to a special disqualification within the meaning of this Act, the minimum penalty shall be fifty pounds, and his conviction shall have the following consequences, that is to say-(a) he shall be disqualified for a civic office for a period of seven years from the conviction unless the Court by which he is convicted sees fit in the circumstances of the case to reduce the period of disqualification to a shorter period not being less than one year." Sec. 33 provides that "(1) The office of an alderman or councillor shall

(b) become vacant occurrence of an extraordinary vacancy," &. Sec. 35 provides that "An extraordinary vacancy in a civic office shall occur if the person elected or appointed thereto

(c) is disqualified for the office," &.

30 CLR 438

Held, that a person who, while legally occupying the office of councillor of a municipality, acquires a pecuniary interest in a contract with the council and is thereby subject to a disqualification under sec. 30 (3), thereupon becomes a disqualified person within the meaning of sec. 30 (2) that sec. 31 (1) imme- diately operates upon him as an occupant of the office and terminates his right to the occupancy by rendering him incapable of further holding or acting in that office; and that if he thereafter acts in that office he is liable to the penalties prescribed by sec. 31 (2) and (3).

Held, therefore, that a person who, having while a councillor acquired an interest in a contract between the council and a third person, afterwards acted as councillor, was liable to the penalties prescribed by sec. 31 (2) and (3), notwithstanding that the obligations of all parties under the contract had been performed, and his pecuniary interest in it had ceased, before he SO acted as

Per Isaacs J. :--(1) The civic office of councillor is an abstract statutory creation existing before any person is elected to fill it and existing in perpetuity. (2) It is not the conditioning facts prescribed by the statute which disqualify

is the Act operating on those facts. The disappearance of the conditioning facts does not destroy the statutory disqualification once created.

Per Higgins J. :-----" Disqualified in the Act means incompetent either to enter or to act in the relevant office-that is to say, the office which he seeks or to which he has been elected. Quaere, can the person whose disqualification has created the vacancy be a candidate for election to that vacancy ?

Decision of the Supreme Court of New South Wales Ex parte Lane, (1921) 21 S.R. (N.S.W.), 796, affirmed.

APPEAL from the Supreme Court of New South Wales.

At the Police Court at Cessnock before George Atkin, Esq., P.M., an information was heard whereby William Morgan charged that William Joseph Lane, having been elected as a councillor of the Shire of Cessnock and having become disqualified for such office in that he had an indirect pecuniary interest in a certain agreement or trading with the Council, did on 11th July 1921 act in such civic office while SO disqualified. Evidence was given to the effect that the defendant, who had been elected as a councillor on 31st January 1920, was appointed as an agent of the Centennial Rubber Co. that after his appointment he received from the Company commission in respect of the sale by the Company to the Council of certain goods which had been ordered by the Council before the defendant became agent of the Company and that sub- sequently he sat and voted at meetings of the Council, and in par- ticular on 11th July 1921. The Police Magistrate convicted the

30 CLR 439

defendant, and made an order disqualifying him for a civic office for twelve months and imposing a fine of £50, in default three months' imprisonment. The defendant thereupon obtained an order nisi for a prohibition, directed to the Police Magistrate and the informant, to restrain them from further proceeding upon the conviction and order, This order nisi was made absolute on 11th October 1922 by James J. in Chambers.

Upon motion by the defendant to the Full Court in term to con- tinue the order absolute the Full Court, by a majority (Cullen C.J. and Wade J., Pring J. dissenting), refused to continue it: Ex parte Lane 1.

From that decision the defendant now, by special leave, appealed to the High Court.

Miles, for the appellant. A special disqualification under sec. 30 3 of the Local Government Act 1919 is removed when the pecuniary interest in the contract with the council ceases. This is shown by sec. 31 (3), which provides a penalty for acting in a civic office "while subject to a special disqualification, and sec. 30 (3), which provides that a person is subject to a special disqualification if he "has" an interest in an agreement with the council. Reading those pro- visions together, a person is liable to a penalty if he acts as a coun- cillor whilst he has an interest in an agreement with the council. That view is supported by Lewis v. Carr 2, Wall v. Neate [No. 1] (3) and Fletcher v. Hudson 4. If that construction of the sections is not correct, the disqualification once having occurred would con- tinue for all time unless the person disqualified were prosecuted under sec. 31 (2), when the period of disqualification would under sec. 31 (3) be limited to a period not shorter than one year or longer than seven years. An extraordinary vacancy does not occur under sec. 35 until in some proceedings the holder of the civic office has been declared to be disqualified. That section does not operate SO as to create a vacancy on the happening of an event which is a ground of disqualification. The appellant was not interested directly or indirectly in an agreement with the Council within the

1(1921) 21 S.R. (N.S.W.), 796. 3(1912) 12 S.R. (N.S.W.), 676. 2(1876) 1 Ex. D., 484. 4(1881) 7 Q.B.D., 611. 30 CLR 440

meaning of sec. 30 (3) (b), for at the time he received the commission

the only interest his principal had was in the payment for the goods (see Cox v. Truscott 1; Royse v. Birley 2 ).

[KNOX C.J. The Court does not consider that point arguable. Flannery K.C. (with him Young), for the respondents. The meaning of sec. 30 (3) is that a condition of disqualification super- venes upon the happening of any of the events mentioned, that that disqualification has relation to the office which the councillor then holds, and that, prima facie and apart from other provisions in the Act, that disqualification continues during the period of the office which the councillor then holds, that is to say, during the remainder of the term for which he was elected or until at an earlier date there is a new election. The effect of secs. 33 (1) (b) and 35 (c) is that the right of the councillor to occupy the office to which he has been elected has gone, and that the office thereby becomes vacant in the sense that a new election for it can be held. Sec. 31 (2) and (3) deals with the position that there is a vacant office and a person whom the Act declares to be disqualified for that office, and it pro- ceeds to impose a penalty upon that person if he pretends to that office.

Miles, in reply.

Cur. adv. vult. The following written judgments were delivered :-

KNOX C.J., GAVAN DUFFY AND STARKE JJ. The appellant, Lane, was prosecuted under sec. 31 of the Local Government Act 1919 (No. 41 of 1919). The information charged that on 11th July 1921 he, being a councillor, and subject to the special disqualification men- tioned in sec. 30 (3) (b), acted in the civic office of councillor. In January of the year 1920 he had become a councillor, and later in the same year he had become subject to the disqualification inas- much as he had a pecuniary interest in an agreement between the Council and other persons. Long before 11th July 1921 the obligations of all parties under the agreement had been performed

1(1905) 92 L.T., 650. 2(1869) 20 L.T., 786. 30 CLR 441

and he had ceased to have such interest. The question now is, was H. he on that date guilty of the offence with which he was charged?

The provisions of the Act relevant to the present case are these:-Sec. 30 (1) enacts that "Unless disqualified by this Act every person whose name is on a roll of electors compiled under this Act shall be qualified for a civic office." The words " civic office " are defined by sec. 4 as including the office of councillor. Sec. 30 (2) enacts that a person shall be disqualified from office if "(i) he is subject to a special disqualification within the meaning of this Act." Sec. 30 (3) declares that a person is subject to a special disqualification within the meaning of this Act if " (b) he has (except as provided in this section) any direct or indirect pecuniary interest in any agreement or trading with the council." Sec. 31 (1) declares that "a person disqualified for a civic office shall not be entitled

to hold office or to act therein." Sec. 35 provides that an extraordinary vacancy in a civic office shall occur if the person elected or appointed thereto '(c) is disqualified for the office."

Applying these provisions to the case in hand, we have this result:- The appellant while legally occupying the office of councillor became subject to a special disqualification within the meaning of sec. 30 (3), and SO a disqualified person within the meaning of sec. 30 (2). Sec. 31 (1) defines the position of such a disqualified person. It immediately operated on the appellant as occupant of the office, and terminated his right to occupancy by rendering him incapable of further holding or acting in that office. Sec. 35 (c) prescribes the operation of disqualification on the office occupied by the disqualified person, and it immediately operated on the office of the appellant and made it vacant. The appellant, though he was no longer a councillor, disregarded the prohibition contained in sec. 31 (1) and continued to act in the office. Sec. 31 (2) thereupon made such continuance an offence punishable by a penalty not exceeding one hundred pounds, and sec. 31 (3) prescribed further penalties because the appellant was not only subject to disqualification but to a special disqualification.

For the reasons we have stated we think that the appellant was rightly convicted, and that the appeal should be dismissed.

30 CLR 442

ISAACS J. The question in this case is Does a councillor who during his term of office, becomes subject to a special disqualification within the meaning of the Local Government Act 1919 by reason of his pecuniary interest in an agreement with the council, cease to be subject to that disqualification merely by reason of the termination of the pecuniary interest ? The answer depends entirely on the intention of the Legislature as gathered from the Act. As the intention is not expressly stated, it must be gathered by implication, not from any technical phrase or term, but from the general con- text. Obviously, therefore, cases determined on other Acts couched in very different language cannot assist very much. The cases cited are chiefly valuable to show how easily varying provisions lead to an entirely different result.

The important sections of the Act are secs. 30 to 43. Sec. 30 declares that every person on a roll of electors compiled under the Act shall (unless disqualified by the Act) be qualified for "a civic office." Now, at the very threshold, we find the expression a civic office," and we know by the definition section (sec. 4) that "civic office" means "office of president, deputy-president, or councillor, or mayor, deputy-mayor, or alderman." But what does "a civic office" mean in sec. 30 ? It cannot in sub-sec. 1, any more than "a roll of electors" can, refer to all New South Wales indis- criminately. "A roll of electors" means some specific roll of electors; and "a civic office" in sec. 30 (1) means some specific civic office which has relation to that particular roll of electors. And what is very essential to observe is that, when the Act declares a person shall be "qualified," it is the statutory declaration that constitutes the "qualification," though it does SO as operating on the fact that the person is on the roll of electors. But the Act also proceeds to "disqualify" in certain events. Again, it is not the events that disqualify: it is the Act operating on the events. And the whole difficulty in this case arises from overlooking two features: (1) that "qualification" and "disqualification" mean the statutory operation in stated circumstances, and (2) that the qualification or disqualification of a person must be considered with reference to some given office in relation to him. This is clear from an inspection of many provisions in the Act. Want

30 CLR 443

OF AUSTRALIA, of qualification as an elector for (say) Newcastle is no dis- qualification for a civic office in Goulburn; interest in a trading agreement with the Council of Albury is no disqualification for an alderman of Orange. Some disqualifications-such as (c), (d) and (e) of sec. 30 (2)- course apply to every civic office and, conse- quently, to any given civic office in relation to which the person is considered. In each case you must consider the specific person in relation to a specific civic office.

In order to meet various considerations addressed to us, it is better, perhaps, to examine the legislation closely, though the immediate question we have to answer may be more shortly determined. A specific person admits of no doubt. But what is a specific civic office ? The statutory definition of "civic office" has been already quoted. Its application begins in Part IV., which provides for the "councils" of cities, municipalities and shires. A "council" is a body corporate (sec. 22), and consists of "aldermen elected by the electors' (secs. 23 (1) and 24 (1) ) or 'appointed" by the Governor (secs. 23 (6) and 24 (6) ). There are in each council not less than six or more than fifteen aldermen, or not less than six or more than nine councillors, as the case may be (secs. 23 and 24). Reading those sections with the definition of "civic office" above quoted, it is seen that in each council there are a certain number of civic offices of aldermen and councillors which are perpetual in duration as "civic offices." These 'civic offices" always exist. So as to the offices of mayor and president (sec. 25). Persons are elected to fill the offices of aldermen and councillors, mayors and presidents.

Division 7 deals with "tenure of civic office," and I shall refer to the tenure of "councillor," as that exemplifies the rest in this respect. Sec. 32 provides, that "subject to the provisions of this Act" (b) a councillor shall "hold" office for three years. But there are provisions which alter that regulation. Sec. 33 provides that the "office of a councillor" (that is, properly, his tenure of the civic office) shall (a) commence on the day of his election or appoint- ment thereto, (b) become vacant (that is, the civic office which he is then filling shall become vacant) either on the day appointed for the next ordinary election of councillors or on the occurrence of an extraordinary vacancy, whichever first happens. Nothing but the

30 CLR 444

perpetual office can become "vacant" on the day appointed for the next ordinary election. The period of three years can never be exceeded, but may be shortened. An extraordinary vacancy occurs (sec. 35) if the person (a) dies, (b) resigns, (c) is disqualified for the office, (d) is ousted, &. If he dies, the civic office of coun- cillor, of course, survives, but his tenure or occupancy of that civic office, or, as it is sometimes called, his " office," necessarily ends, and the three years period mentioned in sec. 32 cannot prolong it. There could not possibly be a "vacancy" in a non-existing office, nor could a person "hold office" (sec. 31 (1) ) if it had ceased to exist. The period of three years is expressly made "subject to the provisions of this Act," which includes secs. 33 and 35. The same result occurs if he resigns, and SQ if he is disqualified for the office." What happens then By sec. 33, "the civic office" of councillor -or, putting it concretely, the chair at the council table-is "vacant," and must be filled to complete the corporate body. Then, under sec. 39 (d), there must be an "extraordinary election" or, failing that, under sec. 24 (6) an appointment to the "vacancy in the office of councillor." It is not a vacancy in the ex-councillor's "office," for he has none. He has simply vacated the "civic office" which he formerly occupied. Once we grasp the fact that the civic office of councillor is an abstract statutory creation existing before any person is elected to fill it and existing in perpetuity, and then that the occupancy of that office by any particular person is to be regu- lated as to time and qualification, I see no difficulty in dealing with the facts of this case.

The appellant committed an act which brought into operation sec. 30 (3), and made him "subject to a special disqualification." Under sec. 30 (2) (i) that was a disqualification and brought into operation secs. 31 (1), 33 and 35 (c). But it was more than a mere ordinary disqualification. Being a special disqualification, it not only terminated his occupancy of the office and forbade him holding it or acting in it and made him liable to £100 fine as a maximum, but it also, in the event of his acting in that office, made him liable to a minimum fine of £50, and to continued dis- qualification, and, if the facts warranted it, to further liabilities. Considering the appellant in relation to the "civic office" in which

30 CLR 445

he assumed to act, he was forbidden to hold it and forbidden H. to act in it, and the Act had subjected him, not merely to "dis- qualification," but to "special disqualification"; that was a fixed statutory effect. The disappearance of the conditioning fact which wrought the special disqualification did not destroy the statutory legal creation, namely, "special disqualification." And, therefore, at the time the appellant acted in assumed virtue of his civic office he was still subject to the special disqualification. He was, therefore, properly convicted. Had no special order as to the period of disqualification been made, he would, by the self- operating provisions of par. (a) of sub-sec. 3 of sec. 31, be 'disqualified for a civic office for a period of seven years from the conviction." That would, like the disqualifications (c), (d) and (e) of sec. 30 (2), disqualify the appellant for any civic office during the whole seven years. But, the period having been reduced to one year, he is dis- qualified for every civic office in New South Wales for one year from the time of his conviction, and then, by virtue of sec. 32 (c), no longer for any civic office.

The judgment appealed from was correct, and should be affirmed.

HIGGINS J. The appellant has been convicted by a Police Magis- trate as for an offence under the Local Government Act 1919. The offence alleged is "that having been duly elected" as a councillor for a shire and having been disqualified for such office " in that he had an indirect pecuniary interest in a certain agreement or trading with the Council "he

did on 11th July 1921 act in such civic office whilst SO disqualified." This convic- tion follows substantially the words of the information and of sec. 31 (2) of the Act. But, as the offence was one that is called by the Act "a special disqualification " (sec. 30 (3) (b) ), the Magistrate, as in pursuance of sec. 31 (3), not only sentenced Lane to pay £50 as the minimum penalty, but also sentenced him to be disqualified for a civic office for twelve months. I under- stand the disqualification for a civic office in this latter clause to mean disqualification for any civic office- the offences which come under "special disqualification" involving some abuse of the position of councillor (or other " civic office" as defined in sec. 4)

30 CLR 446

OF for the officer's own advantage, some breach of his public trust.

The accused, having been elected as councillor in January 1920 became agent for a rubber company in August 1920; and as such agent he accepted a commission on an amount of £3 15s., being the purchase-money for some goods supplied by the rubber company to the Council. The goods were supplied before the accused became agent, but he collected on 4th October 1920.

In my opinion, there is evidence to support the finding. The Magistrate evidently did not take a serious view of the offence- perhaps treated it rather as inadvertence; for he inflicted the lowest possible penalty, and ordered disqualification from all civic office for the least possible period-twelve months, though the Act allows seven years.

But it is urged for the appellant that he did not act in the office " while disqualified therefor" under sec. 31 (2), or "while subject to a special disqualification" under sec. 31 (3). The commission was accepted in October 1920, and it is said that at the date at which the appellant is charged with acting in the office, 11th July 1921, he was not disqualified from acting as councillor. It is con- tended that his interest in the agreement had ceased after he had received the commission, and that therefore on 11th July 1921, the date of acting as councillor, the words of sec. 30 (3) (b) did not apply to him: "A person is subject to a special disqualifica- tion

any direct or indirect pecuniary interest in any agreement or trading with the council." This argument means that if a councillor gets commission from one who contracts with the council, and the fact be not discovered till afterwards, the provision of sec. 30 (3) (b) is nugatory as to him, and he comes under no disqualification. As the Chief Justice has pointed out, it would mean that, even if a councillor converts to his own use the property of the council, he is under no disqualification after the conversion is completed (sec. 30 (3) (c) ). This would be an extraordinary result. What is the meaning of " while dis- qualified" in sec. 31 (2) ? There is no uniform period of dis qualification prescribed by the Act; but some period is evidently contemplated (see sec. 30 (2) (j) ). The only course open to us is to examine the numerous causes of disqualification and see what

30 CLR 447

disqualification period they severally involve. Under sec. 30 (2) (a) a person is disqualified for a civic office if he is not qualified to be an elector. This disqualification obviously ends as to being elected, when he becomes qualified to be an elector. Under (2) (c) a per- son is disqualified if he is a Judge. This disqualification ceases when he ceases to be a Judge. Under (2) (e) a person is disqualified if he is undergoing a sentence of imprisonment. This disqualification ceases when the sentence has been served. Under sec. 30 (2) (h) a person is disqualified if he has within five years before nomination for election been convicted of an offence with respect to administration. This dis- qualification ceases five years after the conviction. But how long is a person disqualified who comes under the words of sec. 30 (3) (b),

any direct or indirect pecuniary interest in any agreement or trading with the council" The object of this provision, as well as the following provision, "if converts to his own use any property of the council," would obviously be defeated if the disqualification ceased as soon as the councillor gets the money in his pocket, or gets the property under his control. The word "has" is in the present tense, and the word "converts" is in the present tense; but the present tense is often used after such words as "if" to refer to future events, and there is here no implication that the disqualification ceases when the interest in the contract is merged in fruition, or when the councillor has completed the conversion of the property. Some difficulty arises from the draftsman's use of the same term "disqualified" in relation to entrance into the council as well as in relation to acting on the council after his election. I understand "disqualified" to mean incom- petent either to enter or to act in the relevant office-that is to say, the office which he seeks or to which he has been elected. When the councillor comes under a disqualifying provision, one condition pre- cedent to his valid election, or to his right to act by virtue of an election, has failed-he is unqualified-as to the relevant election or office. But (subject to sec. 31 (3) (a) and any order made there- under) there is nothing in a previous disqualification to prevent him from being a candidate at a future election, or from acting as coun- cillor if elected thereat-unless and until he come under some ground

30 CLR 448

of disqualification in relation to the new election or office. The dis-

qualifying provisions have to be considered anew in relation to the new election or office: the old disqualification does not apply. If, for instance, the man is still a Judge, or is still undergoing a term of imprisonment, he is disqualified for the new election or office but if at the new election he has no longer any interest in any contract made with the council, he is not disqualified from being elected and he is not disqualified from acting as member unless and until he get an interest in such a contract or come under some other ground of disqualification. The electors are free to vote for him notwithstanding any flaw in his past record. But under secs. 34 and 35 the council- lor's disqualification creates an extraordinary vacancy can the person whose disqualification has created the vacancy be a candi- date for election to that vacancy ? There is force in the argument based on secs. 35 and 36. These expressly provide that a man who becomes bankrupt, &., shall cease to hold office, but that he shall be 'eligible for re-election if not otherwise disqualified; and there is no such provision as to the disqualifications set out in sec. 30: Expressio unius exclusio alterius. But the question does not actually arise, and I desire to leave it open SO far as I am concerned. But, SO long as he is disqualified, under sec. 31 3 (a), from holding any civic office, the man cannot be validly elected, or act as member.

Several cases have been cited; but they are cases under other Acts than this Act of 1919. Whatever these cases say, our primary duty, and our ultimate duty, is to interpret and apply this Act. In the case of Lewis v. Carr 1 the disqualification of the councillor was expressly limited by the words of the Act "during such time as he shall have directly or indirectly

any share or interest in any contract or employment with, by, or on behalf of such council" and the Court necessarily held that the disqualification applied only during the continuance of the interest in the contract. In Fletcher V. Hudson 2 the relevant Act had no such words; and the Court held that the member having been concerned in such a contract had ceased to be a member, and was liable to a penalty for acting after- wards. In R. v. Rowlands (3) the relevant Act had no such words

3(1906) 2 K.B., 292. 1(1876) I Ex. D., 484. 2(1881) 7 Q.B.D., 611. 30 CLR 449

and the Court held that the termination of the contract did not get rid of the disqualification, following Fletcher v. Hudson. In a subse- quent case in the Supreme Court of New South Wales (Wall v. Neate [No. 1] 1 ) the Full Court held that the particular words used in the Act were the same in effect as the words used in the case of Lewis v. Carr, and the Court therefore held that the disqualifica- tion did not apply to acting as a member after the contract had been fulfilled. Looking at the particular words used, I am not sure that

I should, personally, have treated them as having the same effect as in Lewis v. Carr; but whether they should be SO treated or not is immaterial for the purposes of the case before us. The Supreme Court gave its decision in Wall v. Neate [No. 1] on the interpretation of the Act with which it had then to deal; and we have to give our decision here on the interpretation of this Act of 1919-an Act which in several respects differs from the former Act. In this Act there are no such words as in Lewis v. Carr, limiting the disqualification to the time that the interest in the contract remains; and, in my opinion, the decision of the majority of the Full Supreme Court is right, and this appeal should be dismissed.

Appeal dismissed with costs. Solicitors for the appellant, Westcott &Ward, Cessnock, by A. J. Grant.

Solicitor for the respondents, W. J. Enright, West Maitland, by S. E. Pile.

1(1912) 12 S.R. (N.S.W.), 676