Liverpool City Council v Minister for Local Government (No 2)

[2024] NSWLEC 111

Land and Environment Court

New South Wales

Medium Neutral Citation:

Liverpool City Council v Minister for Local Government and Ors (No 2) [2024] NSWLEC 111

Hearing dates:

08 August 2024

Date of orders:

08 August 2024

Decision date:

14 August 2024

Jurisdiction:

Class 4

Before:

Robson J

Decision:

See orders (reconfirmed) at [40]

Catchwords:

CIVIL PROCEDURE — Subpoena to attend and give evidence — Application to set aside — Legitimate forensic purpose — Apparent relevance — A subpoena will be an abuse of process if it is not issued for a legitimate forensic purpose — Subpoena set aside

Legislation Cited:

Evidence Act 1995 (NSW), s 37

Cases Cited:

Commissioner for Railways v Small (1938) 38 SR (NSW) 564

Re Don [2006] NSWSC 1125

Secretary of the Department of Planning, Industry and Environment v Blacktown City Council [2021] NSWCA 145

Category:

Procedural rulings

Parties:

Liverpool City Council (Respondent on the motion)
Minister for Local Government, Ron Hoenig (Second Applicant on the motion)
Brett Whitworth, in his capacity as delegate of the Departmental Chief Executive, Office of Local Government (First Applicant on the motion)
Kiersten Fishburn, in her capacity as Departmental Chief Executive, Office of Local Government (Third Applicant on the motion)
Ross Glover, in his capacity as Commissioner of a Public Inquiry into Liverpool City Council (Fourth Applicant on the motion)
State of New South Wales (Fifth Applicant on the motion)

Representation:

Counsel:
T F Robertson SC with H Grace (Respondent on the motion)
N L Sharp SC with M Harker (First, Second, Third and Fifth Applicants on the motion)
Submitting appearance (Fourth Applicant on the motion)

Solicitors:
Lindsay Taylor Lawyers (Respondent on the motion)
Department of Planning, Housing and Infrastructure (First, Second, Third and Fifth Applicants on the motion)
MinterEllison (Fourth Applicant on the motion)

File Number(s):

2024/00272372

Publication restriction:

Nil

Judgment

1. On 8 August 2024, during the afternoon of the first day of hearing of these Class 4 proceedings, the second respondent moved on a notice of motion filed 7 August 2024 seeking an order to set aside a subpoena to attend and give evidence issued to him by Liverpool City Council (‘Council’) on 6 August 2024.

2. Having received detailed submissions from the relevant parties, I was able to determine the notice of motion (by granting the primary relief sought therein) and, given that there was some urgency in the continuation of the hearing (which had been expedited and set down for two days), I indicated, with the consent of the parties, that I would later provide reasons. These are those reasons.

3. Council commenced these Class 4 judicial review proceedings by summons filed 24 July 2024 seeking declaratory and consequential injunctive relief against various parties, including the Minister for Local Government (‘first respondent’); Brett Whitworth as delegate of the Departmental Chief Executive, Office of Local Government (‘OLG’) (‘second respondent’); a Departmental Chief Executive, OLG (‘third respondent’); Ross Glover as Commissioner of a Public Inquiry into Council (‘fourth respondent’); and the State of New South Wales (‘fifth respondent’). The fourth respondent has entered a submitting appearance for the hearing (including for this notice of motion).

4. The primary relief sought in the substantive proceedings relates to decisions made by the second respondent in relation to the conduct of an investigation into Council under s 430 of the Local Government Act 1993 (NSW) (‘Act’) (‘s 430 Investigation’).

5. Relief is also sought in relation to decisions made (and to be made) by each of the first and second respondents being, first, a decision of the first respondent to appoint the fourth respondent to hold a public inquiry under s 438U of the Act; second, certain “proposed” decisions of the first respondent including, the postponement of the local government elections (scheduled for September 2024) under s 318B(1) of the Act, the suspension of Council under s 438W of the Act, and the appointment of an administrator to Council under s 438Y of the Act); third, a decision of the second respondent to make an “interim report”; and, fourth, decisions in relation to the publication of that interim report.

6. The factual background (which is not in dispute) is that on 6 May 2024, the second respondent determined that there should be an investigation under s 430 of the Act into certain conduct of Council, which had been set out in the “Terms of Reference”, and authorised Brad Wade and two other “Principal Investigators” from the OLG to conduct the s 430 Investigation into Council.

7. On 11 July 2024, the second respondent prepared an “interim report” in relation to the s 430 Investigation (‘Interim Report’) before the completion of that investigation. On 12 July 2024, a “briefing note” was provided to the first respondent, which had several attachments including the Interim Report. On 18 July 2024, the first respondent appointed the fourth respondent to hold a public inquiry into the conduct of Council under s 438U of the Act.

8. On 18 July 2024, the first respondent also notified Council that he intended to postpone Council’s local government elections under s 318B(1) of the Act, suspend Council under s 438W of the Act, and appoint an administrator to Council under s 438Y of the Act, and invited Council to make submissions on these matters by 26 July 2024.

9. The Interim Report contained allegations of a not insignificant nature against Council and a number of Council employees, including concerns relating to potential illegal or improper conduct. It is now common ground that many, if not most, of those individuals mentioned in the Interim Report did not have an opportunity to respond to the allegations that were made against them. As a result, when the summons was filed on 24 July 2024, it sought interlocutory relief relating to a number of the respondents.

10. On 6 August 2024 (two days before this hearing commenced) Council issued a subpoena requiring that the second respondent attend and give evidence, and on 7 August 2024, the second respondent filed the notice of motion (the subject of this judgment) that the subpoena be set aside on the grounds that it “lacks a legitimate forensic purpose and/or is a fishing expedition”.

11. The pleadings are of particular interest in this matter on the basis that, although there are a number of allegations made against the respondents, it has been recently conceded by the respondents that the Interim Report was prepared in a manner that was in breach of the requirements of procedural fairness. Effectively, this means that Council is likely to be entitled to some of the relief otherwise sought. However, as will be seen, the concession has an effect on the other claims.

12. The primary claims are set out in the summons filed 24 July 2024 (pars (1) to (18)). In the response to summons filed 3 August 2024, the respondents agreed and made concessions in relation to various facts identified in pars (8), (9) and (12) of the summons, which relevantly provide:

“GROUNDS

…

8    None of the individuals identified by name or office in the report (the individuals) against whom details of the allegations had been made had been interviewed by the investigators, with the exception of the Mayor, but none of the details of the allegations against him which were published in the report had been put to him in the interview, or in any other way.

9   The First, Second and Third Respondents published the report on 18 July 2024.

…

…

12 The power to conduct and report on an investigation under s. 430 is subject to an implied condition to act reasonably, impartially and without bias.

…”

13. The effect of the respondents’ concession is the essence of the second respondent’s notice of motion to set aside Council’s subpoena.

14. The evidence relied upon for the notice of motion comprised a bundle of documents including background material and correspondence between the parties, primarily being correspondence of 25 July 2024 from the respondents seeking particulars of the claims in the summons, and the response to summons on behalf of the respondents dated 3 August 2024.

Respondents’ position

15. The respondents submit that it is the second respondent’s decision to make the Interim Report that is being challenged by Council in the substantive proceedings. It is clear from the response to summons that the respondents concede that the making and publication of the Interim Report by the second respondent was affected by jurisdictional error as it failed to observe the rules of procedural fairness. The effect of the concession is that the second respondent’s evidence cannot be relevant to any remaining issue in dispute in the proceedings.

16. The respondents maintain that Council’s assertion that the second respondent is affected by actual or apprehended bias (and should be restrained from further involvement in relation to the s 430 Investigation) is baseless on the present evidence.

17. Further, any evidence that could be given by the second respondent cannot be relevant to a claim of apprehended bias because any material that the decision-maker may have taken into account is irrelevant to the objective assessment required by the Court in considering an apprehended bias claim. As such, the subpoena should be set aside because, on the respondents’ case, it is a “fishing expedition” in relation to an unrelated and unpleaded claim of actual bias and it is an abuse of process because the subpoena has not been issued for a legitimate purpose of obtaining apparently relevant evidence.

18. The respondents refer to Secretary of the Department of Planning, Industry and Environment v Blacktown City Council [2021] NSWCA 145 at [80], [89], [98], [100] (‘Blacktown City Council’). Although the principle espoused in that case relates to subpoenas to produce, the principle equally relates to subpoenas to attend and give evidence.

19. The respondents maintain that it is for the issuing party to identify the legitimate forensic purpose for which the subpoena was issued, and repeat, that the second respondent is being called to give evidence in respect of the allegations of bias concerning him and that it could not be relevant because the respondents have conceded that the Interim Report was affected by jurisdictional error in respect of a failure to provide procedural fairness. As such, there remains no issue of fact between the parties that requires evidence from the second respondent.

20. In relation to the remaining challenges in respect of the decision to hold the public inquiry into the conduct of Council under s 438U of the Act, the respondents submit that the only remaining issues are, first, whether the first respondent acted unreasonably; second, whether the first respondent took into account any irrelevant consideration (for example, the Interim Report); and, third, whether the first respondent was affected by actual or apprehended bias. In relation to these three outstanding matters or issues, the evidence of second respondent, again, cannot be relevant.

21. The respondents submit that the allegation of actual bias against the second respondent was the subject of a request for further particulars, however, the particulars supplied, comprise a series of bare, but serious allegations. It is not alleged that the second respondent’s mind was closed, and that there is no logic in the particulars supplied for supporting either actual or apprehended bias, nor has an attempt been made by Council to distinguish between the two.

22. In the circumstances, the respondents submit that Council should not be allowed to “fish” for evidence from the second respondent to see whether an allegation can be made in relation to bias, and that the reality is, that Council is seeking to examine the second respondent to see whether it has a case at all, all of which is not for a legitimate forensic purpose.

23. Further, the evidence of the second respondent is not likely to materially assist on any live issue on the pleadings (or particulars) in the substantive proceedings and it would set a dangerous precedent in judicial review cases, if parties making baseless or unparticularised allegations of actual or apprehended bias were permitted to issue subpoenas requiring the attendance of a decision-maker so they could be examined by the challenger to assess if they had a case.

Council’s position

24. Council submits that the test in relation to the setting aside of a subpoena to produce documents and a subpoena to give evidence is different. A subpoena, on any case, may be set aside if it amounts to an abuse of process.

25. Council submits that the second respondent was a key decision-maker in the issuance of the Interim Report and was frequently named in documents that are now in evidence, and that the allegations made against him relate to both bias and apprehended bias. In the circumstances, such matters would satisfy the apparent relevance test.

26. Council directs the Court to s 37(2) of the Evidence Act 1995 (NSW) which, itself, provides an exception to the general rule to allow leading questions when examining the performance of an official act and questions in relation to an investigation, inspection or report that a witness has made in the course of carrying out public or official duties. Those two matters properly outline the manner in which the Court should approach the current issue.

27. In relation to the question of “materially assist”, Council took the Court to various documents in the bundle of documents and submits that the following material relating to the second respondent assists the Court in considering apparent relevance because it goes to issues in the substantive proceedings, including:

1. Various minutes in the departmental documentation which indicate that the second respondent communicated with the first respondent’s staff, including the Chief of Staff;

2. Documents showing that the second respondent suggested various changes to earlier iterations of the draft report, including the deletion of some matters which may have been favourable to Council, such as removing particular passages indicating that the OLG “does not support the sacking of council” as well as various documents where it appears that certain paragraphs of earlier versions were deleted at the second respondent’s suggestion;

3. Notes made by the second respondent on various documents indicating that he did not wish to publish the Interim Report until the report was tabled in Parliament (however, Council notes the Interim Report was, in fact, published before it was tabled in Parliament);

4. A note by a junior officer who was assisting the second respondent in the preparation of the Interim Report which suggests that the publication of the Interim Report was not prompted by anyone in the OLG;

5. An email to the second respondent, which included a draft briefing note with comments stating, “it is proposed to release the interim report publicly along the terms of reference”, and a response which states, “wasn’t going to dwell on the why”;

6. An email from the second respondent to Brad Wade which states “Brad, thanks for doing this. I’ve made some changes throughout and updated the format”; and

7. An email from the second respondent to various persons regarding the appointment of a person to conduct the anticipated public inquiry.

28. Council directed the Court to other documents, including various earlier iterations of the draft report and miscellaneous notes and records stating that any public inquiry may take a minimum of six months and submits that the Court would find that the abovementioned material would satisfy the test of relevance in relation to the second respondent as it goes to various issues in the substantive proceedings.

Consideration

29. The legal principles that I apply in relation to the determination of the motion are well-known. Although there is a difference between the parties in relation to the (apparently) different tests that relate to whether a subpoena should be set aside depending on whether the subpoena is a subpoena to produce documents or a subpoena to attend, the bottom line is, and I find, that a subpoena will be an abuse of process if it is not issued for a legitimate forensic purpose.

30. Various earlier decisions were reviewed by the Court of Appeal in Blacktown City Council. Although not without raising questions of nicety, a party issuing a subpoena will not necessarily lack a legitimate forensic purpose if they are unable to establish that either the evidence from the person to whom the subpoena has been issued (or in the case of documents sought by way of subpoena) will assist or be likely to assist the issuing party's case.

31. Contrary to what may have been the approach earlier, I consider that the Court of Appeal has determined that if the issuing party is likely to be assisted by the evidence to be adduced, it may make it more likely that the party's purpose will be held to be legitimate, however the inability to show that the evidence is likely to assist or not, does not necessarily mean that the subpoena has not been issued for a legitimate forensic purpose. Simply stated, at least in relation to a subpoena for the production of documents (and which I consider has some relevance to a subpoena to attend and give evidence), it can be said that it is sufficient to justify a subpoena as having been issued for a legitimate forensic purpose if the documents sought are apparently relevant, or, moreover, whether those documents sought to be produced by way of subpoena will materially assist on an identified issue or there is a reasonable basis beyond speculation that the documents subpoenaed are likely to assist: Blacktown City Council at [53]-[65] and [80].

32. I am also conscious that the use of the language of “tests” is not appropriate, and the better position is a determination of whether the conduct of the party issuing the subpoena is seen to involve, or amount to, an abuse of process as part of the Court’s power to regulate and protect its own processes: Re Don [2006] NSWSC 1125 at [26] (Sully J). In the circumstances, I consider that, Council must be able to identify with precision a legitimate forensic purpose, the existence of which can fairly be regarded as justifying the call for the second respondent to attend to give evidence, which the challenged subpoena makes.

33. Having closely considered the submissions and the material to which I have been directed, I find that the respondents are entitled to the primary relief sought in the motion. My reasons may be shortly stated.

34. First, given the concession made by the respondents that the Interim Report was affected by jurisdictional error in respect of a failure to provide procedural fairness and given my concerns as to the precision (or alternatively, the accuracy) of the present claims in the summons, I can see no fact in issue that would be addressed by the evidence of the second respondent.

35. I accept, as submitted by the respondents, that the remaining issues in relation to the specific challenge to the decision to hold a public inquiry relates to issues on, whether the Minister acted unreasonably; whether he took into account an irrelevant consideration; and whether he was affected by actual or apprehended bias. And, I consider that the evidence of the second respondent cannot be relevant to any of those remaining issues. Further, the detailed material to which Council directed the Court in the bundle of documents (some of which is noted earlier in this judgment) will be before the Court in the substantive proceedings in any event.

36. I accept that an allegation of apprehended bias involves an objective inquiry. I consider that the state of mind of the second respondent and his reasons for taking certain actions would be irrelevant. The careful submissions made by Council, including the detailed references to documentation where the second respondent had made certain suggestions, amendments or comments to previous iterations of the Interim Report, are matters that speak for themselves and, as I have indicated, will in any event be in evidence before the Court.

29. It follows that I accept the submission of the respondents that Council’s conduct in seeking evidence from the second respondent relates to whether allegations can be made which presently are not properly pleaded and this is, in effect, piscatorial in the sense understood, resulting from the decision in Commissioner for Railways v Small (1938) 38 SR (NSW) 564. As such, I am not satisfied that the evidence likely to be given by the second respondent would have an apparent relevance. In my view, the evidence of the second respondent is not likely to materially assist on any live issue detailed in the present pleadings or in the particulars.

30. Further, I also accept the respondents’ submission that in the present circumstances, it would set an unfortunate precedent in judicial review cases if a party making insufficiently particularised allegations of actual or apprehended bias were permitted to issue subpoenas requiring the attendance of decision-makers so that they could be examined by the challenger to see whether they had a case at all.

31. In the circumstances, I confirm my orders made on 8 August 2024 that the subpoena be set aside, and reserving costs.

Orders made 8 August 2024

40. The orders of the Court are:

1. The subpoena to attend to give evidence filed 6 August 2024 by Liverpool City Council be set aside.

2. Costs are reserved.

**********

Decision last updated: 28 October 2024