Mauger v Wingecarribee Shire Council (No. 2)
[2015] NSWSC 1191
•28 August 2015
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New South Wales |
Case Name: | Mauger v Wingecarribee Shire Council (No. 2) |
Medium Neutral Citation: | [2015] NSWSC 1191 |
Hearing Date(s): | 14 August 2015 |
Date of Orders: | 28 August 2015 |
Decision Date: | 28 August 2015 |
Jurisdiction: | Common Law |
Before: | Davies J |
Decision: | 1. The Court declares that the findings by the Independent reviewer in her report made on 25 August 2011 (paragraphs 86-88 of the report), as to allegations about expenses incurred by the plaintiff for attending the dinner at Condobolin, was unlawfully made in that the reviewer failed to put to the plaintiff the substance of the information she received in her investigation on and after 2 August 2011 and before she finalised her report. |
Catchwords: | ADMINISTRATIVE LAW – judicial review – reviewer fails to accord procedural fairness – effect of finding – council resolution passed on basis of reviewer’s determination – whether resolution null and void – form of declaration to give effect to finding |
Legislation Cited: | Defamation Act 2005 (NSW) |
Cases Cited: | Cretazzo v Lombardi (1975) 13 SASR 4 |
Category: | Costs |
Parties: | James Mauger (Plaintiff) |
Representation: | Counsel: |
File Number(s): | 2012/260035 |
JUDGMENT
On 31 July 2015 I provided my reasons for judgment in relation to the claims of the Plaintiff arising out of two series of complaints referred under the Council’s Code of Conduct to external reviewers: Mauger v Wingecarribee Shire Council [2015] NSWSC 1022. I found that the Plaintiff failed in relation to the first set of complaints (concerning the illegal dumping of material). In relation to the second set of complaints I found that the Plaintiff was successful in relation to only one of five of the individual matters. That matter concerned the claim for travel expenses of $700 in relation to a dinner at Condobolin. The Plaintiff was successful because he demonstrated that he had been denied procedural fairness in that the reviewer, subsequently to speaking to the Plaintiff, spoke with Council officers and obtained further information or comment from them: see at [101]-[105].
Two issues need now to be determined. The first is the form of the declaration to be made in relation to the finding of procedural unfairness. The second concerns the costs of the proceedings.
The form of the declaration
The Plaintiff’s proposed order is as follows:
The Court declares that the Defendant's resolution of 23 November 2011 adopting the findings of Ms Esther McKay dated 25 August 2011 is null and void.
The Defendant’s proposed declaration is this:
The Court declares that the findings by the independent reviewer in her report made on 25 August 2011 (paragraphs 86-88 of the report), as to allegations about expenses incurred by the plaintiff for attending the dinner at Condobolin, was unlawfully made in that the reviewer failed to put to the plaintiff the substance of the information she received in her investigation after 2 August 2011 and before she finalised her report.
At the costs hearing on 14 August 2015 I indicated that I would make a declaration in the form that the Defendant sought. The declaration will be slightly modified for reasons that will appear. These are my reasons for doing so.
Although the proceedings were in substance an application for judicial review of the reports of each of the Committees established to deal with the two subjects of complaints, the Plaintiff did not seek any orders in the nature of certiorari or mandamus. Rather, all that was sought were declarations. The purpose of the proceedings was said to be to vindicate the reputation of the Plaintiff. He was no longer a member of the Council and has not been a member since the Council elections on 8 September 2012.
I note, however, that the declarations sought in the Amended Summons were these:
1A. A declaration that the decision to refer a 'complaint' about the plaintiff to a Conduct Review Committee established on 5 October 2010 and comprising Ms Esther McKay (Reviewer), was made without jurisdiction.
1B. A declaration that the investigation between 5 October 2010 and 25 August 2011 of the Reviewer was without power.
1C. A declaration that the Council's resolution of 23 November 2011 adopting the findings of the Reviewer is null and void.
The Plaintiff is not entitled to declarations in paragraphs 1A and 1B because I found against the Plaintiff that the decision to refer the complaint to the Reviewer was not made without jurisdiction and, therefore, that the investigation that she made was not without power. The only relevant declaration sought is that the Council's resolution of 23 November 2011 which adopted the Reviewer’s findings is null and void.
There was one resolution in relation to the Reviewer’s report although it contained five paragraphs as follows:
1. THAT Council notes the report and supplementary report relating to Code of Conduct allegations against Clr J Mauger from Sole Conduct Review, Ms Esther McKay.
2. THAT Council notes a strong expression of disapproval of Clr Mauger’s actions as detailed in the reports.
3. THAT in relation to Clr Mauger’s reference to Clr T D Gair as a “maggot” during a dinner at Dormie House on 22 July 2009, Clr Mauger acknowledges regret in respect of the same.
4. THAT in respect of the use of Council’s Theatrette for the “We Still Care” meeting held on 19 June 2009, Clr Mauger be required to pay for the same.
5. THAT in relation to the question of direction of staff, and unauthorised travel expenses claim, Clr Mauger be required to undergo counselling and training relating to these matters.
Two things may be noted about this resolution. First, this resolution dealt only with the Report of the Sole Reviewer in relation to the Mayor’s Complaint. I have never been provided with a copy of any resolution dealing with the Dumping Complaint, nor does the Amended Summons claim any relief in respect of such a resolution. Secondly, the evidence disclosed (Exhibit B) that the resolution was passed at the Council meeting on 16 November 2011 and not 23 November 2011 as was put to me in submissions at the first hearing, and as appears in the Amended Summons and the Plaintiff’s proposed declaration set out at [3] above. To that extent, paragraph [9] of the principal judgment should be corrected to refer to 16 November 2011.
At the time the resolution was passed the Council did not know that the findings of the Reviewer in relation to the Condobolin dinner expenses were reached without according procedural fairness to the Plaintiff. There is no suggestion, however, that the resolution was not appropriately considered by the Council and passed by it.
I have not quashed the findings of the Reviewer. In the first place, I was not asked to do so. Secondly, even if certiorari had been sought there would have been no basis to quash the whole of the report but only the identifiable section that concerned findings in relation to the Condobolin dinner expenses. Again, it is difficult to see that, even if the whole of the Reviewer’s report was quashed that that would make the Council’s resolution null and void. Certainly, where only one aspect of the Reviewer’s report was been successfully impugned, it cannot be said that the Council’s resolution is null and void.
In Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 the joint judgment of McHugh, Gummow, Kirby and Hayne JJ discussed the appropriate test for the legal outcome of a breach of a statutory provision. Formerly, the distinction had been made between directory and mandatory requirements. The joint judgment said:
[93] …They are classifications that have outlived their usefulness because they deflect attention from the real issue which is whether an act done in breach of the legislative provision is invalid. The classification of a statutory provision as mandatory or directory records a result which has been reached on other grounds. The classification is the end of the inquiry, not the beginning. That being so, a court, determining the validity of an act done in breach of a statutory provision, may easily focus on the wrong factors if it asks itself whether compliance with the provision is mandatory or directory and, if directory, whether there has been substantial compliance with the provision. A better test for determining the issue of validity is to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid. This has been the preferred approach of courts in this country in recent years, particularly in New South Wales. In determining the question of purpose, regard must be had to "the language of the relevant provision and the scope and object of the whole statute".
…
[97] Courts have always accepted that it is unlikely that it was a purpose of the legislation that an act done in breach of a statutory provision should be invalid if public inconvenience would be a result of the invalidity of the act. Having regard to the obligations imposed on the ABA by s 160, the likelihood of that body breaching its obligations under s 160 is far from fanciful, and, if acts done in breach of s 160 are invalid, it is likely to result in much inconvenience to those members of the public who have acted in reliance on the conduct of the ABA.
…
[100] In a case like the present, however, the difference between holding an act done in breach of s 160 is invalid and holding it is valid is likely to be of significance only in respect of actions already carried out by, or done in reliance on the conduct of, the ABA. Although an act done in contravention of s 160 is not invalid, it is a breach of the Act and therefore unlawful. Failure to comply with a directory provision "may in particular cases be punishable". That being so, a person with sufficient interest is entitled to sue for a declaration that the ABA has acted in breach of the Act and, in an appropriate case, obtain an injunction restraining that body from taking any further action based on its unlawful action.
Brennan J, although dissenting in the outcome, adopted a similar approach, saying:
[41] The purpose of construing the text of a statute is to ascertain therefrom the intention of the enacting Parliament. When the validity of a purported exercise of a statutory power is in question, the intention of the Parliament determines the scope of a power as well as the consequences of non-compliance with a provision prescribing what must be done or what must occur before a power may be exercised. If the purported exercise of the power is outside the ambit of the power or if the power has been purportedly exercised without compliance with a condition on which the power depends, the purported exercise is invalid. If there has been non-compliance with a provision which does not affect the ambit or existence of the power, the purported exercise of the power is valid. To say that a purported exercise of a power is valid is to say that it has the legal effect which the Parliament intended an exercise of the power to have.
In the present case, the resolution of the Council was properly and validly passed according to proper procedures. To provide for a declaration that said the whole of the resolution was null and void would be inconsistent with the judgment of the Court that in all but one respect the report of the Sole Reviewer should stand.
It is instructive to examine the terms of the Resolution in the light of the Court’s judgment. Paragraphs 1 and 2 merely note the contents of the Report. The acknowledgment by the Plaintiff in paragraph 3 is, in a sense, independent of the Report by reason of what appears at [108]-[110] of the principal judgment. In any event, the Report’s findings on this matter were not successfully challenged. As far as paragraph 4 is concerned, the Reviewer’s findings were not successfully challenged.
It is only paragraph 5 that can be said to be affected by the principal judgment. What is provided for in the paragraph is now history. However, a declaration in the form to be made is a public qualification of paragraph 5 to the extent that the paragraph refers to unauthorised travel expenses. In circumstances where the Plaintiff’s concern was for his reputation a declaration in the terms put forward by the Defendant is both adequate and sufficient to restore his reputation in relation to the one matter where the sole reviewer was found to have erred by not according him procedural fairness.
It cannot have been the intention of Parliament under the Local Government Act 1993 (NSW) that a resolution of Council adopting a Review Committee’s report would be null and void if it could be shown that some aspect of the Reviewer’s report was able to be impugned. The non-compliance in any regard by the Committee does not affect the ambit of Council’s power with respect to passing a resolution: Project Blue Sky at [41].
The one modification to the Defendant’s proposed declaration is the insertion of the words “on and” after “investigation”. The Report makes clear that the Reviewer spoke with a WSC Councillor on 2 August 2011, that is, after the draft report was sent to the Plaintiff. The Defendant’s form of the declaration does not allow for the receipt of information on 2 August.
Costs
The Plaintiff submitted that the Defendant should pay the Plaintiff’s costs of the proceedings. The Plaintiff submitted that he had been successful in establishing a denial of procedural fairness which vitiated the report of the Reviewer. This was because it was the critical finding in the dispute between the parties. The Plaintiff submitted that the applicable principle is that a court should award the costs of the proceedings to a successful party without attempting to differentiate between the issues on which the party succeeded and any issues on which the party failed. The Plaintiff said that a consistent theme of the cases is that justice may not be served if parties are dissuaded by the risk of costs from canvassing all issues which might be material to the decision in the case, in reliance on Hexiva Pty Ltd v Lederer (Costs) [2006] NSWSC 1259 at [9].
The Plaintiff submitted that this was a case in which there were multiple legal issues, none of which was clearly dominant and none of which was severable so that the proper order is that costs ought simply follow the event. Since the Plaintiff was successful the Defendant should pay his costs.
The Defendant submitted that the Court found in the Plaintiff’s favour on a discrete point in the Plaintiff’s claim in relation to allegation 1 in the second group of complaints. The Defendant referred to three principles identified by Toohey J in Hughes v Western Australian Cricket Association (Inc) [1986] ATPR 40, 748 at p 48,136 as follows:
1. Ordinarily costs follow the event and a successful litigant receives his
costs in the absence of special circumstances justifying some other order - Ritter v Godfrey [1920] 2 KB 47.
2. Where a litigant has succeeded only on a portion of his claim, the circumstances may make it reasonable that he bear the expense of litigating that portion upon which he has failed - Forster v Farquhar [1893] 1 QB 564.
3. A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party's costs of them. In this sense, "issue" does not mean a precise issue in the technical pleading sense but any disputed question of fact or of law -.Cretazzo v Lombardi (1975) 13 SASR 4 at 12.
The Defendant submitted that if these principles were applied the Plaintiff failed in 90% of his claim. In those circumstances the Plaintiff should pay 90% of the Defendant's costs. The Defendant relied also on Thiess v TCN Channel Nine Pty Ltd (No 5) [1994] 1 Qd R 156 where the Full Court of the Supreme Court of Queensland said:
While in the end the matter is largely one of impression, we consider that, whatever approach is adopted, the trial judge's apportionment of two-thirds of the costs to the plaintiff was unduly favourable having regard to the comparative success achieved by the defendants in the litigation. Out of the total of 21 imputations alleged they succeeded in proving truth in the case of 13 of them. It is not illegitimate to regard those 13 as representing the more important, and, from the standpoint of the plaintiff's public image, certainly the most serious, of the issues at the trial. In all the circumstances we consider that the discretion of the trial judge as to costs has miscarried. His order that the defendant TCN 9 should pay two-thirds of the plaintiff's costs should be set aside.
The effect of that order is to require the defendant TCN 9 to pay most of the plaintiff's costs of action while continuing to bear all of its own. As such it discounts too severely the extent of the defendant's success in the action by remitting only one-third of the plaintiff's costs of the action. Even if the defendant TCN 9 were ordered to pay only one-third instead of two-thirds of the plaintiff's costs, it would unduly favour the plaintiff by leaving the defendant burdened with payment of all of its own costs of the action. A more realistic reflection of the outcome of the litigation would be to require each party to pay the costs of the other to the extent of the latter's success in the action. Approached in this way, we think it a fair assessment of the relative victories of each party to say that the plaintiff succeeded as to one-third of his claims for defamation, whereas the defendant was successful in establishing a defence to the remaining two-thirds. The net result of such an approach would be to oblige the plaintiff to pay one-third of the costs of the defendant TCN 9. Approximate though this may be, it seems to us to be preferable to the alternative of apportioning costs according to the success of either party in relation to particular issues, which would produce a process of taxation that seems to be almost universally deplored.
Whether and to what extent it can be said that the Plaintiff was successful depends on an analysis of the claims the Plaintiff made. In the first place, as the principal judgment noted at [3]-[6] there were two sets of complaints. Further, as noted at [11] the Plaintiff claimed that both the investigations and the subsequent reports were invalid on four separate bases:
(a) there was no legal basis for commencing each investigation;
(b) the reports did not comply with mandatory provisions of the Code;
(c) the Plaintiff was denied procedural fairness;
(d) the findings that the Plaintiff had breached clauses of the Code were infected by legal error.
In the result the Plaintiff failed entirely in relation to the first set of complaints. In relation to the second set of complaints, which involved five separate matters or allegations, the Plaintiff was successful on one ground only ([24](c) above) in respect of one of the matters or allegations. It is significant also that the complaint about procedural fairness in relation to the first set of complaints was an entirely different allegation to the complaint of procedural fairness in relation to the second set of complaints. The challenge to procedural fairness in relation to the first set of complaints was that the General Manager did not afford procedural fairness to the Plaintiff before he referred the Dumping Complaint to the Review Committee (see principal judgment at [28]). The consideration in relation to that alleged breach of procedural fairness involved entirely different considerations to the procedural fairness grievance in relation to the second lot of complaints (Cf [44]-[52] of the principal judgment with [75] and [97]-[118]). The procedural unfairness was at a completely different time in the process of referral of the complaint and report as between the two sets of complaints. Further, as I have already noted, the Plaintiff was only successful in relation to one of the five allegations in the second set of complaints.
In my opinion, the Plaintiff’s use of the words “issue” and “issues” in his submissions obscures the real enquiry. There were four issues in relation to each of the two sets of complaints ([24] above). The two sets of complaints were not separate issues but separate factual matrices, as were the five separate allegations in the second set of complaints.
Many, if not most, of the cases relied upon by the Plaintiff concerned disputes that involved a number of issues in the ordinarily understood sense of legal issues such as those in [24] above. The present case, as I have said, involved separate claims which had some common issues. However, even if the separate claims in the present matter could be regarded as separate issues the authorities tend to support the view that where there are discrete issues for determination and a party has succeeded on some but not all of those issues there may be an apportionment of the costs.
In Waters v P C Henderson (Aust) Pty Ltd [1994] NSWCA 338; (1994) 254 ALR 328 Mahoney JA (with whom Kirby P and Priestley JA agreed) approved the following statement of principle in Ritchie’s Supreme Court Practice dealing with the power of the Court to order costs:
Where the proceedings involve multiple issues the application of the rule that
costs follow the event may involve hardship where a party succeeds on some
issues and yet fails on others. Particularly is this so where, for example, a defendant succeeds on issues that occupied the bulk of the time taken by the proceedings. Nevertheless unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed.
That statement was expressly approved in James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [32].
The Court of Appeal in James also approved Toohey J’s observations in Hughes ([22] above) and went on to say:
[34] Where a matter involves multiple issues and the question before the court is whether it should make some other order as to costs other than the order that costs follow the event, a distinction is commonly drawn between cases which involve clearly discrete issues for determination, and those in which all issues are inseparable, or at least sufficiently linked, with respect to the overall disposition of a particular matter. In Permanent Trustee Aust Ltd v FAI General Insurance Co Ltd (unreported, NSWSC, 3 June 1998), Hodgson CJ in Eq noted that the obvious examples of a matter involving discrete issues is one where a plaintiff makes separate claims for different relief, or a claim by a plaintiff and a cross-claim by a defendant. Another example is where a respondent is successful in having an appeal against an earlier decision dismissed, but for reasons other than those raised in the respondent’s Notice of Contention. This is not to say that so-called “discrete issues”, for the purposes of apportioning costs, only exist in cases where there are separate claims made within a single matter. As Toohey J stated in the passage quoted at [33] above, it can relate to “any disputed question of fact or law” before a court on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter.
In Permanent Trustee v FAI Hodgson CJ in Eq also said (at 13):
Apart from that consideration, in general terms I accept that if an issue is raised reasonably and is not disproportionate to the whole case, then normally the successful party should get his or her costs. However, particularly in relation to severable issues, the lesser the strength of the point raised and the greater the proportion it bears to the whole case, the more likely it is that the successful party may be deprived of costs; and if the Court comes to the view that it was unreasonable to raise the issue, then the successful party may have to pay the costs of that issue.
In Hockey v Fairfax Media Publications Pty Ltd (No 2) [2015] FCA 750 White J surveyed many of the cases dealing with the apportionment of costs including those already mentioned in this judgment. I accept that both Hockey and Thiess were both defamation cases and costs principles in those cases may not always coincide with common law principles particularly because of a legislated approach (see s 40 Defamation Act 2005 (NSW)). Nevertheless, what was said in Thiess seems to me to be consistent with what Toohey J said in Cretazzo v Lombardi and the principles established in Waters and in James.
The Defendant rightly points out that the matter on which the Plaintiff succeeded took a very small period of time to argue and to articulate. It is referred to only in paragraph 15(c) of the Plaintiff’s Amended Grounds of Review and is referred to only at [32] of the Plaintiff’s written submissions and paragraph [48] of the Defendant’s written submissions. In addition, the point was argued over only four of 55 pages of transcript, two for the Plaintiff and two for the Defendant.
The principal issues argued at the hearing and in the written submissions related to the Code of Conduct (both its relationship to what the Plaintiff was alleged to have done and whether its provisions had been complied with), the notion of functus officio for the referral of the Mayor’s Complaint and procedural fairness in relation to the referral of the Dumping Complaint. The Plaintiff was unsuccessful on all of those issues.
There is one further matter to mention. The Summons filed by the Plaintiff on 21 August 2012 was only concerned with the report of the Conduct Review Committee dated 27 April 2012 in relation to the Dumping Complaint. The first time the Mayor’s complaint, which included the Condobolin dinner expenses, was raised was in a Notice of Motion dated 7 January 2013 which sought leave to amend the Summons to claim declarations in respect of the report of the sole reviewer.
The final result for the Plaintiff was that he succeeded on one legal issue in relation to one out of six complaints that were investigated. So far from this being substantial success for the Plaintiff it was only a small vindication, and in circumstances where it could not be positively shown that the Plaintiff had been denied procedural fairness – only that it may have occurred because the Reviewer did not make clear if she had relied on any material obtained after she last put matters to the Plaintiff on that one allegation.
A division of costs following the Thiess approach would suggest that the Plaintiff ought to pay about 80% of the Defendant’s costs. However, I consider that some weight needs to be given to the fact that it was necessary for the Plaintiff to pursue proceedings (even if many matters should not have been litigated) to achieve a partial vindication of his reputation.
In all of the circumstances the Plaintiff should pay 50% of the Defendant’s costs of the proceedings.
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