Oberon Council v Minister for Local Government; Cabonne Shire Council v Minister for Local Government; McAlister and Graham v Minister for Local Government - [2016] NSWLEC 131

Land and Environment Court

New South Wales

Medium Neutral Citation: Oberon Council v Minister for Local Government; Cabonne Shire Council v Minister for Local Government; McAlister and Graham v Minister for Local Government [2016] NSWLEC 131
Hearing dates: 25, 26, 27, 31 May and 1, 3, 6 June 2016
Date of orders: 07 October 2016
Decision date: 07 October 2016
Jurisdiction: Class 4
Before: Preston CJ
Decision:
The Court orders in each of the proceedings:

(1) The proceedings are dismissed.
(2) The applicant is to pay the respondents’ costs of the proceedings.
Catchwords: JUDICIAL REVIEW – proposals for amalgamation of local government areas – whether proposals made in accordance with Local Government Act 1993 – whether proposals made by Minister – whether decision to make proposals manifestly unreasonable – referral of proposals to Departmental Chief Executive for examination and report – whether referral of proposals manifestly unreasonable – inquiries required to be held – whether reasonable public notice given of the holding of inquiries – whether inquiries held in accordance with Act – whether examination and report on proposals in accordance with Act – whether Departmental Chief Executive had regard to relevant considerations in s 263(3) of Act – whether affected councils denied procedural fairness by Departmental Chief Executive – review and comment on Departmental Chief Executive’s reports by Boundaries Commission – whether review conducted in accordance with Act – whether affected councils denied procedural fairness by Boundaries Commission – publicly accessible material in support of proposals represented that analysis and modelling of consultant was independent – whether representations misleading – whether allegedly misleading representations invalidated statutory process of amalgamation – whether Minister made decisions under Act to recommend implementation of proposals to Governor – whether Minister’s decision to recommend to Governor that a proposal be implemented was invalid
Legislation Cited: Interpretation Act 1987 ss 31, 32
Local Government Act 1993 ss 204, 213, 218A, 218B, 218C, 218CA, 218D, 218E, 218F, 218F(1), 218F(2), 218F(6), 218F(7), 218F(8), 260, 261, 262, 263, 263(2A), 263(2B), 263(3), 264, 265, 354B, 438U, Pts 1, 2 and 3 of Ch 9, Pt 8 of Ch 13, Sch 2
Cases Cited: Ainsworth v Criminal Justice Commission (1992) 175 CLR 564; [1992] HCA 10
Anderson v Minister for Infrastructure Planning and Natural Resources (2006) 151 LGERA 229; [2006] NSWLEC 725
Annetts v McCann (1990) 170 CLR 596; [1990] HCA 57
Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 225 CLR 88; [2005] HCA 72
Assistant Commissioner Condon v Pompano Pty Ltd (2013) 252 CLR 38; [2013] HCA 7
Attorney-General for the State of Victoria v City of Geelong [1989] VR 641
Baba v Parole Board of New South Wales (1986) 5 NSWLR 338
Bartzios v Leichhardt Municipal Council [1978] 1 NSWLR 7
Betfair Pty Ltd v Western Australia (2008) 234 CLR 418; [2008] HCA 11
Botany Bay City Council v Minister for Local Government (2016) 214 LGERA 173; [2016] NSWCA 74
Botany Bay City Council v Minister for Local Government [2016] NSWLEC 35
Botany Bay City Council v The State of New South Wales [2016] NSWCA 243
Bruce v Cole (1998) 45 NSWLR 163
Brunetto v Collector of Customs (1984) 4 FCR 92
Bushell v Repatriation Commission (1992) 175 CLR 408; [1992] HCA 47
Bushell v Secretary of State for the Environment [1981] AC 75
Castle v Director General, State Emergency Service [2008] NSWCA 231
Director General, Department of Trade and Investment, Regional Infrastructure and Services v Lewis (2012) 301 ALR 420; [2012] NSWCA 436
Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd [2014] NSWCA 158
Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations (2011) 195 FCR 318; [2011] FCAFC 88
Elias v Federal Commissioner of Taxation (2002) 123 FCR 499; [2002] FCA 845
Esber v The Commonwealth of Australia (1992) 174 CLR 430; [1992] HCA 20
Foster v Minister for Customs and Justice (2000) 200 CLR 442; [2000] HCA 38
Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149; [1996] HCA 44
Insurance Australia Ltd v Motor Accidents Authority (NSW) [2007] NSWCA 314
Jacob v Save Beeliar Wetlands (Inc) (2016) 216 LGERA 201; [2016] WASCA 126
Jarratt v Commissioner for Police for New South Wales (2005) 224 CLR 44; [2005] HCA 50
Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8
Kindimindi Investments Pty Ltd v Lane Cove Council (2006) 143 LGERA 277; [2006] NSWCA 23
Kioa v West (1985) 159 CLR 550; [1985] HCA 81
Lindemans Wines Pty Ltd v Woodward (1981) 46 LGRA 14
Minister for Immigration and Border Protection v MZYTS (2013) 230 FCR 431; [2013] FCAFC 114
Minister for Immigration and Border Protection v SZSSJ (2016) 90 ALJR 901; [2016] HCA 29
Minister for Immigration and Citizenship v Khadgi (2010) 190 FCR 248; [2010] FCAFC 145
Minister for Immigration and Citizenship v Maman (2012) 200 FCR 30; [2012] FCAFC 13
Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323; [2001] HCA 30
Minister for Local Government v South Sydney City Council (2002) 55 NSWLR 381; [2002] NSWCA 288
Muin v Refugee Review Tribunal (2002) 76 ALJR 966; [2002] HCA 30
Notaras v Waverley Council (2007) 161 LGERA 230; [2007] NSWCA 333
Ogawa v Minister for Immigration and Citizenship (2011) 199 FCR 51; [2011] FCA 1358
P J Magennis Pty Ltd v The Commonwealth (1949) 80 CLR 382; [1949] HCA 66
Parramatta City Council v Hale (1982) 47 LGRA 319
Parramatta City Council v Pestell (1972) 128 CLR 305; [1972] HCA 59
R (on the application of Forest Care Home Ltd) v Pembrokeshire County Council (2011) 14 CCLR 103; [2010] EWHC 3514 (Admin)
Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57; [2001] HCA 22
Scurr v Brisbane City Council (1973) 133 CLR 242; [1973] HCA 39
Singh v Minister for Immigration and Multicultural Affairs (2001) 109 FCR 152; [2001] FCA 389
Sutherland Shire Council v Finch (1970) 123 CLR 657; [1970] HCA 49
Vanmeld Pty Ltd v Fairfield City Council (1999) 46 NSWLR 78; [1999] NSWCA 6
Waitemata County v Local Government Commission [1964] NZLR 689
Walsh v Parramatta City Council (2007) 161 LGERA 118; [2007] NSWLEC 255
Wei v Minister for Immigration and Border Protection (2015) 90 ALJR 213; [2015] HCA 51
Woollahra Municipal Council v Minister for Local Government [2016] NSWLEC 86
Zhang v Canterbury City Council (2001) 51 NSWLR 589; [2001] NSWCA 167
Category: Principal judgment
Parties:
Oberon Council v Minister for Local Government

Oberon Council (Applicant)
Minister for Local Government (First Respondent)
Chief Executive, Office of Local Government (Second Respondent)
Ms Renata Brooks (Third Respondent)
State of New South Wales (Fourth Respondent)

Cabonne Shire Council v Minister for Local Government

Cabonne Shire Council (Applicant)
Minister for Local Government (First Respondent)
Chief Executive, Office of Local Government (Second Respondent)
Mr Richard Pearson (Third Respondent)
State of New South Wales (Fourth Respondent)

McAlister and Graham v Minister for Local Government
Mr Albert McAlister (First Applicant)
Mr David Graham (Second Applicant)
Minister for Local Government (First Respondent)
Chief Executive, Office of Local Government (Second Respondent)
Mr John Turner (Third Respondent)
State of New South Wales (Fourth Respondent)
The Administrator, Gundagai Shire Council (Fifth Respondent)
Representation:
Counsel:
Mr P E King with Ms F A Sinclair (Applicants)
Mr N J Williams SC with Mr J J Hutton, Mr T E O’Brien and Ms B E M Anniwell (Respondents)
Solicitors:
Patterson, Byfield & Bryen (Applicants)
Crown Solicitor’s Office (Respondents)

File Number(s): 2016/00161513, 2016/00161537, 2016/00161546
Publication restriction: No

Judgment

Three councils challenge proposals for amalgamation

The Minister for Local Government (‘the Minister’) on 6 January 2016 made proposals, under s 218E(1) of the Local Government Act 1993 (‘the Act’), for the amalgamation of various local government areas in rural New South Wales. One proposal was the amalgamation of the areas of Oberon with Bathurst (‘the Oberon proposal’); a second was the amalgamation of the areas of Cabonne with Blayney and Orange City (‘the Cabonne proposal’); and a third was the amalgamation of the areas of Gundagai with Cootamundra (‘the Gundagai proposal’).
Also on 6 January 2016, the Minister referred the proposals under s 218F(1) of the Act to the Acting Chief Executive of the Office of Local Government (‘the Departmental Chief Executive’) for examination and report. The Departmental Chief Executive delegated those functions to Ms Renata Brooks (for the Oberon proposal), Mr Richard Pearson (for the Cabonne proposal) and Mr John Turner (for the Gundagai proposal). I will refer to each of these people as the Delegate.
The Delegate was required, under s 263(2A) of the Act, to hold an inquiry for the purpose of exercising the functions in relation to each proposal for amalgamation. Each Delegate gave notice of the holding of an inquiry, including by placing advertisements in various State, regional and local newspapers. Each Delegate held an inquiry. The inquiry was held, for the Oberon proposal, on 4 February 2016 at Oberon and Bathurst; for the Cabonne proposal, on 4 February 2016 at Blayney and Orange and on 5 February 2016 at Molong; and for the Gundagai proposal, on 4 February 2016 at Cootamundra and Gundagai.
Between mid-March and early April 2016, each Delegate completed her or his examination, and provided a report to the Minister and furnished a copy of the report to the Local Government Boundaries Commission (‘Boundaries Commission’) for review and comment. Delegate Pearson provided his report on the Cabonne proposal on 18 March 2016; Delegate Turner provided his report on the Gundagai proposal on 24 March 2016; and Delegate Brooks provided her report on the Oberon proposal on 5 April 2016. In each case, the Delegate recommended that the proposal for the amalgamation of the areas concerned be implemented.
The Boundaries Commission was required, under s 218F(6) of the Act, to review each Delegate’s report and send its comments to the Minister. The Boundaries Commission sent to the Minister its comments on the report on the Cabonne proposal on 22 April 2016 and its comments on the reports on the Oberon proposal and the Gundagai proposal on 29 April 2016.
The Minister, under s 218F(7) of the Act, may recommend to the Governor that a proposal be implemented, with or without modifications or, under s 218F(8), may decline to recommend to the Governor that a proposal be implemented. On 3 May 2016, the Minister decided to recommend to the Governor that the Gundagai proposal be implemented and on 12 May 2016, by proclamation under s 218A(1), the Governor amalgamated the areas of Gundagai and Cootamundra and constituted a new area named Gundagai (Local Government (Council Amalgamation) Proclamation 2016, 12 May 2016).
On 4 May 2016, the Minister decided that the Oberon proposal and the Cabonne proposal be implemented, but subject to the outcome of the current proceedings in this Court affecting these proposals. However, the Minister has not yet made a recommendation under s 218F(7) of the Act to the Governor that either the Oberon proposal or the Cabonne proposal be implemented.
Three of the councils affected by the proposals for amalgamation oppose the proposal. Oberon Council opposes the Oberon proposal but Bathurst Regional Council supports it. Cabonne Shire Council (‘Cabonne Council’) opposes the Cabonne proposal but Blayney Shire Council and Orange City Council support it. Gundagai Shire Council opposed the Gundagai proposal but Cootamundra Shire Council supported it.
On 18 April 2016, Oberon Council and Cabonne Council and on 12 May 2016, Gundagai Shire Council commenced judicial review proceedings challenging the legality of various steps in the statutory process for the amalgamation of the areas concerned. As Gundagai Shire Council was dissolved once the Governor’s proclamation took effect, the former Mayor and Deputy Mayor of Gundagai Shire Council, Mr McAlister and Mr Graham, were substituted as applicants in the proceedings challenging the Gundagai proposal. For court administration purposes, the proceedings were separated into three proceedings. Nevertheless, the three proceedings were heard together. The grounds of challenge substantially overlap. The only different grounds concern the Gundagai proposal, because there were two proposals for amalgamation considered and the Governor has actually made a proclamation which has had the effect of amalgamating the Gundagai and Cootamundra local government areas.
The grounds of challenge are:

The Minister did not make a proposal under s 218E(1) of the Act because:

there was no decision to make the Oberon proposal, the Cabonne proposal or the Gundagai proposal at all;

if there was a decision to make the proposals, the decision was not made by the Minister but rather by others, including Cabinet;

if the Minister did make a decision to make the proposals, his decision was pre-determined; or

any decision of the Minister to make the proposals was manifestly unreasonable.

The Minister’s referral of the proposals under s 218F(1) of the Act for examination and report was manifestly unreasonable.

Each Delegate did not give reasonable public notice of the holding of the inquiry in relation to each proposal, as required by s 263(2B) of the Act in that:

the content of the notice was inadequate; and

“reasonable” public notice was not given.

Each Delegate did not hold an inquiry into each proposal in accordance with s 263(2A) of the Act in that:

there was no informed and genuine inquiry into each proposal and each of the factors in s 263(3) of the Act concerning the proposal;

the conduct of the public meeting was not an “inquiry” in the sense of the Delegate playing a proactive, inquiring role but rather the Delegate played a passive, listening role; and

there were restrictions on members of the public speaking.

Each Delegate did not examine the proposal in accordance with s 218F(1) and s 263(1), including failing to examine each of the factors in s 263(3) of the Act.

Each Delegate did not accord procedural fairness to Oberon Council, Cabonne Council and Gundagai Shire Council, and their ratepayers and residents, in connection with the inquiry or examination of each proposal.

The Boundaries Commission did not conduct a proper and informed review of and comment on each Delegate’s report, in accordance with s 218F(6)(b).

The Boundaries Commission did not accord procedural fairness to Oberon Council, Cabonne Council and Gundagai Shire Council, and their ratepayers and residents, in connection with the Boundaries Commission’s review of and comment on each Delegate’s report.

Misleading statements about the independence of KPMG affected various steps in the statutory amalgamation process, including the notices given of the holding of the inquiries, the inquiries that were held, each Delegate’s examination of the proposals and the Boundaries Commission’s review and comments on each Delegate’s report.

The Minister did not make a recommendation to the Governor in accordance with s 218F(7) that each proposal be implemented because:

for the Oberon and Cabonne proposals, the recommendation was subject to a qualification (concerning the outcome in these proceedings) and there was no power to make a conditional recommendation; and

for the Gundagai proposal, the Minister did not have power to recommend that the Gundagai proposal be implemented until the proposal initiated by Harden Shire Council for the amalgamation of Harden, Cootamundra and Gundagai areas had been finally dealt with. Alternatively, the Minister had no power to recommend the implementation of the Gundagai proposal because it had been superseded by the proposal initiated by Harden Shire Council. Additionally, the proclamation of the Governor impermissibly conferred power on the Minister to determine unresolved issues.

Overview of the statutory process for amalgamation

Division 1 of Pt 1 of Ch 9 of the Act provides for the constitution of land as a local government area and Div 1 of Pt 2 of Ch 9 provides for the constitution of a council to manage that area. The Governor may, by proclamation, constitute any part of New South Wales as an area: s 204(1) of the Act. The area is to have the boundaries determined by the Governor in the proclamation constituting the area: s 204(2) of the Act.
Division 2A of Pt 1 of Ch 9 of the Act prescribes how areas are amalgamated. The Governor may, by proclamation, amalgamate two or more areas into one or more new areas: s 218A(1) of the Act. On the date specified in the new proclamation as the date on which the areas are to be amalgamated, the areas are dissolved and the new area or areas are constituted: s 218A(2)(a) and (b) of the Act.
The proclamation of the Governor may include provisions of the kind referred to in s 213, as are necessary or convenient to give effect to the proclamation: s 218C(1). The provisions include those for or with respect to the transfer of staff.
Where a new council is constituted as a result of the amalgamation of two or more areas and the council of one of those areas employed regular staff at a rural centre in the area of the new council, the new council must ensure that the number of regular staff of the new council employed at the rural centre is, as far as reasonably practicable, maintained at not less than the same level of regular staff as were employed by the previous council at the rural centre immediately before the amalgamation took effect: s 218CA(1) and (2). A “rural centre” means a centre of population of 5,000 people or fewer: s 354B and s 218CA(4).
Division 2B of Pt 1 of Ch 9 of the Act prescribes the process that must be followed before the Governor can, by proclamation, amalgamate areas. A function under s 218A to amalgamate areas may be exercised only after a proposal for the exercise of the function is dealt with under Div 2B: s 218D of the Act.

The making of a proposal

The first step in the process prescribed by Div 2B is the making of a proposal under s 218E of the Act to amalgamate areas. A “proposal” that may be made under s 218E is simply a proposal for the exercise of the function under s 218A(1) to amalgamate two or more areas into one or more new areas.
Three classes of persons may make a proposal under s 218E to amalgamate areas: the Minister, a council affected by the proposal, or an appropriate minimum number of electors: s 218E(1). Any one of these three classes of persons may initiate a proposal for amalgamation. The third class of persons is defined in s 218E(2). The appropriate minimum number of electors varies depending upon whether the proposal applies to the whole of one or more areas or only part of an area. In the first case, the minimum number of electors is 250 of the enrolled electors for each area or 10% of them, whichever is the greater, and in the second case, the minimum number of electors is 250 of the enrolled electors for the part of the area or 10% of them, whichever is the lesser: s 218E(2).
There is no statutory restriction on any member of these classes of persons initiating a proposal, including a person initiating a proposal after another person has initiated a proposal for the amalgamation of areas. Once initiated, each proposal for amalgamation must be dealt with under the process prescribed by Div 2B. There is no express statutory restriction on proposals being dealt with concurrently; there is no express statutory requirement that they can only be dealt with consecutively in a staged process.

The referral of the proposal

The second step in the process prescribed by Div 2B is the referral of the proposal for examination and report. On the Minister making a proposal or receiving a proposal from a council affected by the proposal or by an appropriate minimum number of electors, the Minister must refer the proposal for examination and report to either the Boundaries Commission or the Departmental Chief Executive: s 218F(1).
The “Boundaries Commission” means the Local Government Boundaries Commission constituted under the Act: see the Dictionary and Pt 3 of Ch 9 of the Act. The Boundaries Commission is a body corporate: s 260. It consists of four commissioners appointed by the Governor, of which one is to be a person nominated by the Minister, one is to be a person employed by the Department (Office of Local Government) nominated by the Departmental Chief Executive and two are to be persons appointed from a panel constituted under s 262(1) of the Act: s 261. This panel consists of eight persons who are councillors nominated by the Local Government and Shires Association of NSW: s 262(1). Schedule 2 of the Act contains further provisions on the membership of the Boundaries Commission and the procedure at meetings of the Boundaries Commission: s 261(5).
There are some similarities and some differences in the process of examination of and reporting on a proposal by the Boundaries Commission or the Departmental Chief Executive. The similarities concern the process of examination of a proposal (s 218F(2)) and the principal difference concerns the need for review and comment on a report of the examination of a proposal: s 218F(6).

The examination and report

The third step in the process prescribed by Div 2B is the examination of and report on the proposal by the person to whom the proposal has been referred under s 218F(1). The duty to examine and report on the proposal is imposed by s 263(1):

The Boundaries Commission [or Departmental Chief Executive] is required to examine and report on any matter with respect to the boundaries of areas … which may be referred to it by the Minister.

In Botany Bay City Council v Minister for Local Government (2016) 214 LGERA 173; [2016] NSWCA 74 at [38], the Court of Appeal said of the phrase "any matter with respect to" in s 263(1):

… The phrase 'any matter' is not defined and of itself may be taken to be of wide import. Likewise, the phrase 'with respect to' is of wide import. However, there are two indications in subs (1) itself that its meaning is more confined. First, and most importantly, on the express words of the subsection, 'any matter' is controlled by the phrase 'which may be referred to it by the Minister'. Secondly, any such matter must be 'with respect to the boundaries of [councils]'. Accordingly, what falls within s 263 for examination and report is any matter with respect to boundaries that is referred by the Minister. In this case, that was the Minister's proposal.
(See also at [43])

So too in this case, the matters with respect to the boundaries of local government areas that were referred by the Minister were the Oberon proposal, the Cabonne proposal and the Gundagai proposal for the amalgamation of the respective local government areas. The Minister elected to refer these proposals to the Departmental Chief Executive, who in turn delegated the functions of examining and reporting on the proposals to the respective Delegate.
Section 218F(2) of the Act provides that ss 263, 264 and 265 of the Act apply to the examination of a proposal by the Departmental Chief Executive in the same way as they apply to the examination of a proposal by the Boundaries Commission.
Section 263 specifies the functions of examining and reporting in relation to a proposal for the amalgamation of areas that has been referred under s 218F(1) and how these functions are to be exercised.
Subsection (1) imposes the functions of examining and reporting: the Boundaries Commission or Departmental Chief Executive “is required to examine and report on any matter with respect to the boundaries of areas … which may be referred to it by the Minister”: s 263(1).
In exercising the functions of examining and reporting on a proposal referred by the Minister, the Boundaries Commission or Departmental Chief Executive may or must do the following things.
Where the proposal referred by the Minister is a joint proposal made by two or more councils for the amalgamation of two or more areas under s 218A, the Boundaries Commission or Departmental Chief Executive is required, for the purpose of examining the joint proposal, to seek the views of electors of each of those areas by at least one of two means: first, by means of advertised public meetings, invitations for public submissions and postal surveys or opinion polls, in which reply-paid questionnaires are distributed to all electors, or, secondly, by means of formal polls: s 218F(3). This requirement to seek the views of electors only applies where the initiators of the proposal for amalgamation are two or more councils; it does not apply where the Minister initiates the proposal for amalgamation.

The holding of an inquiry

The Boundaries Commission or Departmental Chief Executive may be required to (if the Minister so approves) or must (if the Minister so directs or if the proposal is for the amalgamation of two or more areas) hold an inquiry for the purpose of exercising the functions of examining and reporting on the proposal: s 263(2) and (2A). Of relevance in this case is subs (2A): the Boundaries Commission or Departmental Chief Executive “must hold an inquiry for the purpose of exercising its functions in relation to a proposal for the amalgamation of two or more areas that has been referred to it in accordance with section 218F”.
Subsection (2B) requires that “[r]easonable public notice must be given of the holding of an inquiry under this section”. Neither s 263 of the Act nor the regulations made under the Act prescribe the form or the content of the public notice required to be given or where or how the public notice is to be given. There is no express guidance given in the Act or the regulations made under the Act of what constitutes “[r]easonable public notice … of the holding of an inquiry”. In Woollahra Municipal Council v Minister for Local Government [2016] NSWLEC 86 at [47]-[56], I held that a proper construction of s 263 reveals the following requirements.
First, s 263(2B) imposes a duty to give reasonable public notice of the holding of an inquiry under s 263. The subsection does not expressly identify the person on whom this duty to give public notice is imposed. But the implication is that the person who is to hold the inquiry, the Boundaries Commission or the Departmental Chief Executive, must give or cause to be given the public notice of the holding of that inquiry. The person need not give the public notice personally but nevertheless needs to arrange for the public notice to be given of the inquiry that the person is to hold. A common way that the person may give public notice is to arrange for a notice to be published in newspapers circulating in the areas concerned.
Second, the public notice that is to be given under s 263(2B) has three content requirements. The first content requirement is to state when and where the inquiry is to be held. The notice must specify the date and time of day at which the hearing of the inquiry will commence. The notice must specify the place at which the inquiry will be held. The degree of specificity of description of the place that will be required will depend on the facts and circumstances regarding the proposal, the local government area in which the inquiry is to be held and public knowledge of and familiarity with the place concerned.
The second content requirement is to state what is the particular inquiry that is to be held. Subsection (2B) refers to the holding of “an inquiry under this section”. An inquiry under s 263 may be held in certain circumstances (under s 263(2)(a)) and must be held in other circumstances (under s 263(2)(b) and s 263(2A)). However, irrespective of whether an inquiry may or must be held, it is to be held in relation to “any matter with respect to the boundaries of areas and the areas of operation of county councils which may be referred” to the Boundaries Commission or Departmental Chief Executive by the Minister for examination and report (see s 263(1) of the Act). The matters with respect to the boundaries of areas that the Minister may refer for examination and report are a proposal for the amalgamation of two or more areas (see ss 218A and 218D-218F) and a proposal for the alteration of the boundaries of areas (see ss 218B and 218D-218F). The public notice that must be given under s 263(2B) needs to specify the matter that the Minister has referred for examination and report and in relation to which the inquiry is to be held.
In this case, the matters in respect to the boundaries of areas which the Minister had referred to the Departmental Chief Executive for examination and report were the Oberon proposal, the Cabonne proposal and the Gundagai proposal for the amalgamation of the respective local government areas that had been referred in accordance with s 218F. The public notice required to be given under s 263(2B) needed to specify that the inquiry was to be held in relation to each proposal for the amalgamation of those areas.
The third content requirement is to state what is the purpose of holding the inquiry. Both subsections (2) and (2A) of s 263, which permit or mandate the holding of an inquiry, specify that the inquiry is to be held “for the purpose of” the Boundaries Commission or Departmental Chief Executive “exercising its functions”. In the case of the proposal for the amalgamation of areas, the functions in relation to that proposal are the functions under s 218F(1) and s 263(1) of examining and reporting on the proposal.
In this case, the public notice that was required to be given under s 263(2B) needed to state that the inquiry that was to be held was for the purpose of exercising the functions of the Departmental Chief Executive of examining and reporting in relation to each of the Oberon proposal, the Cabonne proposal and the Gundagai proposal for the amalgamation of the respective local government areas that have been referred by the Minister to the Departmental Chief Executive in accordance with s 218F.
Third, the public notice that must be given under s 263(2B) is to be “reasonable”. The adjective “reasonable” qualifies both the content and timing of the public notice. The content and timing of the public notice that is required to be given might vary considerably depending on the nature and complexity of the matter (or proposal) in relation to which the inquiry is to be held: see Attorney-General for the State of Victoria v City of Geelong [1989] VR 641 at 649, Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations (2011) 195 FCR 318; [2011] FCAFC 88 at [85]-[87] and Ogawa v Minister for Immigration and Citizenship (2011) 199 FCR 51; [2011] FCA 1358 at [36], [37].
A minor adjustment of a boundary of a local government area might only require that brief notice be given shortly before any inquiry is held (an inquiry in relation to the alteration of boundaries may be held if the Minister so approves and must be held if the Minister directs: s 263(2) of the Act). On the other hand, a more complex proposal for the amalgamation of two or more areas might require that more detailed notice be given at a time significantly before the inquiry is held (an inquiry in relation to a proposal for amalgamation of areas must be held: s 263(2A) of the Act).
A person should know from reading the public notice what is the subject matter and purpose of the inquiry to be held and the person should be given sufficient time to prepare and make a submission to the inquiry.
The reasonableness of the length of time between the giving of the notice and the holding of the inquiry is to be assessed not only by reference to the nature and complexity of the proposal but also to the time of year at which the notice is given. For example, if the period of time between giving the notice and holding the inquiry corresponds with the Christmas/New Year holiday break, reasonable public notice might not be able to be given. The notice might not come to the attention of people interested in making submissions to the inquiry but, even if it did, they may be unable to do so due to the difficulty of researching and preparing a submission in the holiday period, when resources and services are likely to be less available.
Fourth, the form of public notice that is given should be appropriate to achieve the purpose for which notice is to be given of notifying the public of the holding of the inquiry. The form of public notice should reach the audience for which it is intended. Public notice by newspaper advertisement in newspapers circulating in the local government areas affected by the proposal is fair and reasonable notice to the public: Waitemata County v Local Government Commission [1964] NZLR 689 at 699.
Section 263 of the Act distinguishes between the functions of examining and reporting on any matter with respect to the boundaries of areas, including a proposal for the amalgamation of areas referred by the Minister under s 218F, and the holding of an inquiry under s 263. An inquiry under s 263 is to be held for the purpose of the Boundaries Commission or Departmental Chief Executive, to whom a matter with respect to the boundaries of areas, including a proposal for the amalgamation of areas, has been referred, exercising its functions to examine and report on the matter.
The inquiry is not itself the examination of the matter or proposal that is required to be undertaken; rather, it is held for the purpose of exercising the function of such an examination.
The importance of this distinction is that it means that the inquiry that is to be held under s 263 is not itself required to be conducted as an examination of the matter or proposal that has been referred by the Minister. The obligation under s 263 is to hold an inquiry, not to inquire in the sense of examine.
Section 263 identifies that an inquiry under the section is to be conducted in public. The obligation is to “hold” an inquiry: s 263(2) and (2A). Reasonable public notice is to be given of the “holding” of the inquiry: s 263(2B). Members of the public must be allowed “to attend any inquiry held” under the section: s 263(5). This means that an inquiry under the section is only that process that is held in public. The Boundaries Commission or Departmental Chief Executive holding an inquiry under the section may make other inquiries and receive information and submissions other than during the public hearing of the inquiry, as part of its examination of the matter or proposal referred to it under s 218F. However, such examination is not part of the inquiry held under s 263.
Section 263 does not prescribe the practice or procedure by which an inquiry under the section is to be held. This stands in contrast to public inquiries held under Pt 8 of Ch 13 of the Act.
Section 264 does prevent a person attending proceedings before the Boundaries Commission from being represented by an Australian lawyer or any other person acting for a fee or reward (s 264(1)) except in certain circumstances (s 264(2)). A lawyer may, however, prepare any documents or submissions or tender any legal advice in connection with any proceedings before the Boundaries Commission: s 264(2)(c). The reference to “proceedings before the Boundaries Commission” may include an inquiry under s 263 held by the Boundaries Commission or the Departmental Chief Executive: see s 218F(2).
These restrictions on representation in proceedings (including an inquiry) before the Boundaries Commission (or the Departmental Chief Executive) do not prescribe positively the procedure that must be followed in the hearing of the proceedings, but rather proscribe certain people from representing others in proceedings.

Having regard to relevant considerations

When considering “any matter referred to it that relates to the boundaries of areas …”, the Boundaries Commission or Departmental Chief Executive is required “to have regard” to the factors in s 263(3) of the Act.
As the Court of Appeal noted in Botany Bay City Council v Minister for Local Government at [39]: “[t]he reference in subs (3) to any ‘matter referred’ is a reference to that which was referred pursuant to subs (1)”. The role of the Departmental Chief Executive to whom a proposal has been referred by the Minister is to examine and report on that proposal: Botany Bay City Council v The State of New South Wales [2016] NSWCA 243 at [92], [93]. In this case, the matters referred were the Oberon proposal, the Cabonne proposal and the Gundagai proposal, which were made by the Minister to amalgamate the respective local government areas.
The factors prescribed by s 263(3) are:

(a)   the financial advantages or disadvantages (including the economies or diseconomies of scale) of any relevant proposal to the residents and ratepayers of the areas concerned,
(b)   the community of interest and geographic cohesion in the existing areas and in any proposed new area,
(c)   the existing historical and traditional values in the existing areas and the impact of change on them,
(d)   the attitude of the residents and ratepayers of the areas concerned,
(e)   the requirements of the area concerned in relation to elected representation for residents and ratepayers at the local level, the desirable and appropriate relationship between elected representatives and ratepayers and residents and such other matters as it considers relevant in relation to the past and future patterns of elected representation for that area,
(e1)   the impact of any relevant proposal on the ability of the councils of the areas concerned to provide adequate, equitable and appropriate services and facilities,
(e2)   the impact of any relevant proposal on the employment of the staff by the councils of the areas concerned,
(e3)   the impact of any relevant proposal on rural communities in the areas concerned,
(e4)   in the case of a proposal for the amalgamation of two or more areas, the desirability (or otherwise) of dividing the resulting area or areas into wards,
(e5)   in the case of a proposal for the amalgamation of two or more areas, the need to ensure that the opinions of each of the diverse communities of the resulting area or areas are effectively represented,
(f)   such other factors as it considers relevant to the provision of efficient and effective local government in the existing and proposed new areas.

To assist the Boundaries Commission or the Departmental Chief Executive in determining the attitude of the residents and ratepayers of an area or areas for the purposes of s 263(3)(d) of the Act, it may conduct (in such manner as it thinks appropriate) an opinion survey or poll of the residents and ratepayers: s 265(1).
The actions of holding an inquiry in relation to the proposal and having regard to the factors in s 263(3) in considering a proposal are not themselves an “examination” of the proposal; rather they are done by the Boundaries Commission or Departmental Chief Executive “for the purpose of exercising its functions” of examining and reporting on the proposal (in the case of an inquiry) or “considering” the proposal (in the case of having regard to the factors in s 263(3)).
This distinction is important. It means that there is no statutory obligation under s 263 on the Boundaries Commission or the Departmental Chief Executive to hold the inquiry or to have regard to the factors in s 263(3) by way of an “examination”. This is particularly evident from the words used by the legislature in s 263(3). The obligation is to “have regard to” the factors when “considering” the matter referred, not to “examine” the factors when “examining” the matter referred.

Undertaking the examination of the proposal

Apart from the holding of an inquiry and having regard to the factors in s 263(3), the Act does not prescribe what is required by the examination of the proposal or how the examination should be undertaken. These matters are left to the judgment of the Boundaries Commission or the Departmental Chief Executive to whom the matter has been referred.
The Boundaries Commission or Departmental Chief Executive may invite submissions from affected councils and members of the public on the proposal generally and on the factors in s 263(3) in particular. This was done by each Delegate in this case. The call for and consideration of written submissions was undertaken for the purpose of examining the proposal.
The Boundaries Commission or Departmental Chief Executive may engage a consultant or any other person to provide information or advice on particular aspects of that proposal or factors in s 263(3). This was done by the Boundaries Commission in Minister for Local Government v South Sydney City Council (2002) 55 NSWLR 381; [2002] NSWCA 288.
The Boundaries Commission or Departmental Chief Executive may assign “to an agent the task of recording, collating, organising and summarising a mass of submissions covering a range of discordant issues”: Minister for Local Government v South Sydney City Council at [211].
These are some of the ways in which the Boundaries Commission or Departmental Chief Executive may undertake the functions of examining and reporting on the proposal referred to it. But it is not obliged to do these things by the terms of s 263 of the Act or the nature of the functions of examining and reporting on the proposal.

Furnishing the report of the examination

The fourth step in the process prescribed by Div 2B is that the Departmental Chief Executive (to whom the Minister has referred a proposal under s 218F) must furnish the Departmental Chief Executive’s report of the examination of the proposal to the Boundaries Commission for review and comment: s 218F(6)(a).

Reviewing and commenting on the report

The fifth step in the process prescribed by Div 2B is that the Boundaries Commission must review the report of the Departmental Chief Executive and send its comments to the Minister: s 218F(6)(b).
This function of the Boundaries Commission to review and comment on the Departmental Chief Executive’s report is more confined than the Departmental Chief Executive’s function of examining and reporting on the proposal referred by the Minister. As the Court of Appeal has recently held in Botany Bay City Council v The State of New South Wales at [93] and [94]:

It follows from the reasoning of the Court in Botany Council, that the functions of the Chief Executive on the referral of a proposal by the Minister are not at large, but are constrained by the purpose of the referral. The stark contrast between the language of ss 218F(1) and 263(1) on the one hand, and s 218F(6) on the other, demonstrates that the functions of the Commission in conducting a review of a report of the Chief Executive are substantially more confined than the functions of the Chief Executive in preparing a report on a proposal by the Minister. Under s 218F(6) the Commission is not to examine and report on the Minister’s proposal. Instead, the Commission is directed to review the Chief Executive’s report and send its comments to the Minister.
It is no doubt true, as Mr Robinson submitted, that the word “review”, considered in isolation, is capable of describing a reconsideration of the merits of the decision or a proposal. But s 218F(6) must be construed in context. The provision applies to an amalgamation proposal or a proposal that is not supported by at least one of the councils affected. It is the Chief Executive’s report on the proposal, not the proposal itself, that is to be furnished to the Commission for “review and comment”. The Commission is then required to “review the report and send its comments to the Minister”. The “comments” are clearly intended to be the views of the Commission arising from its review of the Chief Executive’s report.

The Boundaries Commission’s role in reviewing and commenting on the Departmental Chief Executive’s report does not extend to re-examining the merits of the Minister’s proposal for amalgamation that has already been examined by the Departmental Chief Executive. The Court of Appeal dismissed an argument to this effect in Botany Bay City Council v The State of New South Wales at [95]-[98] for the following reasons. First, the Court held that the Boundaries Commission’s expertise in local government issues and independence from the Minister does not demonstrate that the Boundaries Commission’s role extends to re-examining the merits of a proposal. Rather, the Act is structured so that this expertise and independence is utilised for the purpose of reviewing and commenting on the Departmental Chief Executive’s report. Second, while the statutory language of ss 218F(6) and (7) permits the Boundaries Commission to identify matters that may warrant modification of a proposal in its comments to the Minister, it does not require the Boundaries Commission to “…undertake its own independent evaluation of whether the proposal should be recommended for implementation”. Third, the Court held that if the Boundaries Commission were to be entitled to re-examine the merits of the Minister’s proposal under the Act, the statutory procedures governing the Departmental Chief Executive’s examination of the merits of the proposal would not apply. The result would be that, contrary to the intention of the Act, the initial examination of the proposal would be set at nought and the public would not be entitled to participate in the decision making process.

Deciding whether or not to recommend implementation of the proposal

The sixth step under Div 2B is the Minister considering the Departmental Chief Executive’s report and, if applicable, the Boundaries Commission’s comments on that report. The Minister may recommend to the Governor that the proposal be implemented with such modifications that arise out of the Departmental Chief Executive’s report and, if applicable, the Boundaries Commission’s comments on that report and with such other modifications as the Minister determines, but may not do so if the Minister is of the opinion that the modifications constitute a new proposal: s 218F(7). Alternatively, the Minister may decline to recommend that the proposal be implemented: s 218F(8).

The proclamation

If the Minister recommends to the Governor that the proposal be implemented, the process under Divs 2A and 2B culminates with the Governor making the proclamation amalgamating the areas. As I have noted earlier, a proclamation by the Governor may include provisions of the same kind as are referred to in s 213. The provisions include those “for or with respect to”: the transfer or apportionment of assets, rights and liabilities; the transfer of staff; the alteration of ward boundaries; the holding of elections; the termination, cessation, dissolution or abolition of anything existing before the proclamation takes effect; the preservation or continuance of anything existing before the proclamation takes effect, amongst other matters: s 213(1) of the Act. The proclamation may also “authorise any matter or thing to be from time to time determined, applied or regulated by any specified person or body”: s 213(2) of the Act.

The making of the proposal

The applicants’ challenges

The applicants’ first grounds of challenge concern the making of each of the Oberon proposal, the Cabonne proposal and the Gundagai proposal. The grounds of challenge are expressed in the alternative:

there was no decision to make the proposals at all;

if there was a decision to make the proposals, the decision was made not by the Minister but by others, including Cabinet;

if the Minister did make a decision to make the proposals, his decision was predetermined; or

any decision of the Minister to make the proposals was manifestly unreasonable.

I will elaborate on each of these arguments.

The applicants firstly argued that “there was no decision by [the Minister] under s 218E(1), because on the balance of probabilities [the Minister] was after June [2015] and until April 2016 a bystander in the statutory process of forced Council amalgamations under sections 218F and 263” (par 5(a), p 2, submissions of applicants, 3 June 2016). The applicants noted that the Minister did not produce, in response to various notices to produce issued by the applicants, “the usual Decision Memorandum or file or document evidencing or referring such a decision [under s 218E(1)] to him”. The applicants noted that such documents do exist in respect of the Minister’s decision in May 2016 under s 218F(7) to recommend to the Governor that the proposals be implemented (par 5(e), p 3, submissions of applicants, 3 June 2016 and see also par 4(f), p 2, outline submissions of applicants in closing, 31 May 2016).
The applicants referred to the absence of evidence from the Minister or any officer of his staff or department to explain what happened in relation to making the proposals under s 218E(1), referring to Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 (par 4(g), p 2, outline submissions of applicants in closing, 31 May 2016 and T 26/5/16, p 181).
The applicants drew the inference from the absence of decision memoranda in respect of a decision under s 218E(1) to make the proposals for amalgamation and the absence of evidence of the Minister about making the decision that the Minister did not make any such decision at all (T 26/5/16, p 184).
The applicants secondly argued that the decision to make the proposals was made by others, either Cabinet or by KPMG and the Department of Premier and Cabinet (‘DPC’) in an informal arrangement which they called a partnership. The applicants submitted that the decision to make the proposals was made by Cabinet on 17 or 18 December 2015, as announced by the Premier on 18 December 2015 and evidenced in the press release of that date (par 4(a), p 2, outline submissions of applicants in closing, 31 May 2016; par 5(f), p 3, submissions of applicants, 3 June 2016 and T 26/5/16, p 176).
Alternatively, the applicants submitted that the decision was made by KPMG/DPC who were in “a joint venture to amalgamate selected NSW councils including the Applicants”. The applicants argued that the Minister “was a mere bystander, after June [2015], as was his Department in the NSW Local Government Reform Process. KPMG/DPC assumed their roles. For example, the Minister did not place his signature on the Proposal Documents, nor even on the draft documents which was simply used at will by KPMG/DPC for the purposes of their enterprise” (par 5(i), p 3, submissions of applicants, 3 June 2016). The applicants argued that the Minister “had no role in the core public process under sections 218F and 263 other than as an amanuensis as directed by KMPG/DPC” (par 5(k), p 4, submissions of applicants, 3 June 2016).
The applicants thirdly argued that if the Minister did in fact make the decision to make the proposals for amalgamation, his decision was “illusory and predetermined by others” (par 5(l), p 4, submissions of applicants, 3 June 2016 and par 4(h), p 2, outline submissions of applicants in closing, 31 May 2016). Presumably, the “others” are either Cabinet or KPMG/DPC. The applicants argued that the only decision the Minister made was “a decision to progress amalgamations, not a decision to propose them” (T 26/5/16, pp 176, 180 and 182). The decision to make the proposals was made by others and the Minister only decided to progress the proposals for amalgamation made by others.
The applicants fourthly argued that if the Minister did make a decision to make the proposals for amalgamation, his decision was manifestly unreasonable. The applicants submitted that the grounds of manifest unreasonableness were threefold.
First, it was manifestly unreasonable to make the decision based on a KPMG report or KPMG material, which the Minister knew was not publicly available and would not be made available to the Delegate, the applicant councils or members of the public to assist them in undertaking the statutory processes of examination, inquiry and review. The applicants argued that the undisclosed KPMG report or material explained and demonstrated the basis of the proposals. Without access to the information in the undisclosed KPMG report or material, the participants could not perform their functions fully under the statutory processes. Further, it was manifestly unreasonable of the Minister to make and refer the proposals but to frustrate the processes of examination, inquiry, report and review by holding back the undisclosed KPMG report or material which justified his decision (pars 6(a)-(c), pp 3-4, outline submissions of applicants in closing, 31 May 2016 and T 26/5/16, pp 186-187; T 31/5/16, p 55).
Second, the applicants argued that it was manifestly unreasonable for the Minister to make a decision based on the disclosed KPMG documents, which allegedly proceeded upon flawed modelling. The applicants referred in particular to the modelling disclosed in the KPMG “Outline of Financial Modelling Assumptions for Local Government Merger Proposals Technical Paper” dated 19 January 2016 (‘KPMG Technical Paper’). The applicants argued that it was illogical to construct a model which proceeds under the misapprehension that amalgamations only result in financial benefits but not to consider or make provision for the possibilities of diseconomies of scale and financial disadvantages to the areas to be amalgamated (especially when these are requirements under s 263(3) of the Act) (pars 1(a) and (b), p 2, applicants’ supplementary reply points, 6 June 2016).
The applicants also argued that it was illogical to construct a model that does not consider the specific local circumstances of each of the areas to be amalgamated. The model inappropriately adopted as a reference point a generic rural council, rather than focussing on the particular local circumstances, and used long term financial plan data rather than the most current audited accounts of each council. The applicants cited R (on the application of Forest Care Home Ltd) v Pembrokeshire County Council (2011) 14 CCLR 103; [2010] EWHC 3514 (Admin) at [131] and [136] where the council, in making a decision based on modelling that failed to consider local factors, was held to have erred in law (par 2, p 2, applicants’ supplementary reply points, 6 June 2016 and T 31/5/16, pp 42-44).
Third, the applicants argued that it was manifestly unreasonable to model the net financial benefits of the proposals without having regard to the “unique status and circumstances of farming community rural centre based councils”. The applicants submitted that in the areas to be amalgamated are rural centres as defined in s 354B of the Act. Under s 218CA, staff numbers in these rural centres must, as far as is reasonably practicable, be maintained after the amalgamation. The applicants argued that the model failed to take into account this requirement in calculating the wage benefits from the amalgamation. The modelling assumptions in the KPMG Technical Paper assumed wage benefits for regional councils, which are different to rural centres (par 3, pp 2-3, applicants’ supplementary reply points, 6 June 2016 and par 5(b), p 3, outline submissions of applicants in closing, 31 May 2016).

The respondents’ rebuttal

The respondents rebutted the applicants’ arguments, put in the alternative, that the Minister did not make any decision to make the proposals for amalgamation but that instead, the decision was made by others, whether Cabinet or KPMG/DPC. The respondents submitted that there was ample evidence on which the Court can infer that the Minister decided to make the proposals under s 218E(1) of the Act.
The Minister’s letter dated 6 January 2016 referring the proposals under s 218F(1) stated that “[a] list of proposals initiated by me pursuant to section 218E(1) of the [Act] is attached and marked Attachment A”. Attachment A included each of the Oberon proposal, the Cabonne proposal and the Gundagai proposal.
The Minister’s letter also attached, as Attachment B, the proposal documents for each proposal being “Merger Proposal: Bathurst Regional Council, Oberon Council, January 2016”, “Merger Proposal: Blayney Shire Council, Cabonne Council, Orange City Council, January 2016” and “Merger Proposal: Cootamundra Shire Council, Gundagai Shire Council, January 2016”. Each proposal document contained a foreword headed “Minister’s Foreword” and bore the signature of the Minister above his name. In the Minister’s Foreword to the proposal documents for Cabonne and Gundagai, the Minister said “I am putting forward the proposal to merge the local government areas of [the named councils]”. The Minister’s Foreword to the proposal document for Oberon is expressed in the passive voice, “… the proposal to merge the local government areas of Bathurst and Oberon is being put forward”, but there is no reason to think that the Minister was not the person putting forward the proposal as he said he was doing for Cabonne and Gundagai (par 32, p 10, respondents’ further submissions, 31 May 2016).
The respondents submitted that the applicants’ reliance on Jones v Dunkel is misplaced. The documents referred to above provided ample evidence that a decision to make the proposals under s 218E was made by the Minister. There was no basis for an adverse inference (to the effect that the Minister made no decision) that the Minister needed to be called in order to displace: Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd [2014] NSWCA 158 at [14] and [81]. The rule in Jones v Dunkel has no operation (par 33, p 10, respondents’ further submissions, 31 May 2016).
The respondents rejected the applicants’ allegation of predetermination, namely that the decision to implement the amalgamations was predetermined by Cabinet on or about 18 December 2015 or by KPMG/DPC and that the Minister’s decision and referral of the proposals on 6 January 2016 was illusory or a charade. The respondents submitted that this ground of challenge should be rejected for at least three reasons.
First, no inference of predetermination can be drawn from the media release of 18 December 2015 of the Premier and the Minister. The press release refers only to “proposed mergers” in general terms not any specific proposal. The media release stated that “[t]he NSW Government is using the existing process set out in the Local Government Act to consider council mergers”. The Minister is quoted as stating that “[o]ur process will provide an objective assessment of the merger benefits and impacts, and give the community a chance to have a say before a final decision is made”. The media release said that “[d]etailed merger proposals are now being finalised and will be referred to the Chief Executive of the Office of Local Government (OLG) for examination and report under the existing process set out in the Local Government Act”. No inference of “predetermination” can be drawn from this document: it clearly states that the proposals will be dealt with under the existing process in the Act and that no final decision has been made (par 34(a), p 11, respondents’ further submissions, 31 May 2016 and T 31/5/16, p 91).
Second, as a matter of fact, the Minister declined to recommend the implementation of some proposals for amalgamation, including the Walcha proposal (involving the amalgamation of Walcha Council and Tamworth Regional Council). This evidences that the Minister was making the decisions and had not predetermined the outcome (par 34(b), p 11, respondents’ further submissions, 31 May 2016 and T 31/5/16, p 92).
Third, the letter sent by the Minister to the mayors and councillors of the councils affected by the amalgamations seeking expressions of interest to serve on any new council expressly said that “no decision has been made on any merger proposal” (an example of the letter was attached to Mr Wallace’s affidavit sworn 23 May 2016). This statement is evidence against predetermination and certainly is not supportive of it (par 34(c), p 11, respondents’ further submissions, 31 May 2016).

The respondents rejected the applicants’ various arguments that the Minister’s decision to make the proposals for amalgamations was manifestly unreasonable.
At the outset, the respondents submitted that the ground of manifest unreasonableness is inapplicable to the making of a proposal under s 218E(1) of the Act. There is no requirement for the making of a “valid” proposal, other than that it must be a proposal of a kind that falls within the terms of the Act (a proposal for amalgamation of two or more areas referred to in s 218A or a proposal to alter the boundaries of one or more areas referred to in s 218B) (T 31/5/16, p 82). The applicants noted that a proposal may be made under s 218E(1) not only by the Minister but also by a council affected by the proposal or by an appropriate minimum number of electors. There is no “minimum agenda” in respect of making a proposal, such as relevant matters that must be considered (T 31/5/16, pp 82 and 93). Persons of the three classes of persons who may initiate a proposal may decide to make a proposal for diverse motives and after having regard to diverse considerations. There is no warrant in the statutory step in s 218E(1) of making a proposal to judicially review the matters taken into account in making a decision or the reasonableness or unreasonableness of a decision to make a proposal. This is equally true for the Minister making a proposal. The Minister’s decision to make a proposal cannot be reviewed on the ground of manifest unreasonableness (T 31/5/16, pp 92-93).
However, if the ground of manifest unreasonableness is available, the respondents submitted that the applicants have not established that the Minister’s decision was manifestly unreasonable in any of the three ways argued.
The applicants’ first argument was that it was manifestly unreasonable to make the decision without making the undisclosed KPMG report or material available to the Delegates, the affected councils and members of the public. The respondents submitted that this argument fails at multiple levels.
First, on a proper construction of the Act, the Minister, in making a proposal and referring it for examination and report, was under no obligation to disclose his motivations or the basis for his motivations. The making of the proposal stands outside the examination, inquiry and reporting stage of the administrative process, and can be made without evidence of the matters in s 263 of the Act, or for a range of motives or purposes, including conflicting ones. So much is clear from the fact that a proposal can be made “by an appropriate minimum number of electors”, some of whom for example might actively oppose the proposal, but want to see the matter put to rest by an examination and inquiry (par 37, p 13, respondents’ further submissions, 31 May 2016).
Second, the examination, inquiry and reporting stage of the administrative process, for each proposal, demonstrated that a reasonable opportunity was in fact given to the Delegates, the affected councils and members of the public to participate in the process. The KPMG reports and material that were publicly disclosed contained sufficient information to enable the participants to participate meaningfully in the statutory process. The respondents, in their submissions to the Court, analysed the KPMG Technical Paper, the list of council data sources used by KPMG (which set out the long-term financial plans from which data for the modelling was taken), a spreadsheet summarising outputs from KPMG’s modelling and other documents. The respondents submitted that the information disclosed in these documents was sufficient to enable a detailed critique of KPMG’s analysis to be put forward. Each applicant council made use of experts on public financing to criticise KPMG’s work and the Delegates addressed those criticisms. Oberon, Cabonne and Gundagai Councils made submissions to the Delegates relying on expert reports on public financing, including reports by Dr Drew and Professor Dollery (pars 38-49, respondents’ further submissions, 31 May 2016).
Third, although KPMG’s actual modelling (that is the mathematical formulas KPMG used and the application of those formulas to the publicly available data) was not made publicly available, it was not manifestly unreasonable to not make that actual modelling publicly available and it was not manifestly unreasonable for the Minister to make a decision to make the proposals without making the actual modelling publicly available (par 50, p 16, respondents’ further submissions, 31 May 2016).
The applicants’ second argument was that it was manifestly unreasonable to decide to make the proposals based on the KPMG Technical Paper in circumstances where the modelling and assumptions in the KPMG Technical Paper were so flawed that no reasonable decision maker could have made use of them. The respondents rejected this argument for two reasons.
First, it is well established that the ground of review of manifest unreasonableness must be established on the material before the decision maker (in this case the Minister). There was nothing before the Minister when he made the proposals to suggest that the modelling and assumptions in the KPMG Technical Paper were so flawed that they could not be relied upon (par 37, respondents’ summary of argument, 23 May 2016). The criticisms of the KPMG modelling made by the experts called by the applicants, Dr Drew and Professor Dollery in their evidence before the Court, was not before the Minister and he cannot have acted manifestly unreasonably by not considering criticisms of which he was unaware.
Second, the respondents noted that the criticisms made by Dr Drew and Professor Dollery in their evidence before the Court were the same criticisms that were made in the submissions of the applicant councils and some members of the public to the Delegates during the examination and inquiry process. The submissions were based, apparently, on the views of the same experts. The criticisms in the submissions were considered and addressed by the Delegates in their respective reports (par 60, p 17, respondents’ further submissions, 31 May 2016). The respondents submitted that it was not manifestly unreasonable for the Minister to make a decision based on the KPMG Technical Paper that was publicly disclosed and able to be, and was in fact, criticised by the applicant councils and some members of the public in the statutory process of examination and inquiry on the proposals.
The applicants’ third argument of manifest unreasonableness was that the KPMG Technical Paper was flawed because it failed to take into account the special measures for maintenance of staff numbers and rural centres under s 218CA and s 354B of the Act. The problem with this argument, the respondents submitted, is that the KPMG assumptions plainly did take those statutory provisions into account. The KPMG Technical Paper stated (at p 3) that “[n]o net staffing reductions were assumed for regional councils”, but “efficiencies are generated by a merger that allows a regional council to re-allocate duplicated back-office, administration and corporate support roles to frontline service positions”. Hence, maintenance of staff in the rural centres in the areas of regional councils was assumed (par 62, respondents’ further submissions, 31 May 2016 and T 31/5/16, p 96).

The making of the proposal was not invalid

The applicants have not established any of their grounds of challenge to the Minister’s decision to make the proposals under s 218E(1) of the Act. My reasons accord with the respondents’ submissions.
The applicants have not established that the Minister did not make the decision under s 218E(1) to make the Oberon proposal, the Cabonne proposal and the Gundagai proposal. The Minister’s letter of 6 January 2016 referring the proposals for examination and report and the proposal documents are evidence that the Minister did in fact make the decision. The Minister referred to the media release of 18 December 2015 where he announced “my intention to prepare proposals to amalgamate or change the boundaries of a number of local government areas across the State”. The Minister then stated that “[a] list of the proposals initiated by me pursuant to section 218E(1) of the Local Government Act 1993 … is attached”. The list included the Oberon proposal, the Cabonne proposal and the Gundagai proposal. The Minister said to the Departmental Chief Executive: “By this letter I am referring these proposals to you pursuant to section 218F(1) of the Act for examination and report …”. The Minister signed the letter above his name. The proposal documents for the Oberon proposal, the Cabonne proposal and the Gundagai proposal (attached to the Minister’s letter of 6 January 2016) contained a Minister’s Foreword stating that the Minister was putting forward the proposals.
The media release of 18 December 2015 of the Premier and the Minister does not prove to the contrary. Cabinet may well have adopted a range of proposed reforms to the local government sector, including a policy in favour of amalgamations of local government areas as a matter of principle. The media release refers to that policy in general and contingent terms. It says that 35 new councils are being “proposed” in NSW, that the Government “is using the existing process set out in the Local Government Act to consider council mergers”, that the Minister had stated that “[o]ur process will provide an objective assessment of the merger benefits and impacts, and give the community a chance to have a say before a final decision is made” and that “[d]etailed merger proposals are now being finalised and will be referred to the Chief Executive … for examination and report …”.
These statements affirm that any proposal for amalgamations (once finalised) will follow the process set out in the Act. This process includes the Minister deciding under s 218E(1) to make the proposals and referring the proposals under s 218F(1) for examination and report, and the examination, inquiry and report on the proposals under s 263, during which process the community would have a chance to have their say on the proposals. The media release affirms that a final decision on any proposal for amalgamations has not been made and will not be made until the process set out in the Act has been followed.
No inference can be drawn from these statements that the Minister had not made and would not make a decision under s 218E(1) to make the proposals, or that instead Cabinet had made or would make the decisions to make the proposals. No inference can also be drawn from these statements that any decision that the Minister did make on 6 January 2016 to make the proposals was “predetermined” by Cabinet on or about 18 December 2015.
The alternative argument that KPMG and DPC were in some form of joint venture to force amalgamations of local government areas and that they made the decisions under s 218E(1) to make the proposals is without foundation. No doubt KPMG as the consultant employed by the NSW Government to assist in the design and implementation of local government reform, including amalgamations, and DPC as one of the key government departments involved in the implementation of that policy, did provide material assistance. This assistance included preparing the KPMG Technical Paper and the proposal documents, both as to the substantive content (such as the modelling assumptions and the model outcomes, including financial benefits of amalgamations) and the form (such as typing, typesetting, layout and application of the Minister’s signature to printed copies of the proposal documents). But provision of this assistance does not establish that KPMG and/or DPC actually made the decision under s 218E(1) to make the proposals or that they actually referred the proposals under s 218F(1) for examination and report or that the Minister did not actually make that decision under s 218E(1) or refer the proposals under s 218F(1).
The applicants’ challenge to the Minister’s decision to make the proposals on the ground of manifest unreasonableness was misconceived. As the respondents submitted, the Act does not set any decision making agenda on a person, including the Minister, making a proposal under s 218E(1). Persons of one of the three classes of persons who may initiate a proposal under s 218E(1) may make a proposal for diverse and potentially conflicting motives and after having regard to diverse considerations, not all of which may be relevant to the Act. There is no warrant in the Act to evaluate the motives of or matters considered by the persons who make a proposal. Take for example the class of a minimum number of electors. How could the motives of or the matters considered by the minimum number of electors (at least 250) sensibly be evaluated? The Act only requires that one of the classes of persons who may initiate a proposal under s 218E(1) in fact makes a proposal that meets the description of a proposal under ss 218A or 218B of the Act. That is sufficient to initiate the process under Div 2B. There is no scope to judicially review the decision to make the proposal on the grounds of failure to consider relevant matters or consideration of irrelevant matters or manifest unreasonableness. This conclusion is sufficient to dispose of, at the threshold, the applicants’ challenge to the Minister’s decision to make the proposals on the ground of manifest unreasonableness.
In any event, however, the applicants have not established that the Minister’s decision under s 218E(1) to make the proposals was manifestly unreasonable in any of the ways argued by the applicants. It was not manifestly unreasonable to make the decision without releasing the undisclosed KPMG material. Whilst there might be some limitations on the purpose for which a decision under s 218E(1) may be made and the considerations to which regard may be had in making a decision under s 218E(1) flowing from the subject matter, scope and purpose of the Act, not making publicly available the undisclosed KPMG material is not one such limitation.
The applicants also have not established that the contents of any undisclosed KPMG material was of such a nature that not to disclose publicly that material would frustrate the statutory process of examination, inquiry, report and review of the proposal. The Minister did disclose publicly other material, including the KPMG Technical Paper containing the modelling assumptions, the input sources of data used in the modelling, and the outputs of the modelling included in the proposal documents. The applicants have not established that, in circumstances where this other material was proposed to be and was in fact made publicly available by the Minister, it was manifestly unreasonable for the Minister to decide to make the proposals but not make the undisclosed KPMG material publicly available.
The applicants have not established that it was manifestly unreasonable to decide to make the proposals based on the publicly disclosed KPMG material, including the KPMG Technical Paper. Even if that material were to have contained factual errors or be based on erroneous assumptions or flawed methodologies, that would not cause the Minister’s decision, which considered or was based on that material, necessarily to be manifestly unreasonable. It has long been established that a decision is not manifestly unreasonable simply because it might be factually wrong. The validity of a decision does not depend on the soundness of the decision: see, for example, Parramatta City Council v Pestell (1972) 128 CLR 305; [1972] HCA 59 at 318, 323, 327 and the cases cited in Walsh v Parramatta City Council (2007) 161 LGERA 118; [2007] NSWLEC 255 at [62], [63].
In any event, however, the applicants have not established that the KPMG material considered by the Minister was so flawed that no reasonable Minister could have made a decision under s 218E(1) after considering that material.
Finally, the applicants have not established that the publicly disclosed KPMG material, including the KPMG Technical Paper, was factually flawed in its assumptions about the staff numbers to be maintained in the rural centres in the areas to be amalgamated under the Oberon proposal, the Cabonne proposal or the Gundagai proposal. The KPMG Technical Paper stated that no net staffing reductions were assumed. The reallocation of staff from duplicated back-office, administrative and corporate support roles to frontline service positions involves the maintenance of staff numbers, not a reduction.
Again, however, even if the KPMG Technical Paper had made a mistake of fact about staff numbers, this would not necessarily result in the Minister’s decision which considered that Technical Paper being manifestly unreasonable.
I reject the challenge to the Minister’s decision under s 218E(1) to make the proposals.

The referral of the proposals

The applicants’ challenges

The applicants’ challenges to the Minister’s referral of the proposals for amalgamation under s 218F(1) to the Departmental Chief Executive for examination and report were based on similar grounds to their challenge to the decision under s 218E(1) to make the proposal. The applicants argued that “the referral was as a matter of probability a step on the predetermined path to the amalgamations”, citing Betfair Pty Ltd v Western Australia (2008) 234 CLR 418; [2008] HCA 11 at [119] (par 4(h), p 2, outline submissions of applicants in closing, 31 May 2016).
The applicants argued that the Minister had no power under s 218F(1) to refer a decision made by others, including Cabinet. Under s 218F(1), the Minister may only refer a proposal that the Minister made or that the Minister received from one or other of the classes of persons who can initiate a proposal under s 218E(1), namely, a council affected by the proposal or an appropriate minimum number of electors. The applicants submitted that neither Cabinet nor KPMG and DPC acting in a joint venture fall within these classes of persons who can initiate a proposal under s 218E(1). Hence, any proposal initiated by them and received by the Minister could not be referred by the Minister under s 218F(1) for examination and report (T 26/5/16, p 176).
The applicants also relied on the ground of manifest unreasonableness. The applicants argued that it was manifestly unreasonable to refer the proposals without making available the undisclosed KMPG material. It was manifestly unreasonable to refer a proposal for examination and report where such functions were “impossible to undertake and futile” because all of the KPMG material which explained and demonstrated the basis of the proposal was withheld (pars 6(a), (b) and (c), pp 3-4, outline submissions of applicants in closing, 31 May 2016 and par 7(a), p 5, submissions of applicants, 3 June 2016).
The applicants also argued that it was manifestly unreasonable to refer the proposals for amalgamation of areas with rural centres that were founded upon a stated net financial benefit over 20 years which paid no regard to the requirement to maintain staff numbers in the rural centres under s 218CA and s 354B (par 6(d), p 4, outline submissions of applicants in closing, 31 May 2016).

The respondents’ rebuttal

The respondents rejected the applicants’ arguments for the same reasons they gave in response to the applicants’ challenge to the decision to make the proposals. The applicants submitted that the evidence established that the Minister decided under s 218E(1) to make the proposals and he referred the proposals under s 218F(1) for examination and report. There was no predetermination.
The respondents submitted that the ground of manifest unreasonableness is inapplicable to the referral of the proposals under s 218F(1). The Minister does not have a discretionary power under s 218F(1) but rather a mandatory duty to refer a proposal that the Minister has made or has received under s 218E(1). Hence, the Minister was bound to refer the proposals he had made for examination and report, regardless of whether to do so was unreasonable in the circumstances or not (T 31/5/16, p 95).

● [s]upport the Government to effectively communicate the benefits of proposed mergers to each affected community and the broader population. (p 3)

The request for quotation set out what the contractor was being invited to do. This included developing a model that:

(a)   [s]upports the development and consideration of options for optimal local government mergers, with the following characteristics:
●   [u]tilises the recommendations and maps of the Independent Local Government Review Panel as a starting point for analysis;
●   key demographic and financial data for all councils eg population, population growth, rates, electors per councillor, revenue, assets, debt, administration expenditure;
●   performance against each of the Fit for the Future benchmarks;
●   Priorities and challenges for the council/community/region, based on relevant State and regional plans and council’s strategic plans (and other available material eg publicly available FFTF proposals …

(b) [e]nables aggregation and dissemination of this information to analyse and compare possible merger options …

The contractor was also invited to “[d]esign a template/narrative that can be populated with requisite analysis to present preferred options for local government reform in all councils in an easy to understand format including:

(d)   [p]referred structural change option, including councils where mergers are not proposed – description and map;
(e)   [c]omparison of new and previous local governments, based on key quantitative and qualitative material;
(f)   [r]ationale for, against key criteria (improved value for ratepayers’ dollars, better services, better infrastructure) using quantitative and qualitative information. (p 4)

In the section on assessment of quotations, the OLG said that it would assess: “[q]ualifications and CVs held by individuals in the project team”, “[r]elevant experience, proven capability and successful outcomes in other projects by both the tenderer and the personnel who will be involved in the project”, “[d]emonstrated competency and experience to project manage the engagement” and “[v]alue for money” (p 6).
The respondents submitted that the Government was requesting the contractor to undertake and develop a model of a particular kind for the local government reform project.
The respondents submitted that the subsequent documents and work done by KPMG supported the inference that KPMG did what they were engaged to do. KPMG developed the independent modelling, using its skills and experience that allowed it to win the bid and as they were called upon to do by the contract documents. Moreover, they did this independently.
The respondents rebutted the applicants’ suggestion that the modelling and assumptions set out in the KPMG Technical Paper and used to derive the financial benefits described in the proposal documents were developed by DPC or by DPC in a joint venture with KPMG. The respondents referred to an email from one DPC officer to another that candidly noted that the key assumptions and data sources for the model were KPMG’s work, but that she had removed KPMG’s branding in producing a version for publication. Nevertheless, the published version was an accurate reflection of KPMG’s work. This established that the modelling assumptions and data sources were KPMG’s work (T 6/6/16, p 203).
The respondents next submitted that, even if contrary to the evidence, the applicants established that KPMG did not model independently, this would not invalidate any step in the statutory process (T 6/6/16, p 207). Any misleading representation about the independence of KPMG in undertaking the modelling and analysis did not cause the notice given, the inquiry held, the examination and report undertaken or the review and comment on the report to not satisfy the statutory requirements. The respondents submitted that a holistic analysis of what was done at each stage in the statutory process needs to be undertaken and any misleading representation must be considered in the whole context. For example, in assessing whether reasonable public notice was given, there needed to be a holistic analysis of all of the forms of public notice that were provided and an assessment of whether the misleading representation had the consequence of causing the public notice that had been provided not to be “reasonable public notice” for the purposes of s 363(2B) (T 6/6/16, pp 207-208 and 217).
The respondents submitted further that any misrepresentation in the documents made available on the Council Boundary Review website and referred to in the public notice could not cause the notice itself to be misleading or legally inadequate. There would have to be in the notice itself something that was misleading and deceptive about the subject matter of the notice before the notice was misleading and adequate. Cases such as Scurr v Brisbane City Council all concern inadequacy in the notice itself. (T 6/6/16, p 218).
The respondents submitted that any misrepresentation in the publicly available documents could not vitiate the examination and report by the Delegates, including the inquiries held. The mere fact that statements or figures in the documents are misleading or deceptive, or even wrong, cannot invalidate public decision making. The respondents submitted that all sorts of statements are made to those who exercise statutory power with varying degrees of accuracy. Public submissions may contain misleading or deceptive or even plainly wrong statements or information. The making of such submissions to a public decision maker cannot invalidate the exercise of power by the decision maker, even if the misleading or deceptive or wrong statements are accepted or acted upon by the decision maker. There is no error of law by a decision maker making a wrong finding of fact or an unsound decision. Misleading conduct, which is not characterised by fraud, bad faith or the like is, at least generally, insufficient to vitiate an administrative decision: Anderson v Minister for Infrastructure Planning and Natural Resources (2006) 151 LGERA 229; [2006] NSWLEC 725 at [79] (T 6/6/16, p 218).

Statements were not misleading and did not invalidate the amalgamation process

The applicants have not established that the statements concerning the independence of KPMG were misleading or, even if they were to be, that this invalidated any step in the statutory process in respect of each proposal. I agree with and adopt the respondents’ submissions.
First, I do not accept that the statements relied on by the applicants were misleading. KPMG was engaged as a contractor to provide financial consulting services to the NSW Government over an extended period of time in relation to local government reform. The various agreements tendered described the nature of the services to be provided. KPMG bid for and was successful in being awarded contracts to perform these services. KPMG used its knowledge, expertise and experience, which enabled it to be awarded the contracts, to perform the services. That knowledge, expertise and experience continued to develop with each contract performed; there were cumulative benefits over time, both for KPMG and the NSW Government. KPMG developed a special understanding of and insights into the Government’s local government reform project, which enabled KPMG to better provide the contracted services to the Government. The nature of the services to be provided, and the repeated engagements over an extended period of time, necessitated consultation, collaboration and co-operation between KPMG as the contractor and the Government as the client.
None of these matters concerning the working relationship between KPMG and the Government caused KPMG not to be an independent contractor providing independent advice and services. They certainly did not cause KPMG and the Government to be in any form of “joint venture” to amalgamate local government areas, including the applicants’ areas. The advice and services provided by KPMG, including the modelling assumptions and analysis, remained KPMG’s work. The fact that there was dialogue and discussion between KPMG and the Government, including on KPMG’s modelling assumptions and analysis, did not cause the relevant materials and documents to cease to be KPMG’s work.
In these circumstances, the statements relied on by the applicants concerning the independence of KPMG and of KPMG’s work were not misrepresentations. This conclusion is sufficient to dispose of this challenge.
In any event, however, any misrepresentation that might have been made in the documents did not vitiate any step in the statutory process for the amalgamation proposals.
The misrepresentations were not contained in the public notices required to be given under s 263(2B) of the Act. It is not sufficient that the misrepresentations were in documents made available on a website referred to in the public notices. That cannot cause the notices to be legally inadequate.
The documents in which the misrepresentations were contained were not documents required to be produced or publicly exhibited by the Act. The documents had no statutory status. Hence, any misrepresentation in the documents could not cause them not to be documents required by statute: see Woollahra Municipal Council v Minister for Local Government at [305]-[307].
The applicants have not established that any misrepresentation caused each Delegate to fail to have regard to any mandatory relevant matter (under s 263(3)) or to fail to exercise the duty to examine and report on the proposal (under s 263(1)). The mere fact that a repository of administrative power (the Delegates in this case) might consider a factually false or misleading statement (that is not fraudulent) does not, by that fact alone, cause any exercise of power to miscarry in law. It will only do so if, as a consequence of the false or misleading statement, a recognised ground of judicial review is established or a mandatory statutory requirement is not complied with: Woollahra Municipal Council v Minister for Local Government at [308].
In this case, the applicants have not established that the Delegates even took into account the statements alleged by the applicants as being misrepresentations, let alone that any such consideration was material in the Delegates exercising the functions of examining and reporting on the proposal. The applicants do not refer to any statement in each Delegate’s report establishing that the Delegate had regard to the misrepresentation or that the misrepresentation affected the Delegate’s examination of the proposal in any way.
The applicants also have not established that the misrepresentation affected in any way the Boundaries Commission’s review of and comment on each Delegate’s report. The sole focus of the Boundaries Commission’s review was each Delegate’s report; it did not consider any of the documents in which the misrepresentation was contained. The Delegate’s report contained no reference to the misrepresentation contained in the documents. Hence, the Boundaries Commission could not have considered the misrepresentation.
The allegedly misleading statements, therefore, have not had the legal consequence of invalidating any step in the statutory amalgamation process for the proposal. I reject this ground of challenge.

The recommendation to the Governor

The applicants’ challenges

The applicants’ final grounds of challenge concern the Minister’s exercise or purported exercise of power under s 218F(7) of the Act to recommend to the Governor that the proposals for amalgamation be implemented. The grounds of challenge differ for the Oberon and Cabonne proposals and for the Gundagai proposal.
For the Oberon and Cabonne proposals, the applicants argued that the Minister had no power to make conditional recommendations to the Governor for implementation of the proposals. In both cases, the Minister received a briefing recommending that the Minister make a decision to amalgamate the relevant local government areas. In both cases, the Minister made a decision on 4 May 2016 in these terms:

Subject to the outcome of the current legal proceedings affecting this proposal, my decision is for this proposal to be implemented.

The applicants submitted that this purports to be a decision under s 218F(7) recommending that the proposal be implemented but conditioned on the outcome of the proceedings in this Court. Such a decision is “ultra vires the power conferred because each is impermissibly conditioned” (par 1, p 18, submissions of applicants, 3 June 2016).
In relation to the Gundagai proposal, the Minister made a decision on 3 May 2016 “to recommend to the Governor that the proposal be implemented”. The Governor made a proclamation on 12 May 2016 to amalgamate many different local government areas to become new areas, including to amalgamate the former areas of Cootamundra and Gundagai to constitute a new area named Gundagai: cl 4(1) of Local Government (Council Amalgamations) Proclamation 2016 (‘the Proclamation’). The councils of the areas amalgamated were dissolved: cl 4(2) of the Proclamation. Schedule 7 of the Proclamation contained provisions relating to the new Gundagai area and the council of that area. One of these concerned the ward structure, that “the new council is not to be divided into wards for the first election”: cl 7 of Sch 7 to the Proclamation.
The Proclamation also gave the Minister power to determine any matter or thing for the purpose of giving effect to the Proclamation. Clause 5(1) of the Proclamation provided:

For the purposes of giving effect to this Proclamation, the Minister may from time to time determine any matter or thing at the Minister’s discretion or if a new council or an Administrator refers any matter or thing requiring determination to the Minister for that purpose.

The applicants challenged this Proclamation, insofar as it applied to the Gundagai proposal, on two grounds. First, the applicants argued that the Minister had no power to recommend to the Governor and the Governor had no power to make a proclamation for the implementation of the Gundagai proposal because, the applicants believed, there was already another proposal for the amalgamation of the areas of Harden, Cootamundra and Gundagai (‘the Harden proposal’). The applicants argued that the statutory scheme does not permit there to be concurrent proposals but rather requires a “staged process” whereby proposals are dealt with consecutively (par 8, p 4, outline submissions of applicants in closing, 31 May 2016 and p 18, submissions of applicants, 3 June 2016; T 27/5/16, pp 6-8).
The applicants argued that once the Harden proposal was received by the Minister, it had to be dealt with under Div 2B of Pt 1 of Ch 9 of the Act and the Minister could not deal with the Gundagai proposal that he had made until he had finished dealing with the Harden proposal. The Minister therefore had no power to make the decision he purported to make on 3 May 2016 to recommend the implementation of the Gundagai proposal because he had not finished dealing with the Harden proposal (T 27/5/16, pp 6-8).
Alternatively, the applicants argued, if the Minister’s decision to recommend the Gundagai proposal could be seen to be a modification of the Harden proposal, it was ultra vires the power in s 218F(7) because the modification would constitute a new proposal.
On the converse factual assumption that the making and referral of the Gundagai proposal preceded the Harden proposal, the applicants contended that the Minister had no power to recommend the implementation of the Gundagai proposal because this proposal had been superseded by the Harden proposal. The superseded Gundagai proposal could not be recommended for implementation because only the Harden proposal, with or without modifications, could be recommended for implementation. If the Minister purported to recommend the superseded Gundagai proposal, this could only be lawful if it constituted a modification of the Harden proposal. Given the significant differences between the two proposals, the applicants submitted that the superseded Gundagai proposal was a new proposal and not a modification of the operative Harden proposal. The Minister had no power under s 218F(7) to recommend the implementation of a new proposal (T 31/05/16, pp 59-60).
Second, the applicants argued that the Proclamation impermissibly conferred power on the Minister by cl 5(1) allowing the Minister to determine any matter or thing at the Minister’s discretion (par 2, p 18, submissions of applicants, 3 June 2016 and T 31/5/16, p 59).
The applicants noted that a proclamation may include facilitating provisions of the kind referred to in s 213 and s 218C(1) of the Act as are necessary and convenient for giving effect to the Proclamation. In this case, the Proclamation did include such provisions, both generally in the body of the Proclamation and specifically for the new Gundagai area and council in Sch 7 of the Proclamation. However, the applicants argued, cl 5(1) of the Proclamation also gave power to the Minister to determine any matter or thing at the Minister’s discretion for the purpose of giving effect to the Proclamation. The applicants submitted that this was an impermissible conferral of power.
The applicants submitted that it is not possible to sever “the unauthorised power of the Minister from the Proclamation [under ss 31 and 32 of the Interpretation Act 1987] because without such [a power] the Proclamation fails to address the necessary requirements in the legal and practical sense: see ss 213 and 218CA” (par 2, p 18, submissions of applicants, 3 June 2016).

The respondents’ rebuttal

The respondents rejected the applicants’ challenges to the Minister’s decisions concerning implementation of the Oberon and Cabonne proposals and the Gundagai proposal.
In relation to the Oberon and Cabonne proposals, the respondents submitted that the Minister has not yet made, under s 218F(7) of the Act, a recommendation to the Governor that either proposal be implemented. The Minister’s decision of 4 May 2016 (“[s]ubject to the outcome of the current legal proceedings affecting this proposal, my decision is for this proposal to be implemented”) was not a decision under s 218F(7) of the Act. In terms, it does not state that it is a decision to make a recommendation to the Governor, which is what s 218F(7) requires, and there is no evidence that the Minister has made a recommendation to the Governor (T 31/5/16, pp 96-97). Each decision of the Minister of 4 May 2016 is not a “self-executing decision”; it cannot come into force once this Court determines the outcome of these proceedings. The Minister will still have to exercise the power under s 218F(7) to recommend to the Governor that the proposals be implemented (T 31/5/16, p 97).
In relation to the Gundagai proposal, the respondents submitted that the applicants’ argument that there cannot be concurrent proposals is factually and legally erroneous.
Factually, the applicants have reversed the order in which the proposals were made and dealt with. The Minister made the Gundagai proposal on 6 January 2016 and referred it on the same day to the Departmental Chief Executive for examination and report. On the same day, the Departmental Chief Executive delegated the function of examining and reporting to Mr Turner. The Delegate held the required inquiry on 4 February 2016. The Delegate furnished his report on 24 March 2016 to the Boundaries Commission and the Minister. The Boundaries Commission reviewed and sent its comments on the Delegate’s report to the Minister on 29 April 2016. The Minister made his decision on 3 May 2016 “to recommend to the Governor that the [Gundagai] proposal be implemented”.
The Harden proposal was received and dealt with later. Following resolutions of Harden Council on 20 January and 17 February 2016, Harden Council forwarded to the Minister on 28 February 2016 the Harden proposal and requested the Minister to refer the Harden proposal for examination and report. In early March 2016, the Minister referred the Harden proposal that he had received to the Departmental Chief Executive for examination and report. On 3 March 2016, the Departmental Chief Executive delegated the function of examination and report to Mr Turner. The Delegate held the required inquiry on 5 and 6 April 2016. The Delegate furnished his report on 22 April 2016 to the Boundaries Commission and the Minister. The Boundaries Commission reviewed and sent its comments on the Delegate’s report on the Harden proposal to the Minister on 3 May 2016. The Minister decided on 5 May 2016 “to decline to recommend to the Governor that the [Harden] proposal be implemented”.

The respondents noted, therefore, that the applicants’ argument that the Minister had no power to refer the Gundagai proposal he had made because he had already received the Harden proposal had an incorrect factual basis. The applicants’ argument cannot succeed on the correct facts. On the applicants’ argument, if the Gundagai proposal was first in time, the Minister had power to refer it and have it dealt with before referring the Harden proposal and having that proposal dealt with. The Minister would have had power to make a decision under s 218F(7) in relation to the Gundagai proposal before he decided the Harden proposal.
Legally, the respondents submitted that the statutory scheme does not prohibit proposals being dealt with concurrently. Indeed, the statutory scheme mandates that the Minister refer each proposal made or received by the Minister on making or receiving the proposal (s 218F(1)) and that each proposal must be dealt with separately according to the statutory procedures in ss 218F and 263 of the Act. It is not until the stage of the Minister’s decision under s 218F(7) that the statutory scheme moves from the mandatory “must” to the discretionary “may” (T 31/5/16, p 102).
The approach that was adopted of processing the Gundagai proposal and the Harden proposal separately but concurrently was consistent with the Court of Appeal’s recent decision in Botany Bay City Council v Minister for Local Government at [43]-[44] upholding the Land and Environment Court’s decision in Botany Bay City Council v Minister for Local Government [2016] NSWLEC 35 at [31] (par 69, p 19, respondents’ further submissions, 31 May 2016). The respondents submitted that two or more proposals, once made or received, can be dealt with in parallel processes that are conducted in effect together (T 31/5/16, p 101).
In relation to the applicants’ challenge to the Proclamation leaving matters to the Minister’s discretion, the respondents submitted that cl 5(1) of the Proclamation was within power. Section 218C(1) enables a proclamation for the amalgamation of areas to include provisions of the same kind as are referred to in s 213. Section 213(1) enables a proclamation to include “such provisions as are necessary or convenient for giving effect to the proclamation, including provisions for or with respect to” various specified matters. Section 213(2) provides that such a proclamation may, amongst other things, “(c) authorise any matter or thing to be from time to time determined, applied or regulated by any specified person or body”.
The respondents submitted that cl 5(1) of the Proclamation was authorised by these provisions in s 213. The power in s 213 “is wide enough to cover a provision of the kind made in [clause 5(1)] which is no more than a sensible administrative provision to deal with a myriad of small matters as they arise” (T 31/5/16, p 98). In particular, the closing words of the chapeau of s 213(1), “for or with respect to”, are wide and authorise a provision of the kind made in cl 5(1) (T 31/5/16, p 99).
The respondents submitted that cl 5(1) of the Proclamation would not be read as allowing the Minister to use the power in cl 5 to vary the Proclamation itself; the Minister could only deal with residual matters that have not been dealt with by the Proclamation (T 31/5/16, p 100). So construed, cl 5(1) of the Proclamation is within the power to make a proclamation.
In the alternative, the respondents submitted that cl 5(1) is severable: “[t]he blue pencil merely need go through one clause” of the Proclamation (T 31/5/16, pp 99-100).

The recommendations and Proclamation are valid

The applicants have not established any of their challenges to the Minister’s decisions concerning the Oberon proposal and the Cabonne proposal or the Minister’s decision and the Governor’s Proclamation concerning the Gundagai proposal. My reasons accord with the respondents’ submissions.
In relation to the Oberon and Cabonne proposals, although the Minister made a decision in relation to each proposal, it was not a decision to exercise the power under s 218F(7) to recommend to the Governor that the proposal be implemented. The terms of the decision in each case do not invoke the language of the power in s 218F(7). The Minister does not state that he has decided to “recommend to the Governor that the proposal be implemented”. The Minister’s decision is recorded at the end of a briefing that reminded the Minister that he had “provided an undertaking to the Court that he will not make a recommendation to the Governor in respect of this proposal” and accordingly, he “will not be able to recommend the proposal to the Governor until any undertakings affecting this proposal expire (which is not likely to occur until the resolution of legal proceedings)”. Finally, there is no evidence that the Minister has recommended to the Governor that either proposal be implemented. In these circumstances, I would not draw the inference that the Minister has made a decision under s 218F(7) to recommend to the Governor that the Oberon and Cabonne proposals be implemented.
In relation to the Gundagai proposal, I reject the applicants’ argument that there was no power to deal with the Gundagai proposal and the Harden proposal concurrently.
Factually, the Gundagai proposal was made and referred before the Harden proposal was received and referred. Even on the applicants’ argument, there was no bar to referring and dealing with the Gundagai proposal if it was made first. I also reject the applicants’ alternative argument based on the correct factual assumption that the Gundagai proposal preceded the Harden proposal. The receipt by the Minister of the Harden proposal did not, as a matter of fact, supersede the earlier made Gundagai proposal. Each proposal was separately referred by the Minister for examination and report, examined and reported on by the Delegate, and reviewed and commented on by the Boundaries Commission.
Legally, the applicants’ argument is erroneous. There is nothing in the statutory scheme that prevents proposals being dealt with concurrently. Indeed, the mandatory language used in the provisions concerning the referral of proposals made or received by the Minister (s 218F(1)), the examination and report on the matter referred (s 263(1)), the holding of an inquiry in relation to a proposal for the amalgamation of two or more areas that has been referred (s 263(2A)), the furnishing of the report on the examination of the proposal to the Boundaries Commission for review and comment (s 218F(6)(a)) and the review and comment by the Boundaries Commission on that report (s 218F(6)(b)) all are indicators that proposals are to be dealt with under ss 218F and 263 once they are made or referred and cannot be held in abeyance while a proposal that has been made or received at an earlier time is dealt with. Rather, each proposal must be dealt with separately and, if they are contemporaneous, concurrently.
Similarly, a new proposal which concerns similar local government areas to an existing proposal does not have the effect of superseding the existing proposal or modifying the terms of the existing proposal. There is no legal basis in the Act to support the applicants’ claim that the Harden proposal superseded or modified the existing Gundagai proposal. The exercise of the Minister’s power under s 218F(7) to recommend the implementation of the Gundagai proposal did not involve a modification of the Harden proposal.
Accordingly, in this case, there was no bar to the Minister referring the Gundagai proposal and having it dealt with under Div 2B and he had power under s 218F(7) to recommend to the Governor that the Gundagai proposal be implemented.
I also reject the applicants’ argument that cl 5(1) of the Proclamation was ultra vires by impermissibly conferring power on the Minister. Clause 5(1) was authorised by s 218C(1) which permitted the Proclamation to include provisions of the same kind as are referred to in s 213. Section 213(2)(c) expressly provides that a proclamation may “authorise any matter or thing to be from time to time determined, applied or regulated by any specified person or body”. This is precisely what cl 5(1) does. It is authorised by s 213(2). Furthermore, cl 5(1) of the Proclamation would authorise the Minister to determine matters or things for or with respect to the matters listed in s 213(1). A provision of this kind is itself a provision for or with respect to the matters in s 213(1) and hence is authorised by s 213(1).

Conclusion and orders

The applicants have not established any of the grounds of challenge to the administrative decisions and actions in relation to the Oberon proposal, the Cabonne proposal or the Gundagai proposal. Each of the proceedings should be dismissed. The usual order for costs in judicial review proceedings, namely that costs follow the event, should apply.
The Court orders in each of the proceedings:

The proceedings are dismissed.

The applicant is to pay the respondents’ costs of the proceedings.

Decision last updated: 07 October 2016

Medium Neutral Citation:	Oberon Council v Minister for Local Government; Cabonne Shire Council v Minister for Local Government; McAlister and Graham v Minister for Local Government [2016] NSWLEC 131
Hearing dates:	25, 26, 27, 31 May and 1, 3, 6 June 2016
Date of orders:	07 October 2016
Decision date:	07 October 2016
Jurisdiction:	Class 4
Before:	Preston CJ
Decision:	The Court orders in each of the proceedings: (1) The proceedings are dismissed. (2) The applicant is to pay the respondents’ costs of the proceedings.
Catchwords:	JUDICIAL REVIEW – proposals for amalgamation of local government areas – whether proposals made in accordance with Local Government Act 1993 – whether proposals made by Minister – whether decision to make proposals manifestly unreasonable – referral of proposals to Departmental Chief Executive for examination and report – whether referral of proposals manifestly unreasonable – inquiries required to be held – whether reasonable public notice given of the holding of inquiries – whether inquiries held in accordance with Act – whether examination and report on proposals in accordance with Act – whether Departmental Chief Executive had regard to relevant considerations in s 263(3) of Act – whether affected councils denied procedural fairness by Departmental Chief Executive – review and comment on Departmental Chief Executive’s reports by Boundaries Commission – whether review conducted in accordance with Act – whether affected councils denied procedural fairness by Boundaries Commission – publicly accessible material in support of proposals represented that analysis and modelling of consultant was independent – whether representations misleading – whether allegedly misleading representations invalidated statutory process of amalgamation – whether Minister made decisions under Act to recommend implementation of proposals to Governor – whether Minister’s decision to recommend to Governor that a proposal be implemented was invalid
Legislation Cited:	Interpretation Act 1987 ss 31, 32 Local Government Act 1993 ss 204, 213, 218A, 218B, 218C, 218CA, 218D, 218E, 218F, 218F(1), 218F(2), 218F(6), 218F(7), 218F(8), 260, 261, 262, 263, 263(2A), 263(2B), 263(3), 264, 265, 354B, 438U, Pts 1, 2 and 3 of Ch 9, Pt 8 of Ch 13, Sch 2
Cases Cited:	Ainsworth v Criminal Justice Commission (1992) 175 CLR 564; [1992] HCA 10 Anderson v Minister for Infrastructure Planning and Natural Resources (2006) 151 LGERA 229; [2006] NSWLEC 725 Annetts v McCann (1990) 170 CLR 596; [1990] HCA 57 Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 225 CLR 88; [2005] HCA 72 Assistant Commissioner Condon v Pompano Pty Ltd (2013) 252 CLR 38; [2013] HCA 7 Attorney-General for the State of Victoria v City of Geelong [1989] VR 641 Baba v Parole Board of New South Wales (1986) 5 NSWLR 338 Bartzios v Leichhardt Municipal Council [1978] 1 NSWLR 7 Betfair Pty Ltd v Western Australia (2008) 234 CLR 418; [2008] HCA 11 Botany Bay City Council v Minister for Local Government (2016) 214 LGERA 173; [2016] NSWCA 74 Botany Bay City Council v Minister for Local Government [2016] NSWLEC 35 Botany Bay City Council v The State of New South Wales [2016] NSWCA 243 Bruce v Cole (1998) 45 NSWLR 163 Brunetto v Collector of Customs (1984) 4 FCR 92 Bushell v Repatriation Commission (1992) 175 CLR 408; [1992] HCA 47 Bushell v Secretary of State for the Environment [1981] AC 75 Castle v Director General, State Emergency Service [2008] NSWCA 231 Director General, Department of Trade and Investment, Regional Infrastructure and Services v Lewis (2012) 301 ALR 420; [2012] NSWCA 436 Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd [2014] NSWCA 158 Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations (2011) 195 FCR 318; [2011] FCAFC 88 Elias v Federal Commissioner of Taxation (2002) 123 FCR 499; [2002] FCA 845 Esber v The Commonwealth of Australia (1992) 174 CLR 430; [1992] HCA 20 Foster v Minister for Customs and Justice (2000) 200 CLR 442; [2000] HCA 38 Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149; [1996] HCA 44 Insurance Australia Ltd v Motor Accidents Authority (NSW) [2007] NSWCA 314 Jacob v Save Beeliar Wetlands (Inc) (2016) 216 LGERA 201; [2016] WASCA 126 Jarratt v Commissioner for Police for New South Wales (2005) 224 CLR 44; [2005] HCA 50 Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 Kindimindi Investments Pty Ltd v Lane Cove Council (2006) 143 LGERA 277; [2006] NSWCA 23 Kioa v West (1985) 159 CLR 550; [1985] HCA 81 Lindemans Wines Pty Ltd v Woodward (1981) 46 LGRA 14 Minister for Immigration and Border Protection v MZYTS (2013) 230 FCR 431; [2013] FCAFC 114 Minister for Immigration and Border Protection v SZSSJ (2016) 90 ALJR 901; [2016] HCA 29 Minister for Immigration and Citizenship v Khadgi (2010) 190 FCR 248; [2010] FCAFC 145 Minister for Immigration and Citizenship v Maman (2012) 200 FCR 30; [2012] FCAFC 13 Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323; [2001] HCA 30 Minister for Local Government v South Sydney City Council (2002) 55 NSWLR 381; [2002] NSWCA 288 Muin v Refugee Review Tribunal (2002) 76 ALJR 966; [2002] HCA 30 Notaras v Waverley Council (2007) 161 LGERA 230; [2007] NSWCA 333 Ogawa v Minister for Immigration and Citizenship (2011) 199 FCR 51; [2011] FCA 1358 P J Magennis Pty Ltd v The Commonwealth (1949) 80 CLR 382; [1949] HCA 66 Parramatta City Council v Hale (1982) 47 LGRA 319 Parramatta City Council v Pestell (1972) 128 CLR 305; [1972] HCA 59 R (on the application of Forest Care Home Ltd) v Pembrokeshire County Council (2011) 14 CCLR 103; [2010] EWHC 3514 (Admin) Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57; [2001] HCA 22 Scurr v Brisbane City Council (1973) 133 CLR 242; [1973] HCA 39 Singh v Minister for Immigration and Multicultural Affairs (2001) 109 FCR 152; [2001] FCA 389 Sutherland Shire Council v Finch (1970) 123 CLR 657; [1970] HCA 49 Vanmeld Pty Ltd v Fairfield City Council (1999) 46 NSWLR 78; [1999] NSWCA 6 Waitemata County v Local Government Commission [1964] NZLR 689 Walsh v Parramatta City Council (2007) 161 LGERA 118; [2007] NSWLEC 255 Wei v Minister for Immigration and Border Protection (2015) 90 ALJR 213; [2015] HCA 51 Woollahra Municipal Council v Minister for Local Government [2016] NSWLEC 86 Zhang v Canterbury City Council (2001) 51 NSWLR 589; [2001] NSWCA 167
Category:	Principal judgment
Parties:	Oberon Council v Minister for Local Government Oberon Council (Applicant) Minister for Local Government (First Respondent) Chief Executive, Office of Local Government (Second Respondent) Ms Renata Brooks (Third Respondent) State of New South Wales (Fourth Respondent) Cabonne Shire Council v Minister for Local Government Cabonne Shire Council (Applicant) Minister for Local Government (First Respondent) Chief Executive, Office of Local Government (Second Respondent) Mr Richard Pearson (Third Respondent) State of New South Wales (Fourth Respondent) McAlister and Graham v Minister for Local Government Mr Albert McAlister (First Applicant) Mr David Graham (Second Applicant) Minister for Local Government (First Respondent) Chief Executive, Office of Local Government (Second Respondent) Mr John Turner (Third Respondent) State of New South Wales (Fourth Respondent) The Administrator, Gundagai Shire Council (Fifth Respondent)
Representation:	Counsel: Mr P E King with Ms F A Sinclair (Applicants) Mr N J Williams SC with Mr J J Hutton, Mr T E O’Brien and Ms B E M Anniwell (Respondents) Solicitors: Patterson, Byfield & Bryen (Applicants) Crown Solicitor’s Office (Respondents)
File Number(s):	2016/00161513, 2016/00161537, 2016/00161546
Publication restriction:	No