Paterson v MacPherson; Zacharakis v MacPherson

Case [2011] SASCFC 49

SUPREME COURT OF SOUTH AUSTRALIA

(Full Court: Application for Judicial Review)

PATERSON & ORS v MACPHERSON & ANOR; ZACHARAKIS v MACPHERSON & ANOR

[2011] SASCFC 49

Judgment of The Full Court

(The Honourable Chief Justice Doyle, The Honourable Justice White and The Honourable Justice Peek)

27 May 2011

ADMINISTRATIVE LAW - JUDICIAL REVIEW - GROUNDS OF REVIEW - ABUSE OF POWER

ADMINISTRATIVE LAW - JUDICIAL REVIEW - GROUNDS OF REVIEW - FAILURE TO OBSERVE STATUTORY PROCEDURE

ADMINISTRATIVE LAW - JUDICIAL REVIEW - GROUNDS OF REVIEW - PROCEDURAL FAIRNESS

On 22 July 2009 the second defendant, the Minister for State and Local Government Relations (‘the Minister’), purporting to exercise the power conferred on her by s 272(1) of the Local Government Act 1999 (SA) (‘LGA’), appointed the first defendant, Mr MacPherson, to investigate and report on certain matters relating to the Council of the City of Burnside (‘the Council’). Mr MacPherson carried out an investigation and in August 2010 sent to each plaintiff, each a member of the Council, a copy of his provisional draft report. He stated that each plaintiff was at liberty to make submissions to him, by a specified date, on any matter in the draft. On 10 September 2010 the plaintiffs sought judicial review contending that (1) Mr MacPherson’s appointment as investigator was invalid; that (2) Mr MacPherson had in any event exceeded the Terms of Reference; and that (3) Mr MacPherson was denying the plaintiffs procedural fairness.

Held:

(1) Doyle CJ and Peek J (White J contra): Although on their face the Terms of Reference authorised an investigation that went beyond any contravention of the LGA by the Council that the Minister had reason to believe had occurred for the purposes of s 272(1) of the LGA, they should, in accordance with s 13 of the Acts Interpretation Act 1915 (SA), be read as limited to the Minister’s belief identified in letters of 2 July 2009 and 22 July 2009, that being a belief in the contravention of, or failure to comply with, ss 6(a) and 132A of the LGA, arising out of the circumstances identified by the Minister in the letter of 2 July 2009. The Minister’s belief defined the scope of the investigation that could be authorised under s 272(1) of the LGA. The ‘matter’ in respect of which the investigator could be appointed was the subject matter of her belief. The scope of the enquiry had to align with that matter. The Notice of Appointment and Terms of Reference were instruments to which s 13 of the Acts Interpretation Act 1915 (SA) applied. The Terms of Reference were to be read as limited to the circumstances identified by the Minister in her letter of 2 July 2009. On that basis, some of the Terms of Reference are beyond power and should be declared invalid. The investigation and the exercise of powers by Mr MacPherson were limited to the matter in respect of which the investigator was validly appointed.

Doyle CJ and Peek J…

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Paterson v Macpherson; Zacharakis v Macpherson [2011] SASCFC 49
Case
[2011] SASCFC 49
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CaseChat Overview and Summary

The case of *Paterson v MacPherson; Zacharakis v MacPherson* involved a challenge to the validity of Terms of Reference issued by a Minister for an investigation into a local council. The plaintiffs, Paterson and Zacharakis, sought judicial review of these Terms of Reference, arguing they were beyond the scope of the Minister's statutory power and that the investigation process lacked procedural fairness. The matter came before the Supreme Court of South Australia, presided over by Doyle CJ, White and Peek JJ.

The central legal issues before the Court were whether the Minister's Terms of Reference for the investigation were authorised by the relevant legislation, specifically section 272 of the *Local Government Act* (LGA), and whether the process adopted by the Minister and the investigator breached the principles of procedural fairness. The plaintiffs contended that the Terms of Reference permitted an investigation into matters that the Minister had no reasonable belief existed, thereby exceeding the statutory authority granted.

The Court reasoned that the Terms of Reference, as initially drafted, purported to authorise an investigation that extended beyond the matters in relation to which the Minister had demonstrated a belief for the purposes of section 272(1) of the LGA. Specifically, the authorisation to investigate contraventions of "any provision at all of the LGA" was considered to be beyond power. However, the Court found that the Terms of Reference could be read as limited to the specific contraventions and circumstances identified by the Minister in her letters of 2 July 2009 and 22 July 2009, pursuant to section 13 of the *Acts Interpretation Act 1915* (SA). The Court also noted that while the investigation was primarily directed at the conduct of the Council, it did not exclude an investigation into the conduct of individuals, though drawing this line would be difficult. The Court concluded that the Minister had complied with the obligation imposed by section 272(2) of the LGA.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

I add that the draft is a substantial document. It is over 1,000 pages long. It is not complete. Some parts, in particular summaries of findings, are yet to be written. No doubt these parts will be completed, and other parts amended, in light of responses by the plaintiffs and others to the draft report.Conclusions I now set out my conclusions. My reasons follow later. As they stand, the Terms of Reference purport to authorise an investigation that goes beyond any matter that the Minister had reason to believe for the purposes of s 272(1). As they stand, each instrument is beyond power. The defect is the authorisation to investigate contravention of, or failure to comply with, any provision at all of the LGA. The Terms of Reference also go beyond any matter in relation to which the Minister has demonstrated a belief for the purposes of s 272 of the LGA in her letter of 2 July 2009. The second and fifth dot points in para (1) and the whole of para (4) are beyond power. They should be struck out. Subject to that, the Terms of Reference can and should be read as limited to the belief identified in the letters of 2 July 2009 and 22 July 2009. That is, a belief in the contravention of or failure to comply with s 6(a) and s 132A of the LGA, arising out of the circumstances identified by the Minister in the letter of 2 July 2009. They should be read in this limited manner pursuant to s 13 of the Acts Interpretation Act 1915 (SA). The investigation that is authorised by the Terms of Reference (limited as indicated by me) is an investigation into the conduct (or failure to act) of the Council. The factual circumstances specified in the Terms of Reference are to be investigated to the extent that they throw light on the Council’s conduct. They are not independent subjects for investigation and report. That limits the extent to which the investigator should investigate these matters, and make findings about the conduct of individuals. However, I emphasise that this does not exclude an investigation into the conduct of individuals. Drawing the line will be difficult. That is a result of the manner in which the Terms of Reference are expressed. The limitation just referred to is one to be observed by the investigator. A failure to do so will result in the investigation going beyond the Terms of Reference. The Minister has complied with the obligation imposed on her by s 272(2) of the LGA. The Court is not presently able to determine whether the draft, if published as the investigator’s report, will go beyond the Terms of Reference.Challenge to appointment Mr Abbott submits that the Minister’s power to appoint Mr MacPherson under s 272 is enlivened by the Minister having reason to believe and in fact believing in the existence of matters that could amount to one or more of the circumstances referred to in s 272(1)(a)[1]. I proceed on the basis that this is correct.[1] See WA Pines v Bannerman (1980) 30 ALR 559 Brennan J at 565(1), 566 and Lockhart J at 570-572 and the authorities there referred to by His Honour. The joint judgment of the High Court in George v Rockett (1990) 170 CLR 104 at 111 took the same approach. However, it must be remembered that there the relevant person to whom the phrase referred was in fact the applicant for the search warrant rather than the reviewing Court.

Ratio Decidendi

Legal Principle Established

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