Paterson v MacPherson; Zacharakis v MacPherson - [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 (White J contra): the Minister had complied with s 272(2) of the LGA by giving the Council a reasonable opportunity to explain its actions, and to make submissions. There was a sufficient identity between the topics raised with the Council and in the scope of the Terms of Reference.
(2) Doyle CJ, White and Peek JJ: The content of Mr MacPherson’s draft report went beyond the matters which were encompassed by the appointment, as limited under s 13 of the Acts Interpretation Act 1915 (SA). As the report was a provisional draft, it was not appropriate for the Court to undertake the task of identifying particular portions of the provisional draft report that would be beyond power if published. It would be appropriate for Mr MacPherson to revise the report in light of the reasons of the majority.
(3) Doyle CJ with White and Peek JJ concurring: the plaintiffs have not been denied procedural fairness. Upon publication of this judgment the plaintiffs would also have the advantage of providing comments against the background of this judgment.
(Orders made)
Doyle CJ with Peek J concurring: a declaration should be made that the Terms of Reference exceed the Minister’s power to the extent identified in the reasons of the Chief Justice but that in other respects the proceedings should be dismissed.
White J, dissenting: a declaration should be made that the appointment of Mr MacPherson under s 272(1) of the LGA was invalid.
Local Government Act 1999 (SA) s 6(a), s 62(2), s 94(5), s 132A, s 272, s 272(1), s 272(1)(a)(i), s 272(1)(a)(ii), s 272(1)(a), s 272(2), s 272(2), s 272(2)(b), s 272(3)(b), s 272(3), 272(4), s 273, s 273(5), s 273(16)(c); Evidence Act 1929 (SA) s 13; Acts Interpretation Act 1915 (SA) s 49(b); Acts Interpretation Act 1901 (Cth) s 64A(1), s 64A(3); Ombudsman Act 1982 (SA) s 19A(1); Trade Practices Act 1974 (Cth) s 155; Acts Interpretation Act 1987 (NSW) s 31, referred to.
The King v Poole; Ex parte Henry [1939] 61 CLR 634; Pidoto v The State of Victoria (1943) 68 CLR 87; Harrington v Lowe (1996-1997) 190 CLR 311; WA Pines v Bannerman (1980) 30 ALR 559; Bank of New South Wales v The Commonwealth (1948) 76 CLR 1, discussed.
George v Rockett (1990) 170 CLR 104; R v Ng (2002) 5 VR 243; Dixon v The Commonwealth (1981) 55 FLR 34; Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd (1994) 49 FCR 576; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 335; Australian Conservation Foundation v Commonwealth (1980) 146 CLR 493; Onus v Alcoa of Australia Ltd (1981) 149 CLR 27; Shop Distributive and Allied Employees Association v Minister for Industrial Relations (SA) (1995) 183 CLR 552, considered.

PATERSON & ORS v MACPHERSON & ANOR; ZACHARAKIS v MACPHERSON & ANOR
[2011] SASCFC 49
Full Court: Doyle CJ, White and Peek JJ

DOYLE CJ: On 22 July 2009 the Minister for State and Local Government Relations (the Minister) exercised the power conferred by s 272(1) of the Local Government Act 1999 (SA) (the LGA) to appoint Mr MacPherson as investigator to investigate and report on certain matters relating to the Council of the City of Burnside (the Council). Mr MacPherson embarked on that investigation.
Each of the plaintiffs in the two actions before the Court was, at the time of the institution of the actions, an elected member of the Council. After an election held on 21 November 2010 each of the plaintiffs ceased to be an elected member of the Council.
In August 2010 Mr MacPherson sent to each plaintiff (and to certain others) a copy of his “provisional draft report” (the draft). 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 five of the plaintiffs instituted proceedings by way of judicial review in this Court. The other plaintiff instituted proceedings on 13 September 2010. The relief claimed in each action is the same, and the issues are the same. Mr Abbott QC appeared for the five plaintiffs, and Mr Prichard for the other plaintiff adopted his submissions. The defendants are Mr MacPherson and the Minister. The plaintiffs challenge the validity of Mr MacPherson’s appointment, and on that basis also challenge the validity of the exercise of compulsive powers by Mr MacPherson in the course of his investigation. However, the relevant powers have already been exercised. They challenge his power to publish a report on the subject matters covered by the draft, at least to the extent that they relate to the plaintiffs. A further claim is that Mr MacPherson has failed to allow them an adequate opportunity to reply to the draft, and so they argue that he has failed to provide to them procedural fairness as required by law.
The Court is not concerned with the soundness or correctness of the content of the draft. The Court is concerned only with the validity of Mr MacPherson’s appointment; with the issue of whether he has acted, or intends to act, in a manner that meets any legal obligation to deal fairly in the circumstances with the plaintiffs, and with the issue of whether his investigation has gone beyond the matters (if any) that he has power to investigate.
The Council is not a party to the proceedings. It has not challenged Mr MacPherson’s appointment or method of proceeding, nor has it challenged the draft.
Permission to proceed has been granted to the plaintiffs. The proceedings were referred to the Full Court. The publication of the draft is prohibited by an order made a Judge pursuant to s 69A(1) of the Evidence Act 1929 (SA).
The appointment of the investigator
The background to the appointment is a history of conflict between certain elected members of the Council, and between certain elected members and the Chief Executive Officer (the CEO) of the Council. There is also a history of complaints that elected members have “leaked” confidential Council information and that staff have been treated inappropriately by elected members. Allegations have been made about the conduct of a number of elected members, and about the manner in which issues have been handled at Council meetings. This background is alluded to in correspondence between officers of the Minister and the Council, and between the Minister and Council. The disputation and conflicts within the Council appear to have been significant. They have been widely publicised in the media.
In August 2008 an officer wrote on behalf of the Minister to the Mayor of the Council, referring to complaints that the Minister had received relating to the Council. The letter expressed a concern that the conflict between certain groups of councillors and the CEO had reached a point at which the Council was not functioning as it should. It was said to be “dysfunctional”. Although not referred to in this letter, from time to time in later correspondence reference is made to an alleged failure by the Council to act as contemplated by s 6(a) of the LGA which provides:
6—Principal role of a council
A council is, under the system of local government established by this Act, established to provide for the government and management of its area at the local level and, in particular—
(a) to act as a representative, informed and responsible decision-maker in the interests of its community; …
The letter also referred to allegations that a person who was not an elected member was exercising inappropriate influence over decision making by elected members. Reference was made in the letter to a possible investigation under s 272 of the LGA.
For convenience, I set out s 272 in full:
272—Investigation of a council
(1)If—
(a)     the Minister has reason to believe—
(i)that a council has—
(A)contravened or failed to comply with a provision of this or another Act; or
(B)failed to discharge a responsibility under this or another Act; or
(ii)that an irregularity has occurred in the conduct of the affairs of a council (in relation to matters arising under this or another Act); or
(b)     the Minister is empowered to act under this section on the basis of another provision of this Act,
the Minister may appoint an investigator or investigators to carry out an investigation and to report on the matter.
(2)The Minister must, before making an appointment under subsection (1), give the council a reasonable opportunity to explain its actions, and to make submissions, to the Minister.
(3)An investigator may, for the purposes of an investigation—
(a)     require a member or employee of the council to answer, orally or in writing, questions put by the investigator to the best of the member's or the employee's knowledge, information and belief;
(b)     require a person to whom questions are put under paragraph (a) to verify the answers to those questions by declaration;
(c)     require a person to produce for examination by the investigator books, papers or other records relevant to the subject matter of the investigation;
(d)     retain books, papers or other records produced under paragraph (c) for such reasonable period as the investigator thinks fit and make copies of any of them or of any of their contents.
(4)A person who refuses or fails to comply with a requirement under subsection (3) is guilty of an offence.
Maximum penalty: $10 000.
(5)A person is not excused from answering a question or from producing books, papers or other records under this section on the ground that to do so might tend to incriminate the person or make the person liable to a penalty.
(6)However, if compliance by a natural person with a requirement to answer a question or to produce a book, paper or other record might tend to incriminate the person or make the person liable to a penalty—
(a)     in the case of a person who is required to produce a book, paper or record, the book paper or record (as distinct from the contents of the book, paper or record); or
(b)     in any other case, the answer given in compliance with the requirement,
is not admissible in evidence against the person in proceedings for an offence or for the imposition of a penalty (other than proceedings in respect of the making of a false or misleading statement).
(7)At the conclusion of an investigation under this section, the investigator or investigators must present a written report to the Minister on the results of the investigation.
(8)The Minister must supply the council with a copy of a report presented under subsection (7).
(9)No action in defamation lies in respect of the contents of a report under this section.
I draw attention in particular to subsections (1) and (2). I will return to these provisions.
A report under s 272 can have significant consequences for a Council. Under s 273, having regard to a report, the Minister can make recommendations to a council, can in certain circumstances give directions to a council, and in other specified circumstances can recommend to the Governor that the council be declared to be a defaulting council. If that is done all members of the defaulting council are suspended from their respective offices, and a suitable person is appointed to be administrator of the affairs of the council.
In June 2009 an officer of the Minister wrote to the Mayor raising again the possibility of an investigation under s 272 of the LGA. An attachment to the letter raised the question of whether “outside influences” were having an inappropriate influence on Council decisions, the question of whether the Council was failing to discharge its responsibilities under the LGA, and whether the Council was contravening or failing to comply with provisions of the LGA. Although these matters are raised in general terms, there is no reason to doubt that they relate to the matters outlined in the earlier letter.
In June 2009 the Minister instructed officers of the Office for State/Local Government Relations (OSLGR) to make some preliminary enquiries, “as a result of growing community concerns regarding the Council’s behaviour and decision making”. Those officers spoke to the Mayor, to the CEO, and to certain elected members. In a report to the Minister the OSLGR stated that “there (sic) significant areas of concern regarding the conduct of the Council under the provisions of the Act…”. Brief details were given, including whether Councillors were acting honestly in the performance and discharge of their duties; alleged “leaking” of confidential Council information; the circumstances of the resignation of the CEO and his subsequent reinstatement; protecting employees from harassment and whether the Council had appropriate policies, practices and procedures as required by s 132A of the LGA (the section is set out later).
The Minister wrote again to the Mayor on 2 July 2009. I set out this letter in full:
Further to my letter dated 17 June 2009 advising of concerns I share with the community about various issues involving the City of Burnside Council, my officers met with most elected members and several senior employees, and have provided advice to me on whether there are grounds for a formal investigation under section 272 of the Local Government Act 1999 (the Act).
My officers have advised that the information provided at these meetings indicated a high level of intractable friction between numerous persons of the Council, and that this friction is having an effect on the Council’s decision-making processes. Further, it appears that there may be irreconcilable differences between the various members of the elected body and staff that have led to a degree of dystunctionality in the Council.
In addition, I am particularly concerned with the reasons given by your Chief Executive Officer which prompted his resignation.
I am also in receipt of your letter dated 30 June 2009 advising of Council’s resolution, at its Special Meeting held on 29 June 2009, to request that I instruct my officers to investigate the actions of an Elected Member.
Based on all of the information provided to me I do not believe that the Council is able to fulfil its obligation to “act as a representative, informed and responsible decision-maker in the interests of the community” and therefore is in contravention of section 6(a) of the Act. This is a principal role of the Council, and fundamental to its ability to provide good government and management of its area.
I have not come to this belief lightly, but have taken into account a culmination of the information before me, on a number of issues, including allegations of:
•the failure of the Council to resolve the friction between elected members notwithstanding a new code of conduct, an independent investigation and mediation;
•the further deterioration in relationships between parties despite the various actions taken by the Council, as evidenced by current litigation between elected members;
•the circumstances surrounding the CEO’s resignation and reinstatement, and the effect that this may be having on councillors’ abilities to bring an impartial mind to their deliberations;
•recent Council meetings having to be adjourned due to a lack of a quorum, apparently caused by members abandoning meetings before their close;
•suggested leaking of confidential Council information;
•bullying and harassment between elected members in meetings, between elected members and members of the public gallery, and between elected members and staff of the Council.
Accordingly, I have considered my powers under section 272 of the Act and advise that I am inclined to appoint an investigator to investigate and report on these matters. Section 272(2) of the Act, requires that I provide the Council with a reasonable opportunity to explain its actions, and to make submissions to me, before making such an appointment.
Accordingly, I invite the Council to make such explanation and submissions, addressed to me, by Friday 17 July 2009.
I anticipate that a copy of this letter will be forwarded to each elected member, and the CEO, and dealt with in confidence at a meeting of the Council. The issues I raise in this letter are serious and as such there are serious implications for all individuals involved. Its confidentiality is paramount and my expectation is that it will be respected.
I expect your response to me will represent an endorsed position of the Burnside Council.
By letter dated 17 July 2009 the Mayor replied on behalf of the Council. The Mayor told the Minister that the Council strongly disputed the Minister’s suggestion that the Council was unable to fulfil its obligations to act as a representative, informed and responsible decision-maker. The Mayor referred in that context to s 6(a) of the LGA. The Mayor complained about a lack of detail concerning the matters on which the Minister relied. The Mayor asked for details of the facts on which the Minister’s concerns were based. The Mayor opposed the appointment of an investigator. With the letter the Mayor provided an 18 page summary of material intended to demonstrate that the Council was fulfilling its obligations under s 6(a) of the LGA and more generally.

By letter dated 22 July 2009 the Minister again wrote to the Mayor. I set out this letter in full:
Thank you for your submission in response to my letter dated 2 July 2009 inviting the City of Burnside (the Council) to explain its actions and make submissions before I made any decision concerning the appointment of an investigator to investigate and report on the matters outlined in my letter.
Having considered all of the information provided, I remain satisfied that there are grounds for an investigation. The information before me provides a basis for my belief that the Council may have contravened section 6(2) [sic] of the Local Government Act 1999 (the Act) by failing to act as a representative, informed and responsible decision-maker in the interests of the community. Further, I consider that the Council may have failed to maintain and implement appropriate policies, practices and procedures to ensure compliance with the law and standards reflecting good administrative practices, in contravention of section 132A.
Accordingly, pursuant to section 272(1) of the Act, I have appointed Mr Ken MacPherson to conduct an investigation into the Council, and report to me in accordance with the attached Terms of Reference.
I carefully considered your request for a council delegation to me before I made my decision but decided that this would not be helpful. The Council has made a very substantial written submission. I consider it preferable for any further information to be provided to Mr MacPherson.
The Appointment and Terms of Reference referred to in that letter are as follows:
Notice of Appointment of Investigator
I, Gail Elizabeth Gago, Minister for State/Local Government Relations, having formed a reason to believe that the Council has contravened or failed to comply with a provision of, or failed to discharge a responsibility under, the Local Government Act 1999, appoint Kenneth Ian MacPherson as an investigator under section 272(1) of the Local Government Act 1999, to investigate and report to me in respect of the City of Burnside Council, in accordance with the Terms of Reference below by 31 October 2009.
Terms of Reference
“To investigate and report to the Minister for State/Local Government Relations by 31 October 2009 as to whether the Council has contravened, or failed to comply with, any provisions of the Local Government Act 1999, and in particular:
(1)whether the Council’s adoption and implementation of policies, practices and procedures since the 2006 election (November 2006) have reflected good administrative practice in the areas of:
•      the alleged improper use of confidential Council information by elected members and by staff of the Council
•      the obligations of elected members to act honestly, and with reasonable care and diligence, in the performance and discharge of their official functions and duties;
•      dealing with conflict between elected members and between elected members and staff;
•      ensuring a working environment that is free from harassment and bullying;
•      managing the relationship between the Council and individual rate-payers;
(2)the circumstances of the Chief Executive’s resignation and reinstatement in June 2009;
(3)whether the Council’s meeting practices since the 2006 election have fulfilled the Council’s obligation to act as a representative, informed and responsible decision‑maker in the interests of the community,
(4)     whether improper weight has been placed by elected members or by staff of the Council in making any decisions of Council on the views and/or influence of a person who is neither an elected member or a member of staff since the 2006 election.
The investigator may present an interim report that he may see fit during the course of the investigation.
Notwithstanding that these terms of reference relate to matters since the 2006 election the investigator is able to collect evidence that is relevant to these terms of reference that may have occurred prior to the 2006 election.
Mr MacPherson then undertook his investigation. He required each plaintiff to provide certain documents. He interviewed each of the plaintiffs. He interviewed numerous other people, and inspected a large number of documents. The draft contains foreshadowed findings which, if ultimately made, are critical of certain of the plaintiffs.
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.
I put it this way because a belief of the kind referred to in s 272(1)(a) must be based on a belief about some matter or matters, and involve a belief that such matter or matters give rise to (putting it briefly) a relevant contravention, a relevant failure to comply or a relevant failure to discharge a responsibility: s 272(1)(a). I consider that the section does not require the Minister to believe in every single fact required to prove contravention, failure to comply or failure to discharge. It is sufficient if the Minister forms a belief which is capable of being supported by the matters on which the Minister relies.
It was also common ground that the appointment was valid only if the Minister complied with the requirements of s 272(2). I accept that as correct.
I consider that it was necessary for the Minister to have “reason to believe” (I will use this phrase as a shorthand indication of satisfaction of the requirements of s 272(1)(a)) only when the appointment of Mr MacPherson was made. It was not essential that the Minister have “reason to believe” when giving the Council the required “reasonable opportunity” under s 272(2), although it is likely that often a Minister will have “reason to believe” at that stage.
In summary, Mr Abbott submits as follows.
First, the Minister did not have reason to believe that the Council had contravened, or failed to comply with a provision of the LGA or had failed to discharge a responsibility under the LGA or that an irregularity had occurred in the conduct of the affairs of the Council: see s 272(1)(a); accordingly, Mr Abbott submits that the purported appointment was invalid.
Mr Abbott initially focuses on the letter of 22 July 2009, the Notice of Appointment and the Terms of Reference. (The letter refers to a belief that the Council has contravened s 6(2) of the LGA. This is a mistake since there is no such provision; I proceed on the basis that a reference to s 6(a) is intended). Mr Abbott submits that a council cannot contravene s 6(a), as a matter of ordinary language (although it might fail to comply with s 6(a)) and accordingly the Minister did not have a relevant belief.
Second, the Council was not given a reasonable opportunity to explain its actions and to make submissions to the Minister: s 272(2). Again, he submits, this invalidates the appointment.
Third, the Terms of Reference go beyond the matters on which the Council was given an opportunity to respond, and beyond the matters in relation to which the Minister had any relevant “reason to believe”. He submits that for that reason, and at least to that extent, the Minister has purported to authorise an inquiry that goes beyond her power. It is implicit in these submissions, and I accept, that the matter which an investigator may investigate under s 272(1) is the matter in relation to which the Minister had the relevant “reason to believe”, and that the matter to be investigated must be one in relation to which the Council had a reasonable opportunity to explain and to make submissions: s 272(2).
The Terms of Reference refer to a contravention of, or failure to comply with, any provision of the LGA, without any particularity or limit. As to this Mr Abbott submits that the Terms of Reference go beyond anything on which the Council was given the opportunity to comment, and further there is nothing to support a finding that the Minister had reason to believe in circumstances that would support such a wide ranging investigation. He submits that in other respects the Terms of Reference go beyond any “reason to believe” asserted by the Minister.
Fourth, he submits that Mr McPherson has investigated matters outside the Terms of Reference and that he has not allowed the plaintiffs an adequate opportunity to respond to the defendants as it relates to each of them.
Fifth, Mr Abbott makes the further point that the letter also refers to a contravention of s 132A of the LGA. That section provides:
132A—Related administrative standards
A council must ensure that appropriate policies, practices and procedures are implemented and maintained in order—
(a) to ensure compliance with any statutory requirements; and
(b) to achieve and maintain standards that reflect good administrative practices.
Mr Abbott submits that this topic or matter had not been raised with the Council, and had not previously been identified as a subject matter of the Minister’s belief; nor had the Council been given the opportunity to comment on a suggested failure to comply with s 132A
It can readily be seen from this summary of Mr Abbott’s submissions that there is a degree of confusion and imprecision on the part of the Minister or her officers as to the application and requirements of the provisions of the LGA, and in particular s 272. I agree that it is unfortunate that a matter as significant as this has been dealt with in a way that allows these submissions to be made.
I now proceed to consider the submissions in detail.
“Reason to believe”
I begin with the question of whether the Minister had “reason to believe” as required by s 272(1). The Minister’s letter of 2 July 2009 identifies allegations or complaints about the conduct of elected members, the circumstances surrounding the resignation and reappointment of the CEO, and “bullying and harassment”. They are matters which, by and large, had been previously raised with the Council and with the Mayor. The Minister’s officers had made preliminary enquiries into them, and had reported to the Minister that there was reason to be concerned about the allegations and complaints. The letter of 2 July refers to a belief by the Minister that the matter has reached a point at which the Council was in contravention of s 6(a) of the LGA by reason of its failure or inability to discharge that broad responsibility.
That letter identifies a “reason to believe” in a matter or matters that fall within s 272(1)(a)(i), and possibly (ii). The “reason to believe” arises from the fact that a number of such allegations or complaints have been made to the Minister; they come from apparently credible sources (I am prepared to assume); they have been enquired into by the Minister’s officers and those officers have reported that there is some substance to them. The Minister states that, based on the information provided to her, she does not believe that the Council is able to fulfil its obligations and that it is in contravention of s 6(a), one of its fundamental functions or obligations.
I reject the submission that a council cannot contravene s 6(a). In any event, the use of the word “contravene” is not crucial. It is clear that the Minister is identifying a belief in a contravention or failure to comply with the obligation implicit in s 6(a). The “matter” that the Minister identifies is a collection of circumstances (outlined by the Minister in the letter) that have produced a situation in which the Minister believes that the Council is not able to fulfil important obligations and is contravening, or not complying with, a fundamental provision of the LGA.
The letter of 22 July is to be read against the background of the letter of 2 July, and against the background of the earlier dealings between the Minister, her officers and the Council. The letter of 22 July is not well expressed. The statement that the Council “may have contravened s 6(2)” (apart from the apparent error by failing to refer to s 6(a)) and the statement that the Council “may have failed to maintain and implement appropriate policies, practices and procedures” is apt to confuse, bearing in mind that the Minister had already expressed a belief about a contravention of s 6(a). In the context of the appointment of an investigator, and bearing in mind the letter of 2 July 2009, I consider that the letter should be read as referring to the belief (referred to in the letter of 2 July 2009) in a contravention which calls for an investigation.
The reference to s 132A at this stage is also confusing, but I consider that this should be read as a reference to the application of s 132A to the collection of circumstances previously identified by the Minister and identified again in the Terms of Reference. The letter of 22 July does not disclose a belief different from that identified in the letter of 2 July 2009, or in the Terms of Reference. It does no more than identify another provision of the LGA that the Minister believes the Council has not complied with, as a result of the circumstances previously identified by the Minister. In other words, in referring to s 132A the Minister is identifying a belief that the circumstances identified by the Minister directed that the Council has not implemented and maintained “appropriate policies, practices and procedures” as required by s 132A.
However, it is important to emphasise that the relevant belief required by the legislation is a belief as to the application of s 132A to the collection of circumstances identified by the Minister. The letter should not be read as asserting or referring to a belief that would support a general inquiry into any circumstance or matter in respect of which the Council may have failed to comply with s 132A. Properly understood, the letter does no more than identify a belief by the Minister (based on identified circumstances) that the Council has failed to comply with a further provision of the LGA.
Unfortunately, the Notice of Appointment is also apt to confuse. It appears to refer to a belief by the Minister relating to unspecified circumstances and perhaps all provisions of the LGA. In this respect it is poorly expressed. I consider that, having regard to the context, the Notice of Appointment should be read as referring to the belief, arising from the circumstances identified by the Minister, that s 6(a) or s 132A have not been complied with.
However, it must be remembered that it is permissible for the Minister to appoint an investigator to investigate whether a belief that identified circumstances constitute a contravention of provisions of the LGA is in fact correct. For example, in a particular case the Minister might have reason to believe that a council has failed to comply with a provision of the LGA, such belief being based on certain matters or circumstances which the Minister has reason to believe do exist. The Minister’s belief need not be one that initially identifies every relevant provision of the LGA; in other words, if the Minister has reason to believe that, in relation to identified circumstances, the Council has not complied with certain identified nominated provisions of the LGA, it is permissible under s 272(1) to appoint an investigator to investigate whether the circumstances identified do indeed give rise to a failure to comply with the identified provision of the LGA, or with other unidentified provisions. Unless that approach is taken, the Minister would have to identify each and every conceivably relevant provision of the LGA that might be involved which, in various cases, will amount to a practical impossibility.
For these reasons I reject the submission that the material before the Court supports a finding that the Minister did not have a belief that met the requirements of s 272(1)(a)(i). To summarise, the Minister asserts a belief in her letter of 2 July 2009, and had reason to believe, that the allegations or complaints about the circumstances identified in her letter of 2 July 2009 were well founded, and had produced a situation in which the Council was not complying with its obligation under s 6(a) of the LGA, and possibly other provisions. The Minister did not have to have a belief that required or involved identifying every provision of the LGA with which the Council might possibly have failed to comply, nor was it necessary for her belief to extend to every provision of the LGA in relation to which such a finding might ultimately be made by an appointed investigator. This conclusion is influenced by the factual circumstances identified by the Minister. In another case in which the matter identified is quite limited and the issues quite specific, it might be necessary for the Minister to hold a belief that is as detailed as Mr Abbott submitted it should have been here. That issue does not arise here.

While I am critical of the lack of clarity in the Minister’s correspondence and in the Notice of Appointment and in the Terms of Reference, it is fair to say the circumstances under consideration made it difficult to be precise. Nevertheless, the letter of 22 July 2009, the Notice of Appointment and the Terms of Reference fall short of what could and should have been achieved in terms of precision.
The question of compliance with Section 272(2)
As to the submission that the Minister did not comply with s 272(2), Mr Abbott’s complaint can be summarised as relying on the lack of particularity as to the facts giving rise to the Minister’s concern; insufficient time for the Council to respond; a failure to identify the provisions of the LGA in relation to which the Minister had a concern (in particular, the introduction of s 132A after the letter of 2 July 2009 to the Mayor); and the complaint that the Minister’s purported reliance on a contravention of s 6(a) constitutes a failure to identify any contravention of the LGA because a Council cannot “contravene” a provision such as s 6(a).
I have already rejected the last of the above submissions; in my view the use of the word “contravene” is not critical and nor is the Minister required to identify each and every relevant provision of the LGA in relation to which she might have reason to believe that a contravention or failure has occurred.
While the lack of clarity referred to gives some support to Mr Abbott’s submission, when one has regard to the nature of the circumstances concerning the Minister it becomes apparent that to satisfy the requirements contended for by Mr Abbott, the Minister would have to conduct some kind of preliminary and quite detailed investigation before she could act under s 272(1). Otherwise, the Minister could not give complete particulars of each incident relied upon, and each provision of the LGA that might be involved.
The fact is that the Minister did identify in general terms a set of circumstances that were a cause for real concern. These circumstances had previously been canvassed with the Council, the Mayor, the CEO and some of the elected members. Having regard to the nature of the resultant concerns that the Minister was expressing, the Minister was entitled to identify the underlying matters in general terms although it must be said that some of them (in particular, the reference to the resignation and reinstatement of the CEO, without any indication of the aspect that was a cause for concern) should have been expressed more informatively.
Section 272(2) - “a reasonable opportunity”
The content of “a reasonable opportunity” for the purposes of s 272(2) will obviously vary with the facts in a given case. Here, the Minister’s concern related to a series of events, and a course of conduct, occurring over a significant period of time and involving a not inconsiderable number of different people in circumstances in which the matters in question had already been the subject of considerable discussion and correspondence. In my view, it was not practical to be much more specific than the Minister was.
As to the complaint of inadequate time in which to respond, the answer is that when the history of the matter is examined it shows that the Minister’s concern had been the subject of discussion with the Council for quite some time, perhaps too long, and that the relatively short time allowed to the Council at the final stage was, in those circumstances, sufficient.
As discussed above, while the Minister’s reason to believe had to be related to provisions of the LGA, it was not necessary for the Minister to draw the Council’s attention to each potentially relevant provision of the LGA. Rather, it was sufficient to identify the main provision in question and this was done here.
In the circumstances of the present case, the relatively late reference to s 132A is of no significance. If the Minister was concerned about protracted and serious conflict between elected members, preventing the Council from functioning as it should, an obvious matter to consider would be what the Council could have done about this, what it did do, and whether the LGA made any relevant provision in relation to it. The Council must have understood that. I consider that, in the context of the present inquiry, the investigator could have considered such matters whether or not the Minister raised them with the Council, or had indicated a belief in relation to them in particular, and whether or not s 132A was referred to in the Terms of Reference.
This is not to say that, once appointed, the investigator is entitled to inquire into anything at all that the investigator thinks is relevant. Rather, it is to make the point that in the context of this particular inquiry there is no need for the Minister to specify exhaustively to the Council, in forming her belief, or when fixing terms of reference, the provisions of the LGA that might be relevant to a consideration of the matters that caused her concern.
For these reasons it does not matter that when one looks at the letter of 1 August 2008 one finds some differences in the subject matters identified compared with the letter of 2 July 2009. This no doubt reflects inquiries made and further events, such as the resignation of the CEO in June 2009. The obligation imposed by s 272(2) cannot be turned into an occasion for a preliminary investigation by the Minister, nor for a detailed contest between the Minister and the Council as to the relevant circumstances and relevant provisions.
I consider that the Minister complied with her obligation under s 272(2).
Standing of the plaintiffs to complain in relation to an obligation owed to the Council.
I add that I doubt whether the plaintiffs have standing to make this particular complaint. The obligation of the Minister under s 272(2) is an obligation owed to the Council. It has not challenged the appointment. Mr Hinton QC SG, counsel for the defendants, did not submit that the plaintiffs lacked standing. As the issue under s 272(2) was argued in full, I have thought it best to deal with it, despite my real doubt about the entitlement of the plaintiffs to raise it.
The Terms of Reference
Mr Abbott also submits that the Terms of Reference authorise an inquiry into matters that go beyond any matter in respect of which it can be demonstrated that the Minister had “reason to believe” in terms of s 272(1)(a), and beyond the matters in relation to which the Minister had to comply with s 272(2). I will deal with the second aspect of the submission later.
The Terms of Reference and the “matter” in s 272(1)
I agree that the effect of s 272(1) is that the “matter” which the Minister appoints the investigator to investigate and report on must correspond with the matter in respect of which the Minister had “reason to believe”. Therefore, to the extent that the Terms of Reference appear to authorise an investigation into compliance by the Council with any provision or all provisions of the LGA I agree with Mr Abbott’s submission that this is inappropriate and beyond power.
The inquiry that the Minister can authorise is limited to the matter or matters in respect of which the Minister had the required “reason to believe”. The Minister’s “reason to believe” related to the circumstances outlined in her letter of 2 July 2009. However, as discussed above, that involved a combination of circumstances (outlined in the letter of 2 July 2009) and an effect on the Council, namely, its inability to function as required by s 6(a).
The Minister’s reasons in that sense may be summarised as follows: continuing and intractable friction between elected members; the failure of the Council to resolve this; the CEO’s resignation and reinstatement; the leaking of confidential Council information; bullying and harassment in the circumstances indicated. With reference to these matters the Minister has stated a belief that the Council cannot function as required by s 6(a) of the LGA, and that the Council has not complied with s 132A.
The Minister’s belief delineates the scope of the investigation that she can authorise under s 272(1). “The matter” in respect of which she can appoint an investigator is the subject matter of her belief. The scope of the enquiry must align with, or at least not go wider than, that matter. The alignment need not be precise but there must be substantial alignment.
If the Terms of Reference are read as authorising an investigation into a failure to comply with any provision of the LGA, the particular topics identified in the Terms of Reference merely being an aspect of that wider enquiry, such purported authorisation of an investigation would be beyond the Minister’s power since the permissible investigation is limited to the circumstances identified by the Minister in her letter of 2 July 2009, which I have summarised above.
The Terms of Reference can and should be read in that more limited sense. In my view, they can be read in that limited sense because the letters of 2 July 2009 and 22 July 2009 clearly are so limited, and the Notice of Appointment and Terms of Reference are to be read as based on those letters.
The basis for this reading down of the Terms of Reference is s 13 of the Acts Interpretation Act 1915 (SA). It provides:
13—Construction of statutory instrument so as not to exceed power
A statutory or other instrument made pursuant to a power conferred by or under an Act will be read and construed so as not to exceed that power, so that, where a provision of the instrument, or the application of a provision of the instrument to any person or circumstances, is in excess of that power, the remainder of the instrument, or the application of the provision to other persons and circumstances, is not affected.
The appointment of the investigator is made by an instrument. The appointment is a formal document exercising a statutory power. It creates and confers legal powers under the Local Government Act 1999 (SA). It is something to which one can apply the concept of legal validity. On this basis it answers the description of an instrument: see the helpful discussion in R v Ng. [2002] VSCA 108; (2002) 5 VR 243 at [48]-[56].
Provisions similar to s 13 have been part of the Australian legal landscape for a long time. They have been applied in a range of circumstances. The approach to such a provision, and the two situations in which such a provision is usually applied, were canvassed by Dixon J in The King v Poole; Ex parte Henry [No 2] (1939) 61 CLR 634 at 652. His Honour said, referring to s 46(b) (the equivalent of s 13):
Two types of case present themselves under provisions such as secs. 15A and 46(b) of the Acts Interpretation Act, provisions which require that an entirely artificial construction shall be placed on a statute found to be invalid in part in order to save so much of it as might have been validly enacted. In one type it is found that particular clauses, provisos or qualifications, which are the subject of distinct or separate expression, are beyond the power of the legislature. In the second type, a provision which, in relation to a limited subject matter or territory, or even class of persons, might validly have been enacted, is expressed to apply generally without the appropriate limitation, or to apply to a larger subject matter, territory or class of persons than the power allows. In the first case, the question usually is whether the operation or effect of the remainder of the Act upon the persons or things to which it would apply would be changed if the clauses, provisos and qualifications held bad were excised. In other words, in such a case the right question to ask may be whether liabilities or rights of a different tenor, measure or nature would result. In the second case, the question may simply be whether the legislature intended the provision to have a distributive operation or effect. That is to say, did it intend that the particular command or requirement expressed in the provision should apply to or be fulfilled by each and every person within the class independently of the application of the provision to the others; or were all to go free unless all were bound?
Another helpful summary can be found in the reasons of Latham CJ in Pidoto v The State of Victoria (1943) 68 CLR 87 at 110-111 where his Honour said:
Thus in my opinion the provisions of the Acts Interpretation Act have provided a rule of construction and not a rule of law. The words of the sections expressly refer to the manner in which laws are to be construed. In the case of separable words and expressions, the application of the sections does not raise as many difficulties as in the case of general words and expressions. If a law is stated to apply to cases A, B and C in express terms and the application of the law to B and C is beyond power, then the law may validly apply to A unless the striking out of the provisions with respect to B and C results in the law having a different policy or operation in relation to A. In other cases, where there are not separate words, but where there are general words or expressions which apply both to cases within power and to cases beyond power, then if an intention of Parliament that there should be a partial operation of the law based upon some particular standard criterion or test can be discovered from the terms of the law itself or from the nature of the subject matter with which the law deals, it can be read down so as to give valid operation of a partial character. In such a case also it would be necessary to consider whether such reading down would alter the policy or operation of the statute with respect to the cases which, after the reading down, would still remain within its terms. But if a law can be reduced to validity by adopting any one or more of a number of several possible limitations, and no reason based upon the law itself can be stated for selecting one limitation rather than another, the law should be held to be invalid. In such a case the law cannot be saved by the Acts Interpretation Act.
More recently, and more succinctly, in Harrington v Lowe (1996-1997) 190 CLR 311, referring to a power to sever or read down at common law, Brennan CJ, Dawson, Toohey, Gaudron, McHugh and Gummow JJ said at 328:
As to the common law in Australia, the position, as established by the earlier decisions of this Court to which we have referred appears to be that a valid operation for the sub-rules might be preserved after textual surgery by operation of the "blue pencil" rule so that the valid portion could operate independently of the invalid portion, or, failing that, by treating the text as modified so as to achieve severance. But this latter step may be taken only where in so doing there is effected no change to the substantial purpose and effect of the impugned provision, and, in particular, there is not left substantially a different law as to the subject-matter dealt with from what it would otherwise be.
Citation omitted
By s 13 Parliament has stated that if the Terms of Reference on their face go beyond the legal power given to the Minister by s 272 of the LGA, that instrument is to be “read and construed so as not to exceed that power”. The cases referred to show the limits on the ability of a court to exercise the power conferred by s 13. In part, those limits have their origin in the nature of judicial power.
The Notice of Appointment and Terms of Reference are a unilateral document, not a contract. Nevertheless, it is permissible to consider them in their context, and that includes the letters of 2 July 2009 and 22 July 2009. That is permissible, in my opinion, even though the person in relation to whom the investigator exercises his powers might not be aware of that correspondence. When a court reads down legislation enacted by Parliament pursuant to s 13, it will also draw on considerations of which a person affected by the exercise of the power would be unaware.
There is no reason to think that the Minister intended the apparently unlimited enquiry authorised by the Terms of Reference. The correspondence makes the Minister’s intention clear. It was that the investigator should investigate the circumstances identified in the valid parts of the Terms of Reference, and should consider whether the Council was contravening s 6(a) of the LGA and s 132A. As part of that, there is nothing to stop the investigator commenting on other possible breaches of the LGA. Reading the Terms of Reference in this way does not change the evident purpose of the appointment. That is because one can conclude that the Minister’s purpose was a limited one. Nor does it create substantially different Terms of Reference.
In relation to the matters identified by the Minister, the focus of the investigation must be whether the Council was able to comply, and was complying, with s 6(a). The focus by the Minister on such a general provision is unfortunate, but that is what the Minister has chosen. Thus, the “matter” for the purposes of s 272(1) is whether, having regard to the particular circumstances identified by the Minister, the Council is complying with s 6(a). The particular matters identified are not to be investigated as “stand alone” matters but are to be investigated only to determine whether the Council is (or was) complying with s 6(a).
Put another way, the investigation and the exercise of powers by the investigator are limited to the matter in respect of which the investigator is appointed. The primary focus of the Terms of Reference is on the question of whether the Council has contravened or failed to comply with s 6(a) of the LGA or another provision of the LGA, arising out of the matters of fact identified in the Terms of Reference. While the investigator can and should enquire into the conduct of elected members and other individuals, in relation to the matters identified in the valid parts of subparas (1)–(4), the conduct of those individuals is not an independent matter for investigation; it is not a matter for investigation in itself.
Thus, the investigator is only authorised to investigate those matters to the extent necessary to come to a conclusion and to report to the Minister whether or not the Council (as distinct from those individuals) has contravened or failed to comply with s 6(a) or another provision of the LGA. However, if, in the course of investigating matters in respect of which the investigator has been appointed, the investigator concludes that an irregularity has occurred in the conduct of the affairs of the Council, there is no reason why the investigator cannot report on that provided that the subject of the irregularity must be something that falls to be investigated under the Terms of Reference.
It is important that a balance be struck, or a line be drawn, between investigating particular matters or topics to the extent necessary to investigate and report on the performance of the Council, and on the other hand descending into the kind of detail that would be appropriate if the investigator were appointed to investigate and report on the topic as such, or as an end in itself, as distinct from for the purposes of determining whether the Council is complying with s 6(a) of the LGA. The line will not be easy to draw in practice and the difficulty is largely created by the awkward manner in which the Terms of Reference are expressed. Nevertheless, it is a line that must be drawn by the investigator. The Court can intervene only if it is clear that the balance has not been struck, or that the line has not been drawn.
Accordingly, the Terms of Reference should be read as meaning that the particular factual matters identified are relevant to the extent that they contribute to a failure to comply with s 6(a) as distinct from being independent subjects for investigation and report. As an example, one of the matters raised by the Minister is the improper use of confidential Council information. As I see it, the only relevance of this matter is the impact or effect on the Council’s functioning of the improper use of confidential information. Accordingly, the investigator must investigate and report on that aspect of relevance but there is no need, and no lawful authority, to treat the misuse of confidential information as a stand alone matter for investigation and report. The need clearly to draw the line indicates that precise findings about who misused what information and on which occasions is not the issue, unless that is the only way of grappling with the topic of the impact or effect on the Council’s functioning of the improper use of confidential information. A report to the Minister that makes relatively general findings about the nature and extent of the misuse of confidential information should suffice, because the issue for the investigator is whether that misuse is contributing to the failure of the Council to comply with s 6(a).
The invalidity of particular Terms of Reference

There is no objection to the allusion to s 132A in the opening words of subpara (1) of the Terms of Reference. For reasons indicated earlier, a matter like that is part and parcel of the enquiry into compliance with s 6(a).
However, I consider that the second dot point of subpara (1) purports to authorise an investigation that goes beyond the Minister’s power. On its face, it authorises a roving enquiry into all aspects of the honesty, care and diligence of elected members. That broad topic was not identified by the Minister as a subject matter of her belief. It would be an extremely wide enquiry. To the extent that the improper use of confidential Council information might disclose a failure by an elected member to act honestly, then the matter will fall within the first dot point. Accordingly, I would declare that in this respect the Terms of Reference are beyond the Minister’s power. That provision, and those referred to below, can be excised in exercise of the power conferred by s 13 of the Acts Interpretation Act.
The fifth dot point of subpara (1) also authorises an investigation that goes beyond the Minister’s power. The subject matter is very wide. It is difficult to identify any particular limit. This topic is not referred to in the Minister’s letter of 2 July 2009 as a matter in respect of which the Minister has formed a belief. It is not, on its face, a necessary component of one of the matters in respect of which the Minister had power to appoint an investigator. In other words, this topic is not a “matter” in respect of which an enquiry can be authorised. Accordingly, I would declare that in this further respect the Terms of Reference are beyond the Minister’s power. I have to say that this is another example, to my mind, of a failure to think through the meaning and effect of the Terms of Reference, having regard to the relevant belief on the part of the Minister.
The other elements of subpara (1) appear to me to be within power, likewise subparas (2) and (3).
Subpara (4) is more difficult. This term of reference also is extremely wide. It appears to authorise investigation into any decision of the Council since the election in 2006, and into the views or influence of any person who is not an elected member or a member of staff. More significantly, this topic is not identified in the Minister’s letter of 2 July 2009 as a matter in respect of which the Minister had formed any particular belief. I realise that there are references in the material before the Court to a particular individual who has said to have exercised inappropriate influence over the decision making by certain elected members. But if the intention was to authorise an investigation in relation to that particular topic, the term of reference should have been drafted appropriately and should have been more limited and more specific. It is not appropriate for me to speculate that that might have been the intention, and to re-word or limit the Terms of Reference accordingly.
For those reasons I would declare that subpara (4) of the Terms of Reference goes beyond the Minister’s power.
The relationship between the Terms of Reference and s 272(2)
I deal now with Mr Abbott’s submission that the appointment of the investigator is beyond power because the Terms of Reference include matters in relation to which the Minister did not discharge her obligation under s 272(2) of the LGA.
I have already noted that s 272 does not require that the Minister have a particular belief when the Minister sets out to comply with the requirements of s 272(2) of the LGA. The “reason to believe” for the purposes of s 272(1) need only exist when the appointment of an investigator is made.
I do not accept Mr Abbott’s submission that to comply with s 272(2) the Minister must raise with the Council “the matter” referred to in s 272(1). There is nothing in the terms of s 272(2) to support that conclusion. Nor does the significance of the powers vested in an investigator support that conclusion.
But there is an unexpressed relationship between s 272(1) and s 272(2). The “reasonable opportunity” to be given to a council is for the purpose of enabling it to “explain its actions and to make submissions” in relation to a possible appointment under s 272(1) in relation to a matter (not yet determined). The Minister will comply with s 272(2) as long as the topics or issues identified to the relevant council have a sufficient relationship to “the matter” that is ultimately the subject of an appointment, to enable one to conclude that the Council has had the “reasonable opportunity” to which it is entitled. There is a question begging aspect to that formulation. But all that one can do is to compare the topics raised with the Council and the matter the subject of an appointment with a view to determining whether or not the relevant council has had “a reasonable opportunity”. It will not be necessary for the Minister to identify to the council every topic, let alone every aspect of each topic, ultimately the subject of an appointment of an investigation. Of course, on the other hand, the difference between the topics identified to a council and the matter in respect of which an investigator is appointed, might cause one to conclude that the Council has not had “a reasonable opportunity”.
When one takes into account the limits that I place on the operation of the Terms of Reference as indicated above and the fact that I consider parts of the Terms of Reference to be beyond power, it is apparent that the Council was allowed a reasonable opportunity to explain its actions and to make submissions. There is a sufficient identity between the topics raised with the Council and the scope of the Terms of Reference (properly understood) to lead to that conclusion. In those circumstances, there is no need to go to the correspondence and dealings between the Minister and Council before the letter of 2 July 2009 to support that conclusion.
The conduct of the investigation
Mr Abbott submits that the investigator has gone beyond the Terms of Reference, and has compelled the production of evidence and the answering of questions which he had no power to compel. He submits that the draft discloses that the investigator has examined matters on the basis that he is investigating “irregularity” for the purposes of s 272(1)(a)(ii) and treating that as an independent subject of inquiry. He submits that some features of the draft that give rise to this inference include the frequent references to conduct of individual councillors said to constitute irregularity and the focus on the conduct of elected members to such an extent as to indicate that the investigator has treated this as the object of his inquiry, or as the purpose or end of the inquiry, rather than as a step on the way to deciding whether or not the Council has complied with its obligations.
A number of difficulties confront the Court in dealing with this submission. As Mr Hinton submits for the defendants, the document is a draft. He submits that it has no status at present and that it might change significantly, once the investigator has considered comments on the draft.
However, the investigator has exercised powers under the LGA to obtain information for the purposes of the draft, and might yet exercise those powers again. While there is reason for caution before the Court intervenes at the stage of a draft, if parts of the draft can be identified as being beyond the scope of an authorised investigation, there is no reason why the Court should not say so.
Another reason for caution at this stage is that if the Court holds, as I would hold, that the Terms of Reference are to be read down or limited in certain respects and that parts of the Terms of Reference go beyond power, the scope of the final report will be narrower than the draft. For example, Chapters 5, 8 and 11 of the draft will require reconsideration for the reasons stated above. The investigator should have the opportunity to consider the impact of the Court’s decision on the scope of the investigation.
It is appropriate to make some further brief comments on some particular aspects of the submissions made by Mr Abbott on this topic.
First, in chapter 1.4 the investigator reports on steps taken to obtain relevant documents from the Council, elected members and others. In section 1.4.5 the investigator begins to deal, in some detail, with efforts to obtain a copy of emails sent and received by an elected member using the email system of the member’s employer. He proceeds to make findings critical of the employer’s response to the investigator’s request for information, and critical of the employer’s record keeping. To my mind, the Terms of Reference do not support an investigation into a matter like this. It is not within the Terms of Reference to make findings about the co-operation or lack of co-operation of the employer, or about the quality of the employer’s records. I descend to this level of detail to make the point that this is an indication that the investigator has failed to observe the line between, on the one hand, investigating and reporting matters that bear on the performance of Council, and, on the other hand, investigating and reporting matters that the investigator has come across but which have no such bearing.
Second, I have a similar concern, and I put it no higher than that, that the investigator may have pursued the issue of breach of confidence in excessive detail. I emphasise that I am not so finding. However, my impression is that the draft may go beyond investigating and reporting what is necessary to determine whether or not the Council was functioning as it should, as distinct from treating breaches of confidence as a subject matter of inquiry and report in their own right.
Third, I have indicated that in my opinion chapter 8, dealing with the relationship between the Council and individual ratepayers, will call for reconsideration. There is an aspect of that chapter on which I wish to comment, because it also reveals an approach which, if taken in other areas, raises the possibility that the investigator has gone beyond the Terms of Reference. On the basis of this aspect of the Terms of Reference, the investigator apparently published advertisements seeking public submissions. A number of submissions were received. They raised complaints about various aspects of Council decision making. That is hardly surprising. Some of the complaints related to matters under the Development Act. As to these, the investigator sought advice from the Department of Planning and Local Government. A number of particular applications were investigated and commented on. The investigator records that some submissions “raised concerns regarding Council decisions in relation to service provisions such as rubbish collection or infrastructure projects such as roads, walking trails or playgrounds”. The investigator reports that he does not deal with each of these matters individually, but comments that the Council has dealt with these matters in a manner that “is often not a positive reflection on the Council and its practices”.
I refer to these matters because in my respectful opinion they indicate a departure from the Terms of Reference, even if the subject matter of the relationship between the Council and the individual ratepayers was a matter within power. To my mind, a critique of the Council’s handling of particular matters under the Development Plan, and matters of service delivery, bears no real relationship to the question of whether the Council is complying with s 6(a) of the LGA.
I earlier alluded to the fact that the draft is more than a thousand pages long. A further problem facing the Court is the practical impossibility of it making a close examination of the draft with a view to identifying parts that go beyond power.
Taking all these considerations into account, I am firmly of the opinion that it is not appropriate for the Court to undertake the task of identifying particular portions of the draft that would, if published, go beyond power. In brief, the document is a draft. The investigator will have to revise it substantially in light of these reasons. Embarking on a detailed study of the draft would further delay the Court’s decision, a decision which is desirable to clarify the extent of the investigator’s power.
Procedural fairness for the plaintiffs
The plaintiffs complain that they have not been allowed sufficient time to comment on the draft report. It appears that since about the time of the institution of the proceedings, the plaintiffs have made no attempt to grapple with the draft, and the investigator, understandably, has not proceeded any further. The plaintiffs have always been free to comment on the draft report to the investigator and they will now have the advantage of being able to do so against the background of the present Judgment. As the investigator will need time to reconsider the draft, the plaintiffs will be able to make use of that same time; there is no need to and no point in the Court determining whether the plaintiffs should be given more time, and if so how much. I can do no more than refer to the clear public interest in this matter being brought to a conclusion as soon as it can.
Other matters
No-one can suggest that this is a satisfactory outcome. It is regrettable that all this time has passed, the completion of the investigation not having been achieved. However, the problems begin with the manner in which the Minister has expressed her belief for the purposes of s 272(1), and then continue with the manner in which the Notice of Appointment and Terms of Reference are expressed; it is not surprising, when one reflects on the manner in which these documents are written, and the nature of the issues that thereby arose, that things have got to this stage.
Orders
I would declare that the Terms of Reference exceed the Minister’s power to the extent that they include the second and fifth dot points in paragraph (1), and the whole of paragraph (4).
I have indicated in what respect the Terms of Reference should be read in a limited fashion. It is not appropriate to make any order or declaration reflecting that. This is something for the investigator to consider and deal with at this stage.
I would reject the remaining attacks on the validity of the Appointment and Terms of Reference.
I would decline to consider the complaint that the provisional draft report, if published as the investigator’s report, goes beyond the scope of the Terms of Reference and should be quashed.
WHITE J: The circumstances giving rise to these proceedings are set out in the reasons of the Chief Justice.
The plaintiffs, each of whom was at relevant times a member of the City of Burnside Council (the Council), challenge the validity of Mr MacPherson’s appointment as an investigator under s 272 of the Local Government Act 1999 (SA) (LGA); the correctness of Mr MacPherson’s understanding of the terms of reference of his investigation; and the adequacy of the opportunity which Mr MacPherson has given them to respond to matters in his draft report.
Before addressing the issues raised by the plaintiffs’ claims, it is appropriate to note some features of local government in South Australia and the system of review of which s 272 forms part.
The Constitution of South Australia contemplates a system of elected local government bodies. Section 64A(1) of the Constitution Act 1934 (SA) provides:
(1)There shall continue to be a system of local government in this State under which elected local governing bodies are constituted with such powers as the Parliament considers necessary for the better government of those areas of the State that are from time to time subject to that system of local government.
It is the LGA which provides the system contemplated by s 64A. The LGA continues in relevant respects the system established by earlier Acts of the same kind. That system involves the establishment and continuation of a number of statutory corporations with authority over defined geographic areas within the State. The communities within those areas are intended to have both responsibility for, and autonomy in, the provision and regulation of a number of functions and activities of a governmental kind.
Section 64A of the Constitution Act and the LGA reflect the community’s judgment that some aspects of government are best discharged at a local, rather than State, level and that local communities will benefit from being empowered to manage, and made responsible for the management of, a variety of governmental functions affecting them. Those functions and responsibilities are, however, to be discharged within a detailed framework of regulation and oversight contained in the LGA itself and Regulations made under it. The LGA provides in detail for the election of persons to local councils and for the manner of discharge by local councils of their responsibilities. The underlying theme is of responsible government at the local level.
The role of councils in the system of local government is seen in a number of provisions of the LGA. Section 6 of the LGA provides:
A council is, under the system of local government established by this Act, established to provide for the government and management of its area at the local level and, in particular —
(a)to act as a representative, informed and responsible decision-maker in the interests of its community; and
(b)to provide and co-ordinate various public services and facilities to develop its community and resources in a socially just and ecologically and sustainable manner; and
(c)to encourage and develop initiatives within its community for improving the quality of life of the community; and
…
Section 7 specifies in general terms a number of functions of a council with the emphasis being on the promotion of the interests of the local community and the local area.
Section 8 states separately the objectives of local councils. It provides that a council must, in the performance of its roles and functions provide open, responsive and accountable government (sub-par (a)); be responsive to the needs, interests and aspirations of individuals and groups within its community (sub‑par (b)); and manage its operations and affairs in a manner that emphasises the importance of service to the community (sub‑par (g)).
So important is the system of local government that the Constitution Act seeks to preserve its continuance. Section 64A(3) provides:
(3)No Bill by virtue of which this State would cease to have a system of local government that conforms with subsection (1) of this section shall be presented to the Governor for assent unless the Bill has been passed by an absolute majority of the members of each House of Parliament.
Given the important role of councils and the autonomy which it is contemplated they should have in the system of local government, it is to be expected that the circumstances in which an elected council may be removed, or have its decisions over-ridden by a Minister or the State Government, will be limited. Part 3 of Chapter 3 of the LGA, of which s 272 forms part, appears to reflect that understanding.
The LGA does empower the Minister to give directions to a council.[2] It also empowers the Minister to take action which would result in the elected council members being suspended from their office and, in their place, an administrator being appointed to manage the affairs of the council.[3] However, the circumstances in which either of these powers may be exercised are closely circumscribed.
[2] See eg Local Government Act 1999 (SA) s 273(2).
[3] Local Government Act 1999 (SA) s 273(5).
The Minister may take either step only on the basis of a report of an investigator appointed under s 272, a report of the Auditor-General, or a report of the Ombudsman, and may only take action which may result in the suspension of elected members from their office if the Minister considers that there has been some “serious” wrongdoing on the part of the council. The Minister’s powers in this respect are contained in s 273 which provides relevantly:
(1)     The Minister may, on the basis of—
(a)     a report of an investigator or investigators under this Division; or
(b)     a report of the Auditor-General (under this or another Act); or
(c)     a report of the Ombudsman (under another Act),
take action under this section.
(2)     The action that the Minister may take is any of the following:
(a)     the Minister may make recommendations to a council;
(b)     if the Minister considers—
(i)that a council has contravened or failed to comply with a provision of this or another Act; or
(ii)that a council has failed to discharge a responsibility under this or another Act; or
(iii)that an irregularity has occurred in the conduct of the affairs of a council (in relation to matters arising under this or another Act),
the Minister may give directions to the council to rectify the matter, or to prevent a recurrence of the act, failure or irregularity;
(c)     if the Minister considers that there has been—
(i)a serious contravention or failure on the part of a council to comply with a provision of this or another Act; or
(ii)a serious failure on the part of a council to discharge a responsibility under this or another Act; or
(iii)a serious irregularity in the conduct of the affairs of a council (in relation to matters arising under this or another Act),
and accordingly that the council should be declared as a defaulting council under this Division—the Minister may recommend to the Governor that the council be declared to be a defaulting council.
(3)The Minister must, before taking action under subsection (2)(b) or (c), give the council a reasonable opportunity to make submissions to the Minister on the report on which the action is based.
(4)     A council must comply with a direction under subsection (2)(b).
(5)If the Minister makes a recommendation under subsection (2)(c), the Governor may, by proclamation—
(a)     declare the council to be a defaulting council; and
(b)     appoint a suitable person or suitable persons to be administrator or administrators of the affairs of the council.
…
(8)On the making of a proclamation under subsection (5), all the members of the defaulting council are suspended from their respective offices until the council ceases to be a defaulting council.
(9)An administrator or administrators appointed under this section will, until the council ceases to be a defaulting council, administer the affairs of the defaulting council in the name of and on behalf of the council (and for that purpose will have all the powers, functions and duties of the council).
…
(15)The Governor may, on the recommendation of the Minister made not earlier than the expiration of three months from the date on which the council was declared to be a defaulting council, by proclamation, declare the offices of all the members of the defaulting council to be vacant.
(16)    A council ceases to be a defaulting council under this Division—
(a)     on the making of a proclamation revoking the proclamation by which the council was declared to be a defaulting council; or
(b)     if a proclamation is made declaring the offices of all members of the defaulting council to be vacant—on the conclusion of the elections to fill the vacant offices; or
(c)     unless a proclamation referred to in paragraph (a) or (b) is sooner made—on the expiration of 12 months from the date on which the council was declared to be a defaulting council.
Section 273(1) makes plain that the Minister may act only on a report of a specified kind. The report under “this Division” to which subs (1) refers is the report of an investigator under s 272(1). This indicates the significance of the appointment of an investigator under that subsection. It is a step which may lead ultimately to the suspension of the elected members of the council and their replacement by an administrator. In other words, it is a step which may lead to the cessation of the form of responsible local government contemplated by the LGA for a period which may be as long as 12 months (s 273(16)(c)).

To my mind, it is not self-evident that the expression “reason to believe” in s 272(1) bears the same meaning. It may instead connote something like “reasonable cause to suspect” that a circumstance of at least one of the enumerated kinds has occurred without requiring in addition an actual belief that such a circumstances has in fact occurred.
The terms of s 273, in particular s 273(2), are important in this context. As noted earlier, s 273 empowers the Minister to take action of a certain kind on the basis, amongst other things, of a report provided under s 272. A comparison of s 272(1)(a) with s 273(2)(b) indicates that the subject matter of the Minister’s belief in each case is the same. The only difference between the two provisions is that in the case of the former, the Minister may appoint an investigator if the Minister has “reason to believe” that one or more of the enumerated circumstances exist, whereas in the case of the latter, the Minister may take the authorised action if the Minister “considers” that one or more of the same enumerated circumstances exist. If reason to believe requires an actual belief based on reasonable grounds, then it would appear that there is little, if any, difference between the states of mind contemplated by ss 272(1) and 273(2)(b). To my mind, this would be a surprising conclusion. As s 272(1) is concerned with the appointment of an investigator which may result in a report on the basis of which the Minister may “consider” one or more of the enumerated circumstances to exist, it seems more likely that it contemplates a state of mind of the Minister less than actual belief that one or other of the enumerated circumstances does exist.
It may also be pertinent in this context to note that s 272(1) does not refer to the Minister having reason to believe that one of the perceived faults may have occurred. Instead, it refers to the Minister having reason to believe that one of the perceived faults has occurred. This too, in the context of a power to appoint an investigator, may suggest that “reason to believe” connotes only “reasonable cause to suspect” and not reasonable grounds for belief coupled with an actual belief.
However, it is not necessary to express a concluded view about these matters. That is because I consider that, on whichever view is taken, the Minister did have the requisite state of mind in relation to many, but not all, of the circumstances which Mr MacPherson was appointed to investigate.
Section 272(1) makes the time of the Minister’s appointment of Mr MacPherson the relevant time for consideration of her state of mind. That state of mind is a matter upon which the Minister has the evidential onus.
The Minister did not give evidence at the hearing. Nor was any affidavit from the Minister tendered. In those circumstances, it was common ground that the Minister’s state of mind at 22 July 2009 was to be determined by reference to the Minister’s letters to the Mayor of the Council on 2 and 22 July 2009, and from the Terms of Reference themselves. By the letter of 2 July 2009, the Minister purported to comply with s 272(2). By the letter of 22 July 2009, the Minister informed the Mayor of Mr MacPherson’s appointment. Each letter is set out in full in the reasons of the Chief Justice at [14] and [16] respectively.
Like the Chief Justice, I consider that the Minister’s reference in the letter of 22 July 2009 to s 6(2) is a mistake and should be understood as a reference to s 6(a). I would reject the plaintiffs’ submission that it is a mistaken reference to s 62(2).
The letter of 22 July 2009 is important in relation to the present issue. It is apparent that by that letter the Minister intended not only to inform the Mayor of Mr MacPherson’s appointment, but also to provide some explanation for that appointment. For that reason, the letter gives useful insights into the Minister’s state of mind. It is significant that in the letter of 22 July 2009 the Minister mentioned only a belief that contraventions of ss 6(a) and 132A had occurred.
That belief is reflected in the Terms of Reference themselves. The opening words to paragraph (1) appear to have been derived from s 132A[9] and paragraph (3) reflects the wording of s 6(a).[10]
[9] Section 132A provides:
[10] Quoted above at [9].
I am not overlooking that in relation to both ss 6(a) and 132A, the Minister referred only to a belief that a contravention may have occurred, rather than that such a contravention had occurred. On the narrower view of the state of mind which s 272(1) requires of the Minister, a belief that a contravention may have occurred may be insufficient. However, as previously indicated, I consider that the present issue can be determined using the construction of “reason to believe” which is most favourable to the Minister.
When regard is had to the letters of 2 and 22 July 2009 and to the Terms of Reference, it can be seen that the Minister does not assert that she had reasonable cause to believe, let alone an actual belief, that the Council may have breached any provision of the LGA other than ss 6(a) and 132A.
It is true that the reference to s 132A in the letter of 22 July 2009 and the implicit reference to s 132A in the Terms of Reference are the first occasions on which the Minister has referred to that provision. It could also be said that the matters particularised in the paragraph (1) of the Terms of Reference (with the exception of the second and fifth dot pointed matters) had, before 22 July 2009, been raised by the Minister only in relation to s 6(a) so that the Minister had not demonstrated the requisite belief that there had been non-compliance with s 132A in relation to those matters. However, I do not consider that the documents should be read narrowly. Putting to one side the second and fifth dot pointed matters, I would not be prepared to conclude that the Minister has not demonstrated reasonable cause to believe in the existence of the individual perceived faults identified in the Terms of Reference.
The second and fifth dot pointed matters are not mentioned by the Minister in either of the letters of 2 and 22 July 2009.
Accordingly, I would uphold the plaintiffs’ submissions only insofar as they impugn the existence in the requisite belief by the Minister of non-compliance with any provision of the LGA other than ss 6(a) and 132A, the existence of any belief by the Minister with respect to the obligations of elected councillors to act honestly and with reasonable care and diligence in the performance and discharge of their official functions and duties, and the existence of any belief by the Minister concerning the management of the relationship between the Council and individual rate payers. In my opinion, the Minister has not shown that she had the requisite state of mind in relation to those matters at 22 July 2009.
Did the Minister Comply with S 272(2)?
As previously noted, s 272(2) of the LGA requires the Minister, before making an appointment of an investigator, to give the Council a reasonable opportunity to explain its actions and to make submissions to the Minister.
The defendants accepted that s 272(2) imposes a requirement which is an essential preliminary, in the sense referred to by the plurality in Project Blue Sky Inc v Australian Broadcasting Authority,[11] to the exercise of the Minister’s power to appoint an investigator.
[11] [1998] HCA 28 at [92]; (1998) 194 CLR 355 at 389.
Obviously, there is more than one way in which a Minister may provide a “reasonable opportunity” to a council for the purposes of s 272(2). In those cases in which the Minister has reason to believe that a council has contravened or failed to comply with a statutory provision, or failed to discharge a responsibility imposed by statute, the Minister will ordinarily have to identify the relevant provision and give at least some indication of the way in which the council is believed to have contravened it. That is because often a council may understand the significance of a perceived fault only if its attention is drawn to the statutory provision in question. In other cases, it may be sufficient for a Minister to refer a council to the circumstances, or constellation of circumstances, which are of concern. When a Minister considers that the particular conduct of a council may have contravened more than one statutory provision, it may be sufficient for the Minister to refer only to the principal provisions in question, without having to attempt an itemisation of each provision which may possibly have been breached. If a Minister is considering appointing an investigator to examine particular conduct or omissions and, in addition, any antecedent or related conduct which, by itself, would amount to a contravention of some other statutory provision, s 272(2) would ordinarily require that the Minister refer the council to that other provision.
In short, the provision to a council of a reasonable opportunity to provide an explanation and to make submissions will vary according to the circumstances of a given case. It will however usually require the Minister to identify to the council both the statutory provisions which are believed to have been contravened and the conduct or omissions thought to amount to the contravention.
In the present case, the Minister adopted the technique of referring the Council both to a statutory provision and to the particular conduct which was the subject of her concerns.
The plaintiffs contended that the Minister nevertheless failed to comply with s 272(2). In particular, they submitted that the Minister had put the Council on notice only of her belief that s 6(a) had been contravened, that is, that she believed that the Council was not fulfilling its role of acting “as a representative, informed and responsible decision-maker in the interests of its community”. The plaintiffs submitted that the Minister had not given the Council notice of any other contravention or possible contravention and, in any event, had not given the Council notice of at least some of the factual circumstances contained in the Terms of Reference.
In support of this submission, the plaintiffs relied on the Minister’s letter to the Council of 2 July 2009. However, I consider it also appropriate to have regard to some earlier communications. In a letter to the Council of 1 August 2008, written at the Minister’s direction, the Chief Executive of the Department of Primary Industries and Resources SA, Mr Knight said:
The Minister for State/Local Government Relations has received several complaints with respect to a range of matters concerning the City of Burnside (the Council), including allegations of mal-administration. …
Two of the complainants seek the Minister’s intervention, and request that an investigation into the Council is undertaken, with a view to the appointment of an administrator for the Council.
With respect to the complaints received, I advise that the concerns raised and allegations made can be summarised as follows:
·       That the conflict between certain groups of councillors and the CEO is now at a level that the Council is dysfunctional.
·       That the Council is placing inappropriate weight in a range of decisions on the views of a person who is neither an elected member nor a member of staff, namely Mr Rick Powers.
·       That various requests for information by certain councillors are being refused by the CEO.
·       That the Council chose not to implement the recommendations from a report addressing allegations made against certain councillors, without good reason.
·       That minor breaches of the Council’s Code of Conduct by certain councillors have been subject to an over reaction by other councillors, motivated by revenge.
·       That the revenge sought relates to failed planning ventures by Mr Powers.
Having summarised these complaints, Mr Knight went on to say:
It would appear that the complaints have arisen largely from an apparent lack of mutual respect and trust between various parties, which has led to the breakdown of any constructive relationship. My concern is that this is not conducive to good decision‑making, and is not in the best interests of the elected body, its administration or the community that the Council represents and serves.
I have considered a number of possible conciliatory interventions, but it seems more appropriate to initiate a course of action that requires the Council to take responsibility and to demonstrate that the elected body can work together constructively, and with the administration. Should this not be possible, consideration will be given to recommending to the Minister an investigation pursuant to s 272(1) of the Local Government Act 1999.
However, before I recommend this course of action, I am providing the Council with an opportunity to make submissions in relation to the allegations made and summarised above, including an explanation why the Council resolved a different course of action to that suggested by Mr Kelly in his “Confidential Report to the City of Burnside Council re Certain Allegations”, and the manner in which the Council proposes to avoid intra‑Council conflict in the future.
(Emphasis added)
It can be seen that by this letter Mr Knight drew the Council’s attention to the nature of the complaints received by the Minister and foreshadowed initiating a course of action which would require the Council to demonstrate that the elected Council members could work together constructively and with the administration. Mr Knight also foreshadowed a possible investigation under s 272.
The evidence before this Court did not disclose what, if anything, happened in response to Mr Knight’s letter. However, nearly a year later, on 17 June 2009 the Minister wrote to Ms Greiner, the Mayor of the City of Burnside, referring to “a diminishing public confidence in your Council and its ability to function under the auspices of the Local Government Act 1999” and stating that she had directed her officers to discuss her concerns with the Council and to prepare advice “as to whether there are any grounds for a formal investigation under the Act”.
On 22 June 2009, Mr Hanlon, the Deputy Chief Executive of the Department of Planning and Local Government, wrote to Ms Greiner confirming that the Minister had directed that officers from the Office for State/Local Government Relations meet with her and others “to discuss various matters of public concern regarding the City of Burnside in order to provide her with informed advice on whether there are grounds for a formal investigation under section 272 of the Local Government Act 1999”. Mr Hanlon attached to his letter a series of questions which the officers proposed raising with each of the elected councillors. It is not necessary presently to record those questions beyond noting that question three inquired:
Has the Council contravened or failed to comply with a provision of this or another Act?
This correspondence indicates that the Council was on notice of the possible appointment of an investigator under s 272 of the LGA.
The officers of the Department did meet with members of the Council and provided a written report to the Minister. That report indicated, amongst other things, that the majority of members had answered question three in the negative. The Minister then made a Ministerial Statement to the Legislative Council in which she reported that her officers’ enquiries had raised allegations of serious concern, including:
A high level of apparently intractable conflict between various people at the Council;
·       A high level of dissatisfaction with the impact this friction appears to be having on the decision-making processes;
·       Apparent irreconcilable differences between elected members and staff; and
·       Bullying and harassment.
The Minister went on to foreshadow an investigation under s 272 but said that she was giving the Council, as required by the LGA, reasonable opportunity to explain its actions and to make submissions to her. It is reasonable to suppose that this Ministerial statement did come to the attention of the Council at the time it was made.
The Minister then wrote to the Council on 2 July 2009. The terms of this letter are set out in full in the reasons of the Chief Justice at [14]. In the first part of the letter, the Minister summarised four matters of concern to her and continued:
Based on all of the information provided to me, I do not believe that the Council is able [to] fulfil its obligation to “act as a representative, informed and responsible decision-maker in the interests of the community” and therefore is in contravention of section 6(a) of the Act. This is a principal role of the Council, and fundamental to its ability to provide good government and management of its area.
The Minister thereby asserted a belief in a contravention of s 6(a) of the LGA. This was the only provision of the LGA which the Minister identified as having been contravened, or possibly contravened, by the Council.
The Minister’s letter then went on to summarise six allegations which she had taken into account in forming her belief that s 6(a) was being contravened. The Minister made it plain that she was giving the Council the opportunity, as required by s 272(2), to explain its actions on the six identified matters and to make submissions to her.
The Council did provide a detailed submission to the Minister on 17 July 2009. Five days later the Minister made the appointment of Mr MacPherson which is the subject of these proceedings.
A comparison of the Terms of Reference with the earlier communications indicates that the Minister did not inform the Council at all of a number of matters which Mr MacPherson was appointed to investigate. These matters are:
1.that Mr MacPherson was, in effect, to investigate and report upon whether, since the 2006 elections, the Council had contravened in any way any provision of the LGA;
2.the subject matter of paragraph (1) of the Terms of Reference, namely, the possible non-compliance by the Council with s 132A of the LGA, whether by reference to the five dot pointed matters or at all;
3.the subject matter of paragraph (4) of the Terms of Reference, namely, whether improper weight had been placed in decision making of the Council by elected members or staff on the views and/or influence of a person who was neither an elected member nor a member of staff.
This last subject matter had been raised in Mr Knight’s letter of 1 August 2008, but only in relation to Mr Powers. That was almost 12 months prior to the appointment of Mr MacPherson. This subject matter was not mentioned at all in the formal notice to the Council of 2 July 2009.
It is also the case that the Minister had not previously notified the Council of any concerns about the second and fifth dot pointed matters in paragraph (1) of the Terms of Reference. If the five dot pointed matters in paragraph (1) were each intended to be the subject of independent investigation by Mr MacPherson, this too would have been a relevant non-compliance with s 272(2). However, the ordinary meaning of paragraph (1) is that Mr MacPherson was to investigate whether the Council had adopted and implemented policies, practices and procedures reflecting good administrative practice in the identified areas, rather than being appointed to investigate whether conduct or circumstances of the kind referred to in the five dot pointed sub-paragraphs had occurred. Put more shortly, Mr MacPherson was to examine whether the Council had appropriate procedures concerning certain issues, rather than whether issues of the identified kind had in fact occurred. The Council had not previously been put on notice that its implementation and maintenance of appropriate policies, practices and procedures in accordance with s 132A was in question. This is the second of the three matters identified above of which the Minister had not previously given notice to the Council.

The consequence, in my opinion, is that in the three identified respects the Minister did not give the Council a reasonable opportunity to explain its actions and to make submissions to her as required by s 272(2).
It could hardly be said that it was not practicable for the Minister to give the Council notice of her concern that it had not complied with s 132A or that improper weight was being placed on the views of an unelected rate payer. It would not have been difficult for the Minister to inform the Council of her concern that it had not ensured that appropriate policies, practices and procedures were implemented to achieve and maintain standards reflecting good administrative practices and to invite an explanation and submissions from it on that topic. Nor would it have been difficult for the Minister to inform the Council that she was concerned about its compliance generally with the provisions of the LGA. Question three in the questions of the departmental officers had hinted at a more wide-ranging concern, but did not have the effect of putting the Council on notice that its compliance generally with the LGA was in issue.
In summary, I consider that the Minister did make the appointment of Mr MacPherson without first having complied with s 272(2).
Section 272(2) and the Plaintiffs’ Standing
In my opinion, s 272(2) is an important procedural safeguard. It ensures procedural fairness to a council, but that is not its only purpose. It also operates to restrain Ministers from interfering too readily with the autonomy of an individual council and its decision-making processes; it seeks to ensure that a Minister will be adequately informed before committing public funds to an investigation of a council; and it provides some assurance to those who will be affected by the decision, including council ratepayers and staff, that action which may result in some abrogation or suspension of responsible local government in their area will not be taken on other than informed grounds.
Although s 272(2) stipulates that it is the Council which must be given a reasonable opportunity to explain its actions and to make submissions, it is arguable that the obligation which it imposes is owed to all those who may be adversely affected by the decision to appoint an investigator including, in a given case, ratepayers, elected members and staff members. Those persons may be affected in their capacity as ratepayers, elected members or as employees, but they may also be affected by the exercise by the investigator of the powers under s 272(3).
In the present case, the plaintiffs as elected members of the Council are particularly at risk of being adversely affected by a report on the Terms of Reference given to Mr MacPherson. They and their fellow Council members are in a sense the human embodiment of the Council. The conduct of the Council which is the subject of the Minister’s concerns appears, in many instances, to be the conduct, or to result from conduct, of some or all of the elected members.
In those circumstances, I consider that it can be said that the plaintiffs have a special interest in the appointment of Mr MacPherson which exceeds that of ordinary members of the public or of ordinary ratepayers in the Council’s area.[12] As the defendants did not dispute the plaintiffs’ standing, it is not necessary to express a final view about that. I indicate, however, that I am prepared to proceed on the basis that the plaintiffs do have the requisite standing.
[12] Australian Conservation Foundation v Commonwealth (1980) 146 CLR 493 at 530-31; Onus v Alcoa of Australia Ltd (1981) 149 CLR 27 at 69; Shop Distributive and Allied Employees Association v Minister for Industrial Relations (SA) (1995) 183 CLR 552 at 558.
I add that if the only issue is one of whether the Council had had adequate time in which to explain its actions or to provide submissions, the standing of the plaintiffs may well have been open to doubt. However, that is not this case. For the reasons given above, I am satisfied that the Minister has failed to give the Council any opportunity at all to explain some of the actions which are the subject of Mr MacPherson’s appointment.
The Consequences of Non-compliance with s 272(2)
As noted earlier, the defendants accepted that s 272(2) is an essential preliminary to the exercise of the power to appoint an investigator contained in subs (1). I understood that the defendants accordingly accepted that a finding that the Minister had not complied with s 272(2) should result in a declaration of the invalidity of Mr MacPherson’s appointment. Subject to the operation of s 13 of the Acts Interpretation Act 1915, that conclusion must follow.
Section 13 of the Acts Interpretation Act 1915
Before considering the possible application of s 13 of the Acts Interpretation Act 1915 (SA), I summarise the conclusions I have reached so far.
First, by appointing Mr MacPherson to investigate whether the Council has contravened in any way any provision of the LGA, the Minister has not appointed him to carry out an investigation of a matter of the kind authorised by s 272(1).
Secondly, the Minister did not, in any event, have reason to believe on 22 July 2009 that the Council had contravened any provision of the LGA other than ss 6(a) and 132A, and there was therefore no basis upon which the appointment of Mr MacPherson to investigate any breach by the Council of any provision other than ss 6(a) and 132A could be made. Nor did the Minister have reason to believe that there had been a contravention or non-compliance by elected members with their obligation to act honestly and with reasonable care and diligence in the performance and discharge of their official functions and duties or that there had been some contravention or non-compliance in relation to the Council’s management of the relationship between it and individual ratepayers.
Thirdly, the Minister had not complied with an essential requirement for the appointment of an investigator as she had not given the Council a reasonable opportunity to explain its actions and to make submissions to her on the topics of whether it had contravened in any way any provision of the LGA, whether it had failed to comply with s 132A (whether by reference to the five dot pointed matters or at all), and whether improper weight had been placed in decision-making of the Council by elected members or staff on the views and/or influence of a person who was neither an elected member nor a member of staff.
These conclusions suggest that the Minister’s appointment of Mr MacPherson to carry out an investigation under s 272 should be declared invalid. However, before any such declaration is made, s 13 of the Acts Interpretation Act should be considered. Section 13 provides:
A statutory or other instrument made pursuant to a power conferred by or under an Act will be read and construed so as not to exceed that power, so that, where a provision of the instrument, or the application of a provision of the instrument to any person or circumstances, is in excess of that power, the remainder of the instrument, or the application of the provision to other persons and circumstances, is not affected.
The effect of s 13 is that courts should read and construe the instruments to which it applies so as to not exceed the power under which they are made and, that even when a portion of the instrument is beyond power, the remainder may stand unaffected. Section 13 thereby indicates a proper approach to the construction of an instrument and authorises a form of severance of invalid portions. The Court should, if more than one interpretation of the Notice of Appointment is possible, adopt the interpretation which will result in its validity, rather than in its invalidity.
I agree that the Minister’s Notice of Appointment of Mr MacPherson, together with the Terms of Reference which it contains, is an instrument to which s 13 applies.
In his reasons, the Chief Justice has referred to a number of authorities concerning the application of statutory or common law counterparts of s 13, and I gratefully adopt that review.
The authorities also indicate that there are limits on the extent to which a court can sever invalid portions of an enactment or instrument. In relation to counterparts of s 13 in the Acts Interpretation Act 1901 (Cth), Dixon J said in Bank of New South Wales v The Commonwealth:[13]
But in applying s 15A and s 46(b) the courts have insisted that a provision, though in itself unobjectionable constitutionally, must share the fate of so much of the statute, regulation or order as is found to be invalid, once it appears that the rejection of the invalid part would mean that the otherwise unobjectionable provision would operate differently upon the persons, matters or things falling under it or in some other way would produce a different result. This consideration supplies a strong logical ground for holding provisions to be inseverable, whether the prima-facie presumption be in favour or against severability. It is important where there is no statutory clause like s 15A and it is important in using s 15A. For the inference in such a case is strong that provisions so associated form an entire law and that no legislative intention existed that anything less should operate as a law.
Further, where severance would produce a result upon the persons and matter affected different from that which the entire enactment would have produced upon them, had it been valid, it might be said with justice that unless the legislature had specifically assented to that result, contingently on the failure of its primary intent, it could not amount to a law.[14]
[13] (1948) 76 CLR 1.
[14] Ibid at 371.
In more recent times, the Full Federal Court considered s 31 of the Interpretation Act 1987 (NSW), a counterpart of s 13, in Sportodds Systems Pty Ltd v New South Wales[15] and said:
Put simply the Court cannot “construe” the relevant provision, whether by reading down or by expunging invalid provisions, where the effect of doing so is to create a provision which the parliament did not intend. For this purpose various indicia are referred to such as the extent of the proposed change; the indicia within the statute itself; the legislative purpose and so on. But the essential issue remains – is the Court carrying out the permissible function of the interpretation of the statute (read in the context of the relevant Acts Interpretation Act provision), or is the Court itself making legislation?[16]
Against that background, I turn to the application of s 13 in the present case.
[15] [2003] FCAFC 237; (2003) 133 FCR 63.
[16] Ibid at [19], 73.
I will proceed on the basis, but without deciding, that it may be possible to construe the expression “any provisions of the [LGA]” in the opening lines of the Terms of Reference as referring only to s 6(a). If so, this would overcome the first ground of invalidity identified above and part of the third ground.
However, to proceed in this way would result in the Terms of Reference being construed very differently from their ordinary meaning and from the intention of the Minister to which I referred earlier. In addition, it would not overcome the difficulties with paragraphs (1) and (4) of the Terms of Reference. Those are the Terms of Reference in respect of which the Minister did not give the Council a reasonable opportunity to provide an explanation and make submissions before she made the appointment. If those two paragraphs are severed, that would leave only paragraphs (2) and (3). That would result in a very confined investigation. The investigator would then be inquiring into the subject matter of paragraphs (2) and (3) only for the purpose of examining whether, in relation to those subject matters, the Council had contravened or failed to comply with s 6(a).
On its face, the circumstances of the Chief Executive’s resignation and reinstatement in June 2009 (the subject of paragraph (2)) seem to have little to do with the Council’s compliance or otherwise with s 6(a). There may be more scope for examination of the subject matter of paragraph (3) in the context of s 6(a), but even so the investigation would be markedly different from that intended by the Minister. The investigator would have to have primary regard only to s 6(a). He may not be precluded altogether from commenting on a breach of any other provision of which he became aware during the course of that investigation, but an examination of the Council’s compliance with any other provision of the LGA could not be the focus of the investigation.
An investigation of this kind would be very different from the broad‑ranging investigation evidently intended by the Minister.
In these circumstances I consider that this is a case in which, using the language of Dixon J in Bank of New South Wales v The Commonwealth, “severance would produce a result upon the persons and matters affected different from that which the entire enactment would have produced upon them, had it been valid.”[17] The effect would be that the Court would be substantially rewriting the Terms of Reference and would be creating terms which the Minister did not herself intend.
[17] (1948) 76 CLR 1 at 371.
For these reasons, I do not consider that s 13 of the Acts Interpretation Act can be applied so as to save at least part of Mr MacPherson’s appointment. Accordingly, I would make a declaration that the Minister’s appointment of Mr MacPherson on 22 July 2009 was invalid.
Is Mr MacPherson in any Event Exceeding the Terms of Reference?
Strictly speaking, my conclusion about the invalidity of Mr MacPherson’s appointment makes it unnecessary to address this issue. However, if contrary to my view, Mr MacPherson’s appointment is held to be valid, then I indicate my agreement with the reasons of the Chief Justice on this issue.
Denial of Procedural Fairness
Again, given my conclusion about the validity of Mr MacPherson’s appointment, it is not strictly necessary to address the plaintiffs’ submissions concerning Mr MacPherson’s alleged denial of procedural fairness. I agree, however, with the reasons of the Chief Justice on this issue.
Conclusion
For the reasons given above, I would make a declaration that the appointment on 22 July 2009 by the second defendant of the first defendant as an investigator under s 272(1) of the Local Government Act 1999 was invalid. I would hear the parties as to any consequential orders.
PEEK J: I agree with the orders proposed by the Chief Justice and with his reasons.

A council must ensure that appropriate policies, practices and procedures are implemented and maintained in order—
(a) to ensure compliance with any statutory requirements; and
(b) to achieve and maintain standards that reflect good administrative practices.