Sharples v Minister for Local Government - [2008] NSWLEC 328

No judgment structure available for this case.

Reported Decision: 166 LGERA 302
[2010] NSWCA 36

Land and Environment Court

of New South Wales

CITATION: Sharples v Minister for Local Government [2008] NSWLEC 328

PARTIES:
APPLICANT:
Terry Patrick Sharples
FIRST RESPONDENT:
Minister for Local Government
SECOND RESPONDENT:
Department of Local Government
THIRD RESPONDENT:
Tweed Shire Council

FILE NUMBER(S): 40959 of 2007

CORAM: Biscoe J

KEY ISSUES:
Judicial Review :- capacity of misleading representation to vitiate an administrative decision - determinations by Minister to increase council's general income under s 508A Local Government Act 1993 - under s 508A(3) determination may be made only on application of council made in accordance with any applicable guidelines issued by Director-General - applicable guidelines specified minimum requirements for applications including evidence of community support for proposal and how community was consulted - whether council made a material misrepresentation to the community as to the effect of proposed rate increase - if so, whether application was not in accordance with this requirement - if so, whether the determinations were invalid - whether council made a misleading representation to Minister concerning extent of community support in responses to surveys - if so, whether Minister's determinations were thereby invalid.
Costs: - whether appropriate to make no order for costs against unsuccessful applicant if the Court is satisfied that the proceedings have been brought in the public interest.

LEGISLATION CITED: Environmental Planning and Assessment Act 1979, ss 45, 66(1), 77(3)(d), 78A(8), 117
Land and Environment Court Rules 2007, rr 3.7, 4.2
Local Government Act 1993, ss 7(c), 23A, 405, 505(a), 506, 508(2), 508A, 509(1), 512, 548(3)(a), 674, 676(1)

CASES CITED: Al-Mehdawi v Secretary of State for the Home Department [1990] 1 AC 876
Anderson v Director General of the Department of Environment and Climate Change [2008] NSWCA 337
Anderson v Minister for Infrastructure Planning and Natural Resources [2006] NSWLEC 725, (2006) 151 LGERA 229
Anderson on behalf of Numbahjing Clan within the Bundjalung Nation v NSW Minister for Planning (No 2) [2008] NSWLEC 272
Australian Broadcasting Corporation v Redmore Pty Ltd [1989] HCA 15, (1989) 166 CLR 454
Azriel v NSW Land and Housing Corporation [2006] NSWCA 372
Barrett v Minister for Immigration, Local Government and Ethnic Affairs [1989] FCA 269, (1989) 18 ALD 129
Belmorgan Property Development Pty Ltd v GPT Re Ltd [2007] NSWCA 171, (2007) 153 LGERA 450
Botany Bay Council v Remath Investments No 6 Pty Ltd [2000] NSWCA 364, (2000) 50 NSWLR 312
Bruce v Cole (1998) 45 NSWLR 163
Bushell v Secretary of State for the Environment [1981] AC 75
Castle Constructions Pty Ltd v North Sydney Council [2008] NSWLEC 137
Commissioner of State Revenue (Victoria) v Royal Insurance Australia Ltd [1994] HCA 61, (1994) 182 CLR 51
Cranky Rock Road Action Group Inc v Cowra Shire Council [2006] NSWCA 339, (2006) 150 LGERA 81
El Cheikh v Hurstville City Council [2002] NSWCA 173, (2002) 121 LGERA 293
Foster v The Minister for Customs and Justice (Senator Vanstone) [1999] FCA 1447
Gales Holdings Pty Ltd v Minister for Infrastructure and Planning [2006] NSWCA 388, (2006) 69 NSWLR 156
GPT Re Ltd v Wollongong City Council [2006] NSWLEC 303, (2006) 151 LGERA 116
Hatton v Beaumont [1977] 2 NSWLR 211
Helman v Byron Shire Council (1995) 87 LGERA 349
Khan v Minister for Immigration and Ethnic Affairs (1987) 14 ALD 291
Ku-ring-gai Council v Minister for Planning (No 2) [2008] NSWLEC 276
Leichhardt Municipal Council v Minister for Planning (1992) 78 LGERA 306
Lezam Pty Ltd v Seabridge Australia Pty Ltd [1992] FCA 206, (1992) 35 FCR 535
Manly Council v Byrne [2004] NSWCA 123
Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24
Minister for Immigration and Citizenship v SZLIX [2008] FCAFC 171, (2008) 245 ALR 501
Minister for Immigration and Multicultural Affairs v Anthonypillai [2001] FCA 274, (2001) 106 FCR 426
Newcastle City Council v Caverstock Group Pty Ltd [2008] NSWCA 249
Notaras v Waverley Council [2007] NSWCA 333, (2007) 161 LGERA 230
Parramatta City Council v Hale (1982) 47 LGRA 319
Port Louis Corporation v Attorney-General of Mauritius [1965] AC 1111
Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28, (1998) 194 CLR 355
Smith v Wyong Shire Council [2003] NSWCA 322, (2003) 132 LGERA 148
SZFDE v Minister for Immigration and Citizenship [2007] HCA 35, (2007) 232 CLR 189
Timbarra Protection Coalition Inc v Ross Mining NL [1999] NSWCA 8, (1999) 46 NSWLR 55
Videto v Minister for Immigration and Ethnic Affairs (1985) 8 FCR 167
Walker v Minister for Planning (No 2) [2008] NSWCA 334
Weal v Bathurst City Council [2000] NSWCA 88, (2001) 111 LGERA 181
Woods v Bate (1987) 7 NSWLR 560
Zhang v Canterbury City Council [2001] NSWCA 167, (2001) 51 NSWLR 589

DATES OF HEARING: 3-7 November, 2-3 December 2008

DATE OF JUDGMENT:
30 December 2008

LEGAL REPRESENTATIVES:
APPLICANT:
Mr T Robertson SC and Mr J Lazarus
SOLICITORS:
Woolf Associates
FIRST AND SECOND RESPONDENTS:
Mr M Izzo
SOLICITORS:
Crown Solicitor's Office (NSW)
THIRD RESPONDENT
Mr C Leggat SC and Mr M Seymour
SOLICITORS:
Marsdens Law Group

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

BISCOE J

30 December 2008

40959 of 2007

TERRY PATRICK SHARPLES v MINISTER FOR LOCAL GOVERNMENT AND ORS

JUDGMENT

1 HIS HONOUR: This case is mainly concerned with the capacity of a misleading representation to vitiate an administrative decision and with one requirement of the applicable guidelines referred to in s 508A(3) of the Local Government Act 1993. On that basis, the applicant challenges the validity of two determinations made by the Minister for Local Government in 2006 and 2007 to increase Tweed Shire Council’s general income under s 508A.

2 The applicant, Mr Terry Sharples, is a ratepayer in Tweed Shire. He pleads that he brings the proceedings pursuant to s 674 of the Local Government Act, which enables any person to bring proceedings in the Land and Environment Court for an order to remedy or restrain a breach of that Act. The first respondent is the Minister for Local Government. The second respondent is the Department of Local Government. The third respondent is Tweed Shire Council

3 As for the first determination challenged by the applicant, on 14 June 2006 the council applied to the Minister under s 508A for increases to its general income for seven years commencing 2006/2007 (2006 Application). On 10 July 2006, the Minister determined the 2006 Application, pursuant to s 508A, by increasing the council’s general income for 2006/2007 to 7.6 percent above that for the preceding year and for 2007/2008 to 8 percent above that for the preceding year (2006 Determination). In the same instrument, the Minister also determined the minimum amount of ordinary rates for those years pursuant to s 548(3)(a).

4 As for the second determination challenged by applicant, on 20 July 2007 the council applied to the Minister under s 508A for increases to its general income for five years commencing 2008/2009 (2007 Application). On 15 August 2007, the Minister determined the 2007 Application, pursuant to s 508A, by increasing the council’s general income for those five years as follows: 2008/2009 – 9.5 percent above that for the preceding year; 2009/2010 – 9.5 percent above that for the preceding year; 2010/2011 – 8.5 percent above that for the preceding year; 2011/2012 – 7.5 percent above that for the preceding year; 2012/2013 – 7.5 percent above that for the preceding year (2007 Determination). In the same instrument, the Minister also determined the minimum amount of ordinary rates for those years pursuant to s 548(3)(a).

5 The council has levied and collected rates and charges for the 2006/2007 and 2007/2008 years in accordance with the 2006 Determination. The council has levied rates and charges and has commenced collection for the 2008/2009 year in accordance with the 2007 Determination.

6 Councils in New South Wales are subject to what is popularly known as rate-pegging. The general income from rates and charges for a specified year cannot be varied by more than the percentage fixed by the Minister for Local Government under s 506 of the Local Government Act (with the exceptions noted in s 505(a)). The Minister’s practice has been to peg this variation to the Consumer Price Index, unless a council could persuade the Minister to support a special variation for between two and seven years. The machinery for doing so appears in s 508A, which relevantly provides:

“ 508A Special variation over a period of years

(1) The Minister may, by instrument in writing given to a council, determine that the council’s general income, or the amount of an annual charge for domestic waste management services provided by the council, or both, for a specified period consisting of two or more years, may be varied by a specified percentage over the whole period.
(2) The specified period must not exceed 7 years, but this subsection does not prevent a further determination being made that takes effect after that period.
(3) The determination may be made only on the application of the council made in accordance with any applicable guidelines issued by the Director-General under this Act.
…

7 The applicable guidelines referred to in s 508A(3) were issued on 28 February 2006 (Guidelines) and contained a number of “Minimum Requirements” in relation to applications to the Minister under s 508A. The Guidelines provided that applications under s 508A should be made by way of a written submission “covering the following minimum requirements”. There followed a list of some 20 minimum requirements. One of those minimum requirements, on which the applicant’s case turns, was as follows:

"

.

Evidence of community support for the proposal and how the community was consulted

8 This Guidelines requirement is for “evidence”. It is not a requirement for evidence of majority community support nor for evidence of any particular amount of community support nor for evidence of any particular weight. The “proposal” referred to in this Guidelines requirement is, I think, a proposal encompassing, at least, the proposed special variation to the rates and the specified outcomes to be achieved if the special variation is approved. I say that because the first of the minimum requirements in the Guidelines for s 508A applications was: “Details of the specified outcomes to be achieved if the special variation is approved”.

9 Section 23A(1) of the Local Government Act empowers the Director-General of the Department of Local Government to prepare or adopt guidelines relating to the exercise by a council of any of its functions:

“For the purposes of this Act, the Director-General may from time to time prepare, adopt or vary guidelines relating to the exercise by a council of any of its functions.”

10 Section 23A(3) mandates that a council must take relevant guidelines into consideration before exercising any of its functions:

“A council must take any relevant guidelines issued under this section into consideration before exercising any of its functions.”

11 One of a council’s functions is to make an application under s 508A(1). Although the statutory obligation of a council is only to take relevant guidelines into consideration – as distinct from an obligation to comply with them – a council is at risk if it contravenes applicable guidelines under s 508A(3) because the Minister may then reject the application under s 508A(1) or may vary or revoke the consequential determination under s 508A(9)(b). Mr Sharples in fact applied to the Minister to exercise this power to revoke the 2006 Determination but the Minister decided not to do so: see [55] and [59] below. There is no challenge to that decision.

12 On 28 February 2006, the same day that the Guidelines were issued, the Department of Local Government issued a circular to all councils relating to applications for special variations to general income made under either ss 508(2) or 508A of the Local Government Act. The circular reminded councils of their responsibility to conduct adequate community consultation about their proposed rating and revenue raising policies. It also stated that each council was required to demonstrate that “broad” community support had been received for its initiatives. The description “broad” was, I think, a gloss on the words in the Guidelines.

13 The applicant’s case also requires some consideration of ss 509(1), 512 and 548(3)(a), which provide:

“509(1) A council must not make rates and charges for a year so as to produce general income of an amount that exceeds the notional general income of the council for the previous year as varied by the percentage (if any) applicable to the council under section 506, 508(2) or 508A for the year for which the rates and charges are made, except as provided by section 511 or 511A.

(2) The Minister may, by order published in the Gazette, exempt a specified council from the operation of subsection (1) (b) for a specified year.

(a) in respect of an ordinary rate, such amount as is determined by the council, not exceeding $259 or such greater amount as may be prescribed by the regulations or, in the case of a rate for which a particular council may, under subsection (1) or (2), specify a minimum amount, such greater amount as the Minister may determine by instrument in writing…"

14 There are two discrete limbs to the applicant’s case, as ultimately refined:

(a) both Determinations were ultra vires because under the Guidelines the council was required to demonstrate to the Minister that there was evidence of community support but, in seeking to obtain such evidence, misleadingly understated to the community the effect of the proposed rate increase in the council newspaper Tweed Link . The applicant called this limb of his case “misleading the public”;
(b) both Determinations were invalid because in the Applications the council misleadingly overstated the extent of community support or understated the extent of community opposition in paper and telephone surveys. The applicant called this limb of his case “misleading the Minister”.

15 The applicant presses for the following relief:

16 The applicant acknowledges that the Court has a discretion as to the relief it may grant under s 676(1) of the Local Government Act, which provides:

“If the Land and Environment Court is satisfied that a breach of this Act has been committed or that a breach of this Act will, unless restrained by order of the Court, be committed, it may make such order as it thinks fit to remedy or restrain the breach.”

17 However, the applicant submits that the discretion to grant relief, including restitutionary relief, could only properly be exercised in one direction – by granting the relief that he seeks: Commissioner of State Revenue (Victoria) v Royal Insurance Australia Ltd [1994] HCA 61, (1994) 182 CLR 51 at 65, 68. Apart from provisions such as s 676(1), in my opinion this Court has power to grant restitutionary relief in its ancillary jurisdiction: Newcastle City Council v Caverstock Group Pty Ltd [2008] NSWCA 249 at [50].

18 The applicant did not challenge the validity of the determinations as to the minimum amount of rates under s 548(3)(a) (see [3] and [4] above) until closing submissions. The applicant then submitted that each s 548(3)(a) determination should be set aside because it was part and parcel of the one decision including the s 508A Determination. If I were to conclude that the applicant is entitled to relief in respect of the s 508A Determinations, a substantial question would arise as to whether I should decline to grant relief in respect of the s 548(3)(a) determinations in circumstances where the power to make them was independent of the power to make s 508A determinations and where their validity was not challenged until closing submissions.

FACTUAL BACKGROUND
Special edition of Tweed Link 28 February 2006

19 Enclosed with the 2006 and 2007 Applications was a copy of a 20 page special edition of the council newspaper Tweed Link of 28 February 2006. This special edition comprised an open letter to the Tweed community from the council Administrators, the council’s proposed “7 Year Infrastructure and Services Plan”, and a survey containing 15 questions to which residents were invited to respond. The Plan listed $133.6 million of proposed Shire projects and invited Shire residents to have their say by completing and returning the survey form. The Plan noted that residents might also be contacted by Market Facts, an independent company conducting a random survey, asking the same questions.

20 The open letter from the council Administrators included the following:

“As newly appointed Administrators one of the early decisions we took was to defer a rate rise proposed for 2005/2006.

...At the time we signalled our intention to plan infrastructure provision over a longer (7 year) period and to seek your endorsement to implement a series of rate rises above the CPI in order to finance any new initiatives.

21 The Plan included the following:

“ What will it Cost?
Some $133M of projects, programs and services has been included in the 7 Year Plan. The plan is quite ambitious and with the inclusion of additional ‘running’ costs a rate increase (above CPI) of around 6% per annum for the next 7 years would be required to deliver the program in full.

…The increase in rate revenue will be funding 60% of the total program of $133M…

Using the table below

Your 2005/06 Residential Increase per annum Number of
Rate (6% of left hand Properties
column)

Totals 35,051
The effect of the proposed 6% increase will be that 83% of ratepayers will pay around $1.00 per week extra for every year of the program.
…
It should be noted that the above table is to be used as a guide only.
The above analysis is based on rates as currently levied.
…
There are currently around 80,000 people living in Tweed Shire and there are presently 36,000 rateable properties of which about 40% pay the minimum residential rate of $536 a year, or a bit over $10.30 a week. Others pay more, with the amount levied linked to their land value.
…
With the proposed rate increases residential rates will be less than $12 a week. That $12 a week entitles people to use everything Council provides.
If a family of four visits the dentist for a regular checkup it will cost more than the average residential rate contribution for a whole year. Watching just one movie at the cinema costs $12.
…
What the 7 Year Plan means
The effect of the proposed 6% increase will be that 83% of ratepayers will pay around $1.00 per week extra for each year of the program.
To fund economic development projects in the proposed plan the average business rate could increase by $250 per assessment.”

(emphasis added)

22 A survey questionnaire was included in the special edition (paper survey). The key questions in the paper survey were questions 4 and 5, as follows:

____________________________________________________________________________________________________________________________________________

______________________________________________”

23 Seven days later, on 7 March 2006, Tweed Link carried the following relatively short qualifying article on the third page:

“ Various factors influence rating

The rating increase associated with the Tweed Shire Council 7 Year Plan is complex due to various factors that influence rating.

On page 12 of the special edition of the Tweed Link there is a table, which is based on the present rating structure…that 83 per cent of ratepayers will pay an extra $1 a week with the rate rise proposed.

It is difficult to calculate next year’s rate increases because the amount people pay may vary due to new land values received recently. Therefore the table is only a guide and based on current year’s rates.

24 Ms Marilyn Smith, the editor of Tweed Link, gave evidence, which I accept. She said that the reason why this qualifying article was published was because she was aware of a number of people contacting the council who were confused as to whether the increase was to be compounded. She agreed that this was because the special edition in February did not disclose that the 6 percent was to be compounded.

25 The council’s summary of the paper survey responses was included in the 2006 Application to the Minister, as follows:

Response No. %

26 The applicant alleges that, based on the analysis of its expert witness, Mr Barry Elliott, the council’s summary was incorrect and that the correct summary is as follows:

%

Positive responses 38.5

Negative responses 46.4

Undecided/irrelevant/no answer/missing 15.1

____

100%

27 In addition to the paper survey responses, the council received 73 submissions from individuals, 28 submissions from groups or associations, six anonymous letters and three petitions regarding the Plan.

28 The council engaged a market research consultant, Market Facts (Qld) Pty Ltd, to conduct and independently analyse telephone survey responses of 330 selected residents using the same question format as the paper survey (see [22] above). The results of the telephone survey were as follows:

Council resolutions 2 May 2006

29 On 2 May 2006 the council resolved that, in view of the high levels of responses to the public consultation, programs contained within the Plan be reduced from $133 million to $118 million; that the revised programs of the Plan be incorporated in the draft management plan for the purpose of formal exhibition; and that application be made to the Minister under s 508A for a structured increase above the approved percentage variation increases to general income for each of the seven years. To reflect the reduced programs, the proposed rate increase was reduced from 6 percent throughout as follows: 2006/07 – 4 percent; 2007/08 – 5 percent; 2008/09 – 6 percent; 2009/10 – 6 percent; 2010/11 – 5 percent, 2011/12 – 4 percent; 2012/13 – 4 percent.

30 In accordance with s 405 of the Local Government Act, the draft management plan was placed on public exhibition In May-June 2006. It stated that the council proposed to seek Ministerial approval in 2006 and beyond for a variation to general income of 6 percent above the 2006/2007 allowable limit of 3.6 percent for the purposes of the Plan, and that:

“The following table represents the estimated total permissible rate income for the following six years providing the application under 508A is successful. The assumption is made that CPI will be constant at 3%.

Year Permissible Income

31 This table indicated that the council’s income would increase by more than two thirds by the seventh year and showed the increase year by year.

32 The closing date for public comment was in early June 2006. On 13 June the council adopted the draft management plan.

The 2006 Application

33 Next day, 14 June 2006, the council made its 2006 Application to the Minister. It was an amendment to a preliminary application made on 30 March 2006 and was signed by the council’s general manager, Mr Mike Rayner. Among the attachments were copies of the special edition of Tweed Link of 28 February 2006 and the draft management plan. The 2006 Application stated that “After extensive community consultation” the council’s earlier preliminary application for a special variation under s 508A for 6 percent increases (for residential ratepayers) above rate pegging for seven years, was amended to propose the following “increases above rate pegging” for residential ratepayers: 2006/07 – 4%; 2007/08 – 5%; 2008/09 – 6%; 2009/10 – 6%; 2010/11 – 5%; 2011/2012 – 4%; 2012/13 – 4%.

34 Rate pegging was identified as 3.6 percent for the first year and 3 percent thereafter. It was stated that council was seeking this variation in perpetuity as the program of works and responsibilities of council went well beyond ten years.

35 The 2006 Application included the following under the heading “Community Consultation”:

“Tweed Shire Council undertook its largest consultation ever with the proposal to make an application to the State Government for approval for a special variation to General income for the next seven years.

Tweed Link (Annexure A)

A special 20 page edition of the Tweed Link (Council’s weekly newspaper circulated to every household – 35,000 copies) was produced to outline details on various plans and strategies that already had been undertaken, and to seek residents’ views of their priorities on proposed projects. The residents’ views could be returned by replied paid survey forms at the back of the booklet special edition.

It was stated as clearly as possible, given recent land valuation increases, what the rate increase would mean to each ratepayer. A table showing that more than half the residents would pay an extra $52 a year (based on the current rating structure) each year based on the general rate was displayed. This was a guide as to how rates would increase above the Minister’s allowed increase if they agreed to the 7 year plan.

A special article in the next edition of the Tweed Link also tried to further outline why the Council based this table on current rates. Land valuation variations projecting to next year’s rates, was not possible to explain easily.

Hotlines & Forums

A hotline was established and promoted in all issues of the Tweed Link during the consultation period, which will end on April 21.

36 A list of forums and meetings was then set out. Reference was made to the council’s website where more information on projects was set out “than could be included in the special edition” of Tweed Link and which included an online survey for residents who wished to return it in that format. The Application continued:

“ External Polls

As an integrity check, an independent marketing company undertook a statistically correct telephone survey of 330 residents spread over all areas of the Shire.

Responses

Response No. %

Major criticism to date has come from the president of the Tweed Heads Chamber of Commerce and dismissed Councillor John Murray, who claims the special edition is misleading.

To counter any such claims another article titled ‘Various factors influence rating’ was published in the next Tweed Link after the special edition, which stated in part ‘Residents should remember that what is proposed is 6 per cent a year increase above CPI and this of course compounds’.

37 Although a copy of the special edition of Tweed Link of 28 February 2006 was an attachment to the 2006 and 2007 Applications, the Department of Local Government, which made a submission to the Minister, did not place a copy before the Minister and the Minister apparently did not see it.

Public submissions to Minister in relation to the 2006 Application

38 The Minister received a good number of letters in opposition to the proposal from ratepayers, including the applicant, and associations. Some understood the actual effect of the proposed rate increase, including that it was to be cumulative, compounding and above the CPI. Some alleged that there had been a misrepresentation to the public. It is not apparent from the letters that all the correspondents understood the actual effect of the proposed rate increase. I will set out some of the letters.

39 Jim and Jan O’Regan’s letter to the Minister of 26 April 2006 stated:

“We wish to register our objection to the 6% per year rate increase requested by the Board of Administrators of Tweed Shire. This requested increase is to be added to the inflation component and of 3.6% this year, giving a rate rise of almost 10% compounding for the next seven years and beyond. Last years component was 3.5% and the pundits and Mr Costello expect rising petrol prices to fuel inflation, some say for two years or more. With this in mind the Board of Administrators is virtually asking for a doubling of our rates.

per head

40 An email from John Murray, President of the Tweed Chamber of Commerce, of 2 May 2006 to the Minister stated:

“In my 26 years living on the Tweed I have never seen the community so united in its opposition to the plans by the Tweed Shire Council Administrators to push ahead with a so called Seven Year Plan. This plan contains a compounding interest rate rise for some seven years! I will attach for your perusal a matrix that shows residential rates will increase by 90% and Business rates increasing by 99% under the plan. These are NOT wild estimates. They are based on using the same formula that the Tweed Shire Council booklet recommends to be used.

Sir, apart from some components of the plan being totally unnecessary, the totally unacceptable feature of the Seven Year Plan is the misleading booklet the Council sent out to its ratepayers. Mr Hickey you MUST read this document BEFORE you make any decision on whether or not to approve the plan. This booklet contains information that is FALSE, MISLEADING AND DOWNRIGHT UNTRUTHFUL.

Four times in the document it refers to the rate rise as being akin to $1 per week for each year of the plan…this is untruthful.

…

41 Mr Murray followed this up with a further email of 3 May 2006 relating to “version 2 of the amended Seven Year Rates Plan. Essentially, the residential rate increase has gone from +90% over 7 years to + 76% for the same term”.

42 An association called “Ratesreform”, which described itself as Tweed Combined Communities Rate Review Committee and as representing thousands of ratepayers, stated in its 14 May 2006 letter to the Minister:

“ We hereby express our earnest opposition to the proposed 7-year Plan and rates increases.

Collectively, our memberships represent thousands of individual ratepayers covering the entire spectrum of communities and interests in the Tweed Shire.
…

Misrepresentation of Resulting Rate Levels

Council presentations and information about the 7-year Plan misrepresents, or inadequately describes, the rate cost implications: The information provided to the community did not disclose:

· the implications of rate compounding and the effect on individual ratepayers in different rating categories or at different rate levels.
· that the proposed rate increase would be on top of the allowable CPI increase or the implications of this – because incomes and offsets (such as the pensioner rebates) are not guaranteed to rise at the same rate as the CPI, the CPI increase can have a real impact on costs for individual ratepayers and this was not explained;
· that the proposed rate increases may not be the only increases over the 7 year period and that additional rate increases could still arise during that period.
…
The following community groups were contacted by Ratesreform to ascertain their reaction to, and views on, the proposed 7 Year Plan and associated Rate increases. Every one of these groups opposes the 7-year Plan and associated rate increases .
…

43 The letter then listed 19 ratepayers’ associations and community and progress associations.

44 A letter to the Minister dated 21 June 2006 from the Banora Point Residents Association stated:

“The Administrators of the Tweed Shire Council have approved the application of a 7 Year Plan on the ratepayers of the Tweed Shire. They have done so against the wishes of the majority of the community. All public meetings conducted around the Shire received an overwhelming rejection of the proposal and 28 submissions from groups and Associations were made, all of which opposed the plan.

On page 12 of the brochure sent to all ratepayers of the Shire, states…’The effect of the proposed 6% increase will be that 83% of ratepayers will pay around $1.00 per week extra for every year of the program’. On the questionnaire sent to all ratepayers, Question 5 states…’The Council has estimated 6% per year as a workable increase. This would mean most residents would only be paying an additional $52 per year. How do you feel about that increase to pay for the necessary important projects? (Write in).’ This is blatantly untrue and was deceptive in that it did not state that the figures quoted would compound to approximately $5.00 per week extra in 7 years. This was confirmed by Administrator Payne to the Sydney Morning Herald on 25th April, 2006.

45 Mr Terry Sharples, the applicant in these proceedings, sent an email dated 26 June 2006 to the Premier enclosing his email to the Minister and copies of some individuals’ responses to the paper survey. Those responses expressed negative feelings ranging from vehemently hostile to “OK if no more than approx $52”. In his enclosed email to the Minister (which appears to have been faxed to the Minister on 28 June), Mr Sharples asserted that the council’s “massive proposed rate hike has almost zero community support and is almost universally misunderstood. The s 508A process has been hijacked by a manipulative, untrustworthy and corrupt council”. Mr Sharples stated that the community consultation process was founded on conduct and statements that were “misleading and deceptive or likely to mislead and deceive”. Mr Sharples described the “key” question in the survey – question 5 – as an open ended qualitative question of three parts, capable of no definitive answer: “Q 1: do you agree that 6% per year is a workable increase? Q2: it’s only going to cost you $1 a week or $52 per year, is that Ok? Q3: is the above increase Ok, for necessary important projects”. He asserted that the representation of the quantitative answers to the survey was in his opinion “fraudulent”. He wrote that at a community consultation meeting on 13 June he advised the council that his “investigations had exposed hundreds of survey forms that had been incorrectly classified as positive when they were, in fact, negative”. Mr Sharples wrote that:

“This community has no understanding of:

46 Mr Sharples sent another email to the Minister on 29 June 2006. He said, among other things, that he would shortly provide an independent report from Dr Mark Bahr, Assistant Professor of Psychology at Bond University, assessing the “two page questionnaire on which all of the community consultation by the Council is based and on which the telephone survey was also based”. Mr Sharples also said:

“…the survey results are not as purported [in the 2006 Application]. The truth is that, even given the difficulty in interpretation of the qualitative Question 5 of the survey as it had 3 possible interpretations, the responses have been deliberately misrepresented to you.

47 A letter dated 30 June 2006 from Mr Sharples to the Department purported to be copied to the Minister but in fact was not seen by the Minister. This letter set out the summary of responses to the telephone survey compared with the paper survey summary (the summaries are at [28] and [25] above). The letter also stated:

“As I advised the Minister yesterday, Dr Mark Bahr… is currently preparing an independent professional assessment of the two page questionnaire and of the subsequent report of the telephone survey…

Given the time frames, I’ve been advised to draw the Ministers and the Departments attention to the fact that the reported results of the independent telephone survey responses do not accord with the reported total of community responses on page 40 of 67 of the Tweed Shire’s Application for Special Variation to General Income…

48 Mr Sharples wrote again to the Minister on 3 July 2006, attaching a preliminary analysis by Dr Bahr of the survey questionnaire and statistical methodology used by the council to obtain the information presented in the 2006 Application. The letter quoted 20 responses to the paper survey; asserted that the council had regarded 15 of them as positive and five as negative; and continued as follows:

“Dr Bahr advises me only two of the above answers could be coded as Negative and only one, as positive. The balance of responses are incapable of being quantified, either because they do not respond to Questions 5 of the survey or set other parameters and conditions that were not part of the question(s) posed by Question 5 of the Survey.

This typifies two of the major problems with the survey responses:

(a) most of the answers were not capable of being quantified and reduced to dichotomy values, of Positive or Negative;
(b) Council coders were subjectively biased in their coding of the community responses such that the statistical information presented on page 40 of the above application is utterly incorrect and misleading.

This is apart from the fact that Question 5 of the survey was itself grossly misleading, stating that ‘the cost to the proposed effect of the increase will be that 83% of ratepayers will pay around $1.00 per week extra for every year of the program,’ when even on that example, minimum ratepayers would, as a simple matter of arithmetic, be required to pay $2.79 per week, ignoring the maximum annual allowable increases.

As pointed out in my letter, dated 30 June 2006, a huge variation between the telephone survey results and the paper survey results just evidences you cannot know which, if any, are right. This is the essence of Dr Bahr’s comment that it would be a very brave government to support such a ‘monumental’ change on the basis of the statistics presented at page 40 of the above application.

The telephone survey results and analysis of Question 5 of the survey were removed from the report on findings by Market Facts (Qld) Pty Ltd no doubt because they were embarrassing to Council’s purported claim that the community in fact supported the above application and were not presented in the above application. Further, no validity check has been attempted to reconcile the differences between the two studies.

49 The enclosed report from Mr Bahr (who did not give evidence in the proceedings) included the following:

“I have had a chance now to examine the questionnaire and structured telephone interview you provided and some of the initial statistics, as I said earlier it appears that the instrument has been designed with integrity but there are a number of issues which may render the results obtained from it invalid or unreliable. The instrument as designed is appropriate for initial investigation of the scope of feeling about the attitudes towards rate change and the prioritisation of development projects however it is not strong enough to provide information from which to make policy decisions. It is highly unlikely that a sample of less than half of one percent of the population of the Tweed Shire could in any sense be called representative and in any instance the nature of the questions does provide an explicit test of ratepayers agreement to change. A government would be very brave to support change on the basis of this document specific concerns are outlined below.”

The 2006 Determination

50 Following a Department submission to the Minister, on 10 July 2006 the Minister determined the 2006 application by conditionally granting a variation only for the years 2006/07 and 2007/08.

The 2007 Application

51 The 2007 Application, as amended on 20 July 2007, sought to vary the rate pegging limit from 3.8 percent per annum to 3.5 percent per annum and to increase the residential rate for the remaining five years of the Plan as follows: 9.5 percent for 2008/09; 9.5 percent for 2009/10; 8.5 percent for 2010/2011; and 7.5 percent for the remaining two years. The 2007 Application illustrated the impact on ratepayers in a series of tables which showed the cumulative and compounding effect of rate increases in each of the seven years.

52 The 2007 Application repeated the section on community consultation which had appeared in the 2006 Application. It then summarised the community consultation in 2007 for the remaining five years of the Plan, as follows:

“In accordance with Section 405 of the Local Government Act 1993, the Draft Management Plan was placed on exhibition for public display from Thursday 10 May 2007 to Friday 8 June 2007.

Council invited submissions from the public on the Draft Management Plan and 7 Year Infrastructure and Services Plan through placing advertisements in the Daily News and Tweed Link . A special edition of the Tweed Link on the 7 Year Infrastructure and Services Plan was published on Wednesday 15 May 2007 and was distributed to 35,500 households in the Shire.

Council invited 15 organisations within the Shire that represent chamber of commerces, ratepayers, community groups or residents, to make a submission on the Draft Management Plan, incorporating the 7 Year Infrastructure and Services Plan.

The Draft Management Plan documents were also placed on public exhibition at the Murwillumbah and Tweed Heads Civic Centres, Libraries at Murwillumbah, Tweed Heads and Kingscliff. The documents were downloadable from the front page of Council’s webpage.

During the exhibition period Council received 1 phone call and 18 written submissions.

53 In addition to attaching a copy of the special edition of Tweed Link of 28 February 2006, the 2007 Application attached a copy of the special edition of Tweed Link dated 15 May 2007, which comprised the “7 Year Plan Update”. This edition stated that, during the previous year, “[i]nfrastructure provisions were programed over a seven-year period and it was planned to implement a series of rate rises above the CPI to finance any new initiatives”.

Public submissions to Minister after the 2006 Determination and before the 2007 Determination

54 On 31 July 2006 (shortly after the 2006 Determination) the Minister received an undated letter from Mr Sharples. He wrote that its purpose was to present substantial evidence in the form of statistical analysis and results of the telephone and paper survey responses. He alleged that this supported his initial advice that the information presented to the Minister in the 2006 Application “was seriously, if not, fraudulently misleading”. He asserted that the Minister had been seriously misled and consequently had fallen into jurisdictional error and failed to take into account a mandatory consideration, being “evidence of community support for the proposal”. Attached were lengthy schedules of individual paper and telephone survey responses with Mr Sharples’ classification of each response. Also attached was a summary schedule comparing the council paper survey summary of responses with Mr Sharples’ “audit sample responses” (classified as positive, negative or unquantifiable), as follows:

Positive Negative Undecided or unquantifiable

Mr Sharples’ audit 29.2% 59.2% 11.6%

Council summary 40.24% 39.31% 20.45%

55 On 1 August 2006 the Minister received a letter dated 26 July 2006 from Mr Sharples which urged the Minister to “have this matter investigated and if the information presented to you and your Department is found to be substantially wrong to exercise your powers to revoke your determination”. This must have been a reference to the Minister’s power under s 508A(9)(b). Enclosed with the letter was a copy of Mr Sharples’ submission dated 25 July 2006 to the council that it should resolve not to adopt the Minister’s determination. The submission set out the council summary of the paper survey responses and the telephone survey results (set out at [25] and [28] above). The submission then set out the alleged result of Mr Sharples’ own audit of the paper and telephone survey results, as follows:

Positive Negative Unquantifiable

Paper survey 29.1% 59.3% 11.6%

Telephone survey 29.7% 58.3% 12%

56 In these proceedings, the applicant did not attempt to support these figures, which differ substantially from the council summaries and from Mr Elliot’s summary of the paper survey responses.

57 On 27 September 2006 the Minister replied to Mr Sharples’ letter of 26 July 2006. The Minister said, among other things, that evidence of community support for a special variation was just one of the factors taken into consideration during the assessment process; that although the council had sought approval for a special variation for six years, the Minister had only approved first two years; and that the Minister had noted Mr Sharples’ concerns.

58 On 31 October 2006 Mr Sharples wrote the Minister alleging “falsification” of the paper survey results by the council and of the telephone survey results by Market Facts (Qld). He drew attention to s 508A(3) of the Local Government Act and the applicable Guidelines and referred to information which he had previously supplied to the Minister. He said he believed that the Minister’s determination was a failure to comply with mandatory procedural requirements and a “criminal fraud” on the community, as well as an improper exercise of power based in part on misleading and deceptive representations. He said that he was not prepared to pay the first instalment of the special rate variation. Legal action was threatened if the matter could not be resolved.

59 The Minister replied by letter on 13 November 2006. The Minister said that, as previously advised, evidence of community support for a special variation is just one of the factors taken into consideration during the assessment process. The Minister said: “While you may not agree with my decision to approve council’s application, it is anticipated that the long-term benefits to the community will greatly outweigh the disadvantages that may arise as a result of the granting of the application. Therefore, I will not be reviewing Tweed Shire Council’s application”. The Minister drew Mr Sharples’ attention to his liability for outstanding rates and charges.

60 There were further letters from Mr Sharples to the Minister in November 2006 and July and August 2007. An email from Mr Sharples to the Minister of 25 July 2007 asserted, first, that the council had knowingly lied about the level of community support; secondly, that the truth was that only 29 percent of ratepayers who responded to the paper survey were supportive of the plan while 59 percent were against it; and, thirdly, that he was talking about “serious criminal allegations worthy of a public investigation”. These assertions were wrong on any view of the evidence in these proceedings.

61 The allegations of fraud, corruption and criminality, which were liberally peppered throughout Mr Sharples’ correspondence with the Minister, were not maintained in these proceedings.

2007 Department submission

62 A Department submission to the Minister recorded that the main community consultation was undertaken in March–May 2006. The submission noted that a submission was received from Mr Sharples providing the Department with a range of information which had been reviewed. However, it was not considered to have any adverse impact on the assessment.

2007 Determination

63 The Minister conditionally granted the 2007 Application on 15 August 2007.

The reasons for the Minister’s Determination

64 The Minister’s statement of reasons for the Determinations was filed in the proceedings pursuant to an order of the Court and was tendered in evidence. I accept that evidence. The Minister at the date of the 2007 Determination did not hold the office of the Minister at the date of the 2006 Determination. In relation to the 2006 Determination, the statement indicated that following consideration of the material before him, the Minister at that time made the 2006 Determination in accordance with the recommendations contained in a Department submission which the Minister endorsed. In relation to the 2007 Determination, the statement indicated that having considered the material before him, the Minister at that time made the 2007 Determination. In relation to the latter Determination, the statement of reasons stated that: “The main community consultation process was undertaken in March-May 2006, at the time of the original application for a special variation.”

65 The first limb of the applicant’s case is that the 2006 and 2007 Determinations were ultra vires and invalid as a result of the council’s alleged misleading representation to the community as to the extent of the proposed rate increases. The applicant’s argument may be summarised as follows:

(a) the council made a misleading representation to the public by understating the effect of the proposed rate increase;
(b) s 508A(3) required that “the application of the council [be] made in accordance with any applicable guidelines”;
(c) the applicable Guidelines required the council to provide the Minister with “Evidence of community support for the proposal” based on consultation with the community;
(d) the council cannot be said to have provided such evidence to the Minister because the misleading representation so infected the evidence of community support for the proposal provided with the 2007 and 2007 Applications as to make it meaningless;
(e) therefore, the 2006 and 2007 Applications were not made “in accordance with” the Guidelines as required by s 508A(3);

(f) it was a condition precedent to the validity of the Determinations that the Applications be made in accordance with the Guidelines. Consequently, the 2006 and 2007 Determinations are ultra vires and invalid;
(g) further, because each Determination was invalid, the council had no power to make the rates and charges referred to in the Determination and, by making such rates or charges, breached s 509(1);
(h) therefore, the rates and charges made pursuant to the Determinations were invalid except the rates and charges for the first year covered by each Determination: s 512(1). The applicant concedes that s 512(1)(a) bars a claim for a refund of rates or charges in relation the first year covered by the 2006 Determination (i.e. the 2006/2007 year) and in relation to the first year covered by the 2007 Determination (i.e. the 2008/2009 year).

66 The first step in the argument is that there was a materially misleading representation to the public. The misleading representation to the public is alleged to have been in the special edition of the council newspaper, Tweed Link, of 28 February 2006, which set out details of the council’s proposed seven year plan: see [19] – [22] above. The special edition stated that a “rate increase (above CPI) of around 6% per annum for the next 7 years would be required to deliver the program in full”. It contained a representation that “the effect of the proposed 6% increase will be that 83% of ratepayers will pay around $1.00 per week extra for every year of the program”. The representation was reinforced by question 5 in the survey which stated that the proposed increase “would mean most residents would only be paying an additional $52 per year”. It was reasonably clear that this was above CPI increases.

67 The applicant submits that the representation was misleading because it indicated that 83 percent of ratepayers would only pay around an extra $1 per week for each week of the entire seven years. The applicant submits that, in fact, around $1 per week extra above CPI would be paid in year 1, and this would increase year by year until in year 7 over $7 per week extra would be paid. That is consistent with the evidence of the council’s Revenue Coordinator, Mr Craig Peate, that the council’s intention was that the proposed 6 percent increase would cost 83 percent of ratepayers $1 per week extra above the previous year for each year of the Plan. In other words, it would be $1 for the first year; $2 for the second year, being $1 above the first year; $3 for the third year, being $1 above the second year; and so on until the seventh year when it would be $7, being $1 above the sixth year. This comes about because of the compounding effect of the 6 percent increase each year for the seven years when applied to the cumulative effect of the CPI rate-pegging of 3.6 percent for the first year and 3 percent per annum thereafter.

68 The Minister and the Department concede that the representation to the public was capable of misleading people and that there were people who were misled. That accords with my view. The council submits that the representation was not misleading when regard is had to the whole of the special edition and the later qualifying article. The council submits that, read in context, the representation was to the effect that the increase of around $1 per week was above CPI and would accumulate and compound at 6 percent per annum.

69 Compounding was not referred to in the special edition, but the qualifying article in the next edition, on 7 March 2006, stated that “Residents should remember that what is proposed is 6 per cent a year increase above the Consumer Price Index (CPI) and this of course compounds”: see [23] above. The qualifying article – for those who read and absorbed it – indicated that the rate increase compounded. However, as was said in another context in Lezam Pty Ltd v Seabridge Australia Pty Ltd [1992] FCA 206, (1992) 35 FCR 535 at 557: “A disclaimer or qualification will frequently have little or no effect on the impact of a misrepresentation”. Furthermore, neither the special edition nor the subsequent qualifying article spelt out the actual dollar effect year by year. The reference in the open letter from the council Administrators in the special edition to “a series of rate rises” did no more than hint at annual increases. The draft management plan exhibited thereafter in May 2006 showed the gross annual permissible income, if the s 508A application was successful, increasing substantially year by year. Some who read it might have gleaned that the $1 per week rate increase represented in Tweed Link would increase substantially in each of the seven years. However, it cannot be inferred that all readers of the special edition of Tweed Link read the draft management plan or, if they did, would have gleaned that conclusion from it.

70 During the hearing, the accounting experts produced a joint report, which I accept, setting out the additional annual rates payable under the proposed 6 percent per annum rate increase for each of the seven years by the four bands of ratepayers comprising the 83 percent referred to in the representation in the special edition of Tweed Link (Exhibit G). The report shows that the extra annual rates payable under the council’s proposed 6 percent rate increase above CPI compounded over the seven years of the Plan. Set out below under the first heading are the additional annual rates for each year compared with the immediately preceding year, together with an averaging calculation tendered by the council (Exhibit 6) which shows that, on average, ratepayers in the four bands comprising the 83 percent would pay around an extra $1.00 per week (more precisely, $0.99 per week) over the seven years. Set out below under the second heading are the additional rates for each year compared with the base year of 2005/2006:

Additional annual rates compared with immediately preceding year Additional annual rates compared with base year 2005/2006

Low Range
$ High Range
$ Low Range
$ High Range
$

2006/2007 32 32 32 32

32 35 32 35

35 45 35 45

48 55 48 55

2007/2008 35 35 67 67

35 38 67 73

38 49 73 94

52 60 100 115

2008/2009 38 38 105 105

38 42 105 115

42 54 115 148

57 66 157 181

2009/2010 42 42 147 147

42 45 147 160

46 59 161 207

62 72 219 253

2010/2011 46 46 193 193

46 50 193 210

50 64 211 271

68 78 287 331

2011/2012 50 50 243 243

50 54 243 264

54 70 265 341

74 85 361 416

2012/2013 54 54 297 297

54 59 297 323

59 76 324 417

80 93 441 509

1359 1546

÷ 28 = 48.53 = 55.21

48.53 + 55.21 = 103.74

103.74 ÷ 2 = 51.87

51.87 ÷ 52 = 0.99

71 The council submits that the increased rates under the first heading above reflect the representation and, therefore, that the representation was not misleading even without the averaging. The representation said nothing about averaging and, therefore, I do not think averaging should be taken into account. Putting aside averaging, if the representation is reflected in the figures under the first heading above, it can be seen that only three increases thereunder during the seven years exceed $78 per annum, that is, $1.50 per week. The significance of those amounts is that the word “around” in the representation is imprecise and calls for an evaluative judgment as to the point at which an increase in rates would cease to be reasonably regarded as “around” $1 per week. It would be reasonable, in my opinion, to draw the line at $1.50 per week or $78 per annum. On the council’s submission, it would be only be to that limited extent that the representation was misleading. It would be difficult to say that this was sufficient to infect the evidence of community support such as to make the evidence meaningless.

72 The council’s submission is that the representation in the special edition of Tweed Link conveyed the meaning that rates would increase at around $1 per week each year compared with the immediately preceding year. It could be understood in that way, I think, by those who read and absorbed the qualifying article in the next edition of Tweed Link, which referred to compounding, and who did the sums. However, in my opinion, reasonable persons who did not do this were likely to understand the representation as meaning that the 83% of ratepayers would only pay around an extra $1 per week for each of the seven years compared with the base year of 2005/2006 current at the time of the representation. In my opinion, so understood, the representation was materially misleading as the increases under the second heading above show. Thus, the council’s community consultation was significantly flawed. As the 2006 and 2007 Applications relied on evidence of community support which flowed from the materially misleading representation, I accept the applicant’s submission that the 2006 and 2007 Applications were not in accordance with the Guidelines because they did not satisfy the minimum requirement of “Evidence of community support for the proposal” based on community consultation.

73 It is unnecessary to show that anyone was actually misled. However, the evidence of responses to the paper survey shows that a significant number of respondents were in fact misled. The evidence also shows that the representation confused readers of the special edition. As discussed above at [24], the evidence of the editor, Ms Smith, was that the reason why the explanatory article was published on 7 March 2006 was because she was aware of people contacting the council who were confused as to whether the rate increase was to be compounded, a confusion which arose because the special edition did not say the rate increase was to be compounded. The evidence of the council’s Revenue Coordinator, Mr Craig Peate, was that he raised a red flag with the council when he read the special edition because it failed to refer to compounding and failed to explain that in the second and subsequent years ratepayers would be paying an additional dollar on top of the existing increases. The evidence of Mr Rayner, the council’s general manager, indicates that at a community meeting on 10 April 2006 ratepayers were confused as to whether rates were compounding.

74 The council submits that as the applicant has not produced any witnesses to say that they were misled by the representation, a Jones v Dunkel inference should be drawn that the evidence of such persons would not have assisted the applicant. I reject the submission. The Court must make an objective assessment of whether the representation was misleading. It is unnecessary to call evidence from persons who were in fact misled for the purpose of establishing objectively that a representation was misleading: see [77] below. Even if that were not so, I do not think that the suggested inference arises. A Jones v Dunkel inference may be drawn where it would be expected that one party rather than the other would call a person as a witness because, for example, the person is in the first party’s camp so as to make it unrealistic for the other party to call the witness: Manly Council v Byrne [2004] NSWCA 123 at [53]. Respondents to the surveys or other persons who read the special edition of Tweed Link cannot, I think, be described in that way. Further, the inference does not arise where the absent evidence is simply cumulative to evidence that was called: Manly Council v Byrne at [60] – [67]. Here, the absent evidence would have been cumulative to the evidence of the actual survey responses to which I have referred. Finally, there was a practical difficulty in calling respondents to the surveys because the survey responses were anonymous.

75 A requirement of consultation with the community in obtaining evidence of community support is embedded in the Guidelines. Consultation is not a mere formality: Leichhardt Municipal Council v Minister for Planning (1992) 78 LGERA 306. In that case s 45 of the Environmental Planning and Assessment Act 1979 provided that: “In the preparation of…a draft regional environmental plan, the Director shall ensure that consultations are held with” each affected council and other nominated bodies. The Court of Appeal held that such consultations were a precondition to the validity of a regional environmental plan: at 340. Sheller JA (Priestley and Meagher JJA agreeing at 308) referred to the legislative recognition of the importance of the duty to consult and was struck by the unusually strong mandatory language of s 45 (not just “shall consult” with the bodies nominated but “shall ensure that consultations are held” with the bodies nominated): at 336, 340. His Honour quoted the following passage from the advice of the Privy Council in Port Louis Corporation v Attorney-General of Mauritius [1965] AC 1111 at 1124, in the context of a local government ordinance which provided that the Governor in Council might by proclamation alter the boundaries of any town “after consultation with the local authority concerned”:

"…the nature and the object of consultation must be related to the circumstances which call for it. The situation to which s 73(1) relates is clear. If there is a proposal to alter the boundaries of a town, or the boundaries of a district, or the boundaries of a village, such alteration must not be made until after consultation with the local authority concerned. It follows that the local authority must know what is proposed before they can be expected to give their views. This does not however involve that the local authority are entitled to demand assurances as to the probable form of the solutions of the problems that may be likely to arise in the event of there being an alteration of boundaries. The local authority must be told what alterations of boundaries are proposed. They must be given a reasonable opportunity to state their views. ...The requirement of consultation is never to be treated perfunctorily or as a mere formality."

76 Given the material misrepresentation and the consequential flawed community consultation, the question then is whether the 2006 and 2007 Determinations are invalid.

77 Materially misleading statements have the capacity to vitiate a decision in some statutory contexts. Something that is materially misleading may not constitute what the statute requires for validity. For example, a public notice mandated by s 66(1)(a) of the Environmental Planning and Assessment Act 1979 as part of the public exhibition process for a draft local environmental plan is invalid if it is materially misleading: El Cheikh v Hurstville City Council [2002] NSWCA 173, (2002) 121 LGERA 293 at [12]; Gales Holdings Pty Ltd v Minister for Infrastructure and Planning [2006] NSWCA 388, (2006) 69 NSWLR 156 at [110]; Castle Constructions Pty Ltd v North Sydney Council [2008] NSWLEC 137 at [105] (Lloyd J). It is not necessary to show that anyone was actually misled: El Cheikh; Castle Constructions at [105]. The misleading matters in those cases conveyed impressions diametrically opposed to the true position. In El Cheikh a public notice, which was not required to explain the effect of the draft local environmental plan, purported to do so but omitted to mention that the plan proposed height controls where previously none existed. In Gales the allegation was that the text of an exhibited draft local environmental plan wrongly indicated that land was to be zoned commercial when in fact it was to be zoned industrial.

78 Port Louis Corporation (above) concerned a mandatory statutory requirement to consult. No equivalent mandatory requirement to consult appears in the Local Government Act. The only requirement to consult is found in the Guidelines referred to in s 508A(3) made under s 23A. The Guidelines form part of the statutory process under ss 23A and 508A. The Act mandates that councils take the Guidelines into consideration: s 23A(3). Compliance by councils with the Guidelines is not mandated by the Act. However, failure to comply with the Guidelines carries the risk that a s 508A application may be refused or a determination may be revoked or varied by the Minister: ss 508A(1) and (9)(b).

79 The applicant submits that under s 508A(3) it was a condition precedent to the Minister’s power to make the 2006 and 2007 Determinations under s 508A(1) that the council’s application be in accordance with the Guidelines. It is clear that a council application is a precondition on which the power depends. If an application which is in accordance with the Guidelines is a precondition on which the power depends, the exercise of the power here was invalid. If a Guidelines discordant application does not affect the existence of the power, the purported exercise of the power was valid.

80 The issue is one of construction. Where there has been a breach of a legislative provision, the test is whether “it was a purpose of the legislation that an act done in breach of the provision should be invalid”: Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28, (1998) 194 CLR 355 at [93]. Strictly, this test may not apply to the present case if I am correct in the conclusion that I have expressed that a council is not under a statutory obligation to comply with (as distinct from giving consideration to) applicable guidelines referred to in s 508A(3): see [11] above. The defect of which the applicant complains is more fundamental, namely, that, regardless of any breach by the council, the power to make a s 508A determination only arises if a council application is in accordance with the applicable guidelines: cf Smith v Wyong Shire Council [2003] NSWCA 322, (2003) 132 LGERA 148 at [135]. Here, in my opinion, the test must be similar, whether it was a purpose of the legislation that a determination made on a Guidelines discordant application should be invalid.

81 In Project Blue Sky it was held at [91] per McHugh, Gummow, Kirby and Hayne JJ (footnotes omitted):

“Unfortunately, a finding of purpose or no purpose in this context often reflects a contestable judgment. The cases show various factors that have proved decisive in various contexts, but they do no more than provide guidance in analogous circumstances. There is no decisive rule that can be applied; there is not even a ranking of relevant factors or categories to give guidance on the issue.”

82 The contestable judgment often involved in finding the legislative purpose is illustrated by reference to cases concerning disregard of a statutory requirement that have fallen on either side of the invalidity line. On the one hand, a fauna impact statement or a species impact statement, where mandated by statute, is an essential condition precedent to a valid decision-making process: Helman v Byron Shire Council (1995) 87 LGERA 349 (CA); Timbarra Protection Coalition Inc v Ross Mining NL [1999] NSWCA 8, (1999) 46 NSWLR 55 at [106]. In Timbarra Spigelman CJ (Mason P and Meagher JA agreeing) concluded that taking into account the critical role of a species impact statement in the quality of the decision-making process in ensuring that detailed information is available, the decision as to whether a species impact statement was required played such a significant role in the statutory scheme that it was appropriate to describe it as an essential condition to a valid decision-making process; and thus it was a jurisdictional fact which the Land and Environment Court was obliged to decide for itself: at [94], [108]. Implicitly, any consent granted in the absence of the essential condition was invalid.

83 On the other hand, total disregard of some statutory requirements may not result in invalidity. In Australian Broadcasting Corporation v Redmore Pty Ltd [1989] HCA 15, (1989) 166 CLR 454 legislation provided that “The Corporation shall not, without the approval of the Minister…enter into a contract under which the Corporation is to pay or receive an amount exceeding $500,000”. It was held that a contract within that provision into which the Corporation entered without the Minister’s approval was not beyond the Corporation’s power. A development consent has been held to be valid where it was not accompanied by a statement of environmental effects as required by statutory regulations: Cranky Rock Road Action Group Inc v Cowra Shire Council [2006] NSWCA 339, (2006) 150 LGERA 81. In that case s 78A(8) of the EPA Act mandated that a development application be accompanied by an environmental impact statement or a species impact statement in specified circumstances. The regulations empowered the consent authority (a) to reject a development application if it was not accompanied by a document with which the regulations required it to be accompanied and (b) to request additional information. Given those two powers (particularly the former) and the essential differences between a statement of environmental effects on the one hand and an environmental impact statement and a species impact statement on the other, it was held that it was impossible to ascertain a clear legislative intention to invalidate every consent granted to a development application which was unaccompanied by a statement of environmental effects: at [88] – [89].

84 The applicant places reliance on Botany Bay Council v Remath Investments No 6 Pty Ltd [2000] NSWCA 364, (2000) 50 NSWLR 312. In that case, s 77(3)(d) of the Environmental Planning and Assessment Act 1979 provided that: “A development application shall…where the application is in respect of designated development, be accompanied by an environmental impact statement in the prescribed form”. The Act was substantially amended in 1997. A transitional regulation provided that the unamended Act continued to apply in respect of “any development application made, but not determined by the consent authority, before the appointed day”. It was held that a development application was not “made” until there was substantial compliance with s 77(3)(d) and that there was substantial compliance if the environmental impact statement was lodged after the application was lodged. I do not find the case to be of assistance. The focus was on the meaning of the word “made” and whether the requirement was satisfied if the environmental impact statement was lodged after the application. It was taken for granted that an environmental impact statement was an essential requirement.

85 A relevant consideration is to determine whether invalidity of non-complying conduct is necessary or desirable to ensure compliance. McHugh JA said in Woods v Bate (1987) 7 NSWLR 560 at 567, in reliance on the line of authority in the Court of Appeal approved in Project Blue Sky:

“In recent times the courts have shown great reluctance to invalidate an act done pursuant to a statutory provision because of the failure to comply with an antecedent condition. Speaking generally, I think that, at the present time, the proper approach is to regard a statutory requirement, expressed in positive language, as directory unless the purpose of the provision can only be achieved by invalidating the result of any departure from it, irrespective of the circumstances or resulting injustice…”

86 In support of that approach his Honour cited Hatton v Beaumont [1977] 2 NSWLR 211 at 226 where Mahoney JA said:

Howard v Bodington

87 Smith v Wyong Shire Council [2003] NSWCA 322, (2003) 132 LGERA 148 is helpful in the present context. Section 117 of the Environmental Planning and Assessment Act 1979 provided that the Minister may direct a council to exercise functions in relation to the preparation of a draft local environmental plan in accordance with “principles” specified in the direction. Section 117(3) mandated that the council “shall comply” with the direction in accordance with its terms. A majority of the Court of Appeal (Spigelman CJ, Sheller JA agreeing) decided that a failure to comply with a s 117(3) direction did not, of itself, invalidate the resultant local environmental plan. The whole Court decided that a breach of s 66(1), which required the council to publicly exhibit a copy of any relevant s 117 direction, did result in invalidity. The factors that the majority took into consideration in reaching the first decision included the following:

(a) whether the statutory provision used amorphous terminology. Section 117(2) used the term “principles” which, to use the terminology from Project Blue Sky at [95], did not have a “rule-like quality which can be easily identified and applied”. What constitutes compliance with a “principle” is a matter on which there is, to again use the terminology of Project Blue Sky , “room for widely differing opinions”: at [22] – [23];
(b) whether to hold the decision to be invalid would work a serious public inconvenience: at [25] – [29];
(c) whether the obligation was created by the Minister (in issuing the direction) and not by legislation or delegated legislation: at [38];
(d) whether the Minister who made the direction was in a position to determine the fate of the non-complying conduct: at [39];
(e) whether invalidity of non-complying conduct is necessary or desirable to ensure compliance: at [40].

88 As to the last-mentioned factor, which is relevant in the present case, Spigelman CJ held at [43] – [45], after quoting the passages from Woods v Bate and Hatton v Beaumont set out above at [85] – [86]:

“43 A failure to comply with a Direction that a council should prepare local environmental plans in a particular way may cover a wide range of defaults. Such failures may be major or minor, deliberate or inadvertent, fundamental or marginal. Indeed, in the present case, the failure appears to have arisen from an error of interpretation as to whether ‘any land’ involved each parcel of land, a matter on which reasonable minds may differ. Furthermore, the failure meant that certain specific areas of land were down-zoned, contrary to the policy reflected in the Direction, in a context where the Amendment, considered as a whole, implemented the policy behind the Direction by increasing the permitted densities in the LEP area to a substantial degree.

44 Invalidity, however, applies, to use McHugh JA's formulation in Woods v Bate ‘irrespective of the circumstances’ or, to use Mahoney JA's formulation in Hatton v Beaumont , ‘regardless of the merits of the individual case’.

Woods v Bate

89 The statutory direction specifying “principles” considered in Smith is analogous to the statutory “guidelines” under s 508A(3).

90 Section 508A(3) is in terms directed to, and imposes an obligation on, the Minister, not on the council. The only obligation of the council is under s 23A, which is not in issue: the council must take any relevant guidelines “into consideration” before exercising any of its functions. One of the council’s functions is to make an application under s 508A(1). Although there is no express obligation on a council to comply with any applicable guidelines, a council is at risk if its application is not in accordance with guidelines applicable to a s 508A(1) application because the Minister may reject the application for that reason or may vary or revoke the resultant determination (s 508A(9)(b)). The applicant’s case is that there is a more drastic consequence of a non-complying application, namely, that any purported determination is void.

91 There are competing considerations as to whether a legislative purpose is that a s 508A(1) determination is invalid if an application does not comply with applicable guidelines referred to in s 508A(3). Three considerations favour an affirmative answer. The first is the use of the word “only” in s 508A(3). Secondly, the process of public consultation to which the Guidelines are relevantly directed is consistent with one of the important purposes of the Local Government Act “to encourage and assist the effective participation of local communities in the affairs of local government”: s 7(c). Thirdly, s 508A is a gateway to the imposition of rates and charges – that is, taxes – and it is a fundamental right of a citizen not to be taxed except in accordance with parliamentary authority.

92 However, a number of factors pointing to the opposite conclusion, some of which Spigelman CJ identified in Smith, are also present:

(a) “Guidelines” (like “principles” in Smith ) is an amorphous, imprecise term. “Guidelines” suggest that there may be acceptable alternatives. “Guidelines” do not have a rule-like quality which can be easily identified and applied. What constitutes “accordance” with the applicable guidelines referred to in s 508A(3) is a matter on which reasonable minds may differ.

(b) The Act does not mandate that councils comply with applicable guidelines. Rather, it mandates that a council must take any relevant guidelines “into consideration” before exercising any of its functions: s 23A(3). Section 508A(3), in terms, is directed not to councils but to the Minister. It directs the Minister only to approve an application that is in accordance with applicable guidelines. To employ old classifications discarded in Project Blue Sky , it suggests that s 508A(3) is a directory rather than mandatory. That is, it tells councils how the Director-General likes applications to be made; and may remind them that under s 23A they have to take any relevant guidelines into consideration and that, if they do not, there are risks of rejection of the application or revocation or variation of the resultant determination.

(c) The power given to the Minister to revoke or vary a determination if the council has contravened any applicable guidelines assumes that the determination is valid: s 508A(9)(b).

93 Weighing the competing factors, I have come to the conclusion that it was not a legislative purpose that a guidelines discordant application should result in invalidity of the resultant determination. The factors suggesting that it was not preponderate. Accordingly, the first limb of the applicant’s case is unsuccessful.

94 I turn to the second and discrete limb of the applicant’s case. The alleged misleading representation to the Minister was that in the 2006 and 2007 Applications the council misrepresented the responses to the council’s paper survey and telephone survey of ratepayers’ feelings about the proposal. The 2006 Application contained the council’s summary of the paper survey responses set out at [36] above. The applicant submits that:

(a) the council’s representation as to the paper survey responses was misleading because it overstated the extent of the positive responses and understated the extent of the negative responses. The applicant says that the correct summary of the responses was as contended for by the applicant’s expert, Mr Elliott, set out at [26] above;
(b) the council’s representation as to the telephone survey results under the heading “External polls” was misleading because it indicated that these results were similar to the results of the paper survey when in fact it showed that more than 57 percent of those surveyed by telephone had negative responses.

95 The applicant pleads that because the representations to the Minister as to the survey results were misleading, the 2006 and 2007 Determinations are invalid on four legal bases:

96 The council submits that the representation to the Minister as to the survey results was not misleading because the council did not intend to manipulate the responses. I accept that the council did not intend to mislead; and the applicant makes no such allegation. However, intention is irrelevant to an objective determination of whether a representation is misleading.

97 As requested by the council’s general manager, the responses to the paper survey were collated by Ms Marilyn Smith, the editor of Tweed Link, and her staff, and classified as positive, negative or undecided. The survey summary was included in the 2006 Application. Ms Smith’s explanation of her methodology, which I accept, was that she adopted a “cautionary view to ensure that any community support for the Council’s 7 year plan was not misrepresented”. She explained that: “Survey responses provided to the council could provide both a ‘for’ and ‘against’ response, for example, a respondent to the survey may have said that they liked a certain project within the Plan but did not agree with the extent of the special variation rate rise proposed. In those cases, I would record a negative or undecided response”. Ms Smith conceded in cross-examination that there were errors in her classification of some responses. However, in a number of those cases, she thought that the correct classification was different from that adopted by Mr Elliott.

98 Mr Elliott, the applicant’s expert, disputed the council’s classification of a significant number of the responses. In the joint report of the experts, Mr Elliott for the applicant and Mr Sergeant for the council, they agreed that Mr Elliot’s analysis was more accurate than the council’s analysis.

99 The competing summaries of classifications by the council and by Mr Elliott were as follows:

Positive Negative Undecided

Council 40.24% 39.31% 20.45%
Mr Elliott 38.5% 46.4 % 15.1%

100 The differences seem to me to be relatively minor, particularly in relation to the positive responses. If Mr Elliott’s figures were to be accepted, they would constitute “evidence of community support for the proposal” as required by the Guidelines. Conversely, if the council’s different figures were characterised as a misrepresentation, it is difficult to see how the misrepresentation was material in terms of the Guidelines.

101 Mr Elliott’s cross-examination established that in a significant number of cases he did not follow his own methodology, described in his affidavit, in that he had the respondent’s response available but, instead of setting it out, he made a précis in his analysis (annexure H to his affidavit). Some of his précis were inaccurate or of dubious accuracy. He conceded that in some of these cases his précis method of recording responses influenced his classification. He conceded that a significant number of the responses were reasonably open to different views as to how they should be classified. In some such cases he made that concession after looking at the actual survey responses; in other such cases he made the concession on the basis that his précis was reasonably accurate. As regards the latter category, in re-examination he was shown some of the individual survey responses and asked whether or not he adhered to his answer that reasonable minds could differ as to the classification. In some cases he adhered, in others he did not.

102 The parties did not submit fresh calculations which took into account the concessions in cross-examination to which I have referred.

103 There have been a number of different analyses of the survey results: the various analyses in Mr Sharples’ letters of 3 July, 26 July and 31 July 2006 and 25 July 2007 (see [48], [54], [55] and [60] above); the analysis by Mr Elliot in the proceedings; and the council’s summary. Mr Sharples’ letters to the Minister illustrate that in a process such as this a decision-maker may be the recipient of conflicting representations from various sources.

104 In my opinion, differing subjective interpretations are (as Mr Sergeant indicated) inherent in the classification of responses to surveys of this nature. There were errors in the classification of some responses by both the council and by Mr Elliott. On the evidence, Mr Sharples’ own very different summaries of the responses in his correspondence with the Minister were wrong and, indeed, were not pressed in the proceedings. A “correct” summary probably lies somewhere between the council’s summary and Mr Elliott’s summary. It is unnecessary and, on the evidence, difficult if not impossible to be more precise. Given the inherent potential for differing subjective interpretations of the survey results, and the uncertain range within which the “correct” summary lies, I am not satisfied that the council’s representation as to the paper survey results was materially misleading.

105 I turn to the telephone survey representation. The council’s summary of the paper survey responses, which were disclosed to the Minister in the Applications, and the summary of the telephone survey responses, which were later disclosed to the Minister by Mr Sharples before the 2007 Determination, were as follows.

Positive Negative Undecided etc

106 The telephone representation was that, “As an integrity check, an independent marketing company undertook a statistically correct telephone survey of 330 residents spread over all areas of the Shire”. The telephone survey results were not disclosed. This could be reasonably be understood as not conveying any information as to the results of the telephone survey. It could also reasonably be understood as indicating that the telephone survey results were reasonably consistent with the paper survey results. That was correct so far as concerns the positive responses, but was incorrect, I think, so far as concerns the negative responses.

107 To the extent, if any, that the paper survey representation and the telephone survey representation were materially misleading, their alleged misleading content was brought home to the Minister and countered, in my view, by the submissions the Minister received from Mr Sharples before he made the 2006 Determination: see [45] – [49] above. Mr Sharples informed the Minister of the results of his audit of the survey results and submitted that the council had misrepresented the survey results. Before the Minister made the 2007 Determination he was fully informed by Mr Sharples as to the actual telephone survey results.

108 The applicant seeks to avoid this conclusion by submitting that the Minister, at most, merely “adverted” to the correspondence from Mr Sharples and did not consider it. The content of an obligation to “consider” a matter has often been addressed by the New South Wales Court of Appeal in the context of mandatory statutory requirements to consider prescribed matters. The view gained currency that it meant “proper, genuine and realistic consideration upon the merits”: Khan v Minister for Immigration and Ethnic Affairs (1987) 14 ALD 291 per Gummow J; Weal v Bathurst City Council [2000] NSWCA 88, (2001) 111 LGERA 181 at [9]. In Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 42 Mason J said that a court must proceed with caution when reviewing an administrative decision on the ground that the administrative body did not properly weigh up the relevant considerations lest the court exceed its supervisory role by reviewing the decision on its merits. This influenced repeated warnings by the Court of Appeal that the epithets “proper, genuine and realistic” (or the like) had to be applied cautiously lest they encourage a slide into impermissible merits review: Bruce v Cole (1998) 45 NSWLR 163 at 186 per Spigelman CJ; Zhang v Canterbury City Council [2001] NSWCA 167, (2001) 51 NSWLR 589 at [62]; Weal at [82]; Azriel v NSW Land and Housing Corporation [2006] NSWCA 372 at [49], [51] per Basten JA; Belmorgan Property Development Pty Ltd v GPT Re Ltd [2007] NSWCA 171, (2007) 153 LGERA 450 at [76] per Basten JA; Notaras v Waverley Council [2007] NSWCA 333, (2007) 161 LGERA 230 at [117] – [120] per Tobias JA; Anderson v Director General of the Department of Environment and Climate Change [2008] NSWCA 337 at [57] – [58] per Tobias JA (Spigelman CJ and Macfarlan JA agreeing). That caution was echoed in this Court: for example, in GPT Re Ltd v Wollongong City Council [2006] NSWLEC 303, (2006) 151 LGERA 116 at [44] (Biscoe J). The “proper, genuine and realistic consideration” formula was criticised by the Full Federal Court in Minister for Immigration and Multicultural Affairs v Anthonypillai [2001] FCA 274, (2001) 106 FCR 426 at [59] – [65].

109 At the same time, it was often said that “mere advertence” to a matter required to be taken into consideration is insufficient: e.g. Zhang at [64] citing Parramatta City Council v Hale (1982) 47 LGRA 319 at 339.

110 Most recently, in Anderson (above) at [57] Tobias JA, who delivered the leading judgment, said he would prefer that the formula “proper, genuine and realistic consideration”, and other similar formulae which qualify the word “consider”, be avoided. “Of course”, his Honour added at [58]:

“the relevant matter must be more than merely adverted to or given mere lip service. Nor would it be sufficient to advert to the matter and then discard it as irrelevant.”

111 Thus, the point has been reached where (in the context of a mandatory consideration requirement in a statute) it must be accepted that it is preferable not to ask what “consider” means (e.g. “proper, genuine and realistic”) but to ask what it does not mean (it does not mean mere advertence or lip service). That which is no longer preferable (“proper, genuine and realistic”) suggested a reasonably rigorous quality to the consideration. The currently preferred approach might suggest that the quality of the consideration is not so rigorous and that anything more than mere advertence or lip service suffices. If so, then the immunity of administrative decisions from judicial review on this ground may be somewhat stronger than it appeared to be under a formula such as “proper, genuine and realistic” (accompanied by the caution that this must not encourage a slide into impermissible merits review).

112 I do not accept the applicant’s submission that the Minister did not consider but, rather, merely adverted to the correspondence that the Minister received from Mr Sharples. The correspondence was before the Minister. The Minister’s statement of reasons for the Determinations is in evidence and indicates that the Minister considered the correspondence.

113 Lest I am still in error, I will next proceed by assuming that the council misleadingly represented the results of the surveys, as alleged by the applicant, and that that was not countered by Mr Sharples’ letters to the Minister. On that assumption, I turn to consider the four legal bases, referred to at [95] above, on which the applicant says that the resultant Determinations are invalid.

114 First, on that assumption, the applicant submits that simply because the survey representations were materially misleading, the Determinations were invalid. The applicant does not allege, and submits that it is unnecessary to allege, that there was fraud, bad faith or the like by the council in making the survey representations. In Anderson v Minister for Infrastructure Planning and Natural Resources [2006] NSWLEC 725, (2006) 151 LGERA 229 at [29] I concluded that misleading conduct by a person whose interests are affected by a decision which is not characterised by fraud, bad faith or the like is, at least generally, insufficient to vitiate an administrative decision. The applicant submits that Anderson was wrongly decided and should not be followed. I do not accept the applicant’s submissions for the following reasons.

115 The High Court in SZFDE v Minister for Immigration and Citizenship [2007] HCA 35, (2007) 232 CLR 189 at 198-206 and the Full Federal Court in Minister for Immigration and Citizenship v SZLIX [2008] FCAFC 171, (2008) 245 ALR 501 at [33] held that decisions of administrative tribunals could be set aside for fraud on the tribunals that stultified the operation of the legislative scheme to afford natural justice to a party or that affected the decision-making process. Negligence is not fraud and provides no ground of complaint that the detriment vitiates the decision made: SZFDE at [53]; SZLIX at [33]; Al-Mehdawi v Secretary of State for the Home Department [1990] 1 AC 876 at 898, 902 (HL). My decision in Anderson is consistent, I think, with those cases.

116 The authorities which the applicant cites establish that a decision which proceeds on a misleading view of the facts because of what a department has communicated to its Minister may be vitiated. I address those authorities below. They do not establish that the same result follows where the misleading communication is made not by the Minister’s advisers but by a person whose interests are affected by the decision.

117 The reason that a Ministerial decision based on a misleading department communication may be vitiated is because the communication may lead the Minister to fail to take into account a relevant consideration. Material in the possession of the Department is legally presumed to be in the possession of the Minister, and a failure by the Department to bring relevant material to the Minister’s attention is a matter for which the Minister bears responsibility. In Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24, Brennan J at 66 quoted the following passage from Bushell v Secretary of State for the Environment [1981] AC 75 per Diplock LJ at 95:

“To treat the minister in his decision-making capacity as someone separate and distinct from the department of government of which he is the political head and for whose actions he alone in constitutional theory is accountable to Parliament is to ignore not only practical realities but also Parliament's intention. Ministers come and go; departments, though their names may change from time to time, remain. Discretion in making administrative decisions is conferred upon a minister not as an individual but as the holder of an office in which he will have available to him in arriving at his decision the collective knowledge, experience and expertise of all those who serve the Crown in the department of which, for the time being, he is the political head. The collective knowledge, technical as well as factual, of the civil servants in the department and their collective expertise is to be treated as the minister's own knowledge, his own expertise.”

“A Minister may retain his power to make a decision while relying on his Department to draw his attention to the salient facts. But if his Department fails to do so, and the validity of the Minister's decision depends upon his having had regard to the salient facts, his ignorance of the facts does not protect the decision.”

118 Gibbs CJ held at 31:

“…if the Minister relies entirely on a departmental summary which fails to bring to his attention a material fact which he is bound to consider, and which cannot be dismissed as insignificant or insubstantial, the consequence will be that he will have failed to take that material fact into account and will not have formed his satisfaction in accordance with law.

119 Mason J, with whom Dawson J relevantly agreed at 71, held at 45:

“It would be a strange result indeed to hold that the Minister is entitled to ignore material of which he has actual or constructive knowledge and which may have a direct bearing on the justice of making the land grant, and to proceed instead on the basis of material that may be incomplete, inaccurate or misleading. In one sense this conclusion may be seen as an application of the general principle that an administrative decision-maker is required to make his decision on the basis of material available to him at the time the decision is made. But that principle is itself a reflection of the fact that there may be found in the subject-matter, scope and purpose of nearly every statute conferring power to make an administrative decision an implication that the decision is to be made on the basis of the most current material available to the decision-maker.”

120 In Barrett v Minister for Immigration, Local Government and Ethnic Affairs [1989] FCA 269, (1989) 18 ALD 129 at 133 the Full Federal Court quoted from the judgments of Gibbs CJ and Mason J, which I have quoted above, and applied them to hold that a departmental submission which gave a wrong impression as to a person’s immigration history might vitiate the Minister’s decision to deport the person.

121 The reasoning in Videto v Minister for Immigration and Ethnic Affairs (1985) 8 FCR 167 was similar, although it was decided before Peko-Wallsend. There, departmental officers had led a visa applicant to believe, incorrectly, that the fact that he had a son in Australia was not relevant to his application to remain in the country. Toohey J held at 179:

“If an officer of the Department withholds information from the Minister or his delegate, it is no answer to a complaint that the decision-maker failed to take into account a relevant consideration to say that the matter was not before him. That information was constructively before him. And, in my view, if an officer of the Department, albeit innocently, dissuades or discourages a person from giving information that is relevant to the decision to be made, it is no answer to a complaint in terms of s 5(2)(e) to say that the decision-maker did not have the matter before him. It was nevertheless a relevant consideration. Clearly much will depend upon the circumstances of each particular case.

122 Foster v Minister for Customs and Justice (Senator Vanstone) [1999] FCA 1447 is no different. The case concerned allegedly misleading information supplied by departmental staff to a Minister in connection with a decision to surrender a person for extradition. Kiefel J at [62] referred to Peko-Wallsend, Barrett and Videto. The case is not authority for the proposition that misleading information supplied by a person whose interests are affected by the decision may vitiate the decision.

123 Gales (above at [77]) concerned an allegedly misleading statement made to the public which had the effect that s 66(1)(b) of the Environmental Planning and Assessment Act 1979 had not been complied with. It was not concerned with whether a decision-maker had made a decision on the basis of misleading information supplied to the decision-maker.

124 The applicant submits that for the purposes of deciding the effect of a misleading representation to the Minister, a local council should be equated with the Minister’s department. There is no authority for that proposition. It is erroneous in principle, in my opinion, for it is the doctrine of Ministerial responsibility that makes the Minister responsible for the conduct of the Minister’s department.

125 Secondly, on the same assumption that the council materially misrepresented the survey results to the Minister, the applicant submits that the 2006 and 2007 Determinations are invalid because, in breach of the Guidelines, the council failed to provide valid evidence of community support to the Minister. I have earlier expressed the opinion, when analysing the applicant’s case of misleading the public, that it was not a purpose of the legislation that a determination made on a Guidelines discordant application should be invalid: see [80] – [93] above.

126 Thirdly, on the same assumption, the applicant submits that the Minister did not give proper consideration to whether there was community support for the proposal and that this is evidenced by the absence of a finding by the Minister that there was community support for the proposal. I do not accept the submission. The Minister was not bound to make such a finding, nor is its absence sufficient to evidence that the Minister did not consider whether there was community support for the proposal. The Guidelines required “evidence” of community support, not the Minister’s acceptance of, or finding as to, the evidence. The Guidelines did not require any particular level of community support. It was within the Minister’s discretion to accept or reject a Guidelines discordant application. Having accepted it, it was also within the Minister’s discretion to revoke or vary the resultant determination: s 508A(9)(b). In any event, in my opinion, the Minister did consider the issue of community consultation, or at least it has not been established that the Minister did not do so. The Minister’s tendered statement of reasons evidences that the Minister took into consideration a range of material which went to the very issue of whether there was community support for the proposal.

127 It follows from these conclusions that the applicant’s fourth ground that the Determinations were manifestly unreasonable is unsustainable. It is therefore unnecessary to address the well-established principles relating to the ground of manifest unreasonableness, which were reviewed in Notaras v Waverley Council [2007] NSWCA 333, (2007) 161 LGERA 230 at [121] – [125].

CONCLUSION

128 For these reasons, the applicant’s claim is unsuccessful.

129 I will hear the parties as to costs if they are not agreed. It may be appropriate to make no order as to costs having regard to the applicant’s measure of success in establishing that there was a misleading representation to the public and the special rule concerning costs where proceedings are brought in the public interest. Rule 4.2 of the Land and Environment Court Rules 2007 applies to proceedings such as these in Class 4 of the Court’s jurisdiction and provides that: “The Court may decide not to make an order for the payment of costs against an unsuccessful applicant in any proceedings if it is satisfied that the proceedings have been brought in the public interest”. An equivalent rule, r 3.7, applies to proceedings in Classes 1 and 2 and to some proceedings in Class 3 of the Court’s jurisdiction. These public interest costs rules were introduced with effect from January 2008. Rule 4.2 was considered and compared with the pre-existing public interest litigation costs principles in Anderson on behalf of Numbahjing Clan within the Bundjalung Nation v NSW Minister for Planning (No 2) [2008] NSWLEC 272 and Ku-ring-gai Council v Minister for Planning (No 2) [2008] NSWLEC 276. Although the new public interest litigation costs rules appear not to have been brought to the attention of the Court of Appeal in the later case of Walker v Minister for Planning (No 2) [2008] NSWCA 334, the Court of Appeal nevertheless declined to order costs against an unsuccessful applicant where the proceedings had been brought in the public interest and additional factors were present.

130 The orders of the Court are as follows:

Citations

Sharples v Minister for Local Government [2008] NSWLEC 328

Most Recent Citation

Cases Citing This Decision

41

Sharples v Minister for Local Government [2010] NSWCA 36

Northern Residential Pty Ltd v Newcastle City Council [2009] NSWCA 141

Cases Cited

43

Statutory Material Cited

3

Commissioner of State Revenue (Vic) v Royal Insurance Australia Ltd [1994] HCA 61

Newcastle City Council v Caverstock Group Pty Ltd [2008] NSWCA 249

Commissioner of State Revenue (Vic) v Royal Insurance Australia Ltd [1994] HCA 61

Actions

Download as PDF Download as Word Document

CITATION:	Sharples v Minister for Local Government [2008] NSWLEC 328
PARTIES:	APPLICANT: Terry Patrick Sharples FIRST RESPONDENT: Minister for Local Government SECOND RESPONDENT: Department of Local Government THIRD RESPONDENT: Tweed Shire Council
FILE NUMBER(S):	40959 of 2007
CORAM:	Biscoe J
KEY ISSUES:	Judicial Review :- capacity of misleading representation to vitiate an administrative decision - determinations by Minister to increase council's general income under s 508A Local Government Act 1993 - under s 508A(3) determination may be made only on application of council made in accordance with any applicable guidelines issued by Director-General - applicable guidelines specified minimum requirements for applications including evidence of community support for proposal and how community was consulted - whether council made a material misrepresentation to the community as to the effect of proposed rate increase - if so, whether application was not in accordance with this requirement - if so, whether the determinations were invalid - whether council made a misleading representation to Minister concerning extent of community support in responses to surveys - if so, whether Minister's determinations were thereby invalid. Costs: - whether appropriate to make no order for costs against unsuccessful applicant if the Court is satisfied that the proceedings have been brought in the public interest.
LEGISLATION CITED:	Environmental Planning and Assessment Act 1979, ss 45, 66(1), 77(3)(d), 78A(8), 117 Land and Environment Court Rules 2007, rr 3.7, 4.2 Local Government Act 1993, ss 7(c), 23A, 405, 505(a), 506, 508(2), 508A, 509(1), 512, 548(3)(a), 674, 676(1)
CASES CITED:	Al-Mehdawi v Secretary of State for the Home Department [1990] 1 AC 876 Anderson v Director General of the Department of Environment and Climate Change [2008] NSWCA 337 Anderson v Minister for Infrastructure Planning and Natural Resources [2006] NSWLEC 725, (2006) 151 LGERA 229 Anderson on behalf of Numbahjing Clan within the Bundjalung Nation v NSW Minister for Planning (No 2) [2008] NSWLEC 272 Australian Broadcasting Corporation v Redmore Pty Ltd [1989] HCA 15, (1989) 166 CLR 454 Azriel v NSW Land and Housing Corporation [2006] NSWCA 372 Barrett v Minister for Immigration, Local Government and Ethnic Affairs [1989] FCA 269, (1989) 18 ALD 129 Belmorgan Property Development Pty Ltd v GPT Re Ltd [2007] NSWCA 171, (2007) 153 LGERA 450 Botany Bay Council v Remath Investments No 6 Pty Ltd [2000] NSWCA 364, (2000) 50 NSWLR 312 Bruce v Cole (1998) 45 NSWLR 163 Bushell v Secretary of State for the Environment [1981] AC 75 Castle Constructions Pty Ltd v North Sydney Council [2008] NSWLEC 137 Commissioner of State Revenue (Victoria) v Royal Insurance Australia Ltd [1994] HCA 61, (1994) 182 CLR 51 Cranky Rock Road Action Group Inc v Cowra Shire Council [2006] NSWCA 339, (2006) 150 LGERA 81 El Cheikh v Hurstville City Council [2002] NSWCA 173, (2002) 121 LGERA 293 Foster v The Minister for Customs and Justice (Senator Vanstone) [1999] FCA 1447 Gales Holdings Pty Ltd v Minister for Infrastructure and Planning [2006] NSWCA 388, (2006) 69 NSWLR 156 GPT Re Ltd v Wollongong City Council [2006] NSWLEC 303, (2006) 151 LGERA 116 Hatton v Beaumont [1977] 2 NSWLR 211 Helman v Byron Shire Council (1995) 87 LGERA 349 Khan v Minister for Immigration and Ethnic Affairs (1987) 14 ALD 291 Ku-ring-gai Council v Minister for Planning (No 2) [2008] NSWLEC 276 Leichhardt Municipal Council v Minister for Planning (1992) 78 LGERA 306 Lezam Pty Ltd v Seabridge Australia Pty Ltd [1992] FCA 206, (1992) 35 FCR 535 Manly Council v Byrne [2004] NSWCA 123 Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 Minister for Immigration and Citizenship v SZLIX [2008] FCAFC 171, (2008) 245 ALR 501 Minister for Immigration and Multicultural Affairs v Anthonypillai [2001] FCA 274, (2001) 106 FCR 426 Newcastle City Council v Caverstock Group Pty Ltd [2008] NSWCA 249 Notaras v Waverley Council [2007] NSWCA 333, (2007) 161 LGERA 230 Parramatta City Council v Hale (1982) 47 LGRA 319 Port Louis Corporation v Attorney-General of Mauritius [1965] AC 1111 Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28, (1998) 194 CLR 355 Smith v Wyong Shire Council [2003] NSWCA 322, (2003) 132 LGERA 148 SZFDE v Minister for Immigration and Citizenship [2007] HCA 35, (2007) 232 CLR 189 Timbarra Protection Coalition Inc v Ross Mining NL [1999] NSWCA 8, (1999) 46 NSWLR 55 Videto v Minister for Immigration and Ethnic Affairs (1985) 8 FCR 167 Walker v Minister for Planning (No 2) [2008] NSWCA 334 Weal v Bathurst City Council [2000] NSWCA 88, (2001) 111 LGERA 181 Woods v Bate (1987) 7 NSWLR 560 Zhang v Canterbury City Council [2001] NSWCA 167, (2001) 51 NSWLR 589
DATES OF HEARING:	3-7 November, 2-3 December 2008
DATE OF JUDGMENT:	30 December 2008
LEGAL REPRESENTATIVES:	APPLICANT: Mr T Robertson SC and Mr J Lazarus SOLICITORS: Woolf Associates FIRST AND SECOND RESPONDENTS: Mr M Izzo SOLICITORS: Crown Solicitor's Office (NSW) THIRD RESPONDENT Mr C Leggat SC and Mr M Seymour SOLICITORS: Marsdens Law Group

Positive	Negative	Undecided or unquantifiable
Mr Sharples’ audit	29.2%	59.2%	11.6%
Council summary	40.24%	39.31%	20.45%

Positive	Negative	Unquantifiable
Paper survey	29.1%	59.3%	11.6%
Telephone survey	29.7%	58.3%	12%

Low Range $	High Range $	Low Range $	High Range $
2006/2007	32	32	32	32
32	35	32	35
35	45	35	45
48	55	48	55
2007/2008	35	35	67	67
35	38	67	73
38	49	73	94
52	60	100	115
2008/2009	38	38	105	105
38	42	105	115
42	54	115	148
57	66	157	181
2009/2010	42	42	147	147
42	45	147	160
46	59	161	207
62	72	219	253
2010/2011	46	46	193	193
46	50	193	210
50	64	211	271
68	78	287	331
2011/2012	50	50	243	243
50	54	243	264
54	70	265	341
74	85	361	416
2012/2013	54	54	297	297
54	59	297	323
59	76	324	417
80	93	441	509
1359	1546
÷ 28	= 48.53	= 55.21
48.53	+ 55.21	= 103.74
103.74	÷ 2	= 51.87
51.87	÷ 52	= 0.99