South Sydney Council v Local Government Boundaries Commission

[2001] NSWLEC 280

Reported Decision: 119 LGERA 238

Land and Environment Court

of New South Wales

CITATION:	South Sydney Council v Local Government Boundaries Commission and Anor. [2001] NSWLEC 280
PARTIES:	APPLICANT: South Sydney Council RESPONDENTS: Local Government Boundaries Commission and Anor.
FILE NUMBER(S):	40219 of 2001
CORAM:	Bignold J
KEY ISSUES:	Injunctions and Declarations - Interlocutory Relief :- Minister's Reference to Boundaries Commission of proposed boundary alterations-Whether procedural fairness applies to functions of Commission-Limited time (7 days) afforded to Council to make submissions-whether denial of procedural fairness.
LEGISLATION CITED:	Local Government Act 1993, s 263, s 675, s 676
CASES CITED:	Ainsworth v Criminal Justice Commission (1992) 175 CLR 56422; Balmain Association Inc v The Plannning Administrator for Leichhardt Council (1991) 25 NSWLR 615; Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148; Kioa v West (1975) 159 CLR 550; May v Commissioner of Taxation (1999) 92 FCR 152 at 160; Vanmeld Pty Ltd v Fairfield City Council (1999) 46 NSWLR 78; Warringah Council v Edmondson (2001) NSWCA 1
DATES OF HEARING:	5 December 2001
DATE OF JUDGMENT:	12/06/2001
LEGAL REPRESENTATIVES:	APPLICANT: Mr N Hemmings QC with I Hemmings, Barrister SOLICITORS Marsdens RESPONDENTS: Mr S Lloyd, Barrister SOLICITORS NSW Crown Solicitor

JUDGMENT:

IN THE LAND AND

Matter No. 40219 of 2001

ENVIRONMENT COURT OF

Coram: Bignold J.

NEW SOUTH WALES

6 December 2001

SOUTH SYDNEY COUNCIL

Applicant

v

LOCAL GOVERNMENT BOUNDARIES COMMISSION

First Respondent

EDITH HALL

Second Respondent

JUDGMENT

Bignold J:

A. INTRODUCTION

1. By its class 4 application filed on 3 December 2001, the Applicant (the Council) claims the following orders:
1. An order that the First and Second Respondents be restrained from reporting to the Minister on any matter with respect to the boundaries of the Applicant’s area until the Applicant has had a reasonable period of time to make submissions to the First Respondent.
2. An order that the Second Respondent be restrained from causing or participating in any decision by the First Respondent to report on any matter with respect to the boundaries of the Applicant’s area until the Applicant has had a reasonable period of time to make submissions to the First Respondent.
3. A declaration that a reasonable pried of time for the purposes of paragraphs 1 and 2 is 40 business day from the date of the making of the order.

2. Additionally, the Council claims by way of interlocutory relief the following orders—
4. An order that the First and Second Respondents be restrained from reporting to the Minister on any matter with respect to the boundaries of the Applicant’s area until further order of the Court.
5. An order that the Second Respondent be restrained from causing or participating in any decision by the First Respondent to report on any matter with respect to the boundaries of the Applicant’s area until further order of the Court.

3. The Council’s claims to interlocutory relief were heard yesterday. They were opposed by both Respondents (the second Respondent being the chairperson of the first Respondent), principally upon the ground that this Court lacks the jurisdiction to entertain the claims.

4. Presumably because it had been put on notice of the Respondents’ claim that this Court lacks the jurisdiction to entertain the Council’s claims, upon the hearing of the Council’s claims to interlocutory relief, the claims were propounded differently from the manner in which the Council’s claims to permanent relief are propounded in the Class 4 application. In that formulation, it is apparent that the sole legal foundation for the claims is the denial by the Respondents to accord procedural fairness or natural justice to the Council.

5. Accordingly, and being sensitive to the Respondents’ challenge to this Court’s jurisdiction, Council’s argument in support of its claim to interlocutory relief was founded upon the assertion of an apprehended breach by the first Respondent in the discharge of its statutory functions under the Local Government Act 1993, s 263, so as to bring its claim within the jurisdiction conferred upon the Court by the LG Act, s 673 and s 674. Notwithstanding the realignment of its argument so as to focus on the concept of “breach of the Act” the Council maintains its essential legal grievance that it has been denied procedural fairness or natural justice by virtue of the first Respondents’ invitation (contained in its letter to the Council dated 26 November 2001) of the opportunity for the Council to make a formal submission by “Wednesday 5 December 2001 at the latest”. (I interpose that in the course of the hearing, Counsel for the Respondents intimated that if its challenge to the Court’s jurisdiction failed, the Respondents would afford the Council a further 14 days to make its submissions. However, this offer was not acceptable to the Council which is seeking a period of 40 days in which to make its submission.)
B. THE COURT’S JURISDICTION TO ENTERTAIN THE COUNCIL’S CLAIM TO INTERLOCUTORY RELIEF

6. The question of jurisdiction arises in the present case because Chapter 9 of the Local Government Act 1993 (“How are Council’s established?”) (the LG Act) is not included in the legislation enumerated in s 20(3) of the Land and Environment Court Act 1979 (LEC Act) and declared to be “a planning or environmental law”.

7. Accordingly, Chapter 9 of the LG Act (which includes the constitution of the Local Government Boundaries Commission) is not a “planning or environment law” in respect of which this Court is vested by s 20(2) of the LEC Act with the same civil jurisdiction as the Supreme Court would have but for s 71 of the LEC (which operates to vest in this Court exclusive jurisdiction in respect of such laws).

8. However, the Council relies upon the LG Act, s 673 as providing this Court with jurisdiction to entertain the Council’s claim to interlocutory relief: vide s 20(1)(d) of the LEC Act.

9. Section 673(1) provides as follows:

Remedy or restraint of breaches of this Act—the Minister, the Director-General and councils

(1) The Minister, the Director-General or a council may bring proceedings in the Land and Environment Court or such other court as may be specified in this Act for the purpose of the proceedings for an order to remedy or restrain a breach of this Act.

10. Section 672 defines “a breach of this Act” to mean—
(i) a contravention of or failure to comply with this Act,
(ii) a threatened or an apprehended contravention of or a threatened or apprehended failure to comply with this Act, and

11. In Wykanak v Rockdale City Council (2001) NSWLEC 65, I held that s 674(1) (which confers upon this Court a similar jurisdiction to that conferred by s 673 (1) except that it empowers “any person” to bring proceedings to “remedy or restrain a breach of the Act”) conferred jurisdiction upon this Court to entertain a claim that a council had conducted its business at a meeting (at which it had excluded the public) in a manner that had exceeded its statutory powers and that s 676 conferred very wide powers upon this Court to remedy such a breach.
C. THE EVIDENCE

12. The evidence supporting the Council’s claim to interlocutory relief is principally contained in the affidavit sworn 3 December 2001 by its Mayor, Mr John Fowler.

13. That affidavit deposes to the Council’s participation in the inquiry conducted between October 2000 and April 2001 by Professor Kevin Sproats on behalf of the Minister for Local Government into the structure of local government in eight council areas in the inner city and eastern suburbs (namely the local government areas of Botany Bay, Leichhardt, Marrickville, Randwick, Sydney, City South Sydney, Waverley and Woollahra).

14. That inquiry culminated in Professor Sproats’ Report dated April 2001 which included a number of recommendations including Recommendation 4 to the effect that the structure of local government in this region be recast by creation of four new councils (instead of the existing eight).

15. The Report concludes with s 3.7 which is headed “Boundary Adjustments” and includes the following content:

3.7 Boundary Adjustments

I stress that a full recasting of councils is my preferred option. If this is not acceptable because of the current policy, the following boundary adjustments could be initiated. I regard these adjustments as a minimalist approach. As discussed earlier all councils submitted proposals for boundary changes. There is also the matter of residential growth in Sydney City and governance of the central business district.

Sydney CBD

I have not been persuaded by the arguments for the contraction of boundaries of Sydney City Council to the commercial heart. I am convinced that for Sydney City to be a dynamic, liveable, global city it must have a sizable residential component. The expansion of the city of Sydney as proposed in Recommendation 4 could be contemplated regardless of any recasting of the remaining councils. The trouble with this is that it would decimate City of South Sydney to the point of not being viable. It would also have implications for Leichhardt, Marrickville, Woollahra (if Paddington included) and Randwick (if Centennial Park included).

A minimal expansion to the east could include Darlinghurst/Kings Cross, Woolloomooloo, Potts Point, Rushcutters Bay, and Elizabeth Bay. This is in effect that part of south Sydney City north of Campbell, Flinders and Oxford Streets. Expansion to the west could include Glebe and Forest Lodge.

16. On 31 May 2001, the Mayor wrote to the Minister conveying the Council’s decisions in response to the release of Professor Sproats’ Report rejecting both Recommendation 4 and the alternative recommendation to that recommendation for reasons stated in the Mayor’s letter. In respect of the alternative recommendation involving the removal from the Council’s area of the “North Ward” (comprising the suburbs of Potts Point, Elizabeth Bay, Rushcutters Bay, Woolloomooloo, Darlinghurst, Paddington and Moore Park), the Mayor’s letter stated that the proposal was “not acceptable to the majority of ratepayers of South Sydney for whom there would be little benefit. I repeat that any such move would be to the detriment of the efficient viability of what would remain of South Sydney City Council”.

17. On 21 November 2001 the Minister wrote to the Mayor advising that he had that day referred “a proposal to the Local Government Boundaries Commission that affects your Council’s local government area”.

18. The Minister’s letter then described in words the areas of land that were proposed to be transferred to Sydney local government area and advised as follows:

The Boundaries Commission is required to examine and report to me on the proposal in accordance with section 263 and in particular section 263(3) of the Local Government Act. I expect the report to be finalised in time for new boundaries to be in place by early next year.

19. By letter dated 26 November 2001, the Chairperson of the first Respondent wrote to the Mayor as follows:

On 20 November 2001 the Minister for Local Government referred a proposal to the Boundaries Commission for boundary changes to five council areas.

I understand details of the changes, which will involve Leichhardt, South Sydney, City of Sydney, Woollahra and Waverley Councils, were conveyed to you on 21 November 2001.

As is usual for boundary alterations, the Commission will not be holding a formal inquiry into the changes. Also, the areas involved were the subject of a public inquiry and submissions process as part of the review conducted earlier this year by Professor Kevin Sproats.

Section 263(3) of the Local Government Act sets out the matters the Commission has to have regard to in its consideration of the boundary alterations. If additional issues are relevant then obviously the Commission will take these into account as well.

While the Commission will not be seeking public submissions, it will review and consider comments made as part of the Sproats review which are relevant to the current proposal. However, as your Council’s area is affected by the proposed changes you are invited to make a formal submission to the Commission.

I would ask that if you are intending to take this opportunity you do so by Wednesday 5 December 2001 at the latest.

Should you have any enquiries in this regard please contact Michelle Carnegie on (02_ 9793 0710.

20. By letter dated 28 November 2001, the Mayor respondent as follows:

Dear Ms Hall,

I write in response to your letter received on the 27th November 2001 to present a formal submission to the Boundaries Commission, by December 5th, within 6 working days.

The proposal announced in Parliament this month has not been the subject of any assessment by the residents and ratepayers who legally and in good faith elected South Sydney Council. This is contrary to the intent of Section 263 of the Local Government Act, especially 2B, Reasonable Public Notice and (3) Consideration, and suggests that such precipitous action by the Government makes a mockery of undue process or accountability. Consequently, my colleagues and I expect reasonable time to consult with those citizens and ratepayers before formulating the formal submission.

I note that the current proposed boundary changes are not those recommended by Professor Sproats. Further, Professor Sproats only sought submission from interested citizens and parties. He did not conduct a survey or poll. Submissions could obviously contain inherent bias throwing considerable doubt on the submission being reflective of public opinion.

This aside, if the inference by Professor Sproats was that suburbs are not to be split between local governments, then I would submit that the jagged boundary that exists from re-establishment of this Council when it separated from the City of Sydney of 1st January 1989 is the boundary that needs justifying.

You will note that the citizens of South Sydney have not elected either the Minister who made this decision or the Lord Mayor of Sydney who covets those citizens. Therefore, despite what this Council chooses to do, Section 265 of the Act clearly requires the Commission to seek assistance for their considerations by determining the attitude of the residents by opinion survey. Such a survey must include those citizens and ratepayers of the whole of South Sydney Council local government area.

The haste of your proposal is more alarming when it is noted that the third position of the Commission in unfilled. If this situation remains when your considerations begin, broad criticism will surely follow.

Finally, your comments if you are intending to take this opportunity (for a formal submission) …, in the face of the removal of one third of residents and half of Council’s income, is insulting to the citizens and ratepayers of South Sydney.

Respectfully, and in the interests of good governance, I urge you urgently review the methods and the timetable for the undertaking of the Commission’s functions.

21. No response being received to its letter the Council instructed its Solicitors to write to the Minister and the first Respondent and by letter dated 3 December 2001, the Council’s Solicitors asked the Minister to confirm that he would not act upon the boundaries proposal until the Council had “had a reasonable opportunity to provide information to the Boundaries Commission” and requested that the Minister direct the first Respondent to hold an inquiry in exercising its statutory function pursuant to the LG Act, s 263.

22. By further letter dated 3 December 2001, the Council’s Solicitor wrote to the second Respondent seeking advice “as a matter of urgency that it consents to a reasonable extension of time” for the Council to prepare its submission.

23. Each of these letters advised that unless satisfactory responses were received by 2 pm that day, it would be necessary for the Council to commence legal proceedings to restrain the first Respondent from reporting to the Minister until such time as the Council has had a reasonable time to make its submission.

24. In the following passages (at par 13 to par 18 inclusive) from his affidavit the Mayor expresses his concern that the first Respondents’ consideration of the proposed boundary changes will proceed in “the absence of adequate information in relation to the impacts of the proposal”:
13. I am aware that for the purposes of preparing a report to the Minister in relation to a boundary change, the Boundaries Commission is required to have regard to the matters set out in s263(3) of the Local Government Act 1993.
14. Given the statements made in its letter to Council, I am concerned that the Boundaries Commission will proceed to examine and report on the Proposal in the absence of adequate information relating to the impacts of the Proposal.
15. I note from the Boundaries Commission letter of 26 November 2001, that it will review and consider comments made as part of the Sproats review. I have considered the Sproats Report. In my opinion, the Sproats Report does not provide information that would permit the Boundaries Commission to consider the matters it is required to consider in s263(3) of the Local Government Act.
16. The Council made a written submission to the Sproats inquiry. That submission addressed matters relating to amalgamation. It did not specifically address matters relating to boundary changes other than in relation to minor boundary re-alignments.
17. In my opinion, the council’s submission to the Sproats Inquiry does not provide information that would permit the Boundaries Commission to consider the matters it is required to consider in s263(3) of the Local Government Act.
18. I have previously reviewed the submissions made by councils that were also involved with the Sproats Inquiry including Waverley Council, Woollahra Council, Marrickville Council, Leichhardt Council and Randwick Council. In my opinion, those submissions do not provide information that would permit the Boundaries Commission to consider the matters it is required to consider in s263(3) of the Local Government Act.

25. In par 19 to par 38 of his affidavit, the Mayor discusses in detail the work required by the Council in preparing its submission to the first Respondent on the proposal, culminating in his opinion that the Council would require eights weeks to “accurately quantify the impacts of the proposal”.

26. The Mayor deposed that part of that work would involve the Council conducting a poll of residents and ratepayers to determine their attitudes to the proposal and that he had also called a public meeting to be held on 8 December 2001 for “Council employees, contractors and other members of the community….to inform them of the proposal and to seek their views”.

27. These passages in the affidavit express the Mayor’s views on a number of matters, including his belief that the proposal “may cause significant financial disadvantage to the residents and ratepayers of South Sydney and may threaten the long-term financial viability of Council” (par 25).

28. The other evidence relied upon by the Council is a transcript of the ABC’s State Line programme telecast on 30 November 2001 which includes statement made by Professor Sproats to the effect that the Minister’s current proposal for boundary alterations does not correspond to the alternative minimalist change canvassed in the latter part of Professor Sproats’ Report.

29. The Respondents tendered an extract from NSW Government Gazette No 184 of 30 November 2001 containing Orders made by the Minister referring to the Boundaries Commission (i) his boundary alteration proposal to transfer the suburbs of Woolloomooloo, Potts Point, Ruschutters Bay, Elizabeth Bay and part of Darlinghurst from South Sydney local government area to Sydney local government area, and (ii) his boundary alteration proposal to transfer portions of the suburbs of Chippendale, Camperdown, Ultimo and the suburbs of Forest Lodge and Glebe within the Leichhardt local government area and South Sydney local government area to Sydney local government area.

30. Each of the Minister’s Orders stated that the Boundaries Commission “may not hold an inquiry on this proposal”.
D. THE STATUTORY SCHEME FOR ALTERATION OF LOCAL GOVERNMENT BOUNDARIES

31. Divisions 2A and 2B of Part 1 of Chapter 9 of the LG Act contain provisions for altering the boundaries of a local government area.

32. Section 218B provides that the Governor may, by proclamation, alter the boundaries of one or more areas. However, s 218D provides that that power may only be exercised after a proposal therefor is dealt with under Division 2B.

33. Section 218E empowers the Minister to make such a proposal and s 218F requires the Minister to refer his proposal for examination and report to the Boundaries Commission or to the Director-General. Upon receipt of the report of the Boundaries Commission, the Minister’s powers in respect of the proposal are specified in s 218F(7) and (8) namely—
(i) he may recommend to the Governor that the proposal be implemented with modifications (subsection (7)); or
(ii) he may decline to recommend to the Governor that the proposal be implemented (Subsection (8)).

34. Part 3 of Chapter 9 to the LG Act contains provisions concerning the Local Government Boundaries Commission (the Commission).

35. Section 260 constitutes the Commission as a body corporation and s 261 provides for its memberships and enacts Schedule 2 which regulates the procedures of the Commission (meetings, voting, etc).

36. Section 263 which specifies the functions of the Commission relevantly provides as follows:

263. (1) The Boundaries Commission is required to examine and report on any matter with respect to the boundaries of areas and the areas of operation of county councils which may be referred to it by the Minister.

but may not hold an inquiry otherwise than as referred to in paragraph (a) or (b).

(2) When considering any matter referred to it that relates to the boundaries of areas or the areas of operations of county councils, the Boundaries Commission is required to have regard to the following factors:
(a) The financial advantages or disadvantages (including the economies or diseconomies of scale) of any relevant proposal to the residents and ratepayers of the areas concerned;
(b) the community of interest and geographic cohesion in the existing areas and in any proposed new area;
(c) the existing historical and traditional values in the existing areas and the impact of change on them;
(d) the attitude of the resident and ratepayers of the areas concerned;
(e) the requirements of the area concerned in relation to elected representation for resident and ratepayers at the local level, the desirable and appropriate relationship between elected representatives and ratepayers and residents and such other matters as it considers relevant in relation to the past and future patterns of elected representation for that area;
(e1) the impact of any relevant proposal on the ability of the councils of the areas concerned to provide adequate, equitable and appropriate services and facilities;
(e2) the impact of any relevant proposal on the employment of the staff by the councils of the areas concerned;
(e3) the impact of any relevant proposal on rural communities in the areas concerned;
(e4) in the case of a proposal for the amalgamation of two or more areas, the desirability (or otherwise) of dividing the resulting area or areas into wards;
(e5) in the case of a proposal for the amalgamation of two or more areas, the need to ensure that the opinions of each of the diverse communities of the resulting area or areas are effectively represented;
(f) such other factors as it considers relevant to the provision of efficient and effective local government in the existing and proposed new areas.
E. IS THE COUNCIL’S CLAIM TO INTERLOCUTORY RELIEF WITHIN THE COURT’S JURISDICTION?

37. The Respondents’ argument that the Council’s claim is outside and beyond this Court’s jurisdiction is essentially founded upon the proposition that the Council’s legal grievance, as expressly framed in its class 4 application, bespeaks an assertion of lack of procedural fairness or of denial of natural justice on the part of the Respondents and as such, the proceedings asserting that claim are not proceedings under the LG Act, s 673 or s 674 that are within this Court’s class 4 jurisdiction: vide the LEC Act, s 20(1)(d).

38. In support of their contention that this Court has no jurisdiction to entertain a claim of denial of procedural fairness against the Respondents, the Respondents rely upon the recent decision of the Court of Appeal in Warringah Council v Edmondson (2001) NSWCA 1. In that case, the Court of Appeal reversed the decision of this Court (Edmondson v Warringah Council (1999) 105 LGERA 37) holding that (i)an acceptance of a tender by a council; and (ii) the consequent grant of lease by the council to the successful tenderer were each void and of no effect.

39. Talbot J had held the lease to be invalid on account of the breach by the council of its duty under s 47(1)(c) of the LG Act to notify owners or occupiers of “adjoining land” of the proposal to grant a lease of “community land”. His Honour appears to have held that the Council’s acceptance of the tender was part and parcel of its decision to grant the lease to the successful tenderer and that in so doing, the Council had “contravened principles of equity and good conscience by failing to deal with all parties fairly and in good faith” (p 44).

40. His Honour dealt with this Court’s jurisdiction to so hold that the acceptance of the tender was invalid in the following passage at 45:

The council, when giving consideration to the tenders, was acting pursuant to its statutory power to grant a lease of the land. It is an incident of that power that it be exercised in accordance with its duty as a statutory corporation. A failure to act reasonably and fairly is relevantly a contravention of or failure to comply with the Act. The applicants are therefore entitled to bring proceeding in this court for an order to remedy or restrain such a breach pursuant to s 674 of the LG Act.

41. This reasoning was criticised in the Court of Appeal’s judgment delivered by Fitzgerald JA (and concurred in by the other members) when his Honour says at par 20:

A fundamental difficulty with this approach is that it misconceives the source of an obligation to afford procedural fairness. In Vanmeld Pty Ltd v Fairfield City Council (1999) 46 NSWLR 78. it was unnecessary for Meagher and Powell JJA to discuss this issue. However, their judgments contain no indication that they disagreed with the Chief Justice on this point. His Honour said: 46 NSWLR 78, 91-92.

The obligation to afford procedural fairness is a doctrine of the common law which attaches to the exercise of public power, subject to any statutory modification of the common law in that regard. See Kioa v West (1985) 159 CLR 550, 576, 581, 632; Annetts v McCann (1990) 170 CLR 596, 598; Ainsworth v Criminal Justice Commission (1992) 175 CLR 564, 574-575; Attorney General (NSW) v Quin (1989-90) 170 CLR 1, 57; Victoria v Master Builders Association of Victoria (1995) 2 VR 112, 138-139, 148, 157-160; Bayne The Common Law Basis of Judicial Review (1993) 87 ALJ 781. The view that the duty to accord procedural fairness is only an issue of statutory interpretation, consistently taken by Sir Gerard Brennan, has not prevailed. (See Kioa v West supra 609-616; FAI Insurance Ltd v Winneke (1982) 151 CLR 342, 407-413; Ainsworth supra 584-585).

42. With respect to the Respondents’ submissions, I am unconvinced that the Court in Edmondson was dealing with the same question as is raised in the present proceedings. The question here is whether there is likely to occur a breach of the Act within the meaning of LG Act, s 673(1) if the Respondent undertakes its statutory function under s 263(1) of the LG Act of examining and reporting on the Minister’s proposed boundary alterations to the local government area of South Sydney in the manner that it has foreshadowed in its letter to the Council dated 26 November 2001.

43. That foreshadowed manner relevantly includes its invitation for the Council to make a submission on the proposal “by 5 December 2001 at the latest”.

44. Assuming for the moment that in undertaking its statutory function in respect of the Minister’s boundary alteration proposals as they affect the Council’s local government area that the first Respondent is bound to afford the Council procedural fairness or natural justice, then I am firmly of the opinion that if that statutory function were undertaken in breach of those requirements that it afford the Council procedural justice or natural justice (either because no opportunity is afforded or the opportunity afforded does not satisfy the content requirements of the procedural fairness that is required in the circumstances of the present case), there would occur relevantly a “breach of the Act” within the meaning of s 673 (read with s 672) with the consequence that proceedings to restrain or remedy such a breach would clearly fall within this Court’s jurisdiction: vide 20(1)(d) of the LEC Act.

45. In so concluding, I do not understand the decision in Edmondson to require a different result, or to stand in the way of my so holding. My conclusion based on the aforesaid assumptions (ie (i) that the requirements of procedural fairness or duty of natural justice applies to the first Respondent in undertaking its statutory function of examining and reporting on the Minister’s boundary alteration proposals; and (ii) that those requirements or that duty have not been satisfied) that the first Respondents’ exercise of it statutory function would involve a “breach of the Act” within the meaning of the LG Act, s 673(1) is an unexceptional legal conclusion based upon the assumed premises cf Spigelman CJ’s conclusions at 100 in Vanmeld Pty Ltd v Fairfield City Council (1999) 46 NSWLR 78 that a draft local environmental plan altered by a Council without according procedural fairness to affected land owners was not a “a draft local environmental plan” within the meaning of the EP&A Act, s 68(4)(c) and accordingly, that the Minister could not make a local environmental plan under s 70(1)(a)(i) “in accordance with a draft local plan as submitted by the council” because no such plan was submitted.

46. To similar effect was the conclusion of the Court of Appeal in Balmain Association Inc v The Planning Administrator for Leichhardt Council (1991) 25 NSWLR 615 that the Minister’s appointment of a planning administrator pursuant to the EP& A Act, s 118 was void and of no effect because of the failure of the Minister to afford natural justice or procedural fairness to the Council to present its case against that appointment being made.

47. Both these cited cases aptly illustrate the principle that where the exercise of a statutory power is subject to the common law obligation to afford procedural fairness, where that obligation is breached, the exercise of statutory power will on that account generally be held to be void and of no effect.

48. It also follows from what I have said that if it can be shown that there is an apprehended breach of the Act by the first Respondent by virtue of the manner it has foreshadowed to the Council that it intends to undertake its statutory function of examining and reporting on the Minister’s boundary alteration proposals, then this Court likewise has jurisdiction to entertain an application to restrain that apprehended breach (just as it has undoubted jurisdiction to remedy an actual breach of the Act).

49. Accordingly, I must now examine the validity of the two assumptions that I have made in so concluding, namely—
(i) does the first Respondent owe the Council the duty of natural justice or procedural fairness in undertaking its statutory function of examining and reporting on the Minister’s boundary alteration proposals?; and
(ii) has the first Respondent relevantly breached its duty?

50. Concerning the first assumption, in my judgment, the application to the statutory functions of the first Respondent under the LG Act, s 263 of the case law (especially the many recent decisions of the High Court of Australia) that were comprehensively surveyed and analysed in the judgment of the Chief Justice in Vanmeld leads to the inevitable conclusion that the common law obligation to afford procedural fairness attaches to the exercise of the statutory function conferred upon the first Respondent which has been invoked by the Minister’s references to the first Respondent of his boundary alteration proposals.

51. In particular, the fact that the first Respondents’ statutory function is confined to “examining and reporting” on the Minister’s proposals in an overall statutory scheme, which gives ultimate power to the Minister to decide whether he will or will not recommend to the Governor implementation of the proposal (with or without modifications arising out of the Commission’s report), does not exempt the first Respondent from the obligation to afford procedural fairness: see Ainsworth v Criminal Justice Commission (1992) 175 CLR 564.

52. Concerning the second assumption, the question whether there has been a breach or denial of the obligation to afford procedural fairness depends upon the content of the relevant obligation. In this respect, the following passage from the judgment of Mason J in Kioa v West (1985) 159 CLR 550 at 584-5 has been adopted by subsequent High Court decisions:

The law has now developed to a point where it may be accepted that there is a common law duty to act fairly, in the sense of according procedural fairness, in the making of administrative decisions which affect rights interests and legitimate expectations, subject only to the clear manifestation of a contrary statutory intention ... But the duty does not attach to every decision of an administrative character. Many such decisions do not affect the rights, interests and expectations of the individual citizen in a direct and immediate way. Thus a decision to impose a rate or a decision to impose a general charge for services rendered to ratepayers, each of which indirectly affects the rights, interests or expectations of citizens generally does not attract this duty to act fairly. This is because the act or decision which attracts the duty is an act or decision:

... which directly affects the person (or corporation) individually and not simply as a member of the public or a class of the public. An executive or administrative decision of the latter kind is truly a policy or political decision and is not subject to judicial review.' (Salemi (No 2) 1977 137 CLR at 452 per Jacobs J).

Where the decision in question is one for which provision is made by statute, the application and content of the doctrine of natural justice or the duty to act fairly depends to a large extent on the construction of the statute. ... What is appropriate in terms of natural justice depends on the circumstances of the case and they will include, inter alia, the nature of the inquiry, the subject matter, and the rules under which the decision maker is acting. ...

In this respect the expression procedural fairness more aptly conveys the notion of a flexible obligation to adopt fair procedures which are appropriate and adapted to the circumstances of the particular case. The statutory power must be exercised fairly, ie in accordance with procedures that are fair to the individual considered in the light of the statutory requirements, in the interests of the individual and the interests and purposes, whether public or private, which the statute seeks to advance or protect or permits to be taken into account as legitimate considerations."

53. I must leave for ultimate consideration of the evidence adduced by the Council in support of its case, the question whether the Council has established a relevant breach by the first Respondent of the obligation to afford the Council the opportunity of procedural fairness. It is sufficient for present purposes for me to simply conclude that the Council’s allegation of denial of procedural fairness by the first Respondent in its foreshadowed manner of undertaking its statutory function of examining and reporting on the Minister’s boundary alteration proposals relevantly attracts this Court’s jurisdiction to restrain an apprehended breach of the Act within the meaning of the LG Act, s 673(1).

54. This conclusion means that it is unnecessary for me to consider the Council’s alternative argument that the foreshadowed manner in which the first Respondent would undertake its statutory function of examining and reporting on the Minister’s proposals exposed a legally flawed approach inasmuch as the first Respondent would not be properly considering relevant matters, because by insisting that the Council’s submission be made within a period of one week, it had effectively excluded from its examination of the Minister’s proposal all of the benefit it would have otherwise obtained from consideration of the Council’s submissions on the proposal, which submissions would have obvious relevance to many of the statutory considerations enumerated in the LG Act s 263(3).

55. An allied or variant submission advanced by the Council was to the effect that the first Respondents’ foreshadowed approach of the manner it would undertake its statutory task exposed a fundamental misconception on its part that the Minister’s proposal was an emanation from Professor Sproats’ alternative recommendation for “minimalist” changes by way of boundary alterations, or that “comments” made by Professor Sproats in his Report, were or could be relevant to the Minister’s proposal when those comments were addressing a different proposal from the proposals that had been recently referred to the first Respondent by the Minister.

56. Because I do not have to decide whether the Council’s alternative argument that its claims fall within the jurisdiction conferred upon this Court by the LG Act, s 673(1) is correct, I do not need to determine the Respondents’ rebuttal of this argument based upon the following statements contained in the judgment of the Full Court of the Federal Court of Australia in May v Commissioner of Taxation (1999) 92 FCR 152 at 160:

For so long as the obligation to accord procedural fairness was viewed as a matter of statutory presumption: see, for example, Kioa v West per Brennan J; and not of common law duty: see for example, Annetts v McCann at 598; it may have been appropriate in some cases to regard relevant considerations and procedural fairness as being interrelated.

……

Given more recent developments in the law on procedural fairness in this country that now locate the right to procedural fairness and the obligation to accord it in the common law: see Annetts v McCann; it is our view unnecessary to merge or blur relevant considerations and procedural fairness at least for the purpose of determining when a consideration is a relevant consideration: but see Aronson and Dyer, Judicial Review of Administrative Action (1996) pp 434-435.

F. HAS THE COUNCIL ESTABLISHED AN ENTITLEMENT TO INTERLOCUTORY RELIEF?

57. In answering this question in these interlocutory proceedings, the relevant considerations enunciated in Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 at 153-154, are as follows:
(i) Is there a serious question to be tried in the sense that if the evidence remains as it is, there is a probability that at the trial of the action, the applicant will be entitled to relief?
(ii) Will the Council suffer irreparable damage unless the interlocutory injunction is granted?
(iii) Does the balance of convenience favour the granting of an injunction?

58. On the basis of the only evidence that is before the Court, I am of the firm opinion that each of these questions must be answered resoundingly in favour of the Council.

59. In particular, the Council’s case appears to be overwhelming that the Respondents have denied the Council procedural fairness by insisting that the Council’s submissions on the Minister’s proposals be made within a period of seven working days where that time was manifestly inadequate, given (i) the nature of the statutory function to be undertaken by the first Respondent, (ii) the serious consequences for the Council of the outcome of the undertaking of that function and (iii) the complex and detailed nature of the content of the submissions that the Council wished to make to the first Respondent in opposing the proposals.

60. The manifest inadequacy of the opportunity afforded to the Council by requiring it to make its submission to the first Respondent within 7 working days, is emphasised by a comparison with the processes of and the generous opportunity for participation in, the Inquiry conducted by Professor Sproats. If it had been the case that the Minister’s proposals were but a logical and natural progression or development of the processes and outcome of that Inquiry, then the first Respondents’ insistence that the Council make its submissions within seven working days would require to be more closely evaluated in order to determine whether the content of the procedural fairness requirement was fair and reasonable in the circumstances of this case. However, as the evidence stands, the Minister’s proposals clearly do not correspond with the proposals canvassed by Professor Sproats in conducting his Inquiry, or in providing his report on that Inquiry and in these circumstances, the Council’s case that it has been denied procedural fairness by virtue of the very inadequate time allowed by the first Respondent for receipt of the Council’s submissions on the proposals is, in my judgment, an overwhelmingly strong case.

61. Although addressing an entirely different statutory function, the decision of the Court of Appeal in the Balmain Association case provides an interesting illustration. In that case, the Minister gave the council a direction pursuant to the Environmental Planning and Assessment Act 1979, s 55 that the council perform all of its functions under s 68 of the Act in respect of four (site specific) draft local environmental plans within a period of five weeks from the giving of the direction. The Court’s decision that the time stipulated in the direction was “manifestly unreasonable” was of course based upon the Court’s detailed analysis of the facts of that case, including the nature of the statutory task that the council had been directed to complete.

62. The Court’s decision on this point was not based upon the application of any principle of procedural fairness. Rather, the Court’s decision was based upon its holding (at 630) that the power for the Minister to give a direction to the Council—

to fix the time for performance by the council of its functions under s 68 has to be exercised according to law and hence consistently with the Act in Regulation. In the light of past delays, the Minister, acting reasonably, would have been entitled to require the council to perform these functions in a timely way and even expeditiously. However, he could not, by direction require performance in a time shorter than the minimum reasonably required by s 68 itself.

63. I have referred to this case, simply for illustrative purposes because unlike that case, the present case does not concern the reasonableness of a time stipulation within which to discharge a statutory obligation. Rather, the nature and content of the task that the Council would wish to undertake in providing a submission to the first Respondent in respect of the Minister’s boundary alteration proposals is at large, with the only evidence relevant to a proper understanding of that task, being the detailed evidence in the affidavit of the Mayor of the Council, which I accept for the purposes of determining the interlocutory questions raised in the proceedings.

64. However, because I am conscious of the fact that the Respondents have not had the opportunity to adduce any countervailing or rebutting evidence, I do not think it appropriate, at least at this interlocutory stage in the proceedings, that I simply adopt the Mayor’s opinion that some 40 days will be required by the Council in order that it may fairly make its submissions to the first Respondent in respect of the Minister’s proposals.

65. At this stage, the appropriate form of interlocutory relief is to restrain the Respondents until further order from reporting to the Minister the examination and report by the first Respondent on the Minister’s boundary alteration proposals affecting the local government area of the Council without affording procedural fairness to the Council by it having the opportunity to make its submission to the first Respondent within a reasonable time.

66. The interlocutory injunction that I propose to grant is authorised by the power conferred upon the Court by the LG Act, s 676(1) which relevantly provides—

If the …Court is satisfied 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….restrain the breach.

67. I grant liberty to apply on two days notice. This liberty will extend to the Respondents seeking a final hearing on the case, if they so desire, and to either of the parties seeking a determination in respect of the amount of reasonable time that the Council should be given within which to make its submissions to the first Respondent (although I would expect the parties to sensibly agree upon this matter).

G. ORDERS

68. For all the foregoing reasons, I make the following orders:

1. Order that the Respondents, until further Order of the Court be restrained from reporting to the Minister for Local Government its examination and report on the Minister’s two boundary alteration proposals affecting the local government area of the Council that have been recently referred to the first Respondent, without affording the Council procedural fairness by having the opportunity to make submissions to the first Respondent in respect of the said proposals within a reasonable time.

2. Grant liberty to apply on two days’ notice.

3. Reserve the question of costs.