Wolf v Zakula
[2019] VSC 214
•3 April 2019
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
GENERAL LIST
S CI 2018 01903
| DAVID WOLF (CHIEF MUNICIPAL INSPECTOR OF THE LOCAL GOVERNMENT INSPECTORATE) | Plaintiff |
| v | |
| JOHN ZAKULA | Defendant |
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JUDGE: | Keogh J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 25 September 2018 |
DATE OF JUDGMENT: | 3 April 2019 |
CASE MAY BE CITED AS: | Wolf v Zakula |
MEDIUM NEUTRAL CITATION: | [2019] VSC 214 |
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LOCAL GOVERNMENT – Local Government Act 1989 (Vic) ss 223A, 223B, 223C – Power to examine or investigate any possible breach of the Act – Notices to produce documents and appear for examination issued to defendant by delegates of the Chief Municipal Officer – Refusal to comply – Whether notice invalid – Pyneboard Pty Ltd v Trade Practices Commission (1982) 57 FLR 368 – Aurora Construction Materials Pty Ltd v Victorian WorkCover Authority [2018] VSCA 165 (29 June 2018) – Whether delegation invalid.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | D Holding | Victorian Government Solicitor’s Office |
| For the Defendant | C Carr with C Tran | DST Legal |
HIS HONOUR:
The plaintiff, Mr Wolf, is the appointed Chief Municipal Inspector (‘CMI’) under the Local Government Act 1989 (Vic) (the ‘Act’).[1] Powers of the CMI include to examine, investigate and prosecute possible breaches of the Act, and, by notice, to require a person to produce documents relating to any matter the CMI may examine or investigate, or to appear for examination on oath to answer questions. Mr Wolf delegated those powers under the Act to Ross Millard, David Walker and Aeron Rice, who, by virtue of the delegations, each became an inspector of municipal administration (‘Inspector’).
[1]Section 223A.
The defendant, Mr Zakula, was a party to a proceeding in this Court against the South Gippsland Shire Council (the ‘Council’) in relation to local wind farms (the ‘wind farm proceeding’). An email relating to the wind farm proceeding, sent by the Council’s CEO to councillors, came into Mr Zakula’s possession. In the course of investigating whether there was an unauthorised release of the email which was a breach of the Act, Mr Walker, by notice in writing, required Mr Zakula to produce documents relating to the email. Later Ms Rice gave Mr Zakula notice to attend for examination under oath in relation to the same matter.
Mr Zakula gave various reasons for refusing to comply with the notices, including legal privilege, his right against self-incrimination, and that he had adequately answered the request for information. Mr Wolf brought this proceeding to enforce compliance with the notices. The reasons Mr Zakula initially gave for refusing to comply with the notices have fallen away. He now opposes the orders sought on two grounds:
(a) The notices were invalid because they did not disclose on their face that the powers Mr Walker and Ms Rice sought to exercise had been delegated to them; and
(b) The delegations were invalid because the Act did not give Mr Wolf a general power of delegation in advance of the occasion for exercise of the power delegated.
Factual Background
On 22 December 2017 the Council’s CEO, Tim Tamlin, sent an email to councillors regarding the windfarm proceeding (the ‘Tamlin email’).
On 23 January 2018 Dominica Tannock, solicitor for Mr Zakula, forwarded a copy of the Tamlin email to the solicitor for the defendant in the wind farm proceeding, stating:
I attach a copy of an email that my client instructs me he received on 12 January 2018 from one of the Councillors at South Gippsland Shire Council. [The ‘Tannock email’]
In the Tannock email it was asserted that the Tamlin email was evidence of the Council’s failure to comply with Court orders relating to the matter in dispute.
On 30 January 2018 the contents of the Tamlin and Tannock emails were published by the South Gippsland Sentinel-Times in an article entitled, ‘Who dunnit?’. On the basis of the article, and a discussion with the acting CEO of the Council, Mr Wolf determined that an investigation was required into whether a councillor had misused their position by leaking the Tamlin email to Mr Zakula.
On 15 February 2018 Mr Millard contacted Ms Tannock requesting to speak to the person who received the Tamlin email. Ms Tannock responded stating she had received the Tamlin email under cover of an email from Mr Zakula which, she alleged, was covered by legal professional privilege. Ms Tannock said she was not willing to further discuss the Tamlin email or participate in the investigation unless directed by a court.
On 28 February 2018 Mr Walker issued a notice to Mr Zakula under s 223B(2) of the Act to ‘Provide Reasonable Assistance and Produce Documents’ regarding his receipt of the Tamlin email. Ms Tannock, on behalf of Mr Zakula, repeated the position stated in her 15 February response.
On 22 March 2018 Ms Rice issued a second notice to Mr Zakula under s 223B(2) to ‘Appear for Compulsory Examination’. Ms Tannock again responded on Mr Zakula’s behalf, communicating his refusal to appear for examination and asserting that he was protected by the right against self-incrimination.
On 22 May 2018 Ms Rice, not believing Mr Zakula to have any lawful excuse for failure to comply with the notices, filed a certificate pursuant to s 223C(2) of the Act. Mr Wolf brings this proceeding seeking orders under s 223C(3)(a) requiring Mr Zakula’s compliance.
The notices
The first notice reads:
Dear Mr Zakula,
NOTICE TO PROVIDE REASONABLE ASSISTANCE TO PRODUCE DOCUMENTS
The local Government Investigations and Compliance Inspectorate (Inspectorate) is conducting an investigation pursuant to section 223B of the Local Government Act 1989 (Act) regarding an alleged misuse of position contrary to section 76D of the Act.
I am an Inspector of Municipal Administration within the meaning of section 223A(5) of the Act.
It is alleged that there was an unauthorised release of information from South Gippsland Shire Council (Council), being an email sent by the Chief Executive Officer, Tim Tamlin (CEO), to all councillors and executive staff on 22 December 2017 (the email). The email related to ligation that you are a party to against Council.
It is alleged that the email was sent to you, from another source, between 5 January 2018 and 12 January 2018. Dominica Tannock of DST Lawyers has confirmed that you were the recipient of the email.
A person who is or had been a Councillor must not misuse his or her position by making improper use of information acquired as a result of the position he or she holds. You are not the subject of this allegation but you are a person that holds relevant information regarding the allegation.
I am writing to give notice that, pursuant to section 223B(2) of the Act, I require you to produce the following:
1.Original email received by you containing the contents of the email, including email header(s) containing the time and date the email(s) were sent/received and the email address of the sender. You are required to print the email for production and also provide an electronic copy.
2.Identifying details of the person who provided you with the email, including name, address, email address and any other relevant information.
Sections 223A, 223B and 223C of the Act are attached for your reference.
Please note that unless a lawful excuse exists, it is an offence to refuse or fail to comply with a requirement of the Chief Municipal Inspector to the extent to which that person is able to comply, to give information which the person knows is false or misleading, or to make a false or misleading statement.
…
Thank you for your assistance with this matter.
Yours sincerely,
David Walker
Inspector of Municipal Administration
The second notice was in similar form, and had attached to it a copy of the same sections of the Act.
Relevant provisions
Section 223A of the Act governs the appointment and functions of the CMI:
Appointment of Chief Municipal Inspector
(1)The Integrity Minister may appoint a Chief Municipal Inspector who is employed under Division 5 of Part 3 of the Public Administration Act 2004.
(2)The Chief Municipal Inspector has the following functions—
(a)to investigate and prosecute any possible offences under this Act;
(b)to examine any possible breaches of this Act;
(c)to investigate any allegations of misconduct, serious misconduct and gross misconduct by a Councillor;
(d)to make an application for a Councillor Conduct Panel to make a finding of serious misconduct against a Councillor;
(e)to make an application to VCAT for a finding of gross misconduct by a Councillor;
(f)any other function conferred on the Chief Municipal Inspector by or under this Act.
(3)The Chief Municipal Inspector has all the powers necessary to perform the Chief Municipal Inspector’s functions.
(4)The Chief Municipal Inspector may, by instrument, delegate any power, duty or function of the Chief Municipal Inspector under this Act to any person who has, in the Chief Municipal Inspector’s opinion, appropriate skills or knowledge to perform that power, duty or function other than this power of delegation.
(5)A person delegated any power, duty or function by the Chief Municipal Inspector under subsection (4) is by virtue of that delegation an inspector of municipal administration.
The CMI is given the following powers by s 223B:
Powers of the Chief Municipal Inspector
(1)The Chief Municipal Inspector may examine, investigate and prosecute—
(a)any matter relating to a Council’s operations or to Council elections or electoral matters; and
(b)any possible breach of this Act.
(2)The Chief Municipal Inspector may, by notice in writing, require a person to—
(a)produce any document (whether or not specifically identified in the notice) in the person’s custody or control that relates to any matter that the Chief Municipal Inspector may examine or investigate; and
(b)give all reasonable assistance in connection with an examination or investigation; and
(c)appear before the Chief Municipal Inspector for examination on oath and to answer questions.
…
The suspected breach of the Act under investigation was misuse of a Councillor’s position pursuant to s 76D:
Misuse of position
(1)A person who is, or has been, a Councillor or member of a special committee must not misuse his or her position—
(a)to gain or attempt to gain, directly or indirectly, an advantage for themselves or for any other person; or
(b)to cause, or attempt to cause, detriment to the Council or another person.
Penalty:600 penalty units or imprisonment for 5 years or both.
(2)For the purposes of this section, circumstances involving the misuse of a position by a person who is, or has been, a Councillor or member of a special committee include—
(a)making improper use of information acquired as a result of the position he or she held or holds; or
…
Mr Wolf brings this application pursuant to s 223C:
Offences relating to investigations
(1)A person must not—
(a)refuse or fail to comply with a requirement of the Chief Municipal Inspector to the extent to which that person is able to comply; or
(b)give information which the person knows is false or misleading to the Chief Municipal Inspector; or
(c)when appearing before the Chief Municipal Inspector-
(i)refuse to take an oath or affirmation; or
(ii)make a false or misleading statement.
Penalty: 240 penalty units or imprisonment for 2 years or both.
(2)If a person fails to comply with a requirement made by the Chief Municipal Inspector and does not prove that the person had a lawful excuse for the failure, the Chief Municipal Inspector may certify the failure in writing to the Supreme Court.
(3)The Supreme Court may—
(a)make an order requiring the person to comply with the requirement made by the Chief Municipal Inspector within the period fixed by the Supreme Court; or
(b)instead of or in addition to an order under paragraph (a), if the Supreme Court is satisfied that the person failed without lawful excuse to comply with the requirement of the Chief Municipal Inspector punish the person as if the person had been guilty of contempt of court.
Mr Wolf seeks orders under s 223C(3)(a) only.
As the defences are raised by Mr Zakula, it is convenient to deal with his submissions first.
Were the notices valid?
Mr Zakula
Mr Zakula submitted the authorities establish that a notice of the kind given by Mr Walker and Ms Rice must disclose, on its face, that it is an exercise of power conferred by the relevant statutory provisions on the person giving the notice.[2] The notices given by Mr Walker and Ms Rice were invalid because they did not identify which powers were delegated, or state that the specific powers being exercised had been delegated. Whilst the notices did state Mr Walker and Ms Rice were inspectors within the meaning of s 223A(5) of the Act, that designation did not disclose that the specific compulsory power purportedly being exercised was delegated to the person giving the notice. The recipient of such a notice is entitled to certainty that the person purporting to compulsorily direct him or her to do something has the power to give that direction.
[2]Federal Commissioner of Taxation v Australian and New Zealand Banking Group Ltd (1979) 143 CLR 499, 525 (Gibbs ACJ); Pyneboard Pty Ltd v Trade Practices Commission (1982) 57 FLR 368, 374 (‘Pyneboard’); Aurora Construction Materials Pty Ltd v Victorian WorkCover Authority [2018] VSCA 165 (29 June 2018) [79] (Kaye JA, Tate JA agreeing) (‘Aurora’).
Mr Zakula submitted the general principle serves an important systemic purpose that the requirements for a notice to be effective should be strictly enforced in order to provide at least some protection of the private rights of the recipient, particularly in circumstances where that person might be liable to a penalty for failure to comply.[3]
[3]Caratti v Commissioner of the Australian Federal Police (2017) 352 ALR 631 [22] (‘Caratti’); XXVII v Commonwealth [2018] FCAFC 59 [184].
In oral submissions counsel for Mr Zakula said:
[The notices] include a simple statement that I have been delegated the power pursuant to s.223B(2). It simply needs to identify on its face that the person making the requirement has the power to make that requirement.
And later added:
If it be, “I am the Chief Municipal Inspector”, then that would suffice. If it be “I am an Inspector of Municipal Administration”, then that would not suffice without more because one is not exercising the powers of an Inspector of Municipal Administration. One is exercising the powers of the Chief Municipal Inspector and one needs to add that second limb to explain how one comes to exercise the powers of a different statutory office holder.
Mr Wolf
Mr Wolf submitted that the information contained in the notices to Mr Zakula was sufficient to satisfy him that Mr Walker and Ms Rice had each been delegated the power to give notice under s 223B(2) of the Act. Mr Walker and Ms Rice were identified in the notices as Inspectors within the meaning of s 233A(5) of the Act, which plainly conveyed that they had been delegated powers of the CMI. By specifying that the author was giving notice pursuant to s 223B(2) of the Act, it was apparent from the terms of each notice that the power being exercised was one which had been delegated. Any further explanation was superfluous, especially given the undesirability of considering such notices in an “over-technical or hypercritical manner”.[4]
[4]Pyneboard (1982) 57 FLR 368 at 375; Aurora [2018] VSCA 165 (29 June 2018) [88].
In relation to Mr Zakula’s argument that the requirements for validity of notices should be strictly enforced so as to safeguard personal privacy, Mr Wolf relied on the following passage from the decision in Caratti:[5]
… in construing with statutory requirements for the issue of a search warrant, the court should be careful to give effect to the legislation by its terms and not approach its task armed with a prima facie hostility to the invasion of privacy that is necessarily involved in the exercise of investigative powers.[6]
[5](2017) 352 ALR 631 [22].
[6]Ibid (citations omitted).
Mr Wolf submitted the terms of the Act warrant the invasion of privacy upon the CMI forming a bona fide view that an investigation is necessary, and that power should not be hindered by taking an over-technical or hypercritical approach to the form of the notice.
Authorities
In Pyneboard,[7] the Full Court of the Federal Court set out the conditions for validity of a notice under s 155 of the Trade Practices Act 1974 (Cth):
[7](1982) 57 FLR 368.
In a context where refusal or failure to comply with a s. 155 notice is punishable by imprisonment or fine, there are, in our view, two further implicit conditions of validity of a notice purportedly given pursuant to s. 155 (1) of the Act. Those two further conditions of validity relate to the form or content of the notice. The first is that the notice must convey, with reasonable clarity, to the recipient what information he is required to furnish or what documents he is required to produce. The second is that the notice must disclose that the Commissioner is entitled to require that the recipient furnish the information or produce the documents which the notice describes.[8]
The Court referred to Gibbs ACJ’s comments of similar effect in Federal Commissioner of Taxation v Australia and New Zealand Banking Group Ltd.[9] In relation to the second requirement, the Court added:
The requirement that a notice under s. 155 (1) show the person to whom it is addressed that the Commissioner is entitled to require that he furnish the information or produce the documents which the notice specifies will not be satisfied unless it appears from the notice that the information or documents sought are information or documents “relating” to one or more “matters” of a kind described in the subsection.[10]
Referring to the approach which should be taken to consideration of whether a notice satisfies the second condition the Court said:
If, on examination of the terms of the notices, it does not appear that the information or documents sought by a particular requirement are information or documents relating to one or other of the above “matters”, the requirement will, at least to the extent to which it would require the furnishing of such information or the production of such documents, be beyond the power conferred by s. 155 (1) of the Act. In this regard however, it should be stressed that the question whether a notice discloses the necessary relatedness between documents or information sought and the identified “matters” is, like the question whether the terms of the notice are sufficiently clear, not to be approached in an over-technical or hypercritical way.[11]
[8]Pyneboard (1982) 57 FLR 368, 374.
[9]Banking Group Ltd (1979) 143 CLR 499.
[10]Pyneboard (1982) 57 FLR 368, 375.
[11]Ibid 376.
In Aurora,[12] Kaye JA emphasised that the principles underpinning the validity of notices need to be adapted to allow for differences in legislative language and context. His Honour noted the fundamental principle discussed in the authorities, that:
[12][2018] VSCA 165 (29 June 2018) [78].
First, the notice must disclose, on its face, that it is an exercise of the power which is conferred on the Authority by the statutory provision in question.[13]
His Honour referred to the decision in D’Anastasi v Environment, Climate Change and Water NSW,[14] in which Young JA, with whom Campbell JA and Sackville AJA agreed, stated:
It is necessary to consider whether the notice fairly indicates to the addressee the matter within the responsibilities and functions of the regulatory authority about which the officer requires information.[15]
In Aurora,[16] Kaye JA concluded a notice must sufficiently disclose the power to require provision of the document or information sought to enable a recipient to assess whether service of the notice was within power and there was an obligation to comply with it. Dealing with a notice under s 9 of the Occupational Health and Safety Act2004 (Vic), Kaye JA said:
The principles, discussed above, do not require that a notice specify, in precise terms, the actual provision, or provisions, of the OHSA or regulations which, it is suspected, have been contravened. In the context of s 9 of the OHSA, what is necessary is that the notice sufficiently inform the recipient of the nature of the particular suspected contravention or contraventions, so that the recipient can sensibly assess whether the Authority has the power to require the provision to it of documents and information, and, further, whether the information and documents, sought in the notice, may relate to the suspected contravention that is the subject of the investigation by the Authority.[17]
[13]Ibid [79].
[14](2011) 81 NSWLR 82 (‘D’Anastasi’).
[15]Ibid [39].
[16]Aurora [2018] VSCA 165 (29 June 2018).
[17]Ibid [92] (citation omitted).
Kaye JA concluded, in the context of that case, that specifying in the notice that the information and documents were sought for the purposes of investigating contravention of a particular section of the Occupational Health and Safety Act 2004 (Vic) would have added little if anything to the information conveyed in the notice about the subject of the investigation or the nature of the suspected contravention.
Analysis
It is not in dispute that Mr Wolf had power to delegate the powers, duties and functions of the CMI, including the power in s 223B(2) of the Act, to Mr Walker and Ms Rice, or that by such a delegation Mr Walker and Ms Rice became Inspectors under s 223A(5).
Each notice informed Mr Zakula of the investigation under s 223B of a possible breach by a Councillor of the Council of s 76D of the Act. Mr Walker’s notice disclosed the background of the possible breach under investigation, the relevance of the role played by Mr Zakula, the basis upon which the matter was being investigated, and that Mr Zakula was not the subject of the allegation but held relevant information. Ms Rice’s notice should be understood in the context of the notice served by Mr Walker.
Each notice disclosed to Mr Zakula that the author was an inspector of municipal administration within the meaning of s 223A(5) of the Act. Copies of ss 223A, 223B and 223C were attached to the notices. Each notice clearly disclosed to Mr Zakula that the author had been delegated powers, duties or functions of the CMI under the Act.
Each notice disclosed that by giving the notice the author was exercising a power under s 223B(2) of the Act. The notices clearly disclosed to Mr Zakula that the power sought to be exercised was one which was conferred by the Act and could be delegated to a person who, by reason of the delegation, became an inspector.
In my view, the notices sufficiently and fairly informed Mr Zakula that Mr Walker and Ms Rice were Inspectors to whom the power to require a person to do the things specified in s 223B(2) had been delegated. It would add little, if anything, to the information conveyed for the notice to specify precisely what powers had been delegated to Mr Walker and Ms Rice, and that those powers included the power to give notice in s 223B(2).
Delegation of power to Mr Walker and Mr Rice
Pursuant to s 233A(4) of the Act, Mr Wolf purported to delegate powers, duties and functions to Mr Walker on 2 September 2016, and to Ms Rice on 1 June 2017 (the ‘delegations’). Each delegation was said to be effective from the date on which it was made until the employment or engagement of Mr Walker or Ms Rice ended, unless revoked earlier. The delegation to Mr Walker reads:
I, David John Wolf, appointed by the Integrity Minister as the Chief Municipal Inspector by Instrument of Appointment dated 3 May 2016, pursuant to subsection 223A(4) of the Local Government Act 1989 (Vic), have formed the opinion that David James Walker has the appropriate skills or knowledge to perform the powers, duties and functions specified in Column 1 and summarised in Column 2 of the attached Schedule, and as limited by Column 3 of the Schedule.
I HEREBY DELEGATE to David James Walker, my powers, duties and functions, under the Local Government Act 1989 (Vic) as specified in Column 1 and summarised in Column 2 of the attached Schedule, and as limited by Column 3 of that Schedule.
By virtue of this delegation and subsection 223A(5) of the Local Government Act 1989 (Vic), David James Walker is an inspector of municipal administration (inspector).
This delegation will be effective until the date on which David James Walker’s employment or engagement by the Chief Municipal Inspector ends, unless earlier revoked.
This delegation comes into force on the day it is signed.
The delegation to Ms Rice is in similar terms. Both delegations include the power under s 223B(2) of the Act. Mr Wolf said that he only delegated the power under s 223B(2) to inspectors with a senior level of experience.
In an affidavit tendered in the proceeding Mr Wolf stated:
6. David Walker (Mr Walker) was employed at the Inspectorate in September 2009 as a Senior Investigator. Under the previous provisions of the Act, Mr Walker was appointed by the Minister for Local Government as an Inspector of Municipal Administration (IMA). Prior to employment with the Inspectorate, Mr Walker held 20 years’ experience as an investigator with the Victorian Police, including 10 years with the major fraud investigation unit. When the Act was amended to include s 223A, Ross Millard executed a delegation for Mr Walker as he formed the opinion that Mr Walker held the appropriate skills and knowledge required to exercise delegated powers.
7. I subsequently executed a delegation for Mr Walker to exercise powers of the CMI as I formed the opinion that Mr Walker held the appropriate skills and knowledge required to exercise delegated powers (see for example affidavit of David Wolf dated 22 May 2018, exhibit DJW-2).
8.Aeron Rice (Ms Rice) was employed in June 2012 as Senior Investigator and was appointed as an IMA about this time. Ms Rice holds a Bachelor of Laws and was admitted to practice as a barrister and solicitor of the Supreme Court of Victoria in 2004. In addition, at the time of employment with the Inspectorate, Ms Rice held positions over eight years as a solicitor and an investigative lawyer in Australia and the United Kingdom. I formed the opinion that Ms Rice held the appropriate skills and knowledge required to exercise delegated powers.
…
10.I will not execute an Instrument of Delegation as a matter of course and I will not delegate all delegable powers, duties or functions, to all IMA[s]. I execute delegations according to each employee’s skills, knowledge and experience in the role. Relevantly, the power to require a person to appear for examination is not routinely delegated upon initial employment with the Inspectorate. This power may be delegated to an employee after a period of time in the position and demonstration that they hold appropriate skills and knowledge to exercise this power. Following induction, mentoring and performance reviews, the delegation is made upon my satisfaction the powers are fully understood.
11.As the CMI, I recognise the importance of the power outlined in s 223B(2) of the Act, where a person may be required to produce documents, give all reasonable assistance or appear for examination. As a check and balance that allows me to continually assess the skills and knowledge of IMA[s], I have issued guidelines within the Inspectorate in relation to the exercise of delegated powers. The guidelines request that IMA’s who intend to exercise delegated powers under s 223B(2) advise me of the process in writing and I approve the use of such powers.
12.With respect to this case, on 23 February 2018, I received written advice from Mr Walker that he intended to exercise the powers under s 223B(2) of the Act requiring the production of documents. The request was reviewed by men and approved.
13.On 20 March 2018, I received written advice from Ms Rice that she intended to exercise the power under section 223B(2) requiring Mr Zakula appear for examination. The request was reviewed by me and approved on 23 March 2018.
In oral evidence Mr Wolf said he is the only CMI. He accepted that when he made the delegations he did not have in mind that Mr Walker or Ms Rice would exercise powers of investigation in relation to the Tamlin email, he could not foresee all the circumstances which could possibly arise in relation to that investigation, but that he formed the opinion the inspectors had the capacity, ability and skills to exercise the power delegated to them in respect of inspections they might conduct, which included investigation of the release of confidential information.
Were the delegations valid?
Mr Zakula
Relying on the decision in R v Ashby,[18] Mr Zakula submitted that the necessary opinion required by s 223A(4) should operate as a strict condition. In Ashby,[19] the relevant provisions of the Police Regulation Act 1958 (Vic) required a delegate to be a person who had taken an oath or affirmation under the Act. Osborn J said:
The conditions imposed on the power to delegate the director’s powers are properly viewed as procedural safeguards for persons affected by the delegation. As such, they should not be construed narrowly.[20]
[18][2010] VSC 14 (5 February 2010) [40] (‘Ashby’).
[19]Ibid.
[20]Ibid.
Mr Zakula submitted, first, that because the delegations to Mr Walker and Ms Rice were made in advance of the occasion for exercise of the power, Mr Wolf could not have formed the opinion called for by s 223A(4) of the Act. The powers in s 223B were limited to “any matters” of “any possible breaches”. Mr Wolf could not form the opinion required by s 223A(4) that pertained to a matter or possible breach which had not yet come to the attention of the inspectorate.
Second, that construction of s 223A(4) was supported by legislative context. The condition that an opinion as to appropriate skill and knowledge be formed is not found in other provisions of the Act which confer a power to delegate certain powers, duties and functions.[21] Inclusion of the condition in s 223A(4) was deliberate and should be taken seriously.
[21]See ss 86(3), 98 and 114.
Third, the construction was supported by legislative history. Mr Zakula made reference to the following historical changes to the Act:
(a) In 1992, s 4 of the Local Government (Financial) Act 1992 (Vic) inserted s 130 into the Act:
130 Appointment of inspectors of municipal administration
(1)The Minister may appoint any person who in the opinion of the Minister has appropriate skills or expertise to be an inspector of municipal administration.
(2)An appointment of an inspector of municipal administration may be general or specific and may be made subject to any conditions determined by the Minister.
…
(b) In 1997, s 25 of the Local Government (Further Amendment) Act 1997 (Vic) repealed s 130 and s 24 inserted s 223A into the Act:
223A Appointment of inspectors of municipal administration
(1)The Minister may appoint any person who has, in the opinion of the Minister, appropriate skills or knowledge to be an inspector of municipal administration.
(2)The Minister–
(a)may make an appointment either generally or specifically; and
(b)may impose conditions on an appointment.
…
(c) In 2015 s 41 of the Local Government (Improved Governance) Act 2015 (Vic) inserted in its current form s 223A creating the office of CMI, and allowing for the CMI to delegate powers.
Mr Zakula submitted that, until the Act was amended in 2015, the power of general appointment available to the Minister was appropriate because that office-holder had a broader function and was likely somewhat removed from the day to day administration of the Act. It would make sense for the Minister not to be tasked with making specific appointments on each and every necessary occasion. The power to make general or specific appointment was removed by the 2015 amendment. By contrast to the role of the Minister, the CMI was dedicated to the administration of the Act and had the capacity to make decisions about what to delegate on a matter-by-matter basis. Construction of s 223A(4) requiring that a delegation for each matter or possible breach is consistent with historical context and the statutory role of the CMI.
Mr Wolf
Mr Wolf submitted, first, that the words “any power, duty or function” appearing in s 223A(4) were sufficiently broad to allow for the delegation of power in relation to future matters or possible breaches. The construction for which Mr Zakula contends would defeat the purpose of the provision, which provides a broad power of delegation, and allows a delegate to exercise the power delegated in their own right. If Parliament wished to confine the power of delegation to particular matters then this would have been made clear in the 2015 amendments.
Second, before the amendments in 2015, the powers of an Inspector were prescribed in s 223B of the Act in similar terms to the powers now conferred upon the CMI. The Minister had power to appoint a number of Inspectors with similar powers to those currently conferred on the CMI. The purpose of the amendment appears to have been to relieve the Minister of that burden and to allow the CMI to make appropriate delegations. This position is supported by the second reading speech in relation to the amending Act, in which it was said:
The chief municipal inspector is also recognised in the bill for the first time to put the chief municipal inspector on a modern statutory footing. This position will be statutory appointment made by the Special Minister of State, and the chief municipal inspector will be employed under the Public Administration Act 2004. He or she will retain the current powers of investigation and be able to delegate these powers to employees of the chief municipal inspector, who will be known as inspectors of municipal administration. This replaces the current appointment of individual inspectors by the minister.[22]
[22]Victoria, Parliamentary Debates, Legislative Council, 17 July 2015, 3262 (Mr Herbert, Minister for Training and Skills).
Third, there is no factual basis to claim that Mr Wolf “cannot have formed a lawful state of satisfaction as at the time of making these instruments of delegation”. One might ask how the CMI could be expected to know which skills and knowledge will be applicable to the circumstances of a particular investigation. To read into the section that the CMI must form a view as to the skills required in relation to the ‘specific’ investigation the subject of this originating motion would severely curtail his powers of investigation and be at odds with his express powers of delegation.
Analysis
The natural meaning of the words used in s 223A(4) give the CMI a broad power to delegate “any power, duty or function”. The section confines the power to delegate in three ways. First, only powers of the CMI under the Act can be delegated. Second, delegation must be to a person who, in the CMI’s opinion, has appropriate skills or knowledge to perform the power, duty or function. Third, the power of delegation cannot be delegated. Beyond these confines, there is nothing in s 223A(4) which restricts the power of delegation to specific matters, investigations or breaches, or prevents the general delegation of powers, duties or functions.
I reject Mr Zakula’s submission that “any” in s 223B(1) should be constructed so as to restrict the power to examine, investigate and prosecute to a specific matter or possible breach. When a power has been delegated, the delegate (inspector) is, to the extent of the delegation, in the position of the CMI. The power of the CMI is not restricted to investigation of a specific matter or possible breach, and there is no reason the power, once delegated, should be restricted in this way.
Both Mr Walker and Ms Rice were delegated the function in s 223A(2)(b) to examine any possible breaches of the Act, and all powers necessary to perform that function under s 223A(3). The function and powers delegated under these provisions are ambulatory rather than being confined to a specific possible breach, and overlap with the powers conferred by s 223B. Consistent construction of the provisions leads to the conclusion that the power of delegation is not limited to a specific matter or possible breach.
I accept Mr Wolf’s submission that this construction is supported by the form of the provisions prior to the 2015 amendment to the Act, and the second reading speech in relation to the amending Act.
I reject Mr Zakula’s submission that Mr Wolf cannot have formed the necessary opinion in advance of the occasion for exercise of the power delegated. Prior to the amendment, the Act allowed the minister to make a general appointment on the basis of forming such an opinion. I accept Mr Wolf’s evidence that he did hold the necessary opinion supporting the delegation of powers to Mr Walker and Ms Rice.
Conclusion
I have concluded the delegations and the notices are valid. I will make the orders sought by Mr Wolf. I will hear from the parties as to the form of the orders, and costs.
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