Woollahra Municipal Council v Minister for Local Government - [2016] NSWLEC 86

Land and Environment Court

New South Wales

Medium Neutral Citation: Woollahra Municipal Council v Minister for Local Government [2016] NSWLEC 86
Hearing dates: 20 and 21 April, 18 and 23 May and 28 June 2016
Date of orders: 20 July 2016
Decision date: 20 July 2016
Jurisdiction: Class 4
Before: Preston CJ
Decision:
Orders as set out at [312]

Catchwords: JUDICIAL REVIEW – proposal for amalgamation of local government areas – referral of proposal to Departmental Chief Executive for examination and report – inquiry required to be held – whether reasonable public notice given of the holding of inquiry – whether inquiry held in accordance with Act – whether examination and report on proposal in accordance with Act – whether an affected council denied procedural fairness by Departmental Chief Executive – review and comment on Departmental Chief Executive’s report by Boundaries Commission – whether review conducted in accordance with Act – whether affected council denied procedural fairness by Boundaries Commission – publicly accessible material in support of proposal represented that analysis and modelling of consultant was independent – whether representations misleading – whether allegedly misleading representations invalidated statutory process of amalgamation
Legislation Cited: Interpretation Act 1987 s 35(1)
Local Government Act 1993 ss 204, 213, 218, 218A, 218B, 218C, 218D, 218E, 218F, 218F(1), 218F(2), 218F(6), 218F(7), 218F(8), 260, 261, 262, 263, 263(1), 263(2), 263(2A), 263(2B), 263(3), 263(5), 264, 265, 438U, 705, 706, Pts 1, 2 and 3 of Ch 9, Pt 8 of Ch 13, Pt 2 of Ch 17, Sch 2
Cases Cited: Akers v Minister for Immigration and Ethnic Affairs (1988) 20 FCR 363
Anderson v Minister for Infrastructure, Planning and Natural Resources [2006] NSWLEC 725; (2006) 151 LGERA 229
Annetts v McCann [1990] HCA 57; (1990) 170 CLR 596
Applicant S214 of 2002 v Attorney-General (Cth) [2004] FCA 1635; (2004) 40 AAR 155
Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 72; (2005) 225 CLR 88
Arnold v Minister Administering the Water Management Act 2000 [2014] NSWCA 386
ASIC v Rich [2005] NSWSC 149; (2005) 190 FLR 242
Attorney-General for the State of Victoria v City of Geelong [1989] VR 641
B Johnson & Co (Builders) Ltd v Minister of Health [1947] 2 All ER 395
Bartzios v Leichhardt Municipal Council [1978] 1 NSWLR 7
Botany Bay City Council v Minister for Local Government [2016] NSWCA 74; (2016) 214 LGERA 173
Botany Bay City Council v The State of New South Wales and Minister for Local Government [2016] NSWSC 583
Bread Manufacturers of New South Wales v Evans [1981] HCA 69; (1981) 180 CLR 404
Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336
Bushell v Secretary of State for the Environment [1981] AC 75
Castle Constructions Pty Ltd v North Sydney Council [2008] NSWLEC 137
Construction, Forestry, Mining and Energy Union v McCorkell Constructions Pty Ltd (No 2) [2013] FCA 446; (2013) 232 IR 290
Curragh Queensland Mining Limited v Daniel (1992) 34 FCR 212
Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations [2011] FCAFC 88; (2011) 195 FCR 318
El Cheikh v Hurstville City Council [2002] NSWCA 173; (2002) 121 LGERA 293
Foster v Senator Vanstone [1999] FCA 1447
Friends of Turramurra Inc v Minister for Planning [2011] NSWLEC 128
Gales Holdings Pty Ltd v Minister for Immigration and Planning [2006] NSWCA 388; (2006) 69 NSWLR 156
Gold and Copper Resources Pty Ltd v Minister for Resources and Energy [2013] NSWLEC 66; (2013) 211 LGERA 196
Government Employees’ Health Fund Ltd v Private Health Insurance Administration Council [2001] FCA 322; (2001) 65 ALD 377
Hillpalm Pty Ltd v Tweed Shire Council [2002] NSWLEC 17; (2002) 119 LGERA 86
Kioa v West [1985] HCA 81; (1985) 159 CLR 550
Lake Macquarie City Council v Australian Native Landscapes Pty Ltd [2015] NSWLEC 92
Litevale Pty Ltd v Lismore City Council (1997) 96 LGERA 91
McHugh Holdings Pty Ltd v Director General Communities NSW [2009] NSWSC 1359
Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24
Minister for Immigration and Border Protection v MZYTS [2013] FCAFC 114; (2013) 230 FCR 431
Minister for Immigration and Citizenship v Maman [2012] FCAFC 13; (2012) 200 FCR 30
Minister for Immigration and Citizenship v SZGUR [2011] HCA 1; (2011) 241 CLR 594
Minister for Immigration and Citizenship v SZIAI [2009] HCA 39; (2009) 83 ALJR 1123
Minister for Immigration and Ethnic Affairs v Haj-Ismail (1982) 57 FLR 133
Minister for Local Government v South Sydney City Council [2002] NSWCA 288; (2002) 55 NSWLR 381
Notaras v Waverley Council [2007] NSWCA 333; (2007) 161 LGERA 230
Oates v Attorney-General for the Commonwealth of Australia [2001] FCA 84; (2001) 181 ALR 559
Ogawa v Minister for Immigration and Citizenship [2011] FCA 1358; (2011) 199 FCR 51
Potato Marketing Board v Merricks [1958] 2 QB 316
Prasad v Minister for Immigration and Ethnic Affairs (1985) 6 FCR 155
Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355
Rexstraw v Johnson [2003] NSWCA 287
Riverside Nursing Care Pty Ltd v Bishop [2000] FCA 1147; (2000) 100 FCR 519
Saeed v Minister for Immigration and Citizenship [2010] HCA 23; (2010) 241 CLR 252
Sharples v Minister for Local Government [2008] NSWLEC 328; (2008) 166 LGERA 302
Smith v Wyong Shire Council [2003] NSWCA 322; (2003) 132 LGERA 148
Sutherland Shire Council v Finch [1970] HCA 49; (1970) 123 CLR 657
Videto v Minister for Immigration and Ethnic Affairs (1985) 8 FCR 167
Waitemata County v Local Government Commission [1964] NZLR 689
Walsh v Parramatta City Council [2007] NSWLEC 255; (2007) 161 LGERA 118
Wei v Minister for Immigration and Border Protection [2015] HCA 51; (2015) 90 ALJR 213
X v University of Western Sydney [2014] NSWSC 82
Zentai v O’Connor (No 3) [2010] FCA 691; (2010) 187 FCR 495
Category: Principal judgment
Parties: Woollahra Municipal Council (Applicant)
Minister for Local Government (First Respondent)
Dr Robert Lang (Second Respondent)
Chief Executive, Office of Local Government
(Third Respondent)
Local Government Boundaries Commission (Fourth Respondent)
Representation:
Counsel:
Dr C J Birch SC with Ms T L Phillips (Applicant) and Mr B W Walker SC with Ms T L Phillips (on 28 June 2016) (Applicant)
Mr N C Hutley SC with Mr J J Hutton, Mr T E O’Brien and Mr D Birch (Respondents)
Solicitors:
Speed and Stracey Lawyers (Applicant)
Crown Solicitor’s Office (Respondents)

File Number(s): 40297 of 2016; JL No. 151926 of 2016
Publication restriction: No

Judgment

A council challenges a proposal for amalgamation

The Minister for Local Government (‘the Minister’) on 6 January 2016 made a proposal under s 218E(1) of the Local Government Act 1993 (‘the Act’) for the amalgamation of the local government areas of Randwick, Waverley and Woollahra (‘the proposal’). The Minister referred the proposal under s 218F(1) of the Act to the Acting Chief Executive of the Office of Local Government (‘the Departmental Chief Executive’) for examination and report. The Departmental Chief Executive delegated those functions to Dr Robert Lang (‘the Delegate’).
The Delegate was required, under s 263(2A) of the Act, to hold an inquiry for the purpose of exercising the functions in relation to the proposal for the amalgamation of the areas. The Delegate gave notice of the holding of an inquiry by placing advertisements in various newspapers on 13, 20 and 27 January 2016. The Delegate held the inquiry in Rose Bay on 4 February 2016.
In late March 2016, the Delegate completed his examination and provided a report entitled “Council Boundary Review Examination Report”. The Delegate recommended that the proposal be implemented. In late March 2016, the Delegate furnished the report to the Local Government Boundaries Commission (‘Boundaries Commission’) for review and comment. The Boundaries Commission was required under s 218F(6) of the Act to review the Delegate’s report and send its comments to the Minister. On 22 April 2016, the Boundaries Commission sent its comments on the Delegate’s report to the Minister. The Minister currently has the Delegate’s report and the Boundaries Commission’s comments on that report. He is poised to make a decision as to whether to recommend, or decline to recommend, to the Governor that the proposal be implemented.
Two of the councils affected by the proposal, Randwick City Council (‘Randwick Council’) and Waverley Council support the proposal for amalgamation but the third council affected, Woollahra Municipal Council (‘Woollahra Council’) is opposed to the proposal. Woollahra Council has brought judicial review proceedings challenging the legality of certain steps in the process for the amalgamation of the areas and seeks to restrain the Minister from recommending to the Governor that the proposal for amalgamation be implemented.
Woollahra Council claims that the Delegate:

did not give reasonable public notice of the holding of the inquiry, as required by s 263(2B) of the Act;

did not hold an inquiry into the proposal in accordance with s 263(2A) of the Act;

did not examine the proposal in accordance with s 218F(1) and s 263(1) of the Act; and

did not accord Woollahra Council procedural fairness in connection with the inquiry or examination.

Woollahra Council claims that the Boundaries Commission:

did not accord Woollahra Council procedural fairness in connection with the Boundaries Commission’s review of the Delegate’s report; and

did not conduct a review of the Delegate’s report in accordance with s 218F(6)(b) of the Act.

Woollahra Council claims that the statutory amalgamation process undertaken in respect of the proposal was invalidated because it was conducted on the misleading premise that KPMG had provided independent analysis of the proposal.
I find that Woollahra Council has not established any of the grounds of challenge concerning the notice of the holding of the inquiry; the holding of the inquiry; the examination and report by the Delegate of the Departmental Chief Executive; the review of, and comments on, the Delegate’s report by the Boundaries Commission; procedural fairness by the Delegate and the Boundaries Commission; and the alleged misrepresentation that KPMG had provided independent analysis of the proposal. The proceedings should be dismissed with costs.

The statutory process for amalgamation

Division 1 of Pt 1 of Ch 9 of the Act provides for the constitution of land as a local government area and Div 1 of Pt 2 of Ch 9 provides for the constitution of a council to manage that area. The Governor may, by proclamation, constitute any part of New South Wales as an area: s 204(1) of the Act. The area is to have the boundaries determined by the Governor in the proclamation constituting the area: s 204(2) of the Act.
Division 2A of Pt 1 of Ch 9 of the Act prescribes how areas are amalgamated. The Governor may, by proclamation, amalgamate two or more areas into one or more new areas: s 218A(1) of the Act. On the date specified in the new proclamation as the date on which the areas are to be amalgamated, the areas are dissolved and the new area or areas are constituted: s 218A(2)(a) and (b) of the Act.
The proclamation of the Governor may include provisions of the kind referred to in s 213, as are necessary or convenient to give effect to the proclamation. The provisions include those for or with respect to the transfer or apportionment of assets, rights and liabilities; the transfer of staff; the alteration of ward boundaries; the holding of elections; the termination, cessation, dissolution or abolition of anything existing before the proclamation takes effect; the preservation or continuance of anything existing before the proclamation takes effect, amongst other matters: s 213(1) of the Act.
Division 2B of Pt 1 of Ch 9 of the Act prescribes the process that must be followed before the Governor can amalgamate areas. A function under s 218A to amalgamate areas may be exercised only after a proposal for the exercise of the function is dealt with under Div 2B: s 218D of the Act.
The first step in the process prescribed in Div 2B is the making of a proposal under s 218E of the Act to amalgamate areas. Three classes of persons may make a proposal under s 218E to amalgamate areas: the Minister, a council affected by the proposal, or an appropriate minimum number of electors: s 218E(1). Any one of these three classes of persons may initiate a proposal for amalgamation. The third class of persons is defined in s 218E(2). The appropriate minimum number of electors varies depending upon whether the proposal applies to the whole of one or more areas or only part of an area. In the first case, the minimum number of electors is 250 of the enrolled electors for each area or 10% of them, whichever is the greater, and in the second case, the minimum number of electors is 250 of the enrolled electors for the part of the area or 10% of them, whichever is the lesser: s 218E(2).
The second step in the process prescribed by Div 2B is the referral of the proposal for examination and report. On the Minister making a proposal or receiving a proposal from a council affected by the proposal or by an appropriate minimum number of electors, the Minister must refer the proposal for examination and report to either the Boundaries Commission or the Departmental Chief Executive: s 218F(1).
The “Boundaries Commission” means the Local Government Boundaries Commission constituted under the Act: see the Dictionary and Pt 3 of Ch 9 of the Act. The Boundaries Commission is a body corporate: s 260. It consists of four commissioners appointed by the Governor, of which one is to be a person nominated by the Minister, one is to be a person employed by the Department (Office of Local Government) nominated by the Departmental Chief Executive and two are to be persons appointed from a panel constituted under s 262(1) of the Act: s 261. This panel consists of eight persons who are councillors nominated by the Local Government and Shires Association of NSW: s 262(1). Schedule 2 of the Act contains further provisions on the membership of the Boundaries Commission and the procedure at meetings of the Boundaries Commission: s 261(5).
There are some similarities and some differences in the process of examination of and reporting on a proposal by the Boundaries Commission or the Departmental Chief Executive. The similarities concern the process of examination of a proposal (s 218F(2)) and the principal difference concerns the need for review and comment on a report of the examination of a proposal: s 218F(6).
The third step in the process prescribed by Div 2B is the examination of and report on the proposal by the person to whom the proposal has been referred. In this case, the Minister elected to refer the proposal he had made to the Departmental Chief Executive. Section 218F(2) of the Act provides that ss 263, 264 and 265 of the Act apply to the examination of a proposal by the Departmental Chief Executive in the same way as they apply to the examination of a proposal by the Boundaries Commission.
Section 263 specifies the functions of examining and reporting in relation to a proposal for the amalgamation of areas that has been referred under s 218F(1) and how these functions are to be exercised.
Subsection (1) imposes the functions of examining and reporting: the Boundaries Commission or Departmental Chief Executive “is required to examine and report on any matter with respect to the boundaries of areas … which may be referred to it by the Minister”: s 263(1).
Subsections (2) and (2A) specify when an inquiry may, may not, or must be held for the purpose of exercising the functions under s 263 of the Act. Of relevance in this case is subsection (2A): the Boundaries Commission or Departmental Chief Executive “must hold an inquiry for the purpose of exercising its functions in relation to a proposal for the amalgamation of two or more areas that has been referred to it in accordance with section 218F”.
Subsection (2B) requires that “[r]easonable public notice must be given of the holding of an inquiry under this section”. Neither s 263 of the Act nor the regulations made under the Act prescribe the form or the content of the public notice required to be given or where or how the public notice is to be given.
The concept of “public notice” is referred to in s 705 of the Act, which provides:

(1)   If the council or another person is required to give public notice under this Act, the notice must state the place at which, the dates on which, and the times during which the matter publicly notified may be inspected by the public.
(2)   The notice is to be in the approved form.
(3)   The notice is to be given in a manner determined by the council with the object of bringing the matter notified to the attention of as many people in its area as possible.

No form has been approved by the regulations made under the Act for the purposes of s 705(2).
However, this public notice referred to in s 705 may not be applicable to the public notice that is required to be given by the Boundaries Commission or the Departmental Chief Executive under s 263(2B) of the Act. The public notice referred to in s 705 is a public notice required to be given under the Act by a council. This is clear from the precondition in the opening words of s 705(1) “[i]f the council or another person is required to give public notice under this Act”, the fact that the manner in which the notice is to be given is to be determined by the council (s 705(3)), the fact that the immediately following statutory provision (s 706) prescribes what must happen if and after public notice is given by a council, and the heading of Div 3 of Pt 2 of Ch 17 in which ss 705 and 706 occur, namely “notices by the council” (which forms part of the statute: see s 35(1) of the Interpretation Act 1987).
There is no express guidance given in the Act or the regulations made under the Act of what constitutes “[r]easonable public notice … of the holding of an inquiry”.
The inquiry required to be held by s 263(2A) is an inquiry that is open to the public. Subsection (5) requires the Boundaries Commission or Departmental Chief Executive to “allow members of the public to attend any inquiry held by” it.
Section 264 concerns representation in “proceedings before the Boundaries Commission”. Section 264 restricts how a person may be represented in proceedings before the Boundaries Commission. A person is not entitled to be represented by an Australian lawyer or by any person acting for a fee or reward: s 264(1) of the Act. However, there are some exceptions, including certain employees or the mayor of a council: s 264(2). As noted earlier, s 218F(2) states that ss 263, 264 and 265 apply to the examination of a proposal for the amalgamation of areas by the Departmental Chief Executive in the same way as they apply to the examination of a proposal by the Boundaries Commission. The only activity involved in the examination of a proposal for the amalgamation of areas referred to in ss 263-265 that could possibly fall within the description of “proceedings” referred to in s 264 is an inquiry held for the purpose of exercising the functions of examining and reporting on a proposal for the amalgamation of areas. Section 264, therefore, may apply to such an inquiry and prevent a person from being represented at the inquiry by an Australian lawyer or any person acting for a fee or reward.
As I have noted, the inquiry is to be held for the purpose of exercising the functions of the Boundaries Commission or the Departmental Chief Executive to examine and report in relation to a proposal for the amalgamation of two or more areas that has been referred to it in accordance with s 218F. Section 263(3) prescribes factors to which the Boundaries Commission or Departmental Chief Executive is required to have regard when considering a proposal for the amalgamation of areas. Subsection (3) provides:

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 residents and ratepayers of the areas concerned,
(e)   the requirements of the area concerned in relation to elected representation for residents 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.

To assist the Boundaries Commission or the Departmental Chief Executive in determining the attitude of the residents and ratepayers of an area or areas for the purposes of s 263(3)(d) of the Act, it may conduct (in such manner as it thinks appropriate) an opinion survey or poll of the residents and ratepayers: s 265(1).
The fourth step in the process prescribed by Div 2B is that the Departmental Chief Executive (to whom the Minister has referred a proposal under s 218F) must furnish the Departmental Chief Executive’s report of its examination of the proposal to the Boundaries Commission for review and comment: s 218F(6)(a).
The fifth step in the process prescribed by Div 2B is that the Boundaries Commission must review the report of the Departmental Chief Executive and send its comments to the Minister: s 218F(6)(b).
The process culminates with the Minister considering the Departmental Chief Executive’s report and, if applicable, the Boundaries Commission’s comments on that report. The Minister may recommend to the Governor that the proposal be implemented with such modifications that arise out of the Departmental Chief Executive’s report and, if applicable, the Boundaries Commission’s comments on that report and with such other modifications as the Minister determines, but may not do so if the Minister is of the opinion that the modifications constitute a new proposal: s 218F(7). Alternatively, the Minister may decline to recommend that the proposal be implemented: s 218F(8).

The challenge to the public notice

The public notice that was given

The Delegate arranged for public notice of the holding of the inquiry to be given by way of advertisement published on 13 January 2016 in the Daily Telegraph and the Sydney Morning Herald and, on 20 and 27 January 2016, in the Wentworth Courier. The notice was in the same form. It stated:

Notification of public inquiry into the proposal to amalgamate or alter the boundaries of local government areas
Pursuant to section 218F of the Local Government Act 1993 the Minister for Local Government has referred a proposal in relation to the following local government areas:
Randwick, Waverley and Woollahra
to the Acting Chief Executive of the Office of Local Government for examination and report.
Pursuant to section 745 of the Local Government Act 1993 the Acting Chief Executive of the Office of Local Government has delegated to me the examination and reporting functions under section 218F of the Local Government Act.
The examination into the proposal has now commenced and submissions are invited from members of the public. The closing date for submissions is 5pm EST, Sunday 28 February 2016. Submissions can be made online at by mail to:

GPO Box 5341

Sydney NSW 2001
A public inquiry in relation to the proposal will be held under section 263 of the Local Government Act 1993 at the following time(s) and venue:
Club Rose Bay:

Thursday, 4 February 2016

1:00pm – 5:00pm and 7:00pm – 10:00pm
Members of the public who would like to attend are requested to register at or by contacting 1300 813 020. Members of the public who would like to speak at the public inquiry are requested to indicate that they wish to do so when they register to attend.
For more information contact 1300 813 020

or visit

Lang

Delegate

Notice in the same form was given on the Office of Local Government’s Council Boundary Review website from 12 January 2016.
By letter dated 14 January 2016 the Delegate asked each of Randwick, Waverley and Woollahra Councils if they “could assist in the promotion of the details of the public inquiry, including by bringing the attached public notice to the attention of as many people in the Council’s area as possible; for example by placing a copy of the public notice on the Council’s website”.
On 22 January 2016, the Mayor of Woollahra Council sent an email to “Residents, Ratepayers, Community Leaders and Friends of Woollahra”, which provided details of the inquiry. Notification about the inquiry was also given by at least one community group.

Woollahra Council’s claim that reasonable public notice was not given

Woollahra Council claimed that the public notice given in the newspapers and elsewhere by the Delegate was legally deficient in three main respects, causing it not to be “reasonable public notice” as required by s 263(2B) of the Act.
The first deficiency, Woollahra Council submitted, was that the public notice did not clearly state what was the proposal. The heading of the notice was ambiguous: “Notification of public inquiry into the proposal to amalgamate or alter the boundaries of local government areas”. An amalgamation of local government areas was a quite different proposal to the alteration of the boundaries of areas.
Whilst the public notice identified the local government areas in relation to which the Minister had made a proposal, namely Randwick, Waverley and Woollahra, Woollahra Council submitted that it did not state what was the proposal in relation to those areas. The notice simply said that the Minister had referred a “proposal” in relation to those areas. The ambiguity in the heading compounded the problem. Woollahra Council asked rhetorically: was the proposal to amalgamate two or all three of the areas into one or more areas, or was the proposal to alter the boundaries of one, two or three of the areas, or was the proposal a combination of the amalgamation of areas and the alteration of boundaries of areas? The reader of the notice would have no way of knowing from the terms of the notice. Certainly, Woollahra Council submitted, the reader was not notified that the proposal was the “forced amalgamation” of all three local government areas of Randwick, Waverley and Woollahra.
The second deficiency, Woollahra Council claimed, was that the public notice that was given was not “reasonable” public notice. First, there was limited circulation of the notice to residents and ratepayers in the affected areas (which contrasted with the widespread consequences to the relevant communities in the event of the amalgamation proposal being implemented). Second, on the occasions when public notice was given, many residents and ratepayers of the Woollahra local government area were on vacation at locations outside Sydney. Third, there was insufficient time between the publication of the notice and the holding of the inquiry for an interested resident or ratepayer wishing to participate in a meaningful fashion at the inquiry to be able to do so. Woollahra Council referred in particular to the various publicly accessible documents prepared by KPMG concerning the financial benefits of the amalgamation of the areas and the complexity of the financial analysis that an interested resident or ratepayer would need to absorb in order to make an informed submission to the inquiry. Fourth, Woollahra Council submitted that the notification process did not enable interested persons to lodge and access submissions in connection with the proposal in advance of the inquiry or to discuss other submissions at the inquiry since the meeting was held three weeks before the closing date for written submissions.
Woollahra Council submitted that these factors did in fact preclude members of the public from making a submission and attending the inquiry. The Delegate’s report noted that 449 submissions were made, reflecting only 0.2% of the 274,164 residents across the Randwick, Waverley and Woollahra areas. Woollahra Council cited Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations [2011] FCAFC 88; (2011) 195 FCR 318 at [85]-[90] and Ogawa v Minister for Immigration and Citizenship [2011] FCA 1358; (2011) 199 FCR 51 at [36]-[37] in support of its claim that “reasonable” notice was not given.
The third deficiency, Woollahra Council claimed, was that the obligation in s 263(2B), to give notice of the holding of the inquiry for the purpose of examining the proposal, required the Delegate to also give notice of the basis upon which the proposal was made, including “the complete material relied upon in respect of the KPMG analysis”, and to make such information publicly available. This was necessary to enable Woollahra Council and the public to properly address, and to provide meaningful submissions on, the proposal in the public forum of the inquiry. However, the Delegate did not give notice of the basis of the proposal.
Finally, Woollahra Council submitted that the obligation under s 263(2B) of the Act to give reasonable public notice falls upon the Boundaries Commission or Departmental Chief Executive and may not be discharged by requesting councils to notify members of the relevant community.

The respondents’ claim that reasonable public notice was given

The respondents submitted that the Act does not prescribe how the Delegate is to give “reasonable public notice” of the inquiry. They submitted that it is sufficient if the notice is of a kind “likely to draw the attention of the public” to the holding of the inquiry into the proposal, referring by analogy to Bartzios v Leichhardt Municipal Council [1978] 1 NSWLR 7 at 10-11.
The respondents rebutted Woollahra Council’s claim that the notice was not reasonable because the notice was placed in newspapers circulated in Sydney at a time of year when residents and ratepayers were likely to be on vacation at locations outside Sydney. That claim, the respondents submitted, ignored the fact that the notice was also given in various other ways, including on the websites of Woollahra Council, the Council Boundary Review and at least one community group, and therefore might have come to the attention of persons outside Sydney. Notice was also given by the letters and emails from the Mayor of Woollahra Council to residents and ratepayers. The respondents also pointed to the fact that a large number of submissions were received (approximately 450), suggesting that the notice was effective in bringing the proposal to the attention of the ratepayers and residents of the areas.

The statutory requirement to give public notice

Neither the Act nor the regulations made under the Act prescribe the public notice that is required to be given under s 263(2B) of the Act. Nevertheless, a proper construction of s 263 reveals the following requirements.
First, s 263(2B) imposes a duty to give reasonable public notice of the holding of an inquiry under s 263. The subsection does not expressly identify the person on whom this duty to give public notice is imposed. But the implication is that the person who is to hold the inquiry, the Boundaries Commission or the Departmental Chief Executive, must give the public notice of the holding of that inquiry. The person need not give the public notice personally but nevertheless needs to arrange for the public notice to be given of the inquiry that the person is to hold. A common way that the person may give public notice is to arrange for a notice to be published in newspapers circulating in the areas concerned.
Second, the public notice that is to be given under s 263(2B) has three content requirements. The first content requirement is to state when and where the inquiry is to be held. The notice must specify the date and time of day at which the hearing of the inquiry will commence. The notice must specify the place at which the inquiry will be held. The degree of specificity of description of the place that will be required will depend on the facts and circumstances regarding the proposal, the local government area in which the inquiry is to be held and public knowledge of and familiarity with the place concerned.
The second content requirement is to state what is the particular inquiry that is to be held. Subsection (2B) refers to the holding of “an inquiry under this section”. An inquiry under s 263 may be held in certain circumstances (under s 263(2)(a)) and must be held in other circumstances (under s 263(2)(b) and s 263(2A)). However, irrespective of whether an inquiry may or must be held, it is to be held in relation to “any matter with respect to the boundaries of areas and the areas of operation of county councils which may be referred” to the Boundaries Commission or Departmental Chief Executive by the Minister for examination and report (see s 263(1) of the Act). The matters with respect to the boundaries of areas that the Minister may refer for examination and report are a proposal for the amalgamation of two or more areas (see ss 218A and 218D-218F) and a proposal for the alteration of the boundaries of areas (see 218B and ss 218D-218F). The public notice that must be given under s 263(2B) needs to specify the matter that the Minister has referred for examination and report and in relation to which the inquiry is to be held. In this case, the matter in respect to the boundaries of areas which the Minister had referred to the Departmental Chief Executive for examination and report was the proposal for the amalgamation of the local government areas of Randwick, Waverley and Woollahra that had been referred in accordance with s 218F. The public notice required to be given under s 263(2B) needed to specify that the inquiry was to be held in relation to that proposal for the amalgamation of those areas.
The third content requirement is to state what is the purpose of holding the inquiry. Both subsections (2) and (2A) of s 263, which permit or mandate the holding of an inquiry, specify that the purpose of holding the inquiry is “for the purpose of” the Boundaries Commission or Departmental Chief Executive “exercising its functions”. In the case of the proposal for the amalgamation of areas, the functions in relation to that proposal are the functions under s 218F(1) and s 263(1) of examining and reporting on the proposal.
In this case, the public notice that must be given under s 263(2B) needed to state that the inquiry that was to be held was for the purpose of exercising the functions of the Departmental Chief Executive of examining and reporting in relation to the proposal of the amalgamation of the local government areas of Randwick, Waverley and Woollahra, that had been referred by the Minister to the Departmental Chief Executive in accordance with s 218F.
Third, the public notice that must be given under s 263(2B) is to be “reasonable”. The adjective “reasonable” qualifies both the content and timing of the public notice. The content and timing of the public notice that is required to be given might vary considerably depending on the nature and complexity of the matter (or proposal) in relation to which the inquiry is to be held: see Attorney-General for the State of Victoria v City of Geelong [1989] VR 641 at 649, Dunghutti at [85]-[87] and Ogawa at [36] and [37].
A minor adjustment of a boundary of a local government area might only require that brief notice be given shortly before any inquiry is held (an inquiry in relation to the alteration of boundaries may be held if the Minister so approves and must be held if the Minister directs: s 263(2) of the Act). On the other hand, a more complex proposal for the amalgamation of two or more areas might require that more detailed notice be given at a time significantly before the inquiry is held (an inquiry in relation to a proposal for amalgamation of areas must be held: s 263(2A) of the Act).
A person should know from reading the public notice what is the subject matter and purpose of the inquiry to be held and the person should be given sufficient time to prepare and make a submission to the inquiry.
The reasonableness of the length of time between the giving of the notice and the holding of the inquiry is to be assessed not only by reference to the nature and complexity of the proposal but also to the time of year at which the notice is given. For example, if the period of time between giving the notice and holding the inquiry corresponds with the Christmas/New Year holiday break, reasonable public notice might not be able to be given. The notice might not come to the attention of people interested in making submissions to the inquiry but, even if it did, they may be unable to do so due to the difficulty of researching and preparing a submission in the holiday period, when resources and services are likely to be less available.
Fourth, the form of public notice that is given should be appropriate to achieve the purpose for which notice is to be given of notifying the public of the holding of the inquiry. The form of public notice should reach the audience for which it is intended. Public notice by newspaper advertisement in newspapers circulating in the local government areas affected by the proposal is fair and reasonable notice to the public: Waitemata County v Local Government Commission [1964] NZLR 689 at 699.

Reasonable public notice was given

In this case, the Delegate of the Departmental Chief Executive who was obliged under s 263(2A) to hold the inquiry in relation to the proposal to amalgamate the local government areas of Randwick, Waverley and Woollahra was under the duty to give reasonable public notice of the holding of the inquiry. The public notice of the holding of the inquiry that was actually given or caused to be given by the Delegate comprised: first, the notice of the inquiry that was published as an advertisement in various newspapers; second, the notice of the holding of the inquiry that was published on the Council Boundary Review website (which was the website referred to in the notice published in the newspapers but which has now changed to third, the Delegate’s letters of 14 January 2016 to the General Managers of Randwick, Waverley and Woollahra Councils notifying them of the holding of the public inquiry and attaching the same public notice as was published in the newspapers and requesting that the Councils bring the attached public notice “to the attention of as many people in the Council’s area as possible; for example, by placing a copy of the public notice on the Council’s website”; and fourth, the notice of the holding of the inquiry that was given by the Councils in response to the Delegate’s request, including the public notice placed on Woollahra Council’s website. These are the forms of notice that collectively make up the public notice that can be said to have been given of the holding of the public inquiry and which need to be assessed in order to determine whether “reasonable public notice” was given of the holding of the inquiry.

The content of the public notice given satisfies the three requirements arising from s 263(1), (2A) and (2B). First, the notice specified when and where the inquiry was to be held. The notice specified that the date and time of the inquiry was “Thursday 4 February 2016” at “1.00pm - 5.00pm and 7.00pm - 10.00pm” and that the venue was to be “Club Rose Bay”. A street address for the venue “Club Rose Bay” was not given. Woollahra Council took no issue with the absence of a street address. Presumably, the venue of “Club Rose Bay” is sufficiently well known in the Woollahra area that the specification of the name of the venue was adequate to identify the place at which the inquiry was to be held.
Second, the notice sufficiently specified the proposal in relation to which the inquiry was to be held. The proposal that the Minister had referred under s 218F to the Departmental Chief Executive for examination and report was the proposal made by the Minister for the amalgamation of the local government areas of Randwick, Waverley and Woollahra. The notice published in the newspapers and attached to the Delegate’s letters to the Councils, and published on various websites was entitled:

Notification of public inquiry into the proposal to amalgamate or alter the boundaries of local government areas

The first paragraph of the notice referred to the proposal in the following terms:

Pursuant to section 218F of the Local Government Act 1993 the Minister for Local Government has referred a proposal in relation to the following local government areas:
Randwick, Waverley and Woollahra
to the Acting Chief Executive of the Office of Local Government for examination and report.

Together, these statements in the notice gave sufficient information or warning to readers of what was proposed. Persons reading the notice were alerted that:

the subject matter of the inquiry was a proposal, which had been referred by the Minister pursuant to s 218F of the Act to the Acting Chief Executive of the Office of Local Government for examination and report;

the proposal was to amalgamate or alter the boundaries of local government areas; and

the local government areas affected were Randwick, Waverley and Woollahra.

The only mistake in this description of the proposal was the addition of the words “or alter the boundaries of” in the heading of the notice. The proposal that the Minister had in fact referred under s 218F was only for the amalgamation of the local government areas of Randwick, Waverley and Woollahra (the function under s 218A); there was no proposal to alter the boundaries of those areas (the function under s 218B). The notice described the proposal as being either the amalgamation of the three areas identified (which was the proposal that the Minister had referred for examination and report) or the alteration of boundaries (which was not part of the Minister’s proposal).
I do not consider that this reference to a matter that was not part of the Minister’s proposal meant that the notice did not alert the reader to the proposal in relation to which the inquiry was to be held and in respect of which submissions to the inquiry were to be made. Notwithstanding the additional reference to alteration of boundaries, the notice still identified that the Minister may have referred a proposal to amalgamate the local government areas of Randwick, Waverley and Woollahra, which was to be the subject of the inquiry that was to be held.
Persons who were concerned about the amalgamation of these areas would be alerted to this fact and the opportunity for them to make a submission to the inquiry about this proposal to amalgamate those areas. The persons would not be dissuaded from doing so because the notice also referred to a proposal to alter the boundaries of those areas.
Third, the notice specified the purpose of holding the inquiry. The notice stated that, pursuant to s 218F of the Act, the Minister had referred the proposal in relation to the local government areas of Randwick, Waverley and Woollahra to the Acting Departmental Chief Executive for examination and report and that the Departmental Chief Executive had delegated to the Delegate the examination and reporting functions under s 218F. The notice stated that a public inquiry in relation to the proposal would be held under s 263 of the Act at the times and venues specified in the notice. Together, these statements alerted the reader that the Delegate was holding the inquiry for the purpose of exercising the functions of examining and reporting on the proposal that had been referred by the Minister in accordance with s 218F.
The public notice that was given was “reasonable” both as to content and timing. As to the content, the notice provided sufficient information to alert the reader about the subject matter and purpose of the inquiry and when and where the inquiry would be held. I do not agree with Woollahra Council’s submission that “the provision of reasonable public notice necessarily requires that the public be sufficiently notified of the basis of the relevant proposal so as to be in a position to formulate such arguments”. The statutory requirement to give public notice of the holding of the inquiry does not extend to requiring that the public notice specify the basis on which the Minister (or any other initiator of a proposal) made the proposal that was referred for examination and report in accordance with s 218F. The statutory requirement for giving public notice also does not require that any documentation on which the proposal was based, in this case said to include various KPMG analyses, be placed on public exhibition so as to enable submissions to be made thereon.
As to the timing, public notice was given progressively. Public notice was first given on the Office of Local Government’s Council Boundary Review website from 12 January 2016 onwards. The notice was first published in the State-wide newspapers of the Sydney Morning Herald and The Daily Telegraph on 13 January 2016. The Delegate wrote to the Councils on 14 January 2016 notifying them of the holding of the inquiry and attaching the public notice. The public notice that had been sent to the Councils was published on at least Woollahra Council’s website at some time after 14 January 2016. Public notice was published in the local newspaper of the Wentworth Courier on 20 and 27 January 2016. The inquiry was held on 4 February 2016. The period of time between the giving of the public notice and the holding of the inquiry was, therefore, up to 23 days (12 January to 4 February 2016), of which 16 days were working days. There were lesser periods of time for the other forms of public notice (22 days for the notice published in the State-wide newspapers; about 20 days for the notice given on Woollahra Council’s website; and 15 days from the first notice published in the local newspaper).
I do not find that the timing of these forms of public notice was unreasonable. First, the periods of time between the giving of the notice and the holding of the inquiry have not been established to be inherently insufficient (having regard to the nature of the proposal and the issues and factors to be considered) for persons who wished to make a submission to the inquiry to be able to do so. Indeed, the detailed submissions that were made by the affected councils and the public indicated that there was sufficient time.
Second, the timing of the public notice needs to be considered in the context that the Minister had announced on 18 December 2015 in general terms that he was going to make proposals for the amalgamation of local government areas and then announced on 6 January 2016 in particular terms that he had made the proposals, including to amalgamate the areas of Randwick, Waverley and Woollahra. Persons who were opposed to or supported the proposal to amalgamate the areas of Randwick, Waverley and Woollahra were thereby already on notice and had an opportunity to commence preparing any submissions that they might wish to make to an inquiry once public notice was given of the holding of the inquiry.
Third, the timing of the public notice also needs to be considered in the context that there was a longer period of time to make written submissions to the Delegate. Although the inquiry was held on 4 February 2016, written submissions were able to be made up to 28 February 2016, another three weeks.
Fourth, some documents concerning the proposal, including the document entitled “Merger Proposal: Randwick City Council, Waverley Council, Woollahra Municipal Council” (‘the proposal document’) dated January 2016, were made publicly available. These documents provided information on the proposal to enable persons to know what was proposed, to take an informed position on it, and make a submission with respect to it. The non-disclosure of other documents, including various KPMG analyses supporting the proposal, did not make the period of notice necessarily insufficient or unreasonable.
Fifth, the fact the public notice was given progressively throughout January, when people might be on vacation, did not cause the public notice that was given to be unreasonable. The earliest that public notice was given was on 12 January 2016. This was after the Christmas/New Year period and the first week of January, being the periods when the greatest number of people are on vacation. The last two weeks of January and the first week of February do not fall into the same category. The evidence of a few people that they did not become aware of and did not attend the inquiry does not establish that the public notice that was given was ineffective in alerting people to the holding of the inquiry. Indeed, the sizeable number of people who did make submissions (449) and attended the two sessions of the inquiry that was held on 4 February 2016 points to the contrary.
Finally, the forms of public notice of the holding of the inquiry that were given included newspaper advertisements in both State-wide and local newspapers. Public notice by newspaper advertisements of the holding of the inquiry was fair and reasonable notice to the public, which was the audience to whom notice was intended to be given. I do not accept Woollahra Council’s argument that there was “limited circulation” of the public notice.
For these reasons, Woollahra Council has not established that reasonable public notice was not given of the holding of the inquiry, as was required by s 263(2B) of the Act. I reject this ground of challenge.

The challenge to the inquiry

The inquiry that was held

The Delegate held the inquiry at Club Rose Bay on 4 February 2016. There were two sessions, the first from 1.00pm to 5.00pm and the second from 7.00pm to 10.00pm.
The public notice that was given of the holding of the inquiry requested persons who wished to attend the inquiry to register at the Council Boundary Review website or by telephoning a free call number. Persons who wished to speak at the inquiry were requested to indicate that they wished to do so when they registered to attend. A total of 140 speakers registered to speak at the inquiry, 80 persons at the 1.00pm session and 60 persons at the 7.00pm session.
At the start of each session, the Delegate made an opening statement, explaining amongst other things that:

he was the Delegate of the Departmental Chief Executive appointed to examine and report on the Minister’s proposal to amalgamate Randwick, Waverley and Woollahra Councils;

he was holding the inquiry as part of the examination and reporting process into the amalgamation proposal;

his role was to examine the proposal and to provide a report to the Minister and the Boundaries Commission;

the inquiry would provide members of the public with the opportunity to provide their views on the proposal directly to him;

members of the public could provide their views by speaking about the proposal at the inquiry and/or by making a written submission about the proposal (through the process stated on the Council Boundary Review website);

in preparing his report, he was required to consider the 11 factors in s 263(3) of the Act (which he outlined);

at the conclusion of the process, he would provide a report to the Boundaries Commission and the Boundaries Commission would review and provide comments on his report to the Minister;

the Minister would consider both the Delegate’s report and the comments from the Boundaries Commission and may or may not recommend to the Governor to implement the amalgamation proposal with or without modifications;

in order to allow the hearing of the inquiry to be conducted fairly and efficiently, the inquiry would be very formally structured and a schedule of speakers and time limits would be imposed (which the facilitator would subsequently explain); and

his role at the hearing of the inquiry was to listen to all submissions and to consider them and other material provided throughout the course of the examination process in the preparation of his final report. He stated that he did not have the power to resolve any specific issues or identify solutions or to take action on any complaints that any individual may raise; he was at the inquiry “just to listen”.

The facilitator then explained in each session the process by which the inquiry would be conducted. Amongst the matters the facilitator raised were that:

a speaker would have the opportunity to speak once;

only one member from an organisation could speak on behalf of that organisation;

he would endeavour to ensure that everyone who wanted to speak had the opportunity to do so;

unregistered speakers would have an opportunity after all of the registered speakers had had their turn;

representatives of Randwick, Waverley and Woollahra Councils would have 15 minutes to present their views and slide presentations;

all other registered speakers had just three minutes;

if speakers wished to provide the Delegate with further information, including any submissions and any material that they thought he would be advantaged by having, they could do that as a written submission; and

the hearing of the inquiry was being recorded and the recording would be used by the Delegate in his deliberations and to formulate his recommendations to the Minister.

Each session then continued by representatives of one or more of the three affected councils speaking, followed by the other registered speakers. The facilitator enforced time limits on speakers.
Occasionally a speaker asked the Delegate a question. For example, speaker 6 in the 1.00pm session asked the Delegate whether he had “received the KPMG material in its entirety”. The Delegate replied “I’m afraid I can’t answer you”.
At the 1.00pm session, when all of the registered speakers had spoken, there was still time available before the advertised closure of the session at 5.00pm. The Delegate asked whether any person attending the hearing who had not spoken but who would like to speak could indicate this to him so that he could hear them in the remaining time. The Delegate called a 10 minute recess to allow persons who would like to speak to make themselves known. After the recess, three more persons spoke. After a second recess, a fourth person spoke. A similar process was followed at the end of the 7.00pm session. After all of the registered speakers had spoken, the Delegate invited other persons to indicate whether they would like to speak during a short recess. Three other persons so indicated and spoke after the recess.
At the end of each session, the Delegate closed the session by reiterating his call for written submissions and informing people about the Council Boundary Review website and the information there available on the proposal for the amalgamation of the three areas.

Woollahra Council’s claim that there was no valid inquiry

Woollahra Council claimed that the inquiry held by the Delegate did not meet the statutory description and requirements of an inquiry under s 263(2A).
Woollahra Council submitted that, in determining what is required by an “inquiry” held under s 263(2A) of the Act, it is necessary to consider the text of that provision, the context in which it appears, and its general purpose and policy, citing Botany Bay City Council v Minister for Local Government [2016] NSWCA 74; (2016) 214 LGERA 173 at [37]. Woollahra Council contended that, in discerning what an “inquiry” under s 263(2A) entails, significant weight needs to be given to the following features of the statutory scheme:

while proposals to constitute or alter the boundaries of a local government area must be subject to examination and report (ss 204, 218, 218B, 218F(1)) and may be the subject of an inquiry (s 263(2)), amalgamation proposals must be subject to examination and report and also must be subject to an inquiry for that purpose (ss 263(1) and (2A));

the subject matter of the inquiry mandated by s 262(2A) is the particular proposal that has been referred by the Minister for examination and report (s 263(1) and see also Botany Bay City Council v Minister for Local Government at [38]-[40] and Minister for Local Government v South Sydney City Council [2002] NSWCA 288; (2002) 55 NSWLR 381 at 439 [264]). Notably, the relevant statutory duty is to “hold” an inquiry, not to make an inquiry into an amalgamation proposal in a general sense;

the function of conducting the inquiry may fall to be exercised by either the Departmental Chief Executive (or their Delegate) or the Boundaries Commission, but the inquiry is to be performed in the same manner irrespective of the person or entity that is presiding: ss 218F(2), 263 and see also Botany Bay City Council v Minister for Local Government at [24]. It is relevant in considering the kind of process that is envisaged, that the Boundaries Commission is a body consisting of commissioners appointed for five year terms who are independent of the political process: s 261 and cl 1 of Sch 2 and see also Minister for Local Government v South Sydney City Council at [37];

an inquiry held before the Boundaries Commission and, by extension, before a Delegate of the Departmental Chief Executive, is described as a kind of “proceeding” at which submissions are made, material may be “tendered” and persons are capable of “appearing” (s 264) and such an inquiry must be capable of being “attended” by members of the public (s 263(5)). The language connotes a structure and forensic process similar to that of an administrative tribunal; and

the scheme enacted in relation to boundary proposals clearly distinguishes between the concepts of an “inquiry” on the one hand, and an “advertised public meeting” on the other. The latter is referred to in s 218F(3)(a)(i) in connection with a joint proposal of two or more councils for the amalgamation of two or more areas. Effect must be given to this difference in language.

Woollahra Council submitted that, having regard to the above matters, an inquiry under s 263(2A) is required to be active and transparent. To be active, the Boundaries Commission or Departmental Chief Executive holding the inquiry must take action to inquire about the proposal and the factors required to be considered under s 263(3) of the Act. Woollahra Council cited as analogous the dicta in Prasad v Minister for Immigration and Ethnic Affairs (1985) 6 FCR 155 at 169-170; Minister for Immigration and Citizenship v SZIAI [2009] HCA 39; (2009) 83 ALJR 1123 at [22]-[25]; Wei v Minister for Immigration and Border Protection [2015] HCA 51; (2015) 90 ALJR 213 at [49] in support of its contention that the obligation to examine and report, and to hold an inquiry, involved an obligation to inquire. The Delegate could not satisfy this duty to inquire by simply accepting the broad propositions contained in the Minister’s proposal document and other documents provided to the Delegate, including the KPMG “Local Government Reform Merger Impacts and Analysis” document dated 18 December 2015 and the KPMG “Outline of Financial Modelling Assumptions for Local Government Merger Proposals Technical Paper” dated 19 January 2016.

Woollahra Council also relied on the KPMG document “Options Analysis Local Government Reform Randwick, Waverley and Woollahra Cluster” dated 12 August 2015. This KPMG Options Analysis document was not provided to the Delegate or relied on by the Delegate. Nonetheless, Woollahra Council submitted that the document reinforced Woollahra Council’s argument that there was insufficient material made publicly available or given to the Delegate to enable any inquiry or examination to be conducted into the financial results that the proposal document stated would flow from the amalgamation or the appropriateness of the assumptions upon which those results were based. Woollahra Council pointed out that the KPMG Options Analysis (in August 2015) assumed different information and communications technology (ICT) costs as part of the amalgamation costs to the ICT costs later assumed in the proposal document (in January 2016). Woollahra Council said that the difference in assumed ICT costs would have raised for examination the viability of the ICT costs assumed in the proposal document.
Woollahra Council submitted that it was incumbent on the Delegate, as part of any valid inquiry, to closely scrutinise the assumptions upon which the proposal and the amalgamation savings asserted in the proposal document were based.
Woollahra Council submitted that this obligation to inquire also required the Delegate to hold an active inquiry, including asking questions and eliciting information. Instead, however, the Delegate was passive, saying that he was at the inquiry only to listen.
To be transparent, the whole process of inquiry must be held in public. Woollahra Council submitted that the inquiry required under s 263(2A) entails the entire process at which materials are advanced and arguments are made in relation to an amalgamation proposal and it is this process which must be “held” in public and be capable of attendance by the public: citing Bread Manufacturers of New South Wales v Evans [1981] HCA 69; (1981) 180 CLR 404 at 412-413, 432 and 444. That is, the public inquiry was required to cover “whatever is material to an informed decision” (citing Sutherland Shire Council v Finch [1970] HCA 49; (1970) 123 CLR 657 at 662) as to the merits or demerits of the proposal. It was not sufficient or permissible for the Delegate to discharge that duty, as he purported to do, by holding a single advertised meeting at which he said he was “here only to listen”, followed by one or more private meetings at which information about the proposal and the KPMG analysis therein was received but from which the public were precluded from attending.
Woollahra Council submitted that an “inquiry” into the proposal could not be held to the extent that key matters relied upon therein, including the basis for the KPMG figures, were not publicly accessible in advance of the inquiry. As stated by Gibbs CJ in Bread Manufacturers of New South Wales v Evans at 413: “[t]he holding of a public inquiry would be illusory if the Commission, after solemnly taking evidence in public, could, without notice to the parties, base its decision on material that it had obtained in secret and never disclosed”.
While the Delegate was not bound to make public any workings that he produced for the purpose of considering the effect of the evidence given or submissions made in an inquiry under s 263(2A), Woollahra Council submitted that he was not permitted to obtain or rely on evidence that was obtained privately and which was not laid bare for public scrutiny in a public forum, citing Bread Manufacturers of New South Wales v Evans at 413. It could not be supposed that Parliament intended a regime where the Delegate was required to hold a public inquiry yet was free to receive and consider evidence in a private domain, without public disclosing it, in the course of preparing the required report.
Woollahra Council submitted that this obligation to rely only on evidence obtained publicly and not privately also flows from the requirement to act fairly. Woollahra Council referred to the dicta of Lord Diplock in Bushell v Secretary of State for the Environment [1981] AC 75 at 101-102 (citing Lord Greene MR in B Johnson & Co (Builders) Ltd v Minister of Health [1947] 2 All ER 395 at 399-400) that:

[w]hen [the Minister] is considering the respective representations of the promoting authority and of the objectors made at the local inquiry and the report of the inspector upon them … he must act fairly as between the promoting authority and the objectors; after the inquiry has closed he must not hear one side without letting the other know; he must not accept from third parties fresh evidence which supports one side's case without giving the other side an opportunity to answer it.

Woollahra Council submitted that these observations apply with equal force to the functions of the Delegate under ss 218F and 263 of the Act.

As a consequence of these matters, Woollahra Council submitted that the Delegate did not hold an inquiry under s 263(2A) of the Act.

The respondents’ claim that there was a valid inquiry

The respondents disputed that the inquiry held by the Delegate did not meet the statutory description or requirements of an inquiry under s 263(2A).
First, the respondents noted that the nature of the “inquiry” to be held by the Delegate is not prescribed by the Act (this is in contrast to a “public inquiry” held under Pt 8 of Ch 13 of the Act, which does prescribe the procedure). In Bushell v Secretary of State for the Environment, the House of Lords held that in the absence of statutory rules as to the conduct of a “local inquiry” to be held in accordance with a statute, in relation to a proposed motorway, the procedure to be followed was a matter of discretion for the Minister or appointed inspector empowered to hold that inquiry (at 95). In that case, Lord Diplock warned against, “over-judicialising” such inquiries by insisting on the observance of the procedures of a court of justice (at 95, 97) and suggested that such inquiries ought to be as informal as was consistent with achieving the objects of the inquiry. This aspect of Bushell v Secretary of State for the Environment was cited with approval in Kioa v West [1985] HCA 81; (1985) 159 CLR 550 at 629.
The respondents submitted that various features of the Act made clear that the “inquiry” required by ss 218F(2) and 263(2A) is not a formal inquiry in the nature of a coronial inquiry or a Royal Commission, involving summonsing of witnesses, compulsory production of documents, cross-examination, admission or rejection of evidence, and so forth. First, the Boundaries Commission and Departmental Chief Executive (or his or her delegate) do not have the powers needed to conduct a formal inquiry of that kind. Second, the Act does confer such powers on commissioners charged with undertaking what the Act describes as “public inquiries” (see s 438U and generally Pt 8 of Ch 13). The distinction must be taken to be a conscious one by the drafters. Thirdly, s 264 provides that a person is not to be represented by an Australian lawyer or a person acting for a fee or reward in proceedings before the Boundaries Commission or the Departmental Chief Executive (or his or her delegate). The procedures typically engaged in a coronial inquiry or a Royal Commission would be completely inappropriate, and in many cases unjust, in those circumstances.
The respondents submitted that the present statutory context is one where Lord Diplock’s observations in Bushell v Secretary of State for the Environment are apposite. The manner in which the Delegate went about his task did not fall short of meeting the statutory description of “inquiry”. The Delegate’s report shows a close and careful consideration of the proposal and the written and oral submissions made. The Delegate did not fail to carry out an “inquiry” because he did not question speakers at the public inquiry or because he imposed a time limit on them. Nor did the Delegate fail to carry out an inquiry because he did not require KPMG to provide its modelling and assess that modelling. An administrative process does not cease to be an “inquiry” because an expert opinion is not tested in the manner that might occur in adversarial litigation or because every assumption is not scrutinised.
The respondents also distinguished the observations of Gibbs CJ in Bread Manufacturers of New South Wales v Evans. The public inquiry required by the legislation in that case had all the trappings of a legal hearing spelt out in detail. As Gibbs CJ observed (at 414), the conclusion he reached depended entirely on the construction of the legislation.

The statutory requirements for the inquiry

Section 263 of the Act distinguishes between the functions of examining and reporting on any matter with respect to the boundaries of areas, including a proposal for the amalgamation of areas referred by the Minister under s 218F, and the holding of an inquiry under s 263. An inquiry under s 263 is to be held for the purpose of the Boundaries Commission or Departmental Chief Executive, to whom a matter with respect to the boundaries of areas, including a proposal for the amalgamation of areas, has been referred, exercising its functions to examine and report on the matter.
The inquiry is not itself the examination of the matter or proposal that is required to be undertaken; rather, it is held for the purpose of exercising the function of such an examination.
The importance of this distinction is that it means that the inquiry that is to be held under s 263 is not itself required to be conducted as an examination of the matter or proposal that has been referred by the Minister. The obligation under s 263 is to hold an inquiry, not to inquire in the sense of examine.
Section 263 identifies that an inquiry under the section is to be conducted in public. The obligation is to “hold” an inquiry: s 263(2) and (2A). Reasonable public notice is to be given of the “holding” of the inquiry: s 263(2B). Members of the public must be allowed “to attend any inquiry held” under the section: s 263(5). This means that an inquiry under the section is only that process that is held in public. The Boundaries Commission or Departmental Chief Executive holding an inquiry under the section may make other inquiries and receive information and submissions other than during the public hearing of the inquiry, as part of its examination of the matter or proposal referred to it under s 218F. However, such examination is not part of the inquiry held under s 263.
Section 263 does not prescribe the practice or procedure by which an inquiry under the section is to be held. As the respondents have noted, this stands in contrast to public inquiries held under Pt 8 of Ch 13.
Section 264 does prevent a person attending proceedings before the Boundaries Commission from being represented by an Australian lawyer or any other person acting for a fee or reward (s 264(1)) except in certain circumstances (s 264(2)). A lawyer may, however, prepare any documents or submissions or tender any legal advice in connection with any proceedings before the Boundaries Commission: s 264(2)(c). The reference to “proceedings before the Boundaries Commission” may include an inquiry under s 263 held by the Boundaries Commission or the Departmental Chief Executive: see s 218F(2).
These restrictions on representation in proceedings (including an inquiry) before the Boundaries Commission (or the Departmental Chief Executive) do not prescribe positively the procedure that must be followed in the hearing of the proceedings, but rather proscribe certain people from representing others in proceedings.

A valid inquiry was held

Woollahra Council has not established that the inquiry held by the Delegate did not meet the statutory description or the requirements of an inquiry under s 263 of the Act. First, I do not agree with Woollahra Council’s interpretation that an inquiry under the section requires “a structure and forensic process similar to that of an administrative tribunal”. Nothing in s 263 supports that construction. The restrictions on representation in s 264 also do not support that contention. Section 264 merely provides what cannot be done, not what must be done, in proceedings before the Boundaries Commission (or Departmental Chief Executive).
Second, whilst it is correct to note that the statutory scheme with respect to boundaries of areas distinguishes between “advertised public meetings” (s 218F(3)(a)(i)) and an “inquiry” (s 263(2) and (2A)), this difference in language does not illuminate how an inquiry under s 263 must be conducted. Advertised public meetings are prescribed as one of the ways in which the Boundaries Commission or Departmental Chief Executive must seek the views of electors of each of the areas that are the subject of a joint proposal of two or more councils for amalgamation. An inquiry under s 263 is held for the different purpose of exercising the functions of examining and reporting on a matter with respect to the boundaries of areas, including a proposal for the amalgamation of areas. It is apt to use the language of an advertised public meeting as a means to seek the views of electors and to use the language of holding an inquiry for the purpose of exercising the functions of examining and reporting on a matter, including a proposal.
But it does not necessarily follow from this use of different language that an advertised public meeting and an inquiry must be held according to different procedures, or more particularly that an inquiry under s 263 cannot be held in the same manner as an advertised public meeting might be held.
Third, I do not agree with Woollahra Council’s submission that the inquiry “entails the entire process at which materials are advanced and arguments are made in relation to an amalgamation proposal” and that the inquiry “was required to cover ‘whatever was material to an informed decision’ as to the merits or demerits of the proposal”, and that this entire process must be held in public and be capable of attendance by the public. This “entire process” referred to by Woollahra Council is part of the functions of the Boundaries Commission or Departmental Chief Executive in examining and reporting on the matter, including a proposal, referred to it by the Minister under s 218F. An inquiry under s 263 is held for the purpose of exercising those functions but it is not itself the exercise of the functions. Section 263 does not require that the Boundaries Commission or Departmental Chief Executive carry out its function of examination of the proposal in public at an inquiry.
Once this is understood, the “entire process” referred to by Woollahra Council did not need to be carried out in public at an inquiry.
It follows from this conclusion that s 263 did not mandate that the person holding the inquiry (in this case the Delegate of the Departmental Chief Executive) actively question persons speaking at the inquiry or answer questions asked of the Delegate at the inquiry. Where the section is silent as to the procedure to be followed at the inquiry, that procedure within such limits as are necessarily imposed by its qualifying for the description “inquiry”, is left to the discretion of the person holding the inquiry: Bushell v Secretary of State for the Environment at 94-95. The Delegate did not fail to hold an inquiry under the section by stating that he was “here only to listen”.
Fourth, it also follows from the previous point that s 263 does not require that all key material relied upon by the Boundaries Commission or Departmental Chief Executive in examining and reporting on a proposal referred to it by the Minister under s 218F must be publicly accessible in advance of the holding of the inquiry. This argument of Woollahra Council is predicated on its mistaken contention that the entire process of examination and report must be carried out in public at the inquiry.
The citation of Bread Manufacturers of New South Wales v Evans (at 413) is misplaced. The inquiry required to be conducted in the circumstances and under the legislation considered in that case was quite different to the inquiry required to be held under s 263 of the Act. There, the High Court held that, because legislation in that case conferred investigative powers on the Prices Commission for the purposes of a public inquiry, where an inquiry was held, the Prices Commission was precluded either from using information obtained privately for the purposes of the inquiry without disclosing it to the parties (per Gibbs CJ and Aickin J) or from obtaining information for the purposes of the inquiry except in public and on oath (per Wilson and Mason JJ). Here, s 263 does not so require that information obtained by the Boundaries Commission or Departmental Chief Executive must be publicly disclosed and publicly adduced at an inquiry held under the section. So too, the inquiries held under the legislation considered in Bushell v Secretary of State for the Environment and B Johnson & Co (Builders) Ltd v Minister of Health were quite different to the inquiry required to be held under s 263 of the Act.
I reject this ground of challenge that the inquiry that was held by the Delegate was not an inquiry under s 263 of the Act.

The challenge to the examination and report

The examination and report that was undertaken

The proposal for amalgamation of the local government areas of Randwick, Waverley and Woollahra was referred on 6 January 2016 to the Departmental Chief Executive, who in turn delegated his functions to the Delegate, for examination and report.
At the time of the referral of the proposal on 6 January 2016, the Minister provided the proposal document, being the “Merger Proposal: Randwick City Council, Waverley Council, Woollahra Municipal Council” dated January 2016. The proposal document was also published on the Council Boundary Review website on or about 6 January 2016. That document set out the case in favour of the proposal. It referred to analysis by KPMG, which showed that the new council had “the potential to generate … more than $124 million in net financial savings in 20 years”.
On 7 January 2016, the Delegate wrote to the General Managers of the affected councils about the proposal for amalgamation. From 12 January 2016, notice of the holding of an inquiry in relation to the proposal for amalgamation was posted on the Council Boundary Review website. The notice invited submissions on the proposal for amalgamation. Other documents were posted, and hence made publicly available, on the Council Boundary Review website and were also made available to the Delegate. These documents provided further information about the KPMG analysis of the proposal for amalgamation. These documents included:

on 18 December 2015, a document prepared by KPMG entitled “Local Government Reform Merger Impacts and Analysis”;

on 20 January 2016, a document entitled “Outline of Financial Modelling Assumptions for Local Government Merger Proposals Technical Paper”; and

on 5 February 2016, documents entitled “List of Council Data Sources used by KPMG” and a spreadsheet summarising outputs from KPMG’s modelling.

On 12 January 2016, the Delegate met with the Mayor and General Manager of Randwick Council and Waverley Council about the proposal for amalgamation of the three areas. On 18 January 2016, the Delegate met with the Mayor and General Manager of Woollahra Council about the proposal for amalgamation of the three areas.
On 14 January 2016, the Delegate wrote to each affected council giving notice of the inquiry to be held on 4 February 2016.
On 14 January 2016, a “delegate briefing”, co-ordinated by the Department of Premier and Cabinet (‘DPC’), took place for the various delegates of the Departmental Chief Executive appointed to examine and report on different proposals for amalgamation of local government areas. The Delegate in this case was one of the persons who attended the briefing. At the briefing, KPMG gave a presentation entitled “Overview of assumptions underpinning financial modelling”.

an email from an employee of KPMG to an employee of the DPC dated 1 December 2015, which was said to demonstrate that KPMG had been instructed to develop a total of 44 amalgamation proposal documents and, therefore, that KPMG was engaged to not only undertake financial analysis and modelling but also to prepare the amalgamation proposals;

a KPMG paper entitled “Options Analysis, Local Government Reform, Randwick, Waverly [sic] and Woollahra Cluster” dated 12 August 2015, in which KPMG estimated the information and communications technology (ICT) costs of the amalgamation to be $40 million with an assumed Government grant of $45.8 million. However, following a change in assumptions for the model, the ICT costs were reduced in the KPMG Technical Paper entitled “Outline of Financial Modelling Assumptions for Local Government Merger Proposals” dated 19 January 2016 to $3.35 million, plus a 30% contingency fee, which reduced the Government grant to $10 million. Woollahra Council submitted that these changes in assumptions and costings indicates “close liaison” between KPMG and the Government.

a letter from a Partner at KPMG to an Executive Director of the DPC dated 17 September 2015, containing KPMG’s instruction to the Government that a “public report” was not to be altered after being provided to the Government. Woollahra Council claimed that this “public report” appeared to have been altered after being provided to the respondents.

Woollahra Council submitted that this body of evidence, in addition to various other statements by KPMG, justified two factual findings. First, there was a public representation to the effect that KPMG had provided independent analysis of, at the least, the financial implications of the proposal. Second, given the engaged involvement of KPMG over a considerable period of time in support of the Government’s local government reform agenda, the description of KPMG’s analysis and modelling as “independent” was not true. A contrary finding was said by Woollahra Council to require the extensive qualification of the meaning of the word “independent”, such that it would have an unacceptably peculiar meaning.
As to the third step, Woollahra Council submitted that the inclusion of a misleading representation in the proposal document and other relevant documents had the capacity to invalidate both the public notice of an inquiry given under s 263(2B) and the inquiry conducted thereafter under s 263(2A) of the Act. It was contended by Woollahra Council that “where the public and the decision-maker (in this case, the Delegate) have been misled in a material respect relating to a matter of some significance to the decision to be made, the decision is liable to be set aside”, citing, by analogy, Minister for Immigration and Ethnic Affairs v Haj-Ismail (1982) 57 FLR 133 at 140, 162; Videto v Minister for Immigration and Ethnic Affairs (1985) 8 FCR 167 at 179; Akers v Minister for Immigration and Ethnic Affairs (1988) 20 FCR 363 at 373; Curragh Queensland Mining Limited v Daniel (1992) 34 FCR 212 at 221; Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at 30-31, 45-46, 66; Sharples v Minister for Local Government [2008] NSWLEC 328; (2008) 166 LGERA 302 at [116]-[123]; Gales Holdings Pty Ltd v Minister for Immigration and Planning [2006] NSWCA 388; (2006) 69 NSWLR 156 at [110]; Friends of Turramurra Inc v Minister for Planning [2011] NSWLEC 128 at [121]; Litevale Pty Ltd v Lismore City Council (1997) 96 LGERA 91 at 101-102; El Cheikh v Hurstville City Council [2002] NSWCA 173; (2002) 121 LGERA 293 at [12] and Castle Constructions Pty Ltd v North Sydney Council [2008] NSWLEC 137 at [81]-[93], [103]-[105].
However, Woollahra Council emphasised that it did not contend that any inaccuracy or error in any document prepared for the purpose of an inquiry under the Act would invalidate the inquiry or the Delegate’s report. It was conceded that the relevant error would have to be more than an innocent, immaterial mistake or a mistake of a kind appropriate to be corrected through the statutory process for an amalgamation proposal. Rather, Woollahra Council submitted that for an error in a published document to have caused the inquiry and Delegate’s examination and report to miscarry in law, the error in question would have to have been capable of deflecting the process of inquiry or the Delegate’s examination from possessing the nature or character intended by the Act. Assessing the materiality of the error and whether it is enough to invalidate what follows involves a qualitative judgment of a kind that the Act invites, in light of Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355.
Woollahra Council contended that the various public representations as to the “independence” of KPMG’s analysis, which related to the mandatory relevant matter of the “financial advantages and disadvantages” under s 263(3)(a) of the Act, were misleading and created a serious departure from the proper statutory process. These representations were said to have deflected the fulfilment of the statutory intention of the Act because they gave false comfort to the public regarding KPMG’s modelling and potentially dissuaded the public from making a submission to the Delegate thereon. These allegedly erroneous and misleading representations were said by Woollahra Council to be analytically distinct from any other factual error contained in other material relating to the proposal, such as an erroneous representation within oral and written submissions made to the Delegate, because the representations were “part and parcel of the material to which people, considering how they would respond to the public notice” given under s 263(2B), were invited to consider.
Woollahra Council submitted that the representations of independence were intended by the Government to lend cogency to the KPMG material provided in support of the proposal. Woollahra Council stated that some submissions to the Delegate had assumed that the claim that KPMG’s analysis was independent was correct. If KPMG’s lack of independence had been disclosed, it was said that there would have been greater public scrutiny of the publicly available KPMG material. Woollahra Council submitted that this was not because people would have doubted the honesty or professionalism of KPMG but, rather, because unique significance is attached by the public to the work of those who are sufficiently neutral of a Government’s political aims, such as a probity auditor. Woollahra Council submitted that such disclosure was analogous to the funding disclosure requirements imposed on researchers by scientific journals.
Consequently, the misleading representations were said by Woollahra Council to have deflected the Delegate from being able to adequately consider the attitudes of residents and ratepayers towards the proposal, as the Delegate was required to do under s 263(3)(d). If this class of persons had known that KPMG’s materials were not independent, some may have expressed a different attitude to the proposal, especially in relation to the perceived financial advantages and disadvantages of the proposal. Woollahra Council also referred to s 263(3)(e1), (e2) and (f) as forming the basis for a similar contention.
Similarly, if the Delegate failed to appreciate that KPMG’s analysis was not independent, this was said by Woollahra Council to have resulted in the miscarriage of the Delegate’s consideration of the mandatory factor in s 263(3)(a) of the Act and to have impeded the Delegate from properly carrying out an inquiry under s 263(2A) of the Act. Woollahra Council submitted that, with the knowledge that KPMG’s analysis was not independent, the Delegate would have given less weight to the opinions expressed by KPMG, citing, by analogy, ASIC v Rich [2005] NSWSC 149; (2005) 190 FLR 242 at [334]; Lake Macquarie City Council v Australian Native Landscapes Pty Ltd [2015] NSWLEC 92 at [9]-[15].
Woollahra Council also claimed that the Delegate’s determination that the formation of an amalgamated council would “create a financially stronger and more viable council” was based, in large part, upon the Delegate’s acceptance that KPMG’s analysis was “independent”. Woollahra Council submitted that the evidence demonstrated that KPMG was engaged by the Government to only provide information in support of the proposal and not to consider the “financial disadvantages” of the proposal required to be considered by the Delegate under s 263(3)(a). The Delegate was said to have been susceptible to having been deflected from considering the “financial disadvantages” of the proposal because of the misleading representations that KPMG’s analysis was “independent”.
Alternatively, if the Delegate did appreciate that KPMG’s analysis was not independent, Woollahra Council submitted that any of the Delegate’s findings based upon the KPMG material would have led the Delegate’s examination and inquiry to fall short of that which was required under the Act.

The respondents’ rebuttal that the statements were not misleading and did not invalidate the amalgamation process

The respondents submitted that the public statements that KPMG’s modelling and analysis was “independent” were not misleading but even if such a factual finding were to be made, it would not follow that the Delegate’s report was invalid on any of the bases put by Woollahra Council.
The respondents submitted that the Court, in deciding whether or not the representations alleged were actually made and were misleading, must proceed on the basis that Woollahra Council bears the onus of proof, citing Minister for Immigration and Citizenship v SZGUR [2011] HCA 1; (2011) 241 CLR 594 at [67] and the principle in Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 at 362.
The respondents submitted that in determining what a reasonable interested person would understand the public statements relating to the “independence” of KPMG’s analysis and modelling (and not KPMG itself) to mean, the “ordinary speech” meaning of “independent” should be applied, citing Rexstraw v Johnson [2003] NSWCA 287 at [62], [69]-[70]. The respondents said that, while always a matter of context, the “independence” of the work of a professional consultant conveys at most that the professional consultant has exercised his or her professional judgment and has not been overborne or dictated to, citing Potato Marketing Board v Merricks [1958] 2 QB 316 at 335; Construction, Forestry, Mining and Energy Union v McCorkell Constructions Pty Ltd (No 2) [2013] FCA 446; (2013) 232 IR 290 at [93]-[96].
The respondents submitted that the statements concerning the independence of KPMG’s analysis did not convey either of the representations alleged by Woollahra Council. As to the first representation, a reasonable member of the public would not expect the Government to engage a consultant who was ignorant of or uninfluenced by work that had already been done on local government reform and the opinions that had been previously expressed. A consultant who was not ignorant or uninfluenced by the existing body of knowledge and opinion could still give an independent opinion. Independence does not equate to ignorance.
As to the second representation, the statements made did not convey that the proposals were initiated by the Government if initiated means that the Government developed the proposals unassisted. It was quite clear from many documents that the development of the various proposals for amalgamations had been informed by extensive council and community consultation and assisted by the work of others, including consultants. At most, the statements implied that the proposals were “of” (that is made by) the Government and had been “analysed” by KPMG.
Instead of the representations claimed by Woollahra Council, the respondents submitted that only the following representations were conveyed: that KPMG had been engaged to “give impartial and accurate advice” or would “bring and independent mind to bear” about the impacts of the proposed amalgamation; that KPMG’s modelling and analysis had been undertaken by professional KPMG employees (rather than by employees of the DPC, Office of Local Government or the NSW Government); and that KPMG had, in carrying out its modelling and analysis of the impacts of the proposed amalgamations, exercised its professional judgment in good faith and had not been overborne or dictated to by the Government.
The respondents contended that in the light of the entire context of KPMG’s interactions with the Government, it was apparent that KPMG had exercised its professional judgment in undertaking its analysis and modelling and in assisting to communicate the benefits of the amalgamations, and was not dictated to or overborne by the Government. First, the respondents claimed that this contention was supported by the repeated references in KPMG’s material to its analysis and modelling as needing to be “robust”, “balanced” and “rigorous”. Second, the actual analysis and modelling carried out by KPMG was said to show a high degree of attention to detail and the exercise of professional judgment in the development of assumptions and model methodology. Third, a document entitled “Briefing for the Local Government Reform Taskforce” dated 19 November 2015 noted that KPMG’s modelling had produced lower net present value benefits than the modelling undertaken by other consultants for councils and the Government. Fourth, a letter from a Partner at KPMG to an Executive Director of the DPC dated 17 September 2015, in detailing the purpose of its engagement to prepare the public report, stated that “…the Report must not be altered or amended in any way once it has been provided to you in final form”. Fifth, KPMG described itself as carrying out “independent” analysis and modelling in various documents, such as the Technical Paper entitled “Outline of Financial Modelling Assumptions for Local Government Merger Proposals” dated 19 January 2016, a claim it would not make if it was not independent. Sixth, the respondents referred to an email dated 13 January 2016 in which the DPC was said to disclose that it did “not have full copies of the independent analysis and modelling for each merger proposal by KPMG. This remains the consultants’ intellectual property”.
The respondents rejected Woollahra Council’s claims that the representations relating to the independence of KPMG’s financial analysis and modelling were false or misleading. First, the various statements to the effect that KPMG had been engaged to “support” the Government’s “reform agenda” were said to be “merely tags” identifying that KPMG’s analysis and modelling would assist the Government in making decisions about the amalgamation. Second, the statements of KPMG which attested to KPMG’s understanding of the importance of the “reform agenda” were said only to convey that KPMG would not undertake its analysis and modelling from a position of ignorance but rather had a deep understanding of, and experience in, the issues involved in local government reform based on previous engagements, including by councils. Third, the respondents submitted that KPMG’s statements in various proposal “bid” documents, identifying itself as a “strategic adviser” or “partner”, only reflected KPMG’s recognition that it was a consultant repeatedly engaged by the Government in relation to local government reform tasks. This was confirmed by the fact that KPMG also described itself as having “partnered” with councils in “bid” documents. Fourth, the respondents claimed that the fact that KPMG engaged in multiple tasks for the Government, including financial analysis and modelling and preparing amalgamation proposal documents, was perfectly consistent with it having brought an independent mind to bear in relation to the analysis and modelling.
Fifth, the respondents submitted that the evidence, such as several emails by which KPMG was instructed to prepare amalgamation proposal documents, demonstrated that, while KPMG had assisted in preparing the amalgamation proposal documents, it was instructed by the Government as to what proposals were to proceed. Sixth, the change in the assumed ICT costs of the amalgamation between the options analysis stage (as set out in the Options Analysis document dated 12 August 2015) and the final evaluation of the proposal (as set out in the KPMG Technical Paper dated 19 January 2016) was said by the respondents to reflect the fact that the KPMG assumption in the publicly available Technical Paper only reflected the “veneer” ICT costs not the full cost of integration over time.
If contrary to these submissions the statements as to KPMG’s independence were found to be misleading, the respondents submitted that the Delegate’s report or other steps in the amalgamation process would not be invalid.
As a preliminary point, the respondents rejected Woollahra Council’s interpretation of the law that “where the public and the decision-maker (in this case, the Delegate) have been misled in a material respect relating to a matter of some significance to the decision to be made, the decision is liable to be set aside”. Rather, the respondents contended that a non-fraudulent factual misstatement will only invalidate an administrative decision if, as a consequence of the misstatement of fact, some recognised ground of judicial review is established (such as a failure to have regard to a mandatory relevant consideration) or a mandatory statutory requirement is not complied with, citing Gold and Copper Resources Pty Ltd v Minister for Resources and Energy [2013] NSWLEC 66; (2013) 211 LGERA 196 at [118]-[120]; Oates v Attorney-General for the Commonwealth of Australia [2001] FCA 84; (2001) 181 ALR 559 at [132]-[136]; Zentai v O’Connor (No 3) [2010] FCA 691; (2010) 187 FCR 495 at [88]; McHugh Holdings Pty Ltd v Director General Communities NSW [2009] NSWSC 1359 at [41] and [66]; Foster v Senator Vanstone [1999] FCA 1447 at [62]; Anderson v Minister for Infrastructure, Planning and Natural Resources [2006] NSWLEC 725; (2006) 151 LGERA 229 at [75]-[79]; Arnold v Minister Administering the Water Management Act 2000 [2014] NSWCA 386 at [130]-[137]; Sharples v Minister for Local Government at [77], [117]-[122].
The respondents distinguished the misleading notice cases relied on by Woollahra Council such as Litevale Pty Ltd v Lismore City Council and El Cheikh v Hurstville City Council. There, the misleading statement was in the notice itself, depriving it of the quality of being a “public notice” within the meaning of the statute. So too, the cases of Smith v Wyong Shire Council [2003] NSWCA 322; (2003) 132 LGERA 148 and Gales Holdings Pty Ltd v Minister for Infrastructure and Planning were distinguishable. There, the misleading or allegedly misleading statements were in documents required by the statute to be publicly exhibited with subordinate legislation such as a local environmental plan, depriving the documents of the status of being the supporting documents required by the statute. Here, the respondents submitted that the allegedly misleading statements were not in the public notice required by the Act to be given or any document required by the Act to be publicly exhibited.
The respondents rebutted each of Woollahra Council’s submissions as to the legal consequences of any misleading statement.
First, the respondents rejected Woollahra Council’s contention that the inquiry held by the Delegate miscarried in law because it was conducted on the false premise that KPMG’s analysis and modelling was independent. That contention, the respondents submitted, relied upon the erroneous premise that there is a broad principle that an administrative decision will be invalidated if the public participants in an inquiry or the decision-maker proceed on a misapprehension of fact. The respondents also submitted that Woollahra Council’s contention relied upon ascribing a special juridical character to the published documents with the alleged misrepresentations, in comparison to any other published material which may have contained an error and may have deflected the inquiry and the Delegate’s examination and report. The respondents submitted that such a distinction found no statutory basis in the Act and was illusory. There was no analytical way of distinguishing the supposed misrepresentations identified by Woollahra Council from any other erroneous representation that might have been made to the Delegate.

Second, the respondents submitted that it could not be said that any of the allegedly misleading statements caused the Delegate to fail to consider the mandatory relevant consideration in s 263(3)(a), including “the financial advantages or disadvantages” of the proposal. There was no evidentiary basis to find that the Delegate failed to scrutinise the KPMG analysis because he regarded it as independent. The respondents noted that the Delegate had observed that the KPMG report had been the subject of criticism but found support in two separate analyses of financial impacts by SGS Economics and Planning for his overall conclusion that the proposal had substantial financial benefits. The Delegate did consider, at a level higher than “mere advertence” or “lip service”, the financial advantages or disadvantages of the proposal. Therefore, if the Delegate is found to have adequately considered the matter in s 263(3)(a), this finding would be unaffected by the fact that the Delegate’s consideration may have been different if it were not for a particular misrepresentation.
Third, the respondents rejected Woollahra Council’s claim that reasonable public notice of the inquiry under s 263(2B) of the Act miscarried because of any misleading statements as to the independence of KPMG’s modelling and analysis. The alleged misleading statements were not in the formal public notice or in any other document by which reasonable public notice was given. Additionally, the respondents said that it was not possible for the giving of reasonable public notice to miscarry on the basis that one of the documents on which the inquiry would concentrate contained a factual error. In fact, the respondents claimed that the purpose of an inquiry might be thought to be to bring such a factual error to light, or at least to challenge or test it.

Statements were not misleading and did not invalidate amalgamation process

Woollahra Council has not established that statements concerning the independence of KPMG’s analysis and modelling were false or misleading or, even if they were to be, that this invalidated the statutory amalgamation process in respect of the proposal. My reasons are those advanced by the respondents and summarised above.
In summary, I do not accept that the statements in the publicly available documents concerning “independent analysis and modelling by KPMG” conveyed the representations claimed by Woollahra Council but instead I find that they conveyed the representations submitted by the respondents. I find that the latter representations were not false or misleading. KPMG exercised its professional judgment in undertaking the analysis and modelling of financial impacts of the proposal made by the Minister and was not dictated to or overborne by the government. None of the matters relied on by Woollahra Council falsified the representations, for the reasons given by the respondents.
Nevertheless, even if the statements concerning KPMG’s independent analysis and modelling were to be false or misleading, this would not have the legal consequence of invalidating any step in the amalgamation process, for the reasons given by the respondent. The allegedly misleading statements were not in any notice required to be given under the Act or in any document required to be produced or publicly exhibited by the Act.
The statements were not in the public notice that was required (under s 263(2B)) to be given of the holding of the inquiry. It is true that the public notice that was given referred to the Council Boundary Review website and that at least two of the documents relied on by Woollahra Council as containing misleading statements were able to be publicly accessed via that website. However, the statements said nothing misleading about the proposal that was the subject of the inquiry (the amalgamation of the local government areas of Randwick, Waverley and Woollahra) or about the statutory process for considering that proposal. There was, therefore, nothing misleading that was said that could cause the public notice that was given not to be a “public notice” within the meaning of s 263(2B) of the Act.
There was no statutory requirement to publicly exhibit any document as part of the process of holding the inquiry or examining and reporting on the proposal. Hence, any allegedly misleading statement in documents accessible on the Council Boundary Review website could not cause the documents not to be documents required by the Act.
Woollahra Council also has not established that the allegedly misleading statements caused the Delegate to fail to consider any mandatory relevant matter (under s 263(3)) or fail to exercise its duty to examine and report on the proposal (under s 263(1)). The mere fact that a repository of administrative power (the Delegate in this case) might consider a factually false or misleading statement (that is not fraudulent) does not, by that fact alone, cause any exercise of the power to miscarry in law. It will only do so if, as a consequence of the false or misleading statement, a recognised ground of judicial review is established or a mandatory statutory requirement is not complied with.
In this case, the allegedly false or misleading statements have not caused the Delegate to fail to give the public notice required, to hold the inquiry required or to examine and report on the proposal as required by the Act. The allegedly false or misleading statements, therefore, have not had the legal consequence of invalidating any step in the statutory amalgamation process concerning the proposal.
I reject this ground of challenge.

Conclusion and orders

Woollahra Council has not established any of its grounds of challenge. The proceedings should therefore be dismissed. The usual order for costs, namely that costs follow the event, should apply.
The Court orders:

The proceedings are dismissed.

The applicant is to pay the respondents’ costs of the proceedings.

Decision last updated: 13 April 2018

Medium Neutral Citation:	Woollahra Municipal Council v Minister for Local Government [2016] NSWLEC 86
Hearing dates:	20 and 21 April, 18 and 23 May and 28 June 2016
Date of orders:	20 July 2016
Decision date:	20 July 2016
Jurisdiction:	Class 4
Before:	Preston CJ
Decision:	Orders as set out at [312]
Catchwords:	JUDICIAL REVIEW – proposal for amalgamation of local government areas – referral of proposal to Departmental Chief Executive for examination and report – inquiry required to be held – whether reasonable public notice given of the holding of inquiry – whether inquiry held in accordance with Act – whether examination and report on proposal in accordance with Act – whether an affected council denied procedural fairness by Departmental Chief Executive – review and comment on Departmental Chief Executive’s report by Boundaries Commission – whether review conducted in accordance with Act – whether affected council denied procedural fairness by Boundaries Commission – publicly accessible material in support of proposal represented that analysis and modelling of consultant was independent – whether representations misleading – whether allegedly misleading representations invalidated statutory process of amalgamation
Legislation Cited:	Interpretation Act 1987 s 35(1) Local Government Act 1993 ss 204, 213, 218, 218A, 218B, 218C, 218D, 218E, 218F, 218F(1), 218F(2), 218F(6), 218F(7), 218F(8), 260, 261, 262, 263, 263(1), 263(2), 263(2A), 263(2B), 263(3), 263(5), 264, 265, 438U, 705, 706, Pts 1, 2 and 3 of Ch 9, Pt 8 of Ch 13, Pt 2 of Ch 17, Sch 2
Cases Cited:	Akers v Minister for Immigration and Ethnic Affairs (1988) 20 FCR 363 Anderson v Minister for Infrastructure, Planning and Natural Resources [2006] NSWLEC 725; (2006) 151 LGERA 229 Annetts v McCann [1990] HCA 57; (1990) 170 CLR 596 Applicant S214 of 2002 v Attorney-General (Cth) [2004] FCA 1635; (2004) 40 AAR 155 Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 72; (2005) 225 CLR 88 Arnold v Minister Administering the Water Management Act 2000 [2014] NSWCA 386 ASIC v Rich [2005] NSWSC 149; (2005) 190 FLR 242 Attorney-General for the State of Victoria v City of Geelong [1989] VR 641 B Johnson & Co (Builders) Ltd v Minister of Health [1947] 2 All ER 395 Bartzios v Leichhardt Municipal Council [1978] 1 NSWLR 7 Botany Bay City Council v Minister for Local Government [2016] NSWCA 74; (2016) 214 LGERA 173 Botany Bay City Council v The State of New South Wales and Minister for Local Government [2016] NSWSC 583 Bread Manufacturers of New South Wales v Evans [1981] HCA 69; (1981) 180 CLR 404 Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 Bushell v Secretary of State for the Environment [1981] AC 75 Castle Constructions Pty Ltd v North Sydney Council [2008] NSWLEC 137 Construction, Forestry, Mining and Energy Union v McCorkell Constructions Pty Ltd (No 2) [2013] FCA 446; (2013) 232 IR 290 Curragh Queensland Mining Limited v Daniel (1992) 34 FCR 212 Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations [2011] FCAFC 88; (2011) 195 FCR 318 El Cheikh v Hurstville City Council [2002] NSWCA 173; (2002) 121 LGERA 293 Foster v Senator Vanstone [1999] FCA 1447 Friends of Turramurra Inc v Minister for Planning [2011] NSWLEC 128 Gales Holdings Pty Ltd v Minister for Immigration and Planning [2006] NSWCA 388; (2006) 69 NSWLR 156 Gold and Copper Resources Pty Ltd v Minister for Resources and Energy [2013] NSWLEC 66; (2013) 211 LGERA 196 Government Employees’ Health Fund Ltd v Private Health Insurance Administration Council [2001] FCA 322; (2001) 65 ALD 377 Hillpalm Pty Ltd v Tweed Shire Council [2002] NSWLEC 17; (2002) 119 LGERA 86 Kioa v West [1985] HCA 81; (1985) 159 CLR 550 Lake Macquarie City Council v Australian Native Landscapes Pty Ltd [2015] NSWLEC 92 Litevale Pty Ltd v Lismore City Council (1997) 96 LGERA 91 McHugh Holdings Pty Ltd v Director General Communities NSW [2009] NSWSC 1359 Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 Minister for Immigration and Border Protection v MZYTS [2013] FCAFC 114; (2013) 230 FCR 431 Minister for Immigration and Citizenship v Maman [2012] FCAFC 13; (2012) 200 FCR 30 Minister for Immigration and Citizenship v SZGUR [2011] HCA 1; (2011) 241 CLR 594 Minister for Immigration and Citizenship v SZIAI [2009] HCA 39; (2009) 83 ALJR 1123 Minister for Immigration and Ethnic Affairs v Haj-Ismail (1982) 57 FLR 133 Minister for Local Government v South Sydney City Council [2002] NSWCA 288; (2002) 55 NSWLR 381 Notaras v Waverley Council [2007] NSWCA 333; (2007) 161 LGERA 230 Oates v Attorney-General for the Commonwealth of Australia [2001] FCA 84; (2001) 181 ALR 559 Ogawa v Minister for Immigration and Citizenship [2011] FCA 1358; (2011) 199 FCR 51 Potato Marketing Board v Merricks [1958] 2 QB 316 Prasad v Minister for Immigration and Ethnic Affairs (1985) 6 FCR 155 Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 Rexstraw v Johnson [2003] NSWCA 287 Riverside Nursing Care Pty Ltd v Bishop [2000] FCA 1147; (2000) 100 FCR 519 Saeed v Minister for Immigration and Citizenship [2010] HCA 23; (2010) 241 CLR 252 Sharples v Minister for Local Government [2008] NSWLEC 328; (2008) 166 LGERA 302 Smith v Wyong Shire Council [2003] NSWCA 322; (2003) 132 LGERA 148 Sutherland Shire Council v Finch [1970] HCA 49; (1970) 123 CLR 657 Videto v Minister for Immigration and Ethnic Affairs (1985) 8 FCR 167 Waitemata County v Local Government Commission [1964] NZLR 689 Walsh v Parramatta City Council [2007] NSWLEC 255; (2007) 161 LGERA 118 Wei v Minister for Immigration and Border Protection [2015] HCA 51; (2015) 90 ALJR 213 X v University of Western Sydney [2014] NSWSC 82 Zentai v O’Connor (No 3) [2010] FCA 691; (2010) 187 FCR 495
Category:	Principal judgment
Parties:	Woollahra Municipal Council (Applicant) Minister for Local Government (First Respondent) Dr Robert Lang (Second Respondent) Chief Executive, Office of Local Government (Third Respondent) Local Government Boundaries Commission (Fourth Respondent)
Representation:	Counsel: Dr C J Birch SC with Ms T L Phillips (Applicant) and Mr B W Walker SC with Ms T L Phillips (on 28 June 2016) (Applicant) Mr N C Hutley SC with Mr J J Hutton, Mr T E O’Brien and Mr D Birch (Respondents) Solicitors: Speed and Stracey Lawyers (Applicant) Crown Solicitor’s Office (Respondents)
File Number(s):	40297 of 2016; JL No. 151926 of 2016
Publication restriction:	No