Botany Bay City Council v Minister for Local Government

Land and Environment Court (NSW)|2016-03-31|Before: Pain J

SOLICITORS: Houston Dearn O'Connor (Applicant) Crown Solicitor for NSW (Respondents) File Number(s): 40261 of 2016

Local Government Act 1993 (NSW)

The Local Government Act 1993 ("LG Act") provides for the amalgamation of council areas. Chapter 9 How are councils established? Part 1 Areas … Division 2A How are areas amalgamated or their boundaries altered? 218A Amalgamation of areas (1) The Governor may, by proclamation, amalgamate two or more areas into one or more new areas. (2) On the date specified in the proclamation as the date on which the areas are to be amalgamated: (a) the areas are dissolved, and (b) the new area or new areas are constituted, and (c) subject to section 218C, the councillors of the former areas cease to hold office. (3) Divisions 1 and 2 apply to a new area constituted by a proclamation under this section in the same way as they apply to an area constituted by a proclamation under section 204. (4) Section 212 (2) does not apply to the dissolution of a former area by a proclamation under this section. 218B Alteration of boundaries of areas The Governor may, by proclamation, alter the boundaries of one or more areas. 218C Facilitating provisions of proclamations (1) A proclamation of the Governor for the purposes of this Division may include provisions of the same kind as are referred to in section 213. (2) Such a proclamation may also include provisions for or with respect to: (a) the appointment of administrators for any area constituted by the proclamation, and (b) the continuation in office, as councillors of any area constituted by the proclamation, of any or all of the councillors of any area dissolved by the proclamation. … Division 2B What must be done before areas can be amalgamated or their boundaries altered? 218D Exercise of functions under secs 218A and 218B A function under section 218A or 218B may be exercised only after a proposal for the exercise of the function is dealt with under this Division. 218E Who may initiate a proposal? (1) A proposal may be made by the Minister or it may be made to the Minister by a council affected by the proposal or by an appropriate minimum number of electors. … 218F Referral of proposal for examination and report (1) On making or receiving a proposal, the Minister must refer it for examination and report to the Boundaries Commission or to the Departmental Chief Executive. (2) Sections 263, 264 and 265 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. (3) For the purpose of examining a joint proposal of 2 or more councils for the amalgamation of two or more areas under section 218A, the Boundaries Commission or Departmental Chief Executive, as the case requires, must seek the views of electors of each of those areas: (a) by means of: (i) advertised public meetings, and (ii) invitations for public submissions, and (iii) postal surveys or opinion polls, in which reply-paid questionnaires are distributed to all electors, or (b) by means of formal polls. (4) The period over which the views of electors are to be sought as referred to in subsection (3) must be a period of at least 40 days. (5) Part 3 of Chapter 4 applies to a formal poll taken by the Boundaries Commission or Departmental Chief Executive in the same way as it applies to a council poll referred to in that Part. (6) If a proposal that is not supported by one or more of the councils affected by it, or that is an amalgamation proposal, has been referred to the Departmental Chief Executive under subsection (1): (a) the Departmental Chief Executive must furnish the Departmental Chief Executive's report to the Boundaries Commission for review and comment, and (b) the Boundaries Commission must review the report and send its comments to the Minister. (7) The Minister may recommend to the Governor that the proposal be implemented: (a) with such modifications as arise out of: (i) the Boundaries Commission's report, or (ii) the Departmental Chief Executive's report (and, if applicable, the Boundaries Commission's comments on that report), and (b) with such other modifications as the Minister determines, but may not do so if of the opinion that the modifications constitute a new proposal. (8) The Minister may decline to recommend to the Governor that the proposal be implemented. Part 3 Local Government Boundaries Commission … 263 Functions of the Boundaries Commission (1) The Boundaries Commission is required to examine and report on any matter with respect to the boundaries of areas and the areas of operation of county councils which may be referred to it by the Minister. (2) For the purpose of exercising its functions, the Boundaries Commission: (a) may hold an inquiry if the Minister so approves, and (b) must hold an inquiry if the Minister so directs, but may not hold an inquiry otherwise than as referred to in paragraph (a) or (b). (2A) Despite subsection (2), the Boundaries Commission 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. (2B) Reasonable public notice must be given of the holding of an inquiry under this section. (3) 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. (4) The Boundaries Commission is not entitled to examine or report on any matter relating to the area of operations of a county council constituted or proposed to be constituted for the supply of electricity. (5) The Boundaries Commission must allow members of the public to attend any inquiry held by the Commission under this section. (6) The Boundaries Commission may continue with an examination or inquiry even though a commissioner or acting commissioner replaces another commissioner during the course of the examination or inquiry. (7) The Supreme Court may not make an order in the nature of prohibition in respect of, or an order for removing to the Court or quashing, any decision or proceeding made or conducted by the Boundaries Commission in connection with the exercise of its functions. 264 Can a person be represented in proceedings before the Boundaries Commission? … (not relevant). 265 Boundaries Commission may conduct survey or poll … (not relevant). Chapter 17 Enforcement Introduction Part 1 General Division 1 Legal proceedings 672 What constitutes a breach of this Act for the purposes of this Part? In this Part: (a) a breach of this Act means: (i) a contravention of or failure to comply with this Act, (ii) a threatened or an apprehended contravention of or a threatened or apprehended failure to comply with this Act, and (b) this Act includes: (i) an approval under Part 1 of Chapter 7, and (ii) an order under Part 2 of Chapter 7, and (iii) the regulations. 673 Remedy or restraint of breaches of this Act - the Minister, the Departmental Chief Executive and councils (1) The Minister, the Departmental Chief Executive or a council may bring proceedings in the Land and Environment Court or such other court as may be specified in this Act for the purpose of the proceedings for an order to remedy or restrain a breach of this Act. (2) Subsection (1) does not apply in relation to an alleged contravention of Part 2 (Duties of disclosure) of Chapter 14 (Honesty and disclosure of interests). … Dictionary area means an area as constituted under Division 1 of Part 1 of Chapter 9. Departmental Chief Executive means the Chief Executive of the Office of Local Government

Evidence

Two affidavits of Timothy O'Connor (solicitor for the Council) sworn 23 March 2016 were read by the Council. The first had exhibited to it a bundle of documents which was tendered in the proceedings as Exhibit A. Contained in that exhibit is the submission sent by the Council to the delegate on 28 February 2016, urging the rejection of the proposal for the merger of the Council with Rockdale City Council. Factors under s 263(3) of the LG Act, such as financial modelling, geographic cohesion, historical and traditional values, the view of the community, matters related to the elected representation of the area and the ability of the relevant councils to provide adequate services and facilities, and impacts on the employment of Council staff are considered in the submission. The submission also outlines the Council's view on the desirability of including Port Botany and Sydney Airport within the boundaries of the City of Botany Bay. An addendum submission was provided to the delegate on 3 March 2016 which contains a further report on the community poll arranged by the Council on 27 February 2016. Ninety-eight percent of voters opposed the merger proposal. Amended plans of the Council's alternate suggested amalgamated area were provided as well as further submissions opposed to the proposed merger with Rockdale City Council, including one submitted by the Botany Bay Business Enterprise Centre.
Exhibited to the second affidavit of Mr O'Connor sworn 23 March 2016 was a bundle of documents tendered as Exhibit B. The affidavit of Lara Kirchner (general manager of the Council) sworn 23 March 2016 was also read by the Council. The affidavit attests to a discussion Ms Kirchner had with the delegate in a meeting on 15 January 2016, when the delegate told Ms Kirchner that he had "until about the end of March to complete [his] report". Annexed to the affidavit is an email from Ms Kirchner to the delegate attaching the mayoral minute from the Council meeting on 16 November 2015 and the letter sent by the mayor to the Minister on 17 November 2015. A further affidavit of Mr O'Connor sworn 29 March 2016 was filed in court and read by the Council. Annexed to that affidavit is an undated letter from the Minister to the mayor and councillors regarding the amalgamations and inviting expressions of interest from councillors who wish to be considered for a role in the new council.
The Respondents read the affidavit of John McDonnell sworn 24 March 2016. Exhibited to that affidavit is a bundle of documents which was tendered in the proceedings as Exhibit 1.

Agreed chronology

The parties agreed a chronology of events which was based in large part on the documents exhibited to the affidavits read by the parties as follows: 1. 17 November 2015 - the Council's mayor wrote to the Minister in relation to proposals or plans for Council amalgamations or boundary proposals affecting the City of Botany Bay. The mayor referred in the letter to Council's resolutions of 16 November 2015, in which inter alia it: at (1) reaffirmed that it had no interest nor need to participate in a voluntary merger and responded to the State Government in those terms; at (6) stated that it believed that while the people of the City of Botany Bay would be best served by the retention of the current boundaries, should the State Government pursue forced expansion of the Council's boundaries and population, the Council should pursue an outcome that delivers a community of common interest and that this would involve an expansion of Council's boundaries to include parts of the City of Sydney and Randwick City that share a common interest; and at (8) reiterated that the Council does not support a voluntary merger but put forward the option at (6) above to ensure that any sudden move to forced amalgamations is informed by a superior option to those that have previously been discussed. 1. 18 December 2015 - the Council was first informed by the Minister about a proposed merger between the Council and Rockdale City Council. 2. 6 January 2016 - the Minister referred his proposal to the Chief Executive for examination and report. 3. 6 January 2016 - the Chief Executive delegated functions to the delegate. INSTRUMENT OF DELEGATION Pursuant to s 745(1) of the Local Government Act 1993 (the "LG Act"), I, Tim Hurst, Acting Chief Executive, Office of Local Government, delegate to the persons listed in part A in respect of the proposals listed opposite in part B the following functions conferred on me by the LG Act: 1. Examination of and report on one or more proposals referred by the Minister under s 218F of the LG Act, and 2. Any function that is incidental to the function of examining of and reporting on proposals under s 218F of the LG Act. PART A PART B … … Rod Nockles City of Botany Bay and Rockdale City … …

6 January 2016 - first contact between the Council and the delegate in relation to the Minister's proposal. The deputy mayor offered the opportunity of a meeting, which the delegate accepted on 7 January 2016. 2. 7 January 2016 - the delegate formally notified the Council of the Minister's proposal and his appointment to examine the proposal. He invited representatives of the Council to meet with him to discuss the proposal and any relevant information they may wish to provide in relation to the s 263(3) factors or any other relevant matters. The delegate also encouraged the Council to make a submission on the proposal before 28 February 2016 and invited Council representatives to speak at the public inquiry. 3. 10 January 2016 - the Council's general manager confirmed the meeting with the delegate for 15 January 2016. 4. 14 January 2016 - the delegate confirmed with the Council the public inquiry date, and encouraged the Council to present its views on the amalgamation proposal at the inquiry. 5. 15 January 2016 - meeting between the Council and the delegate. 6. 18 January 2016 - the Council informed the delegate that it will be conducting a community (Council) poll on 27 February 2016 and that it intended to provide an addendum to its submission detailing the outcome. 7. 19 January 2016 - the delegate indicated that he was willing to receive an addendum to the Council's submission after the closing date, preferably by 3 March 2016. 8. 2 February 2016 - public inquiry held. 9. 19 February 2016 - the delegate participated in a tour of the Council local government area with the deputy mayor, general manager and staff. 10. 28 February 2016 - the Council provided a submission to the delegate in relation to the Minister's proposal. Closing date for submissions. 1. 3 March 2016 - the Council provided an addendum to its submission to the delegate. 2. 7 March 2016 - the Minister provided an update on the progress of the reforms following the passing of the deadline for submissions to the mayor which stated in part: In addition to the Government's 35 original proposals, a number of councils have made their own proposals under the Local Government Act. These have been referred to the Chief Executive of OLG for examination and report, which will occur in the same way as the Government's proposals. As a consequence of these council-initiated proposals, I have put forward three additional proposals in adjacent areas for examination and report in the event that a council-initiated proposal proceeds. If any of these proposals replace a Government proposal, consideration will be given to funding them in the same way. The Government anticipates that these additional proposals may be reported on by the delegates, and Boundaries Commission comments provided, in a timeframe that may enable the Government to keep its commitment of commencing any new local government areas covered by these proposals by around the middle of 2016. Should any further proposals be made by councils, the Government will continue to assess whether they satisfy the requirements for a proposal under the Local Government Act and if so, refer them for examination and report as required under the Act. The timeframe during which they are then considered under the Act is a matter for the Chief Executive of OLG or his delegate and then the Boundaries Commission. It may be likely that consideration of any further proposals may occur subsequent to the proposals under current consideration. 1. 11 March 2016 - the Council sent its proposal to the Minister. In the covering letter, the general manager stated that the proposal should be urgently referred to the delegate currently considering the Minister's proposal, on the basis that he was required to have regard to it due to s 263(3)(a), (e1) and (e2) of the LG Act. 2. 18 March 2016 - the Minister's representative informed the Council that the Council's proposal had been referred to the Chief Executive. 3. 21 March 2016 - the Council's legal representatives wrote to the delegate enclosing the letter to the Minister and its proposal, stating its position that the Minister was required to take the proposal into account and requesting confirmation that he would do so. The Council also requested an opportunity to make a submission in respect of s 263(3)(a), (e1) and (e2) before any report was prepared. 4. 21 March 2016 - the Council's legal representatives wrote to the Chief Executive, enclosing the letter to the Minister and its proposal, and its letter to the delegate, seeking confirmation that the Council's proposal had been referred to the delegate and requesting an opportunity to make submissions. A follow-up letter was sent to the Chief Executive and the delegate later that day requesting urgent confirmation that its proposal had been forwarded to the delegate, and informing that without such confirmation court action would be taken. 5. 22 March 2016 - the delegate's representatives informed the Council's solicitors that the delegate would consider all relevant information that the Council provided before the deadline for submissions, and that the decision to review or select a delegate to undertake a review of any alternative proposal was a matter for the acting Chief Executive. 6. 22 March 2015 - the Chief Executive's legal representatives informed the Council's solicitors that the Chief Executive had not yet decided whether and if so to whom he would be referring the Council's proposal as follows: I refer to your letter of 21 March 2016 concerning a proposal by the City of Botany Bay council to merge with parts of the Randwick and Sydney Local Government Areas. I am instructed to act on behalf of Mr Nockles, in his capacity as delegate of the Chief Executive of the Office of Local Government for the purpose of examination and report on the proposal. As publicly advertised, the review of the proposal to merge the City of Botany Bay with Rockdale City included a call for submissions from the public and councils with a closing date of 28 February 2016. In its submission to the review, the City of Botany Bay Council provided brief details of Council's alternative proposal, which would significantly impact upon the current local government boundaries of the City of Sydney and Randwick City. Mr Nockles will consider all relevant information that the City of Botany Bay provided to the review prior to the deadline for submissions closing, noting that he granted the City of Botany Bay an extension of time to provide an addendum to its submission with results of its community poll. The decision to review or select a delegate to undertake a review of any alternative proposal referred to the Departmental Chief Executive under Section 218F of the Local Government Act 1993 is a matter for the Acting Chief Executive of the Office of Local Government. 1. 23 March 2016 - the Council commenced these proceedings. Undertaking given by the Minister not to make a recommendation to the Governor pursuant to s 218F of the LG Act in relation to the Minister's proposal before 1 April 2016. 1. End of March - the time by which the delegate indicated to the Council's general manager in a conversation on 15 January 2016 that he was to complete his report.
These proceedings were heard on 31 March 2016 and judgment was reserved. An undertaking was given on behalf of the Minister that no recommendation will be made to the Governor pursuant to s 218F(7) of the LG Act regarding the Minister's proposal under s 218E relating to Botany Bay City Council before 5pm Friday 8 April 2016. An undertaking was also given on behalf of the delegate not to provide a report regarding the Minister's proposal relating to Botany Bay City Council and Rockdale City Council to the Minister or Boundaries Commission before 5pm Friday 8 April 2016.

The Council's submissions

Aspects of the Council's proposal were made known to the Minister on 17 November 2015. Aspects of the Council's proposal were also made known to the delegate in the Council's written submission lodged with him on 28 February 2016 and the addendum submission lodged on 3 March 2016. In considering the Minister's proposal, the delegate is obliged to have regard to the Council's proposal for the reason that it is a relevant "matter" or "proposal" for the purposes of s 263 of the LG Act.
On 21 March 2016, the Council wrote to the Chief Executive and the delegate forwarding, inter alia, the Council's proposal and requesting a reasonable time for the Council to provide additional submissions to them in respect of s 263(3)(a), (e1) and (e2) of the LG Act. The Chief Executive and the delegate have refused or failed to confirm or indicate to the Council that the Council will or might be afforded an opportunity to make submissions or have the Council's proposal considered at the same time or even about the same time as the Minister's proposal is being considered. The Chief Executive has not referred it and he has not delegated it for examination and report pursuant to s 263. In the circumstances, the Chief Executive should refer consideration of the Council's proposal to the same delegate now dealing with the Minister's proposal. The delegate is already dealing with aspects of the Council's proposal (as set out above). The consideration of the two amalgamation proposals is now impermissibly bifurcated.
In circumstances where the Chief Executive holds information that is centrally relevant to the work of his delegate which he has not referred or delegated to him, there is also a denial of procedural fairness to the Council. In not providing the Council with an opportunity to put before the Chief Executive and/or the delegate additional submissions in relation to s 263(3)(a), (e1) and (e2) of the LG Act, they have denied or would deny the Council procedural fairness. Any failure by the Chief Executive and/or the delegate to afford procedural fairness to the Council is properly characterised as a threatened or apprehended breach of the LG Act. Denial of procedural fairness is a jurisdictional error. The decision can be said to be a decision not lawfully made, and there is not a decision in law or in fact (eg: Minister for Immigration & Multicultural Affairs v Bhardwaj [2002] HCA 11; (2002) 209 CLR 597 at [53]).
Where the relevant breach results from a failure to comply with the general law principles of procedural fairness or from a failure of the decision-maker to observe fair decision-making statutory procedures, it is irrelevant to the Court's discretion that the breach is merely trivial or technical - a remedy should not be withheld (SAAP v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 24; (2005) 228 CLR 294 at [83]-[84] (per McHugh J, Kirby J agreeing), citing Re Refugee Review Tribunal; Ex parte Aala [2000] HCA 57; (2000) 204 CLR 82 at [59] (per Gaudron and Gummow JJ)).
In addition, there is a breach or a threatened or apprehended breach of the LG Act in that the Council has properly and lawfully made a new proposal under the LG Act "on a matter" that is "with respect to" the boundaries of council areas within the meaning of those expressions in s 263(1). The Council's proposal is properly characterised as a "matter" that "relates" to the boundaries of council areas which needs to be considered by the delegate within the meaning of those words in s 263(3) of the LG Act. It is also a "relevant proposal" within the meaning of that expression in s 263(3)(e1), (e2), (e3), and (f).
The Minister cannot lawfully recommend a proposal to the NSW Governor pursuant to s 218F(7) which is invalid or afflicted by procedural unfairness or illegality.

Respondents' submissions

The Chief Executive has delegated his functions under s 218F to a delegate (the Fourth Respondent) to report in relation to the Minister's proposal for amalgamation of the Council and Rockdale City Council. There is no power vested in the delegate to consider the Council's proposal.
Pursuant to s 218F(2) of the LG Act ss 263, 264 and 265 of the LG Act apply to the Chief Executive's examination of a proposal in the same way they apply to the examination of a proposal by the Boundaries Commission (agreed). The coincidence of language in s 263(1) and the chapeau of s 263(3) indicates an intention to confine the scope of "any matter" in s 263(3) to the subject of the referral by the Minister pursuant to s 263(1).
There was no failure to afford the Council procedural fairness in the circumstances that the delegate wrote to the Council on 7 January advising it of the process whereby submissions on the Minister's proposal were due by 28 February 2016. A public notice informing of a public inquiry on 2 February 2016 was provided with a letter to the Council from the delegate dated 14 January 2016. The Council made a lengthy submission to the delegate dated 28 February 2016 and an addendum dated 3 March 2016 which included the results of a public poll of residents in the council area was also accepted by the delegate. It participated in the public hearing, officers met separately with the delegate on 15 January 2016 and the delegate visited the area with Council officers and the deputy mayor on 19 February 2016.

No breach or apprehension of breach of LG Act established

The Court has jurisdiction to consider these proceedings alleging a breach or apprehension of breach of the LG Act by virtue of ss 672 and 673 of the LG Act. The relief sought in the summons is specific, firstly a declaration that the Chief Executive through his delegate consider the Council's proposal dated 11 March 2016 as a relevant matter for the purposes of s 263 of the LG Act when the delegate is considering the Minister's proposal. Leaving aside the issue of whether a declaration in those terms can or should be made, the order sought in prayer two has a similar intent in that it seeks an order requiring the Chief Executive to refer the Council's proposal to the delegate so that the delegate can consider it when he considers the Minister's proposal.
The order sought in prayer three is that the Boundaries Commission be prohibited from considering any report from the delegate about the Minister's proposal. This circumstance may arise in the future under s 218F(6). It is unnecessary to consider that relief as the matter is presently in the hands of the delegate and he has given an undertaking to the Court that no report will be sent to the Boundaries Commission before 5 pm 8 April 2016. It is also unnecessary to consider prayer four which seeks to restrain action by the Minister under s 218F(7) in light of the undertaking given by the Minister until 8 April 2016. It is also not necessary to consider interim relief as referred to in prayer five given that undertaking.
The Council accepted at the hearing that its numerous resolutions on 17 November 2015, three of which are identified above in par 7(1), were not a proposal within the meaning of s 218F(1). That must be the case given that the first and last resolutions were to the effect that the Council did not support any change to its boundaries. Resolution six identified a possible boundary change with incorporation of areas of the City of Sydney and Randwick Councils. There is no dispute that the Council's proposal dated 11 March 2016 is a new proposal. It is described as such in the document and is clearly quite different from the Minister's proposal. The Council proposes that its boundaries be expanded to include parts of the City of Sydney and Randwick City. That circumstance is relevant when the statute is construed.
Considering where the Minister's proposal sits presently in the statutory scheme, under s 218F(1) on making a proposal the Minister must refer it to the Chief Executive (or the Boundaries Commission). The Chief Executive must comply with ss 263, 264 and 265 by virtue of s 218F(2). Subsections (3) and (4) of s 218F do not apply to the Minister's proposal. The delegate on behalf of the Chief Executive has been complying with s 263 such as by holding a public inquiry as provided in subs (2), (2A) and (2B). The delegate is preparing a report to the Boundaries Commission under s 218F(6)(a) which must consider the matters identified in s 263(3)(a)-(f).
The Council's proposal dated 11 March 2016 has been sent by the Minister to the Chief Executive for examination and report as required by s 218F(1). The advice of the Chief Executive through his legal representative on 22 March 2016, the day before these proceedings commenced, was that he had yet to determine if he would refer the matter to a delegate and if he did who that would be.
Before turning to the statutory construction issues raised by the Council's case, the most obvious difficulty with the relief sought in prayers one and two is that the delegate was authorised by the Chief Executive on 6 January 2016 to consider the Minister's proposal for the amalgamation of the Council and Rockdale City Council and matters relevant to that. The terms of the delegation are set out above in par 7(4). The delegate is not presently authorised to consider other proposals which can be made under s 218E(1) by a council (or by a minimum number of electors). The delegate does not have the relevant delegated authority to consider the Council's proposal.
While the principles applicable to statutory construction are well established, as is often the case their application by the parties produces different results. In Hurstville City Council v Minister for Planning and Infrastructure [2012] NSWLEC 134; (2012) 189 LGERA 269 I stated at [55]: Section 33 of the Interpretation Act 1987 [(NSW)] requires a construction which promotes the purpose or object of an Act over one which would not. Guidance on applying this approach was provided by McHugh, Gummow, Kirby and Hayne JJ in Project Blue Sky at 381 - 382. Their Honours stated that the "primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute", that a "legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals" and that "a court construing a statutory provision must strive to give meaning to every word of the provision"... In Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27 at [47] the joint judgment (Hayne, Heydon, Crennan and Kiefel JJ) confirmed that statutory construction commences with a consideration of the language of the text, which may require consideration of the context, including the general purpose of the provision and the mischief it seeks to remedy.
As the Council submitted the ordinary grammatical meaning of a statutory provision will normally be its legal meaning citing Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 per McHugh, Gummow, Kirby and Hayne JJ at [78]. As the Council also submitted, citing Leeming JA in Smalley v Motor Accident Authority of New South Wales [2013] NSWCA 318; (2013) 85 NSWLR 580 at [43]-[45], the statute must be read as a whole. On the Council's case the Minister's proposal may, between the time it is initiated under s 218E, referred to the Chief Executive under s 218F, sent for review and comment by the Boundaries Commission under s 218F(6) and returned to the Minister, become an entirely new proposal under s 218F(7). It may or may not be referred to the Governor (s 218F(8)). If the Respondents' submissions are correct no new proposal only a modified proposal can be referred to the Governor by the Minister under the current process.
Consideration of the scope of s 263 which specifies the mandatory process the Council wishes the Court to command in the relief sought is informed by the determination of whether s 218F(7) empowers the Minister to refer a new proposal to the Governor. At issue is the meaning of the second "may" in s 218F(7). I repeat that section here with "may" in bold for ease of reference together with s 218F(8). (7) The Minister may recommend to the Governor that the proposal be implemented: (a) with such modifications as arise out of: (i) the Boundaries Commission's report, or (ii) the Departmental Chief Executive's report (and, if applicable, the Boundaries Commission's comments on that report), and (b) with such other modifications as the Minister determines, but may not do so if of the opinion that the modifications constitute a new proposal. (8) The Minister may decline to recommend to the Governor that the proposal be implemented.
The parties agree that the first "may" in s 218F(7) and "may" in s 218F(8) are discretionary and accord with s 9 of the Interpretation Act 1987 (NSW) which provides: 9 Meaning of may and shall (1) In any Act or instrument, the word "may", if used to confer a power, indicates that the power may be exercised or not, at discretion. (2) In any Act or instrument, the word "shall", if used to impose a duty, indicates that the duty must be performed.
It is important to consider the text of the subsection in its overall statutory context to determine if the second "may" in s 218F(7) is mandatory or confers a discretion. I agree with the Respondents that the second "may" used with "…not do so…" is limiting the power of the Minister to recommend the modification of a proposal if to do so would in his or her opinion result in a new proposal. As the Respondents submitted, the text of s 218F(7) serves to ensure that a proposal cannot be modified to such a degree that it cannot be fairly viewed, in the opinion of the Minister, as having been subject to the processes in Div 2B of Pts 1 and 3, which include a public inquiry.
To conclude that the word "may" in that context is discretionary is contrary to the overall statutory scheme which includes s 263 whereby public consultation in relation to a particular proposal is required. Some analogy can be drawn with the many cases which have considered the extent of permissible amendment of a draft environmental planning instrument placed on public exhibition under the Environmental Planning and Assessment Act 1979 (NSW), for example, Save Little Manly Beach Foreshore Inc v Minister for Planning (No 3) [2015] NSWLEC 77, Friends of Turramurra Inc v Minister for Planning [2011] NSWLEC 128, Bryan v Lane Cove Council [2007] NSWLEC 586; (2007) 158 LGERA 390, John Brown Lenton & Co Pty Ltd v Minister for Urban Affairs and Planning [1999] NSWLEC 213; (1999) 106 LGERA 150 and Leichhardt Council v Minister for Planning [No 2] (1995) 87 LGERA 78. Amendment of a draft local environment plan exhibited to the public in its final form is restricted on the basis of these authorities.
Further, the first "may" in s 218F(7) is agreed by the parties as conferring a discretion on the Minister, enabling him or her to either recommend the proposal to the Governor, or, as it follows, not recommend the proposal to the Governor. If the Council's construction of the second "may" were correct, s 218F(7) would contain unnecessary duplication, granting to the Minister two separate discretionary powers to not recommend the proposal to the Governor, in addition to the discretionary power in s 218F(8).
My construction of s 218F(7) means that it is beyond the Minister's power to consider modifying his proposal to that proposed by the Council in the current process as the Council's proposal is new. Essentially the LG Act operates so that a new proposal must be considered separately as required in the mandatory processes specified in s 218F(2). This construction does not render s 218F(8) otiose, contrary to the Council's submission.
That construction of s 218F(7) informs understanding of the operation of s 263, and vice versa. At issue in relation to s 263 is whether the matter referred to in s 263(1), here the Minister's proposal, is the matter referred to throughout the rest of the section, as the Respondents submit. The Council submits its proposal can and should be considered with the Minister's proposal in the same process as this is a matter of the kind which s 263 provides for. I agree with and adopt the Respondents' submissions on the scope of s 263. Subsection (1) requires the Chief Executive/delegate to examine and report on any matter with respect to the boundaries of areas which may be referred to him or her by the Minister. Subsection (1) informs the numerous subsections in subsection (3) which specify the matters the Chief Executive/delegate must have regard to in this case. Subsection (3) also reinforces the limitation in subsection (1) of a matter being referred by the Minister as it states "when considering any matter referred to it [I infer, by the Minister] that relates to the boundaries of areas…" Subsection (e1) refers to the impact of any relevant proposal, which must be a reference to the Minister's proposal. Subsection (e2) and (e3) refer to "... in the areas concerned…" which means by inference the areas the subject of the matter referred by the Minister. Subsection (e5) refers to a proposal to amalgamate two or more areas, which must be the Minister's proposal in this context. This construction which the Respondents contended for suggests that the Council's construction is incorrect. Section 263 does not support as a discretionary matter, let alone as a mandatory matter, the Council's proposal being inserted into the current process considering the Minister's proposal as the summons seeks to do. That construction of s 263 means that the Council's argument that its proposal is a mandatory relevant matter which the delegate must consider cannot succeed.
The Council relied on the Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 ("Peko") as authority for the argument that a decision must be set aside if the decision-maker does not consider submissions that go to a material fact that is not insignificant or insubstantial and that the decision-maker is bound to take into account (per Gibbs CJ at pp 30-31 and Mason J at pp 39-43). The Council argues that the statutory process in place under the LG Act requires that the delegate consider the Council's proposal as the Minister for Aboriginal Affairs was bound to consider the mining company's submission in Peko. As the Respondents correctly submitted, Peko is not authority that any submission about the Council's boundaries is a mandatory relevant consideration in this statutory context. For the reasons already stated above in the context of this statutory scheme the Council's proposal is not a mandatory relevant consideration for the delegate.
Contrary to the Council's submissions in reply there is no statutory basis for suggesting that the delegate must take into account other new proposals when he is considering the Minister's proposal. Given that s 218F(7) contemplates modification by the Minister where these arise out of the Boundaries Commission's or the Chief Executive's report (subs (a)) or otherwise (subs (b)) there is scope for the delegate to consider some variations of the Minister's proposal but not a completely different proposal. That the Council's proposal has been referred by the Minister to the Chief Executive as he must under s 218F(1) provides that proposal with no legal status in the current process.
I agree with the Respondents' submission that the Council's construction of ss 218F and 263 has the result that if a council or a number of electors made a new proposal pursuant to s 218E anytime up to the Minister referring a proposal to the Governor under s 218F(7) the process would have to be halted because such a proposal would be a mandatory relevant consideration. Where that would leave the mandatory processes under s 263 particularly where public consultation had already occurred is unclear. That construction does not give rise to a coherent or timely statutory scheme. As identified in the extract of the letter from the Minister to the Council with an update on progress of 7 March 2016 in par 7(16) a number of councils made their own proposals under the LG Act which were referred to the Chief Executive for examination and report. Had the Council put in its proposal earlier than 11 March 2016 the proposal could have been considered earlier.
The Council submitted that the modification provision in s 218F(7) could only be meaningful if the delegate's inquiry could range widely to include consideration of new proposals so that a better way identified could be considered by the delegate. The consideration of proposals for amalgamation in Ch 9 Pt 2 Divs 2A and 2B and Pt 3 of the LG Act does not support that submission. Contrary to the Council's submissions the two proposals are not inextricably linked as a matter of law.
Turning to the second ground of review, for the reasons given by the Respondents recorded above in par 17 there has been no denial of procedural fairness to the Council in the process adopted by the delegate in relation to the Minister's proposal.
The LG Act does not specify any time frames for the mandatory processes required by s 218F and in s 263. The evidence includes the letter from the Minister to the Council dated 7 March 2016 in par 7(16) stating that it is the Minister's intention to have new councils determined by mid-2016. Is the potential for the Council to be dissolved under s 218A(1) and (2), as would result from the Minister's proposal for amalgamation if recommended to the Governor, relevant to the consideration of the statutory construction issues that arise in this matter? The Council says yes because it is possible that it will be dissolved before the processes for its proposal under ss 218F and 263 have occurred, which would immediately bring its proposal to an end. Whether that would be the legal position if this situation eventuates is not self-evident and it is not necessary to resolve that issue to determine the issues in this case.
The letter from the Minister dated 7 March 2016 to the Council extracted above in par 7(16) identified that if further proposals are made the government will assess whether they satisfy the LG Act and if so will be referred to the Chief Executive or the Boundaries Commission. The letter then states, ''[i]t may be that consideration of any further proposals may occur subsequent to the proposals under current consideration." That is the extent of the evidence as to what may occur in the future and does not support the Council's fear of dissolution before its proposal is considered.
The Respondents submit this possibility is irrelevant, is impermissibly speculative on the evidence before the Court and does not assist in the statutory construction required by the Council's case. The Respondents' submissions are correct.
The Council's complaint that its proposal languishes on the Chief Executive's desk is not justified. The proposal sent to the Minister was dated 11 March 2016 and the Minister informed the Council seven days later on 18 March 2016 that it had been sent to the Chief Executive. In a letter dated 22 March 2016 only four days later the Respondents' solicitor stated that no decision had yet been made by the Chief Executive about whether the proposal would be sent to a delegate and if so who. The Council commenced these proceedings the next day, 23 March 2016. These timeframes are very short on any view.
The Council has not established any breach or apprehension of breach of the LG Act and its summons should be dismissed.
Costs in Class 4 proceedings generally follow the event. An order that the Council pay the Respondents' costs will be made within seven days unless the Council files a notice of motion indicating that an alternative costs order will be sought.

Orders

The Court orders that: 1. Botany Bay Council's summons dated 23 March 2016 is dismissed. 2. Costs are reserved for seven days.

Amendments 12 April 2016 - Formatting error in par [7] DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 12 April 2016

(2007) 158 LGERA 390

(2012) 189 LGERA 269

(1999) 106 LGERA 150

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