Charlton v Moore

THIRD RESPONDENT: Singleton Council

FOURTH RESPONDENT: Gary Woodman

KEY ISSUES: JUDICIAL REVIEW :- Practice and procedure - whether council should be ordered to furnish a written statement setting out the reaons for its challenged decision purusant to Land and Environment Court Rules 2007 r 4.3.

Administrative Appeals Tribunal Act 1975 (Cth), s 28(1) LEGISLATION CITED: Administrative Decisions (Judicial Review) Act 1975 (Cth), s 13 Land and Environment Court Rules 2007, r 4.3 National Health Act 1953 (Cth), s 98BD

Australian Institute of Marine and Power Engineers v Secretary, Department of Transport (1986) 13 FCR 124 Charlton v Moore [2009] NSWLEC 25 Commissioner of Taxation v Coombes [1999] FCA 842 CASES CITED: Commonwealth v Pharmacy Guild of Australia (1989) 91 ALR 65 McGovern v Ku-ring-gai Council [2008] NSWCA 209, (2008) 161 LGERA 170 Osmond v Public Service (NSW) [1984] 3 NSWLR 447 Parker v Auburn Council [2000] NSWLEC 127

APPLICANT: Mr P Larkin SOLICITORS Thompson Norrie LEGAL REPRESENTATIVES: 1ST-4TH RESPONDENTS: Ms C Adamson SC and Ms M Nagy SOLICITORS Sparke Helmore

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

EX TEMPORE JUDGMENT 1 HIS HONOUR: The issue before the Court is whether orders should be made against the respondent council, pursuant to r 4.3 of the Land and Environment Court Rules 2007, including an order that it provide the applicant with a statement setting out its reasons for a decision which the applicant challenges. Rule 4.3 provides as follows:

" 4.3 Proceedings for the review of public authority's decision

In any proceedings in which a public authority's decision is challenged or called into question, the Court may make one or more of the following orders:

(a) an order directing the public authority to make available to any other party any document that records matters relevant to the decision,

(b) an order directing the public authority to furnish to any other party a written statement setting out the public authority's reasons for the decision, being a statement that includes:

(i) the public authority's findings on any material questions of fact, and

(ii) the evidence on which any such findings were based, and

(iii) the public authority's understanding of the applicable law, and

(iv) the reasoning process that led to the decision,

(c) an order for particulars, discovery or interrogatories." Background

2 The applicant, Belinda Lee Charlton, is an applicant for the vacant position of general manager of Singleton Council. She is a senior council officer and has been the acting general manager of the council at various times since that position became vacant in July 2008. By a council resolution of 15 December 2008, Mr Garry Woodman was appointed acting general manager from 31 January to 22 March 2009 and Ms Charlton was appointed acting general manager from 23 March 2009 until commencement of service of the new general manger. 3 On 2 March 2009 the council resolved to amend the December 2008 resolution by extending Mr Woodman's appointment as acting general manager to the earlier of 30 June 2009 or the commencement of service of the newly appointed general manager, and by changing the date of commencement of Ms Charlton's appointment as acting general manager to 1 July 2009. In her points of claim the applicant calls this the "removal resolution".

4 There is a substantial prospect that the new general manager will be appointed before 1 July 2009. If that occurs, the direct financial effect of the removal resolution on Ms Charlton is that she will not receive income of about $1,800 per fortnight that otherwise she would have received as acting general manager from 23 March 2009.

5 In this proceeding, which was commenced in late February 2009, the first respondent is Susan Rosalie Moore, the mayor of Singleton Council. The second respondent is Alison Gay Howlett, a councillor who is said to have made a complaint against Ms Charlton, which was later withdrawn. The third respondent is Singleton Council. The fourth respondent is Mr Woodman, who was recently joined as a respondent. The mayor and Ms Howlett were among those appointed by the council to the selection committee for the appointment of the new general manager.

6 As against the council a declaration is sought, inter alia, that the removal resolution infringed the principles of procedural fairness.

7 The points of claim (which in light of the argument before me today, require amendment, that the applicant has indicated that she proposes to seek leave to make) allege that: (a) the resolution was made without providing the applicant with any or any proper prior opportunity to be heard and on the basis of a report, the instructions for the preparation of which were given by Mr Woodman and/or the mayor and/or Mr Woodman, the mayor and Ms Howlett.

(b) Mr Woodman has a conflict of interest and a pecuniary interest in the making of the removal resolution.

(c) the removal resolution, among other things, breached the principles of procedural fairness. It emerged in discussion before me, first, that what is intended to be encompassed by this allegation is not only the alleged failure to provide the applicant with any or any proper opportunity to be heard but actual and/or apprehended bias; and, secondly, that it was the council that breached the principles of procedural fairness in passing the removal resolution. The applicant accepts that some amendment of the points of claim is necessary to put these matters more squarely on the table. 8 The applicant says that whether actual or apprehended bias is pressed may depend upon whether it emerges (in answer to an interrogatory which the applicant also seeks to administer to the council) whether it was the first, second or fourth respondent who gave instructions to solicitors to provide what is referred to in the pleading as a report, but which in fact was legal advice. On an earlier occasion I held that legal advice to be privileged: Charlton v Moore [2009] NSWLEC 25. 9 The applicant seeks the following two orders against the council pursuant to r 4.3 of the Land and Environment Court Rules 2007:

"(1) In relation to the resolution made on 2 March 2009 the third respondent is, by 17 March 2009, to furnish a written statement setting out the third respondent's reasons for the resolution, being a statement that includes:

(i) the third respondent's findings on any material questions of fact;

(ii) the evidence on which any such findings were based;

(iii) the third respondent's understanding of the applicable law;

(iv) the reasoning process that led to the decision:

(2) The third respondent is also to specify, by 17 March 2009, the identity of all persons who gave instructions relating to the preparation of the report referred to in the minutes of the meeting of 2 March 2009 as having been 'prepared for consideration of the Committee of the Whole under Section 10(2)(e) and (g)...'" Proposed Order 1

10 The first issue in relation to proposed order 1 is whether the matters sought to be included in the proposed statement of reasons are relevant. To some extent the council was handicapped prior to the hearing before me this morning, because it was not apparent that the applicant proposed to contend that the removal resolution was invalid not only because of denial of a proper opportunity to be heard (which was pleaded) but also because of actual and/or apprehended bias (which was not pleaded). The parties have, however, sensibly proceeded upon the basis that that is what the applicant proposes to contend and that the points of claim will be amended to make that clear. 11 The applicant submits that the reasons for the removal resolution are relevant because of the principle that the rules of procedural fairness "have a flexible quality depending upon such matters as...the circumstances in which the power comes to be exercised": McGovern v Ku-ring-gai Council [2008] NSWCA 209, (2008) 161 LGERA 170 at [71] per Basten JA (Campbell JA agreeing at [234]) quoting Brennan J in Kioa v West (1985) 159 CLR 550 at 612-613). Similarly, in McGovern Spigelman CJ said at [7]-[9]:

"[7] How the apprehended bias test is applied is, as Basten JA indicates, affected by the statutory functions being performed and by the identity and nature of the decision-maker who is obliged by statute to perform those functions. The content of what the test requires varies from one context to another...

[8] Each of the elements in the apprehension of bias principle requires a context specific approach...

[9] In each case the Court must have an understanding, in the particular context of: · What is the process involved in 'resolving the question' that the decision-maker 'is required to decide'". 12 The reasons for the removal resolution are, I think, relevant to the allegation of denial of procedural fairness in both its limbs: alleged failure to give the applicant an opportunity to be heard and alleged actual or apprehended bias. The reasons form part of the circumstances and context, which were emphasised in McGovern. The ultimate significance of the reasons is a matter for the trial. 13 The council submits that other matters nevertheless make it inappropriate to exercise the discretion so as to require reasons to be provided. In that regard the council submits that (a) the resolution of a local council is not generally amenable to a direction to give reasons because of the collegiate nature of the decision-maker; (b) when a resolution is passed by a multi-member body such as a local council by the taking of a vote the reasons of the body are no more complicated than that the votes in favour of the motion exceed the votes against the motion; (c) members of the majority may differ in their reasons, and in the case of a multi-member body, it is difficult to ascertain who should carry out any obligation to state the reasons; and (d) if an order to give reasons were made, it is difficult to conceive how it could be complied with.

14 If that submission were to be accepted it would strip r 4.3 of most of its potential application. That is because decisions of public authorities that are challenged or called into question in this jurisdiction largely concern collegiate decisions by local councils. As the argument was developed before me I think there may have been some acknowledgment by the council of that proposition. Indeed, as I understand it, the council ultimately suggests that the exercise of the discretion may be appropriate where, for example, the challenge is that the collegiate body failed to take into consideration a mandatory relevant consideration but is inappropriate where the allegation is failure to accord procedural fairness.

15 Rule 4.3 of the Land and Environment Court Rules is in very similar terms to paragraph 23 of the Supreme Court of New South Wales Practice Note SC CL 3 Administrative Law List. 16 The beneficial nature of such provisions is manifest. In Australian Institute of Marine and Power Engineers v Secretary, Department of Transport (1986) 13 FCR 124 at 130 Gummow J said of s 13 of the Administrative Decisions (Judicial Review) Act:

"Section 13 of the ADJR Act is a remedial provision in that the duty for which it provides stands in high contrast to the apparently very limited obligations at common law of a decision-maker to furnish reasons...Brennan J recently observed ( Miller v TCN Channel Nine Pty Ltd (1986) 60 ALJR 698 at 720-721) that the ADJR Act removes what would otherwise have been procedural obstacles to discovery of the grounds on which discretions have been exercised. The policy which s 13 implements is (as Lockhart J explained in Dalton v Deputy Commissioner of Taxation (NSW) (1985) 7 FCR 382 at 391-392) to provide any citizen having sufficient interest in the matter with material to assist him in determining whether there is any error in the process of reasoning of the decision-maker and, accordingly, to chart his future course of action...Section 13 is not to be construed grudgingly or with a penchant for technicality." 17 The importance of the provision of reasons was similarly acknowledged in relation to a collegiate public body, the Pharmaceutical Benefits Remuneration Tribunal, in Commonwealth v Pharmacy Guild of Australia (1989) 91 ALR 65. That tribunal was constituted by a chairperson and at least two additional members. Sheppard J said at 88:

"The provision of reasons is an important aspect of the tribunal's overall task. Reasons are required to inform the public and parties with an immediate interest in the outcome of the proceedings of the manner in which the tribunal's conclusions were arrived at. A purpose of requiring reasons is to enable the question whether legal error has been made by the tribunal to be more readily perceived than otherwise might be the case. But that is not the only important purpose which the furnishing of reasons has. A primary purpose is the disclosure of the tribunal's reasoning process to the public and the parties. The provision of reasons engenders confidence in the community that the tribunal has gone about its task appropriately and fairly. The statement of bare conclusions without the statement of reasons will always expose the tribunal to the suggestion that it has not given the matter close enough attention or that it has allowed extraneous matters to cloud its consideration. There is yet a further purpose to be served in the giving of reasons. An obligation to give reasons imposes upon the decision-maker an intellectual discipline...". 18 These comments echo those of Kirby P in Osmond v Public Service Board of New South Wales [1984] 3 NSWLR 447 at 468 (Priestley JA agreeing) as to the importance of reasons. 19 I do not think that there should be any reluctance to exercise the discretion to order reasons under r 4.3 merely because the public authority is a collegiate body such as a local council. No case was cited in which it has been held or suggested that the collegiate nature of an administrative body is a reason for not exercising the discretion. 20 An analogy is found in provisions of Commonwealth statutes which require collegiate public bodies, namely tribunals, to give reasons: see s 28(1) of the Administrative Appeals Tribunal Act 1975 and s 98BD of the National Health Act 1953. Reference was also made in argument to s 13(2) of the Administrative Decisions (Judicial Review) Act 1977 but that directs a particular person who made the decision, rather than a collegiate body, to give reasons. The fact that Commonwealth legislation directs collegiate tribunals to give reasons suggests that the collegiate nature of a body is not a strong policy consideration against such a requirement.

21 The council's submissions raise the possibility of difficulties in identifying the reasons because the council is a collegiate body. It is not known on the material before me whether in fact there will be any difficulty. In any case, the difficulty, if any, would be no greater than those confronted every day in the courts where corporations are interrogated, which is met by requiring the answers to be to the best of the company's knowledge, information and belief. In Parker v Auburn Council [2000] NSWLEC 127 Sheahan J at [66] quoted Spedley Securities Limited (in liq) v B R Yuill & Ors (No 4) (1991) 5 ACSR 758 at 762 per Cole J:

"Interrogatories must be answered to the best of the company's 'knowledge, information and belief', and a company must make all proper inquiries to enable it so to answer. As Gibbs J said in Sharpe v Smail (1975) 49 ALJR 130 at 132:

'It is well established that a party interrogated must answer to the best of his knowledge, information and belief (unless he objects to answer) and that to use the words of Bankes LJ in Douglas v Morning Post Ltd (1923) 39 TLR 402 at 403, if he affirms as to one of these elements he must affirm as to all three. It is not enough to say that he has no knowledge, because he is bound also to answer according to information acquired from servants or agents who have gained it in that capacity, and where appropriate his answer must show that he has made all proper inquiries and that having made them he has no information enabling him to answer further.

Such inquiries would include making inquiries of former directors of the company who had or may have had dealings or knowledge related to matters material to matters the subject of proper interrogatories...'". 22 In the present case, an order under r 4.3 could be moulded so that the statement setting out the council's reasons for the decision would be to the best of its knowledge, information and belief or that of the person providing the statement. 23 I propose to make an order for the provision of a statement of reasons and will hear the parties as to the precise form of the order. Proposed Order 2

24 Proposed order 2 requires the council to specify the identity of all persons who gave instructions relating to the preparation of the "report" referred to in the minutes of the meeting of 2 March 2009 as having been prepared for the consideration of the committee of the whole. As I found in my earlier judgment relating to privilege in Charlton v Moore [2009] NSWLEC 25 at [10], the "report" considered by the council was in fact a letter of advice from their solicitors addressed to the general manager for the attention of Mr Woodman, and is privileged. The council submitted in its written submissions that the identity of the person who gave instructions is privileged, but I did not understand that to be pressed in oral submissions. In any case, in my opinion, the identity of the person who gave instructions is not privileged: Commissioner of Taxation v Coombes [1999] FCA 842 at [28] and [31]. 25 The council also submits, however, that the disclosure of the identity of that person or persons is not likely to be productive of anything relevant to the proceedings. In the points of claim para 49 it is pleaded that the removal resolution was made on the basis of a report, the instructions for the preparation of which were given by the fourth respondent and/or (further or alternatively) the fourth respondent and the first and second respondents. The applicant contends that there was a breach of the principles of procedural fairness in passing that resolution not only because of alleged failure to give a prior opportunity to be heard but also because of actual apprehended bias. Further, the applicant says that the question of whether the bias was apprehended or actual may depend upon the identity of which of those respondents gave the instructions. At this interlocutory stage I am only concerned with whether the identity of that person or persons arguably relates to an issue raised in the proceedings. Having regard to the points of claim and the way that the applicant puts the relevance of that information, I think it arguably does and that an order for the identification of that person or persons should be made.

26 I make the following orders: (1) The parties are to bring in agreed or competing short minutes of orders at 9.30am tomorrow to reflect my reasons for judgment.

(2) The applicant will by 4pm today serve any proposed further amended summons and any proposed amended points of claim on the other parties. I will endeavour to deal with any application to amend at 9.30am tomorrow.

(3) Grant leave to the applicant to file in Court a notice of motion seeking to vacate the hearing date and the supporting affidavit of Alan Joseph McKelvey sworn on 17 March 2009. The time for service is abridged to 1 pm today. The notice of motion is to be made returnable before me at 9.30am tomorrow.

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.