TITLE OF COURT: SUPREME COURT OF TASMANIA (FULL COURT)

Administrative Law - Judicial review - Grounds of review - Procedural fairness - Hearing - Nature of the hearing - Generally - Request to amend planning scheme - Applicant accompanied request with detailed expert report - Whether right to be heard in reply.

Land Use Planning and Approvals Act 1993 (Tas), s33(3A).

Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group (1969) 122 CLR 546; Kioa v West [1985] HCA 81; (1985) 159 CLR 550, applied.

Russell v Duke of Norfolk [1949] 1 All ER 109, followed.

R v Resource Planning and Development Commission [2003] TASSC 69; (2003) 12 Tas R 69, distinguished.

Administrative Law - Judicial review - Grounds of review - Unreasonableness - Whether irrelevant considerations taken into account - Whether relevant considerations not taken into account - Whether decision unreasonable.

Judicial Review Act 2000 (Tas), ss17(2), 20, 27.

Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] EWCA Civ 1; [1948] 1 KB 223, followed.

Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24, applied.

Judgment Number: [2007] TASSC 16

CLARENCE CITY COUNCIL v SOUTH HOBART INVESTMENT PTY LTD

3 In lieu thereof, the application for a judicial review of the applicant's decision of 14 March 2006 is dismissed.

CLARENCE CITY COUNCIL v SOUTH HOBART INVESTMENT PTY LTD

1 The respondent wanted to develop 5.33 hectares of land on Kennedy Drive in the Municipality of Clarence. The land is of irregular shape and located near the Acton Overpass. It is presently used as pasture for the periodic grazing of horses and cattle and for a "one hole golf competition". The respondent saw a potential for use as large display areas for the sale of boats, caravans and the like. A report to the appellant states:

"The locality surrounding the site is characterised by a mixture of land uses including rural residential, agricultural, light industrial, storage, aviation and a historic church and graveyard.

The subject land and neighbouring land to the east is zoned Reserved Controlled Industrial, the land to the north, on the opposite side of Kennedy Drive is zoned Intensive Agriculture, the land to the west is zoned Controlled Industrial while the land on the southern side of the Highway is zoned Rural Residential."

2 The material in the appeal book indicates that the land is actually zoned Reserved Controlled Industrial and Passive Recreation. The respondent asked the council to rezone the land to Controlled Industrial, and to make a related change to the density rating in that zone. He also lodged a development application, submitted on the basis that the zoning would be altered in accordance with his request.

3 An officer of the Council recommended the proposed change to the planning scheme and the granting of provisional conditional approval to the development application. However, on 14 March 2006 the council resolved not to initiate the requested amendment to the planning scheme and consequentially resolved not to approve the development application.

4 The respondent sought a review of the appellant's decision upon the grounds set forth in the Judicial Review Act 2001, s17(2)(a), (e) and (f). The review was successful and on 28 July 2006, an order of this Court was made quashing the appellant's decision. The appellant has now appealed to the Full Court alleging that the learned judge at first instance erred in her construction of the provisions of the Land Use Planning and Approvals Act 1993 ("LUPA") and in her conclusions with respect to issues of natural justice, the taking into account of irrelevant considerations and the failure to take into account relevant considerations that were raised at first instance.

The statutory provisions relating to amendments to a planning scheme

5 The provisions of LUPA, Pt3, Div2, deal with amendments to planning schemes. Section 32 sets out the basic propositions that an amendment to a planning scheme must "seek to further" the objectives set out in Sch1, must accord with State policies and must comply with other prescribed matters, including the provisions of LUPA, s20, governing the content of planning schemes. Section 33(1) provides that anybody may request an amendment to a planning scheme. If a request is made, s33(2B) requires a council to consider whether the requested amendment "is consistent with" s32 and any advice referred to in the Local Government Act 1993, s65, that a council may have received. LUPA, s33(3), obliges a council to make a decision "as to whether or not to initiate an amendment to the planning scheme" within 42 days of receipt of the request and to give notice of the decision to the person who made the request. In the event of a council deciding not to initiate the requested amendment, the following subsections of s33 apply:

"(3A) Where a planning authority decides not to initiate an amendment of the planning scheme, the person who requested the amendment may, within 14 days of being notified of that decision, request the Commission to review the process by which the planning authority reached its decision.

(3B) Where the Commission has been requested to review the process by which the planning authority reached its decision, the Commission may request the planning authority to provide it with any material relevant to that process.

(3C) A planning authority must provide the material requested by the Commission within 7 days of receiving that request.

Penalty:

(3D) The Commission must, not later than 28 days after receiving the material requested by it or such longer period as the Minister may allow ¾

(a) direct the planning authority to reconsider the amendment; or

(b) confirm that in reaching its decision the planning authority took into account the matters specified in subsection (2B).

(3E) The Commission must, within 7 days of making its decision, notify the planning authority and the person who requested the review of its decision.

(4) Where a planning authority decides not to initiate an amendment of the planning scheme, a person may not request the authority to initiate an amendment which is substantially the same as the first-mentioned amendment within a period of 2 years from the date on which the planning authority made its decision."

6 In the event of a council deciding to accede to a request to initiate an amendment to a planning scheme, LUPA, s35, requires a council to ensure that the amendment complies with s32, certify compliance with the section, and send the amendment to the Resource Planning and Development Commission ("the Commission"). Assuming that the amendment is not just a formal matter, as described in s37, LUPA, s38, obliges the Commission to put the proposed amendment on public exhibition in accordance with the prescribed time constraints, and advertise it. Section 39 provides that during this period any person can make representations to a council. If representations are received, a council must forward them to the Commission, together with its opinion on their merits, and the need, if any, to modify the proposal.

7 Pursuant to s40, the Commission is required to consider that material and hold a hearing in relation to each representation. This last requirement may be waived if all the representations support the proposed amendment. LUPA, s41, enacts that at the end of the process, the Commission may require a council to alter or modify the proposal, alter or modify it itself, or direct a council to reject it. If the Commission directs a council to modify the proposal, a council must do so and the altered proposal goes back to the Commission and the process of public exhibition, representations and consideration by the Commission is repeated. Finally, if the Commission is satisfied that a draft amendment is in order, it must approve it in obedience to LUPA, s42.

8 This statutory scheme makes ample provision to satisfy the audi alteram partem principle, but only after a council has decided to initiate an amendment. LUPA makes no provision for any right to be heard prior to a council deciding whether or not to initiate an amendment. In the event of a refusal to initiate an amendment, the only rights provided by the statute are those enacted in LUPA, s33(3A) - (4), as set out above.

9 To understand the issues raised on this appeal, it is necessary to set out some factual material.

Circumstances surrounding the decision not to initiate the amendment

10 About two months before the respondent asked the council to initiate the amendment, a director of it, Mr Stewart, wrote a letter to the owners of three nearby properties. The terms of the letter make it clear that Mr Stewart had previously spoken to each of the owners and none had been unreservedly supportive of the proposed amendment. The letter offered each owner $10,000 if the change in zoning was successful and other incentives to achieve that end.

11 Within a few days of the date of Mr Stewart's letter, one of the nearby owners, Mrs Morris, wrote to the council and enclosed a copy of Mr Stewart's letter. Mrs Morris' letter to the council asked certain questions about the proposal and inquired whether there had been any prior discussions between the council and Mr Stewart. An officer of the council replied to the questions asked, but wrote in relation to whether there had been prior discussions that such a matter was confidential but any amendment required an advertising process and the final decision lay with the Commission.

12 Meantime, the council received two other letters objecting to the proposed amendment. The respondent's request for an amendment was referred to an officer of council, Mr Lovell, who described himself in his report to the council as "Manager Integrated Assessment". As mentioned earlier, he recommended that the council initiate the amendment. Mr Lovell's report referred to the letters that had been sent to council and other matters.

13 The respondent's request was placed on the agenda for a council meeting to be held on 14 March 2006. What happened next is well described by the learned judge at first instance at par11 of her reasons for judgment:

"The date of Council's meeting was advertised. On 9 March 2006 a ring binder was placed at Council's reception area, the contents of which could be inspected by members of the public. In that binder was the agenda for the meeting and a copy of the full report referred to in the previous paragraph. Mrs Sylvia Morris and Mr Phil Butler applied on 10 March 2006 to make a statement to the Council at its meeting about the rezoning application for the land. Mrs Morris brought to the Council, whether or not it was prior to or at the Council meeting is not known, a petition signed by 132 people relating to the applicant's proposed development in Kennedy Drive. By that petition, the petitioners sought that the mayor and alderman of the City of Clarence 'refuse to approve the proposed rezoning to Service Industrial and subdivision into five industrial lots. ... We strongly feel the proposed development is not an appropriate use of the land concerned as it unites the Acton Corridor green belt with the Backhouse Lane and Coal River Valley agricultural areas'."

•

The petition was received.

•

That Mrs Morris and Mr Phil Butler addressed the meeting. (There is no record of what they said).

•

The executive summary of Mr Lovell's report formed part of the agenda.

•

The council resolved that:

"A That Council resolves, under Section 34(1) of the Land Use Planning and Approvals Act 1993, not to initiate draft Amendment 2006/2 for the following reasons:

1 There are alternative industrial sites available.

2 The amendment will adversely affect the amenity of neighbours.

3 The Rural Residential zone proposed under the Draft Clarence Planning Scheme 2002 is to protect the rural amenity.

B That the applications for a 4 lot subdivision, at 2 Kennedy Drive, Cambridge (C1 Ref SD-2006/2) and the marine saleyard and showroom, at 2 Kennedy Drive, Cambridge (C1 Ref SD-2006/2) be refused for the following reason:

1 The applications are prohibited under the Eastern Shore Planning Scheme 1986."

15 Another factual matter relevant to the submissions made by the respondent to the learned judge at first instance and again on this appeal was set out by her Honour at pars15 - 17:

"A new planning scheme had been 'on the table' for the area at least since 2002. That was the Draft Clarence Planning Scheme 2002. On 22 August 2005, the Commission resolved to direct the Council to 'do again' parts of the scheme (LUPA, s28). That new scheme is not finalised.

The issue of the impact, if any, of the new, as yet unimplemented, scheme on developments was considered by the Commission in July 2005. It was considering an application for an amendment to the Scheme and a permit to allow a Homemaker Centre at 66 Kennedy Drive, the same street in which the land stands. The application was granted. The Commission said at page 3 of its decision:

'Some of the written evidence sought to demonstrate consistency with the draft Clarence planning scheme 2002 that is currently subject to the statutory approvals processes. The obligation to consider the draft planning scheme was a matter of preliminary ruling by the Delegates to the effect that there was no such obligation. However to the extent that the Coty principle (Coty (England) Pty Ltd v Sydney City Council (1957) 2 LGRA) is applicable, the Delegates are satisfied that the commercial use of the subject land at Cambridge will not frustrate the planning strategy of the draft planning scheme as certified.'

On 4 May 2006, the Commission made a decision on another draft amendment to the Scheme. This was an application to amend the zone relating to another property in Kennedy Drive from Reserved Controlled Industry to Controlled Industry and to alter the density rating (the same as that sought in the present case). The Commission approved the amendment. Mrs Sylvia Morris was a representor on that application."

16 Encapsulated by the written submissions filed on behalf of the appellant, the issues raised by the grounds of appeal are:

(a) Was the council required to give the respondent procedural fairness, and if so, what did that require?

(b) Did the council exercise its powers reasonably, with regard to relevant material and without regard to irrelevant material?

17 Since the decision of Kioa v West [1985] HCA 81; (1985) 159 CLR 550, the common law of Australia has been that procedural fairness in the making of administrative decisions must be afforded if those decisions "affect rights, interests and legitimate expectations, subject only to the clear manifestation of a contrary statutory intention" per Mason J (as he then was) in Kioa v West at 584.

18 It may be argued that the provisions of LUPA, Pt3, Divs1 and 2, impliedly manifest an intention to exclude procedural fairness except to the extent it is provided by the statute itself. The statutory scheme provides that in the case of new planning schemes, and in the case of amendments to existing schemes, the originator is always the council. With the consent of the Minister, the Commission can compel a council to draft a planning scheme and, as noted, any person may request the council to initiate an amendment to a planning scheme, but until a council acts, there will be neither scheme nor amendment.

19 However, once a council acts, LUPA sets out a very detailed and comprehensive scheme to give every interested person a right to be heard and have their views taken into account. Blow J examined this aspect of the statutory provisions in R v Resource Planning and Development Commission [2003] TASSC 69; (2003) 12 Tas R 69. Under consideration was whether the Parliament impliedly excluded the common law duty to afford procedural fairness to the processes prescribed by LUPA, ss38 - 40. His Honour cited the well-known passage from the judgment of Mason CJ, Deane and McHugh JJ in Annetts v McCann [1990] HCA 57; (1990) 170 CLR 596 at 598:

"It can now be taken as settled that, when a statute confers power upon a public official to destroy, defeat or prejudice a person's rights, interests or legitimate expectations, the rules of natural justice regulate the exercise of that power unless they are excluded by plain words of necessary intendment."

20 After referring to Vanmeld Pty Ltd v Fairfield City Council [1999] NSWCA 6; (1989) 46 NSWLR 78, Blow J concluded that the detailed provisions enacted by LUPA, ss38 - 40, carried an implied intention to exclude the common law obligation that would otherwise fall on councils to afford natural justice. His Honour concluded at 107:

"I believe that Parliament intended that councils were not to be subject to any duty to accord procedural fairness to any person or body who or which might be affected by the provisions of a draft planning scheme or a draft amendment to a planning scheme. Parliament made it the role of the Commission, rather than councils, to afford procedural fairness to such persons, pursuant to the RPDC Act, s10(1)(b)(v)."

21 The learned judge at first instance disagreed with this view, "to the extent that it is so broadly stated". With respect, I think she was right to do so because the decision that has to be made pursuant to LUPA, s33(3), is quite different from the decisions that have to be made pursuant to the statutory obligations that were under consideration by Blow J. There is nothing in his Honour's reasons to suggest that he intended his conclusion to apply to LUPA, s33(3).

22 Section 33 gives a person whose request for an amendment has been refused a right to have the decision reviewed by the Commission, but subs(3A) limits the ambit of that review to a review of the process by which the council reached its decision.

23 The authorities are clear that even in the case of a multi-tiered decision-making process with a full right to be heard at the second stage, natural justice will apply to the preliminary decision unless there are clear words or necessary implied intention to exclude it. See Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564 at 578. I see no such clear words or necessary implied intention in the relevant sections of LUPA to exclude procedural fairness from s33(3).

24 However, natural justice is only afforded those who have a right or an interest or a legitimate expectation that may be destroyed, defeated or prejudiced by the exercise of the statutory power. The learned judge at first instance recognised this in her reasons for judgment and at par40, correctly, in my respectful opinion, observed that the respondent had no right to develop its land as it wished to do so. Accordingly, her Honour held that the respondent did not have a right that an exercise of the power conferred by LUPA, s33(3), could destroy, defeat or prejudice. She then said, at par40 of her reasons for judgment:

"However an applicant such as that in this case must have a legitimate expectation, having regard to the scheme in LUPA, that, with a properly documented application supported by a supportive report from the Council's own officers, it will at least be entitled to have its application fully canvassed in an open and public forum (the Commission) in which it can take part. It has not only lost that expectation, but by virtue of LUPA, s33(4), it is prevented from renewing a substantially similar application for two years."

25 I do not agree with the first part of that conclusion. The conclusion that the respondent had a legitimate expectation that its application would be fully canvassed by the Commission is a conclusion that the council must accede to the request if it is a properly documented application supported by a supportive report from the council's own officers. Such a conclusion removes any discretion from the council, which is contrary to the terms of the statute which imposes no fetter on the council's decision once it has considered the matters set out in LUPA, s33(2B). The respondent might legitimately expect the council to act reasonably, take into account all relevant matters, and not take into account irrelevant matters. If the request is properly documented and supported by a supportive report from a council officer, as it was, the respondent might well expect its request to be granted, but that is not a legitimate expectation grounding a right to procedural fairness. If the decision is unreasonable in the Wednesbury sense, or tainted with error of law, it will be set aside for error, not because the council did not afford procedural fairness.

26 However, as the learned judge at first instance noted, LUPA, s33(4) provides that if a request to initiate an amendment to a planning scheme is refused, the person who made the request may not make substantially the same request again until two years after the refusal. LUPA, Pt3, Div2A, enabled the respondent to combine an application for a permit with his request for an amendment, even though the permit could not be granted unless the amendment was made. So it might be said that the council's refusal prejudiced or adversely affected the rights conferred upon the respondent by ss33(1) and 43A because the respondent could not exercise those rights to make substantially the same request and the same application for a permit for two years after the refusal. However, it is not necessary to decide whether the loss of the right to request an amendment and make a development application for two years are rights that entitled the respondent to procedural fairness when the council considered its request for an amendment, as I am satisfied that in any event, the respondent was afforded natural justice.

27 The content of natural justice varies from case to case. In Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group (1969) 122 CLR 546, the High Court expressed agreement at 552 - 553 with this observation of Tucker LJ in Russell v Duke of Norfolk [1949] 1 All ER 109 at 118:

"The requirements of natural justice must depend on the circumstances of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject matter that is being dealt with, and so forth."

"It is plain that when it is necessary to consider a question of fairness in relation to a tribunal the whole of the circumstances in the field of the inquiry are of importance. The nature of the jurisdiction exercised and the statutory provisions governing its exercise are amongst those circumstances."

28 With respect to the exercise of a power conferred by statute, Mason J said in Kioa v West (supra), at 584, "the application and the content of the doctrine of natural justice or the duty to act fairly depends to a large extent on the construction of the statute", and continued at 585:

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

See also Wilson J at 594, where his Honour referred with approval to the statement by Tucker LJ cited above. The same approval was expressed by Deane J in Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 at 366 - 367.

29 The respondent was given an opportunity to be heard by the council with respect to his request and application for a permit. The request and application were accompanied by a 138 page detailed report from consulting engineers GHD, written in support of the request and application. The council was not exercising any adjudicative function, but making an administrative decision about whether to initiate a change in the planning scheme which, if taken, would lead to an extensive consultative process. This was not a decision-making process that raised issues of credit, making an oral hearing necessary. In Re Minister for Immigration and Multicultural Affairs; ex parte Miah (2001) 206 CLR 57, Kirby J said the following about the content of procedural fairness at 115:

"The scope of the applicable legal entitlement is defined by the rules of natural justice consistent with the Act. Those requirements are neither absolute nor rigid. They adapt to all of the circumstances of a particular case. They have been described as 'chameleon-like'." [Cited authorities omitted.]

30 In White v Ryde Municipal Council (1977) 36 LGRA 400, Reynolds JA said at 413:

"It is now well established that what will be sufficient to satisfy the requirements [of natural justice] depends on the circumstances of the particular case as well as upon the nature of the statutory power. The requirement of natural justice has a 'fluctuating content'. Granting the necessity for a hearing a question remains as to what is the scope and content of the hearing which will satisfy the requirements in a particular case."

31 The statutory scheme contemplates that an elected council has an overall responsibility to make decisions with respect to the initiation of planning schemes and amendments to planning schemes. A council is expected to have a general knowledge of the requirements of its municipality. A decision pursuant to LUPA, s33(3), is a preliminary decision to determine if the request should be pursued further to exhibition and subsequent hearings. The council is not solely dependent upon the protagonists and the opponents of the request for material upon which to make such a decision. The protagonist is entitled to be heard as to all the reasons why the amendment should be initiated. The respondent availed itself of this opportunity and furnished the report by its consultant. Procedural fairness did not oblige the council to advise the respondent of all the material that it took into account in making the decision. A consideration of a request made pursuant to LUPA, s33(3), did not involve an adversarial proceeding. There is no similarity between the content of procedural fairness in the case of a quasi-judicial hearing involving personal rights, legitimate expectations or interests, and a decision that has to be made pursuant to LUPA, s33(3). It may be that had the council received material indicating that some critical points in the consultant's report were incorrect, procedural fairness would require that this material be disclosed and the respondent given an opportunity to respond, but this was not the case here. Brennan J (as he then was) said in National Companies and Securities Commission v The News Corporation [1984] HCA 29; (1984) 156 CLR 296 at 326:

"When the limits of a statutory function are ascertained the interests which are apt to be affected by the performance of the function can be identified. Then it is possible for a court to say - in the absence of express statutory provision - what has to be done to be fair to those whose interests are apt to be affected by the performance of the function. The terms of the statute which creates the function, the nature of the function and the administrative framework in which the statute requires the function to be performed are material factors in determining what must be done to satisfy the requirements of natural justice: see FAI Insurances Ltd v Winneke [1982] HCA 26; (1982) 56 ALJR 388, at p 417; R v Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group (1969) 122 CLR 546; at p 553."

32 The respondent's complaint was that it was denied natural justice because:

•

At the meeting of council on 14 March 2006, council received a petition but did not advise the respondent that it had done so and accordingly, he was given no right of reply to it.

•

The council received three letters about the respondent's request for an amendment to the planning scheme. These were referred to in Mr Lovell's report, but the respondent was not given a copy of Mr Lovell's report, nor a copy of those letters, and was not afforded an opportunity to reply to them.

•

The council received a copy of the letter that the respondent wrote to Mrs Morris, but did not disclose this to the respondent.

•

At the meeting on 14 March 2006, council was addressed by Mrs Morris and Mr Butler, but the respondent was not advised that this was going to occur, nor was the decision delayed to give him an opportunity to reply to those addresses.

33 There are 132 signatories to the petition. They are prefaced by this statement:

"Subject: The proposed rezoning and proposed industrial development at the western end of Kennedy Drive.

We, the undersigned, petition the Mayor and Alderman [sic] of the city of Clarence to:

Refuse to approve the proposed rezoning to Service Industrial and subsequent subdivision into five industrial lots. The area of land concerned is at the western end of Kennedy Drive between Historic Church and the Acton Road overpass over the Tasman Highway.

We strongly feel the proposed development is not an appropriate use of the land concerned as it unites the Acton Corridor green belt with the Backhouse Lane and Coal River Valley agricultural areas.

Please sign below in support of this petition."

34 With respect to the three letters, the one from Mrs Morris only sought information from the council; the other two, one from Mr and Mrs Pepper and the other from Mr Symons, are each encompassed on a single page and each express opposition to the requested rezoning in general terms, viz, it would change the residential amenity of the neighbourhood, devalue the existing houses, and so forth.

35 Mr Lovell's report, which recommended the council accede to the respondent's request, just mentions that three letters have been received and notes that they raise "concerns largely [relating] to the impact on the existing residential amenity".

36 The letters that the respondent wrote to Mrs Morris and the other neighbours make it quite clear that well before the meeting of 14 March, the respondent knew that there was going to be opposition to his request for an amendment and development application on the grounds of adverse impact on the existing residential amenity, so it could not be said that the letters constituted new material adverse to the respondent's rights which required the council to refer them back to it and give it an opportunity to be heard in reply.

37 As to the addresses delivered by Mrs Morris and Mr Butler, there is no material to indicate for how long either of them spoke, nor what they said. Indeed, the material before the Court does not indicate who Mr Butler is, nor what his interests might have been.

38 In my opinion, procedural fairness did not require the council to give notice to the respondent that it had the letters and the petition, nor that had heard Mrs Morris and Mr Butler, as all of that material did no more than articulate the generality, of which the respondent was well aware, that there was opposition to his request being granted on the grounds that it would adversely impact on the amenity of the area. The respondent's case for amendment was detailed in the consultant's report, it was supported by Mr Lovell's report and procedural fairness did not give the respondent the right of reply to the letters, the petition or the unknown content of the addresses of Mrs Morris and Mr Butler.

39 The learned judge at first instance held that the respondent was entitled to procedural fairness and, at par50 of her reasons for judgment, that there was a beach of the rules of natural justice. She said:

"In all the circumstances I am satisfied that the Council had an obligation to make the applicant aware of the existence of the petition, the letters written by Mrs Morris and others to the Council adverse to the application, the fact that the Council had in its possession a copy of Mr Stewart's letter to Mrs Morris, and the fact that Mrs Morris and Mr Butler had been given permission to make a statement to the council meeting so that if it chose, the applicant could put material to the meeting in response."

40 I am satisfied that in so concluding the learned judge at first instance fell into error. This deals with grounds 3 - 9 inclusive of the notice of appeal under the heading "natural justice."

41 In view of her conclusions with respect to natural justice or procedural fairness, the learned judge at first instance said that the applicant was entitled to the order sought and the council's decision would be quashed. However, she very properly proceeded to consider the other grounds raised in the application.

42 Before making a decision pursuant to LUPA, s33(3), subs(2B) obliges a council to "consider":

•

whether the requested amendment is consistent with the requirements of s32; and

•

any advice referred to in the Local Government Act 1993, s65 that the council has received.

43 With respect to the ambit of the council's discretion in s33(3), the learned judge at first instance said at par60 of her reasons for judgment:

"At this point in the process the Council is only required to consider if the amendment proposed is 'consistent with' the requirements of s32. Once however the amendment is initiated it must then determine that it 'meets' the requirements. That is, the test becomes more stringent. This scheme is inconsistent with any real merits-based consideration of any request at this stage of the process when any such consideration will clearly later occur in the Commission."

44 With respect to her Honour, I think that she fell into error by confining the discretion conferred by s33(3) to the matters raised in s33(2B). Firstly, that is not what the Act says, and secondly, had that been Parliament's intention, it could have easily so provided. Relevantly, the Local Government Act, s65, provides, apart from an immaterial exception, that a council cannot decide on any matter which requires the advice of a qualified person without considering that advice. In this case, s65 required the council to consider Mr Lovell's advice. However, there is no obligation on council to act in accordance with Mr Lovell's advice. If that were the case, the council would have had no decision to make. There is nothing in LUPA, s33(3), to suggest that the council must only consider the matters referred to in s32 and the content of Mr Lovell's advice. In Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24, Mason J (as he then was) said, at 40 - 41:

"(d) The limited role of a court reviewing the exercise of an administrative discretion must constantly be borne in mind. It is not the function of the court to substitute its own decision for that of the administrator by exercising a discretion which the legislature has vested in the administrator. Its role is to set limits on the exercise of that discretion, and a decision made within those boundaries cannot be impugned (Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] EWCA Civ 1; [1948] 1 KB 223 at p228)."

45 I venture to repeat what I said in Nekon Pty Ltd v Hobart City Council [2004] TASSC 44 at par79:

"There is no statutory prescription specifying the matters the respondent can or must take into account in the formation of the opinion. See Minister for Aboriginal Affairs v Peko-Wallsend Limited (supra) at 40. In a case such as this where the opinion in question relates to such a wide and undefined matter as a particular benefit to a particular property or properties from the promotion of a defined area in the city, the factors that could properly influence the corporate mind are so wide and varied that the applicants face an extremely onerous task in establishing that the opinion formed on 11 August 2003 was so unreasonable that no council, acting lawfully and reasonably, would have formed such an opinion."

46 The learned judge at first instance cited the above paragraph at par58 of her reasons for judgment. However, she distinguished the present case from Nekon and held that the statutory framework did fetter the discretion enacted in s33(3). She said, at par59:

"The factual situation being there considered by Underwood J must be contrasted with that being considered in the present case. LUPA, s32, set out what any amendment to a planning scheme must and may provide for. The decision of the Council must be constrained by those parameters. Additionally, LUPA, s33(2B), directs the Council to consider whether the application was 'consistent with' the requirements of s32 and any advice referred to under the LGA, s65. It cannot be inferred from that framework that the Council had a broad and largely unfettered discretion whether to initiate an amendment or not. This view is reinforced when the role of the Council at different stages of the process is examined."

47 With respect, I am of the opinion that this is an erroneous construction of s33(3). Her Honour speaks of the council not having "a broad and largely unfettered discretion" and there being no "real merit-based discretion", but does not articulate the ambit or limits of the discretion that the council has pursuant to s33(3). Further, it would seem that her construction of LUPA, s33(3), is somewhat at odds with her conclusion that the respondent was entitled to natural justice and entitled to be given notice of the material the council impliedly took into account concerning the amenity of the neighbourhood.

48 Given the wide ambit of matters referred to in s32, and the wide variety of matters that might be set out in an officer's advice to council, it is difficult to see how any constraints on the ambit of a council's discretion could be identified. Accordingly, grounds 1 and 2 of the notice of appeal are made out. However, error in statutory construction per se is not a sufficient basis for the appellant to succeed. It is necessary to examine the consequences of the error in construction.

Taking into account irrelevant, and not taking into account relevant, material.

49 It is convenient to deal with these issues, raised by the balance of the grounds of appeal, by setting out those parts of the application for a judicial review (renumbered for convenience) that allege that there was an improper exercise of power and/or error of law because the council took into account irrelevant material and failed to take into account relevant material. In these respects, the application for review provided:

"1 There was an improper exercise of power and an error of law as the decision was manifestly unreasonable and was wrong within the meaning of s17(e) and s17(f) of the JRA in that:

(a) it was made contrary to the advice and recommendation of its own planning expert Ross Lovell, and the detailed expert opinion of the applicant's planner Mark Iles set out in his report of January 2006;

(b) the requested amendment was consistent with the relevant mandatory requirements of s32 LUPAA in that it was in conformity with the Objectives set out in Schedule 1 of that Act and with the relevant State Policies made under the State Policies and Projects Act 1993. Had the Council taken those relevant considerations into account as mandated by S322(2B) of the Act it would have initiated the amendment.

2 There was an improper exercise of power and an error of law as irrelevant matters where [sic] considered within the meaning of s17(e) and s17(f) of the JRA in that:

(a) Council took into account an irrelevant consideration, namely the availability of alternative industrial sites was considered;

(b) Council took into account the residential amenity of neighbours and rural amenity when the residences concerned enjoy only pre-existing non-conforming use rights in the Reserved Controlled Industrial zone and when the circumstances of the residential enclave concerned have changed by virtue of planning decisions made in the area since the Council's arbitrary, non strategic and as yet not finally implemented, decision to zone the land Rural Residential in the draft Clarence Planning Scheme 2002.

3 There was an improper exercise of power and an error of law as relevant matters where [sic] not taken into account within the meaning of s17(e) and s17(f) of the JRA in that:

(a) the requested amendment was consistent with the relevant mandatory requirements of s3**3(2B)**2 LUPAA in that it was in conformity with the Objectives set out in Schedule 1 of that Act and with the relevant State Policies made under the State Policies and Projects Act 1993. Had the Council taken those relevant considerations into account as mandated by s332(2B) of the Act it would have initiated the amendment;

(b) the Council failed to take into account the relevant consideration that the Commission has previously held that prima facie such an amendment in this area 'to provide for commercial use at Cambridge is consistent with the Planning Scheme generally and the description and principles for the district';

(c) the Council failed to take into account the relevant consideration that the Commission has previously held that the Council has no obligation to consider the provisions of the draft Clarence Planning Scheme 2002 which is currently subject to the statutory approval process.

4 There was an improper exercise of power and an error of law within the meaning of s17(2)(a), (e) and (f) of the JRA in that the Council by its delegates breached the rules of natural justice in respect of making the decision and failed to follow the proper procedure for initiating an amendment in that:

(a) it permitted a one sided and limited public involvement in the decision making process it 'undertook when the question before it was only whether to implement the requested amendment, the decision to do so itself being the trigger which leads to the public involvement of all interested persons by public exhibition and, the receipt of representations and deputations.

(b) the requested amendment was consistent with the relevant mandatory requirements of s3**3(2B)**2 LUPAA in that it was in conformity with the Objectives set out in Schedule 1 of that Act and with the relevant State Policies made under the State Policies and Projects Act 1993. Had the Council taken those relevant considerations into account as mandated by s332(2B) of the Act it would have initiated the amendment." [Original emphasis and alterations.]

50 The complaint in par1(a) seems to proceed upon the assumption that because the decision was contrary to the consultant's report and contrary to Mr Lovell's report, error must have occurred. With respect to judicial review of discretionary administrative decisions, Gibbs J (as he then was) said in Buck v Bavone [1976] HCA 24; (1976) 135 CLR 110 at 118 - 119:

"Whether the decision of the authority under such a statute can be effectively reviewed by the courts will often largely depend on the nature of the matters of which the authority is required to be satisfied. In all such cases the authority must act in good faith; it cannot act merely arbitrarily or capriciously. Moreover, a person affected will obtain relief from the courts if he can show that the authority has misdirected itself in law or that it has failed to consider matters that it was required to consider or has taken irrelevant matters into account. Even if none of these things can be established, the courts will interfere if the decision reached by the authority appears so unreasonable that no reasonable authority could properly have arrived at it. However, where the matter of which the authority is required to be satisfied is a matter of opinion or policy or taste it may be very difficult to show that it has erred in one of these ways, or that its decision could not reasonably have been reached. In such cases the authority will be left with a very wide discretion which cannot be effectively reviewed by the courts." [Emphasis added.]

51 Some might say that the council "got it wrong" but making a wrong decision is not an error of law if there is some material to support it. Plainly the impact of the proposal on the amenity was material to support the decision - material that the councillors were well equipped to evaluate. The complaint in par1(b) that had the council taken into account the matters it was required by LUPA, s32, to take into account, "it would have initiated the amendment", is no more than argument. There is no reason to suppose that the council failed to consider the matters it was required to consider by s33(2B). These matters were addressed in the consultant's report which accompanied the request for amendment, and also in Mr Lovell's report. There is no evidence to suggest that the council did not consider these reports.

52 With respect to the complaint alleged in par2(a) of the application for review, it is apparent from the resolution of council that it did take into account the availability of alternative industrial sites, but that does not constitute legal error vitiating the decision. Availability of alternative industrial sites is a matter relevant to town planning generally. The weight that is given to that matter is for council to determine. Error by taking into account irrelevant material would occur, for example, if the council took into account the religious beliefs of the directors of the respondent.

53 The same observation applies to the complaint in par2(b) that the council took into account the residential amenity of the neighbourhood when such amenity was a pre-existing non-conforming use and the circumstances are changed by virtue of a prior planning decision in the same area.

54 With respect to the complaints set out in par3, allegedly as errors because relevant matters were not taken into account, I have dealt with (a) and there is no evidence of either (b) or (c). In any event, even if the council had failed to take into account the two matters alleged in pars(b) and (c), there would not have been error. This complaint is no more than an assertion either that the council's decision was obliged by law to adopt the advice it was given, or the council made the wrong decision. In Peko-Wallsend, Mason J said, at 39 - 40:

"What factors a decision-maker is bound to consider in making the decision is determined by construction of the statute conferring the discretion. If the statute expressly states the considerations to be taken into account, it will often be necessary for the court to decide whether those enumerated factors are exhaustive or merely inclusive. If the relevant factors - and in this context I use this expression to refer to the factors which the decision-maker is bound to consider - are not expressly stated, they must be determined by implication from the subject matter, scope and purpose of the Act. In the context of judicial review on the ground of taking into account irrelevant considerations, this Court has held that, where a statute confers a discretion which in its terms is unconfined, the factors that may be taken into account in the exercise of the discretion are similarly unconfined, except in so far as there may be found in the subject matter, scope and purpose of the statute some implied limitation on the factors to which the decision-maker may legitimately have regard (see Reg v Australian Broadcasting Tribunal; Ex parte 2HD Pty Ltd [1979] HCA 62; (1979) 144 CLR 45, at pp 49-50, adopting the earlier formulations of Dixon J in Swan Hill Corporation v Bradbury [1937] HCA 15; (1937) 56 CLR 746, at pp 757-758, and Water Conservation and Irrigation Commission (NSW) v Browning [1947] HCA 21; (1947) 74 CLR 492, at p 505). By analogy, where the ground of review is that a relevant consideration has not been taken into account and the discretion is unconfined by the terms of the statute, the court will not find that the decision-maker is bound to take a particular matter into account unless an implication that he is bound to do so is to be found in the subject matter, scope and purpose of the Act."

55 I have already dealt with the two matters of complaint listed in par4.

56 It is a little difficult to discern how the learned judge at first instance dealt with each of the complaints following her construction of LUPA, s33(3). At par67, she held that "it is hard to see [the availability of alternative industrial land] is a relevant consideration in the very preliminary stage the Council was dealing with the matter". At par72, her Honour held that the issue of amenity, the new draft planning scheme and the availability of alternate sites were not "wholly irrelevant considerations in the planning process", but held, "the issue is whether they were [relevant considerations] at this stage of the process, given the Council's role and the requirement of LUPA, s33(2B) that the Council consider whether the amendment is 'consistent with' s32" [original emphasis].

57 With respect to the prior decision by the Commission, the learned judge at first instance noted that the legislation did not bind the council to follow prior decisions, but noted the policy objectives of the Schedules to LUPA for sound, strategic planning co-ordinated action and said, at par74:

"To suggest that the Council is entitled to act effectively at large, entirely without regard to decisions of the Commission clearly of relevance to its own decision, flies in the face of those objectives."

58 There followed a finding that the council embarked upon what counsel for the applicant at trial called a "merit based decision". The ultimate conclusion was expressed at pars76 - 77:

"The only conclusion must be that the Council's role at the early stage we are dealing with here is constrained by the requirement that it consider the matters set out in LUPA, s33(2B).

In that context, I am satisfied that the Council took into account irrelevant considerations when making its decision and failed to have regard to relevant considerations. In so doing and generally, it reached a conclusion which no reasonable Council could have reached had it restricted its decision-making role to that constrained by LUPA."

59 An order was made that the council's decision be quashed. For the reasons I have set out earlier, there was no denial of natural justice, nor did error attend the making of the council's decision and accordingly I would allow the appeal, quash the order made at first instance, and dismiss the application for judicial review.

CLARENCE CITY COUNCIL v SOUTH HOBART INVESTMENT PTY LTD

60 I agree with the conclusion reached by the learned Chief Justice that the appeal should be upheld and concur with the orders which he proposes.

61 In general terms I agree with his reasoning that there had been no denial of procedural fairness to the respondent. It is not necessary for the purpose of this appeal to consider whether, if at all, there is a difference between the approach taken by Blow J in R v Resource Planning and Development Commission [2003] TASSC 69; (2003) 12 Tas R 69 and the learned judge at first instance in this case (South Hobart Investment Pty Ltd v The Clarence City Council [2006] TASSC 63) in relation to exclusion or otherwise of common law principles governing procedural fairness by the Land Use Planning and Approvals Act 1993 ("LUPA"), ss38 - 40 or the extent of any limitations stated in LUPA, s33(3), (2B) or (4). Here the respondent was not denied procedural fairness. The decision was made in an open meeting after due notice. The agenda proposed for the meeting and a copy of the report of an officer of the Clarence City Council ("the council") was placed in the reception area of the council on 9 March, some five days prior to the meeting and made available for inspection by members of the public. The respondent, as the intended developer, had full notice of the terms of the competing views and arguments concerning the proposal. Procedural fairness did not require special notice to the respondent that the council had received the petitions at its meeting on 14 March. The terms of the correspondence and the views and arguments of the proponents were fully set out in the report, which had been available at the council office. The decision of the appellant was not to deprive the respondent of a "right", but simply to decline to initiate an amendment to the planning scheme in the terms sought by the developer. I would follow the approach taken by Kirby J in Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57 at 115 that:

"The scope of the applicable legal entitlement is defined by the rules of natural justice consistent with the Act. Those requirements are neither absolute (R v War Pensions Entitlement Appeal Tribunal; Ex parte Bott [1933] HCA 30; (1933) 50 CLR 228 at 256 per Evatt J) nor rigid (Haoucher [1990] HCA 22; (1990) 169 CLR 648 at 652; cf Russell v Duke of Norfolk [1949] 1 All ER 109 at 118 applied R v Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group (1969) 122 CLR 546 at 552). They adapt to all of the circumstances of a particular case. They have been described as 'chameleon-like' (Kioa [1985] HCA 81; (1985) 159 CLR 550 at 612 per Brennan J)."

62 The appellant was required to consider, but not necessarily accept, the advice provided by its officer. The grounds of appeal claim "improper exercise of power and an error of law" but in reality seek to do no more than challenge an exercise of discretion (Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24). I agree with the reasoning of the learned Chief Justice in relation to these grounds but do not find it necessary to resolve the differing approaches taken by him and the learned judge at first instance as to the effect of LUPA, s33(3) and (2B). I would agree that the matters required by LUPA, s33(3), are not confined, for the purpose of any initiation of an amendment to a planning scheme, to those specified by s33(2B). But, for the purpose of the determination of this appeal, any difference in the interpretation of the relevant provisions would not affect the outcome. The appellant was required, and in fact did, consider competing principles and applications of policy. It had not been involved in any "improper exercise of power". In my opinion, the appeal should be upheld.

File No FCA 63/2006

CLARENCE CITY COUNCIL v SOUTH HOBART INVESTMENT PTY LTD

63 I have read the reasons for judgment of the learned Chief Justice. I agree with those reasons, and with the orders that he proposes. There is a little that I would like to add.

64 It is true that I said in R v Resource Planning and Development Commission [2003] TASSC 69; (2003) 12 Tas R 69 at 107 that I believed that "Parliament intended that councils were not to be subject to any duty to accord procedural fairness to any person or body who or which might be affected by the provisions of a draft planning scheme or a draft amendment to a planning scheme". However that case concerned the scope of the duty of procedural fairness of the Resource Planning and Development Commission at a much later stage of the amendment process. My comment did not relate to the situation when a council is required by the Land Use Planning and Approvals Act 1993, s33(3), to make a decision whether or not to initiate an amendment to a planning scheme.

65 Assuming, without deciding, that a council required to make such a decision does have a duty of procedural fairness, I think that any such duty was discharged in this case. Councils make decisions by means of resolutions at council meetings. Under s33(3), once a council receives a request for an amendment to a planning scheme, it has only 42 days to make a decision as to whether or not to initiate the amendment. Because of that time restriction, it would often be impracticable for a council to invite submissions from the person requesting the amendment in relation to competing submissions received by it. For the purpose of making a decision under s33(3), councillors are likely to inform themselves on all sorts of matters in all sorts of ways from all sorts of sources. The procedure instituted by Parliament in s33 would sometimes be unworkable if the proponents of draft amendments were always to be offered a right of reply. The proponent of a draft amendment can always attend the council meeting at which a decision under s33(3) is expected to be made. There was nothing to stop any representative of the respondent from attending the council meeting to which this appeal relates, and seeking to speak at it, but apparently no representative of the respondent attended that meeting. In all the circumstances, I think one must conclude that there was no breach of any applicable rule of natural justice within the meaning of the Judicial Review Act 2000, s17(2)(a).

66 The only other matter I wish to address is the conclusion of the learned primary judge that the appellant "reached a conclusion which no reasonable Council could have reached ...". There are cases in which administrative decisions are quashed, or held to be void, because they are so unreasonable that no reasonable decision-maker could have made them: Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] EWCA Civ 1; [1948] 1 KB 223. Such cases are very rare. To be void for unreasonableness, a decision needs to be so unreasonable that it is regarded as not being an exercise of the decision-making power at all. A good example is the decision to make the fisheries management plan that was considered in the Federal Court in Austral Fisheries Pty Ltd v Minister for Primary Industries and Energy [1992] FCA 351; (1992) 37 FCR 463, La Macchia v Crean (1992) 110 ALR 201, Minister for Primary Industries and Energy v Austral Fisheries Pty Ltd [1993] FCA 45; (1993) 40 FCR 381, and Coleman v Grey (1994) 55 FCR 412. It allocated quotas for orange roughy catches for the year 1992 in such a way that an operator with one boat was given an absurdly large quota, entitling it to take a much larger quantity of fish than could be caught with that boat in a year, at the expense of most or all of the other operators in the fishery, who were allocated very small quotas. It was held that the decision in question was so unreasonable that no reasonable decision-maker could have made it.

67 When an administrative decision-maker takes into account irrelevant considerations, or fails to take into account relevant considerations that are required to be taken into account, or both, it by no means follows that the resulting decision is unreasonable in the Wednesbury sense or at all. In this case, there were a number of powerful factors weighing in favour of the council not initiating the draft amendment. It therefore cannot be said that the decision was unreasonable in the Wednesbury sense, whatever the merits of the other grounds of review might have been.