Coppock v Secretary, Department of Planning and Environment - [2020] NSWCATOD 89 - NSWCATOD 2020 case summary — Zoe

NSWNSWCATOD

Coppock v Secretary, Department of Planning and Environment

[2020] NSWCATOD 89

NCAT Occupational|2020-06-19

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At a glance

Source facts

Court

NCAT Occupational

Decision date

2020-06-19

Catchwords

(2013) 249 CLR 332 Minister for Immigration and Border Protection v Singh [2014] FCAFC 1

Source

Original judgment source is linked above.

Catchwords

(2013) 249 CLR 332 Minister for Immigration and Border Protection v Singh [2014] FCAFC 1

Judgment (16 paragraphs)

[1]

REASONS FOR DECISION

On 28 February 2020 Mr Tim Hurst, Deputy Secretary, Local Government Planning and Policy, as delegate of the Secretary, Department of Planning, Industry and Environment, by order: 1. Pursuant to s 440I(2)(e) of the Local Government Act 1993 (the LG Act), directed that Councillor Stuart Coppock of Willoughby City Council (the Council) undertake training with respect to his rights and obligations as a councillor when interacting with Council staff within 3 months of the date of the decision; and 2. Pursuant to s 440I(2)(h) of the LG Act, suspended Councillor Coppock's right to be paid any fee or other remuneration to which he would otherwise be entitled as the holder of civic office for a period of 2 months (without suspending him from civic office for that period) commencing on 1 April 2020 and ending on 31 May 2020.
Clr Coppock lodged an external appeal to the Tribunal from that decision under s 440L of the LG Act, seeking an order pursuant to s 440L(4)(c) to set aside the Order, and costs. The application also sought a stay under s 440L(3), and foreshadowed an order to amend the application within 28 days "due to disruptive effect of corona virus work limitations". The proposed amended application has been provided, but not considered pending determination of the preliminary issue.

[2]

[5]

Factual background

The following summary is derived from the documents provided by the parties, in terms which do not purport to resolve any dispute as to the alleged conduct.
Clr Coppock was first elected to Council in September 1999. An allegation was made that on 18 October 2017 he telephoned Mr Mark Fisher, a Council Development Enforcement Officer, in relation to a site inspection of premises in Naremburn, and requested Mr Fisher not to proceed with any enforcement action flowing from the inspection. In January 2018 the Council's Acting Governance Manager instructed Enterprise Risk Solutions to conduct an investigation in relation to the allegation.
On 18 April 2018 Dr Mark Loves, the conduct reviewer, provided a Report of an Investigation into Alleged Misconduct Involving Clr Coppock. Dr Loves had interviewed the council officer, Mr Fisher, and had a written submission and a statement from Clr Coppock in which he denied trying to influence any council officer. Dr Loves found that the allegation was substantiated, and that Clr Coppock's conduct was in breach of cll 5.8, 6.2(b) and (c) and 6.7(g) of the Council's Code of Conduct, and in breach of the Council's Access to Information and Interaction with Staff Policy. Dr Loves recommended that the findings of inappropriate conduct be made public, and that Clr Coppock be formally censured for the breach under s 440G of the LG Act.
Dr Loves provided a Supplementary Report dated 18 May 2018, responding to two statutory declarations including one by Clr Coppock, referred by the Council at its meeting on 14 May 2018. The Supplementary Report confirmed the conclusions reached in the Report of 18 April 2018.
At its meeting of 28 May 2018, the Council resolved: That Council: 1. Note the findings of the Conduct Reviewer. 2. That Council does not adopt the recommendations of the Conduct Reviewer. 3. That Council's reason for not adopting the recommendations was that Council does not accept the finding of the Conduct Reviewer due to the differing perceptions of the participants in the conversation. 4. Make public Council's resolutions as above, following the closed part of this meeting, pursuant to clause 253 of the Local Government (General) Regulation 2005.
By letter dated 4 June 2018 the Council, pursuant to cl 8.59 of the Procedures for the Administration of the Model Code of Conduct, notified the respondent that Council had not accepted the recommendations of the conduct reviewer, and the terms of the resolution of 28 May 2018.
On 4 October 2018 the DCE authorised preparation of a departmental report into Clr Coppock's conduct. A further authorisation was made on 8 February 2019. The Departmental Report under Section 440H of the Local Government Act 1993 issued in July 2019 stated in relation to the authorisations: 1 Authorisation 1. Section 440H(5A) of the Local Government Act 1993 (the Act) authorises the (then) Chief Executive, Office of Local Government (OLG) to arrange for a departmental report to be prepared about whether a councillor has engaged in misconduct without an investigation being carried out under that section if: (a) the matter has been referred to the Departmental Chief Executive by the council and the Departmental Chief Executive is of the opinion that the report may be based on the findings of an investigation conducted by or on behalf of the council, or (b) the Departmental Chief Executive is of the opinion that the alleged misconduct, if proven, would be minor in nature and, were it to warrant disciplinary action, the disciplinary action would be comprised only of counselling or reprimanding the councillor, or (c) the Departmental Chief Executive otherwise considers it appropriate to do so. 2. On 4 October 2018, the (then) Chief Executive authorised the preparation of a departmental report into the conduct of Clr Stuart Coppock of Willoughby City Council under section 440H(5A)(a) of the Act. 3. Upon further consideration, there was some doubt about whether Council had "referred" the matter to OLG, or whether it had "notified" OLG of the matter. While nothing may have ultimately turned upon this distinction, for the avoidance of doubt, on 8 February 2019 the (then) Chief Executive re-authorised the preparation of the departmental report under section 440H(5A)(c) of the Act. It was considered appropriate to authorise the preparation of a departmental report without investigation under this subsection as the evidence gathered by the conduct reviewer was available and sufficient for the purposes of making findings and grounding recommendations with respect to the alleged misconduct.
At Part 3, headed "The Conduct Reviewer's Investigation and Report", the departmental report referred to the investigation conducted by Dr Loves and his report and supplementary report. The departmental report referred to the evidence as to the telephone call of 18 October 2017, and to the Council's policies and procedures. At para 47 the departmental report noted that the versions provided by Mr Fisher and Clr Coppock as to the content of the telephone conversation differed, and concluded that Mr Fisher's version was considered to be more probably correct, stating five reasons for that conclusion. The departmental report concluded that the evidence supported a finding that Clr Coppock telephoned Mr Fisher to discuss an enforcement matter, and that in the course of the discussion with Mr Fisher, Clr Coppock requested Mr Fisher not to issue an infringement notice to the owner.
The departmental report concluded that Clr Coppock had contravened cll 3.1(a), (c) and (d), 5.8 and 6.2(b) and (c) of the Council's Code of Conduct, and the failure to comply with the Councillors' Access to Information and Interaction with Staff Policy and those clauses of the Code of Conduct and s 440(5) of the Act constituted misconduct as defined in s 440F of the LG Act. The departmental report concluded that the finding of misconduct warranted disciplinary action by the Deputy Secretary.

[6]

Legislation

Part 1 of Chapter 14 of the LG Act is headed "Conduct", and includes provisions for codes of conduct applicable to councillors, members of staff and delegates of councils. Under s 440, each council must adopt a code of conduct that incorporates the provisions of the model code of conduct prescribed under the regulations, and each councillor must comply with the applicable provisions of the council's adopted code and the model code of conduct: s 440(5). Under s 440AA, each council must adopt a procedure for administering the code of conduct that incorporates the provisions of the model procedure prescribed by the regulations.
The applicable code of conduct and procedure at the time of the alleged misconduct and the investigation and reports by Dr Loves were identified in the conduct reviewer's report as the Council's Code of Conduct - Councillors and Officers edition, and Council's Procedures for the Administration of the Model Code of Conduct.
Part 1 Div 3 of Chapter 14 is headed "Misconduct". The term "misconduct" is defined in s 440F: 440F Definitions (1) In this Chapter - misconduct of a councillor means any of the following - (a) a contravention by the councillor of this Act or the regulations, (b) a failure by the councillor to comply with an applicable requirement of a code of conduct, (c) a failure by a councillor to comply with an order issued by the Departmental Chief Executive under this Division, (d) an act of disorder committed by the councillor at a meeting of the council or a committee of the council, (e) an act or omission of the councillor intended by the councillor to prevent the proper or effective functioning of the council or a committee of the council. (2) For the purposes of determining whether a person has engaged in misconduct, the person does not breach a provision of a code of conduct that requires the disclosure of a pecuniary interest if the person did not know and could not reasonably be expected to have known that the matter under consideration at a meeting was a matter in which the person had a pecuniary interest. (3) A reference in this Division to misconduct includes a reference to misconduct that consists of an omission or failure to do something.
Div 3 of Part 1 provides what was described in Cornish v Secretary, Department of Planning, Industry and Environment [2019] NSWSC 1134 at [25] as "a carefully modulated scheme for dealing with complaints of misconduct". As discussed in Cornish at [37]-[38], in that scheme the disciplinary actions that may be taken by the DCE, or by the Tribunal, are distinct and more serious forms of disciplinary action than the only action that may be taken by a council.
A council may by resolution at a meeting formally censure a councillor for misconduct: s 440G(1).
Section 440H confers power on the DCE to conduct an investigation to determine whether a councillor has engaged in misconduct, on his or her own initiative, or if the general manager of a council or a council by resolution refers an allegation of misconduct, or if the Ombudsman or the Independent Commission Against Corruption (ICAC) state in a report that they are satisfied that a councillor has or may have engaged in misconduct: s 440H(2).
The DCE may arrange for a departmental report to be prepared in relation to an investigation (s 440H(5)), or without an investigation in circumstances specified in s440H(5A). Preparation of a departmental report is a pre-requisite to a decision by the DCE to take disciplinary action against a councillor: s 440H(6).
Section 440H provides: 440H Departmental Chief Executive may investigate or seek report on misconduct of councillor (1) The Departmental Chief Executive may conduct an investigation for the purpose of determining whether a councillor has engaged in misconduct. (2) The Departmental Chief Executive may conduct such an investigation - (a) on his or her own initiative, or (b) if the general manager of a council refers an allegation of misconduct by a councillor to the Departmental Chief Executive, or (c) if a council, by resolution, refers an allegation of misconduct by a councillor to the Departmental Chief Executive, or (d) if the Ombudsman states in a report that the Ombudsman is satisfied that a councillor has or may have engaged in misconduct, or (e) if the Independent Commission Against Corruption states in a report that the Commission is satisfied that a councillor has or may have engaged in misconduct. (3) For the purpose of an investigation, the Departmental Chief Executive may, by order in writing served on any person, direct the person to do any one or more of the following - (a) provide written information, by the date specified in the order, and to verify the information by statutory declaration, (b) produce, at a time and place specified in the order, any document specified in the order that is in the person's custody or control. Note. Failure to comply with the direction is an offence under section 661. (3A) However, the Departmental Chief Executive is to withdraw the direction if it appears to the Departmental Chief Executive that - (a) the person does not consent to compliance with the direction, and (b) the person would not, in court proceedings, be required to comply with a similar direction on grounds of privilege against self-incrimination or legal professional privilege, and (c) the privilege is not a privilege in favour of a public authority or former public authority, (and, if the direction is required to be withdrawn, the person is not guilty of an offence against section 661). (4) The Departmental Chief Executive may take copies of or extracts from any document to which the Departmental Chief Executive gains access under this section. (5) The Departmental Chief Executive may arrange for a departmental report to be prepared in relation to an investigation conducted under this section. (5A) The Departmental Chief Executive may arrange for a departmental report to be prepared about whether a councillor has engaged in misconduct without an investigation being carried out under this section if - (a) the matter has been referred to the Departmental Chief Executive by the council and the Departmental Chief Executive is of the opinion that the report may be based on the findings of an investigation conducted by or on behalf of the council, or (b) the Departmental Chief Executive is of the opinion that the alleged misconduct, if proven, would be minor in nature and, were it to warrant disciplinary action, the disciplinary action would be comprised only of counselling or reprimanding the councillor, or (c) the Departmental Chief Executive otherwise considers it appropriate to do so. (6) The preparation of a departmental report is a prerequisite to a decision by the Departmental Chief Executive to take disciplinary action against a councillor, unless the disciplinary action is taken on the basis of a report by the Ombudsman or Independent Commission Against Corruption. (7) This section authorises reports relating to misconduct to be made by the Ombudsman or Independent Commission Against Corruption and a reference to a report of the Ombudsman or Independent Commission Against Corruption is a reference to a report made to the Departmental Chief Executive under the authority of this subsection or under any other provision of this or any other Act. (8) The powers conferred on the Departmental Chief Executive by this section may also be exercised for the purposes of determining if an administrator has engaged in conduct that would be misconduct if the administrator were a councillor. (9) In this section - administrator means an administrator of a council (other than an administrator appointed by the Minister for Primary Industries under section 66).
The DCE may take disciplinary action himself or herself for misconduct: 440I Departmental Chief Executive may take disciplinary action for misconduct (1) The Departmental Chief Executive may take disciplinary action against a councillor if the Departmental Chief Executive is satisfied that - (a) the councillor has engaged in misconduct (whether on the basis of a departmental report or a report by the Ombudsman or Independent Commission Against Corruption), and (b) disciplinary action is warranted. (2) The Departmental Chief Executive may take one or more of the following actions (and any such action is disciplinary action) - (a) counsel the councillor, (b) reprimand the councillor, (c) by order, direct the councillor to cease engaging in the misconduct, (d) by order, direct the councillor to apologise for the misconduct in the manner specified in the order, (e) by order, direct the councillor to undertake training, (f) by order, direct the councillor to participate in mediation, (g) by order, suspend the councillor from civic office for a period not exceeding 3 months, (h) by order, suspend the councillor's right to be paid any fee or other remuneration, to which the councillor would otherwise be entitled as the holder of the civic office, in respect of a period not exceeding 3 months (without suspending the councillor from civic office for that period).
Section 440L confers a right for a councillor against whom disciplinary action is taken by the DCE to appeal to the Tribunal. That is the right exercised by Clr Coppock in this proceeding. The nature of the appeal is considered below.
The DCE may, instead of taking disciplinary action against a councillor, either refer the matter to the council concerned with recommendations as to how the council might resolve the matter, by alternative dispute resolution or otherwise; or refer the matter to the Tribunal for consideration: s 440J(2).
If the matter is referred to the Tribunal, and the Tribunal decides under s 470A(1) to conduct proceedings into the matter, the Tribunal has the following powers: 482A Decision of NCAT - misconduct matters (1) This section applies where a matter has been referred to the Civil and Administrative Tribunal under section 438HA or 440J. (2) The Tribunal may, if it finds that the behaviour concerned warrants action under this section - (a) counsel the councillor, or (b) reprimand the councillor, or (c) suspend the councillor from civic office for a period not exceeding 6 months, or (c1) disqualify the councillor from holding civic office for a period not exceeding 5 years, or (d) suspend the councillor's right to be paid any fee or other remuneration, to which the councillor would otherwise be entitled as the holder of the civic office, in respect of a period not exceeding 6 months (without suspending the councillor from civic office for that period). (3) In determining which action, if any, to take against a councillor, the Tribunal may take into account any previous incidents of misconduct by the councillor, any disciplinary action previously taken against the councillor and any other relevant matters. (4) In this section, councillor includes a former councillor.

[8]

Applicant's submissions

Clr Coppock submits that s 440H(5A), in conferring power to prepare a departmental report without an investigation under s 440H, must be construed in context. That includes the surrounding relevant provisions and the statute as a whole, as well as extrinsic materials which illustrate the purpose of the provision and the mischief it was designed to address, and matters of legislative history.
Section 440H(5) provides that the DCE may arrange for a departmental report to be prepared in relation to an investigation conducted under s 440H. Pursuant to s 440H(6) preparation of a departmental report is a prerequisite to any decision to take disciplinary action against a councillor under s 440I. The applicant submits that ordinarily departmental reports are based on investigations undertaken by the DCE, which is significant as it conveys that such reports are the product of an independent investigation by the DCE, and an investigation is an important means to ensure that any sanctions imposed under s 440I are premised on a departmental report which is the product of an independent investigation by the DCE.
An exception is provided by s 440H(5A), which enables the preparation of a departmental report without an investigation in three circumstances: under (a) when a matter of misconduct has been referred by a council; under (b) if the DCE considers that any misconduct, if proven, would be minor and if it were to warrant disciplinary action, that action would be comprised of counselling or reprimanding the councillor; and under (c) if the DCE "otherwise considers it appropriate to do so".
The applicant submits that while the power under s 440H(5A)(c) appears in terms unfettered, and contingent only on the DCE forming an opinion that it is appropriate for a departmental report to be prepared without an investigation having occurred, that power must be exercised for a proper purpose. The legislature has specifically dealt with the situation of a referral to the DCE by a council where the council has conducted an investigation which has made findings of misconduct in s 440H(5A)(a). It cannot have been intended that the DCE could exercise the power under s 440H(5A)(c) to reactivate a matter where a council had determined not to accept the findings of an investigation, and had not referred the matter to the DCE. Further, the circumstances in which the DCE may rely on reports by third parties and be relieved of the necessity to conduct an investigation are limited. Under s 440H(2)(d)-(e) reports of the Ombudsman and ICAC are conditions precedent to the DCE conducting an investigation into misconduct, and do not remove the imperative for the DCE to conduct its own investigation into whether a councillor has engaged in misconduct.
The applicant submits that the limited ambit of s 440H(5A)(c) is also illustrated by s 440H(5A)(b), where the need for a fresh and independent investigation is removed if the consequences for the councillor of any adverse finding are likely to be relatively trivial. That points against s 440H(5A)(c) permitting an investigation to be avoided where the potential consequences are significant or likely to be significant for the councillor. Section 440H(5A)(c) is an exception to the general requirement imposed by s 440H(5). That s 440H(5A) is not intended to apply where an investigation has been conducted by a council, but its findings were not accepted by council and the matter was not referred to the DCE, is supported by the relevant extrinsic materials, including the Explanatory Note to the Local Government Amendment (Councillor Misconduct and Poor Performance) Bill 2015, and the Second Reading Speech for the Bill in the Legislative Assembly.
The applicant further contends that it was not reasonably open for the DCE to exercise the power under s 440H(5A) so as to avoid the necessity for an investigation to occur before a departmental report could be issued, given that the Council had not accepted the investigation findings, and had not referred the matter to the DCE. The applicant submits that an investigation was required so the DCE could understand the specific conduct in its factual setting, and apprehend the full context in which the impugned conduct occurred; and the misconduct alleged against the applicant was significant and far from trivial. The DCE's exercise of power under s 440H(5A)(c) was vitiated as it was manifestly unreasonable, and hence there was no "departmental report" capable of grounding the disciplinary sanctions imposed on the applicant under s 440I.

[9]

Respondent's submissions

While in agreement as to the applicable principles, the respondent contends that the applicant's construction as to the ambit of s 440H(5A)(c) is not correct, for the following reasons: 1. The context in which s 440H must be considered is that of the wider range of disciplinary sanctions available to the DCE under s 440I(2), and that the DCE may only take disciplinary action where satisfied that the councillor has engaged in misconduct, and disciplinary action is warranted. The DCE serves the important purpose of providing oversight in respect of misconduct matters over what are essentially political bodies of local governance, and one function of the DCE in considering the exercise of powers under s 440I is to satisfy himself that the relevant councillor did engage in misconduct; 2. Section 440H is the means by which the DCE is to be placed in a position to exercise the function in considering the exercise of the powers under s 440I of satisfying himself that the councillor did engage in misconduct. The scheme of s 440H and 440I permits the DCE to exercise disciplinary powers where sufficient reliable factual information exists to form the necessary conclusion that misconduct occurred, recognising that in some circumstances the DCE will not need to conduct an independent investigation to reach the level of satisfaction required by s 440I(1)(a). Neither s 440H nor s 440I requires that an investigation be conducted before the DCE is able to fulfil the fact finding function reposed in him by s 440I(1)(a), rather what is required is a finding based on either a departmental report or the receipt of a report by the Ombudsman or ICAC; 3. Section 440H(5A)(a) provides that one situation where the DCE may decide not to conduct further investigation in order to be sufficiently appraised of the relevant facts is where a council has caused an investigation to be conducted, and thus expressly recognises that a conduct reviewer's report may provide a sufficient evidentiary basis for the preparation of a departmental report and the exercise of the function in s 440I(1)(a); 4. The discretion in s 440H(5A)(c) is a wide power and ought not be construed narrowly, and the word "otherwise" stresses that it is a gap-filling discretion of general ambit that may apply where the other discretionary powers in s 440H(5A) do not. The construction urged by the applicant by which the criteria in (a), being a referral by the relevant council, assumes inordinate significance, is at odds with the general terms of the power and the statutory scheme; 5. The conclusion that there is no relevant conflict between paras 440H(5A)(a) and (c) is supported by reference to extrinsic material evincing the purpose of the provision, which was inserted into the LG Act by the Local Government Amendment (Councillor Misconduct and Poor Performance) Act 2015, an object of which was to streamline the process for dealing with councillor misconduct to ensure faster but fair outcomes. The construction advanced by the applicant would cut across that legislative purpose, and the additional time and expense incurred by conducting a further investigation in circumstances where a council decided not to accept a conduct reviewer's recommendations for political reasons would be antithetical to the purpose of the amending legislation.
The respondent contends that the applicant's contention that the decision to proceed in the absence of a referral was legally unreasonable is not made out, for the following reasons: 1. it conflates the decision making powers under s 440H(5A) with those under s 440I and relies improperly on the fact that different decisions were reached by different bodies as demonstrative of legal unreasonableness; 2. the conduct reviewer's report contained a body of evidence including transcripts, and it was the availability of that objective material that was considered in forming a view in connection with s 440H(5A). It was entirely reasonable to conclude that there was sufficient material available to the DCE to both understand the specific conduct in its factual setting, and apprehend the full context in which the impugned conduct occurred. A decision under s 440H(5A) is not whether misconduct occurred, rather it is whether there is sufficient material to permit the DCE to make that determination on a departmental report referred to in s 440I(1)(a) without a fresh investigation; 3. the decision by the Council not to accept the recommendations in the report has no bearing on a decision by the DCE in respect of the fact finding decision under s 440I(1)(a) as to whether misconduct occurred, and was not a relevant consideration at the s 440H(5A) stage; 4. while the decision of the DCE to proceed under s 440H(5A)(c) was not accompanied by reasons, the decision was arrived at after detailed consideration of the final and supplementary reports provided by Dr Loves, the Council's decision, and the presentation of those views in accordance with normal procedures; 5. the proposition that because the Council did not accept the investigation findings it was not reasonably open for the DCE to proceed on the basis of them, is a fallacious proposition.
In support of the submissions directed to the unreasonableness ground, the respondent relies on the statements dated 12 June 2020 by Ms Lynette Brown and Mr Tony Day, both of whom refer to a case meeting held on 13 September 2018 attended by Mr Hurst, Ms Brown, Chris Rowe (Senior Investigator - Legal) and Bron Hewson (Principal Investigator) at which Mr Day presented his assessment of Dr Loves' investigation.

[10]

Reply submissions

In reply, the applicant formally objects to parts of paras 17 (legal conclusion) and 21 (speculation/conjecture, hearsay) of Ms Brown's statement and part of para 17 (hearsay) of Mr Day's statement, submitting that that evidence should either be rejected by the Tribunal or, if admitted, accorded little weight.
On the construction of s 440H(5A), the applicant submits that: 1. the political nature of councils to which the respondent refers supports the preference accorded by the statutory scheme to independent and separate investigations being conducted by the DCE in order to prepare a departmental report, rather than reliance on reports prepared by any other person, particularly persons engaged or commissioned by the council; 2. the respondent's approach places undue stress on the word "otherwise" in s 440H(5A)(c) and ignores the immediate context given by s 440H(5A)(a) and (b). Section 440H(5A)(c) does not, in terms, permit the DCE to conduct a partial or confined investigation, rather it provides that the DCE may determine to conduct no investigation at all. In the absence of a report by the Ombudsman or the ICAC, a departmental report in relation to an investigation into misconduct is a prerequisite to the taking of disciplinary action against a councillor; and 3. any departmental report in the circumstances of the present matter, given that the misconduct was said to involve a conversation between a council officer and the applicant, would need to resolve the question as to which of the accounts was true and correct; and only an investigation where the applicant and council officer's credibility and reliability could actually be assessed could fairly and reasonably resolve the factual dispute at the heart of the matter.
In further support of his position that the decision to prepare the departmental report without an investigation under s 440H was unreasonable, the applicant submits that: 1. there is no evidence from the relevant decision maker, and it is not open to the Tribunal to guess at or infer what Mr Hurst's reasons for the decision were. Mr Day's opinion and reasons are irrelevant; 2. what occurred between 13 September 2018 to 8 February 2019 is unclear, and no particular decision making processes appear from the evidence filed by the respondent to have been engaged in after the purported re-authorisation and before the purported departmental report was published in July 2019. The purported authorisation under s 440H(5A)(c) almost five months later calls into question the bona fides of the exercise of power under s 440H(5A)(c); 3. it is imperative that a departmental report be based on an objective and impartial assessment of relevant evidence which has been assessed and analysed appropriately having regard to the particular context of the allegations of misconduct under consideration. Mr Hurst could have put on evidence detailing his reasons, and a Jones v Dunkel inference can be drawn from his failure to do so; and legal unreasonableness can in the circumstances more readily be found in the absence of any evidence from Mr Hurst as to the reasons for his decision; and 4. the evidence as to the critical conversation between the applicant and the council officer was in dispute, which called for an evaluation of the credibility and reliability of the applicant's account as against that of the officer to assess whether the officer's account could be accepted. An independent investigation was required in which the protagonists could be interviewed and their credit and reliability properly assessed by the author of the departmental report.

[11]

Whether a hearing should be dispensed with

Section 50 of the Civil and Administrative Tribunal Act 2013 (NCAT Act) relevantly provides: 50 When hearings are required (1) A hearing is required for proceedings in the Tribunal except: … (c) if the Tribunal makes an order under this section dispensing with a hearing, or … (2) The Tribunal may make an order dispensing with a hearing if it is satisfied that the issues for determination can be adequately determined in the absence of the parties by considering any written submissions or any other documents or material lodged with or provided to the Tribunal. (3) The Tribunal may not make an order dispensing with a hearing unless the Tribunal has first: (a) afforded the parties an opportunity to make submissions about the proposed order, and (b) taken any such submissions into account.
The parties were directed to include in their submissions on the preliminary issue whether a hearing on that issue was required. The applicant made no submission in his submissions in chief as to whether a hearing could be dispensed with, and in reply submissions stated that he was content for the matter to be dealt with on the papers. The respondent reserved its position as to whether the preliminary issue could be dealt with on the papers until after considering any material filed and served in reply. On 25 June 2020 the respondent advised the Tribunal that on consideration of the applicant's submissions in reply, its position was that the matter does not lend itself to being determined on the papers. The applicant by email on that date disagreed, noting that no witnesses are required for cross examination, no oral evidence is to be elicited and the legal arguments of the parties are set out in their written submissions.
The respondent has not indicated why it considers an oral hearing is necessary. It may be that that position is based on the objections made to parts of the statements of Ms Brown and Mr Day. However, while the applicant has formally objected to parts of those statements, he has not requested an opportunity to cross examine either Mr Day or Ms Brown.
The issues are comprehensively canvassed in the written submissions, and the Tribunal is satisfied can be adequately determined on the basis of the written submissions and supporting documents provided by the parties. The parties would be put to unnecessary expense if a hearing were held, and to do so would not be consistent with the guiding principle in s 36(1) of the NCAT Act.
The Tribunal is satisfied that the preliminary issue can be adequately determined in the absence of the parties by considering the written submissions and supporting documents provided to the Tribunal. The order under s 50(2) of the NCAT Act has accordingly been made.

[12]

Discussion and findings

The application before the Tribunal is an appeal by Clr Coppock under s 440L of the LG Act against the disciplinary action taken by the DCE on 28 February 2020. The appeal is not an appeal against the decision of the DCE to prepare a departmental report. The parties' submissions do not address the basis on which the Tribunal, in determining an appeal under s 440L, has power to consider the validity of the underlying steps taken for the decision that is the subject of the appeal, including the preparation of a departmental report, but assume that that power exists.
The Note to s 440L states that "An appeal under this section is an external appeal to the Tribunal for the purposes of the Civil and Administrative Tribunal Act 2013". Section 31(4) of the NCAT Act provides that an "external appeal" is an appeal to the Tribunal against an appealable external decision. That term is defined in s 31(3) to mean "a decision of an external decision-maker over which the Tribunal has external appeal jurisdiction".
The term "decision" is defined in s 5 of the NCAT Act, and includes in s 5(2)(b): (b) a decision that purports to be made under enabling legislation or this Act is taken to be a decision made under the enabling legislation or this Act even if the decision was beyond the power of the decision-maker to make,
Section 79 of the NCAT Act provides for external appeals: 79 Making and determination of external appeals (1) An external appeal may be made to the Tribunal by a person entitled to do so under enabling legislation on such a basis or grounds, or in such circumstances, as may be provided by that legislation. (2) In determining an external appeal, the Tribunal may - (a) in the case of enabling legislation that specifies the orders that may be made by the Tribunal on the appeal - make any of those orders, or (b) in any other case - make such orders as it considers appropriate in light of its decision on the appeal, including (but not limited to) orders that provide for any one or more of the following - (i) the appeal to be allowed or dismissed, (ii) the decision under appeal to be confirmed, affirmed or varied, (iii) the decision under appeal to be quashed or set aside, (iv) the decision under appeal to be quashed or set aside and for another decision to be substituted for it, (v) the whole or any part of the case to be reconsidered by the decision-maker whose decision is under appeal, either with or without further evidence, in accordance with the directions of the Tribunal.
The LG Act is the "enabling legislation" as defined in s 4(1) of the NCAT Act. No grounds on which the appeal may be made are specified in s 440L, or elsewhere in Chapter 14 of the LG Act. Section 440L(4) provides the orders that may be made by the Tribunal on the appeal.
Neither the NCAT Act nor the LG Act specifies what type of appeal is created by s 440L. In Fox v Percy (2003) 214 CLR 118 Gleeson CJ, Gummow and Kirby JJ distinguished between four types of appeal: 20. Appeal is not, as such, a common law procedure. It is a creature of statute. In Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd, Mason J distinguished between (i) an appeal stricto sensu, where the issue is whether the judgment below was right on the material before the trial court; (ii) an appeal by rehearing on the evidence before the trial court; (iii) an appeal by way of rehearing on that evidence supplemented by such further evidence as the appellate court admits under a statutory power to do so; and (iv) an appeal by way of a hearing de novo.
In Phillips v Director General, Department of Premier and Cabinet [2014] NSWCATOD 48 Deputy President Haylen noted at [31] an absence of binding decisions or analysis on the nature and scope of the appeal under s 440L, and that the parties differed as to whether the Tribunal could consider whether misconduct had occurred. After detailed consideration of the statutory scheme, the Deputy President concluded at [39] that it was open on the appeal to challenge the underlying finding of misconduct: 39. …Absent clear words in the Act, such an appeal may encompass the underlying conduct that has brought the councillor to disciplinary attention. The legislature would be reasonably expected to specify in clear terms that a counsellor under such circumstances would be required to challenge the underlying finding of misconduct by way of judicial review and could only appeal the consequential finding of misconduct in the Tribunal. The facts of the present case show how unlikely is that course: here, there is no issue that the required apology has not been given and thus it follows that there has been a breach of the Code of Conduct. The Tribunal would not be permitted to consider the underlying conduct but would be restricted to perhaps dealing only with the appropriate penalty to be imposed for the consequential breach. It follows from this unlikely conclusion that it is open to Clr Phillips in this appeal to challenge the finding of misconduct for allegedly disclosing confidential information. ...
Subsequent decisions of the Tribunal have adopted that reasoning, concluding that an appeal under s 440L is an appeal de novo which encompasses both the underlying finding of misconduct, and the appropriate disciplinary response: Hindi v Chief Executive, Office of Local Government [2016] NSWCATOD 134 at [3]; Meineke v Acting Chief Executive, office of Local Government [2016] NSWCATOD 135 at [5].
Phillips was considered in some detail by Basten J in Cornish v Secretary, Department of Planning, Industry and Environment [2019] NSWSC 1134, an appeal from a decision of the Tribunal on a referral by the DCE under s 440J(2) of the failure of the councillor to comply with a council resolution requiring him to apologise for conduct at council meetings found by a conduct reviewer to be in breach of the council's code of conduct.
The Tribunal had concluded that it was not part of its role to review the findings of the conduct reviewer and determine whether there had been a breach of the code of conduct, but rather its role was to consider the councillor's failure to comply with the council resolution requiring him to apologise for that conduct. Basten J disagreed, concluding at [90] that on the s 440J referral, on being invited by the person brought before it for disciplinary action to consider the basis on which the resolution had been made by Council and his reasons for not complying with it, the Tribunal ought to have conducted an inquiry as to the justification for the recommendations.
In the course of his reasoning his Honour considered the Tribunal decision in Phillips on the nature of an appeal under s 440L, and commented at [73] that if a councillor against whom action was taken by the DCE had a full appeal under s 440L on the merits, including the right to challenge findings of a conduct reviewer, it would seem anomalous if instead the DCE having referred to matter to the Tribunal, the Tribunal could not adopt a similar approach. Basten J noted at [86] that the appeal under s 440L against the decision of the DCE to take disciplinary action is in more constrained terms than that of a referral to the Tribunal of a "matter" for "consideration" under s 440J. His Honour concluded that the approach adopted in Phillips should be accepted with respect to a referral under s 440J(2) of the failure to comply with a council resolution. If the underlying finding were only open to challenge on judicial review there would be no opportunity for independent review of the exercise of fact-finding undertaken by the conduct reviewer.
The discussion in Cornish supports the conclusion in Phillips that on an appeal under s 440L the Tribunal is required to consider the underlying findings as to the councillor's conduct. It may be that it is sufficient for the purposes of an appeal under s 440L that there is, in fact, a departmental report, and if the underlying findings are contested the Tribunal is required to make findings based on the evidence before it. Or, depending on the circumstances, the question of whether there was power under s 440H(5A) for the preparation of that report may properly fall within the consideration required by s 440L. The Tribunal is of the view that the former is the correct position, and that any challenge to the validity of such a report ought more properly be the subject of judicial review proceedings. The Tribunal's jurisdiction is to determine the appeal from the DCE's decision to take disciplinary action.
However, in case that is incorrect, and as the parties have provided detailed submissions on the issue, the Tribunal is of the view that the discretion conferred on the DCE under s 440H(5A)(c) for the preparation of the departmental report was not limited as contended for by the applicant. The reasons for that conclusion are as follows.

[13]

Whether s 440H(5A) of the Local Government Act enabled preparation of the departmental report

Construction of s 440H(5A) requires consideration of the ordinary and grammatical sense of the words used, having regard to the context, which includes legislative history and extrinsic materials, and legislative purpose: SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362; [2017] HCA 34 at [14]; CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355.
Div 3 of Part 1 of Chapter 14 establishes three avenues for disciplinary action to be taken against a councillor for misconduct: formal censure by the council (s 440G); disciplinary action taken by the DCE (s 440I); or referral of the matter under s 440J by the DCE to the Tribunal for consideration. In the absence of a report by the Ombudsman or the ICAC, a prerequisite to the taking of disciplinary action by the DCE is that there be a departmental report: s 440H(6); Hindi v Chief Executive, Office of Local Government [2016] NSWCATOD 134 at [11].
The preparation of a departmental report is addressed in s 440H(5), which provides that the DCE "may arrange for a departmental report to be prepared in relation to an investigation conducted under this section", that is, an investigation "for the purpose of determining whether a councillor has engaged in misconduct": s 440H(1). Such an investigation may be conducted on his or her own initiative (s 440H(2)(a)), or if the general manager of a council or a council by resolution refers an allegation of misconduct (s 440H(2)(b), (c)), or if the Ombudsman or the ICAC state in a report that that either is satisfied that "a councillor has or may have engaged in misconduct" (s 440H(2)(d), (e)). The powers of the DCE in the conduct of an investigation are specified in s 440H(3) and (3A), and s 440O addresses the use of information or a document that tends to incriminate the person subject to a direction to provide written information or produce a document.
Section 440H(5A) specifies the circumstances in which the DCE may arrange for a departmental report to be prepared without an investigation being carried out under s 440H. Section 440H(5A) was inserted in the LG Act by the Local Government Amendment (Councillor Misconduct and Poor Performance) Act 2015, which commenced on 13 November 2015. Both parties relied on the Second Reading speech (Legislative Assembly, 16 September 2015), in which the Minister for Local Government stated: It is also proposed to remove the requirement for the Chief Executive of the Office of Local Government to undertake an investigation as a prerequisite to taking disciplinary action for misconduct in all cases, allowing them to dispense with an investigation where one is not required to establish whether grounds exist that would warrant such action. This will be the case where sufficient evidence already exists of the misconduct because the matter had been previously investigated under a council's code of conduct and had been referred by the council to the chief executive for disciplinary action under the misconduct provisions of the Local Government Act. Allowing the chief executive to dispense with the need for a further investigation in such cases will reduce the time involved in dealing with such matters by 9 to 13 weeks.
The Explanatory Memorandum was to similar effect: Schedule 1 [29] amends section 440H of the principal Act by inserting a new subsection that enables the Departmental Chief Executive to arrange for a departmental report to be prepared without an investigation in certain situations where it is alleged that a councillor has engaged in misconduct. This is where the matter has been referred by the council and an investigation has already been conducted by the council, where, in the opinion of the Chief Executive, the allegation relates to a minor matter for which at most, the councillor would be counselled or reprimanded, and in other circumstances where the Chief Executive considers that arrangement appropriate.
Section 440H(5A) specifies three circumstances in which a departmental report can be prepared without an investigation under s 440H. First, under para (a), where a council has already conducted an investigation and referred the matter to the DCE by the council. It was common ground that the Council did not refer the matter to the DCE, but notified the DCE of its decision not to take the recommended action. Secondly, under para (b), where the DCE is of the opinion that the alleged misconduct if proven would be minor in nature and any likely disciplinary outcome would take the form of counselling or a reprimand.
The third basis on which a departmental report can be prepared without an investigation under s 440H is para (c), if the DCE "otherwise considers it appropriate to do so". The circumstances in which the DCE could decide under s 440H(5A)(c) that it would be appropriate to proceed to the preparation of a departmental report without first having conducted an investigation are not specified. The discretion, as with all exercises of discretionary power, is not absolute or unfettered, and in the absence of some limitation discernible from the text, is limited by the scope and objects of the legislation: Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at 204-5.
The applicant contends there is such a limitation in s 440H(5A) itself, and that the reference in para (a) to an investigation carried out by or on behalf of the council in a matter referred by the council, indicates a legislative intention to exclude from the residual power under para (c) the ability to consider an investigation conducted by the council where that council has not referred the matter to the DCE.
The text of s 440H(5A)(c), and the inclusion of the word "otherwise", does not in the Tribunal's view support that reading. The word "otherwise", the ordinary meaning of which is "under other circumstances", or "in other respects", must be given some work to do, as discussed recently in a different disciplinary context: Pharmacy Council of NSW v Ibrahim [2020] NSWSC 708. The references to the circumstances in paras (a) and (b) in the Second Reading speech do not, and could not, limit the discretion conferred in the legislation to the circumstances specified in paras (a) and (b).
That the legislature has not attempted to confine the residual discretion in the manner urged by the applicant is illustrated by the diversity of circumstances in which the DCE may be considering whether alleged misconduct warrants action, and if so, of what kind. That is confirmed in the list in s 440H(2) of the circumstances in which the DCE may conduct an investigation for the purpose of determining whether a councillor has engaged in misconduct. The reference in s 440H(2) (d) and (e) to "has or may" envisages that a report by the Ombudsman or the ICAC which precedes conduct of an investigation under s 440H may have identified, but not investigated fully and reached conclusions on, possible misconduct: in those circumstances, an investigation under s 440H may be appropriate.
It is the departmental report that in the absence of a report by the Ombudsman or the ICAC plays the central role in the initiation and consideration of possible disciplinary action by the DCE exercising the powers under s 440I: s 440H(6) and s 440I(1)(a). As noted by Basten J in Cornish v Secretary, Department of Planning, Industry and Environment at [78], where the DCE is required to obtain a departmental report before exercising disciplinary powers which extend across a range of levels of severity, the DCE will need to understand any specific conduct in its factual setting. In that scheme the investigation conducted under s 440H is the precursor for preparation of the departmental report, unless dispensed with under s 440H(5A). As identified in the Second Reading speech, there may be circumstances in which there is already sufficient evidence as to the grounds that may warrant disciplinary action for alleged misconduct, in which case in the interests of ensuring effective and timely action, no purpose would be served by the conduct of an investigation by the DCE.
The applicant points to the need to have the evidence as to alleged misconduct properly tested, submitting that a departmental report would need to resolve which of the conflicting accounts was correct. That submission overlooks the totality of the legislative scheme, which incorporates both the availability of an appeal under s 440L from disciplinary action taken by the DCE, and the consideration by the Tribunal on a referral under s440J. In that scheme the Tribunal is able to determine any challenge to the findings of a conduct reviewer, including, if contested, an assessment of the councillor's alleged conduct.
That submission also overlooks the factual context of the present proceeding, where the departmental report was based on the investigation undertaken by the conduct reviewer on behalf of the Council. At para [15], the departmental report stated that the procedural matters raised by Clr Coppock's legal representative during the course of Dr Loves' investigation were not revisited, and evidence generated in that investigation was considered and assessed. As the record of that evidence in both the departmental report and in Dr Loves' report makes clear, the evidence of both Clr Coppock and the Council officer as to the content of the telephone conversation was before the conduct reviewer. To restrict reliance on a council's investigation only to circumstances that fall within s 440H(5A)(a), without regard to the possibility that a council investigation might provide sufficient evidence as to the grounds that may warrant disciplinary action for alleged misconduct, would give s 440H(5A)(c) no work to do.
The applicant has not established that the power conferred on the DCE under s 440H(5A) to prepare a department report without an investigation being carried out under s 440H is, where a council has conducted an investigation, limited to the circumstances specified in para (a) of s 440H(5A), such that there was no power under s 440H(5A)(c) for the DCE to prepare the departmental report of July 2019.

[14]

Whether the authorisation of a departmental report without an investigation under s 440H was unreasonable

The applicant contends that if, contrary to his position that it was not open to the DCE under s 440H(5A) to prepare a departmental report without first conducting an investigation under s 440H, there was power to prepare the departmental report, the power was exercised unreasonably.
A departmental report is a precondition to the DCE's decision to take disciplinary action, which is the subject of the appeal; however the Tribunal is not persuaded that the proper exercise of the powers conferred under s 440L includes any requirement for, or authorisation of, an evaluation by the Tribunal of the reasonableness of the DCE's decision to prepare the departmental report without an investigation, if there is in fact a departmental report.
If that conclusion is incorrect, the Tribunal would not in any event find that the decision to prepare a departmental report in the present circumstances was legally unreasonable, for the following reasons.
The test for unreasonableness is necessarily stringent, and a conclusion that a decision is legally unreasonable is not lightly reached: Minister for Immigration and Border Protection v SZVFW [2018] HCA 30 at [11] (Kiefel CJ), [135] (Edelman J).
The parties referred to the summary of principles concerning unreasonableness in the judgment of Wigney J in BHL19 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCAFC 94 at [131]-[138]. Those principles applicable on judicial review are framed in similar terms to the statement of the Full Court in Minister for Immigration and Border Protection v Eden [2016] FCAFC 28 at [58]-[65], which address the earlier decisions of the High Court in Minister for Immigration and Citizenship v Li [2013] HCA 18; (2013) 249 CLR 332 and the Federal Court in Minister for Immigration and Border Protection v Singh [2014] FCAFC 1; (2014) 231 FCR 437 and Minister for Immigration and Border Protection v Stretton [2016] FCAFC 11.
The principles can be summarised as follows: 1. A discretionary power statutorily conferred must be exercised reasonably: Li at [29], [63, [88]; Singh at [43]; Stretton at [4], [53]; 2. An evaluation for legal unreasonableness does not involve a court reviewing the merits of the decision: Li at [66], Stretton at [12], [58]; 3. Legal unreasonableness may take the form of an error in the decision-making process, such as failure to have regard to a relevant consideration, or an "outcome focussed" conclusion without any specific error being identified: Li at [27]-[28], [72]; Singh at [44] ; 4. Within the boundaries of the power, there is an area of decisional freedom within which a decision-maker has a genuine discretion and where reasonable minds might differ as to the correct decision or outcome: Li at [29], [66]; Stretton at [7]; 5. The relevant statute must be construed, requiring an evaluation of the nature and quality of the decision by reference to the subject matter, scope and purpose of the statutory power: Li at [24], [67]; Stretton at [55], [62]; 6. Where reasons for the decision are available the reasons are likely to provide the focus for evaluation of whether the decision is legally unreasonable; however an inference of unreasonableness may be drawn even if no error in the reasons can be identified: Singh at [45]-[47]; 7. Evaluation of legal unreasonableness is not amenable to rigidly defined categorisation or fixed formulae: Stretton at [2], [10], [62].
The applicant's contention that the DCE could not reasonably have exercised the power under s 440H(5A)(c) to prepare a departmental report without an investigation under s 440H is put in two ways. First, in the submissions filed on 22 May 2020, because the Council had not accepted the investigation findings, or referred the matter to the DCE, and an investigation was required so the DCE could understand the specific conduct in its factual setting and an investigation was essential so the DCE could apprehend the full context. Secondly, in the reply submissions, referring to the circumstances of the particular allegations levelled at the applicant, and the conflicting evidence about the crucial conversation, the fact that the Council had not accepted the investigator's findings and had not referred the matter to the DCE, and the fact that the legislative scheme gives significance to a departmental report as a precondition to the exercise of disciplinary powers under s 440I.
The applicant relies on the absence of evidence from Mr Hurst as to his reasons for authorising the preparation of the departmental report. As the above summary of principle confirms, legal unreasonableness may be apparent from reasons where provided; however in the absence of any obligation to provide reasons, the absence of evidence from Mr Hurst cannot be a basis on which to conclude that the authorisation was as a consequence unreasonable. In any event, the recommendation made by Mr Day on 5 February 2019 that preparation of a departmental report be authorised under s 440H(5A)(c) was made on the basis that it would be open to form the view that it was appropriate to arrange for a departmental report without investigation "as the evidence gathered by the conduct reviewer is available and sufficient for the purposes of making findings and grounding recommendations with respect to the alleged misconduct" was approved, and the departmental report records the same conclusion at [3] (see [16] above).
The Tribunal does not agree that the fact that the Council did not accept the investigation findings or refer the matter to the DCE means that the authorisation of the preparation of the departmental report based on that investigation was legally unreasonable. As noted by Basten J in Cornish v Secretary, Department of Planning, Industry and Environment at [91], the role of councillors in disciplining their members is an unusual aspect of the functions of a council. There may be many reasons why a council may or may not refer a matter to the DCE. The DCE was required by s 440H(5A)(c) to form an opinion as to whether it was appropriate to proceed as he did; and the Council's non acceptance of the investigation's findings could not preclude a proper exercise of that statutory discretion.
As confirmed in Cornish, given the significance of the departmental report in the disciplinary scheme, the DCE would need to understand the alleged conduct in its factual setting. The departmental report drew upon Dr Loves' investigation for that purpose. The conduct reviewer's report summarised the information provided by Mr Fisher and the manager of the Compliance Unit, and the information provided by Clr Coppock; analysed the evidence for and against the allegation against Clr Coppock; addressed Clr Coppock's response to the draft report as required by the Procedures for the Administration of the Code of Conduct; and stated the conclusion reached. The departmental report reviewed the evidence, and stated at [47] five reasons why Mr Fisher's version of the conversation was accepted rather than that of Clr Coppock, and the reasons for the findings as to breaches of the Code of Conduct, and that the finding of misconduct warranted disciplinary action.
The applicant takes issue with the objectivity of the conclusions reached by the conduct reviewer, and submits that it was not sufficient that there was evidence about the critical events available to the DCE. However, whatever challenge might be made to the conduct reviewer's findings, the appeal under s 440L is an appeal de novo, and the Tribunal is required to determine, on the basis of the evidence put before it, whether the alleged misconduct is proven, and if so, what is the appropriate disciplinary response. As discussed in Phillips at [39], that will require the Tribunal to consider all the evidence and make findings on the underlying conduct that brought the applicant to disciplinary attention.

Coppock v Secretary, Department of Planning and Environment

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