Deputy Secretary, Local Government, Planning and Policy v Garrard

NCAT Occupational|2021-04-16|Before: Commission J

Introduction

By letter dated 3 December 2020, the Deputy Secretary, Local Government, Planning and Policy ('the Deputy Secretary'), under delegation from the Secretary, Department of Planning, Industry and Environment, referred allegations of misconduct by Mr Garrard, a Councillor of Cumberland Council, to the Tribunal for its consideration under s 440J(2)(b) of the Local Government Act 1993 (NSW) ('the Act'). The letter was accompanied by a copy of a report of an investigation into the allegations. The investigation was undertaken under s 440H of the Act.
This decision is a preliminary decision under s 470A of the Act concerning the question of whether the Tribunal should conduct proceedings into the matter the subject of the referral under the Act.
In many of the provisions of the Act relevant to this decision, functions and powers are conferred upon the 'Departmental Chief Executive'. In the Dictionary at the end of the Act, the 'Departmental Chief Executive' is defined to mean the 'Chief Executive of the Office of Local Government'. Subsequent to the coming into operation of the Act, the title of that position has changed to the Secretary of the Department of Planning, Industry and Environment (see clause 13(3)(b) of the Administrative Arrangements (Administrative Changes-Public Service Agencies) Order 2019 and Schedule 1(1) of the Administrative Arrangements (Administrative Changes-Public Service Agencies) Amendment Order 2019). The Secretary of the Department of Planning, Industry and Environment has delegated his functions and powers under the Act to the Deputy Secretary, Local Government, Planning and Policy ('the Deputy Secretary'). For convenience, where the Act confers a power or function upon the Departmental Chief Executive, I will refer to it having been conferred upon the Deputy Secretary.

Hearing

A directions hearing took place shortly after the Tribunal received the referral of the matter under s 440J of the Act. At that directions hearing, the respondent was asked whether he wished to have an opportunity to make submissions on the question of whether the Tribunal should decide to conduct proceedings into the matter under s 470A of the Act. The respondent indicated that he did wish to make submissions on that question, so a timetable for the filing and serving of submissions by both parties was set, and the matter was listed for hearing on that issue.
Both parties filed and served written submissions, and the hearing on the question of whether the Tribunal should decide to conduct proceedings into the matter under s 470A of the Act took place.

Was it necessary to hear the parties on the question of whether the Tribunal should decide to conduct proceedings into the matter under s 470A of the Act?

The Act, in s 470A(1), says that the Tribunal may decide to conduct proceedings into the matter 'After considering a report presented to it under section … 440J in relation to a referred matter'. In some of the past matters involving a report under s 440J of the Act, those words have been interpreted or assumed to mean that the Tribunal need do nothing other than to consider the report in the making of the decision as to whether to conduct proceedings, and the Tribunal has made its decision having regard only to the report presented to it.
In the letter dated 3 December 2020 which accompanied the report presented to the Tribunal in this matter, the Deputy Secretary, Local Government, Planning and Policy ('the Deputy Secretary') said that he had invited Mr Garrard to make submissions on the Deputy Secretary's preliminary view that the matter should be referred to the Tribunal, but Mr Garrard did not respond to that invitation. In submissions before me, it was explained that the invitation to make submissions was sent to an email address which Mr Garrard had stopped using some time previously.

The Role and Powers of the Deputy Secretary and the Tribunal

The Office of Local Government received a referral from the Independent Commission Against Corruption ('ICAC') on 13 November 2018 under s 53 of the Independent Commission Against Corruption Act 1988 (NSW).
Pursuant to s 440H(1) of the Act, the Deputy Secretary conducted an investigation. A report of that investigation was prepared under s 440H(5) of the Act.
Pursuant to s 440I of the Act, the Deputy Secretary may take disciplinary action against a councillor if the Deputy Secretary is satisfied that the councillor has engaged in misconduct and the disciplinary action is warranted.
The Deputy Secretary's powers in relation to disciplinary action are set out in s 440I as follows: (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). (3) In determining which disciplinary action, if any, to take against a councillor who has engaged in misconduct, the Departmental Chief Executive 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. (3A) Before taking disciplinary action against a councillor, the Departmental Chief Executive is to - (a) give the councillor written notice - (i) specifying the grounds on which it is proposed to take disciplinary action against the councillor, and (ii) specifying the disciplinary action that the Departmental Chief Executive proposes to take against the councillor, and (iii) inviting the councillor to make submissions within a specified period (of not less than 14 days) about the proposal, and (b) consider any submissions made by the councillor in accordance with the notice. (4) The Departmental Chief Executive is to notify the councillor of any decision to take disciplinary action under this section and the reasons for the decision. (5) A copy of the decision and the statement of reasons for the decision are to be provided to the council. (6) The Departmental Chief Executive is to make any decision to suspend a councillor from civic office or to suspend a councillor's right to be paid any fee or other remuneration under this section, and the statement of reasons for the decision, publicly available. (7) The Departmental Chief Executive may make any other decision to take disciplinary action against a councillor, and the statement of reasons for the decision, publicly available. (8) No liability (including liability in defamation) is incurred for making a decision publicly available as permitted or required by this section or for publishing in good faith a fair report or summary of such a decision.
Pursuant to s 440J of the Act, instead of taking disciplinary action against a councillor, the Deputy Secretary may (among other alternatives), refer the matter to this Tribunal 'for consideration'.
In this matter, the Deputy Secretary referred the matter to the Tribunal by the provision of a copy of the Departmental report pursuant to s 440J(3) of the Act, which was accompanied by letter dated 3 December 2020. The stated grounds for the referral were that referral was warranted on account of the seriousness of the case, and because of the broader range of penalties available to the Tribunal. The Deputy Secretary said, in his letter, that he also considered that it would be in the public interest for the matter to be subject to a hearing by the Tribunal.
Under s 482A of the Act, the following are available to the Tribunal to impose in the event that misconduct (which is defined to include a breach of the code of conduct) is found to have taken place: (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.
The sanctions available for the Tribunal to impose include sanctions which are more onerous than those available to the Deputy Secretary, in that the Tribunal may suspend a councillor for 6 months, whereas the Deputy Secretary is limited to the imposition of a suspension for 3 months, the Tribunal may suspend the councillor's right to be paid for 6 months instead of the 3 months available to the Deputy Secretary and the Tribunal may disqualify a councillor from holding civic office for a period not exceeding 5 years, whereas the Deputy Secretary has no ability to impose a disqualification.
Pursuant to s 440I(3A), the procedure prescribed for the Deputy Secretary in considering the merits of the allegations involves the giving of written notice of the grounds upon which it is proposed to take disciplinary action, and the disciplinary action proposed, to the councillor, and inviting the councillor to make written submissions to the Deputy Secretary. Any written submissions made by the councillor are to be taken into account by the Deputy Secretary prior to the making of the decision as to whether to take disciplinary action.
If the Tribunal conducts proceedings in relation to a matter, there is a presumption, implicit in the provision of the Act, that the Tribunal will conduct a hearing. A hearing may be dispensed with under s 470B: 470B Circumstances in which NCAT may dispense with hearing (1) After considering a report presented to it under section 438HA or 440J and any other document or other material lodged with or provided to the Tribunal in relation to the report, the Civil and Administrative Tribunal may determine the proceedings without a hearing if - (a) the Departmental Chief Executive and the councillor to whom the report relates have agreed that the proceedings may be determined without a hearing, and (b) there are no material facts in dispute between the Departmental Chief Executive and the councillor, and (c) in the opinion of the Tribunal, public interest considerations do not require a hearing.
To summarise, the process by which the allegations of misconduct are tested may be different depending upon whether the Deputy Secretary or the Tribunal decides the merits of the matter. The Tribunal also has the ability to impose more onerous sanctions than the Deputy Secretary in the event that misconduct is proven.

The Tribunal's decision under s 470A of the Act

As I have said, above at [5], The Act, in s 470A, says: 470A NCAT to decide whether or not to conduct proceedings into a referred matter relating to misconduct (1) After considering a report presented to it under section 438HA or 440J in relation to a referred matter, the Civil and Administrative Tribunal may decide to conduct proceedings into the matter. (2) If the Civil and Administrative Tribunal decides not to conduct proceedings into a referred matter, it must provide a written statement of its decision, and the reasons for its decision - (a) to the councillor to whom the report relates, and (b) to the council concerned, and (c) to the Departmental Chief Executive.
The first question is whether the Tribunal's decision as to whether or not it will conduct proceedings into the matter referred to it by the Deputy Secretary is the kind of decision which attracts an obligation to give the affected parties an opportunity to make submissions in relation to that decision. This question falls to be decided in the context of the provisions of the Civil and Administrative Tribunal Act 2013, including s 38(2) which provides, in effect, that the Tribunal's processes are subject to the rules of natural justice (now more usually referred to as the rules of procedural fairness).
The issue as to the source of a possible obligation to accord procedural fairness to a person affected in such a process has been the subject of a series of decisions beginning with Kioa v West (1985) 159 CLR 550 and including Plaintiff S10/2011 v Minister for Immigration and Citizenship (Kaur's case) (2012) 86 ALJR 1019. The current position on the question is summarised by Matthew Groves in Modern Administrative Law in Australia, Chapter 10, The Evolution and Entrenchment of Natural Justice (Cambridge University Press 2014) at p 217 as follows: …The result is a strong presumption that the rules of natural justice apply to the exercise of statutory powers, and an acceptance that those rules can be excluded or limited by sufficiently clear legislation. The important issue is now not the source of any duty to act fairly but the legislative and factual context, the combination of which determine the scope and content of the requirement of natural justice, and their exclusion or limitation. That reasoning was confirmed in Kaur's case, where Gummow, Hayne, Crennan and Bell JJ suggested that continued questions about the basis of the duty to act fairly served no purpose. They explained (at [97]): the common law usually will imply, as a matter of statutory interpretation, a condition that a power conferred by statute upon the executive branch be exercised with procedural fairness to those whose interests may be adversely affected by the exercise of that power. If the matter be understood in that way, a debate whether procedural fairness is to be identified as a common law duty or as an implication from statute proceeds upon a false dichotomy and is unproductive.
In Livers v Legal Services Commissioner [2018] NSWCA 319, Gleeson JA, with whom Barrett AJA and Simpson AJA agreed, said, in relation to the exercise by the Tribunal of the power to make disciplinary orders with respect to legal practitioners under s 562 of the Legal Profession Act 2004, at [70]: 70 Whether the observance of the principles of natural justice is a condition attached to the statutory power of the Tribunal under s 562 of the Legal Profession Act, is a question of statutory construction. The starting point is a consideration of the nature of the power, and whether the exercise of that power has the potential to destroy, defeat or prejudice a person's rights or interests. If so, it is necessary to consider whether the operation of the rules of natural justice is excluded by "plain words of necessary intendment": Annetts v McCann (1990) 170 CLR 596 at 598; [1990] HCA 57. See generally the summary of principles in Saeed v Minister for Immigration and Citizenship (2010) 241 CLR 252; [2010] HCA 23 at [11]-[14].
The Tribunal's decision under s 470A of the Act as to whether to conduct proceedings into a referred matter has the potential to affect the rights or interests of the councillor the subject of the matter in that, in the event that the Tribunal decides to conduct proceedings, it will expose the councillor to a procedure which is likely to include a hearing (whereas the Deputy Secretary's decision on the merits is made on the papers) and, in the event that the misconduct is proven, it will expose the councillor to the possibility of the imposition of more serious disciplinary orders.
Exposure to the possibility of being required to prepare for and attend a hearing, and to the possibility of having imposed a more serious disciplinary order than that which the Deputy Secretary could impose, are both outcomes of the exercise of power by the Tribunal which have the potential to prejudice a councillor's interests. Whilst circumstance may be imagined in which a councillor may welcome the opportunity to have allegations tested in a public hearing, the process will usually require the councillor to expend considerably more time and cost in defending themselves against the allegations. The conduct of proceedings in the Tribunal also has the potential to have a greater negative impact upon the councillor's reputation. Reputation is an interest which attracts the protection of the rules of procedural fairness (see Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at [27])
The better view is that the Tribunal's decision under s 470A of the Act is a decision which attracts the requirement to observe the rules of procedural fairness, unless the relevant statutory provision clearly excludes those rules.
There is an argument that the legislature intended to convey, in s 470A(1) of the Act, that the report presented to it under s 438HA or 440J is the only material that the Tribunal needs to consider before making the decision as to whether to conduct proceedings into the matter. I note that the legislature is prescriptive as to the steps to be followed in some of the processes leading to that decision.
It weighs on the other side of the argument, however, that the importance of the decision under s 470A(1) of the Act is implicitly acknowledged in s 470A(2) of the Act, with the imposition of a requirement that the Tribunal provide reasons to the councillor, the council and the Deputy Secretary in the event that it decides not to conduct proceedings.
The matter is finely balanced, but, having regard to the strong presumption that the rules of procedural fairness apply, the better view is that it was not intended that the rules of procedural fairness be implicitly excluded in the Tribunal's process leading up to the decision provided for in s 470A of the Act.
It is the practice of the Deputy Secretary to seek submissions from a councillor when the Deputy Secretary is considering whether to refer the matter to the Tribunal under s 440J(2)(b) of the Act. The question then arises as to whether the hearing rule component of procedural fairness is thereby satisfied for the purposes of the Tribunal's function under s 470A of the Act. The Deputy Secretary, properly, seeks submissions from the councillor on the question of whether the Deputy Secretary ought to refer the matter to the Tribunal under s 440J(2)(b) of the Act. The question the Tribunal must answer is the different question as to whether the Tribunal should conduct proceedings. The seeking of submissions by the Deputy Secretary does not fulfil the Tribunal's obligation to accord procedural fairness.
There is a practical aspect to this issue. These matters sometimes, for a variety of reasons, proceed from stage to stage at a slow pace. It may well be that, by the time the Tribunal comes to consider its decision under s 470A(1), facts and circumstances may have come to light which were not brought to the intention of the author of the report referred to the Tribunal. Matters relevant to the Tribunal's decision as to whether to conduct proceedings may have emerged. Inviting submissions and holding a brief hearing on the decision to be made under s 470A(1) may conduce to the efficient disposal of the matter.

Should the Tribunal conduct proceedings into this matter?

The respondent's submissions

It was submitted on behalf of Councillor Garrard that both considerations of liability and considerations of discretion should lead to the conclusion that the Tribunal should not conduct proceedings.
Whilst it was argued that the Tribunal might determine, ultimately, that there had been no misconduct which warrants punishment, it was conceded that, on the state of the information before the Tribunal, the possibility exists that the Tribunal may not be persuaded that no misconduct occurred. It was argued, however that even where it is open to the Tribunal to make adverse findings, it is possible for the Tribunal to be persuaded that it ought not to conduct proceedings.
Councillor Garrard argued that the Act strikes a balance between the desirability of holding councillors to account for breaches of duty and obligation on the one hand and the recognition that the role of an elected official is not an easy role to discharge and has a political aspect which must be exercised in the context of the Council's executive functions.
It was submitted that the public interest would not be served by the conduct of proceedings in the Tribunal.
Councillor Garrard has given 47 years of continuous public service as a councillor. He has been an active and engaged representative of his community. He has never been the subject of any other investigation or inquiry.
The submissions on behalf of Councillor Garrard traversed the allegations in some detail, and argued, in effect, that they are allegations of non-pecuniary conflict of interest which could also be characterised as an error of judgment in an omission to make a disclosure, rather than being characterised as misconduct under the Act. Councillor Garrard concedes that he ought to have disclosed his non-pecuniary interest. That non-pecuniary interest, it was argued, consisted of a personal relationship with an applicant for development approval.
It is pointed out that Councillor Garrard has served 9 years of his time as a councillor since the allegations the subject of the report came to the attention of the Department, and since that time he has sought out and completed education as to the issues arising in the report.
Ultimately, the submission was made that the lesson for Councillor Garrard emerging from the events the subject of the report is that he must disclose his potentially conflicting interests. It is said that Councillor Garrard has well and truly learned that lesson and will not repeat his mistake.

The Deputy Secretary's submissions

The Deputy Secretary submitted that the report provides a sufficient basis for the Tribunal to decide to conduct proceedings.
It is further submitted that there may be facts to be found, and that the extent of the seriousness of Councillor Garrard's omission to disclose his relationship with the applicant for development approval has yet to be determined.
The Deputy Secretary pointed to s 7(e) of the Act, which states that one of the purposes of the Act is 'to provide for a system of local government that is accountable to the community…'. It was argued that the Tribunal's decision under s 470A should be exercised in a way which promotes that accountability.
It was argued that a decision not to conduct a hearing might be appropriate if it were evident that the allegations the subject of the report were incapable of constituting misconduct, or if it were apparent that the allegations are not sufficiently serious to justify the holding of a hearing in the Tribunal. However, in circumstances where it has been admitted by Councillor Garrard that a non-pecuniary interest existed and was not declared, it was argued that the need for local government to be accountable to its community is a persuasive reason for the Tribunal to make a decision in favour of the conduct of proceedings.
The Deputy Secretary argued that the conduct alleged was serious and warranted the conduct of proceedings. It was argued that, even if the Tribunal was of the view that a disciplinary order available to the Deputy Secretary to impose would be an appropriate outcome of the matter, it was still appropriate for the Tribunal to conduct proceedings in the furtherance of the accountability of the Council and its members to the community.

Decision

Having regard to the report presented to the Tribunal by the Deputy Secretary and the submissions of both parties, both orally and in writing, the Tribunal will conduct proceedings into this matter.
Although some matters have been conceded or agreed by Councillor Garrard, some factual matters may remain to be decided, and it is possible that inferences may be drawn from evidence in the reports. If there is a finding that misconduct has been proven, those facts and inferences will affect the assessment as to the seriousness of that misconduct.
On the fact of the report, the allegations are sufficiently serious to warrant the conduct of proceedings by the Tribunal.
Councillor Garrard's long service to his community as a councillor may be relevant to the decision as to the appropriate disciplinary orders in the event that misconduct is proven, but it does not weigh heavily in the decision as to whether the Tribunal should conduct proceedings.
Both parties made submissions with respect to the merits of the allegations. I have not set those submissions out in detail or dealt with them in any detail because they are matters which it is appropriate for the Tribunal to deal with for the first time during the conduct of proceedings.

Non-publication

The information contained in the report is presently subject to a non-publication order under s 112 of the Independent Commission Against Corruption Act 1988. That order was varied to allow the report to be given to the Tribunal for the purposes of these proceedings. That variation did not extend beyond the Tribunal. Both parties asked that we make a non-publication order under s 64(1)(c) of the Civil and Administrative Tribunal Act 2013 (NSW) in relation to the report to ensure that the ICAC order is not breached. I will make an order on that basis, noting that it should be reviewed during the conduct of the proceedings having regard to whether the ICAC order remains in place at that time.

Orders

I make the following orders: 1. Publication of the whole or any part of the report entitled 'Departmental Report under section 440H of the Local Government Act 1993 (NSW) Councillor Paul Garrard Cumberland Council (formerly of Parramatta City Council) October 2020' is prohibited under s 64(1)(c) of the Civil and Administrative Tribunal Act 2013 (NSW) until further order. 2. Having considered the report dated October 2020 presented to the Tribunal in relation to the matter referred by the Deputy Secretary to the Tribunal concerning Councillor Paul Garrard, the Tribunal determines that it will conduct proceedings into the matter.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 07 June 2021

At a glance

Court

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Before

Source

Judgment (13 paragraphs)

Parties

Legislation Cited (3)

Cases Cited (8)

Cited By (6)