Loder v Narrabri Shire Council [2021] NSWLEC 33 | Case summary

Land and Environment Court (NSW)|2021-02-23|Before: Pain J

The Applicant's public interest argument

As to the Engadine factor in [9(a)] above, the precise nature of the public interest relied on by the Applicant is a little difficult to discern from her submissions. It is said that the proceedings involved an issue of public importance concerning the construction of the LG Act that is said to be of general application throughout NSW (above in [13]). Contrary to the Applicant's submissions, the Court did not recognise the "importance of the case generally" (see Loder No 1 at [80]). Rather, it was noted that it was important to resolve the case, given that a by-election needed to be held if the Applicant's civic office was made vacant. Her Honour then proceeded to explain the importance of a councillor attending and participating in council meetings. None of those observations lend any support to the Applicant's present costs application.
While the Applicant is correct to submit that the decision is of general application, the fact that the "leave of absence" provisions have been litigated just twice in the last 30 years (see Ryan v Heiler), might suggest that the issue of construction determined by the Court - whether acceptance of an apology is sufficient to qualify as "leave granted by the Council" within the meaning of s 234(1)(d)(ii) of the LG Act - is not just narrow but in practice is unlikely to arise again.

The alleged "something more"

In support of the submission that there was "something more" in this case, it is said that the issue was one of general importance, the case contributed to a proper understanding of local government law and the case affects a significant portion of the public. The Applicant also prays in aid the fact that the Applicant's illness provided a legitimate reason for her absence from the three relevant council meetings.
Addressing the last point first, the issue determined by the Court had nothing to do with whether the reasons for the Applicant's absences were legitimate or not. The issue was simply whether, as a matter of law, the acceptance of her apologies amounted to a leave of absence within the meaning of the LG Act. Thus, it is entirely irrelevant for the Court to have regard to the legitimacy or otherwise of the apologies.
In relation to Caroona factors in [10(a)] and [10(b)] above, the proceedings raised an issue of construction which, though arguably novel, was not of general importance by any means. As success of one party in proceedings will often, if not inevitably, entail a clarification of the law to some extent or in some respect, it is hard to see how clarification of the law could amount to a factor tending strongly in favour of a departure from the usual rule as to costs: Botany Bay City Council v Minister for Local Government (No 2) [2016] NSWCA 127 at [17]; Local Democracy at [12]. Contrary to the Applicant's submission above in [19], merely raising an arguable and serious issue has not been regarded as sufficient to establish the requisite "something more".
As to the factor in [10(c)] above, the litigation was not brought to protect the environment or some component of it.
As to the factor in [10(d)] above, the litigation only affected a significant section of the public as a result of the by-election required as a consequence of the vacation of the Applicant's civic office.
As to the factor in [10(e)] above, as submitted above, the Applicant would have been a beneficiary of financial gain as a result of her success in the proceedings.

Countervailing considerations

In terms of relevant countervailing considerations: 1. the Applicant stood to benefit from the litigation, as explained above; 2. the issue of construction raised in the proceedings was narrow, involving a discrete point of interpretation without broad ramifications; and 3. the Applicant was aware from a very early stage of her tenure of the Council's requirement for an application for leave of absence to be made formally and in writing (Loder No 1 at [45]-[47]), and had only relatively recently been reminded of the requirement that sending an apology was insufficient as part of her involvement in the approval of the 2019 Council Code (Loder No 1 at [92]). In addition, she had been requested by the Council on numerous occasions to fill out a leave of absence form. In that sense, the Applicant was the author of her own misfortune.

Consideration

The usual costs rule is set out in r 42.1 of the UCPR to the effect that costs follow the event, subject to the rules of court. Rule 4.2(1) of the LECR provides that the Court may decide otherwise. The relevant principles as identified in Caroona are set out above in [8]-[11]. Considering firstly whether the proceedings can be characterised as being in the public interest, at issue in the proceedings was the operation of s 234(1)(d) of the LG Act. Much of the reasoning in the judgment concerned statutory construction issues which considered the differences between "leave of absence" which is referred to in s 234(1)(d) and "apology", which is not, in the context of the LG Act and its predecessor the Local Government Act 1919 (NSW) (LG Act 1919). The earlier LG Act 1919 was the subject of Ryan v Heiler and the obiter comments of Young J relied on by the Applicant. No other caselaw on this issue in relation to the LG Act or the LG Act 1919 was referred to. There has been very little litigation about the issues that arose in this case. The relief sought concerned alleged breaches of the LG Act by the Council in preventing the Applicant fulfilling her duties as a councillor. In that sense, the issue raised had wider ramifications beyond the parties. The clarification of circumstances that give rise to vacation of civic office is a matter of relevance to all elected councillors in NSW. The operation of laws affecting elected councillors arguably concerns public law obligations.
It is fair to observe that the issues at stake are a mix of public interest and private interest. The particular circumstances of the Applicant as a councillor in not attending three council meetings gave rise to the circumstances which resulted in the litigation. Were the Applicant able to resume office she would once again receive the usual remuneration paid to all councillors, a private financial benefit and other benefits of being a councillor.
Whether the Applicant's prime motivation was to clarify the law in relation to the holding of civic office is unknown in that I am not aware of any evidence of her motivation in commencing these proceedings, as the Council submitted. Her legal representative's submissions about what was intended to be achieved by commencing these proceedings are submissions simpliciter.
On balance I am prepared to find that the litigation was in the public interest as it does serve to clarify matters under the LG Act in relation to the vacation of civic office.
As to whether there is "something more", this is only the second case after Ryan v Heiler in 1990 where these issues have arisen in a court. Given the large number of elected councillors in NSW, that is perhaps surprising. Whether it means that little clarification of the law is needed, as the Council submitted, is hard to say conclusively. The particular circumstances of the Applicant did give rise to circumstances which required consideration of how sections of the LG Act operate. The Applicant essentially relied on the same submissions as supported a finding of public interest in relation to this second aspect, in addition to other submissions.
There is no suggestion that the proceedings were frivolous or lacked any legal basis. That the claim was arguable, and was legitimately based on obiter comments in Ryan v Heiler, does not contribute to a finding of "something more", in the sense referred to in Caroona.
Other submissions concerning "something more" being demonstrated relied on personal matters particular to the Applicant, namely that the Applicant was ill, did tender apologies at three meetings, that the reason she was not present at meetings due to ill health was well known to the Council and the Applicant cannot be blamed for missing meetings. I agree with the Council's submission that the fact that the Applicant had a legitimate reason to miss three council meetings is irrelevant to this costs application. The evidence of the Council in Loder No 1 at [45]-[47], [92] referred to in this costs argument, I infer because of the personal matters raised by the Applicant, was to the effect that the Applicant was made aware of the need to apply for a leave of absence during councillor training, was reminded of the need to lodge a leave of absence form more than once and was provided with the leave of absence form used by the Council in advance of the 28 April 2020 meeting, the third meeting missed.
The particular circumstances of the Applicant were not relevant to the statutory construction issues that arose in Loder No 1. At [106] in Loder No 1 I observed that I did not need to determine when the Applicant was informed of the need to lodge a signed leave of absence form with the Council before the Council meeting on 28 April 2020 to avoid the operation of s 234(1)(d). I identified in Loder No 1 at [110] I did not need to consider much of the background circumstances to resolve the construction issue before me. If s 234(1)(d) of the LG Act applied, as I found that it did, the Applicant's civic office became vacant by force of the LG Act regardless of her surrounding circumstances.
I do not consider it is appropriate in this costs application to form a view about whether the Applicant was "at fault" because she failed to lodge the form sent to her by council officers, but nor can I accept as relevant that the Applicant had a good reason for not attending three council meetings in a row and gave apologies, in determining whether "something more" is demonstrated. The criteria in Caroona for whether litigation contributes "something more" essentially concern the wider benefit to the administration of justice in considering the public interest arising from particular litigation. While the criteria are not exclusive, the reliance on essentially personal matters in this regard does not inform that wider benefit.
The non-exclusive criteria referred to in Caroona in [10] above include whether the litigation was novel (criterion (a)). I do not consider the case is novel. It required the consideration of well understood statutory construction principles in relation to provisions in the LG Act. Whether the litigation contributed in a material way to the proper understanding, development or administration of the law (criterion (b)) is satisfied to some extent, for much the same reasons already identified for why it can be considered public interest litigation. Criterion (c) concerning the environment being protected is not relevant. The criterion of whether the litigation affects a significant section of the public (criterion (d)) is not satisfied. The only person directly affected by the litigation was the Applicant. The last criterion (e) concerns whether there was financial gain. There was financial gain for the Applicant if she was successful in the proceedings.
The circumstances in Millers Point are dissimilar. In that case, the applicant was a community association concerned with preserving a local park area for recreation and enjoyment. Robson J held at [26] that whilst the applicant was formed by representatives from the Millers Point area, the public park area would have been accessible to the general public and as such, the proceedings concerned a broad sector of community beyond local residents - extending to those working in and visiting what was envisaged to be a major Sydney landmark. The applicant filed an affidavit in support of the notice of motion seeking alternative costs orders stating that its prime motivation in initiating the substantive proceedings had been to enforce public law obligations regarding the development of public land.
The Applicant has not demonstrated that there was "something more" in the litigation.
Exercising the discretion I have to determine costs as provided for under r 4.2(1) of the LECR, I consider that the usual costs rule should apply. The Applicant is therefore liable for the Council's costs and I will so order.
Costs of this costs motion must also be determined. The Council has been successful in resisting the order sought by the Applicant and its costs ought be paid.

Order

The Court orders: 1. The Applicant is to pay the Council's costs of the substantive proceedings. 2. The Applicant is to pay the Council's costs of the costs hearing. 3. The exhibits are returned.

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: 16 April 2021

Local Government Act 1919(NSW)

360) Uniform Civil Procedure Rules 2005(NSW)r 42.1

Local Government Act 1993(NSW)ss 232, 234, 355, Ch

Judgment

The Applicant Ms Loder commenced proceedings challenging the decision of Narrabri Shire Council (the Council) to consider that her position as an elected councillor was vacant resulting in various breaches of the Local Government Act 1993 (NSW) (LG Act). In Loder v Narrabri Shire Council [2020] NSWLEC 109 (Loder No 1) I dismissed the Applicant's summons and reserved costs. The principal legal issue in Loder No 1 concerned the construction of sections of the LG Act dealing with the vacation of elected councillor positions as a result of absences from council meetings. The Applicant seeks an order that each party pay its own costs of the proceedings. The Council seeks its costs of the proceedings. The litigation arose because the Applicant missed three consecutive ordinary council meetings on 25 February 2020, 24 March 2020 and 28 April 2020.
At issue in Loder No 1 was the operation of s 234(1)(d) of the LG Act which provides for the vacation of civic office if a councillor is absent from three consecutive ordinary meetings of a council without prior leave of the council or leave being granted by a council at any of the meetings concerned. The Applicant alleged a number of breaches of the LG Act arising from the Council's actions preventing her from fulfilling her duties as an elected councillor such as not giving her notice of meetings and not paying her councillor remuneration inter alia.
It was not disputed that the Applicant did not attend three ordinary council meetings in a row due to poor health. At issue in the substantive hearing was whether resolutions of the Council at the three meetings to accept the Applicant's apologies together with surrounding circumstances were sufficient to constitute a leave of absence granted by the Council for the purposes of s 234(1)(d). The Applicant relied on obiter comments of Young J in Ryan v Heiler (1990) 69 LGRA 307. The Council argued that acceptance of an apology at a council meeting did not qualify as leave granted by the Council for the purposes of s 234(1)(d)(ii). The Council was ultimately successful in its arguments.
Relevant sections of the LG Act included s 232 specifying the role of a councillor, s 234 identifying circumstances in which the civic office of a councillor becomes vacant, s 355 concerning how councils exercise their functions, s 360 concerning the conduct of meetings of councils and committees and other provisions in Ch 12 Pt 2 Div 2 concerning the conduct of council meetings.
The usual rule in proceedings of this kind is that costs follow the event subject to court rules: Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 42.1. The usual rule if applied would result in a costs order in favour of the Council.
Rule 4.2(1) of the Land and Environment Court Rules 2007 (NSW) (LECR) provides as follows: The Court may decide not to make an order for the payment of costs against an unsuccessful applicant in any proceedings if it is satisfied that the proceedings have been brought in the public interest.
The Applicant seeks to rely on r 4.2(1) of the LECR and bears the onus of demonstrating that the usual costs position should be departed from in this case.
In Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd (No 3) (2010) 173 LGERA 280; [2010] NSWLEC 59 (Caroona) (summarised in Local Democracy Matters Inc v Infrastructure NSW; Waverley Council v Infrastructure NSW (No 4) [2019] NSWLEC 140 at [6]-[9]), Preston CJ identified a three step approach to determine whether to depart from the usual costs rule in certain proceedings (at [13]-[20]) as follows: 1. first, can the litigation be characterised as having been brought in the public interest; 2. second, if so, is there "something more" than the mere characterisation of the litigation as being brought in the public interest; and 3. third, are there any countervailing circumstances, including those relating to the conduct of the applicant, which speak against a departure from the usual costs rule in respect of public interest litigation.
In relation to the first step, Preston CJ in Caroona endorsed the following summary in Engadine Area Traffic Action Group Inc v Sutherland Shire Council (No 2) (2004) 136 LGERA 365; [2004] NSWLEC 434 (Engadine) at [15] of the factors that assisted in determining whether litigation could properly be characterised as having been brought in the public interest: 1. whether the public interest was served by the litigation; 2. whether that interest was confined to a relatively small number of members from the group or association in the immediate vicinity of the development, or whether the interest was wider, involving a significant number of members of the public and was concerned with a wider and significant geographic area; 3. whether the applicant sought to enforce public law obligations; 4. whether the prime motivation of the litigation was to uphold the public interest and the rule of law; and 5. whether the applicant had a pecuniary interest in the outcome of the proceedings.
In Caroona at [60], at least five categories of cases containing additional factors (the "something more"), were identified namely whether: 1. the litigation raised one or more novel issues of general importance; 2. the litigation contributed, in a material way, to the proper understanding, development or administration of the law; 3. the litigation was brought to protect the environment or some component of it, and the environment or component was of significant value and importance; 4. the litigation affected a significant section of the public; and 5. there was no financial gain for the applicant in bringing the proceedings.
In relation to the third step, the following are some of the countervailing circumstances that may weigh in favour of the application of the usual costs rule (Caroona at [61]): 1. the applicant was seeking to vindicate rights of a commercial character and stood to benefit from the litigation; 2. where the applicant was an incorporated association, the private interests of members of the association would have been affected, legally or financially by the outcome of the litigation; 3. the applicant was supported financially by persons or bodies who benefited from, or would have had their legal or financial interests affected by, the outcome of the litigation; 4. the narrowness of the question of public interest raised, such as only involving a discrete point of interpretation without broad ramifications; 5. the applicant unreasonably pursued or persisted with points which had no merit or issues that were not eminently arguable; and 6. there was disentitling conduct of the applicant, such as impropriety or unreasonableness in the conduct of the litigation.

The proceedings were brought in the public interest

The case has materially contributed to the proper understanding and administration of local government meetings within New South Wales (NSW), in particular to an understanding of the circumstances in which a civic office becomes vacant: Local Democracy Matters Inc v Infrastructure NSW (No 2) [2019] NSWCA 118 (Local Democracy) at [11]. Pain J recognised the importance of the case generally in Loder No 1 at [80], noting the central role of an elected councillor within the statutory framework of local governance within NSW and the significance of elected representatives being able to sit on a council and represent the interests of the electors. Clearly the public interest is very wide here, extending well beyond the interests of the Applicant and the Narrabri electorate. The decision is of general application within every council in NSW.
The Applicant clearly sought to enforce public law obligations. The object of the action was to enforce the Council's compliance with the LG Act and to identify whether the Applicant's civic office had become vacant. Her civic office having been declared vacant by the Council, the Applicant was concerned to establish that the tendering and acceptance of her apologies at each of the three meetings was sufficient to amount to "prior leave" of the Council within the meaning of s 234(1)(d)(i) of the LG Act.
As to the Applicant's motivation, it was not in dispute that at the time of the relevant meetings she was having treatment for cancer and that she wished to resume her councillor duties if her civic office was restored to her. It is also not in dispute that whilst she was a councillor, the Applicant represented her constituents conscientiously. Because it is obvious that the decision of this Court would have significant ramifications for all elected councillors in NSW, the prime motivation, as well as allowing the Applicant to resume her office, was to clarify the law in the public interest. Similarly, other than being able to receive expenses for council work and a relatively minor amount of remuneration, the Applicant had no pecuniary interest in the outcome of the proceedings. She wants to return to her office so that she can continue to help the local community.

Whether there is "something more"

At [56] of Caroona, Preston CJ held that the meaning of the "something more" criterion is that although characterisation of litigation as public interest litigation is a necessary condition, it may not be sufficient in all cases and it may be necessary to look for something more to justify departure from the usual costs rule. Thus, the public interest character of the litigation may itself be sufficient in some cases, whereas in other cases further factors may be needed before r 4.2(1) of the LECR should apply.
The Applicant's primary position is that, for the reasons outlined above, the nature of this action is in all the circumstances sufficient to warrant departure from the usual rule as to costs in UCPR r 42.1: Anderson on behalf of Numbahjing Clan within Bundjalung Nation v NSW Minister for Planning (No 2) (2008) 163 LGERA 132; [2008] NSWLEC 272 at [10]. Those circumstances include that the issue was of general importance, the case contributed to a proper understanding, development or administration of the law of local government and the case affects a significant portion of the public: Local Democracy at [11].
Nevertheless there are specific additional factors at play in this ultimately sad case (sad for the Applicant personally and sad for the electors of Narrabri and the Council who are deprived of the Applicant's continuing services) which satisfy the "something more" criterion beyond those in the five factors identified in Caroona at [60]. As set out above, the Applicant was being treated for cancer, sent her apologies to each meeting, and her apologies were accepted at each of those meetings. It is important to note that the Council acknowledges that the Applicant "had legitimate reasons for her absence from Council meetings". No blame should be attached to the Applicant for missing meetings, nor can there be any inference that she was too busy with other work to attend council meetings. Similarly, she wishes to return to the Council so that she can carry on with her assistance to the community of Narrabri.
In Oshlack v Richmond River Shire Council (1994) 82 LGERA 236 at 246, one of the factors that Stein J at first instance considered provided "something more" was that the basis of the challenge was arguable, raising serious and significant issues. The Applicant's claim was obviously arguable and serious. She relied upon the plain meaning of the text and the observations of Young J in Ryan v Heiler at 311, a decision of the Supreme Court, that "if the apology had been accepted there may have been a very strong argument for saying that the absence was with leave of the council". The fact that Pain J ruled against the Applicant in Loder No 1 and distinguished this case from Ryan v Heiler, does not detract from the submission that the claim was arguable and serious.

Council's submissions on costs

The public interest and an arguable case are not necessarily decisive and not, of themselves, sufficient to prevent the usual costs order being made: People for the Plains Inc v Santos NSW (Eastern) Pty Ltd (No 2) [2017] NSWCA 157 at [40]. As was pointed out by the Full Court of the Federal Court in Bat Advocacy NSW Inc v Minister for Environment Protection, Heritage and the Arts (2011) 280 ALR 91; [2011] FCAFC 84 at [13]: Espousing the public interest alone is not a grant of general immunity from costs (Oshlack per Kirby J (at 123)). There is no general principle from Oshlack that usual costs orders should not apply if the subject matter of the litigation is a matter of public interest (Ruddock (No 2) (at [21)).

(2010) 173 LGERA 280

(2008) 163 LGERA 132

(2004) 136 LGERA 365

Loder v Narrabri Shire Council

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Cases Cited (15)