MINISTER FOR LOCAL GOVERNMENT & ANOR v SOUTH SYDNEY CITY COUNCIL

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40444/02

20 September 2002 MINISTER FOR LOCAL GOVERNMENT & ANOR v SOUTH SYDNEY CITY COUNCIL (NO 3) Judgment 1 SPIGELMAN CJ: On 30 August 2002 the Court allowed the appeal of the Minister for Local Government and the Local Government Boundaries Commission in these proceedings. 2 The Court ordered that the declarations and orders made by Talbot J in the Land and Environment Court on 31 May 2002 be set aside, and in lieu thereof, ordered that the application of the South Sydney City Council to that Court be dismissed with costs. The judgment is [2002] NSWCA 288. 3 The appeal, and the application before the Court, concern the validity of the report by the Local Government Boundaries Commission in relation to a proposed alteration of the boundary between the City of Sydney Council and the South Sydney City Council local government areas. 4 In the Land and Environment Court the South Sydney City Council claimed that the report was invalid on a number of bases, including denial of procedural fairness to the Council as a body whose rights and interests would be affected by the outcome of the report and, also, on the basis of a failure by the Boundaries Commission to fulfil its obligation to "examine and report", in accordance with the provisions of Chapter 9 Part 1 Divisions 2A and 2B of the Local Government Act 1993. 5 The structure of the Act can be briefly recapitulated. It appears at greater length in the judgment of the Court. The Governor may, by proclamation, alter the boundaries of a local government area. (s218B) The Governor's function may be exercised only after a proposal has been dealt with under Division 2B Part 1 of the Local Government Act. (s218D) A proposal may be initiated by the Minister making a proposal. (s218E) The Minister must refer the proposal for "examination and report" to the Boundaries Commission. (s218F(1)). The Minister may recommend a proposal be implemented with modifications. (s218F(7)). 6 In the present case it was the process of examination and report undertaken by the Boundaries Commission in relation to the alteration of the South Sydney City Council area in two particular respects, which was impugned by that Council and claimed to be invalid. I say in two particular respects, because the proposal was the subject of two Orders gazetted by the Minister, referring to two separate parts of the local government area of the South Sydney City Council. The two Orders are set out in paragraph [71] of the decision of the Court. 7 By reason of s218D, the existence of a valid Boundaries Commission report is a precondition to the exercise of the Governor's power to proclaim a new boundary. The result of the success of the South Sydney City Council's application in the Land and Environment Court was that the Minister for Local Government was prevented from proceeding with the proposal for alteration of the boundaries. However, when the Minister's appeal was allowed on 30 August 2002, that obstacle was removed and the Minister was empowered to proceed with a recommendation to the Governor for proclamation of new boundaries. 8 The Claimant now seeks an order to prevent the Minister recommending that the proposal be implemented pending determination of its application for special leave to appeal to the High Court. 9 It was common ground that this Court has jurisdiction to grant relief of the nature sought. There was some dispute as to whether or not, on the authorities, there was a material difference between the grant of an injunction and of a stay. However, in the circumstances of the present case, it is not necessary for me to determine whether there is any such difference. 10 The principles applicable to the grant of a stay and of an injunction substantially overlap. The authority for the former most frequently referred to is the judgment of Brennan J, as his Honour then was, in Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd [No 1] (1986) 161 CLR 681, particularly at 684-685. In the case of an injunction, the authority that is most frequently referred to is the judgment of Mason CJ in Smith Kline & French Laboratories (Aust) Limited v Secretary, Department of Community Services and Health (1991) 65 ALJR 360, especially at 361. 11 These cases are also authority for the proposition that an intermediate court of appeal should not be diffident in granting a stay or an injunction, in an appropriate case, notwithstanding the difficulty that may sometimes be occasioned for a member of an intermediate court of appeal in making an assessment of the prospects of a grant of special leave in a particular case. 12 It appears on the authorities that there are a number of elements that often arise in these matters. It is always material to look at the prospects of success, relevantly in this case, the prospects of a grant of special leave. It is also always material to look at the probability that a successful appeal would not make any practical difference to the rights and interests of the appellant unless a stay or injunction was granted. 13 With respect to this latter factor, there are various verbal formulations that have been adopted in the authorities as appropriate to the particular circumstances of the case under consideration. One formulation that is often used is that of 'preserving the subject-matter of the litigation' (see Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd at 685, and Smith Kline & French Laboratories (Aust) Limited v Secretary, Department of Community Services and Health at 681). Reference has also been made to 'preserving the integrity of the litigation' (see Advanced Building Systems Pty Ltd v Ramset Fasteners (Aust) Pty Ltd (1997) 71 ALJR 814 at 815 per McHugh J, and also, in the same case at 815, to the creation of "practical difficulties" for the relief which the High Court would grant. Another formulation, is whether there is a 'real risk that it is not possible for a successful appellant to be restored substantially to his, her or its former position', (see Commissioner of Taxation (Commonwealth) v Myer Emporium Limited [No 1] (1986) 160 CLR 220 at 223 per Dawson J). The Advanced Building Systems, and Myer Emporium cases were applied by the Full Court of the Western Australian Supreme Court in Hamersley Iron Pty Ltd v Lovell (No 2) (1998) 20 WAR 79, especially at 84-85. Another formulation refers to the 'futility' of the appeal. (See, for example, Patrick Stevedore Operations No 2 Pty Ltd v Maritime Union of Australia (No 2) (1998) 72 ALJR 869 at [3] per Hayne J). Reference has also been made to 'foreclosing the utility of an appeal'. (See Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1996) 70 ALJR 603 at 606 per Kirby J). 14 All of these formulations relate to the effect of not granting a stay or an injunction on the rights, obligations or interests of the putative appellant. The effect on the interests or rights or obligations of an appellant will vary across a spectrum. No doubt such variation may explain the different terminology in which the courts have approached this issue, as I have just set out. 15 In the present case the claimant placed particular reliance on s738 of the Local Government Act 1993 which provides in subsection 1: "A proclamation or notification of the Governor purporting to be made under this Act and being within the powers conferred on the Governor is not invalid because of any non-compliance with any matter required by this Act as a preliminary to the making of the proclamation or notification." 16 This privative clause would, at the very least, transform the appeal. It may very well render it futile and nugatory. 17 The Opponent in this Court accepts that the section would have a dramatic effect on the legal position. Mr B Walker SC, senior counsel for the Opponent, accepted that the appeal would be transformed, and perhaps even destroyed as to its utility, should the section take effect. On this basis the case for an injunction pending the appeal is an extremely strong one. Nevertheless, other questions must be weighed in the balance and, in particular, the issue of the strength of the case, in terms of the probability of obtaining special leave, must be assessed. 18 The claimant has filed an application for special leave in the High Court, together with an application for expedition of that special leave application. It has also filed in the High Court a summary of argument which identifies four special leave questions. These are referred to in that summary of argument as:

• The content of the duty issue; - The proper consideration issue; - The subsidiary issue; - The inquiry issue. 19 In the submissions to this Court, Mr D F Jackson QC, who appeared for the Claimant, placed primary reliance on the content of the duty issue and the subsidiary issue. He referred to the proper consideration issue and the inquiry issue, accepting that those matters, as set out in the applicant's argument, turn very much on the particular circumstances of the case. The grant of special leave may be less likely in the case of those issues but, he noted, when the High Court gives special leave it sometimes does not confine the grant so that leave is given on a broader range of appeal grounds. I would agree with the conclusion that grant of special leave on the proper consideration issue and the inquiry issue is unlikely, given the factual nature of the matters that arise under those two headings. 20 The other two issues, the content of the duty issue and the subsidiary issue, are concerned with the obligation to accord procedural fairness. In this regard there were some differences in the judgments delivered in this Court. 21 The content of the duty issue was put in terms of whether or not one part of the reasoning of Mason P was "consistent with" the High Court's decision in Muin v Refugee Review Tribunal [2002] HCA 30. It has long been accepted that the content of the duty turns on the circumstances of the case and that an obligation to accord procedural fairness is not a prescription for any fixed body of rules. In that context I do not see how an issue of 'consistency' with a particular High Court decision on content in a specific set of circumstances in a specific statutory context, would itself give rise to a significant prospect of special leave. 22 The passage in the judgment of the President, to which particular attention was directed in the argument filed in the High Court, is found in paragraph [272] of his Honour's judgment. That was a reference back to a quotation from the Lord Diplock in Mahon v Air New Zealand [1984] AC 808 which was set out in paragraph 257 of the President's judgment. It does not appear to me that the President intended to confine the duty in an unacceptable way. It was part of the analysis by the President rejecting what he identified as the "open file" submission. I do not see that that particular paragraph, relied on in the argument, is the definitive basis on which the claimant's "open file" submission was rejected. 23 Nevertheless, I can see that some argument can be put on the special leave application that there was a degree of restriction that may not be appropriate in all of the circumstances of the case, including the statutory context. Unlike in Muin, Mason P was concerned with a statutory context in which there was a mere investigatory body and a multi-level decision-making process in which further submissions could be made at the next level. Nevertheless, I am not prepared to reject out of hand the possibility of special leave on a matter of this character. 24 The subsidiary issue refers to an alternative basis on which I decided the case. (Ipp AJA agreed with my judgment) That was to the effect that there had not been a separate challenge to what was referred to as the "red line" adjustment in the court at first instance, and that it could not be raised for the first time on appeal. I find it difficult to discern an issue of principle. It appears to be the application of well-known principles to the particular circumstances of the case. 25 In my judgment, the prospects of special leave must be regarded as weak, at best. However, this has to be considered in the balance with the quite drastic consequences of the application of s738 of the Act. Whilst assessing the prospects of special leave as low, I am not prepared, in all of the circumstances, to allow the Minister to act in such a way as would render nugatory the right to make an application for special leave to appeal to the High Court. 26 The question of the boundaries of the South Sydney City Council, and its relationship to the boundaries of the City of Sydney Council, has been under consideration in this State for a period of two years. Important issues of public interest arise in matters of this character. It is, of course, desirable that these issues be resolved promptly. This objective is being pursued by the application for expedition to the High Court. 27 I gave consideration to the granting of an injunction linked to the application for expedition rather than to the application for special leave itself. I did so in the context of the public interest involved in ensuring that matters of this character should be determined as soon as reasonably practicable. Nevertheless, Counsel for the Minister properly drew my attention to the indication in both the Burgundy Royale Investments case and the Smith Kline & French Laboratories case, that this Court should, in an appropriate case, ensure that the High Court of Australia is not burdened by having to consider such matters. 28 That factor is of even greater significance today than it was at the time that Mason CJ and Brennan J, as his Honour then was, made those observations. The pressure on the High Court has increased, particularly by reason of the restriction of the jurisdiction of the Federal Court in dealing with immigration matters. If anything, this Court should be even more concerned to ensure that the High Court is not burdened with additional tasks of this character than would have been the case at the time of the Burgundy Royale Investments and Smith Kline & French Laboratories decisions. 29 It has been indicated to me, during the course of submissions, that the High Court, in its administrative arrangements, will often treat a matter in which there is an application for expedition, by ensuring an early hearing of the special leave application, rather than hearing the application for expedition. In the light of that practice, in my opinion, the injunction that should issue ought be directed, as requested in the Notice of Motion before the Court, to the time of the special leave application, rather than to be related to the application for expedition. 30 I propose to make an order in the following terms:

Upon the Claimant giving the usual undertaking as to damages, and upon the Claimant giving an undertaking to prosecute with due diligence its application for expedition and its application for special leave to appeal to the High Court, the first Opponent be restrained from making a recommendation to the Governor to alter the boundaries of the Claimant's area until the determination of the Claimant's application for special leave to appeal to the High Court, and if special leave is granted, until the determination of that appeal, in respect of the decisions of this Court made on 30 August 2002 and 20 September 2002. 31 [Further submissions] I make the order I have outlined. 32 It is recorded that both undertakings have been given by the Claimant. 33 The costs of this application are to be borne as follows:

(a) in the event that the Claimant's application for special leave is refused, as part of the Opponent's costs of the appeal to this Court;

(b) in the event that the Claimant's application for special leave is granted, in accordance with the costs order made by the High Court upon its disposition of the appeal to that court.

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