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[2018] NSWCA 133
Court of Appeal (NSW)
2018-05-28
Bathurst CJ, McColl JA, Leeming JA
Original judgment source is linked above.
grath v Goldsbrough, Mort and Company Ltd (1932) 47 CLR 121; [1932] HCA 10 Principal Registrar of the Supreme Court v Tastan (1994) 75 A Crim R 498 PT Garuda Indonesia Ltd v Australian Competition & Consumer Commission (2012) 247 CLR 240; [2012] HCA 33 Resort Hotels Management Pty Ltd v Resort Hotels of Australia Pty Ltd (1991) 22 NSWLR 730 Ross v Internet Wines Pty Ltd (2004) 60 NSWLR 436; [2004] NSWCA 195 State of NSW v Kable (2013) 252 CLR 118; [2013] HCA 26 Category: Principal judgment Parties: Minister for Local Government (Applicant) Blue Mountains City Council (Respondent) Representation: Counsel: Noel Hutley SC, Peter Strickland (Applicant) Peter Singleton (Respondent)
Solicitors: Crown Solicitor's Office (Applicant) McPhee Kelshaw (Respondent) File Number(s): 2018/77589 Publication restriction: Nil Decision under appeal Court or tribunal: Supreme Court of New South Wales Jurisdiction: Common Law Division Citation: [2018] NSWSC 183; [2018] NSWSC 193 Date of Decision: 22 February 2018 Before: Schmidt J File Number(s): 2018/60355
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] HEADNOTE [This headnote is not to be read as part of the judgment] Section 438I of the Local Government Act 1993 (NSW) provides that the Minister for Local Government may "… suspend a council for a period specified in the order if the Minister reasonably believes that the appointment of an interim administrator is necessary to restore the proper or effective functioning of the council." Section 438K required the Minister to give notice of her intention to suspend the Council, specify a consultation period and to have regard to any submissions made by the Council before exercising power under s 438I. On 13 December 2017, the Minister sent a letter to the Mayor of Blue Mountains City Council informing him of her intention to suspend the Council, citing concerns with the management of asbestos by the Council. The Minister stated that her preliminary belief was that the appointment of an interim administrator was necessary within the meaning of s 438I and set a consultation period of seven days. The Council's response, sent on 20 December 2017, referred to its prompt appointment of two independent investigators, including Mr Michael Tooma. The Council invited the Minister, instead of appointing an interim administrator, to issue a Performance Improvement Order. By letter dated 22 December 2017, the Minister indicated that she had determined not to suspend the Council and acceded to the request to issue a Performance Improvement Order, which came into effect on 22 January 2018. On 13 February 2018, it was stated on talkback radio that Mr Tooma had an undisclosed professional and social relationship with Mr Mark Mulligan, an employee of the Council said to have been connected with Mr Tooma's investigation. It was said that Mr Mulligan had been "sacked" that morning and that he had been the Council's Chief Safety Officer. The Council wrote to the Minister later that same day, confirming that Mr Mulligan had been employed, that his employment had ceased the previous day and explaining the nature of Mr Tooma's association with Mr Mulligan. It stated that the prior relationship had not been disclosed to the Council. On 14 February 2018, the Minister wrote to the Mayor, advising of her intention to suspend the Council. The letter referred to s 438K of the Act but did not refer in terms to s 438I or the test of reasonable necessity. The letter referred to probity concerns and the Minister's ongoing concerns about the Council's capacity to manage its issues with asbestos. It stated that Mr Mulligan had been the Council's Chief Safety Officer. It specified a consultation period of seven days. The Council responded with submissions on 22 February 2018. Also on that day, it sought to apply to the Land and Environment Court, but for reasons which are unclear, was unable to do so. Thereafter it applied to the Duty Judge at Common Law, ex parte, for an injunction restraining the Minister from suspending the Council. The primary judge granted an injunction "until further order" and stood the matter over until the following day. The Minister was advised of the order and the following day applied to dissolve the injunction. The primary judge refused, stating that there was a serious question to be tried, namely, that when a s 438K notice is issued the Minister must hold the reasonable belief referred to in s 438I, and that there was no indication in the letter of 14 February that the Minister had held that belief. The primary judge also relied on the factual error in the Minister's letter, in that Mr Mulligan was not and had never been the Council's Chief Safety Officer. The primary judge considered that the balance of convenience favoured the Council, since it was open to the Minister to issue another letter indicating that she did hold the relevant belief. She then made an order transferring the proceedings to the Land and Environment Court. The Minister appealed, primarily on the basis that the primary judge erred in considering that there was a serious question to be tried. A further issue was raised by the Court, namely, whether the Supreme Court had jurisdiction to issue the injunction. Section 673 of the Local Government Act provides "The Minister, the Departmental Chief Executive or a council may bring proceedings in the Land and Environment Court or such other court as may be specified in this Act for the purpose of the proceedings for an order to remedy or restrain a breach of this Act." No other court is specified. Section 20(1)(d) of the Land and Environment Court Act 1979 provides that the Land and Environment Court has jurisdiction to hear and dispose of proceedings under s 673 of the Local Government Act. Further, s 20(1)(e) provided that the Land and Environment Court had jurisdiction to hear and dispose of proceedings referred to in s 20(2), including, relevantly, proceedings to enforce any right, obligation or duty conferred or imposed by a planning or environmental law. A planning or environmental law was defined to mean certain sections of the Local Government Act, but not s 673. Section 71 relevantly provided that "proceedings of the kind referred to in section 20(1)(e) may not be commenced or entertained in the Supreme Court." Section 71 does not in terms apply to proceedings identified in s 20(1)(a)-(dj), but the large majority refer to proceedings in the Land and Environment Court. Held, by Leeming JA, Bathurst CJ and McColl JA agreeing, allowing the appeal: 1. Section 71 of the Land and Environment Court Act reserves to the exclusive jurisdiction of the Land and Environment Court the matters referred to in s 20(1)(e). While the other proceedings referred to in s 20(1) do not fall within s 71, the large majority of proceedings under those sections may only be brought in the Land and Environment Court because the sections confer a right to proceed only in that Court and s 20(1) defines the Court's jurisdiction by reference to proceedings under those sections, not by reference to the subject matter of or relief sought in the relevant matter: at [1], [2], [63]-[84]. 2. The present proceedings were not brought under s 673 of the Local Government Act, but were in the nature of an application for an injunction to enforce a statutory scheme, brought by a directly affected party with standing to do so. Accordingly, the Supreme Court had jurisdiction to issue the injunction: at [1], [2], [85]-[90]. King v Goussetis (1986) 5 NSWLR 89, Community Housing Limited v Clarence Valley Council (2015) 90 NSWLR 292; [2015] NSWCA 327, applied. 1. At the time a s 438K notice is issued, the Minister is not required to hold the belief referred to in s 438I. The Minister is only required to hold an "intention" to suspend the Council referred to in s 438K. To hold otherwise would disregard the textual differences between the provisions, and undermine the legislative scheme requiring the Minister to consider submissions in evaluating whether various criteria were satisfied before exercising power under s 438I. Accordingly, there was no serious question to be tried: at [1], [2], [100]-[106]. 2. There was, on the evidence, a factual error in the Minister's letter. However, that error did not give rise to a serious question to be tried that any future exercise of the power would be vitiated: at [1], [2], [118]-[121]. 3. Consideration of the practice relevant to ex parte injunctions, including the necessity of applying promptly and seeking the minimum relief necessary on an interim not interlocutory basis. Where an ex parte injunction is granted, the onus lies with the plaintiff to demonstrate that it should be continued, not the party subject to ex parte relief: at [1], [2], [41]-[48]. Resort Hotels Management Pty Ltd v Resort Hotels of Australia Pty Ltd (1991) 22 NSWLR 730, Ross v Internet Wines Pty Ltd (2004) 60 NSWLR 436; [2004] NSWCA 195, considered.
Judgment
Factual background
The position at the end of 2017
The first s 438K notice and the response to it
The events of 13 February 2018
The second s 438K letter
The ex parte application
The contested application
The injunctive relief ordered at first instance
Jurisdiction
The Council's submissions
The Minister's submissions
Summary of conclusions on jurisdiction
The legislative scheme regulating the jurisdiction of the Supreme Court and the Land and Environment Court
The jurisdiction of the Supreme Court
Was there a serious question to be tried?
The construction of ss 438I and 438K
Did the primary judge apply a different construction?
Should it be inferred the Minister misapprehended the test?
The significance of the factual error
Conclusion and orders
Annexure
Amendments 20 June 2018 - Headnote - pinpoint references to judgment corrected. 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: 20 June 2018
Minister for Local Government
Blue Mountains City Council
[1994] HCA 54
(2014) 88 NSWLR 488
(1957) 99 CLR 155
(2015) 90 NSWLR 292
(1973) 129 CLR 65
(1986) 5 NSWLR 89
(2017) 95 NSWLR 70
(1932) 47 CLR 121
(2012) 247 CLR 240
(1991) 22 NSWLR 730
(2004) 60 NSWLR 436
(2013) 252 CLR 118
(1994) 181 CLR 404