Murlan Consulting Pty Limited v Ku-ring-gai Council and Others [2010] NSWLEC 95 | Case summary

Murlan Consulting Pty Limited v Ku-ring-gai Council and Others [2010] NSWLEC 95 | Case summary | Zoe

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Attorney General v Times Newspapers Ltd [1974] AC 273 Attorney-General of New South Wales v World Best Holdings Ltd [2005] NSWCA 261; (2005) 223 ALR 346 Aussie Airlines Pty Ltd v Australian Airlines Pty Ltd (1996) 65 FCR 215 Australian Industry Group v Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union [2003] FCAFC 226 Australian National Industries Ltd v Spedley Securities Ltd (in liq) (1992) 26 NSWLR 411 Australian Postal Commission v Dao (No. 2) (1986) 6 NSWLR 497 Brown v Gosford City Council [2006] NSWLEC 56; (2006) 143 LGERA 311 City of Burnside v Attorney General of South Australia (1994) 63 SASR 65 Construction Forestry Mining and Energy Union v Queensland Coal and Oil Shale Mining Industry (Superannuation) Ltd [2003] FCA 1174; (2003) FCR 516 Corporate Affairs Commission v Bradley [1974] 1 NSWLR 391 Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 Elite Protection Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373 Gameplan Sports & Leisure Pty Ltd v South Sydney Council [2000] NSWLEC 112 Gillies v Secretary of State for Work and Pensions [2006] UKHL 2; [2006] 1 All ER 731 Johnson v Johnson [2000] HCA 48; (2000) 201 CLR 488 Kerry Lynch & Judith Lynch v Allan Norman [1998] NSWLEC 229 Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 CASES CITED: Laws v Australian Broadcasting Tribunal [1990] HCA 31; (1990) 170 CLR 70 Liversey v New South Wales Bar Association [1983] HCA 17; (1983) 151 CLR 288 McGovern v Ku-ring-gai Council [2008] NSWCA 209; (2008) 72 NSWLR 504 Mercantile Mutual Insurance (Workers Compensation) Ltd v Di Cecco [2003] NSWCA 141 Metlife Insurance Ltd v Visy Board Pty Ltd [2008] NSWSC 111 Murlan Consulting Pty Limited v Ku-Ring-Gai Council [2007] NSWLEC 374 Murlan Consulting Pty Ltd v Ku-ring-gai Council and Anor [2007] NSWLEC 704 Murlan Consulting Pty Limited v Ku-Ring-Gai Council and Anor [2008] NSWLEC 318 Murlan Consulting Pty Ltd v Ku-ring-gai Municipal Council [2009] NSWCA 300; (2009) 170 LGERA 162 Najjar v Haines (1991) 25 NSWLR 224 O'Toole v Charles David Pty Ltd (No 2) [1991] HCA 14; (1991) 171 CLR 232 Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 Porter v Magill [2001] UKHL 67; [2002] 1 All ER 465 R v Cavit; Ex parte Rosenfield (1985) 33 NTR 29 R v Watson; ex parte Armstrong (1976) 136 CLR 248 Raybos Australia Pty Ltd v Tectran Corporation Pty Ltd [No 9] (Court of Appeal, 27 November 1990, unreported) Rein Warry & Co v Wollondilly Shire Council [2004] NSWLEC 58 S & M Motor Repairs Pty Ltd v Caltex Oil (Australia) Pty Ltd (1988) 12 NSWLR 358 Webb v The Queen [1994] HCA 30; (1994) 181 CLR 41

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JUDGMENT 1 Her Honour: In Murlan Consulting Pty Limited v Ku-ring-gai Council and Anor [2008] NSWLEC 318 (Murlan No 3) I dismissed an application to have Class 1 proceedings reopened and Murlan Consulting Pty Limited v Ku-ring-gai Council [2007] NSWLEC 374 (Murlan No 1), a decision of two commissioners, set aside because of a reasonable apprehension of bias in relation to one of the commissioners. The Court of Appeal in Murlan Consulting Pty Ltd v Ku-ring-gai Municipal Council [2009] NSWCA 300 (the Court of Appeal decision) set aside the orders in Murlan No 3 and ordered that Murlan's reamended Notice of Motion filed on 18 November 2008 be remitted for determination by this Court. 2 On 21 January 2010 the Crown Solicitor's Office advised the Land and Environment Court Registrar that the Attorney General of New South Wales was exercising his right to intervene in the remitted proceedings pursuant to s 64(2) of the Land and Environment Court Act 1979 (the Court Act), and filed an appearance in the matter on 25 January 2010. The Council has entered a submitting appearance save as to costs in the first hearing and in relation to the remitter hearing. The intervention occurred following observations by Basten JA at [81]-[82] that the Attorney was the appropriate person to appear as contradictor to Murlan's Notice of Motion rather than the Council. The Council then notified the Attorney of the proceedings. 3 By way of background, Murlan lodged an application for the development of land at Wahroonga, a suburb of Sydney, with the Council in August 2006. The Council refused the development application. Murlan appealed pursuant to s 97 of the Environmental Planning and Assessment Act 1979. Those Class 1 proceedings were heard by Acting Commissioner Taylor (Dr Taylor) and another commissioner of the Court. The application was dismissed in June 2007: Murlan No 1. Murlan appealed to a single judge of the Court pursuant to s 56A of the Court Act. The appeal was heard and dismissed in October 2007; Murlan Consulting Pty Ltd v Ku-ring-gai Council and Anor [2007] NSWLEC 704 (Murlan No 2). 4 In August 2008 Murlan became aware of facts and circumstances relating to the association between Dr Taylor and the Council. Dr Taylor was at that time appointed as an acting commissioner of the Court sitting part-time and was also employed as an academic in the Department of Environmental Science at Macquarie University in Sydney. Murlan applied by Notice of Motion for orders setting aside the decision of the commissioners and remitting the proceedings for fresh determination. That application was dismissed in December 2008 in Murlan No 3. Murlan appealed that decision to the Court of Appeal which upheld the appeal. Court's jurisdiction to determine the reamended Notice of Motion 5 The reamended Notice of Motion dated 18 November 2008 seeks orders that the orders made by Watts C and Taylor AC (Dr Taylor) on 26 June 2007 (Murlan No 1), and the orders made on 29 October 2007 (Murlan No 2) be set aside pursuant to: (a) this Court's incidental or implied power to do so; and (b) the Uniform Civil Procedure Rules 2005 (the UCPR) r 36.15(1). 6 Murlan also seeks an order that the proceedings be remitted to a commissioner, commissioners or judge other than Watts C and Taylor AC for redetermination. As neither commissioner sits on the Court in that capacity any more that order will be unnecessary in the event that I find for Murlan. 7 The parties do not dispute that the Court has jurisdiction to determine Murlan's motion under r 36.15 of the UCPR. Rule 36.15 provides: 36.15 General power to set aside judgment or order (1) A judgment or order of the court in any proceedings may, on sufficient cause being shown, be set aside by order of the court if the judgment was given or entered, or the order was made, irregularly, illegally or against good faith. ….

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I did not finally determine this matter in Murlan No 3 as it was not necessary to do so but expressed the preliminary view that the rule could be availed of even where orders were perfected following an unsuccessful s 56A appeal, at [70]. Basten JA held that the Court's original jurisdiction rather than its appellate jurisdiction was invoked by the reliance on r 36.15 at [40]. The Court's jurisdiction in relation to Murlan's Reamended Notice of Motion is exercised pursuant to r 36.15. I note for completeness that Sackville JA considered whether the Court was exercising its jurisdiction under r 36.15 in Class 1 or Class 4 proceedings without finally determining the matter. The matter has always been dealt with in Class 1. Chronology 8 The chronology provided by Murlan for these remitted proceedings up to the decision in Murlan No 1 is set out below. It is very similar to the chronology I considered in Murlan No 3 at [11] and considered by the Court of Appeal. A number of events in it are referred to by Basten JA in the Court of Appeal. Date Event March 2004 Dr Taylor submits final report to Council, entitled "Ku-ring-gai Rivers". Report commissioned by Peter Davies on behalf of Council. June 2004 Ku-ring-gai Council's Bushland, Catchments and Natural Areas Reference Group ( " BCNARG " ) established as an advisory committee to Council. 18 October 2004 Inaugural meeting of BCNARG. Dr Taylor in attendance as a member as a member. General discussion at the meeting regarding the potential for Blue Gum High Forest to be rezoned (7C) conservation. 29 November 2004 Meeting of BCNARG. Dr Taylor in attendance as a member. December 2004 Council's Riparian Policy published; the involvement of Dr Taylor acknowledged. 2004-2005 Research papers co-authored by Dr Taylor and Council officers (Davies and Wilks). 21 February 2005 Meeting of BCNARG. Dr Taylor in attendance as a member. Discussion by BCNARG of the proposed Bushland Plan of Management. 9 May 2005 Meeting of BCNARG. Dr Taylor in attendance as a member. 20 June 2005 Meeting of BCNARG. Dr Taylor not in attendance. Discussion by BCNARG of the Council's Bushland Plan of Management and Biodiversity Strategy. Meeting of BCNARG. Dr Taylor in attendance as a member. Discussion by BCNARG of the proposed Bushland Plan of Management, including discussion of the following issues:

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· "how to manage the cumulative and site impacts of development ... on bushland". 18 October 2005 Dr Taylor appointed as a member of Ku-ring-gai Council's Small Community Grants Committee ( " SCGC " ). Meeting of BCNARG. Dr Taylor in attendance as a member. 21 November 2005 Discussion by BCNARG of the Bushland Plan of Management and Biodiversity Strategy; Dr Taylor leads discussion on Riparian Policy. Late 2005 - early 2006 Dr Taylor, in his capacity as academic employee of Macquarie University, receives funding in the amount of $23,000, coupled with considerable in-kind support, from the Council. 8 February 2006 Meeting of SCGC. Dr Taylor in attendance as a member. 20 February 2006 Meeting of BCNARG. Dr Taylor in attendance as a member. Discussion by BCNARG of the Bushland Plan of Management and Biodiversity Strategy. 3 April 2006 Meeting of BCNARG. Dr Taylor not in attendance. Discussion by BCNARG of the Bushland Plan of Management and Biodiversity Strategy. May 2006 Macquarie University receives $3,500 under Ku-ring-gai Council's Small Community Grants Scheme for a project coordinated by Dr Taylor. Council resolves to adopt the Bushland Plan of Management; 23 May 2006 Council resolves to adopt the Biodiversity Strategy. 4 August 2006 Development Application No. 855/06 lodged with Ku-ring-gai Council. Meeting of BCNARG. Dr Taylor in attendance as a member: 14 August 2006 Dr Taylor gives presentation to BCNARG entitled, "An evaluation of the ecological condition and biodiversity value of urban riparian environments in Ku-ring-gai, Sydney"; Nancy Pallin gives presentation to BCNARG entitled, "Blue Gum High Forest Ecological Community: Core Precincts and Connectivity in Ku-ring-gai". Ms. Pallin's presentation expressly identifies the land the subject of the Murlan DA; Presentation to BCNARG by Ku-ring-gai Council staff, introduced by Peter Davies. Presentation refers to projects undertaken in collaboration with Dr Taylor. Meeting of BCNARG. Dr Taylor in attendance as a member. 16 October 2006 Discussion by BCNARG of the Council's draft Bushland Encroachment Policy;

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Dr Taylor supported by Council as a nominee to the Hawkesbury Nepean CMA/LGMA meeting. 12 December 2006 Council refuses Development Application No. 855/06. 12 December 2006 Appeal filed in Class 1 jurisdiction of the Land and Environment Court against the Council's refusal to consent to the Development Application, pursuant to s97 of the Environmental Planning and Assessment Act 1979. 7 February 2007 Dr Taylor commences a 12 month tenure as an Acting Commissioner of the Land and Environment Court. 19 February 2007 Meeting of BCNARG. Dr Taylor in attendance as a member. Discussion by BCNARG of the Biodiversity Strategy; minutes note Dr Taylor's contributions to the discussion. 13 March 2007 Council resolves to adopt Bushland Encroachment Policy. 19 March 2007 Macquarie University Science News publication congratulates Dr Taylor for receipt of the 'Ku-ring-gai Council Mayoral Award for Outstanding Service to the Ku-ring-gai Community'. 2 April 2007 Meeting of BCNARG at which Dr Taylor resigns as member of the BCNARG. 24 April 2007; The Council contributes, or agrees to contribute, the amount of $18,000 over 3 years, together with in kind support of $48,500 over the same period, towards an ARC Linkage research grant for which Dr Taylor was an applicant. 2 May 2007 30 April 2007; 1 May 2007; First three days of hearing of Class 1 application heard by Commissioner Watts and Acting Commissioner Taylor. 2 May 2007 Dr Taylor attends the 5th Australian Stream Management Conference , at which he presented a paper co-authored (amongst others) by Peter Davies of the Council. 21-25 May 2007 An additional paper co-authored (amongst others) by Dr Taylor and Peter Davies was presented at the Conference. 28 May 2007 Final two days of Class 1 application heard by Commissioner Watts and Acting Commissioner Taylor. 30 May 2007 26 June 2007 Decision of Commissioner Watts and Acting Commissioner Taylor in Class 1 Appeal delivered, dismissing application: [2007] NSWLEC 374 .

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Evidence 9 Murlan tendered the two volume appeal books relied upon in the Court of Appeal to enable ease of reference (exhibit A) and an agreed bundle of the parties' written submissions relied upon in Murlan No 1 (exhibit B). 10 The Australian Research Council (ARC) research linkage application referred in the chronology at par 8 was referred to in detail by the parties. It was completed on or before 2 May 2007. The ARC application form for funding to commence in 2008 identifies that the organisation administering the funding was the University of Technology, Sydney. Three chief investigators were nominated, being Associate Professor Dr James Ball (Faculty of Engineering, University of Technology, Sydney) and Dr Mark Taylor (Department of Environmental Science, Macquarie University) and Dr Jaya Kandasamy (Faculty of Engineering, University of Technology, Sydney). Each included their respective academic employment history and a precis of most significant research contributions and relevant publication history. Partner organisations and non-ARC contributors identified in the application are the University of Technology, Ku-ring-gai Council, and DHI Water and Environment Pty Ltd. Contributions from each organisation include personnel, equipment and other incidentals. Mr P Davies, Ku-ring-gai Council's Manager of Sustainability and Natural Resources is identified as "integrally involved with the project" and his involvement is listed as an in-kind monetary contribution throughout the three year funding proposal. Ku-ring-gai Council is also listed as providing a total cash contribution of $18,000 and facilities for regular monthly meetings of the project team at Council offices. The Council's contribution is confirmed in the letter dated 24 April 2007 from the Council to Associate Professor Ball. As a further part of its contribution to the project, Ku-ring-gai Council is identified as "undertaking hydraulic and stream monitoring across four of its catchments at a cost of $20,000. This monitoring is to provide data pertinent to this project which currently is not available but essential for the successful completion of the proposed research." None of the chief researchers, including Dr Taylor, disclosed any association with a partner organisation named in that part of the application as required at par B4 - Memberships/Associations. Court of Appeal decision 11 Delivering the lead judgment upholding Murlan's appeal in the Court of Appeal, Basten JA (Macfarlan JA and Sackville AJA agreeing) observed at [27] and [35]-[36]:

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(a) they were not required to be legally qualified but were required to have qualifications, knowledge or experience relevant to the subject matter of such proceedings; (b) they were not bound by the rules of evidence, or matters of form or technicality and were entitled to rely upon and apply their own knowledge and experience to the resolution of the issues in dispute, and (c) they stood in the shoes of the consent authority for the purpose of determining the development application. 36 Whilst these factors were characteristic of administrative, rather than judicial, decision-making, it was also significant that the functions exercised by the Commissioners were part of the jurisdiction of the Court, and that their decisions were decisions of the Court and were thus made within the institutional structure of the Court. They were, thus, required to exercise their statutory functions independently of the consent authority from which the "appeal" was brought. 12 At [57] his Honour held: 57 The same concern (as to a required connection with an issue in dispute) was raised by the appellant with respect to a number of collaborative research projects undertaken between Dr Taylor and Council staff, together with the conference papers co-authored with a Council staff member, presented at the Albury conference which occurred in the course of the proceedings. With respect to the collaborative research projects which were no longer on foot, it was not inappropriate for her Honour to look for disqualifying connections with the matters in issue in the proceedings. Such an approach was consistent (by analogy) with that required by Re Polites. However, the attendance at the conference while the case was part-heard before the Commissioners fell into a different category. Whilst it might not, by itself, have given rise to any reasonable apprehension of bias, the manner in which that question was addressed was too limited. A case of continuing association must be addressed by reference to the broader test of creating a potential for deviation from the course of deciding the case on its merits, being a test not limited to a connection with the issue in dispute. 13 At [60] - [63] his Honour held: 60 In this Court, the Applicant placed emphasis on the circumstances with respect to the ARC grant application. The Applicant contended that the preparation and submission of, and expectations in relation to, this application demonstrated a close and on-going connection between the Acting Commissioner and the Council at the time of the hearing. The relationship was not one which had ceased with the Acting Commissioner's appointment to his position within the Court. To the extent that the grant application constituted a continuation of activities which had long pre-dated his appointment within the Court, and accepting that the activities were entirely appropriate and expected of an academic with his research interests, those activities must, nevertheless, have affected his proper role as a Commissioner and the cases on which he could sit. Development applications to which the Council was a party could not properly fall within his exercise of the Court's jurisdiction.

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14 Disqualification of Commissioners (1) Where a Commissioner: (a) has a pecuniary interest, direct or indirect, in a matter which is the subject of proceedings before the Court, or (b) is a member, officer, employee or servant of a public or local authority that is a party to any proceedings before the Court, being proceedings in respect of which the Commissioner is exercising any functions conferred or imposed on the Commissioner by or under this Act or the rules, then: (c) the Commissioner shall inform the Chief Judge that the Commissioner has such an interest or is such a member, officer, employee or servant, and (d) the Commissioner shall thereupon cease to exercise those functions in relation to the proceedings. … 16 Basten JA considered s 14(1) of the Court Act at [64]-[67]. He held at [66] that the apparent purpose of s 14(1) of the Court Act is to ensure that commissioners, who will often perform functions otherwise vested in local councils, are subject to similar controls "in respect of boards or other bodies, including local councils" designed to avoid conflicts of interest. It does not necessarily preclude a conclusion that a decision of commissioners should be set aside because it is infected by a reasonable apprehension of bias. 17 His Honour at [70]-[71] (Macfarlan JA at [85] and Sackville AJA at [117] agreeing) held that the evaluative judgment necessary to determine whether the association gave rise to a reasonable apprehension of bias had not been made according to correct legal principle. More than one factual conclusion was reasonably open and the matter ought be remitted to this Court for redetermination pursuant to s 57(2) of the Court Act. 18 The Court of Appeal did not uphold all grounds of appeal. For example, it held that there was no error in drawing a distinction between judicial decision-making and the extra-curial decision-making process exercised by commissioners (at [49]-[51]). 19 The Court of Appeal made final orders on 6 October 2009 to: 1. Set aside the orders made by Pain J on 4 December 2008 ( Murlan No 3). 2. Remit the reamended Notice of Motion filed on 18 November 2008 for determination by the Land and Environment Court. 3. Dismiss the appeal from the orders as to costs made on 25 February 2009. 4. Order that the Council pay Murlan's costs in this Court. Reamended Notice of Motion Applicant's submissions 20 The Court of Appeal held that there is no basis for limiting analysis of an association between a decision-maker and one of the parties to the identification of a connection between that association and one of the issues in dispute. Such an association may give rise to a reasonable apprehension of bias without any such connection being present. Murlan contends that the degree of association between one of the two commissioners of this Court who heard and determined Murlan's application and the Council, offended the reasonable apprehension of bias principle. 21 Murlan submitted that there are four distinct, though overlapping, categories of case involving disqualification by reason of the appearance of bias being "interest" (some direct or indirect interest in the proceedings, whether pecuniary or otherwise), "conduct" (either in the course of, or outside, the proceedings), "association" (some direct or indirect relationship, experience or contact with a person or persons interested in, or otherwise involved in, the proceedings), and "extraneous information" (knowledge of some prejudicial but inadmissible fact or circumstance): see Webb v The Queen [1994] HCA 30; (1994) 181 CLR 41 at 74. Murlan raises the existence of association and interest of an indirect pecuniary nature as between Dr Taylor and the Council such that a fair-minded observer might reasonably apprehend that Dr Taylor might not bring an impartial mind to the resolution of a question involving the interests of the Council. Nature of relationship 22 There must be an articulation of the logical connection between the association and any apprehended deviation from impartial adjudication. This does not require proof of the existence of some factual overlap between Dr Taylor's association with Ku-ring-gai Council and the issues in the Class 1 proceedings. In this case, the requisite logical connection is a natural corollary of the nature and extent of Dr Taylor's association with the Council. It does not depend on any correspondence between its content and the issues that were before the Court in the Class 1 proceedings (based on Court of Appeal judgment). 23 Evidence of the association and an indirect pecuniary interest between Dr Taylor and the Council was identified in written submissions as follows: 18. The evidence of the association and interest included the following:

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24 The indirect pecuniary interest arises from the indirect financial assistance obtained through grants from the Council for research. 25 This evidence of association was not intermittent. Rather it revealed a lengthy and substantial professional association through different points of contact extending over a number of years and continuing throughout the Class 1 proceedings (written submissions par 21). The feared diversion from impartial decision making in the eyes of a fair-minded observer, having knowledge of the facts, could reasonably be expected to arise because of the close association between Dr Taylor and the Council. Without fear or favour 26 Further, that association gives the appearance that Dr Taylor was in the Council's camp, much as one could apprehend bias if the judge were a close relative of one of the parties, or was recently an employee of the party. A commissioner who had undertaken and continued to undertake (including during the hearing) collaborative professional work with Council officers and whose university had been the beneficiary of Council grants earmarked for his research, might be perceived as not bringing an impartial mind to the resolution of the dispute. Non- disclosure 27 The apprehension of bias is compounded by Dr Taylor's silence about his prior and continuing association with the Council when the matter was listed before him, or at any continuing aspects of the hearing. The fair-minded observer would be inclined to be more concerned about the association, and more inclined to infer a want of impartiality, in circumstances where the Commissioner failed to disclose the association (written submissions par 22). Fair-minded observer 28 Murlan argued that Dr Taylor's academic post and advancement at Macquarie University was based, in part, on establishing successful community engagement (submissions par 23). Dr Taylor's connection with the Council must have fulfilled or contributed to the satisfaction of those requirements. Murlan submitted that a fair-minded observer would infer that collaborative research projects with the Council, research funding grants from the Council, and the collaborative presentation and publishing of conference papers with Council staff would satisfy community engagement in these terms. Further, as a member of committees established by the Council, Dr Taylor was able to contribute to the development of Council policy. 29 Dr Taylor made such claims in an ARC funding application (see exhibit A p 193). Indeed, Dr Taylor expressly made a claim that "My research findings from (sic) have guided policy and environmental management at Ku-ring-gai Council" ("Australian Research Council Linkage Projects (Round One) - Application Form for Funding Commencing in 2008"). He goes on to acknowledge that the successful application of his riparian assessment tools across the Ku-ring-gai local government area led in turn to their implementation in Hornsby, which together gave him such "success and profile in this area" that he achieved an appointment as an acting commissioner of the Land and Environment Court. The fair-minded observer might very well think that Dr Taylor was saying that he was appointed to the Court because of his successful engagement with the officers of Ku-ring-gai Council. 30 Murlan submitted that Dr Taylor's academic career progression, reliant on demonstrating successful community engagement, amounted to an indirect pecuniary interest (written submissions par 26). The fair-minded observer might apprehend that Dr Taylor was also a university academic whose status and seniority within the university, and prospects for future advancement, depended upon the maintenance and enhancement of links with this particular Council, and for that reason, he might not have an impartial mind when issues that relate to that particular Council were to be considered and determined. Those examples of the association between Dr Taylor and the Council raise a reasonable apprehension of bias whether or not the projects for which grants were made, or the topics on which the papers were presented, were directly connected or referable to the issues in the proceedings. 31 A detailed list of research papers identified by Dr Taylor in the ARC application was filed in Court. The analysis identified a total of ten research papers from 2005 to April 2007. From these ten papers, eight referred either directly or indirectly to the Ku-ring-gai local government area and ecological riparian management. Six research papers were identified as being co-authored with Council employees, and six research papers were identified as having published acknowledgement of Council support, with some overlap of the two. Two of the research papers not co-authored with Council employees acknowledged Council support. Submissions of the Attorney as Intervenor 32 The Attorney submitted that the Court's task was to make the required evaluative judgment of whether a fair-minded lay observer might reasonably apprehend that Dr Taylor may not have an impartial mind in the Class 1 proceedings regarding the two errors the Court of Appeal identified in relation to a failure to apply the correct test to questions of association. The first error related to Dr Taylor's attendance at the 5th Australian Stream Management Conference in May 2007 (the Albury conference) while the Class 1 proceedings were part-heard where two papers Dr Taylor co-authored with another Council employee were delivered (Attorneys submissions par 7; see also [20] and [57] of the Court of Appeal judgment). The second error was Dr Taylor's "on-going collaborative association" with the Council in relation to the ARC grant (see [63] of the Court of Appeal judgment). In relation to both errors the Court erred in requiring a logical connection between Dr Taylor's activities and the issue in dispute in the Class 1 proceedings. On remitter, this Court's task is to make the required evaluative judgment regarding the two matters in respect of which the Court of Appeal held the primary judge failed to apply the correct test to questions of association. The other matters should be considered only to the extent, if any, they demonstrate the closeness of the relationship between Dr Taylor and the Council at the time of the Class 1 proceedings. 33 Murlan refers to the timing of the Albury conference and the ARC grant as "particularly significant" (Applicant's outline of submissions par 19), but also cites in support of its submissions various other matters that it previously relied upon in the Court of Appeal, including Dr Taylor's membership of the Bushland, Catchments and Natural Areas Reference Group (BCNARG) and the Council's Small Community Grants Committee (SCGC), the Council's grants of funds to or for the benefit of Dr Taylor and students under his supervision in 2005 and 2006, Dr Taylor's collaboration on projects, papers and supervision of students with David Wilks at unspecified times, and his collaboration on conference papers and professional presentations with Peter Davies between 2004 and 2007 (Applicant's outline of submissions par 18). With the exception of Peter Davies' involvement with papers presented at the Albury conference, as indicated above, the Court of Appeal did not identify errors in this Court's approach to any of these other matters when taken individually. Fair-minded observer 34 The Attorney argued that in making the required evaluative judgment on remitter, the extent of the knowledge to be attributed to the fair-minded observer is important. It is necessary to identify the extent of such knowledge in order to determine, according to the Ebner test, what the observer might apprehend in the context of a particular case. Mason CJ and Brennan J attributed knowledge of the "actual circumstances of the case", including the circumstances leading to the bringing of the action, to the hypothetical fair-minded observer in Laws v Australian Broadcasting Tribunal [1990] HCA 31; (1990) 170 CLR 70 at 87. In S & M Motor Repairs Pty Ltd v Caltex Oil (Australia) Pty Ltd (1988) 12 NSWLR 358 the majority of the Court of Appeal (Priestley and Clarke JJA) considered the level of knowledge attributable to a moderately informed observer. In Najjar v Haines (1991) 25 NSWLR 224 at 263 Rogers AJA considered the majority and Kirby P's dissenting approach in S & M Motor Repairs at 368-69 with approval.

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37 The authorities are unclear on the detailed knowledge of the practices of an organisation whose relationship with a decision-maker is in question which should be attributed to the fair-minded observer, see for example Clarke JA at [240] in Najjar in relation to the knowledge of tendering practices of a government department that should be attributed to the observer. The notorious elements of academic promotion relied on by Murlan are initiating and undertaking research projects, establishing community engagement and attracting funding. There is no evidence that these were requirements of Dr Taylor at the time of the Class 1 proceedings. Even if they were, such knowledge would not be matters of notoriety to be attributed to the fair-minded observer. 38 Further, a fair-minded observer should be assumed to have knowledge of the role of a commissioner of the Court. The Court of Appeal endorsed this Court's recognition that a commissioner is not a judicial officer, at [28]. The relevance of the statutory context to the imputed knowledge of a fair-minded observer was recognised in McGovern v Ku-ring-gai Council [2008] NSWCA 209; (2008) 72 NSWLR 504 at 507-508 and 519 per Basten JA. Other provisions of the Court Act concerning the appointment, tenure, remuneration, removal and disqualification of commissioners and the Court's role and procedure in Class 1 proceedings also inform the fair-minded observer, as set out in the judgment of Basten JA at [29]-]36] and [67]. Second Ebner step 39 Having identified the matter that might lead an adjudicator not to act impartially (the first step) the second part of the Ebner test requires an "articulation of the logical connections between the matter and the feared deviation from the course of deciding the case on its merits"; Ebner at [8]. The Court of Appeal held at [57] that the possible potential for deviation from the course of deciding a case on its merits had to be considered in relation to Dr Taylor and the Council. Murlan argued firstly there is a nexus as a natural corollary of the nature and extent of Dr Taylor's association with the Council (written submissions par 20). Secondly, Murlan argued Dr Taylor's professional standing and promotion depended on maintaining and enhancing his links with the Council, suggesting he was beholden to the Council (written submissions par 25). 40 In relation to the first argument, the nature and extent of the professional relationship considering the four factors of nature, duration, intensity and proximity identified by Kirby P (in minority) in S & M Motor Repairs was insufficient to justify a reasonable apprehension of bias. The relationship was professional not personal, as found by Basten JA at [62]. The intensity is not clear from the evidence. Dr Taylor attended 12 meetings of BCNARG and one of the SCGC over three years before the Class 1 hearing. It can be inferred that he met and corresponded with Council employees Wilks, Davies and others in relation to research and research grant applications, writing conference papers and co-supervising post-graduate students but the extent of that contact is unknown. The level of contact is much less intense than in the case of the judge who acted extensively for one party in S & M Motor Repairs. 41 The second argument suggests that Dr Taylor was beholden in some way to the Council. In Aussie Airlines Pty Ltd v Australian Airlines Pty Ltd (1996) 65 FCR 215 relied on by Murlan, there was a longstanding and close personal and professional association in addition to a substantial financial association between the presiding judge and counsel appearing for one of the parties. Merkel J found no rational links between that association and his capacity to bring an impartial mind to the resolution of the case as he considered at 222: There must be something in the nature or the extent of the association which leads that bystander to conclude, whether for friendship, love, money, fear, favour or otherwise, that the adjudicator might be influenced by it. 42 The notion that an association with a decision-maker must involve an element of fear, favour or capacity to exercise power in relation to the association in order to raise the potential for deviation from the course of deciding a case on its merits is supported by Nader J's judgment in R v Cavit; Ex parte Rosenfield (1985) 33 NTR 29. Basten JA referred to the mutual benefit in the on-going collaboration between the Council and the academic researchers including Dr Taylor at [63] but that does not establish the nexus identified in the second step of Ebner. A detailed consideration of the ARC grant shows that it does not identify an amount of time to be spent by Dr Taylor on the project. Nor does the application suggest a dependency by or need to find favour with Dr Taylor on the Council (see analysis of publications at par 29(a)-(e) of the Attorney's written submissions).

[36]

47 The Court should not place any material weight on Dr Taylor's non-disclosure of his association with the Council. The matters that were not disclosed did not raise a reasonable apprehension of bias. Details of collaborative conference presentation and publication were in the public domain, and there can be no justification of any inference of intentional concealment by Dr Taylor in relation to the ARC funding application as that grant had not yet been approved (written submissions par 33). Finding 48 The Court of Appeal upheld Murlan's appeal because my consideration of apprehension of bias by reference to the connection between Dr Taylor's activities and the Council and the issues in the Class 1 proceedings was too limited. Circumstances which may give rise to an apprehension of bias on a broader basis as identified in [57], [62] and [63] of the Court of Appeal decision arise where there is a continuing association as in this case. At [71] the Court of Appeal identified that on remitter this Court is required to make an evaluative judgment of "whether a fair minded lay observer might reasonably apprehend that Dr Taylor may not have brought an impartial mind to the Class 1 proceedings" (the Ebner test) applying the broader test. As submitted by Murlan there must be a logical connection between the association and any apprehended deviation from impartial adjudication. Basten JA noted at [57] that the same obligation to avoid circumstances giving rise to an apprehension of bias arises for a commissioner as for a judge of this Court. 49 As a number of cases emphasise, the requirement that there be no apprehension of bias on the part of a judicial officer or tribunal member is to ensure that all parties are accorded natural justice and that justice is done and also seen to be done, see for example Kirby P describing the enduring principle of judicial independence based on principles of judicial neutrality and impartiality in S&M Motor Repairs at 360-361. The Ebner might/might test reflects the important goal that justice should be seen to be done. I should emphasise that in applying that test there is no suggestion of actual bias on the part of the acting commissioner.

[37]

Scope of matters considered on appeal 50 The Attorney submitted that I should focus on Dr Taylor's attendance at the Albury conference in May 2007 and the ARC grant application as the matters the subject of a finding of error by the Court of Appeal. At [57] Basten JA stated that it was not inappropriate to consider the approach of identifying if there was a connection to the issues in the proceedings in relation to the collaborative research projects which were no longer on foot at the time of the conference proceedings. At [60] Basten JA referred to the continuing association with the Council at the time of the Class 1 proceedings as being a matter which required analysis under the broader test, not limited to whether there was a connection with an issue in dispute. 51 I agree with Murlan that I should consider all the matters identified in the chronology as relevant to the assessment of the nature of the relationship between Dr Taylor and the Council giving rise to that continuing association at the time of the hearing of the Class 1 proceedings. That approach is also supported by authority, see Kirby P (in minority, majority not disagreeing on this point) in S&M Motor Repairs at 368-369 referring to a full understanding of the facts, and Clarke JA (Kirby P and Rogers AJA concurring) in Najjar at 240 referring to the need to consider all aspects of a relationship in order to determine if an apprehension of bias arose. That consideration is to enable determination of the nature of the association but I note that none of the events in the chronology apart from the two which continued at the time of the Class 1 proceedings were found by the Court of Appeal to give rise to any apprehension of bias. 52 There are several matters where the Court of Appeal found no error in addition to that at [57] in relation to collaborative research that had ended before appointment as an acting commissioner. These are summarised by the Attorney's submissions as: (a) distinguishing between the role and expectations of judges and commissioners of the Land and Environment Court, particularly insofar as aspects of the matters relied on by Murlan invoked an element of pre-judgment (at [49], [50]); (b) requiring a connection between the impugned activities of Dr Taylor and the matters in issue in the Class 1 proceedings insofar as Murlan relied upon a form of pre-judgment arising from Dr Taylor's membership of the Council's Bushland, Catchments and Natural Areas Reference Group ("BCNARG") (at [56]); and (c) none of the four matters of (direct) financial interest gave rise to an apprehension of bias because they were "indirect" and "all sums were paid to Macquarie University and used on research projects generally within Dr Taylor's areas of expertise and interest, riparian management" (at [52], quoting Murlan No 3 at [55]). 53 The evidence as detailed in the chronology above in par 8 and summarised in Murlan's submissions (par 21), identifies over a period from March 2004 to May 2007 the intermittent interactions between Dr Taylor and the Council through participation on the BCNARG with attendance at meetings in October, November 2004, February, May, August, November 2005, February, April, August, October 2006, February, April 2007 (12 in all). His membership of the SCGC involved attendance in October 2005, February, April 2006. In late 2005/2006 Dr Taylor as an academic at Macquarie University received $23,000 from the Council for a project co-ordinated by Dr Taylor. In May 2006 Macquarie University received a single-payment one-off grant for $3,500 from the Council's SCGC for a project co-ordinated by Dr Taylor. 54 Dr Taylor was an acting commissioner at the time of the determination of the Class 1 proceedings in April/May 2007, having been appointed on 7 February 2007. The activities that were on-going at the time of the Class 1 hearing are a particular focus of Murlan's submissions and of the judgment in the Court of Appeal. In the ARC research grant proposal the Council agreed to contribute $18,000 over three years plus an additional in kind support to the value of $48,000 in May 2007. Dr Taylor attended the Albury conference on 21-25 May 2007 where two papers co-authored with a Council officer Mr Davies manager of planning and sustainability were presented by Dr Taylor and another author while the Class 1 matter was part-heard. 55 Murlan provided a table of ten published, refereed research papers which Dr Taylor co-authored and which were referred to in the ARC application prepared by Dr Taylor. An employee of the Council is co-author of six. Such research papers are in the public domain.

[38]

Fair-minded observer 56 It is first useful to consider what knowledge should be attributed to the fair-minded observer identified in Ebner as that is the "lens" through which the association and indirect pecuniary interest Murlan alleges must be considered. Ebner was decided in 2000 and referred to a number of older cases where essentially the same test was identified, such as R v Watson; ex parte Armstrong (1976) 136 CLR 248 and Liversey v New South Wales Bar Association [1983] HCA 17; (1983) 151 CLR 288. The test has long relied on the hypothetical fair-minded observer and several of the cases referred to pre-date Ebner. The Attorney made detailed submissions on this issue as set out in par 34-38 above with particular reference to S&M Motor Repairs (1988) and Najjar (1991). 57 In S&M Motor Repairs (1988) the Court of Appeal had to consider whether a judge should disqualify himself on the grounds of apprehended bias where he had acted extensively as a barrister for one of the parties over a ten year period. The application to the judge asking that he disqualify himself came after the hearing and before a decision was handed down. There was no disclosure by the judge before the hearing. Priestley and Clarke JJA, in majority, held that the fair-minded observer should be considered as moderately informed as opposed to uninformed and in the matter before them considered that observer would not consider there was an apprehension of bias on the part of the trial judge, stating at 381: … in a case such as the present, where some particular knowledge is needed for a sensible opinion to be formed, the only apprehension of possible bias worth considering is that of the moderately informed observer rather than an observer at first uninformed, and when informed unable to explain adherence to his or her first opinion. This conclusion is related to our earlier comment that the reasonable observer would want to know, at least in outline, the relevant information, before deciding whether or not to be apprehensive of possible bias. We stress that whenever a court is called on to decide whether disqualifying bias or apprehension of bias exists all the circumstances of the particular case must be looked at. 58 Kirby P (while in the minority his judgment has been referred to often in subsequent decisions) identified a number of principles he considered relevant to the consideration of judicial disqualification at 367-373 including (principle 3) that whether apprehension of bias arises from a relationship between the parties depends on a full understanding of the facts, including its nature, duration, proximity and intensity (at 368-369). Kirby P considered that the circumstances of the relationship with the connection lasting over a decade would have given rise to considerable connection leading to the establishment of rapport and respect. He considered that intangible connections of personal relationships and knowledge of people would be important in the public's mind. At the time of the hearing the connection was less than three years old, in contrast to the trial judge in Raybos Australia Pty Ltd v Tectran Corporation Pty Ltd [No 9] (Court of Appeal, 27 November 1990, unreported) where the connection between the judge and a solicitor's firm was over nine years old at the time of hearing.

[40]

60 In Johnson v Johnson (2000) the High Court considered whether an apprehension of bias arose in relation to a Family Court judge because of comments made at the conclusion of a hearing as to what evidence he would rely on. The majority (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ) affirmed the test in Ebner and held that these circumstances did not give rise to an apprehension of bias. In relation to the hypothetical observer they stated at 493 that the test is objective, by a fair-minded observer and that the person observed in that case was a judge with certain training. Detailed knowledge of the law or the character of a particular judge is not assumed. Kirby J made extensive obiter remarks at 504-509 about the knowledge to be imputed to the fictitious bystander who is not assumed to be highly specialised and who represents the impression of how the facts might appear to the parties and the public. At [53]: The attributes of the fictitious bystander to whom courts defer have therefore been variously stated. Such a person is not a lawyer. Yet neither is he or she a person wholly uninformed and uninstructed about the law in general or the issue to be decided. Being reasonable and fair-minded, the bystander, before making a decision important to the parties and the community, would ordinarily be taken to have sought to be informed on at least the most basic considerations relevant to arriving at a conclusion founded on a fair understanding of all the relevant circumstances. The bystander would be taken to know commonplace things, such as the fact that adjudicators sometimes say, or do, things that they might later wish they had not, without necessarily disqualifying themselves from continuing to exercise their powers. The bystander must also now be taken to have, at least in a very general way, some knowledge of the fact that an adjudicator may properly adopt reasonable efforts to confine proceedings within appropriate limits and to ensure that time is not wasted. The fictitious bystander will also be aware of the strong professional pressures on adjudicators (reinforced by the facilities of appeal and review) to uphold traditions of integrity and impartiality. Acting reasonably, the fictitious bystander would not reach a hasty conclusion based on the appearance evoked by an isolated episode of temper or remarks to the parties or their representatives, which was taken out of context. Finally, a reasonable member of the public is neither complacent nor unduly sensitive or suspicious.

[41]

61 Few cases with similar facts where a person is engaged as an adjudicator in a court on a part time basis were found. One case is Najjar concerning a person engaged as a referee in court proceedings. Gillies v Secretary of State for Work and Pensions [2006] UKHL 2; [2006] 1 All ER 731 was an appeal to the House of Lords on a point of law of whether a fair-minded and informed observer would conclude the existence of unconscious bias on the part of a medically qualified doctor participating as part of a non-judicial tribunal convened to determine Social Security administrative appeals against disability living allowance decisions. Medically qualified tribunal members were not required to take a judicial oath or give any other kind of formal undertaking as to the way in which they would carry out their duties as a member of the tribunal. The doctor was concurrently contracted, on a part time sessional fee-paid basis, to a private sub-contracting organisation which provided disability living allowance medical assessment services for the Department of Social Security. 62 The appeal was dismissed on the basis that the integrity of adjudication and decision-making was not compromised by the use of specialist knowledge and experience when the judge or tribunal member was examining the evidence (at [22], [23]). The House of Lords (Lord Nicholls of Birkenhead, Lord Hope of Craighead, Lord Rodger of Earlsferry, Lord Walker of Gestingthorpe and Baroness Hale of Richmond) unanimously held that there was nothing in the doctor's outside activities or in the way in which she conducted herself to show that she was unable to fulfil the duty of every tribunal member to reach an independent judgment. The relevant test, as approved by the House of Lords in Porter v Magill [2001] UKHL 67; [2002] 1 All ER 465, is "whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased" (Lord Hope of Craighead at [3]). His Lordship continued at [17]: The fair-minded and informed observer can be assumed to have access to all the facts that are capable of being known by members of the public generally, bearing in mind that it is the appearance that these facts give rise to that matters, not what is in the mind of the particular judge or tribunal member who is under scrutiny. It is to be assumed … that the observer is neither complacent nor unduly sensitive or suspicious when he examines the facts he can look at.

[43]

64 It is important to note that the test of "a real possibility" of bias in England is different compared to the test identified in the High Court in Ebner. The Ebner might/might test in Australia is less onerous (for further discussion of these different tests see Mark Aronson, Bruce Dyer and Matthew Groves, Judicial Review of Administrative Action, 4th ed (2009) Lawbook Company at 655-659). The case is useful in highlighting the role of a part time tribunal member in contributing skills and knowledge where they may be undertaking related external employment. The description of what knowledge should be attributed to a fair-minded observer is also pertinent. 65 The level of knowledge to be attributed to a fair-minded observer as identified in the authorities must be applied in terms of matters that would be known to a member of the public having made some inquiries and having an understanding of relevant circumstances at a general level (so called notorious matters). As submitted by the Attorney and noted by Kirby J in Johnson at [54] there is not a uniform approach to the knowledge to be attributed to the fair-minded observer, and views will differ. Further, in Johnson Kirby J cautioned against attributing too great a level of sophistication to the fair-minded observer at [54], as the Attorney submitted (par 35 above). 66 In relation to Dr Taylor's role as an academic, Murlan argued knowledge attributed to the fair-minded observer should include that promotion as an academic relies on collaborative research and attracting funding for such projects and community engagement. The Attorney did, appropriately in my view, accept that a fair-minded observer might generally understand that it is useful for academics to develop research partnerships to attract students and funding and to cite such when applying for promotion in a university (submissions par 19). Murlan submitted these matters relevant to academic promotion were notorious, which submission I accept. 67 The Attorney also submitted that an observer would expect some degree of academic independence from any research partners and this would influence a fair-minded observer's assessment of the proximity of the relationship between Dr Taylor and the Council. I agree, but as will become clear shortly that does not negate the significance of the proximity of the relationship. 68 The Attorney submitted a fair-minded observer should be taken to understand, "at least in a general way", the difference between the Council as an organisation and its individual employees with whom Dr Taylor had contact, relying by analogy on S&M Motor Repairs at 381 where the majority discussed the independence of barristers' work. The attribution of such knowledge to a fair-minded observer is not appropriate. The relationship between a barrister, with attendant professional responsibilities, and his or her clients is clearly at greater arm's length and of a different character to that of a council employee and a council who employs him or her. 69 What level of knowledge should be attributed on the basis of the facts in this case should also be considered. Attendance at BCNARG and SCGC meetings would be known publicly, also that Dr Taylor's membership of BCNARG had ceased at the time of the Class 1 proceedings. Published papers referred to in the ARC application were already in the public domain. Several acknowledge assistance of the Council and/or were co-authored with a Council employee. 70 Both parties referred in detail to the ARC application. The level of detail considered by the Attorney and Murlan in submissions which examined the ARC application closely is at a depth of knowledge that is not reasonable to attribute to that fair-minded observer particularly as the application would be unlikely to be a matter of public record at the application stage. The general detail of the ARC application might be able to be identified on inquiry but the extent to which this could be done is speculative. The hypothetical fair-minded observer could be assumed to be aware after inquiry that such an application was made by various institutions including Dr Taylor from his university and with the support of the Council for a project on riparian management lasting three years and that it would be administered by UTS. 71 Murlan submitted that the ARC application and the joint conference paper were a "behind the scenes" relationship with the Council, in contrast to Dr Taylor's participation in the BCNARG which ceased on 2 April 2007. The description of "behind the scenes" suggesting not publicly known is a fair characterisation. While the conference paper was delivered at a professional conference and would be considered as within the public domain once delivered, the preparations for this would not be generally known at the time of the commencement of the Class 1 hearing. Further the decision of the Council to participate in the ARC grant proposal process would not necessarily be known to the public.

[46]

76 In terms of the nature of the relationship, as recognised by Basten JA at [62] the relationship was not a personal one. Rather it is professional in that Dr Taylor was involved in various collaborative projects over time with the Council in relation to his area of academic expertise. As found in Murlan No 3 at [57], the Council has not been a client of Dr Taylor and has not had an adviser/client relationship in any professional capacity (such as a consultant). His participation in two Council committees, the BCNARG and the SCGC, was voluntary. Nor has he held a paid position with the Council or received payment from it in any employment capacity (Murlan No 3 at [65]). 77 Murlan's submissions drew an analogy between the association in this case and where a judge was a close relative of one of the parties or was recently an employee of a party, referring to cases considered by Aronson et al, Judicial Review of Administrative Action at [9.160] and [9.170]. Such relationships are not directly analogous to the relationship between Dr Taylor and the Council which I consider is at greater arm's length given his academic employment at a separate and unrelated institution. The circumstances of this relationship are markedly less intense than the longstanding, personal, professional and financial relationships considered in Aussie Airlines and S&M Motors between a judge and counsel, and in Najjar between the referee and one of the parties. 78 In relation to intensity, duration and proximity to the Class 1 hearing, the chronology in par 8 details intermittent events over a three year period some of which were continuing at the time of the Class 1 hearing. Dr Taylor was involved in professional activities with at least one employee of the Council at the time of the hearing of the Class 1 proceedings. Some of the collaborative research work undertaken between Dr Taylor and a Council officer Mr Davies was continuing during the hearing, with the presentation of two jointly authored conference papers at the Albury conference. Further, the ARC grant application was on foot at the time of that hearing. 79 Murlan relies on indirect pecuniary interest in relation to the grants received from the Council. The past grants are not relevant for the application of the broader test I must consider where the collaborative research is at an end, an approach supported by Basten JA in the Court of Appeal at [62]. It is the potential for the ARC grant to provide ongoing funding for three years for Dr Taylor and others which gives rise to the issue of indirect pecuniary interest. The Council is one participating organisation contributing a small amount with a view to obtaining a larger sum from the ARC for a number of institutions. No Council money is paid to Dr Taylor or Macquarie University under the proposal. The benefit arises if the ARC decides to award funding to that application, which had not occurred at the time of the Class 1 proceedings. In these circumstances the indirect pecuniary interest is not substantial but does exist and is proximate. 80 In addition to these matters the intensity is otherwise reflected in the numerous meetings of BCNARG and to a lesser extent SCGC attended by Dr Taylor. The level of intensity is difficult to gauge in the absence of knowing what else Dr Taylor was doing in his role as a full time academic up to his appointment as an acting commissioner in February 2007 and thereafter. He is likely to have had a number of other duties to perform and other activities he was involved in separately to the activities involving the Council given his full time academic position. Those responsibilities may well have continued after his appointment as a part time acting commissioner. I would describe the relationship as of low level intensity. 81 The question of apprehension of bias arises in the context of Dr Taylor's appointment as a part time commissioner of this Court. A part time commissioner is not required to devote all his or her time to that office; Sch 1 cl 1(2) of the Court Act. In Murlan No 3 I held that commissioners are expected to have knowledge and expertise which can inform their decisions. Those findings were upheld in the Court of Appeal by Basten JA at [49]-[51]. In Murlan No 3 I found at [68] that the various matters relied on by Murlan identified the activities of an academic scientist engaged in expanding his expertise through orthodox channels of collaborative research and engagement with the community. Those observations were not made with the circumstance that Dr Taylor was an acting commissioner also considered. That is an important aspect of my consideration now in applying the broader test required by the Court of Appeal. 82 It is the proximity of the professional relationship with the Council which might suggest that the relationship might give rise to an apprehension of bias in the mind of a fair-minded observer. The fact that the relationship existed and was intended to continue into the future if the ARC funding application was successful does give rise to an apprehension of bias in the mind of the hypothetical fair-minded observer. Without fear or favour 83 Murlan also alleges that the association of Dr Taylor with the Council might cause a fair-minded observer to consider he is beholden to the Council so that he might be perceived as not acting without fear or favour. I have already noted above at par 61 that this matter varies from many of the cases referred to because Dr Taylor held at the relevant time a part time appointment as a commissioner. Murlan's submission that the evidence discloses contact only with Ku-ring-gai Council and no other council is pertinent to consider in this regard. In this regard a statement by Dr Taylor in the ARC application current at the time of the Class 1 hearing that his work with Ku-ring-gai Council had contributed to his appointment as an acting commissioner of the Court is relevant to consider from the viewpoint of a fair-minded observer. 84 Murlan argues that the association and indirect pecuniary interest would in the mind of a fair-minded observer give rise to a concern that the acting commissioner might favour the Council. In R v Cavit to which the Attorney referred, Nader J held that an acting magistrate on unpaid leave from his job as a crown prosecutor was in a position where he had to concern himself not only with the duties of magisterial office, but also issues related to promotion when he returned to his former position in the same department. At 34: ... as a prudent man, he ought also to concern himself with any effect his performance of those duties might have upon his career. ... It is difficult enough for a person, whose mind is uninfluenced by a desire not to displease those who control his destiny, to make unbiased and objective judgments. It is intolerable that the acting magistrate should be put to the test in this way. The nice decision that might well go either way, which the acting magistrate believes could be a matter of interest to his departmental seniors, presents a temptation that a fair-minded person would quite reasonably suspect might induce partiality and bias in the decision. An apprehension of bias arose because he had a continuing attachment to his role as a Crown prosecutor. The circumstances in Cavit are quite different, and not surprisingly gave rise to a finding of an apprehension of bias. The position of the acting commissioner in this case is at greater arm's length. Dr Taylor continued in his employment as an academic at Macquarie University at the time of the Class 1 hearing. The Council has no direct role to play in Dr Taylor's promotion within the University. He was actively engaged at the time of the Class 1 hearing with the Council in his professional employment as an academic. 85 Murlan focuses on the on-going activity at the time of the Class 1 hearing, being the pending ARC application and the co-authored paper delivered at the Albury conference. In the Court of Appeal Basten JA stated that the on-going collaborative association in relation to the ARC grant was mutually beneficial to the academic researchers and the Council at [63]. The academic researchers because the carrying out of such research may well have constituted a significant element of their academic and professional careers and to the Council because it potentially gained valuable research for a small contribution to the total package. Does that mutual benefit suggest that a fair-minded observer might consider that Dr Taylor might not act without fear or favour? Murlan emphasised that the success of the ARC funding application depended in part on attracting funding from other sources, such as the Council. The period of the ARC grant if successful was three years. 86 That there was mutual benefit from the ARC application must be considered with other on-going collaboration in the preparation of conference papers between Dr Taylor and individual Council staff. The engagement with the Council was current during the hearing of the Class 1 proceedings and directly linked to his work as an academic and presumably assisted him in developing and applying his area of expertise. That was to his professional benefit. The only Council with which he was so actively engaged was Ku-ring-gai Council.

[49]

92 Costs were reserved in relation to some aspects of the re-amended Notice of Motion, specifically the ground of appeal concerning Dr Smith (not pressed) and the costs of the Second Respondent. On 25 February 2009, I determined the reserved costs by making a further costs order which ordered Murlan to pay the Council's "costs thrown away as a result of Murlan's Notice of Motion and Re-Amended Notice of Motion", and the Council's costs of its Notice of Motion seeking costs. An appeal against that further costs order in the Court of Appeal was dismissed in the orders made on 6 October 2009 in prayer 3 and this order is not disturbed. 93 In the Court of Appeal decision, Basten JA stated at [81]-[82]: 81 In relation to matters arising in the Land and Environment Court, it will usually be a local council which, as consent authority, is required to determine whether it will take an active part in proceedings, and if so in what manner. However, where there is an issue as to the regularity of the administration of justice in a court or tribunal, the appropriate contravener may well be the Attorney-General and not the consent authority. If the Attorney does not wish to intervene, the Court may be left without a contravener. That, however, is not an obvious reason why the consent authority should take up that role in the absence of the Attorney-General. 82 There was an additional complicating factor in the present case. The role of the Council was in substance to defend the conduct of the Acting Commissioner, in circumstances where his conduct was allegedly compromised by his involvement with the Council itself. The appearance of impartiality on the part of the Acting Commissioner was, at least retrospectively, not enhanced by the Council participating actively in defence of his decision-making role. Murlan's submissions 94 Regardless of the outcome of the remitted proceedings, Murlan seeks an order that the Council pay its costs of the first hearing, save in respect of costs the subject of orders made on 25 February 2009.

[53]

99 Murlan neglects the fact that a respondent's argument is responsive to the case put by an applicant. Counsel for Murlan submitted orally that the fair-minded observer might apprehend that Taylor AC was deciding a question which involved the impact of a development on the blue gum high forest in circumstances where he had been involved in council processes for formulating policy on that topic, namely the BCNARG, and that this supplied a logical connection with the Class 1 proceedings, for the purposes of the test in Ebner. 100 In Elite Protection Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373 the Court of Appeal (Beazley, McColl and Basten JJA) recognised that where there are multiple issues the Court does not seek to differentiate between these unless there is a particular issue or group of issues which is separable and dominant. Accordingly a court may deprive a successful party of costs or a portion of their costs if the matters upon which that party was unsuccessful were "clearly dominant or separable" and took up a significant part of the trial. A separable issue for the purposes of apportioning costs may be a disputed question of fact or law. The many routes to establishing appearance of bias which were advanced by Murlan and rejected were separable and occupied significant time. If Murlan succeeds on the remitter on the single component in relation to which the Court of Appeal found error, that does not affect Murlan's lack of success on the numerous remaining aspects of bias which Murlan actively advanced at the earlier hearing. If Murlan is successful in the remitted proceedings the Council should be ordered to pay no more than 20 per cent of its costs of the earlier proceedings. Finding on costs of first hearing 101 Under s 98 of the Civil Procedure Act 2005 the Court has wide discretion to order costs. The relevant costs rule in Pt 42 r 42.1 of the UCPR is that costs follow the event unless the Court determines otherwise. That rule is subject to any applicable rule of a court. Under r 3.7 of the Land and Environment Court Rules 2007 costs in Class 1 proceedings are only ordered to be paid if the Court considers that it is fair and reasonable to do so. Under r 3.7(3) examples of circumstances where the Court might consider making a costs order include where an issue of law or mixed fact and law arises which does not involve an evaluation of the merits of an application. In Murlan No 3 I considered it was appropriate that costs follow the event as Murlan's motion was not part of a merit hearing and ordered the Council to pay the Applicant's costs. 102 I have broad discretion to determine costs in relation to the first hearing in the absence of any relevant finding by the Court of Appeal. As identified in the Council's arguments that exercise of discretion can include awarding costs on a partial basis only. This can be done on an apportionment basis where there are a number of discrete issues. Various cases caution against undertaking a strictly mathematical approach when doing so. 103 Murlan relies on the criticism of the Council acting as the contravener at first instance by Basten JA at [82]. Part of his comments included that this was contrary to the obiter statements of Gaudron and Gummow JJ in Oshlack at [12]. He stated at [81] the appropriate contravener may well be the Attorney. If the Attorney does not intervene and the Court has no contravener that is not an obvious reason in his view for the consent authority to take up that role. No issue was raised at the first hearing by either party, both represented by experienced legal representatives, or by me as the trial judge that it was inappropriate for the Council to participate as a party seeking to uphold the Commissioners' decision in Murlan No 1. Basten JA in the Court of Appeal raised the matter of his own accord not arising from submissions of either party in the appeal. Murlan's reliance on these criticisms as a basis for awarding all the costs of the first hearing against the Council is unwarranted in these circumstances. 104 Nor do I accept Murlan's submissions that the Council caused me to fall into error. The parties at first instance presented their argument and I determined the matter in the way I considered correct. No fault is attributable to a party in these circumstances. 105 As the Council's submissions point out Murlan was unsuccessful on various grounds in the Court of Appeal which upheld my first instance decision on several issues raised by Murlan. Those issues occupied substantial hearing time in the first hearing and can be considered separately. It is therefore appropriate to require the Council to pay part only of Murlan's costs of the first hearing. I consider the Council should pay half of Murlan's costs of the first hearing and will so order. Costs of remitted proceedings 106 I must also determine costs in these remitted proceedings. Section 64(2) of the Court Act pursuant to which the Attorney intervened does not say anything about costs. Murlan's submissions 107 Murlan argued the Attorney as intervenor should pay costs. Murlan and the Council are in agreement that the Land and Environment Court is presently exercising its implied or incidental jurisdiction under UCPR r 36.15 to hear Murlan's re-amended Notice of Motion. Accordingly, the Court is required to order that the costs follow the event unless it appears that some other order should be made as to the whole or part of the costs (UCPR r 42.1). This is consistent with the "fundamental principle" that costs must be assessed from the perspective of the successful party for the reason that "costs are not awarded by way of punishment of the unsuccessful party. They are compensatory in the sense that they are awarded to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings" (per Mason CJ in Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 at 543). There was no requirement or necessity for the Attorney to intervene based on Basten JA at [81]. The task required by the Court of Appeal on remitter could be performed without the intervention of the Attorney. The Court's performance of this task was not aided by the Attorney's presentation of his discretionary evaluation of the undisputed evidence and it was unnecessary.

[54]

108 The Attorney should be ordered to pay Murlan's costs of the remitted proceedings, save for those costs which relate to the costs submissions put by the Council. Indeed, pursuant to UCPR r 42.1, this Court is required to make such an order unless it believes that some other order should be made in the circumstances. Murlan submits that no circumstances exist to remove these proceedings from the ambit of the usual order as to costs. 109 In the alternative, if Murlan's primary position is not accepted, Murlan submits that the Attorney should be ordered to pay such of Murlan's costs as are directly referable to the Attorney's intervention. Even if one approaches the question of costs from the false premise of the Attorney, focussing attention on the conduct of the Attorney in the remitted proceedings, it is evident that Murlan was put to significant cost by reason of the Attorney's intervention. Murlan was required to review and prepare written submissions in reply to the written submissions of the Attorney and submissions in reply to those put by the Attorney and, in Murlan's submission, the hearing was extended by half a day in order to accommodate the oral submissions of the Attorney. Consistent with the approach adopted by Debelle J in City of Burnside v Attorney General of South Australia (1994) 63 SASR 65 (cited by the Attorney at par 10 of submissions), Murlan should not be made to bear the cost of this additional activity. Council's submissions 110 If Murlan's re-amended Notice of Motion is allowed, costs of the remitted proceedings should follow the event. In the case of the Council, given that it had no active role in the remitted proceedings, but made a submitting appearance save as to costs (and on the basis that there is no occasion for it to participate other than by filing submissions relating to costs), no costs order should be made against the Council. I agree with these submissions as they reflect the Council's role in the remitted proceedings. Attorney's submissions 111 This Court does not appear to have previously considered the liability of the Attorney for costs following his intervention pursuant to s 64(2) of the Court Act. In the present case, the Attorney accepts that, as an intervenor pursuant to s 64(2) of the Court Act, he has the status of a party to the remitted proceedings: see Corporate Affairs Commission v Bradley [1974] 1 NSWLR 391 at 397 per Hutley JA (Reynolds and Glass JJA agreeing) concerning the role of an intervenor, albeit that the question in Bradley was whether a basis for intervention existed, the question of costs not being in issue.

[55]

112 As an incident of his status as a party to the remitted proceedings, the Attorney accepts that he may incur liability for costs. This Court has recognised that an intervenor (not the Attorney) who participated at all stages of a hearing "is to be treated as a party with the same rights and liabilities so far as costs are concerned": Kerry Lynch & Judith Lynch v Allan Norman [1998] NSWLEC 229 at [3] per Cowdroy AJ. The Attorney submits that the rule that costs follow the event should not apply to him in this case. Consistent with the position in other courts concerning costs of and against an intervenor in the absence of special circumstances, he should neither obtain the benefit, nor bear the burden, of a costs order in the present case. 113 In O'Toole v Charles David Pty Ltd (No 2) [1991] HCA 14; (1991) 171 CLR 232 the High Court (Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ) held that only in special circumstances should a court make an order for costs against an intervenor or an order resulting in an intervenor paying more than the costs claimed by a party as a result of the intervention. Such circumstances were found in that case. It involved constitutional issues which the Commonwealth Government as intervenor obtained removal of to the High Court. Recognition of the need for special circumstances was acknowledged by Brereton J relying on O'Toole, in Metlife Insurance Ltd v Visy Board Pty Ltd [2008] NSWSC 111 at [4]. 114 An example of another case where special circumstances were found to exist by the Court of Appeal and costs were ordered against the intervenor (the WorkCover Authority) is Mercantile Mutual Insurance (Workers Compensation) Ltd v Di Cecco [2003] NSWCA 141. There an appeal was rendered moot because the intervenor made a material mistake as to the limit of cover under an insurance policy. 115 The Attorney intervened in the remitted proceedings pursuant to s 64(2) of the Court Act in highly unusual circumstances. Not only had Basten JA (Macfarlan JA agreeing) suggested at [81] that the Attorney was the appropriate contravener on the issue of the regularity of the administration of justice in this Court in circumstances where the Attorney had played no role in either the first hearing of the re-amended Notice of Motion or the Court of Appeal, but this Court would have been left without a contravener on remitter had the Attorney failed to intervene. The interest which the Attorney intervened to protect was not similar to that protected by any existing party in light of Basten JA's conclusion at [82] that it was inappropriate for the Council to play the role of contravener in relation to the re-amended Notice of Motion. In his written and oral submissions, the Attorney endeavoured to assist the Court by adopting the role of contravener and elucidating the issues on remitter, in response to significant allegations of apprehended bias on the part of a decision-maker in this Court.

[57]

117 The Attorney submits that his intervention could not have significantly increased Murlan's costs on remitter or put Murlan to substantial unnecessary cost. Both written submissions and a hearing on remitter would have been required, even if the Attorney had not intervened (cf Metlife v Visy Board at [11], where Brereton J accepted that "there would have had to be a hearing in this proceeding in any event"). The Attorney did not seek to rely on any new evidence on remitter, and his written submissions (and Murlan's response to them) were brief. Moreover, the Attorney's intervention did not delay the hearing on remitter, or add significantly to the length of the hearing on 11 March 2010. The hearing on remitter was completed within one sitting day, of which the Attorney's submissions occupied less than two hours. As in Australian Industry Group v Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union [2003] FCAFC 226 at [11], given the dispute between Murlan and the Council regarding costs of the first hearing of the re-amended Notice of Motion, the hearing on remitter would have required a sitting beyond the usual lunch time adjournment even if the Attorney had not intervened. 118 Finally, Kirby P's consideration in Australian Postal Commission v Dao (No. 2) (1986) 6 NSWLR 497 of the undesirable results of imposing costs on the Attorney intervening (from the perspective of discouraging future intervention) is apposite to the present case, albeit that his Honour's remarks were made in the context of intervention on constitutional issues. The practical effect of an award of costs against the Attorney in this case may be to discourage future intervention by the Attorney in cases remitted by the Court of Appeal to this Court, in order to avoid costs liability in the event of an unsuccessful intervention, even in circumstances where the Court would otherwise lack the assistance of a contravener if the Attorney did not intervene. Finding on costs of remitter proceedings 119 The basis for considering costs is identified above at par 101 in relation to the costs of the first hearing. While the usual rule is that costs follow the event, I have wide discretion to determine costs. The Attorney intervened following statements in the Court of Appeal judgment of Basten JA at [81]-[82] suggesting that may be an appropriate course. But for those statements the Attorney would not have intervened. The Applicant argues that these statements were not an invitation to the Attorney to intervene and it was unnecessary for him to do so. There was no necessity for a contravener when the matter was remitted as the task of the Court was to evaluate the uncontested evidence in light of the test required by the Court of Appeal. 120 I accept the Attorney's submissions that his intervention was highly unusual given that he played no role in the first hearing or the Court of Appeal proceedings. The appeal was remitted by the Court of Appeal because it recognised that different conclusions could arise on the basis of the facts before the Court. In other words the outcome of the remitter was not a foregone conclusion. Lack of a contravener at the remitter hearing would have been problematic had the Attorney not intervened in my view. It was clearly inappropriate for the Council to continue in the matter in light of Basten JA's comments at [82]. As submitted by the Attorney the interest which he intervened to protect was not similar to that protected by any existing party given Basten JA's conclusion that the Council should not continue as contravener. The intervention was appropriate in the circumstances. 121 Murlan argued that the Attorney should not receive any immunity from the usual costs order because of any perceived assistance to the Court on remitter. It follows from my statements in the previous paragraph that I consider that the Attorney was of assistance and the issue of whether the Attorney should have immunity from the usual costs order arises. 122 The Attorney provided extensive written submissions on costs which identify that this Court has not considered the issue of the liability of the Attorney where he intervenes pursuant to s 64(2) of the Court Act. Examples of where the Attorney has intervened in Class 1 proceedings pursuant to s 64(2) were identified: Gameplan Sports & Leisure Pty Ltd v South Sydney Council [2000] NSWLEC 112; Rein Warry & Co v Wollondilly Shire Council [2004] NSWLEC 58; Brown v Gosford City Council [2006] NSWLEC 56; (2006) 143 LGERA 311. No award of costs was made against the Attorney in any of these cases. 123 The Attorney also refers to other cases in this Court where intervenors have intervened in Class 1 proceedings outside the context of s 64, see Kerry Lynch & Judith Lynch v Allan Norman. Generally costs are not awarded where merit issues have been raised by an intervenor given the usual costs rule in Class 1 proceedings is that each party pays its own costs. I do not find these cases to be of much assistance in determining costs in the context of this matter which arises pursuant to r 36.15 of the UCPR. 124 The Attorney's submissions refer to at least two approaches to costs of an unsuccessful intervenor who intervenes on behalf of the Crown. One approach applied by the High Court in O'Toole is that costs should only be awarded against an unsuccessful intervenor where special circumstances are found. Another approach as considered and applied by Debelle J in City of Burnside is that the intervenor should be liable to pay a portion of the successful party's costs based on the extent to which the hearing was lengthened by the intervention. Debelle J applied what he called a "broad axe approach" and this he elucidates at 68; In determining whether the intervener should be liable for costs, the Court should adopt a broad axe approach. If the hearing was slightly longer than it would have been but for the intervention, it might not be appropriate to order the intervener to pay costs. It will be a question of fact and degree in every case whether the intervener's participation has resulted in the trial being substantially longer than it would have been but for the intervention. In determining whether the intervener should be liable, it would be appropriate to have regard also to such factors as whether the interest which the intervener sought to protect was adequately protected by an existing party. Depending on the nature of the issues in the action, it might be a relevant factor that the intervener has assisted the parties and the Court in identifying or elucidating the issues. It is not unrealistic to suppose that, although the intervention has prolonged the trial, the intervenor's participation has been of substantial assistance. In such a case, it might be inequitable to order the intervenor to contribute to the costs of the successful party.

[58]

125 Numerous cases decided by the Federal Court in non-constitutional cases are identified in the Attorney's written submissions. In Australian Industry Group v Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union the Minister unsuccessfully intervened in proceedings pursuant to s 471 of the Workplace Relations Act 1996 (Cth). An application for an order for costs against the intervenor was dismissed, relying on O'Toole in holding that no special circumstances to do so were identified. Nor were the parties' costs increased to a material extent. Single judge decisions as set out in par 12 - 13 of the Attorney's written submissions vary in approach, with successful intervenors denied their costs on the basis it was not the Court's practice to apply conventional costs to intervenors in Construction Forestry Mining and Energy Union v Queensland Coal and Oil Shale Mining Industry (Superannuation) Ltd [2003] FCA 1174. There is not a uniform approach or any rule of thumb I can discern based on these cases. 126 The Attorney submitted that he had intervened solely to make submissions directed to the regularity of the administration of justice in this Court. That role is recognised by Lord Diplock in Attorney General v Times Newspapers Ltd [1974] AC 273. That role is unlike that referred to by Gaudron and Gummow JJA in Oshlack at [48]. 127 Consideration of whether costs ought be awarded against the Attorney intervening pursuant to s 78A(2) of the Judiciary Act 1903 (Cth) was considered in Metwally and Dao No 2 (Kirby P, Samuels, McHugh JJA concurring). In Dao No 2 costs awarded against the Attorney were confined to the additional costs incurred by virtue of the intervention at 507, following a consideration of relevant principles by Kirby P. The Attorney submitted that the decision to award costs against him in Attorney-General of New South Wales v World Best Holdings Ltd [2005] NSWCA 261; (2005) 223 ALR 346 at [131]-[132] Spigelman CJ (Tobias JA concurring at [200], Mason P dissenting at [182]) was distinguishable from this case. In that matter the Attorney sought leave to intervene as a party, which leave was granted, to uphold his decision to assign a person lacking the requisite statutory qualifications as a member to an administrative tribunal. I agree that circumstance gives rise to different considerations to those before me. 128 Given the circumstances of the Attorney's intervention I consider costs should not be awarded on the basis that costs follow the event. No special circumstances such as those referred to in O'Toole arise to suggest the Attorney ought pay costs. The only costs that I will consider ordering, if there be any, are any additional costs incurred by Murlan as a result of the intervention. 129 The matter would have required at least half a day hearing even if the Attorney had not intervened. The matter was heard in one day with the Attorney filing extensive and helpful written submissions to which Murlan responded. I agree with Murlan that the matter would have occupied half a day had there been no contravener. The hearing was lengthened to a limited extent by the Attorney's intervention. That intervention was of assistance to the Court and, as already observed, there was no other party which could have otherwise assisted. In these circumstances I do not consider I should exercise my discretion to order the Attorney to pay any of Murlan's costs of the remitted proceedings. All parties are therefore to pay their own costs of the remitted proceedings. Orders 130 The Court makes the following orders: 1. The Court's orders of 26 June 2007 in Murlan Consulting Pty Limited v Ku-ring-gai Council [2007] NSWLEC 374 are set aside. 2. The Council is to pay half of Murlan's costs of the first hearing apart from the costs order made on 25 February 2009 which remains. 3. The exhibits may be returned.

Murlan Consulting Pty Limited v Ku-ring-gai Council and Others

At a glance

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Before

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Judgment (59 paragraphs)

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Legislation Cited (2)

Cases Cited (42)

Cited By (1)