The case against the Council
178By an amended summons, orders were sought against the Council, restraining it and its servants and agents from dealing any further with the complaint. In the alternative, that it be restrained from taking any account of Mr Smith's report. While I have concluded that orders restraining the Council from taking account of Mr Smith's report must be made, I am not able to conclude that it should be restrained from dealing further with the complaint, in the circumstances which have arisen.
179True it is that the Council has not restricted its involvement in the proceedings to a purely submitting appearance. Its pleadings were not initially considered by Mr Nichols to be a basis upon which the orders now sought could rest, notwithstanding that they supported the position of the other defendants. All of the defendants were represented by the same legal representatives and the Council instructed Mr McKelvey as its solicitor in the proceedings, notwithstanding that it had come to light that he had had a critical involvement in the subject matter of the complaint. The change in Mr Nichols' position was explained to have arisen out of the Council's later conduct of these proceedings, in which it had actively pursued various matters in issue, when there were other sufficient contradicters, contrary to the Hardiman principle.
180Mr Nichols' complaints rested on the Council's resistance to the production of its documents and the motion pursued in relation to disclosure of the complainant's name. It was argued to be relevant that Mr Greensill and Mr Smith knew the identity of the complainant, the Council did not and that they were entitled to argue the public interest immunity point. In the circumstances, the Council was an unnecessary contradicter in relation to both matters. It certainly ought not to have resisted any production of documents. It was accepted however, that it was entitled to resist the contempt motion brought against it.
181It was argued that the result was that even though the Council had not as yet considered the complaint, the way in which it had conducted this litigation as a protagonist, meant that it ought now to be precluded from doing so.
182It was also submitted to be relevant that the Court had no power to make orders as to the constitution of the Council, when it came to consider the complaint, it being an elected body constituted in accordance with s 222 of the Act. The case pressed was that in these circumstances, a 'fair minded observer, knowing the litigation history, would conclude that the Council might not bring a fair and unprejudiced mind to determining the complaint', even though it was accepted that it could be assumed that any individual councillors who are duty bound to recuse themselves from consideration of the complaint, would do so, if the complaint came before the Council for consideration.
183This issue has to be determined, having in mind the Council's role under this statutory scheme. Day-to-day conduct of its affairs lies in the hands of the general manager. There was no evidence as to who made particular decisions as to the Council's conduct of the litigation, about which complaint was made. Under this statutory scheme, it is unlikely that they were decisions which the Council made itself. While the evidence does not suggest that the litigation was conducted on a basis with which the Council was not content, the course which the litigation took certainly suggests that there came to be a real appreciation, albeit belated, that the Council ought to have taken a more limited role, than it had initially pursued.
184The Council thus accepted that it had taken a more active part in the proceedings than a submitting appearance would have permitted. Its case was that even so, the orders sought would not be made, given what it had done in the litigation, in circumstances where it had as yet made no decisions in relation to the complaint, which was yet to come before it.
185As submitted for the Council, the effect of these proceedings was a 'pre-emptive strike' on a multi-stage decision-making process, to preclude the Council from giving any consideration at all to the complaint made against Mr Nichols. The Council accepted that if and when it came to consider that complaint, it is bound to afford him his common law rights to procedural fairness, the Code being silent as to how the Council is to consider a complaint.
186In resolving this issue, on the Council's approach, consideration had to be given to three matters, namely whether there was another proper contravener in the proceedings; the extent to which it had presented a case by way of evidence and submissions; and the extent to which its arguments were presented or limited to matters relating to its powers and procedures. The Hardiman principle was a statement by the High Court of the need for decision makers like the Council to ensure by that by defending proceedings such as this, they did not taint their capacity to apply an independent and impartial mind to the resolution of the matter. It was relevant that in Hardiman, the difficulty lay with the Tribunal's cross-examination of witnesses. There was no problem of that kind in this case.
187It was also argued that there was no other proper contradicter in the case so far as Mr Nichols' Hardiman submission was concerned, other than the Council, it being the decision maker alleged to have inappropriately conducted the proceedings as a protagonist. The Council had presented no substantive argument as to the legal principles or evidence going to the grounds of review raised against the other three defendants. Its submissions as to the Hardiman complaint and in relation to the public interest immunity considerations relating to the disclosure of the identity of the complainant, were submitted to be entirely consistent with Hardiman .
188As to the complaints about its role in relation to Mr Nichols' claim for verified discovery of documents, the position was that an affidavit verifying the discovery given was sworn by the Assistant General Manager, after the Registrar's orders were made. That resulted in a motion for contempt. There could be no suggestion that Council was not entitled to take the position it did, in relation to that motion. The position was that after it was advanced, it had jointly filed a points of defence document, which dealt with its powers and the facts which necessarily bore on a consideration of its exercise of those powers.
189It was also argued to be relevant that apprehended bias was not alleged against it. In Hardiman by way of contrast, the Tribunal, which had conducted a part heard inquiry, had made a ruling the validity of which was under consideration and which it sought to defend in judicial proceedings. By way of contrast, in this case the Council has made no decision and has embarked on no consideration of the complaint. It was also relevant to consider that the Hardiman observations related to questions of costs, not to grounds of review.
190In my assessment these submissions have force. The Council comprises 12 elected councillors. They each have an obvious interest in ensuring proper adherence to all of the relevant requirements of the Act and the Code. It was accepted by Mr Nichols that any of them obliged to excuse themselves at a meeting at which the complaint arises to be considered, will do so, in accordance with their obligations. In those circumstances there is in my view no basis on which a fair minded observer might reasonably apprehend that councillors who did not recuse themselves, would bring an unfair or prejudiced mind to the questions which arise for them to consider, when the complaint comes before it, notwithstanding what has transpired in these proceedings.
191In Hardiman it was observed at 306:
"There is one final matter. Mr Hughes was instructed by the Tribunal to take the unusual course of contesting the prosecutors' case for relief and this he did by presenting a substantive argument. In cases of this kind the usual course is for a tribunal to submit to such order as the court may make. The course which was adopted by the Tribunal in this Court is not one which we would wish to encourage. If a tribunal becomes a protagonist in this Court there is the risk that by so doing it endangers the impartiality which it is expected to maintain in subsequent proceedings which take place if and when relief is granted. The presentation of a case in this Court by a tribunal should be regarded as exceptional and, where it occurs should, in general, be limited to submissions going to the powers and procedures of the Tribunal.
In the result, we would make absolute the order nisi for mandamus."
192The course which the Council finally adopted was not of this kind. Situations such as those which arose in Hardiman have arisen for consideration in other contexts, albeit usually when the question of costs arose for consideration. That is still a live issue on which the parties are yet to be heard in this case.
193In Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [12] it was observed:
"... The Council is the authority which had granted the consent upon which the developer relied. In those circumstances, and also having regard to the earlier litigation, it might have been expected that the Council would submit to such order as the Court might make and that it would not become a protagonist, lest by doing so it endanger the impartiality it would be expected to maintain upon any subsequent applications to it which might ensue were relief granted to the appellant."
194In Fagan v Crimes Compensation Tribunal [1982] HCA 49; (1982) 150 CLR 666, Brennan J observed at 681 - 682:
"In this case the Tribunal appeared by counsel as respondent to contest the appellant's case. Where curial proceedings arise out of a matter which is contested between parties appearing before a tribunal, it is not ordinarily appropriate for the tribunal to appear to contest the curial proceedings brought by one of the parties before it ( Reg. v. Australian Broadcasting Tribunal; Ex parte Hardiman [1980] HCA 13; (1980) 144 CLR 13, at pp 35-36 ). But where the proceedings before the tribunal are not inter partes, and where the Attorney-General cannot or does not intervene to represent the public interest (cf. Corporate Affairs Commission v. Bradley (1974) 1 NSWLR 391 ) and neither a law officer nor a public official is heard by the court (cf. Reg. v. Cook; Ex parte Twig [1980] HCA 36; (1980) 147 CLR 15 ), it may be desirable that the tribunal should appear by counsel to make such submissions as it thinks calculated to assist the court and, in an appropriate case, to argue against the applicant's case. That is what was done in this case. Here, the Tribunal's function was to determine whether and to what extent a claimant was entitled under statute to a payment out of public moneys. Though the Tribunal was bound to act impartially, it was in a sense the guardian of the moneys appropriated by Parliament to answer the proper claims for compensation under the Act. In proceedings to review its decision, the Tribunal properly represents the public purse, and it was right that the Tribunal should appear by counsel as a party to respond substantially to the application. It follows that the Tribunal should then be treated as an ordinary party in the matter of costs. Therefore I would make an order awarding the applicant his costs against the Tribunal both here and in the Supreme Court."
195The observation in Oshlack was referred to in Murlan Consulting Pty Ltd v Ku-ring-gai Municipal Council [2009] NSWCA 300, where the Court of Appeal observed:
"80 It is sometimes said that the Hardiman principle involves an exception in respect of submissions which are limited to the powers and procedures of the tribunal. However, that is not strictly so: the High Court in Hardiman said that the presentation of a case by a tribunal should be regarded as "exceptional" and that where it occurs the presentation should be limited to submissions going to the powers and practices of the tribunal: at 36. The scope of possible exceptional cases was not explored, but must clearly be governed by the degree of inconsistency with the underlying principle, namely that the tribunal should not endanger its impartiality. On that basis, it is true that impartiality will be less endangered by submissions unrelated to the substance of the issues which might come back before it, and will be less endangered in circumstances where the matter is unlikely to go back before the tribunal in any event. It may also be appropriate to grant some weight to the practical consideration that, without any appearance by the tribunal, the Court may be left without the valuable assistance which might be obtained from a contravener.
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."
196In McGovern v Ku-ring-gai Council [2008] NSWCA 209; (2008) 72 NSWLR 504 at 551 - 552 it was observed:
"There is a separate issue, however, as to whether the appellants should pay the costs of both respondents in the Land and Environment Court (and in this Court). There is no doubt that both parties were properly joined in the proceedings; however, they had a community of interest on the primary point, which was maintaining the validity of the second consent. As noted above, comments in the joint judgment in Oshlack raise a question as to whether it is appropriate for the Council to be an active opponent of proceedings, where it is the consent authority and may need to reconsider a decision under challenge. A possible result is that, if it plays an inappropriate role, even on the successful side of the record, it may not obtain its costs of the proceedings. However, this was not a usual case. The major part of the challenge mounted by the appellants was to the conduct of two councillors and at least one Council officer. Although a complaint of reasonable apprehension of bias does not necessarily involve any suggestion of improper conduct on the part of a decision-maker, it is clear that the manner in which the claims were formulated in the present case did. Accordingly, this was a case in which it was appropriate for the Council to take an active role in defence of its councillors and officers.
The Council further argued that the Hardiman principle could not properly apply because the need to maintain the appearance of impartiality could not arise where the proceedings themselves alleged partiality. A submission in those terms should not be accepted: it could equally be argued that the Council should not, in successfully defending its officers, create an apprehension of partiality in circumstances where it successfully demonstrated that there had been none. It is preferable to consider the appropriate role of Council by reference to the specific circumstances, as noted above."
197The circumstances in this case were admittedly unusual. The Act and the Code provide a scheme whereby the Council is given an important role in relation to complaints made about individual councillors. In this case, the complaint made about Mr Nichols was dealt with under the Code by appointment of a reviewer. That process went seriously awry. Mr Smith's report has, however, not been considered by the Council. It has not as yet taken any steps at all to consider the complaint or the report. Initially, no orders were sought to preclude it considering the complaint. There were other parties appearing in the proceedings, including its general manager. Given the nature of the complaints advanced against him, however, that the Council had a separate concern as to its powers, duties and obligations under the Act and the Code must be accepted.
198It did not file a submitting appearance and, it seems to me, initially, involved itself inappropriately in a question of discovery. That this was the result of any decision made by the Council itself, is not apparent. Given the nature of this statutory scheme, the day-to-day conduct of litigation appears to fall within the general manager's responsibility. The Registrar made orders that verified discovery be given, after a contested hearing (see Nichols v Singleton Council v Others, unreported, 5 April 2011). It also claimed, but later abandoned legal professional privilege in relation to legal advice which its solicitors had given it, in relation to the complaint. It is difficult to see that this accorded with the Hardiman principle.
199All of this was, however, eventually resolved, albeit it generated a motion alleging that the Council was in contempt, which was finally not pressed. At the hearing it did not seek to defend any steps thus far taken in respect of the conduct of the investigation into the complaint, nor did it seek to defend any decision made by the other defendants about the complaint. It was, however, concerned to resist orders pressed on a Hardiman basis, which would preclude it from dealing with the complaint, given the obligations imposed upon it by the Code and the Act. It seems to me that given this statutory scheme, that approach is not one which should lead to the orders pressed.
200The Act obliges the Council to consider the complaint and any report properly put before it, to determine whether Mr Nichols has breached the Code and whether any of the sanctions specified in cl 12.25 of the Code should be imposed, including censure for misbehaviour, in accordance with s 440G of the Act. That section provides:
"440G Formal censure of councillor for misbehaviour
(1) A council may by resolution at a meeting formally censure a councillor for misbehaviour.
(2) A formal censure resolution may not be passed except by a motion to that effect of which notice has been duly given in accordance with regulations made under section 360 and, if applicable, the council's code of meeting practice.
(3) A council may pass a formal censure resolution only if it is satisfied that the councillor has misbehaved on one or more occasions.
(4) The council must specify in the formal censure resolution the grounds on which it is satisfied that the councillor should be censured.
(5) A motion for a formal censure resolution may, without limitation, be moved on the report of a committee of the council and any such report must be recorded in the minutes of the meeting of the council."
201'Misbehaviour' is defined in s 440F to include 'a failure by the councillor to comply with an applicable requirement of a code of conduct as required under section 440(5)'. Section 440 provides:
" 440 Codes of conduct
(1) The regulations may prescribe a model code of conduct (the model code) applicable to councillors, members of staff of councils and delegates of councils.
(2) Without limiting what may be included in the model code, the model code may:
(a) relate to any conduct (whether by way of act or omission) of a councillor, member of staff or delegate in carrying out his or her functions that is likely to bring the council or holders of civic office into disrepute, and
(b) in particular, contain provisions for or with respect to conduct specified in Schedule 6A.
(3) A council must adopt a code of conduct (the adopted code) that incorporates the provisions of the model code. The adopted code may include provisions that supplement the model code.
(4) A council's adopted code has no effect to the extent that it is inconsistent with the model code as in force for the time being.
(5) Councillors, members of staff and delegates of a council must comply with the applicable provisions of:
(a) the council's adopted code, except to the extent of any inconsistency with the model code as in force for the time being, and
(b) the model code as in force for the time being, to the extent that:
(i) the council has not adopted a code of conduct, or
(ii) the adopted code is inconsistent with the model code, or
(iii) the model code contains provisions or requirements not included in the adopted code.
(6) A provision of a council's adopted code is not inconsistent with the model code merely because the provision makes a requirement of the model code more onerous for persons required to observe the requirement.
(7) A council must, within 12 months after each ordinary election, review its adopted code and make such adjustments as it considers appropriate and as are consistent with this section.
(8) Nothing in this section or such a code gives rise to, or can be taken into account in, any civil cause of action, but nothing in this section affects rights or liabilities arising apart from this section."
202Council was represented in the proceedings by the same firm of solicitors which represented the other three defendants. Their interests in the proceedings were not identical to those of the Council, given the complaints advanced and the relief sought in the original summons, in relation to their respective involvement in the consideration of the complaint received. The Council came to recognise this with the result that at the hearing it only advanced submissions as to the Hardiman principle, given its statutory obligations to deal with the complaint, and resisted disclosure of the complainant's name. It does seem the submission that Mr Greensill was in a position to advance the latter argument, given his position as the Council's General Manager, without the Council also putting that case, has some force.
203In the event, the approach finally adopted by the Council was argued for Mr Nichols to have been adopted too late, to overcome the consequences of its conduct of the proceedings to that point, with the result that orders precluding it considering the complaint must be made.
204It seems to me that in the circumstances, the preferable course would have been for the Council, from the outset, to have confined itself as it finally did at the hearing. Even so, while the parties must be heard on the question of costs, the circumstances are in my assessment not such that orders restraining the Council from dealing with the complaint at all, may be made, given the Council's statutory role in relation to the complaint, how the Council is constituted, that it is not in issue that individual councillors who should recuse themselves, will do so and that the Council has as yet not considered the complaint at all. It did ultimately not defend the case advanced against the other defendants. The case finally put in relation to the Hardiman case, was appropriate for it to advance. The case in relation to the disclosure of the complainant's name is, in my view, not an appropriate basis for the orders now ought.
205The alternative order pressed, that Council be restrained from giving any consideration to Mr Smith's report, should be made, given the conclusions I have reached in relation to that report.