North Sydney Council v Minister for Local Government

Background

1. The background of the application for expedition can be summarised as follows.
2. In 2015, the New South Wales Government took the policy decision to explore options for amalgamations of local government councils throughout the state. Having received certain advice, the government determined to progress a number of amalgamation proposals and commenced processes under the Local Government Act 2005 (NSW) ('LGA') that would permit some of the amalgamation options to be given effect.
3. On 25 February 2016 the Minister referred a proposal concerning amalgamation of North Sydney Council, Willoughby City Council and the Municipality of Mosman ('LNS Amalgamation') to the Chief Executive of the Office of Local Government, the third respondent ('Chief Executive'), pursuant to Section 218F of the LGA. The Chief Executive delegated his functions under s 218F of the LGA to Ian Reynolds, the second respondent ('Delegate'). In April 2016 the Delegate prepared a report relating to the proposal ('Report').
4. The government conduct spawned a number of proceedings brought, in effect, to prevent the amalgamations from going ahead. The most relevant of these are Class 4 proceedings brought by North Sydney Council against the Minister and others. This matter was heard, along with a number of related proceedings, over 12 days by Moore J in May to August 2016. His Honour handed down judgment on 20 September 2016 in Hunter's Hill Council v Minister for Local Government [2016] NSWLEC 124.
5. In those proceedings, although numerous complaints were raised by various parties, one of the specific complaints raised by North Sydney Council challenging the proposed LNS Amalgamation was upheld. More specifically, Moore J found that the Delegate who had been assigned the task of inquiring into, and reporting on, this proposed amalgamation had failed adequately to have regard to one aspect of the elements mandated by s 263(3) of the LGA as part of his inquiry. His Honour declared that the Report, which had been furnished by the Delegate to the Local Government Boundaries Commission, the fourth respondent ('Boundaries Commission'), was not a valid report in satisfaction of the requirements of s 218F(6)(a) of the LGA.
6. Two relevant matters have resulted from the decision of Moore J. First, on 30 September 2016, the Delegate furnished a further report on the proposal to the Minister and the fourth respondent pursuant to 218F(6)(a) of the LGA ('Revised Report'). Second, on 13 October 2016, North Sydney Council filed a Notice of Intention to Appeal in the NSW Court of Appeal against the judgment of Moore J, which was followed by a Notice of Appeal that was filed on 8 December 2016. The Notice of Appeal claims, amongst other things, that Moore J erred in various respects and seeks various orders including a declaration that the delegation by the Chief Executive to the Delegate for the function of examining and reporting on the proposed LNS Amalgamation is invalid and of no effect. It also seeks an order that the Minister be restrained from reporting to recommend implementation of the proposed LNS Amalgamation under s 218F(7) of the LGA, amongst other consequential relief.
7. In the above circumstances, North Sydney Council seeks declaratory and consequential relief in relation to the Revised Report which was prepared in September or October 2016 apparently to address the findings of Moore J that the Report was not a valid report.
8. For the purposes of the application for expedition, the effect of the above can be summarised as follows: 1. The finding that the Report is invalid has led the Minister to cause for the Revised Report to be prepared and furnished to the Boundaries Commission and the Minister. 2. North Sydney Council now alleges that the Revised Report itself is invalid and of no effect, primarily because the Delegate was disqualified from making the report due to his active participation in the proceedings before Moore J and on the basis of apprehended bias. 3. In the alternative, North Sydney Council claims that it was denied procedural fairness, both in relation to the Delegate's conduct in preparing the Revised Report and separately on the basis that the Revised Report has not been made available to North Sydney Council, which thus means that it has been denied procedural fairness by both: 1. the Delegate, who it is alleged did not permit North Sydney Council to have reasonable opportunity to make submissions in relation to the preparation of the Revised Report; and 2. the Boundaries Commission, as North Sydney Council was denied reasonable opportunity to make submission on the Revised Report.

Present application

1. The evidence relied upon by the Minister (as per the affidavit of Ms Lowes) is that the Delegate furnished the Revised Report to the Minister and the Boundaries Commission on 30 September 2016, and that on 5 October 2016 the Boundaries Commission reviewed and provided commentary on the Revised Report to the Minister pursuant to s 218F(6)(b) of the LGA. Despite this, the Minister has not yet made recommendations to the Governor in respect of the proposal. Further, the Minister has given an undertaking to both North Sydney Council and Mosman Municipal Council to not do so before midnight on the seventh day after the Court of Appeal delivers its judgment in another set of (somewhat) related proceedings brought by Woollahra Municipal Council with the matter number 00221839 of 2016.
2. It is common ground that if North Sydney Council is successful in the Court of Appeal proceedings (which are anticipated to be completed and judgment handed down before 1 August 2017), the present Class 4 proceedings will be otiose. This is because the current proceedings are related primarily to the Revised Report which itself was brought into being as a result of the judgment of Moore J. In the above circumstances, the Minister's evidence is that: 1. if the local government areas of North Sydney Council and Mosman Municipal Council are dissolved, and a new local government area is constituted pursuant to s 218A of the LGA after 10 April 2017, but prior to the election dates for North Sydney Council and Mosman Municipal Council (likely to be 9 September 2017) those elections will need to be cancelled; 2. if the local government areas of North Sydney Council and Mosman Municipal Council are dissolved and a new local government area is constituted pursuant to s 218A of the LGA prior to 1 August 2017, the earliest date on which an election can be held for the new Council is March 2018; and 3. if the local government areas of North Sydney Council and Mosman Municipal Council are dissolved and a new local government area is constituted pursuant to s 218A of the LGA after 1 August 2017, the earliest date on which an election can be held for the new Council is September 2019, although the NSW Electoral Commissioner has advised that it may be preferable for such an election to be held in September 2020.
3. According to the Minister, any delay for the elections as outlined above will have unfortunate consequences.

Legal principles

1. The power for the Court to grant expedition is found in ss 61(1) and (2) of the Civil Procedure Act 2005 (NSW) ('CPA'), which provides as follows: 61 Directions as to practice and procedure generally (1) The court may, by order, give such directions as it thinks fit (whether or not inconsistent with rules of court) for the speedy determination of the real issues between the parties to the proceedings. (2) In particular, the court may, by order, do any one or more of the following: (a) it may direct any party to proceedings to take specified steps in relation to the proceedings, (b) it may direct the parties to proceedings as to the time within which specified steps in the proceedings must be completed, (c) it may give such other directions with respect to the conduct of proceedings as it considers appropriate.
2. However, whilst this power is granted by s 61 of the CPA, this provision provides no guidance as to when such a discretion should be exercised. However, some guidance can be obtained from s 56 of the CPA, which is that the overriding purpose of the Act, and as such s 61 of the CPA, is to "facilitate the just, quick and cheap resolution of the real issues in the proceedings". Further, s 57(1) of the CPA requires that there be the "efficient disposal of the business of the court", the "efficient use of available judicial and administrative resources" and the "timely disposal of the proceedings…at a cost affordable by the respective parties".
3. As noted by Pepper J in Wren Investments Pty Ltd v Hunter [2011] NSWLEC 122 at [36]-[37] and Campbell J in Vaughan v Dawson [2005] NSWSC 33 at [8], the principles for whether the Court should exercise its discretion to expedite the proceedings were accurately summarised by Young J in Greetings Oxford Hotel Pty Ltd v Oxford Square Investments Pty Ltd (1989) 18 NSWLR 33 at 42-43: …when considering whether to expedite proceedings in this Division there are at least six factors which are taken into account. These are: (1) Is this the appropriate court for the litigation, in particular: (a) does the litigation fall into the work normally done by this court; and (b) is there a sufficient nexus with New South Wales. (2) Is there a special factor involved which warrants expedition. Usually these factors will be: (a) the loss of witnesses if the case is not fixed at an early date; (b) matters of public importance; (c) that the subject matter of the litigation will be lost if it is not heard quickly; (d) that the litigation to date has been delayed through no fault of the applicant; (e) that the applicant is suffering hardship not caused through his own fault; (f) that there is self-induced hardship (including those cases where corporate bodies fix a meeting date in the near future and then expect the court to displace all other matters to hear their dispute before that date); (g) the nature of the case (for example, ejectment, child custody); and (h) that there are large sums of money involved. There may, of course, be other matters which can count as special factors, but the list that I have given is what occurs in the usual case. The health or age of parties or witnesses may, of course, come under (a), (c) or (e) or all of those headings. (3) Have the parties proceeded up to the date of the hearing of the motion for expedition with due speed? (4) Are the parties willing if expedition is granted to do all in their power to abridge the hearing time including joining in an agreed bundle of documents, preparing statements of witnesses, filing lists of objections to affidavits, making admissions of matters not really in dispute and restraining wide-ranging cross-examination. Of course there will always be cases where one party's interests are to delay resolution of the dispute as much as possible. Such cases can usually be recognised and special procedures adopted. Then there are two factors dealing with the exigencies of the list, viz: (5) Any application for expedition must be judged in the light of the number of other cases of equal or higher priority that also seek an expedited hearing. (6) Any "right" to expedition is a right to have the case fixed on one occasion. If, after a date has been fixed, it has to be vacated, it is difficult indeed to justify again expediting the proceedings The question here is whether there is a seventh guideline, namely, that one should not expedite a case where the chances of the applicant for expedition securing what it wants in the proceedings are not high. This point arises because the defendant submits that because of the matters I have already canvassed, the chances of the plaintiff obtaining equitable relief must, according to the defendant, be slim. I do not think that the court, ought in an application for expedition, to make an assessment of the applicant's chances of success. However, I do agree that there is a seventh guideline, namely, that the court should not expedite a case if it considers that in all the circumstances the chances of the applicant obtaining what it seeks in the litigation cannot be put as higher than speculative.

Minister's submissions

1. The Minister submitted, in effect, that there are three reasons why expedition should be granted.
2. First, it was submitted that if this matter and the Court of Appeal proceedings are not determined by 10 April 2017, it may be that the NSW Electoral Commissioner will have to set elections for North Sydney Council and Mosman Municipal Council as they presently exist. It submits that this would be costly to cancel and reorganise for the new Council if North Sydney Council was unsuccessful in these proceedings and the Court of Appeal proceedings. It submitted that an expedition order could therefore save substantial public costs generally. It also submits that this is consistent with the fact that other amalgamation cases (which preceded the present proceedings) were expedited, despite relating to more complex matters.
3. Second, it was submitted that the Court of Appeal proceedings were likely to be resolved by 1 August 2017, which would allow elections for the new Council to be held by March 2018 if a decision were made to amalgamate those areas. It was submitted that the worst case scenario of the Court of Appeal proceedings was that the present proceedings might become otiose, depending on what the Court of Appeal determines. However, it also submitted that this would still not change the issues before the Court.
4. Third, it was submitted that any delay in the present proceedings that extended further than the Court of Appeal proceedings would, in effect, delay proper elections taking place if the Minister were to be successful in both sets of proceedings, and determine that the proposed LNS Amalgamation goes ahead.
5. Finally, the Minister made a concession that if the Court of Appeal found for North Sydney Council, and there was a causal link which rendered the present proceedings otiose, the Minister would pay the costs thrown away by North Sydney Council

North Sydney Council's submissions

1. North Sydney Council also submitted that there were three reasons why the application for expedition should be rejected.
2. First, it submitted that the present proceedings were, in some respects, similar to the Court of Appeal proceedings, particularly insofar as some of the grounds which its raises in both are identical. It submitted that if it were successful in the Court of Appeal proceedings, the present proceedings would be otiose, and as such cause the parties to incur unnecessary costs.
3. Second, it submitted that, in any event, there was no reason why the proceedings could not be resolved before August 2017 without an order for expedition. It submitted that the matter could be listed for directions after the hearing in the Court of Appeal in April 2017, and suggested that it could be expedited and heard before August 2017 in any event.
4. Third, and in response to the Minister's concession that it would pay the costs thrown away of North Sydney Council, it submitted that I should also have regard to any wastage of the Court's resources as a result of these proceedings becoming otiose.

Mosman Municipal Council's submissions

1. Mosman Municipal Council noted that it would be commencing similar proceedings to the present proceedings which it intended would follow and likely be heard concurrently with those commenced by North Sydney Council, and submitted that any order for expedition would produce an additional disadvantage to it, given the reduced amount of time it would have to prepare for the hearing.

Consideration

1. Having regard to the parties' submissions and the legal principles outlined above, I find that it is appropriate to make an order for expedition.
2. I consider that there are good reasons to order expedition of this matter, not least the potential costs and public inconvenience of cancelling elections for the new Council should the Minister be successful in both these proceedings and the Court of Appeal proceedings, and go ahead with the proposed LNS Amalgamation. I also consider that this is consistent with the overriding purpose of the Court to resolve disputes quickly.
3. The primary concern of North Sydney Council is that these proceedings may be rendered otiose by the Court of Appeal proceedings, and that this may cause for costs to be unnecessarily expended. Whilst it is important that the Court allow for the "cheap" resolution of matters at a cost "affordable to the parties", I consider that this ground of objection is unfounded given that the Minister has, in effect, agreed to pay North Sydney Council's costs that may be thrown away. As such, I find that it would not be a disadvantage the parties' financial position if these proceedings were to be expedited.
4. With regard to North Sydney Council's concern regarding the Court's resources, I also find that whilst it is important to take these into account, they would not necessarily be used inefficiently if these proceedings were to be expedited, and given that the estimated hearing would be no more than two days, would also not outweigh the benefits of the proceedings being expedited as outlined above.
5. Further, and with regard to Mosman Municipal Council's submissions, whilst I consider that expedition may place some burden on Mosman Municipal Council's ability to prosecute its own proceedings (which have not yet been commenced), there is no evidence before me other than what has been suggested from the bar table which would allow me to find that this disadvantage would outweigh the costs of not resolving the proceedings in an expedited manner.

Conclusions

1. The Court orders that: 1. The hearing of the proceedings be expedited. 2. The parties provide proposed short minutes of order to the Court on or before 5:00pm on 15 December 2016 which provide a timetable for the proceedings and seek an order that the matter be heard for an estimate of one day on 23 March 2017.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 14 December 2016