Oberon Council v Minister for Local Government; Cabonne Shire Council v Minister for Local Government; McAlister and Graham v Minister for Local Government

Catchwords

[1992] HCA 10 Anderson v Minister for Infrastructure Planning and Natural Resources (2006) 151 LGERA 229[2006] NSWLEC 725 Annetts v McCann (1990) 170 CLR 596[1990] HCA 57 Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 225 CLR 88[2005] HCA 72 Assistant Commissioner Condon v Pompano Pty Ltd (2013) 252 CLR 38[2008] HCA 11 Botany Bay City Council v Minister for Local Government (2016) 214 LGERA 173[2011] FCAFC 88 Elias v Federal Commissioner of Taxation (2002) 123 FCR 499[2002] FCA 845 Esber v The Commonwealth of Australia (1992) 174 CLR 430[1992] HCA 20 Foster v Minister for Customs and Justice (2000) 200 CLR 442[2000] HCA 38 Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149[1996] HCA 44 Insurance Australia Ltd v Motor Accidents Authority (NSW) [2007] NSWCA 314 Jacob v Save Beeliar Wetlands (Inc) (2016) 216 LGERA 201[2016] WASCA 126 Jarratt v Commissioner for Police for New South Wales (2005) 224 CLR 44[2005] HCA 50 Jones v Dunkel (1959) 101 CLR 298[1959] HCA 8 Kindimindi Investments Pty Ltd v Lane Cove Council (2006) 143 LGERA 277[2006] NSWCA 23 Kioa v West (1985) 159 CLR 550

Judgment (53 paragraphs)

[1]

shell v Secretary of State for the Environment [1981] AC 75 Castle v Director General, State Emergency Service [2008] NSWCA 231 Director General, Department of Trade and Investment, Regional Infrastructure and Services v Lewis (2012) 301 ALR 420; [2012] NSWCA 436 Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd [2014] NSWCA 158 Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations (2011) 195 FCR 318; [2011] FCAFC 88 Elias v Federal Commissioner of Taxation (2002) 123 FCR 499; [2002] FCA 845 Esber v The Commonwealth of Australia (1992) 174 CLR 430; [1992] HCA 20 Foster v Minister for Customs and Justice (2000) 200 CLR 442; [2000] HCA 38 Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149; [1996] HCA 44 Insurance Australia Ltd v Motor Accidents Authority (NSW) [2007] NSWCA 314 Jacob v Save Beeliar Wetlands (Inc) (2016) 216 LGERA 201; [2016] WASCA 126 Jarratt v Commissioner for Police for New South Wales (2005) 224 CLR 44; [2005] HCA 50 Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 Kindimindi Investments Pty Ltd v Lane Cove Council (2006) 143 LGERA 277; [2006] NSWCA 23 Kioa v West (1985) 159 CLR 550; [1985] HCA 81 Lindemans Wines Pty Ltd v Woodward (1981) 46 LGRA 14 Minister for Immigration and Border Protection v MZYTS (2013) 230 FCR 431; [2013] FCAFC 114 Minister for Immigration and Border Protection v SZSSJ (2016) 90 ALJR 901; [2016] HCA 29 Minister for Immigration and Citizenship v Khadgi (2010) 190 FCR 248; [2010] FCAFC 145 Minister for Immigration and Citizenship v Maman (2012) 200 FCR 30; [2012] FCAFC 13 Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323; [2001] HCA 30 Minister for Local Government v South Sydney City Council (2002) 55 NSWLR 381; [2002] NSWCA 288 Muin v Refugee Review Tribunal (2002) 76 ALJR 966; [2002] HCA 30 Notaras v Waverley Council (2007) 161 LGERA 230; [2007] NSWCA 333 Ogawa v Minister for Immigration and Citizenship (2011) 199 FCR 51; [2011] FCA 1358 P J Magennis Pty Ltd v The Commonwealth (1949) 80 CLR 382; [1949] HCA 66 Parramatta City Council v Hale (1982) 47 LGRA 319 Parramatta City Council v Pestell (1972) 128 CLR 305; [1972] HCA 59 R (on the application of Forest Care Home Ltd) v Pembrokeshire County Council (2011) 14 CCLR 103; [2010] EWHC 3514 (Admin) Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57; [2001] HCA 22 Scurr v Brisbane City Council (1973) 133 CLR 242; [1973] HCA 39 Singh v Minister for Immigration and Multicultural Affairs (2001) 109 FCR 152; [2001] FCA 389 Sutherland Shire Council v Finch (1970) 123 CLR 657; [1970] HCA 49 Vanmeld Pty Ltd v Fairfield City Council (1999) 46 NSWLR 78; [1999] NSWCA 6 Waitemata County v Local Government Commission [1964] NZLR 689 Walsh v Parramatta City Council (2007) 161 LGERA 118; [2007] NSWLEC 255 Wei v Minister for Immigration and Border Protection (2015) 90 ALJR 213; [2015] HCA 51 Woollahra Municipal Council v Minister for Local Government [2016] NSWLEC 86 Zhang v Canterbury City Council (2001) 51 NSWLR 589; [2001] NSWCA 167 Category: Principal judgment Parties: Oberon Council v Minister for Local Government

[2]

Oberon Council (Applicant) Minister for Local Government (First Respondent) Chief Executive, Office of Local Government (Second Respondent) Ms Renata Brooks (Third Respondent) State of New South Wales (Fourth Respondent)

[3]

Cabonne Shire Council v Minister for Local Government

[4]

Cabonne Shire Council (Applicant) Minister for Local Government (First Respondent) Chief Executive, Office of Local Government (Second Respondent) Mr Richard Pearson (Third Respondent) State of New South Wales (Fourth Respondent)

[5]

McAlister and Graham v Minister for Local Government

[6]

Mr Albert McAlister (First Applicant) Mr David Graham (Second Applicant) Minister for Local Government (First Respondent) Chief Executive, Office of Local Government (Second Respondent) Mr John Turner (Third Respondent) State of New South Wales (Fourth Respondent) The Administrator, Gundagai Shire Council (Fifth Respondent) Representation: Counsel: Mr P E King with Ms F A Sinclair (Applicants) Mr N J Williams SC with Mr J J Hutton, Mr T E O'Brien and Ms B E M Anniwell (Respondents)

[7]

Solicitors: Patterson, Byfield & Bryen (Applicants) Crown Solicitor's Office (Respondents) File Number(s): 2016/00161513, 2016/00161537, 2016/00161546 Publication restriction: No

[8]

Three councils challenge proposals for amalgamation

The Minister for Local Government ('the Minister') on 6 January 2016 made proposals, under s 218E(1) of the Local Government Act 1993 ('the Act'), for the amalgamation of various local government areas in rural New South Wales. One proposal was the amalgamation of the areas of Oberon with Bathurst ('the Oberon proposal'); a second was the amalgamation of the areas of Cabonne with Blayney and Orange City ('the Cabonne proposal'); and a third was the amalgamation of the areas of Gundagai with Cootamundra ('the Gundagai proposal').
Also on 6 January 2016, the Minister referred the proposals under s 218F(1) of the Act to the Acting Chief Executive of the Office of Local Government ('the Departmental Chief Executive') for examination and report. The Departmental Chief Executive delegated those functions to Ms Renata Brooks (for the Oberon proposal), Mr Richard Pearson (for the Cabonne proposal) and Mr John Turner (for the Gundagai proposal). I will refer to each of these people as the Delegate.
The Delegate was required, under s 263(2A) of the Act, to hold an inquiry for the purpose of exercising the functions in relation to each proposal for amalgamation. Each Delegate gave notice of the holding of an inquiry, including by placing advertisements in various State, regional and local newspapers. Each Delegate held an inquiry. The inquiry was held, for the Oberon proposal, on 4 February 2016 at Oberon and Bathurst; for the Cabonne proposal, on 4 February 2016 at Blayney and Orange and on 5 February 2016 at Molong; and for the Gundagai proposal, on 4 February 2016 at Cootamundra and Gundagai.
Between mid-March and early April 2016, each Delegate completed her or his examination, and provided a report to the Minister and furnished a copy of the report to the Local Government Boundaries Commission ('Boundaries Commission') for review and comment. Delegate Pearson provided his report on the Cabonne proposal on 18 March 2016; Delegate Turner provided his report on the Gundagai proposal on 24 March 2016; and Delegate Brooks provided her report on the Oberon proposal on 5 April 2016. In each case, the Delegate recommended that the proposal for the amalgamation of the areas concerned be implemented.
The Boundaries Commission was required, under s 218F(6) of the Act, to review each Delegate's report and send its comments to the Minister. The Boundaries Commission sent to the Minister its comments on the report on the Cabonne proposal on 22 April 2016 and its comments on the reports on the Oberon proposal and the Gundagai proposal on 29 April 2016.

[9]

Overview of the statutory process for amalgamation

Division 1 of Pt 1 of Ch 9 of the Act provides for the constitution of land as a local government area and Div 1 of Pt 2 of Ch 9 provides for the constitution of a council to manage that area. The Governor may, by proclamation, constitute any part of New South Wales as an area: s 204(1) of the Act. The area is to have the boundaries determined by the Governor in the proclamation constituting the area: s 204(2) of the Act.
Division 2A of Pt 1 of Ch 9 of the Act prescribes how areas are amalgamated. The Governor may, by proclamation, amalgamate two or more areas into one or more new areas: s 218A(1) of the Act. On the date specified in the new proclamation as the date on which the areas are to be amalgamated, the areas are dissolved and the new area or areas are constituted: s 218A(2)(a) and (b) of the Act.
The proclamation of the Governor may include provisions of the kind referred to in s 213, as are necessary or convenient to give effect to the proclamation: s 218C(1). The provisions include those for or with respect to the transfer of staff.
Where a new council is constituted as a result of the amalgamation of two or more areas and the council of one of those areas employed regular staff at a rural centre in the area of the new council, the new council must ensure that the number of regular staff of the new council employed at the rural centre is, as far as reasonably practicable, maintained at not less than the same level of regular staff as were employed by the previous council at the rural centre immediately before the amalgamation took effect: s 218CA(1) and (2). A "rural centre" means a centre of population of 5,000 people or fewer: s 354B and s 218CA(4).
Division 2B of Pt 1 of Ch 9 of the Act prescribes the process that must be followed before the Governor can, by proclamation, amalgamate areas. A function under s 218A to amalgamate areas may be exercised only after a proposal for the exercise of the function is dealt with under Div 2B: s 218D of the Act.

[10]

The making of a proposal

The first step in the process prescribed by Div 2B is the making of a proposal under s 218E of the Act to amalgamate areas. A "proposal" that may be made under s 218E is simply a proposal for the exercise of the function under s 218A(1) to amalgamate two or more areas into one or more new areas.
Three classes of persons may make a proposal under s 218E to amalgamate areas: the Minister, a council affected by the proposal, or an appropriate minimum number of electors: s 218E(1). Any one of these three classes of persons may initiate a proposal for amalgamation. The third class of persons is defined in s 218E(2). The appropriate minimum number of electors varies depending upon whether the proposal applies to the whole of one or more areas or only part of an area. In the first case, the minimum number of electors is 250 of the enrolled electors for each area or 10% of them, whichever is the greater, and in the second case, the minimum number of electors is 250 of the enrolled electors for the part of the area or 10% of them, whichever is the lesser: s 218E(2).
There is no statutory restriction on any member of these classes of persons initiating a proposal, including a person initiating a proposal after another person has initiated a proposal for the amalgamation of areas. Once initiated, each proposal for amalgamation must be dealt with under the process prescribed by Div 2B. There is no express statutory restriction on proposals being dealt with concurrently; there is no express statutory requirement that they can only be dealt with consecutively in a staged process.

[11]

The referral of the proposal

The second step in the process prescribed by Div 2B is the referral of the proposal for examination and report. On the Minister making a proposal or receiving a proposal from a council affected by the proposal or by an appropriate minimum number of electors, the Minister must refer the proposal for examination and report to either the Boundaries Commission or the Departmental Chief Executive: s 218F(1).
The "Boundaries Commission" means the Local Government Boundaries Commission constituted under the Act: see the Dictionary and Pt 3 of Ch 9 of the Act. The Boundaries Commission is a body corporate: s 260. It consists of four commissioners appointed by the Governor, of which one is to be a person nominated by the Minister, one is to be a person employed by the Department (Office of Local Government) nominated by the Departmental Chief Executive and two are to be persons appointed from a panel constituted under s 262(1) of the Act: s 261. This panel consists of eight persons who are councillors nominated by the Local Government and Shires Association of NSW: s 262(1). Schedule 2 of the Act contains further provisions on the membership of the Boundaries Commission and the procedure at meetings of the Boundaries Commission: s 261(5).
There are some similarities and some differences in the process of examination of and reporting on a proposal by the Boundaries Commission or the Departmental Chief Executive. The similarities concern the process of examination of a proposal (s 218F(2)) and the principal difference concerns the need for review and comment on a report of the examination of a proposal: s 218F(6).

[12]

The examination and report

The third step in the process prescribed by Div 2B is the examination of and report on the proposal by the person to whom the proposal has been referred under s 218F(1). The duty to examine and report on the proposal is imposed by s 263(1): The Boundaries Commission [or Departmental Chief Executive] is required to examine and report on any matter with respect to the boundaries of areas … which may be referred to it by the Minister.
In Botany Bay City Council v Minister for Local Government (2016) 214 LGERA 173; [2016] NSWCA 74 at [38], the Court of Appeal said of the phrase "any matter with respect to" in s 263(1): … The phrase 'any matter' is not defined and of itself may be taken to be of wide import. Likewise, the phrase 'with respect to' is of wide import. However, there are two indications in subs (1) itself that its meaning is more confined. First, and most importantly, on the express words of the subsection, 'any matter' is controlled by the phrase 'which may be referred to it by the Minister'. Secondly, any such matter must be 'with respect to the boundaries of [councils]'. Accordingly, what falls within s 263 for examination and report is any matter with respect to boundaries that is referred by the Minister. In this case, that was the Minister's proposal. (See also at [43])
So too in this case, the matters with respect to the boundaries of local government areas that were referred by the Minister were the Oberon proposal, the Cabonne proposal and the Gundagai proposal for the amalgamation of the respective local government areas. The Minister elected to refer these proposals to the Departmental Chief Executive, who in turn delegated the functions of examining and reporting on the proposals to the respective Delegate.
Section 218F(2) of the Act provides that ss 263, 264 and 265 of the Act apply to the examination of a proposal by the Departmental Chief Executive in the same way as they apply to the examination of a proposal by the Boundaries Commission.
Section 263 specifies the functions of examining and reporting in relation to a proposal for the amalgamation of areas that has been referred under s 218F(1) and how these functions are to be exercised.
Subsection (1) imposes the functions of examining and reporting: the Boundaries Commission or Departmental Chief Executive "is required to examine and report on any matter with respect to the boundaries of areas … which may be referred to it by the Minister": s 263(1).

[13]

The holding of an inquiry

The Boundaries Commission or Departmental Chief Executive may be required to (if the Minister so approves) or must (if the Minister so directs or if the proposal is for the amalgamation of two or more areas) hold an inquiry for the purpose of exercising the functions of examining and reporting on the proposal: s 263(2) and (2A). Of relevance in this case is subs (2A): the Boundaries Commission or Departmental Chief Executive "must hold an inquiry for the purpose of exercising its functions in relation to a proposal for the amalgamation of two or more areas that has been referred to it in accordance with section 218F".
Subsection (2B) requires that "[r]easonable public notice must be given of the holding of an inquiry under this section". Neither s 263 of the Act nor the regulations made under the Act prescribe the form or the content of the public notice required to be given or where or how the public notice is to be given. There is no express guidance given in the Act or the regulations made under the Act of what constitutes "[r]easonable public notice … of the holding of an inquiry". In Woollahra Municipal Council v Minister for Local Government [2016] NSWLEC 86 at [47]-[56], I held that a proper construction of s 263 reveals the following requirements.
First, s 263(2B) imposes a duty to give reasonable public notice of the holding of an inquiry under s 263. The subsection does not expressly identify the person on whom this duty to give public notice is imposed. But the implication is that the person who is to hold the inquiry, the Boundaries Commission or the Departmental Chief Executive, must give or cause to be given the public notice of the holding of that inquiry. The person need not give the public notice personally but nevertheless needs to arrange for the public notice to be given of the inquiry that the person is to hold. A common way that the person may give public notice is to arrange for a notice to be published in newspapers circulating in the areas concerned.
Second, the public notice that is to be given under s 263(2B) has three content requirements. The first content requirement is to state when and where the inquiry is to be held. The notice must specify the date and time of day at which the hearing of the inquiry will commence. The notice must specify the place at which the inquiry will be held. The degree of specificity of description of the place that will be required will depend on the facts and circumstances regarding the proposal, the local government area in which the inquiry is to be held and public knowledge of and familiarity with the place concerned.

[14]

Having regard to relevant considerations

When considering "any matter referred to it that relates to the boundaries of areas …", the Boundaries Commission or Departmental Chief Executive is required "to have regard" to the factors in s 263(3) of the Act.
As the Court of Appeal noted in Botany Bay City Council v Minister for Local Government at [39]: "[t]he reference in subs (3) to any 'matter referred' is a reference to that which was referred pursuant to subs (1)". The role of the Departmental Chief Executive to whom a proposal has been referred by the Minister is to examine and report on that proposal: Botany Bay City Council v The State of New South Wales [2016] NSWCA 243 at [92], [93]. In this case, the matters referred were the Oberon proposal, the Cabonne proposal and the Gundagai proposal, which were made by the Minister to amalgamate the respective local government areas.
The factors prescribed by s 263(3) are: (a) the financial advantages or disadvantages (including the economies or diseconomies of scale) of any relevant proposal to the residents and ratepayers of the areas concerned, (b) the community of interest and geographic cohesion in the existing areas and in any proposed new area, (c) the existing historical and traditional values in the existing areas and the impact of change on them, (d) the attitude of the residents and ratepayers of the areas concerned, (e) the requirements of the area concerned in relation to elected representation for residents and ratepayers at the local level, the desirable and appropriate relationship between elected representatives and ratepayers and residents and such other matters as it considers relevant in relation to the past and future patterns of elected representation for that area, (e1) the impact of any relevant proposal on the ability of the councils of the areas concerned to provide adequate, equitable and appropriate services and facilities, (e2) the impact of any relevant proposal on the employment of the staff by the councils of the areas concerned, (e3) the impact of any relevant proposal on rural communities in the areas concerned, (e4) in the case of a proposal for the amalgamation of two or more areas, the desirability (or otherwise) of dividing the resulting area or areas into wards, (e5) in the case of a proposal for the amalgamation of two or more areas, the need to ensure that the opinions of each of the diverse communities of the resulting area or areas are effectively represented, (f) such other factors as it considers relevant to the provision of efficient and effective local government in the existing and proposed new areas.

[15]

Undertaking the examination of the proposal

Apart from the holding of an inquiry and having regard to the factors in s 263(3), the Act does not prescribe what is required by the examination of the proposal or how the examination should be undertaken. These matters are left to the judgment of the Boundaries Commission or the Departmental Chief Executive to whom the matter has been referred.
The Boundaries Commission or Departmental Chief Executive may invite submissions from affected councils and members of the public on the proposal generally and on the factors in s 263(3) in particular. This was done by each Delegate in this case. The call for and consideration of written submissions was undertaken for the purpose of examining the proposal.
The Boundaries Commission or Departmental Chief Executive may engage a consultant or any other person to provide information or advice on particular aspects of that proposal or factors in s 263(3). This was done by the Boundaries Commission in Minister for Local Government v South Sydney City Council (2002) 55 NSWLR 381; [2002] NSWCA 288.
The Boundaries Commission or Departmental Chief Executive may assign "to an agent the task of recording, collating, organising and summarising a mass of submissions covering a range of discordant issues": Minister for Local Government v South Sydney City Council at [211].
These are some of the ways in which the Boundaries Commission or Departmental Chief Executive may undertake the functions of examining and reporting on the proposal referred to it. But it is not obliged to do these things by the terms of s 263 of the Act or the nature of the functions of examining and reporting on the proposal.

[16]

Furnishing the report of the examination

The fourth step in the process prescribed by Div 2B is that the Departmental Chief Executive (to whom the Minister has referred a proposal under s 218F) must furnish the Departmental Chief Executive's report of the examination of the proposal to the Boundaries Commission for review and comment: s 218F(6)(a).

[17]

Reviewing and commenting on the report

The fifth step in the process prescribed by Div 2B is that the Boundaries Commission must review the report of the Departmental Chief Executive and send its comments to the Minister: s 218F(6)(b).
This function of the Boundaries Commission to review and comment on the Departmental Chief Executive's report is more confined than the Departmental Chief Executive's function of examining and reporting on the proposal referred by the Minister. As the Court of Appeal has recently held in Botany Bay City Council v The State of New South Wales at [93] and [94]: It follows from the reasoning of the Court in Botany Council, that the functions of the Chief Executive on the referral of a proposal by the Minister are not at large, but are constrained by the purpose of the referral. The stark contrast between the language of ss 218F(1) and 263(1) on the one hand, and s 218F(6) on the other, demonstrates that the functions of the Commission in conducting a review of a report of the Chief Executive are substantially more confined than the functions of the Chief Executive in preparing a report on a proposal by the Minister. Under s 218F(6) the Commission is not to examine and report on the Minister's proposal. Instead, the Commission is directed to review the Chief Executive's report and send its comments to the Minister. It is no doubt true, as Mr Robinson submitted, that the word "review", considered in isolation, is capable of describing a reconsideration of the merits of the decision or a proposal. But s 218F(6) must be construed in context. The provision applies to an amalgamation proposal or a proposal that is not supported by at least one of the councils affected. It is the Chief Executive's report on the proposal, not the proposal itself, that is to be furnished to the Commission for "review and comment". The Commission is then required to "review the report and send its comments to the Minister". The "comments" are clearly intended to be the views of the Commission arising from its review of the Chief Executive's report.
The Boundaries Commission's role in reviewing and commenting on the Departmental Chief Executive's report does not extend to re-examining the merits of the Minister's proposal for amalgamation that has already been examined by the Departmental Chief Executive. The Court of Appeal dismissed an argument to this effect in Botany Bay City Council v The State of New South Wales at [95]-[98] for the following reasons. First, the Court held that the Boundaries Commission's expertise in local government issues and independence from the Minister does not demonstrate that the Boundaries Commission's role extends to re-examining the merits of a proposal. Rather, the Act is structured so that this expertise and independence is utilised for the purpose of reviewing and commenting on the Departmental Chief Executive's report. Second, while the statutory language of ss 218F(6) and (7) permits the Boundaries Commission to identify matters that may warrant modification of a proposal in its comments to the Minister, it does not require the Boundaries Commission to "…undertake its own independent evaluation of whether the proposal should be recommended for implementation". Third, the Court held that if the Boundaries Commission were to be entitled to re-examine the merits of the Minister's proposal under the Act, the statutory procedures governing the Departmental Chief Executive's examination of the merits of the proposal would not apply. The result would be that, contrary to the intention of the Act, the initial examination of the proposal would be set at nought and the public would not be entitled to participate in the decision making process.

[18]

Deciding whether or not to recommend implementation of the proposal

The sixth step under Div 2B is the Minister considering the Departmental Chief Executive's report and, if applicable, the Boundaries Commission's comments on that report. The Minister may recommend to the Governor that the proposal be implemented with such modifications that arise out of the Departmental Chief Executive's report and, if applicable, the Boundaries Commission's comments on that report and with such other modifications as the Minister determines, but may not do so if the Minister is of the opinion that the modifications constitute a new proposal: s 218F(7). Alternatively, the Minister may decline to recommend that the proposal be implemented: s 218F(8).

[19]

The proclamation

If the Minister recommends to the Governor that the proposal be implemented, the process under Divs 2A and 2B culminates with the Governor making the proclamation amalgamating the areas. As I have noted earlier, a proclamation by the Governor may include provisions of the same kind as are referred to in s 213. The provisions include those "for or with respect to": the transfer or apportionment of assets, rights and liabilities; the transfer of staff; the alteration of ward boundaries; the holding of elections; the termination, cessation, dissolution or abolition of anything existing before the proclamation takes effect; the preservation or continuance of anything existing before the proclamation takes effect, amongst other matters: s 213(1) of the Act. The proclamation may also "authorise any matter or thing to be from time to time determined, applied or regulated by any specified person or body": s 213(2) of the Act.

[20]

The applicants' challenges

The applicants' first grounds of challenge concern the making of each of the Oberon proposal, the Cabonne proposal and the Gundagai proposal. The grounds of challenge are expressed in the alternative: 1. there was no decision to make the proposals at all; 2. if there was a decision to make the proposals, the decision was made not by the Minister but by others, including Cabinet; 3. if the Minister did make a decision to make the proposals, his decision was predetermined; or 4. any decision of the Minister to make the proposals was manifestly unreasonable. I will elaborate on each of these arguments.
The applicants firstly argued that "there was no decision by [the Minister] under s 218E(1), because on the balance of probabilities [the Minister] was after June [2015] and until April 2016 a bystander in the statutory process of forced Council amalgamations under sections 218F and 263" (par 5(a), p 2, submissions of applicants, 3 June 2016). The applicants noted that the Minister did not produce, in response to various notices to produce issued by the applicants, "the usual Decision Memorandum or file or document evidencing or referring such a decision [under s 218E(1)] to him". The applicants noted that such documents do exist in respect of the Minister's decision in May 2016 under s 218F(7) to recommend to the Governor that the proposals be implemented (par 5(e), p 3, submissions of applicants, 3 June 2016 and see also par 4(f), p 2, outline submissions of applicants in closing, 31 May 2016).
The applicants referred to the absence of evidence from the Minister or any officer of his staff or department to explain what happened in relation to making the proposals under s 218E(1), referring to Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 (par 4(g), p 2, outline submissions of applicants in closing, 31 May 2016 and T 26/5/16, p 181).
The applicants drew the inference from the absence of decision memoranda in respect of a decision under s 218E(1) to make the proposals for amalgamation and the absence of evidence of the Minister about making the decision that the Minister did not make any such decision at all (T 26/5/16, p 184).
The applicants secondly argued that the decision to make the proposals was made by others, either Cabinet or by KPMG and the Department of Premier and Cabinet ('DPC') in an informal arrangement which they called a partnership. The applicants submitted that the decision to make the proposals was made by Cabinet on 17 or 18 December 2015, as announced by the Premier on 18 December 2015 and evidenced in the press release of that date (par 4(a), p 2, outline submissions of applicants in closing, 31 May 2016; par 5(f), p 3, submissions of applicants, 3 June 2016 and T 26/5/16, p 176).

[21]

The respondents' rebuttal

The respondents rebutted the applicants' arguments, put in the alternative, that the Minister did not make any decision to make the proposals for amalgamation but that instead, the decision was made by others, whether Cabinet or KPMG/DPC. The respondents submitted that there was ample evidence on which the Court can infer that the Minister decided to make the proposals under s 218E(1) of the Act.
The Minister's letter dated 6 January 2016 referring the proposals under s 218F(1) stated that "[a] list of proposals initiated by me pursuant to section 218E(1) of the [Act] is attached and marked Attachment A". Attachment A included each of the Oberon proposal, the Cabonne proposal and the Gundagai proposal.
The Minister's letter also attached, as Attachment B, the proposal documents for each proposal being "Merger Proposal: Bathurst Regional Council, Oberon Council, January 2016", "Merger Proposal: Blayney Shire Council, Cabonne Council, Orange City Council, January 2016" and "Merger Proposal: Cootamundra Shire Council, Gundagai Shire Council, January 2016". Each proposal document contained a foreword headed "Minister's Foreword" and bore the signature of the Minister above his name. In the Minister's Foreword to the proposal documents for Cabonne and Gundagai, the Minister said "I am putting forward the proposal to merge the local government areas of [the named councils]". The Minister's Foreword to the proposal document for Oberon is expressed in the passive voice, "… the proposal to merge the local government areas of Bathurst and Oberon is being put forward", but there is no reason to think that the Minister was not the person putting forward the proposal as he said he was doing for Cabonne and Gundagai (par 32, p 10, respondents' further submissions, 31 May 2016).
The respondents submitted that the applicants' reliance on Jones v Dunkel is misplaced. The documents referred to above provided ample evidence that a decision to make the proposals under s 218E was made by the Minister. There was no basis for an adverse inference (to the effect that the Minister made no decision) that the Minister needed to be called in order to displace: Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd [2014] NSWCA 158 at [14] and [81]. The rule in Jones v Dunkel has no operation (par 33, p 10, respondents' further submissions, 31 May 2016).

[22]

The making of the proposal was not invalid

The applicants have not established any of their grounds of challenge to the Minister's decision to make the proposals under s 218E(1) of the Act. My reasons accord with the respondents' submissions.
The applicants have not established that the Minister did not make the decision under s 218E(1) to make the Oberon proposal, the Cabonne proposal and the Gundagai proposal. The Minister's letter of 6 January 2016 referring the proposals for examination and report and the proposal documents are evidence that the Minister did in fact make the decision. The Minister referred to the media release of 18 December 2015 where he announced "my intention to prepare proposals to amalgamate or change the boundaries of a number of local government areas across the State". The Minister then stated that "[a] list of the proposals initiated by me pursuant to section 218E(1) of the Local Government Act 1993 … is attached". The list included the Oberon proposal, the Cabonne proposal and the Gundagai proposal. The Minister said to the Departmental Chief Executive: "By this letter I am referring these proposals to you pursuant to section 218F(1) of the Act for examination and report …". The Minister signed the letter above his name. The proposal documents for the Oberon proposal, the Cabonne proposal and the Gundagai proposal (attached to the Minister's letter of 6 January 2016) contained a Minister's Foreword stating that the Minister was putting forward the proposals.
The media release of 18 December 2015 of the Premier and the Minister does not prove to the contrary. Cabinet may well have adopted a range of proposed reforms to the local government sector, including a policy in favour of amalgamations of local government areas as a matter of principle. The media release refers to that policy in general and contingent terms. It says that 35 new councils are being "proposed" in NSW, that the Government "is using the existing process set out in the Local Government Act to consider council mergers", that the Minister had stated that "[o]ur process will provide an objective assessment of the merger benefits and impacts, and give the community a chance to have a say before a final decision is made" and that "[d]etailed merger proposals are now being finalised and will be referred to the Chief Executive … for examination and report …".
These statements affirm that any proposal for amalgamations (once finalised) will follow the process set out in the Act. This process includes the Minister deciding under s 218E(1) to make the proposals and referring the proposals under s 218F(1) for examination and report, and the examination, inquiry and report on the proposals under s 263, during which process the community would have a chance to have their say on the proposals. The media release affirms that a final decision on any proposal for amalgamations has not been made and will not be made until the process set out in the Act has been followed.

[23]

The applicants' challenges

The applicants' challenges to the Minister's referral of the proposals for amalgamation under s 218F(1) to the Departmental Chief Executive for examination and report were based on similar grounds to their challenge to the decision under s 218E(1) to make the proposal. The applicants argued that "the referral was as a matter of probability a step on the predetermined path to the amalgamations", citing Betfair Pty Ltd v Western Australia (2008) 234 CLR 418; [2008] HCA 11 at [119] (par 4(h), p 2, outline submissions of applicants in closing, 31 May 2016).
The applicants argued that the Minister had no power under s 218F(1) to refer a decision made by others, including Cabinet. Under s 218F(1), the Minister may only refer a proposal that the Minister made or that the Minister received from one or other of the classes of persons who can initiate a proposal under s 218E(1), namely, a council affected by the proposal or an appropriate minimum number of electors. The applicants submitted that neither Cabinet nor KPMG and DPC acting in a joint venture fall within these classes of persons who can initiate a proposal under s 218E(1). Hence, any proposal initiated by them and received by the Minister could not be referred by the Minister under s 218F(1) for examination and report (T 26/5/16, p 176).
The applicants also relied on the ground of manifest unreasonableness. The applicants argued that it was manifestly unreasonable to refer the proposals without making available the undisclosed KMPG material. It was manifestly unreasonable to refer a proposal for examination and report where such functions were "impossible to undertake and futile" because all of the KPMG material which explained and demonstrated the basis of the proposal was withheld (pars 6(a), (b) and (c), pp 3-4, outline submissions of applicants in closing, 31 May 2016 and par 7(a), p 5, submissions of applicants, 3 June 2016).
The applicants also argued that it was manifestly unreasonable to refer the proposals for amalgamation of areas with rural centres that were founded upon a stated net financial benefit over 20 years which paid no regard to the requirement to maintain staff numbers in the rural centres under s 218CA and s 354B (par 6(d), p 4, outline submissions of applicants in closing, 31 May 2016).

[24]

The respondents' rebuttal

The respondents rejected the applicants' arguments for the same reasons they gave in response to the applicants' challenge to the decision to make the proposals. The applicants submitted that the evidence established that the Minister decided under s 218E(1) to make the proposals and he referred the proposals under s 218F(1) for examination and report. There was no predetermination.
The respondents submitted that the ground of manifest unreasonableness is inapplicable to the referral of the proposals under s 218F(1). The Minister does not have a discretionary power under s 218F(1) but rather a mandatory duty to refer a proposal that the Minister has made or has received under s 218E(1). Hence, the Minister was bound to refer the proposals he had made for examination and report, regardless of whether to do so was unreasonable in the circumstances or not (T 31/5/16, p 95).
The respondents submitted that, in any event, there was no manifest unreasonableness in referring the proposals without making available the undisclosed KPMG material or based on the KMPG Technical Paper's and proposal documents' consideration of the net financial of the proposals, for the reasons they gave earlier.
The proposal that is referred is simply the "single sentence" proposing that two or more areas are amalgamated into one or more new areas. The proposal is not the proposal document in which the statement of the proposal is included. There is nothing in the Act that requires the Minister to provide any supplementary information when the Minister refers the proposal. There is no statutory basis to review the reasonableness or unreasonableness of any information provided that was not required to be disclosed under the Act (T 31/5/16, p 95).

[25]

The referral of the proposals was valid

The applicants have not established any of their grounds of challenge to the Minister's referral of the proposals under s 218F(1). I agree with the respondents' submissions.
For the reasons I have given in relation to the first challenge, the Minister made the decision under s 218E(1) to make the proposals and he referred the proposals he had made, as he was bound to do under s 218F(1), for examination and report. The applicants have not established that other persons, including Cabinet or KPMG and DPC acting in a joint venture, decided to make the proposals or that there was any predetermination.
The applicants also have not established manifest unreasonableness in the ways argued, for the reasons I have explained in relation to the applicants' challenge to the Minister's decision to make the proposals.
In any event, however, even if the referral of the proposals were to have been, to use the applicants' wording, "a step on the predetermined path to the amalgamations" or were to be unreasonable in any of the ways argued by the applicants, this would have no legal consequence. The Minister was under a duty, imposed by s 218F(1), to refer the proposals that had been made; he did not have a discretion to refer or not refer the proposals or to refer them in any particular way, such as with or without making available certain material or based on certain modelling or assumptions. The Minister had a duty to refer the proposals that had been made, regardless of such circumstances.
I reject the challenge to the referral of the proposal under s 218F(1).

[26]

The applicants' challenges

The applicants challenged the public notice that was given by the Delegates of the holding of the inquiries. The applicants argued that "reasonable public notice" was not given of the holding of each inquiry, in contravention of s 263(2B) of the Act. The applicants challenged both the content and the reasonableness of the notices that were given by the Delegates.
As to the content of the notice, the applicants referred to the heading of the notice: "Notification of public inquiry into the proposal to amalgamate or alter the boundaries of local government areas". The notice then stated: "Pursuant to section 218F of the Local Government Act 1993 the Minister for Local Government has referred a proposal in relation to the following local government areas [the applicable areas were specified] to the Acting Chief Executive of the Office of Local Government for examination and report". The applicants argued that it was not possible from reading each notice to know whether the proposal was for the amalgamation of the areas specified (under s 218A) or the alteration of the boundaries of the areas specified (under s 218B). The applicants noted that each proposal had very different consequences, both for the content of the proclamation and the continued existence of each council of the areas as an entity (referring to s 213). The applicants argued that the notice refers ambiguously to the inquiry to be held and does not specify whether the inquiry is in relation to a proposal for amalgamation of areas under s 218A or alteration of the boundaries of areas under s 218B. This omission is of substance and renders the notice invalid: Scurr v Brisbane City Council (1973) 133 CLR 242; [1973] HCA 39; Lindemans Wines Pty Ltd v Woodward (1981) 46 LGRA 14 and Bartzios v Leichhardt Municipal Council [1978] 1 NSWLR 7 at 10-11 (the notice must "draw the attention of the public … to the council's proposal" - here the notice did not.) (pp 6-7, submissions of applicants, 3 June 2016 and T 31/5/16, pp 77-78).
As to the reasonableness of the notice, the applicants argued that the requirement of s 263(2B) to give "reasonable public notice" of the holding of the inquiry assumes that there will be a reasonable opportunity for the public to participate in the inquiry, by written submission or attendance. First, as to making written submissions, the applicants argued that the notice given did not call for written submissions to be made to the inquiry. Accordingly, members of the public were unaware, should they follow the announcements of the inquiry made in the notice, that it was possible to make a written submission in the alternative to attending the public inquiry. Second, the applicants argued that the notice did not state that members of the public who made a written submission would be given the opportunity to attend and participate in the oral inquiry. Section 263(5) requires ("must allow") that members of the public be given the opportunity to attend any inquiry held. This means that even those who made written submissions must be given the opportunity to attend and participate in the oral inquiry (pp 7-8, submissions of applicants, 3 June 2016).

[27]

The respondents' rebuttal

The respondents submitted that the public notice given by each Delegate of the holding of the inquiry did satisfy the requirements of s 263(2B) of the Act.
The respondents submitted that s 263(2B) does not prescribe that notice must be given of anything more than the fact of the holding of the inquiry under the section; it does not require advice to be given of the documents in which the proposal was contained or the documents relied upon in making the proposal. The notices that were given did provide further information, such as inviting submissions from members of the public and referring to the Council Boundary Review website, but this further information was not required by s 263(2B) (par 81, respondents' summary of argument, 23 May 2016).
In relation to the content of the notices given, the respondents submitted that the notice advised of the holding of an inquiry, at the specified times and venues, and sufficiently identified the subject matter of the inquiry. True the notice said that the proposal involved the amalgamation or alteration of the boundaries of the areas but that was enough to alert anyone who was concerned to become better informed about the proposal by looking, for example, at the Council Boundary Review website identified in the notice or by asking for information by telephoning the free call number given in the notice (T 31/5/16, pp 108-109 and T 6/6/16, p 213). Information was available on the website identified. For example, the proposal documents describing the proposals were published on the website from 6 January 2016 (T 31/5/16, p 109).
In further answer to the issue of the notice stating that the inquiry is into the proposal to amalgamate or alter the boundaries of areas, the respondents submitted that a description in those terms is adequate because "it defines the entirety of the possibilities that might be under consideration". The notice gives notice to "anyone who might be interested in any proposal of that kind, be it complete amalgamation, amalgamation of some areas only or alteration. Anyone who's interested in any of those subjects has, by that notice, with a clear identification of the two local government areas, and the inquiry and the referral of the proposal, been put on notice that this is something that they should pursue further." (T 6/6/16, p 209).
The respondents submitted that, if the inclusion of reference to alteration of boundaries of the areas went beyond what the notice should have included, "it was no more than surplusage, which did not … mislead anyone" (T 6/6/16, p 210). Anyone concerned about amalgamation but unconcerned about alteration would have attended the inquiry or made further inquiries as to the details of the proposal. They would not have been misled into doing nothing (T 6/6/16, p 211).

[28]

Reasonable public notice was given

The applicants have not established that reasonable public notice was not given in any of the ways that they argued.
As to the content of the notice, the first criticism was that the notice was ambiguous as to whether the proposal the subject of the inquiry was for the amalgamation of the areas specified in the notice or the alteration of the boundaries of those areas. This ambiguity arose from the heading and the first paragraph of the notice.
I find that each notice did give sufficient information or warning to readers of the inquiry to be held. Each notice was expressed in very similar terms. An example is the notice for the Oberon proposal which stated: Notification of public inquiry into the proposal to amalgamate or alter the boundaries of local government areas Pursuant to section 218F of the Local Government Act 1993 the Minister for Local Government has referred a proposal in relation to the following local government areas: Bathurst Regional and Oberon to the Acting Chief Executive of the Office of Local Government for examination and report. Pursuant to section 745 of the Local Government Act 1993 the Acting Chief Executive of the Office of Local Government has delegated to me the examination and reporting functions under section 218F of the Local Government Act. The examination into the proposal has now commenced and submissions are invited from members of the public. The closing date for submissions is 5pm EST, Sunday 28 February 2016. Submissions can be made online at www.councilboundaryreview.nsw.gov.au or by mail to: GPO Box 5341 Sydney NSW 2001 A public inquiry in relation to the proposal will be held under section 263 of the Local Government Act 1993 at the following time(s) and venue(s): Oberon Showground: Thursday, 4 February 2016 1:00pm - 4:00pm Panthers Bathurst: Thursday, 4 February 2016 7:00pm - 10:00pm Members of the public who would like to attend are requested to register at www.councilboundaryreview.nsw.gov.au or by contacting 1300 813 020. Members of the public who would like to speak at the public inquiry are requested to indicate that they wish to do so when they register to attend. For more information contact 1300 813 020 or visit Renata Brooks Delegate

[29]

The applicants' challenges

The applicants argued that the inquiry held by each Delegate was not an inquiry under s 263(2A) of the Act on two grounds.
The first ground of challenge was that the process adopted was not an informed or genuine inquiry, citing Sutherland Shire Council v Finch (1970) 123 CLR 657; [1970] HCA 49 at 662 (par 10, p 7, outline submissions of applicants in closing, 31 May 2016). The applicants put this ground in a number of ways.
The applicants firstly submitted that the concept of an inquiry is "an investigation as into a matter; the act of inquiring, or seeking information by questioning; interrogation": Macquarie Dictionary (4th ed, 2005). In the inquiries held by the Delegates, the applicants submitted that the evidence established that "there was no seeking of information or questioning or any act of inquiring, but merely the provision of a restricted opportunity for some member of the public to speak, on conditions such as registration and finishing within 3 hours, and not speaking for more than 3 or 2 minutes etc. Many who intended or who wished to speak did not, or could not. No provision was made for those who were away, or at work, or with other commitments in the narrow window allowed" (pp 12-13, submissions of applicants, 3 June 2016 and T 31/5/16, p 74).
The applicants secondly submitted that the Delegates were obliged to find out what the response of those affected by the proposals (including the affected councils) was to the proposals and to the reasons and basis of the proposals considered by the Minister. The Delegates had to make their own inquiries and form their own views upon the Minister's proposals, citing amongst other decisions, Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 225 CLR 88; [2005] HCA 72 at [26] (par 10(a) and (c), pp 7-8, outline submissions of applicants in closing, 31 May 2016).
The applicants thirdly submitted that it is impossible to inquire into a proposal unless the reasons for and the evidentiary basis of it is at least disclosed to the persons affected, so as to give such persons an opportunity to comment on the proposal (p 13, submissions of applicants, 3 June 2016). The applicants submitted that the Minister did not provide the affected councils or members of the public with the undisclosed KPMG material, which explained and demonstrated the basis of the proposal.

[30]

The respondents' rebuttal

The respondent rejected both grounds on which the applicants submitted that there were no inquiries held under s 263(2B) of the Act.
As to the first ground, that the process adopted was not an informed or genuine inquiry into the proposal, the respondents submitted that the nature of the "inquiry" to be held by the Delegate is not prescribed by the Act (in contrast to a "public inquiry" in Pt 8 of Ch 13 of the Act). In Bushell v Secretary of State for the Environment [1981] AC 75, the House of Lords held that, in the absence of statutory rules as to the conduct of a "local inquiry" to be held in accordance with a statute, in relation to a proposed motorway, the procedure to be followed was a matter of discretion for the executive officer empowered to hold that inquiry. In that case, Lord Diplock warned against "over-judicialising" such inquiries by insisting on the observance of the procedures of a court of justice (at 95, 97) and suggested that such inquiries ought to be as informal as was consistent with achieving the objects of the inquiry (cited with approval in Kioa v West (1985) 159 CLR 550; [1985] HCA 81 at 629).
The respondents submitted that various features of the Act make clear that the inquiry required by ss 218F(2) and 263(2A) is not a formal inquiry in the nature of a coronial inquiry or royal commission, involving summonsing of witnesses, compulsory productions of documents, cross-examination, admission or rejection of evidence and so forth. First, the Boundaries Commission and Departmental Chief Executive do not have the powers needed to conduct a formal inquiry of that kind. Secondly, the Act does confer such powers on commissioners charged with undertaking what the Act describes as "public inquiries" (see s 438U and generally Pt 8 of Ch 13 of the Act). The distinction must be taken to be a conscious one by the drafters. Thirdly, s 264 provides that a person is not to be represented by an Australian lawyer or a person acting for a reward in proceedings before the Boundaries Commission or Departmental Chief Executive. The procedures typically engaged in a coronial inquiry or royal commission would be completely inappropriate, and in many cases unjust, in those circumstances. The present statutory context is one where Lord Diplock's observations in Bushell v Secretary of State for the Environment are apposite. The manner in which the Delegates went about their task did not fall short of meeting the statutory description of "inquiry" (pars 67-69, pp 24-25, respondents' summary of argument, 23 May 2016).

[31]

Valid inquiries were held

The applicants have not established that the inquiry held by each Delegate did not meet the statutory description or the requirements of the inquiry required to be held under s 263(2A) of the Act on either of the two grounds argued by the applicants.
I do not agree with the applicants' interpretation that an inquiry under s 263(2A) demands the investigation and interrogation by the Delegates contended for by the applicants. As I held in Woollahra Municipal Council v Minister for Local Government at [99]-[102], the inquiry required to be held under s 263(2A) is not itself the examination of the proposal that is required to be undertaken under s 263(1); rather, the inquiry is held for the purpose of exercising the function of such an examination. This means that the inquiry that is held under s 263(2A) is not itself required to be conducted as an examination of the proposal that has been referred. The obligation under s 263(2A) is to hold an inquiry, not to inquire in the sense of examine.
Section 263 does not prescribe the procedure by which an inquiry under s 263(2A) is to be held. Where the section is silent as to the procedure to be followed at the inquiry, that procedure, within such limits that are necessarily imposed by its qualifying for the description "inquiry", is left to the discretion of the person holding the inquiry: Bushell v Secretary of State for the Environment at 94-95.
The Delegates exercised that discretion to adopt a procedure for the orderly and efficient conduct of the inquires that they held, including requesting persons wishing to speak at the inquiry to register beforehand, imposing time limits on each speaker, allowing speakers to speak without interruption, and listening to rather than questioning the speakers. The adoption of such a procedure for the conduct of each inquiry did not cause the inquiry to not qualify as an inquiry under s 263. Furthermore, I do not accept that the restrictions actually imposed by each Delegate at the inquiries were so great an impingement on peoples' ability to speak at the inquiry as to cause the inquiry not to be an inquiry under s 263(2A).
I do not accept that the Delegates were obliged by s 263 to find out what the responses of all persons affected by the proposals were to the proposals. No doubt, the Delegates did find out what were the responses to the proposals by those persons who chose to speak at the inquiry. However, the Delegates did not fail to hold an inquiry under s 263(2A) by not finding out what were the responses to the proposals of those persons who did not attend or did not speak at each inquiry.

[32]

The applicants' challenges

The applicants argued that there was no examination of the proposals in accordance with s 263(1) of the Act because the Delegates did not "examine" each of the 11 factors specified in s 263(3) with regard to each proposal.
The applicants submitted that the Delegates were required to examine and report on each proposal "rigorously, fairly and in a manner which indicates that they understand and have evaluated each factor and have weighed up arguments presented to them" (par 9, p 5, outline submissions in closing, 31 May 2016).
The applicants argued that the Act, and s 263(3) in particular, imposes a requirement to examine each and every factor in s 263(3); it is not sufficient to consider one or several (T 27/5/16, pp 11 and 14). The Act "unusually imposes a requirement to make a finding on every question of fact after examining and reporting on each such factor and which the Parliament has stipulated is material" (p 3, applicants' supplementary reply points, 6 June 2016). The applicants cited Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323; [2001] HCA 30 at 330-331, 346.
The applicants argued that, notwithstanding the language used in s 263(3) that the Boundaries Commission or Departmental Chief Executive is to "have regard to" the factors when "considering" the matter referred (the proposal), the obligation is to "examine" each of the factors. The applicants submitted that the opening words of s 263(3) ("[w]hen considering any matter referred to it …") refers back to the matter referred for examination and report under s 263(1). Hence, what is required is not consideration but examination (T 27/5/16, pp 13-14).
The applicants submitted that the obligation in s 263(3) requires all factors in s 263(3) to be given "heightened consideration sufficient to be an adequate examination". The applicants cited Insurance Australia Ltd v Motor Accidents Authority (NSW) [2007] NSWCA 314 at [40]; Elias v Federal Commissioner of Taxation (2002) 123 FCR 499; [2002] FCA 845 at 512; Parramatta City Council v Hale (1982) 47 LGRA 319 at 339; Zhang v Canterbury City Council (2001) 51 NSWLR 589; [2001] NSWCA 167 at 601 (par 9(a), p 5, outline submissions of applicants in closing, 31 May 2016).
The applicants submitted that the Delegates were required to treat each factor as a fundamental element in or focal point of the examination process, invoking the language in Zhang v Canterbury City Council at [75]. (The applicants did, however, also cite Minister for Immigration and Citizenship v Khadgi (2010) 190 FCR 248; [2010] FCAFC 145 at [61] where a full Federal Court agreed with Sackville J in Singh v Minister for Immigration and Multicultural Affairs (2001) 109 FCR 152; [2001] FCA 389 at [54] that the expression "have regard to" is capable of different meanings depending on the context: it may require the decision maker merely to consider specified matters rather than treat them as fundamental elements in the decision making process) (par 9(d), p 6, outline submissions of applicants in closing, 31 May 2016).

[33]

The particular challenges to the examination of the Oberon proposal

In relation to the Oberon proposal, the applicants argued that the Delegate failed to examine the factors in s 263(3) in the following respects.
For s 263(3)(a), the applicants submitted that the Delegate "did not conduct an adequate examination" in three ways. First, the Delegate did not examine either the financial disadvantages or the diseconomies of scale. The applicants referred to the Delegate's discussion in her report of economies and diseconomies of scale at pp 19-20: 'Economies of scale' is an economic term proposing that there is a linear correlation (relationship) between increasing scale and decreasing unit costs of production up to a point where costs start to increase and diseconomies of scale arise. Efficiencies from economies of scale are one potential source of financial benefit arising from a merger scenario. Because of the diversity of functions undertaken by local government, economies of scale are best considered in relation to specific functions rather than across the whole organisation. An example might be governance, where economies of scale might apply on the basis that a large council servicing many ratepayers is likely to have lower costs per ratepayer than a small council servicing fewer ratepayers. Conversely, diseconomies of scale may arise if a geographically large merged council with an extensive road network centralises road maintenance and the maintenance cost per kilometre of road becomes higher because of the time and fuel costs of transporting equipment and personnel from a central location. In general, lower population densities and a large geographical area may impede economies of scale but may not create diseconomies of scale.
The applicants argued that this discussion showed that the Delegate misunderstood and misdirected herself as to the question she was examining in relation to diseconomies of scale. The applicants argued that the Delegate wrongly conflated "economies of density with economies of scale and … geographical scale with economic scale" (pp 2-3, applicants' table of Oberon Delegate's consideration of s 263(3) factors ('Oberon table') and T 31/5/16, p 63).
Second, the applicants argued that the Delegate did not adequately consider the factor in s 263(3)(a) because she made numerous wrong findings of fact. The applicants submitted that the Delegate erroneously found that savings in materials and contracts might exist through an amalgamated council procuring through the Central Region Organisation of Councils ('CENTROC') despite acknowledging that Oberon Council already procured through CENTROC. The Delegate ought to have found, therefore, that there were no savings in materials and contracts arising from the Oberon proposal (p 3, Oberon table and T 31/5/16, p 63). (This submission does not adequately summarise what the Delegate found. In fact, the Delegate found that direct potential merger benefits may arise from "[e]fficiencies in procurement from increased scale in procuring goods and services may allow a more favourable unit cost to be negotiated" (p 17, Oberon Delegate's report). The Delegate responded to submitters' comments on KPMG's financial modelling by stating that "[t]he assumption in relation to modelling efficiencies from materials and contracts expenditure appears conservative, notwithstanding statements that Council efficiency already benefits from bulk procurement through [CENTROC]. Even if no efficiencies were to be achieved through this route (which is unlikely) this represents a relatively minor component of overall savings" (Attachment G, p 1, Oberon Delegate's report)).

[34]

The particular challenges to the examination of the Cabonne proposal

In relation to the Cabonne proposal, the applicants argued that the Delegate failed to examine the factors in s 263(3) in the following respects.
For s 263(3)(a), the applicants made similar submissions to those made with respect to the Oberon Delegate's examination of this factor. There was no adequate examination because the Delegate did not examine the financial disadvantages or the diseconomies of scale, in the respects previously submitted (p 3, applicants' table of Cabonne Delegate's consideration of s 263(3) factors ('the Cabonne table')).
The applicants also argued that the Delegate focussed on the financial benefits of the new council and did not examine the financial disadvantages to the transferor council area (in this case, the Cabonne local government area) (p 3, Cabonne table).
The applicants argued that the Delegate did not address in his report a number of matters. The first matter was the opportunities for improved services and infrastructure. The proposal document had given as an example of local infrastructure that could be funded by merger-generated savings, the upgrading of water and sewerage systems. However, Cabonne Council had noted in its submission to the Delegate that it had already completed two sewerage systems for two towns and had secured funding to provide potable water to those towns. The applicant argued that "this is not a credible opportunity" for improved infrastructure and "was not considered by the [Delegate] at all even though it was raised in the [Cabonne submission]" (p 3, Cabonne table).
The second matter that the applicants argued that the Delegate did not address in his report was that the proposal document had used "incorrect revenues and incorrect asset valuations as identified in the [Cabonne submission]" (p 3, Cabonne table).
The third matter that the applicants argued had not been addressed by the Delegate in his report was that the asset value identified for Cabonne Council in the proposal document was $211m less than the amount identified in Cabonne Council's financial reports (p 4, Cabonne table).
The fourth matter that the applicants argued was not addressed by the Delegate in his report was an issue raised by Cabonne Council in its submission to the Delegate that there was "confusion around the assumptions of the dollar values of potential savings or benefits and the composition of the future operating revenue and surpluses of the new council" (p 4, Cabonne table).

[35]

The particular challenges to the examination of the Gundagai proposal

In relation to the Gundagai proposal, the applicants argued that the Delegate failed to examine the factors in s 263(3) in the following respects.
For s 263(3)(a), the applicants argued that the Delegate did not conduct an adequate examination of this factor for similar reasons to those given in relation to the Oberon Delegate's examination of this factor. In particular, the applicants argued that the Delegate failed to properly analyse the economies of scale and diseconomies of scale of the proposal. The applicants gave examples of where they said the Delegate had failed to examine economies of scale and diseconomies of scale.
One example of a failure to examine economies of scale was that the Delegate stated that there would be "[n]et financial savings of $3 million to the new council over 20 years (approx. $150,000 per annum)" (p 9, Gundagai Delegate's report), but, the applicants argued, the Delegate failed to address Gundagai Shire Council's 10 year strategic plan which showed that infrastructure improvements and cash reserves will deliver $2.05m annually (p 3, applicants' table of Gundagai Delegate's consideration of s 263(3) factors ('Gundagai table')).
A second example given by the applicants was the Delegate's failure to address Gundagai Shire Council's submission to the Delegate questioning "the spurious alleged financial benefits of the [Gundagai proposal]" (p 3, Gundagai table).
A third example given by the applicants was that the Delegate mentioned the term "economies of scale" only once in his consideration of the factor in s 263(3)(a) (on p 18 of the Gundagai Delegate's report) and this was only in the context of allowing "economies of scale in service delivery". The applicants argued that the Delegate's "use of the term is not made in any sense which might suggest the [Delegate] was aware of what the term meant or, had in any sense, engaged with the term" (p 13, Gundagai table).
With respect to diseconomies of scale, the applicants submitted that the Delegate did not make "a single mention of 'diseconomies of scale' in his entire report outside of direct citations from s 263(3)(a) of [the Act]. It can only be concluded that the [Delegate] did not know what diseconomies of scale were and therefore disregarded this factor, an essential part of (3)(a)" (p 3, Gundagai table).

[36]

The respondents' rebuttal

The respondents rejected both the applicants' construction of the duty under s 263(3) of the Act to have regard to the specified factors and the applicants' factual argument that the Delegates failed to have regard to certain factors.
The respondents submitted that the duty under s 263(3) is not, as the applicants argued, to "examine" each of the factors in s 263(3), but rather to "have regard to" the factors when examining the proposal that has been referred by the Minister. Accordingly, the issue is correctly framed as being whether the Delegates "had regard to" the s 263(3) factors in examining each proposal (par 72, p 20, respondents' further submissions, 31 May 2016).
The respondents disputed the applicants' argument that the Delegates were required to treat each factor in s 263(3) as a fundamental element in or a focal point of the examination process. The respondents submitted that the phrase "have regard to" in s 263(3) merely required the Boundaries Commission or the Departmental Chief Executive to whom a proposal has been referred for examination and report to consider the factors, rather than treat them as fundamental elements or focal points: Minister for Immigration and Citizenship v Khadgi at [61]. There are 11 factors listed in s 263(3). Although the Boundaries Commission or Departmental Chief Executive was required to "have regard to" each factor, not all of them will be central or fundamental to every proposal the Boundaries Commission or Departmental Chief Executive is called upon to examine: see Minister for Immigration and Citizenship v Khadgi at [62] (pars 79-80, pp 21-22, respondents' further submissions, 31 May 2016).
The respondents submitted that the applicants' arguments that the Delegates failed to have regard to certain factors depended on the applicants reformulating the factors at a greater level of factual specificity than they are expressed by the legislature in s 263(3). In order for the applicants to succeed on the ground of failure to consider a relevant matter, "the statute must expressly or impliedly oblige the decision maker to enquire and consider the subject matter at the level of particularity involved in the applicants' submission": Walsh v Parramatta City Council at [60] applying Foster v Minister for Customs and Justice (2000) 200 CLR 442; [2000] HCA 38 at [23] and adopted in Notaras v Waverley Council (2007) 161 LGERA 230; [2007] NSWCA 333 at [120]. The respondents submitted that it is not legitimate for the applicants to reformulate the factors in s 263(3) at a greater level of factual specificity and then allege that the Delegates failed to have regard to the specific matters so identified. Yet that is exactly what the applicants seek to do in the tables they provided with their written submissions commenting on each Delegate's examination of the s 263(3) factors. The applicants' ground of challenge can be dismissed on this basis (par 74, p 20, respondents' further submissions, 31 May 2016).

[37]

The Delegates had regard to the s 263(3) factors

The applicants have not established that each Delegate's examination and report on the proposal fell short of what was required in any of the ways argued by the applicants. I agree with the respondents' submissions.
First, the applicants' argument that there was a failure to examine the factors in s 263(3) depended on an incorrect construction of the Act. The statutory obligation in s 263(3) is to "have regard to" the factors specified when "considering" the matter referred (being the proposals for amalgamation), but not to "examine" the factors when "examining" the matter referred: see Woollahra Municipal Council v Minister for Local Government at [149]-[152]. I reject the applicants' construction that the Delegates were required to "examine" the factors in s 263(3).
I also reject the applicants' argument that the Delegates were required to examine "each" factor and to make a finding on every question of fact relevant to each factor. This argument was founded on the decision in Minister for Immigration and Multicultural Affairs v Yusuf. However, the decision turned on the terms of the particular federal statute concerned. The Act imposed no obligation on the Delegates when considering the proposals referred by the Minister to make a finding on every question of fact relevant to each factor in s 263(3).
The applicants are also incorrect in arguing that the phrase "have regard to" in s 263(3) demands that each factor in s 263(3) be treated as a fundamental element or focal point; it is sufficient in this statutory context for the Delegates to consider them: Minister for Immigration and Citizenship v Khadgi at [61]. Different factors will take on different importance depending on the proposal being considered.
The applicants' invocation of the formulation "proper, genuine and realistic consideration" as the standard against which the Delegates' consideration must be evaluated was also problematic. What the applicants argued was necessary in order for there to be proper, genuine and realistic consideration of the factors by the Delegates was, at base, a disagreement with the merits, including the correctness of the findings and conclusions and the sufficiency of the supporting evidence. Such disagreement does not establish a failure to consider the relevant factors.
Second, the applicants have not established on the evidence that each Delegate failed to have regard to any factor in s 263(3). I reject the applicants' argument that the Oberon Delegate failed to have regard to the factor in s 263(3)(e5), for the reasons given by the respondents. The applicants also have not established that each of the Delegates failed to have regard to the other factors identified by the applicants.

[38]

The applicants' challenges

The applicants alleged that the inquiry by each Delegate was conducted without affording procedural fairness to the applicant councils and to the ratepayers and residents of each area proposed to be amalgamated. The applicants alleged that procedural unfairness arose by reason of: 1. the legal insufficiency of the notice given of the holding of the inquiry: Scurr v Brisbane City Council at 252; Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations at 367-368; Ogawa v Minister for Immigration and Citizenship at 58-59; 2. the "limited access rights and involvement in participation in the inquiry", as explained in the applicants' affidavit evidence: Kioa v West at 609; Annetts v McCann (1990) 170 CLR 596; [1990] HCA 57 at 598; Assistant Commissioner Condon v Pompano Pty Ltd (2013) 252 CLR 38; [2013] HCA 7 at [156]; and 3. the inquiry being "blinkered and insufficient" and "not an informed inquiry", as explained in the applicants' affidavit evidence: Minister for Immigration and Border Protection v MZYTS (2013) 230 FCR 431; [2013] FCAFC 114 at [58]-[62]; Wei v Minister for Immigration and Border Protection (2015) 90 ALJR 213; [2015] HCA 51 at [49] (par 12, p 9, outline submissions of applicants in closing, 31 May 2016.

[39]

The respondents' rebuttal

The respondents did not dispute in principle that a duty to afford procedural fairness may attach to the exercise of the statutory power under s 263 to examine and report on a proposal for amalgamation. The respondents did, however, contest that the content of the duty to accord procedural fairness was as contended by the applicants or that there was any denial of procedural fairness to the applicants.
The respondents noted that the leading decision on the content of the duty to accord procedural fairness under the statutory scheme for examination and report on a proposal is the Court of Appeal's decision in Minister for Local Government v South Sydney City Council. The respondents noted that the Court of Appeal: 1. held that the use of a consultant by the person charged with examining and reporting on the proposal was not an abdication of duty, and there was nothing wrong in principle with the task of recording, collating, organising and summarising submissions being assigned to an agent: at [211]; 2. held that the person charged with examining and reporting on the proposal (in that case the Boundaries Commission, in this case the Delegates of the Departmental Chief Executive) had a "duty … to consult with affected councils about the detailed issues required to be taken into account by s 263(3)" and give them "a reasonable opportunity to address these statutory issues" but that duty had been discharged by giving the affected council an opportunity to present detailed written submissions on those matters and by meeting with the affected councils for 1-2 hours: at [113], [242] and [243]; 3. rejected a submission that the statutory scheme required the affected council to have access to and an opportunity to comment on submissions made by other stakeholders that were adverse to its interests (described as the "open file" submission): "An obligation with such content cannot be accepted. It effectively converts the examination and report stage of the process into a full-blown adversarial trial": at [251], see also [44]; and 4. said that while it was not possible "to describe or define with precision" what adverse material was required to be disclosed in order to afford an affected council a "reasonable opportunity" to address the statutory criteria, the Court clearly favoured a narrow view. The Court warned against uncritically applying the general statement of Brennan J in Kioa v West at 629 endorsed in Muin v Refugee Review Tribunal (2002) 76 ALJR 966; [2002] HCA 30 that "an opportunity should be given to deal with adverse information that is credible, relevant and significant to the decision to be made", noting that "[t]he facts of Muin were, however, far removed from the present case, having regard to the specific interest of the applicant, the direct impact of the adverse material and the way in which he was misled by a positive misrepresentation about the true position": at [260]. The Court made observations about the attenuated nature of the obligation to disclose adverse material in the statutory context of examining and reporting on a proposal: at [264]-[268] (pars 40-44, pp 13-15, respondents' summary of argument, 23 May 2016).

[40]

No denial of procedural fairness by the Delegates

The applicants have not established that the Delegates denied them, or their ratepayers and residents, procedural fairness in any of the ways argued by the applicants.
The first way was the insufficiency of the notice given of the holding of the inquiry. The applicants argued that the notice given, by reason of its inadequate content and not being reasonable notice, did not satisfy the statutory requirements in s 263(2B) of the Act so as to be reasonable public notice of the holding of the inquiry. The applicants argued that the inadequacy of the notice also impeded the applicants, residents and ratepayers, and members of the public from participating fully in the inquiry. For the reasons I have given in relation to the applicants' challenge to the notice, I do not accept that the public notice given of the holding of the inquiry was inadequate. The public notice given was not only the advertisement placed in newspapers, but also the notice given on the Council Boundaries Review website, attached to the Delegate's letters to the applicant councils and placed on the applicant councils' websites at the Delegates' request. Considering all of the forms of public notice given, the applicants, residents and ratepayers and members of the public were given adequate notice of the holding of the inquiry and had sufficient opportunity to participate in the inquiry, if they chose to do so.
The second way was based on the limitations imposed by the Delegates on the applicants and members of the public participating in the inquiry, including requiring speakers to register and imposing short time limits on speakers at the inquiry. The applicants argued that these limitations caused the inquiries held by the Delegates not to satisfy the statutory requirement in s 263(2A) of the Act of an inquiry in relation to the proposals. The applicants argued that these limitations on the inquiries also impeded the applicants, residents and ratepayers, and members of the public from participating fully at the inquiries. For the reasons I have given in relation to the applicants' challenge to the inquiries, I do not accept that the limitations on how the applicants, residents and ratepayers, and the members of the public were able to participate at the inquiries denied them procedural fairness. The Delegates had a discretion to formulate the procedure to be followed at the inquiry. The requirements for registration of speakers and restrictions on time for speakers were within the discretion of the Delegates to facilitate the orderly and efficient conduct of the inquiries. Imposition of these requirements did not cause the inquiries not to answer the statutory description of "inquiry". But they also did not deny the applicants, residents and ratepayers or members of the public the opportunity to participate in the inquiry.

[41]

The applicants' challenges

The applicants argued that the Boundaries Commission did not conduct a proper and informed review of and comment on each of the Delegate's reports, as required by s 218F(6)(b) of the Act. The applicants submitted that "there was no 'review' in law by the Boundaries Commission of the factors in the comments upon each Delegate's report into his or her examination of each amalgamation proposal of [the Minister], save for factor (e5) in respect of Oberon … and even then the review was perfunctory" (par 11, p 8, outline submission of the applicants in closing, 31 May 2016).
First, the applicants submitted that the functions of review and comment are more demanding than merely checking that the report of the Departmental Chief Executive complies with the statutory requirements of examination and report. The applicants submitted that the verb to "review" involves "to view, look at, or look over again" or "to inspect, especially formally or officially" and that the noun of "comment" involves "a note in explanation, expansion, criticism of a passage in a writing, book etc; an annotation" and the verb to "comment" involves "to write explanatory or critical notes upon a text" (Macquarie Dictionary (4th ed, 2005)). The applicants submitted that the Boundaries Commission's actions fell short of such a review and comment on each Delegate's report.
The applicants submitted that the action of review "does not infer reference only, or mere consideration of the function performed, but rather a detailed, proper and genuine review to determine if the task, in this case an examination and report, has been attended to. This requires consideration of at least what modification if any is appropriate to be recommended by the Boundaries Commission which has an expert role to play with respect to the proposal" (p 16, submissions of applicants, 3 June 2016).
The applicants referred to the character of the Boundaries Commission as a specialist entity whose members have expertise in local government governance. Having regard to this character, the applicants submitted, the review the Boundaries Commission undertakes "involves arriving at the 'correct or preferable decision' as upon the merits", akin to the merits review undertaken by the Administrative Appeals Tribunal, citing Esber v The Commonwealth of Australia (1992) 174 CLR 430; [1992] HCA 20 at 440 and 448; Bushell v Repatriation Commission (1992) 175 CLR 408; [1992] HCA 47 at 425.

[42]

The respondents' rebuttal

The respondents rejected the applicants' construction of the statutory function of the Boundaries Commission under s 218F(6)(b) of reviewing and commenting on the report of the Departmental Chief Executive. The respondents summarised the statutory function of various persons under s 218F of the Act, in circumstances where an amalgamation proposal is opposed by one or more of the councils affected, as follows: 1. the Delegate of the Departmental Chief Executive is to conduct an examination of the proposal, and report on the proposal (ss 218F(1) and (2)); note that an incident of the examination function is the holding of an 'inquiry' (s 263); 2. the Boundaries Commission, on the other hand, is to review the Delegate's report (and not the proposal) and send its comments on the Delegate's report to the Minister (s 218F(6)); and 3. the Minister may make a recommendation to the Governor that the proposal be implemented (with or without modifications), or decline to make such a recommendation (ss 218F(7) and (8)).
The respondents noted that two points are apparent from this statutory scheme. First, the only person required to make (or decline to make) a "recommendation" is the Minister. Second, while the object of the Departmental Chief Executive's "examination" and the Minister's "recommendation" is the "proposal", the object of the Boundaries Commission's review and comment is the "report" of the Delegate.
The respondents noted that the only document that the Act requires be "furnished" to the Boundaries Commission for the purposes of its review and comment is the Delegate's report (s 218F(6)(a)). The Boundaries Commission does not have any power to compel the production of documents and it is not required to be provided with the submissions made to the Delegate or the other material relied upon by him or her. That is consistent with its task being to review the "report" rather than the "proposal".
The respondents noted that the Boundaries Commission is charged with reviewing and commenting upon the Delegate's report. It does not refer the proposal and does not conduct an examination or hold a public inquiry (contrast the duties of the Departmental Chief Executive pursuant to ss 218F(1) and (2) and s 263). The purpose of the Boundaries Commission's "review" and "comment" function is evidently to assist the Minister in carrying out his or her recommendatory function under ss 218F(7) and (8). The Boundaries Commission, as an expert body, provides a checking or "quality assurance" role in relation to the report of the Departmental Chief Executive (pars 19-22, pp 6-7, respondents' further submissions, 31 May 2016).

[43]

The Boundaries Commission's reviews and comments were valid

The applicants have not established that the Boundaries Commission's review and comment on each Delegate's report did not satisfy the statutory requirements in s 218F(6)(b) of the Act. I agree with and adopt the respondents' submissions.
The applicants' arguments depended on construing the statutory requirements of review and comment as involving a re-examination of the merits of the proposals, including a re-examination of each of the factors in s 263(3) of the Act. That construction is incorrect. First, the object of the review and comment of the Boundaries Commission under s 218F(6)(b) is the report of the Departmental Chief Executive, not the proposal referred by the Minister. In contrast, the object of the Departmental Chief Executive's report is the proposal referred by the Minister.
Second, the functions of the Boundaries Commission under s 218F(6)(b) are to "review and comment", not "examine and report," which are the functions of the Departmental Chief Executive. The functions of the Boundaries Commission under s 218F(6)(b) "are substantially more confined" than the functions of the Departmental Chief Executive: Botany Bay City Council v The State of New South Wales at [93].
Third, the Boundaries Commission's role in reviewing and commenting on the Departmental Chief Executive's report does not involve re-examining the merits of the proposal referred by the Minister: Botany Bay City Council v The State of New South Wales at [97] and [98]. The Boundaries Commission does not undertake merits review to arrive at the correct or preferable decision about the proposal.
On a proper understanding of the role of the Boundaries Commission, the review of and comments on each Delegate's report did not fall short of what was required under s 218F(6)(b) of the Act. I reject this challenge.

[44]

The applicants' challenges

The applicants argued that the Boundaries Commission failed to afford procedural fairness to the applicants and to the ratepayers and residents of each area proposed to be amalgamated, by failing to give them a reasonable opportunity to be heard or to make submissions with respect to the reviews of the Delegates' reports by the Boundaries Commission.
The applicants submitted that the Boundaries Commission was under a duty to afford procedural fairness. A duty of procedural fairness will apply to the exercise of a statutory power unless excluded expressly or by necessary implication. The intention of the legislature to exclude natural justice requires "clear manifestation" and upon the face of the statute "plain words of necessary intendment": Kioa v West at 584; Annetts v McCann at 598; Jarratt v Commissioner for Police for New South Wales (2005) 224 CLR 44; [2005] HCA 50 at [24], [51], [138] and [150].
The applicants submitted that no such plain words appear in s 218F(6)(b) of the Act. The fact that certain hearing requirements have been expressly imposed elsewhere in the Act (such as in s 263(2B) in relation to the conduct of an inquiry) has been held not to exclude the operation of the rules of natural justice: Ainsworth v Criminal Justice Commission (1992) 175 CLR 564; [1992] HCA 10 at 575. This is because, even in respect of bodies whose role it is to report or comment to another, or to research and generate proposals for law reform, "it is improbable that, though it did not say so, the legislature would intend that a body of that kind should not act unfairly": Ainsworth v Criminal Justice Commission at 575-576.
In the present case, the applicants submitted, the Boundaries Commission not only receives the Departmental Chief Executive's report and must review that report, it must comment on the report. Those comments, together with the report, must be considered by the Minister under s 218F(7)(a)(ii) of the Act. Further, the Boundaries Commission's comments may recommend or form the basis for any modification of the proposal by the Minister, including a proposal's terms under s 213 and further boundary changes, limited only by the requirement that the modifications do not constitute a new proposal (p 9, submissions of applicants, 3 June 2016).
The applicants submitted that the silence of the legislature in s 218F(6)(b) of the Act rather indicates an intention to allow the common law principles of procedural fairness to determine what procedures are appropriate for the Boundaries Commission's review of and comment on the Departmental Chief Executive's report, citing Baba v Parole Board of New South Wales (1986) 5 NSWLR 338 at 347 and 349 and Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57; [2001] HCA 22 at 93 and 115. The applicants submitted that there is no provision in s 218F(6)(b) for any express statutory procedure for fairness in respect of the Boundaries Commission conducting its review, and none is excluded by express words or necessary implication. There is, therefore, no conceptual difficulty in reading the rules of procedural fairness into the words of the statute (p 10, submissions of applicants, 3 June 2016).

[45]

The respondents' rebuttal

The respondents disputed that the Boundaries Commission had a duty to afford procedural fairness as alleged by the applicants. The respondents submitted that the Boundaries Commission was not required to provide the applicant councils or their residents and ratepayers reasonable public notice of the relevant Delegate's report, the Boundaries Commission's review of the Delegate's report or its comments on that report, or give the applicant councils or their residents or ratepayers an opportunity to make submissions on the Delegate's report. The respondents gave three reasons.
First, the respondents noted that the applicant councils and their residents and ratepayers had already been afforded an opportunity to make both oral and written submissions in relation to the proposal. The applicant councils took advantage of each such opportunity. The statutory scheme in respect to amalgamations is a clear example of Parliament having decided what opportunity to be heard should be afforded, namely a public inquiry held during the examination and report phase, pursuant to s 263(2A). The respondents cited Minister for Local Government v South Sydney City Council at [35] and [267].
Second, the respondents submitted that, unlike a public inquiry concerning the proposal, the Act does not require public notice to be given of the Delegate's report being furnished to the Boundaries Commission or that the Boundaries Commission will commence reviewing the Delegate's report and commenting on it. Further, the Boundaries Commission is only charged with providing its comments on the report to the Minister. This indicates that this stage of the amalgamation process is not intended to be public. Rather, the Boundaries Commission's review and comments, which are limited to the report of the Delegate who held the public inquiry, are for the benefit of the Minister.
Furthermore, there is no basis for inferring an obligation to afford procedural fairness in circumstances where the Boundaries Commission is only required to be given one document, that is the report, and has no powers of gathering information. It is not the function of the Boundaries Commission, in undertaking the review of the Departmental Chief Executive's report, to conduct any inquiry or gather any information. The extent of the Boundaries Commission's statutory function is limited and there is no room within the statutory scheme for implying a duty of procedural fairness within that process (T 31/5/16, p 85).

[46]

No denial of procedural fairness by the Boundaries Commission

The applicants have not established that they were denied procedural fairness by the Boundaries Commission. The Boundaries Commission was not obliged to furnish the applicants with a copy of each Delegate's report, give the applicants an opportunity to comment on that report or consider any comments of the applicants in reviewing each Delegate's report and sending its comments to the Minister.
I agree with and adopt the respondents' submissions summarised above that the Boundaries Commission did not have a duty to afford procedural fairness, as alleged by the applicants. I also repeat the reasons I gave in Woollahra Municipal Council v Minister for Local Government at [267]-[272]: The common law duty to accord procedural fairness, when applicable, attaches to the exercise of a statutory power: Minister for Local Government v South Sydney City Council at [15]. For this claim of denial of procedural fairness, the relevant statutory power is that of the Boundaries Commission under s 218F(6)(b) to review the report of the Departmental Chief Executive (or his or her delegate) and send its comments to the Minister. Does a duty to accord procedural fairness attach to the exercise of this statutory power? In my view, it does not. The statutory scheme evinces an intention on the part of the legislature to exclude the application of the principles of procedural fairness at this stage in the statutory process in relation to the proposal for amalgamation of local government areas. The legislature has turned its mind to the times at which and the manner in which persons affected by a proposal for amalgamation would be given an opportunity to be heard. The legislature expressly required the holding of an inquiry in relation to an amalgamation proposal (s 263(2A)). Reasonable public notice must be given of the holding of the inquiry (s 263(2B)). Members of the public must be allowed to attend the inquiry (s 263(5)). The factors to which regard must be had in considering the amalgamation proposal are prescribed (s 263(3)). The legislature made no equivalent prescription for participation of the public or affected councils at the following stages in the statutory process in relation to the amalgamation proposal. The legislature required the Departmental Chief Executive (or his or her delegate) to "furnish the Departmental Chief Executive's report to the Boundaries Commission for review and comment" (s 218F(6)(a)). The legislature did not require the Departmental Chief Executive to furnish a copy of his or her report to anyone else, including the councils, affected by the amalgamation proposal, or prescribe the process by which anyone other than the Boundaries Commission, including affected councils, might be given an opportunity to review and comment on the Departmental Chief Executive's report. Specification of the persons and the process for providing persons with the opportunity to review and comment on the Departmental Chief Executive's report would be critical to ensure the workability of any scheme for review and comment by persons other than the Boundaries Commission. Who are the persons or classes of persons who are to be given a copy of the Departmental Chief Executive's report? By what criteria are the persons or classes of persons to be selected? Who decides which particular persons or classes of persons satisfy the criteria? How is the Departmental Chief Executive's report to be furnished to the selected persons or classes of persons? What is the content of the opportunity to be heard? Is it the same as the duty on the Boundaries Commission under s 218F(6)(b) to review and comment on the Departmental Chief Executive's report or is it different? Can persons provide further comments on the amalgamation proposal that is the subject of the report? Does any other information have to be provided apart from the Departmental Chief Executive's report to enable the person to be able to review and comment on the report? How long should the person have to provide their comments? These questions would need to be answered in order to provide a workable scheme for persons other than the Boundaries Commission to review and comment on the Departmental Chief Executive's report. Providing an opportunity to persons to review and comment on the Departmental Chief Executive's report also changes the duty of the Boundaries Commission. Under s 218F(6)(b), the sole focus of the Boundaries Commission's duty is to review and comment on the Departmental Chief Executive's report. If persons are to be provided with an opportunity to review and comment on the Departmental Chief Executive's report, the Boundaries Commission would need to consider these comments in its review and comment on the report. Does the Boundaries Commission need to include in its comments to the Minister a summary of the comments made by other persons and explain how the Boundaries Commission dealt with those comments? If so, the object of the review and comment expands beyond merely being the Departmental Chief Executive's report to also include the comments of other persons on that report. However, the legislature has not provided for this to be done. The exercise of the statutory power in question, s 218F(6)(b), also is not apt to affect adversely a council affected by an amalgamation proposal. Woollahra Council relied on the stark consequence that once a recommendation for the implementation of an amalgamation proposal is adopted by the Governor, the affected councils are immediately dissolved. However, the Boundaries Commission's action in reviewing the Departmental Chief Executive's Report, and sending its comments to the Minister, although a step in the statutory process, does not itself have any consequence for an affected council. The focus of the Boundaries Commission's comments is the Departmental Chief Executive's Report and not the amalgamation proposal itself. The Boundaries Commission's comments on that report are not apt to adversely affect the councils affected by the amalgamation proposal.

[47]

The applicants' challenges

The applicants argued that various statements were made concerning the independence of KPMG, but that these were misleading and affected the legal validity of various steps in the statutory process for amalgamation.
The statements relied on by the applicants were made in various documents, including the "merger proposal" documents for the Oberon proposal, Cabonne proposal and Gundagai proposal, published on or after 6 January 2016. The proposal documents stated that: 1. each proposal was: "… supported by independent analysis and modelling by KPMG"; 2. "[a]nalysis by KPMG shows the new council has the potential to generate net savings to council operations"; and 3. "the analysis also shows the proposed merger is expected to generate … savings every year from 2020 onwards. Savings will primarily be from the redeployment of back office and administrative functions; streamlining of senior management roles; efficiencies from increased purchasing power of materials and contracts; and reduced expenditure on councillor fees".
The applicants pleaded that the references in the proposal documents to "independent analysis and modelling by KPMG" and "independent analysis" and the description of KPMG's role as "independent" in the amalgamation process under ss 218F and 263 of the Act were "misleading and deceptive" in that "as from at least June 2015 to March 2016, the preparation and making of the amalgamation proposals and the said other publicly available documents pursuant to Divs 2A and 2B of Pt 1 of Ch 9 of the Act has been a joint venture and/or partnership and/or collaboration between the [State of New South Wales] and KPMG and the analysis and modelling of KPMG was not independent and impartial, there was no independent assessment of the process, and KPMG's role as a consultant to the [State of New South Wales] in the amalgamation process under the Act was not independent and impartial" (par 11A of second further amended statement of claim of Oberon Council, the other statements of claim being in similar terms).
The applicants pleaded that this alleged misrepresentation was relied upon, and believed to be true and correct, by the Departmental Chief Executive and the Delegates, the Boundaries Commission and the ratepayers and residents of the affected councils in respect of their participation in the amalgamation process under ss 218F and 263 of the Act (par 11B of second further amended statement of claim of Oberon Council and equivalent paragraphs in the other statements of claim).

[48]

The respondents' rebuttal

The respondents disputed that the evidence showed that KPMG did not carry out its work, including its modelling and analysis, independently or that it was dictated to by the NSW Government. The respondents referred to the KPMG documents tendered by the applicants, which the applicants said showed the joint venture between KPMG and the NSW Government. One of these documents was the "Options Analysis Local Government Reform Project Plan" dated 7 July 2015. This project plan noted that the purpose of the engagement of KPMG was: to develop an appropriate evidence base that: 1. provides the necessary information to the NSW Government on the full range of financial, economic, social and community impacts of reform options and support optimal reform decisions; and 2. underpins the communication of reform outcomes to each affected community and the broader population, cognisant of local priorities and concerns about local government reform. (p 3)
The respondents submitted that this showed that the first purpose was to collect material in a form that provided an appropriate evidence base for decision making (T 6/6/16, p 204).
The second document to which the respondents referred was the "Local Government Reform Merger Proposals" document of 1 November 2015. In the section "Appendices - Template Designs", KPMG referred to work that it had done previously for the NSW Government. KPMG said that it was "engaged in October 2015 to prepare a public report on the impacts of local government reform in NSW" and that that report drew heavily on "the analysis undertaken for the comprehensive merger business case KPMG had previously prepared for DPC" (p A13). The respondents said that this analysis of KPMG involved independent modelling. The respondents noted that there is nothing wrong in these statements or previous work to support an inference of want of independence but instead they are completely consistent with KPMG having performed its role in the manner described in the documentation (T 6/6/16, p 205).
The respondents referred to the various agreements between KPMG and the NSW Government tendered by the applicants. The agreement of 22 June 2015 between KPMG and the OLG, for example, described the services to be provided by KPMG as being to: ● Assist the Government to make a decision on optimal council mergers, based on a combination of qualitative and quantitative analysis; and ● Support the Government to effectively communicate the benefits of proposed mergers to each affected community and the broader population.

[49]

Statements were not misleading and did not invalidate the amalgamation process

The applicants have not established that the statements concerning the independence of KPMG were misleading or, even if they were to be, that this invalidated any step in the statutory process in respect of each proposal. I agree with and adopt the respondents' submissions.
First, I do not accept that the statements relied on by the applicants were misleading. KPMG was engaged as a contractor to provide financial consulting services to the NSW Government over an extended period of time in relation to local government reform. The various agreements tendered described the nature of the services to be provided. KPMG bid for and was successful in being awarded contracts to perform these services. KPMG used its knowledge, expertise and experience, which enabled it to be awarded the contracts, to perform the services. That knowledge, expertise and experience continued to develop with each contract performed; there were cumulative benefits over time, both for KPMG and the NSW Government. KPMG developed a special understanding of and insights into the Government's local government reform project, which enabled KPMG to better provide the contracted services to the Government. The nature of the services to be provided, and the repeated engagements over an extended period of time, necessitated consultation, collaboration and co-operation between KPMG as the contractor and the Government as the client.
None of these matters concerning the working relationship between KPMG and the Government caused KPMG not to be an independent contractor providing independent advice and services. They certainly did not cause KPMG and the Government to be in any form of "joint venture" to amalgamate local government areas, including the applicants' areas. The advice and services provided by KPMG, including the modelling assumptions and analysis, remained KPMG's work. The fact that there was dialogue and discussion between KPMG and the Government, including on KPMG's modelling assumptions and analysis, did not cause the relevant materials and documents to cease to be KPMG's work.
In these circumstances, the statements relied on by the applicants concerning the independence of KPMG and of KPMG's work were not misrepresentations. This conclusion is sufficient to dispose of this challenge.

[50]

The applicants' challenges

The applicants' final grounds of challenge concern the Minister's exercise or purported exercise of power under s 218F(7) of the Act to recommend to the Governor that the proposals for amalgamation be implemented. The grounds of challenge differ for the Oberon and Cabonne proposals and for the Gundagai proposal.
For the Oberon and Cabonne proposals, the applicants argued that the Minister had no power to make conditional recommendations to the Governor for implementation of the proposals. In both cases, the Minister received a briefing recommending that the Minister make a decision to amalgamate the relevant local government areas. In both cases, the Minister made a decision on 4 May 2016 in these terms: Subject to the outcome of the current legal proceedings affecting this proposal, my decision is for this proposal to be implemented.
The applicants submitted that this purports to be a decision under s 218F(7) recommending that the proposal be implemented but conditioned on the outcome of the proceedings in this Court. Such a decision is "ultra vires the power conferred because each is impermissibly conditioned" (par 1, p 18, submissions of applicants, 3 June 2016).
In relation to the Gundagai proposal, the Minister made a decision on 3 May 2016 "to recommend to the Governor that the proposal be implemented". The Governor made a proclamation on 12 May 2016 to amalgamate many different local government areas to become new areas, including to amalgamate the former areas of Cootamundra and Gundagai to constitute a new area named Gundagai: cl 4(1) of Local Government (Council Amalgamations) Proclamation 2016 ('the Proclamation'). The councils of the areas amalgamated were dissolved: cl 4(2) of the Proclamation. Schedule 7 of the Proclamation contained provisions relating to the new Gundagai area and the council of that area. One of these concerned the ward structure, that "the new council is not to be divided into wards for the first election": cl 7 of Sch 7 to the Proclamation.
The Proclamation also gave the Minister power to determine any matter or thing for the purpose of giving effect to the Proclamation. Clause 5(1) of the Proclamation provided: For the purposes of giving effect to this Proclamation, the Minister may from time to time determine any matter or thing at the Minister's discretion or if a new council or an Administrator refers any matter or thing requiring determination to the Minister for that purpose.

[51]

The respondents' rebuttal

The respondents rejected the applicants' challenges to the Minister's decisions concerning implementation of the Oberon and Cabonne proposals and the Gundagai proposal.
In relation to the Oberon and Cabonne proposals, the respondents submitted that the Minister has not yet made, under s 218F(7) of the Act, a recommendation to the Governor that either proposal be implemented. The Minister's decision of 4 May 2016 ("[s]ubject to the outcome of the current legal proceedings affecting this proposal, my decision is for this proposal to be implemented") was not a decision under s 218F(7) of the Act. In terms, it does not state that it is a decision to make a recommendation to the Governor, which is what s 218F(7) requires, and there is no evidence that the Minister has made a recommendation to the Governor (T 31/5/16, pp 96-97). Each decision of the Minister of 4 May 2016 is not a "self-executing decision"; it cannot come into force once this Court determines the outcome of these proceedings. The Minister will still have to exercise the power under s 218F(7) to recommend to the Governor that the proposals be implemented (T 31/5/16, p 97).
In relation to the Gundagai proposal, the respondents submitted that the applicants' argument that there cannot be concurrent proposals is factually and legally erroneous.
Factually, the applicants have reversed the order in which the proposals were made and dealt with. The Minister made the Gundagai proposal on 6 January 2016 and referred it on the same day to the Departmental Chief Executive for examination and report. On the same day, the Departmental Chief Executive delegated the function of examining and reporting to Mr Turner. The Delegate held the required inquiry on 4 February 2016. The Delegate furnished his report on 24 March 2016 to the Boundaries Commission and the Minister. The Boundaries Commission reviewed and sent its comments on the Delegate's report to the Minister on 29 April 2016. The Minister made his decision on 3 May 2016 "to recommend to the Governor that the [Gundagai] proposal be implemented".
The Harden proposal was received and dealt with later. Following resolutions of Harden Council on 20 January and 17 February 2016, Harden Council forwarded to the Minister on 28 February 2016 the Harden proposal and requested the Minister to refer the Harden proposal for examination and report. In early March 2016, the Minister referred the Harden proposal that he had received to the Departmental Chief Executive for examination and report. On 3 March 2016, the Departmental Chief Executive delegated the function of examination and report to Mr Turner. The Delegate held the required inquiry on 5 and 6 April 2016. The Delegate furnished his report on 22 April 2016 to the Boundaries Commission and the Minister. The Boundaries Commission reviewed and sent its comments on the Delegate's report on the Harden proposal to the Minister on 3 May 2016. The Minister decided on 5 May 2016 "to decline to recommend to the Governor that the [Harden] proposal be implemented".

[52]

The recommendations and Proclamation are valid

The applicants have not established any of their challenges to the Minister's decisions concerning the Oberon proposal and the Cabonne proposal or the Minister's decision and the Governor's Proclamation concerning the Gundagai proposal. My reasons accord with the respondents' submissions.
In relation to the Oberon and Cabonne proposals, although the Minister made a decision in relation to each proposal, it was not a decision to exercise the power under s 218F(7) to recommend to the Governor that the proposal be implemented. The terms of the decision in each case do not invoke the language of the power in s 218F(7). The Minister does not state that he has decided to "recommend to the Governor that the proposal be implemented". The Minister's decision is recorded at the end of a briefing that reminded the Minister that he had "provided an undertaking to the Court that he will not make a recommendation to the Governor in respect of this proposal" and accordingly, he "will not be able to recommend the proposal to the Governor until any undertakings affecting this proposal expire (which is not likely to occur until the resolution of legal proceedings)". Finally, there is no evidence that the Minister has recommended to the Governor that either proposal be implemented. In these circumstances, I would not draw the inference that the Minister has made a decision under s 218F(7) to recommend to the Governor that the Oberon and Cabonne proposals be implemented.
In relation to the Gundagai proposal, I reject the applicants' argument that there was no power to deal with the Gundagai proposal and the Harden proposal concurrently.
Factually, the Gundagai proposal was made and referred before the Harden proposal was received and referred. Even on the applicants' argument, there was no bar to referring and dealing with the Gundagai proposal if it was made first. I also reject the applicants' alternative argument based on the correct factual assumption that the Gundagai proposal preceded the Harden proposal. The receipt by the Minister of the Harden proposal did not, as a matter of fact, supersede the earlier made Gundagai proposal. Each proposal was separately referred by the Minister for examination and report, examined and reported on by the Delegate, and reviewed and commented on by the Boundaries Commission.

[53]

Conclusion and orders

The applicants have not established any of the grounds of challenge to the administrative decisions and actions in relation to the Oberon proposal, the Cabonne proposal or the Gundagai proposal. Each of the proceedings should be dismissed. The usual order for costs in judicial review proceedings, namely that costs follow the event, should apply.
The Court orders in each of the proceedings: 1. The proceedings are dismissed. 2. The applicant is to pay the respondents' costs of the proceedings. 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: 07 October 2016

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Judgment (53 paragraphs)

Cases Cited (85)