Port Macquarie-Hastings Council v Mansfield

Court of Criminal Appeal (NSW)|2018-10-31|Before: Hoeben CJ, Harrison J, Schmidt J, Sheahan J

Judgment

THE COURT: Port Macquarie-Hastings Council seeks leave to appeal pursuant to s 5F of the Criminal Appeal Act 1912 from an interlocutory decision of Sheahan J in the Land and Environment Court published on 16 July 2018 setting aside two subpoenas issued by the prosecutor. Leave is required in accordance with s 5F(3)(a) of the Act as the prosecutor made no application to his Honour pursuant to s 5F(3)(b) to certify that the decision is a proper one for determination on appeal.
The interlocutory order or judgment appealed from concerns Sheahan J's discretionary decision to set aside the subpoenas by reason of the prosecutor having issued them without a legitimate forensic purpose. In order to succeed, therefore, the Council must demonstrate the kind of error identified in House v The King (1936) 55 CLR 499; [1936] HCA 40.
The single ground of appeal upon which the Council relies is in the following terms: (1) His Honour erred in finding that the Environmental Planning and Assessment Act 1979 did not permit the Council to issue a s 119J notice for the purposes of criminal proceedings, in circumstances where it had not decided to commence criminal proceedings.
With respect to whoever drafted that ground of appeal, it is in those terms susceptible to being misunderstood. For clarity we note that the words "in circumstances where it had not decided to commence criminal proceedings" represent the Council's contention concerning the factual state of affairs at the time it issued the relevant s 119J notice. In other words, the ground of appeal should be read to mean that the Council takes issue with his Honour's finding that the Council had already decided to commence criminal proceedings when it issued the notice.

Zhang v Woodgate and Lane Cove Council

It was uncontroversial that in arriving at his decision, Sheahan J relied substantially upon the decision of Preston CJ in Zhang v Woodgate and Lane Cove Council (2015) LGERA 1; [2015] NSWLEC 10. In that case the Council prosecuted Mr Zhang for carrying out development in breach of the Environmental Planning and Assessment Act. After the prosecution had commenced, a Council officer issued a notice to a third party requiring him to answer questions about the subject matter, and for the purposes, of the prosecution. The notice was issued on 29 August 2014. At that time, s 118BA of the Environmental Planning and Assessment Act permitted a Council officer, in terms similar to s 119J, to issue a notice requiring a person to answer questions. The power under s 118BA, alike with s 119J, was only available to enable a Council "to exercise its functions under this Act".
Mr Zhang commenced proceedings challenging the validity of the notice. He argued that s 118BA could be used to require a person to answer questions to enable the Council to perform regulatory or administrative functions under the Act, such as determining whether criminal proceedings for an offence against the Act should be instituted. However, it could not be used to obtain information to enable the Council to exercise prosecutorial functions after criminal proceedings had already been commenced by the Council.
Preston CJ found that the notice was invalid. He reasoned as follows: "Finding upholding statutory construction ground [64] I consider that there is force in Mr Zhang's first statutory construction argument that the Notice is ultra vires because it was issued in aid of the pending criminal proceedings against Mr Zhang to enable the Council to exercise its function to prosecute for the offence against the EPA Act, but that function is not a function of the Council under the EPA Act. [65] Section 125 of the EPA Act creates the offences for contraventions of the EPA Act (an offence against the Act: s 125(1)) or the regulations (an offence against the regulations: s 125(2)). Section 127 of the EPA Act specifies the courts in which proceedings for an offence against s 125 can be taken, being the Local Court and the Land and Environment Court in its summary jurisdiction for proceedings for an offence against the EPA Act (s 127(1)) and the Local Court for an offence against the regulations (s 127(2)). But neither section confers a right or a power on any person (including a council) to institute proceedings for an offence against the EPA Act or an offence against the regulations. The right and the power of a council to institute proceedings for an offence against the EPA Act or the regulations must be found elsewhere. [66] The right of a council to institute a prosecution for an offence against the EPA Act or the regulations is to be found in s 14 of the Criminal Procedure Act. The power of a council to institute proceedings for an offence under any Act is in the Local Government Act, being conferred either directly by ss 21, 684 and 687 of the Local Government Act or indirectly because the power is supplemental or incidental to, or consequential on, the exercise of the functions conferred on a council by or under the Local Government Act or any other Act including the EPA Act (see s 23 of the Local Government Act) or because it is necessary for, or incidental to, the exercise of a council's functions under the Local Government Act or any other Act including the EPA Act (s 50(1)(e) of the Interpretation Act, which power is applied by s 22 of the Local Government Act). [67] The manner in which a council is to commence proceedings for a summary offence against the EPA Act or the regulations in the Local Court is specified by ss 172 and 173 of the Criminal Procedure Act, namely by a public officer issuing and filing a court attendance notice in the Local Court. The manner in which a council is to commence proceedings for an offence against the EPA Act in the Land and Environment Court in its summary jurisdiction is by summons claiming an order under s 246 of the Criminal Procedure Act in respect of the offence (s 41 of the Land and Environment Act 1979 and r 5.3 of the Land and Environment Court Rules 2007). [68] The name in which the council may commence proceedings for an offence can be the name of an employee of the council who is a public officer authorised under s 14 of the Criminal Procedure Act or the Local Government Act to commence proceedings for an offence (s 173 of the Criminal Procedure Act and s 684(b) of the Local Government Act) or the council itself (s 684(a) of the Local Government Act). [69] The upshot is that the function (the power) of a council to prosecute for an offence against the EPA Act or the regulations is not conferred by the EPA Act but rather by the Local Government Act. The consequence is that the power under s 118BA of the EPA Act cannot be used to issue a notice to obtain information to enable a council to exercise its function to prosecute for an offence against the EPA Act because that function is not a function under the EPA Act. [70] In the case of the Notice issued by Mr Woodgate, the evidence establishes that it was issued to require Mr Ferguson to answer questions in relation to the matter the subject of, and in aid of, the pending criminal proceedings in the Local Court against Mr Zhang. That is to say, the Notice was issued to obtain information to enable the Council to exercise its function to prosecute for the offence against the EPA Act. That purpose is plain from the evidence of the timing and circumstances of the issue of the Notice; the express reference to the pending criminal proceedings in the heading of the covering letter serving the Notice; and the heading and statements of the Council's solicitors in their letter responding to Mr Zhang's solicitors' demand that the Notice be revoked as being in contempt of court, an abuse of process and ultra vires. The Council speculated in submissions that the Notice might have been issued for some other purpose, such as to investigate whether to exercise other enforcement functions of the Council, such as issuing an order under s 121B of the EPA Act. However, in the face of the evidence that the Notice was issued in aid of the pending criminal proceedings against Mr Zhang, 'it is useless to speculate on what might have been': The Melbourne Steamship Co Ltd v Moorehead at 346 and see also 342-343. [71] In the circumstances, therefore, the Council acted ultra vires the power in s 118BA by issuing the Notice requiring Mr Ferguson to answer questions in aid of the pending criminal proceedings against Mr Zhang. The Notice should therefore be declared invalid on this ground."

Sheahan J's findings

In the present proceedings the Council contended that his Honour had determined, as a matter of fact, that the s 119J notice issued by the Council had been issued so as to enable the Council to perform regulatory or administrative functions, such as determining whether criminal proceedings for an offence against the Act should be instituted. The Council maintained that the s 119J notice had not been used to obtain information to enable the Council to exercise prosecutorial functions after criminal proceedings had already been commenced by the Council.
His Honour found that it was clear to the Council from 30 November 2015 that offences might have been committed in developing the subject land, and that the Council might consider bringing charges for carrying out the development without consent. By 15 December 2015, on which date the first s 119J notice was issued, Mr Henderson's position had moved beyond issuing an order under s 121B of the Environmental Planning and Assessment Act, or a penalty infringement notice. The s 119J notice was issued because he said he "needed some kind of follow up" or a "better picture" to inform a "final view" on taking some more serious action (i.e. in class 4 or 5). The reference to class 4 proceedings was a reference to civil proceedings brought in the Land and Environment Court seeking orders to remedy or restrain a breach of the Act. The reference to class 5 proceedings was a reference to a prosecution brought in the Land and Environment Court.
When the development application was lodged on 7 September 2016, the Council deferred its consideration of whether or not to take action against the respondent. On 24 May 2017, the development application was approved. Between 14 August and 19 September 2017, the Council (i.e. Mr Henderson in consultation with his bosses) decided to bring the proceedings. Sheahan J found that Mr Henderson, by his use of s 119J in 2015-2016, was seeking to clarify matters, which would later found particulars of charge.
His Honour found that Mr Henderson may well have had a dual purpose, but the criminal option was a very "substantial", if not his only, or his primary, purpose in using s 119J.
As the Council could not satisfy the Court that the s 119J process was truly legitimate "in the Zhang sense", the Council could not satisfy the Court that its forensic purpose in issuing the subpoenas was legitimate.
His Honour rejected the Council's submission that investigating possible offences was a Council function under the Environmental Planning and Assessment Act. His Honour accepted Mr Mansfield's submissions which were first, that documents may be sought and later used in criminal proceedings, provided that was not a substantial purpose for the issue of the notice and secondly, that a council was restricted to issuing a s 119J notice for the purpose of enabling it to exercise its functions under the Environmental Planning and Assessment Act, and a criminal prosecution was not one of those.
In accepting Mr Mansfield's submissions, his Honour found that s 119J did not permit the Council to issue a notice for the purposes of gathering evidence of an offence for the purposes of criminal proceedings. Because of his Honour's finding that Mr Henderson decided to commence criminal proceedings some 18 months after issuing the first s 119J notice, his Honour effectively found that such a principle applies during the investigation phase and before a Council has decided to prosecute.
Given that there was no challenge to his Honour's findings of fact, or to the process by which he arrived at those findings, it becomes instructive to consider precisely what his Honour said in this context. Paragraphs [306] to [322] are as follows: "[306] It was clear to Council from 23 September 2015, and certainly from 30 November 2015, that offences might have been committed in developing the subject land, and that Council might consider bringing charges for the doing of the 'offending' and 'significant' development without consent. [307] In the email sent to him on 30 November 2015 … the Defendant was put on notice of Council investigations, the need to cease work, and to not use the premises for some purposes, and the requirement that he provide information. He was, it appears, not specifically warned of criminal proceedings. [308] By 15 December 2015, Henderson's position had moved beyond issuing a s 121B order, or merely a PIN. His s 119J notice to the Defendant was issued on that date, because, even though he told the Court he may have ultimately decided on taking 'no action', Henderson said he 'needed some kind of follow up', or a 'better picture' to inform a 'final view' on taking some more serious action (i.e. in Class 4 or Class 5). [309] By 4 February 2016, the parties' competing interpretations of the EPA Act and Zhang were already on the record between them, and Henderson admitted, in his evidence, that criminal proceedings were, at that date, 'a possibility'. [310] By May 2016, the Defendant had responded, comprehensively, to the December 2015 s 119J notice, and further notices were issued (to others). [311] When the eco-tourist (or 'validating') DA was lodged on 7 September 2016, consideration of Council action (or no action) against the Defendant was deferred, but K&C's SEE, submitted with the DA, acknowledged, on the Defendant/applicant's behalf, that works had been undertaken on the site, without consent, during 2014-2015. [312] Sometime after the eco-tourist approval was granted on 24 May 2017, the Council issued (on 3 August 2017) its 'show cause notice, which clearly indicated that criminal proceedings were contemplated - the notice emphasised the absence of consent in 2014-15, in probable 'breach' of the Act. [313] Between 14 August and 19 September 2017, Council (i.e. Henderson in consultation with his 'bosses') 'decided' to bring these proceedings. [314] It was only at that late stage (in December 2017, or, indeed, February/April 2018) that Henderson researched the internet, media etc., whereas the Council had pursued the s 119J route in late 2015/early 2016, had commenced the prosecutions in September 2017, and had issued these subpoenas on 7 February 2018. [315] I find that Henderson, by his use of s 119J in 2015-2016, was seeking to clarify matters, which would later found 'particulars of charge', rather than to inform any decision by him as between Class 4 and Class 5 proceedings. I reject Council's arguments to the contrary. While I found that Henderson to be a candid witness ([248]), I cannot accept his 'reconstructive' evidence in this respect. [316] Henderson may well have had a 'dual purpose', but the Class 5 (i.e. criminal) option was a very 'substantial', if not his only, or his primary, purpose in using s 119J. [317] As the issuing party cannot satisfy the Court that the s 119J process was truly 'legitimate', in the Zhang sense, in all the circumstances of the subsequent prosecution, the Prosecutor cannot satisfy the Court that its forensic purpose in issuing the subpoenas was 'legitimate'. [318] I also find that the authority of Zhang to that effect is not eroded by the subsequent legislative changes discussed above ([262]-[264]). [319] The Council appears to contend that changes were made to the EPA Act because of the decision in Zhang, but there is no evidence of that. [320] On this 'statutory context' aspect of the matter, Mr Ireland's submissions (set out at length, and with relevant emphasis, in [280] above) are, with respect, clearly to be preferred to those of Mr O'Gorman-Hughes ([252]-[268]). [321] I also accept the submissions made by Mr Ireland in respect of 'ulterior purpose' (as discussed in Samrein and Desane). Those submissions include the following (Tp60, L40-p61, L6, and p61, LL13-23): '... gathering evidence for the purposes of the criminal proceedings ... was ... at least equally important as obtaining information for civil proceedings. There's absolutely no evidence that the notice would have been issued absent that ulterior purpose of being able to obtain the information for use in criminal proceedings and ... the failure to give an undertaking at an early point in time that material wouldn't be used in criminal proceedings is also highly indicative. ... Henderson['s] ... own original affidavit at para 6 referred to the offences that had apparently been committed. It's only his later affidavit of 1 May that reworks the situation and sets out [a] dual purpose position ... ... .... A DA being approved, according to Mr Henderson's evidence, [is] a reason for commencing prosecution proceedings [but] ... there's an absence of documentation as to any recommendation that Mr Henderson gave that that would be the determinant as to whether class 4 proceedings or criminal proceedings were to be instituted by him, given his alleged decision making capacity for council. [322] I accept the correctness of Preston J's decision in Zhang, and am very comfortable in following it in the present case, where the target of the statutory process is a likely defendant to criminal proceedings, and not merely a witness."
The Council did not challenge his Honour's finding at [315]. The correctness of Zhang was also not challenged by the Council in this Court.

Legislation

Section 119C was at the relevant time in the following terms: "119C Purposes for which powers under Division may be exercised (1) A departmental investigation officer may exercise powers under this Division for any of the following purposes: (a) enabling the Minister or the Secretary to exercise their functions under this Act, (b) determining whether there has been compliance with or a contravention of this Act, including any instrument, consent, approval or any other document or requirement issued or made under this Act, (c) obtaining information or records for purposes connected with the administration of this Act, (d) generally for administering this Act. (2) A council investigation officer may exercise powers under this Division for any of the following purposes: (a) enabling a council to exercise its functions under this Act, (b) at the request of the Commissioner of Fire and Rescue NSW, determining whether or not adequate provision for fire safety has been made in or in connection with a building. (3) Nothing in this Division affects any function under any other provision of this Act or under any other Act."
Section 119J was also in the following terms at that time: "119J Requirement to provide information and records (1) An investigation officer may, by notice in writing given to a person, require the person to furnish to the officer such information or records (or both) as the notice requires in connection with an investigation purpose. (2) The notice must specify the manner in which information or records are required to be furnished and a reasonable time by which the information or records are required to be furnished. (3) The notice may only require a person to furnish existing records that are in the person's possession or that are within the person's power to obtain lawfully. (4) The person to whom any record is furnished under this section may take copies of it. (5) If any record required to be furnished is in electronic, mechanical or other form, the notice requires the record to be furnished in written form, unless the notice otherwise provides. (6) An investigation officer may exercise a power under this section whether or not a power of entry is being or has been exercised."
An "investigation purpose" is defined in s 119A as "a purpose for which a power may be exercised under this Division". This refers to the purposes outlined in s 119C.
It is unnecessary for present purposes to reproduce other provisions of the Act.

The issue

Having regard to the terms of these relevant sections of the Act, and to the findings made by his Honour as to the relative timing of the issue of the s 119J notices and the commencement of the prosecution, the question for determination by his Honour became in effect whether the issue of the notices requiring the recipients to furnish information or records occurred "in connection with an investigation purpose". His Honour held that it did not and that the subpoenas should therefore be set aside. The issue for consideration in this Court is whether his Honour's conclusion was erroneous.

Comment

Much has been made both in this Court and in the Court below of Mr Henderson's motivations in the context of attempting to determine whether criminal proceedings were contemplated at the time when he issued the s 119J notices. The order in which certain things were done by him and others was examined by his Honour in arriving at his conclusions. It is important, however, to observe that the question at hand is whether the issue of the notices occurred in connection with an investigation purpose. The fact that criminal proceedings may or may not have been contemplated or already instituted at the time the notices were issued is but one factor informing the assessment of whether the issue of the notices did or did not occur in connection with an investigation purpose. It follows that the relative timing of the issue of the notices on the one hand and the institution of criminal proceedings on the other hand is a persuasive, but is not a determinative, consideration in deciding whether or not the issue of s 119J notices occurred in connection with an investigation purpose. It is ultimately beside the point and cannot be conclusive or decisive of the question of whether or not the Environmental Planning and Assessment Act confers a power to prosecute upon the Council.

Consideration

The essential proposition propounded by the Council is that at the time it issued the s 119J notices, it had not decided either wholly or substantially to commence criminal proceedings. The Council challenges his Honour's conclusion, consequent upon his finding that the Council had decided to commence criminal proceedings when it did so, that the issue of the s 119J notices was therefore ultra vires. The Council contended that the question posed by this appeal is whether the Environmental Planning and Assessment Act confers powers of enforcement upon it.
The Council commenced by submitting that the purpose of investigating the possible breach of the Act is not only to discover whether a breach has been committed, but also to determine whether any regulatory action should follow and what it should be. The Council's choices extend from taking no action or sending a warning letter, to issuing a penalty notice, taking civil proceedings or issuing an administrative order to restrain or repair the breach, or prosecuting the alleged offender. The Council's submissions also included the following: "The sophisticated interplay between enforcement powers would be frustrated if the breach could only be investigated where Council abdicated its responsibility for criminal enforcement at the outset of the investigation. Apart from the illegitimate fetter this would impose, it produces an unrealistic consequence in light of the enforcement choices."
The issue for present purposes is not whether the Council has power to prosecute or not prosecute but what is the source of that power, or, in other words, is criminal prosecution a function of a local council under the Environmental Planning and Assessment Act? We do not understand the legal position, in the sense of the applicable, albeit renumbered, provisions of the Act, to have changed since Preston CJ's analysis in Zhang, especially at [70] and [71] in that case. Sheahan J's equivalent factual analysis is recited above at [26].
In issue below was whether the subpoenas which the Council had issued in the criminal proceedings it had brought against Mr Mansfield for breaches of ss 76A and 76B of the Environmental Planning and Assessment Act lacked legitimate forensic purpose.
On Mr Mansfield's case, the subpoenas involved an abuse of process because their issue was based on information obtained by Council as the result of its s 119J notices issued before the proceedings were commenced. He claimed that all of those notices were ultra vires, having been issued for an improper purpose, that is, to obtain information and documents to be used in criminal proceedings that the Council intended at the time to bring against him.
While the Council accepted that it had a number of purposes for issuing the notices, Mr Mansfield's case was that its substantial purpose was to enable it to exercise its prosecutorial function. That was not a function given to the Council by the Environmental Planning and Assessment Act and was not therefore a relevant point of distinction to what had been decided in Zhang v Woodgate and Lane Cove Council [2015] NSWLEC 10, that when the s 119J notices were issued, criminal proceedings had not yet been commenced: judgment at [106]-[107].
Sheahan J accepted Mr Mansfield's case.
In resolving whether his Honour erred, it is important to bear in mind that these issues turned on a s 119J notice which the Council issued to Mr Mansfield in December 2015, not long after the investigation into the complaint which it had received in late September about the commencement of building works he had undertaken in 2014 and 2015. This notice was answered in 2016, before criminal proceedings were commenced.
Seven further s 119J notices were issued to third party contractors in April 2016. Some of the responses received to those notices were inadequate and were later followed up by the Council's solicitor, once again before the criminal proceedings were commenced.
In 2016, Mr Mansfield also made an application for building approval of an eco-tourism facility, which the Council considered and finally approved in May 2017. The criminal proceedings were commenced after Mr Mansfield responded to the Council's August 2017 notice to show cause why criminal proceedings should not be brought against him.
Sheahan J purported to apply the conclusions reached in Zhang to find that the subpoenas in issue were invalid. In our view, that necessarily involved an incorrect extension of what was decided in Zhang, in a way not only inconsistent with what that case decided, but also inconsistently with the proper construction of s 119J when considered in its statutory context and in light of the purpose of the Environmental Planning and Assessment Act.
Given the functions which the Environmental Planning and Assessment Act imposes on councils and the powers it grants to investigation officers who they appoint, including those granted by s 119J, which s 119C provides are to be exercised so that councils may undertake their statutory functions, there can, in our view, be no question as to the validity of either the s 119J notices issued to Mr Mansfield and third parties before the criminal proceedings were brought, or the subpoenas later issued to third parties, after they were commenced. As explained below, the s 119J notices were all issued for an investigation purpose as s 119C required.
In Zhang, Preston CJ considered that the function of bringing a criminal prosecution for breach of the Environmental Planning and Assessment Act was not conferred on councils by that Act, but rather, "either directly or indirectly" by ss 21, 684 or 687 of the Local Government Act 1993: Zhang at [66]-[67]. As there discussed, those proceedings had to be brought in accordance with the requirements of ss 172 and 173 of the Criminal Procedure Act 1986.
However, there is no reason why the Legislature cannot confer on councils the function of investigating all breaches of the Environmental Planning and Assessment Act, by that Act, including those which ultimately result in a council bringing a criminal prosecution under the Local Government Act. This is supported by the fact that the Local Government Act does not confer on councils the function of investigating breaches of the Environmental Planning and Assessment Act, even if they result in a criminal prosecution. That is a function conferred by the Environmental Planning and Assessment Act.
Section 21 of the Local Government Act provides that councils have the functions conferred on them by that Act. Section 22 provides that they have the functions conferred or imposed on them by or under any other Act or law. Section 23 provides that councils could also do all such things as are supplemental or incidental to, or consequential on, the exercise of their functions. Given the investigative function expressly conferred on councils by the Environmental Planning and Assessment Act, s 23 of the Local Government Act is not the source of their power to investigate alleged breaches of the Environmental Planning and Assessment Act.
Enforcement is dealt with in Chapter 17 of the Local Government Act. It provides in Division 1 Legal Proceedings of Part 1 General, how breaches of the Local Government Act are to be dealt with. In Division 1 General of Part 2 Proceedings by the council or its employees, s 684 deals with laying of an information "for an offence" and s 687 with appearances in the Local Court for the enforcement of a penalty or criminal proceedings. But breaches of the Environmental Planning and Assessment Act are not there dealt with expressly, which explains Preston CJ's view in Zhang, unchallenged in these proceedings, that the function of bringing a criminal prosecution for breach of the Act was conferred on councils "either directly or indirectly" by the Local Government Act.
It follows that to draw a distinction between an investigation conducted by a council into alleged breaches of the Environmental Planning and Assessment Act for the purpose of a criminal prosecution and investigations of such breaches conducted for the other purposes for which they may be pursued under the Environmental Planning and Assessment Act, is not only artificial, but not one drawn by that Act. Nor is it to be found in the Local Government Act. To the contrary, express provisions in the Environmental Planning and Assessment Act actually envisage that investigations into breaches of that Act will result in the gathering of information which may be used in subsequent criminal proceedings: s 119S.
The fact that the Environmental Planning and Assessment Act empowers councils to take various other steps to deal with breaches of the Act during their investigations, including the issue of notices under s 119J, before any criminal charges are laid, must also be taken into account when considering whether Sheahan J erred in arriving at his conclusions.
The parliament cannot have intended that a s 119J notice, issued during an investigation in order to obtain information about to whom a council should direct a stop work or rectification order, might be ultra vires simply because a criminal prosecution was then contemplated.
When the s 119J notices were issued, the Council had not commenced criminal proceedings against Mr Mansfield even though Mr Henderson contemplated at that time that it was possible or even likely. This did not invalidate the s 119J notices: they were not ultra vires. It follows that the commencement of criminal proceedings some years later did not mean that the subpoenas later issued to third parties in the criminal proceedings were also invalid.

What was decided in Zhang

Zhang was concerned with s 118BA, the predecessor to s 119J, in circumstances quite different to the present case. In Zhang, after proceedings had been commenced in the Local Court by a court attendance notice under s 173 of the Criminal Procedure Act for an offence against s 125(1) of the Environmental Planning and Assessment Act, the Council purported to issue a notice under s 118BA. It required a third party to answer questions about the over-excavation of the property Mr Zhang owned, which was the subject of the criminal prosecution then on foot.
Preston CJ upheld Mr Zhang's first statutory construction argument that a notice issued in aid of the pending criminal proceedings was ultra vires, because it had been issued to enable the Council to exercise its function of prosecuting an offence against the Environmental Planning and Assessment Act, which was not a function of the Council under the Act: at [64]. His Honour said this: "[73] It is no doubt correct to say that a statutory power to require a person to answer questions, such as in s 118BA of the EPA Act, should be read down so as not to be able to be used, after criminal proceedings have been commenced against an accused, to require the accused to answer questions in relation to matters the subject of the pending criminal proceedings. [74] It is a principle of statutory construction that a 'statute expressed in general terms should not be construed so as to authorize the doing of any act which amounts to a contempt of court': Pioneer Concrete (Vic) Pty Ltd v Trade Practices Commission at 473; Lee v NSW Crime Commission [2013] HCA 39; (2013) 251 CLR 196; (2013) 87 ALJR 1082 at [319]. The expression 'contempt of court' covers 'the various ways in which words or conduct unlawfully interfere with the administration of justice': Attorney-General (NSW) v John Fairfax & Sons Ltd (1985) 6 NSWLR 695 at 707 cited in NSW Food Authority v Nutricia Australia Pty Ltd at [58]; Environment Protection Authority v Caltex Refining Co Pty Limited at 558. [75] An extra-curial inquisitorial investigation, enabled by the issue of a notice compelling an accused to answer questions, concerning the involvement of the accused in the matters which form the basis of the criminal proceedings against the accused constitutes an improper interference with the due administration of justice in the proceedings against the accused and a contempt of court: Hammond v The Commonwealth (1982) 152 CLR 188 at 206; Brambles Holdings Ltd v Trade Practices Commission (No 2) at 194-195; Pioneer Concrete (Vic) Pty Ltd v Trade Practices Commission at 467-468; NSW Food Authority v Nutricia Australia Pty Ltd at [57], [58]; Lee v NSW Crime Commission at [206], [213]. One way in which it interferes is by prejudicing the accused in his or her defence: Hammond v The Commonwealth at 198; Lee v NSW Crime Commission at [211]. [76] The reason why a restrictive construction is given to a statute creating such a power is that the power to compel an accused to answer questions in relation to facts relating to the offence with which the accused stands charged is wholly inconsistent with the rights of the accused under the accusatorial system of justice, including an accused's right to silence: Environment Protection Authority v Caltex Refining Co Pty Limited at 516-517. The right to silence is 'a convenient description of a collection of principles and rules' including: 'The right of any person to refuse to answer any question except under legal compulsion; the privilege of any person to refuse to answer any question at any time on the ground of self-incrimination; the right of any person who believes that he or she is suspected of a criminal offence to remain silent when questioned by any person in authority about the occurrence of an offence, the identity of the participants and the roles which they played; and the right of a person charged with a criminal offence to a fair trial, 'more accurately expressed in negative terms as a right not to be tried unfairly or as an immunity against conviction otherwise than after a fair trial': Lee v NSW Crime Commission at [318]. [77] The statute is read down to protect these rights of the accused and interference with the due administration of criminal justice."
In the present case, by comparison, Mr Henderson issued the s 119J notice to Mr Mansfield in December 2015, by which time the Council had already received a complaint about the unapproved development in September. He also issued the notices to contractors in April 2016, before Mr Mansfield answered his notice: at [199]-[200]. The work had been stopped, but there were no criminal proceedings on foot when any of these notices were issued. Still, such a prosecution was plainly then possible, as Sheahan J found on Mr Henderson's evidence.
Preston CJ did not, however, uphold Mr Zhang's second statutory construction argument, namely, that the power in s 118BA should be read down so as to prevent the issue of a notice requiring any person to answer questions after proceedings for an offence had been commenced, taking the view that "that is too sweeping a proposition": at [72]. His Honour's reasons for that conclusion were as follows: "[78] However, these reasons for reading down a statutory power to compel answers to questions are not as readily applicable to a person other than an accused. The issue of a notice to answer questions to a person who is not charged with an offence cannot interfere with the rights of that person under the accusatorial system of criminal justice, as the person is not accused of committing any offence. [79] Mr Zhang submitted, however, that a notice requiring a person who might be a potential witness in criminal proceedings against an accused to answer questions in an extra-curial investigation would interfere with the accused right's under the accusatorial system of criminal justice. It is difficult to identify with any precision what rights (or even privileges) of an accused are interfered with, or otherwise how there is an improper interference with the due administration of justice in the proceedings against the accused, by a person who is not a witness in the proceedings being required to answer questions in the extra-curial inquiry. The accused has no right to prevent a prosecutor from investigating and inviting any person to answer questions about matters involved in criminal proceedings. The accused may well hope that a person who has knowledge of such matters might decline the prosecutor's invitation to answer questions. But if the person accepts the invitation and voluntarily answers questions providing information about the matters, the accused has no right to prevent that occurring. Such an inquiry would be extra-curial, in private and in the absence of the accused, and without the procedural safeguards for the accused that curial processes at trial would afford. [80] The giving of a notice under s 118BA of the EPA Act compelling the person to answer questions, rather than merely inviting the person to answer questions, does change the basis upon which the questioning is done. The person will be bound, on pain of punishment, to answer the questions. A natural person may not refuse to answer the questions on the ground that the answers might incriminate the person. However, on objection on the ground of self-incrimination, there is a direct use immunity for the answers given, although not a derivative use immunity. This affects the rights of the person being questioned but it does not affect the rights of the accused. No right that the accused had under the accusatorial system of criminal justice is adversely affected by the person being compelled to answer questions, rather than voluntarily answering questions, about matters the subject of the pending criminal proceedings against the accused. [81] The giving of a notice compelling the person to answer questions might lead to the loss of the chance that the person might have declined any invitation to answer questions. But the loss of a forensic advantage is not a right of the accused under the accusatorial system of criminal justice. As Gageler and Keane JJ said in Lee v NSW Crime Commission at [324]: 'The notion that any subtraction, however anodyne it might be in its practical effect, from the forensic advantages enjoyed by an accused under the general law necessarily involves an interference with the administration of justice or prejudice to the fair trial of the accused is unsound in principle and is not consistent with Hamilton v Oades.' [82] I would, therefore, not read down s 118BA of the EPA Act so as to prevent it from being used against a person other than a defendant in pending criminal proceedings, just because the criminal proceedings have been commenced: ASIC v Elm Financial Services at [59]; De Greenlaw v National Companies and Securities Commission at 793."
Preston CJ concluded, however, that the relevant notice was ultra vires for two reasons. First, it was issued to enable the Council to exercise its prosecutorial function in aid of the pending criminal proceedings, which was not a function it had under the Environmental Planning and Assessment Act. Secondly, the notice failed to identify to the addressee the matter in relation to which the questions were directed. Even though the notice was declared invalid, injunctive relief was refused, because his Honour considered that those conclusions did not mean that the Council could not validly exercise the power under s 118BA to give a notice to a person other than Mr Zhang, notwithstanding that criminal proceedings were already pending against him: at [122]-[123].

The facts found

Sheahan J found that Council's decision to prosecute was not made until 2017, after Mr Mansfield was given the opportunity to show cause why a prosecution should not be brought against him.
The Council had received the complaint about Mr Mansfield's building work in September 2015. Mr Henderson began investigating in November. Sheahan J noted at [189]-[190] that by 30 November 2015, Mr Henderson had established that the work "was obviously beyond exempt development" and so he advised Mr Mansfield by email that: "It is clear that the works require development consent, and a review of Council's records failed to indicate any development applications. As I have discussed with you on the phone today, Council intends to undertake further investigations, and will require further information from you during the course of the investigation. In the meantime, as discussed I request that all work cease at the premises, and that the buildings at the premises not be used for purposes that require approval/consent until the investigation is complete. You told me that you have ceased all works, and that Mr Glass would be leaving the premises today. You also told me that you understood that the premises could not be used for habitation until approval/consent is granted, and you acknowledged that this may impact on your intended family gathering at the premises at Christmas. I note that you intend to engage a consultant immediately, and you will instruct them to contact me as soon as possible. Please don't hesitate to contact me to discuss."
It was Mr Henderson's decision to issue the December 2015 s 119J notice to Mr Mansfield, his view being then that the Council was likely to take further steps, by taking class 4 or class 5 proceedings: at [192].
Under the heading "Chronology", Sheahan J recorded the following: "[297] The prosecuting Council in the present matter received a complaint, about works on the Defendant's site, on 23 September 2015, inspected the subject property on 30 November 2015, and commenced discussions and correspondence with the Defendant immediately. [298] The Council issued its s 119J notice to the Defendant on 15 December 2015, and correspondence ensued between Council and a solicitor then acting for the Defendant (Mantei). [299] In January 2016, K&C was engaged to assist the Defendant with his eco-tourist DA/SEE process. … [300] The date upon which the Defendant responded in detail to the s 119J notice is not clear, but is said to be 9 May 2016. [301] The Defendant's eco-tourist DA was lodged on 7 September 2016, and consent was granted 24 May 2017. [302] Council issued its "show cause" notice to the Defendant on 3 August 2017, and he responded on 14 August 2017. [303] These two Class 5 proceedings were commenced on 21 September 2017, and the subject subpoenas were issued on 7 February 2018. [304] K&C complied with its subpoena on 19 February 2018, but the NsOM to set both subpoenas aside were filed on 5 March 2018."
His Honour also considered at [306] that: "It was clear to Council from 23 September 2015, and certainly from 30 November 2015, that offences might have been committed and that it might consider bringing charges for the doing of the 'offending' and 'significant' development without consent".
By email dated 30 November 2015, Mr Mansfield was put on notice of the Council investigations, the need to cease work, and to not use the premises for some purposes, and the requirement that he provide information, but he was not specifically warned of criminal proceedings: at [307].
The s 119J notice was issued to Mr Mansfield on 15 December 2015 because, even though he told the Court he may have ultimately decided on taking "no action", Mr Henderson said that he "needed some kind of follow up", or a "better picture" to inform a "final view" on taking some more serious action (i.e. in Class 4 or Class 5): at [308].
By 4 February 2016 when the parties' competing interpretations of Zhang were known, criminal proceedings were "a possibility": at [309].
Mr Mansfield had responded comprehensively to the s 119J notice by May 2016 and the Council then issued further notices to others: at [310].
When the DA was lodged on 7 September 2016, the Council's consideration of taking action or no action against Mr Mansfield was deferred, but the Statement of Environmental Effects prepared by one of the subpoenaed companies acknowledged on his behalf that works had been undertaken on the site without consent during 2014-2015: at [311].
The DA was granted in May 2017 and in the following August the Council issued a "show cause" notice, which indicated that criminal proceedings were contemplated. The notice emphasised the absence of consent in 2014-15, in probable "breach" of the Act: at [312].
The decision to prosecute was made between 14 August and 19 September 2017 by Mr Henderson in consultation with his "bosses" at the Council: at [313].
The proceedings were commenced in September 2017 and the subpoenas were issued to third parties in February 2018: at [314].

The extension of Zhang

The difficulty with Sheahan J's conclusions is that it is not clear what his Honour meant when he said that the council could not establish that "the s 119J process was truly 'legitimate', in the Zhang sense". His Honour's view was that in 2015-2016, Mr Henderson was seeking to "clarify" matters, which would later found "particulars of charge", rather than to inform any later decision he made as between Class 4 and Class 5 proceedings. But that could not make the s 119J notices then issued ultra vires.
His Honour also considered that Mr Henderson may well have had a "dual purpose", with the criminal option being a very "substantial", if not his only, or primary, purpose in using s 119J. But the Environmental Planning and Assessment Act does not draw such a distinction. Rather, what s 119C(2) is relevantly concerned with is that council investigation officers exercise their powers, including the power to issue a s 119J notice, in order to enable a council to exercise its functions under the Act.
On Mr Henderson's evidence, his Honour certainly made no firm finding that the only purpose for the issue of the s 119J notices was the pursuit of a prosecution. Nor did he find that the notices had not been issued in order to enable the Council to exercise its functions under the Act.
The result of his Honour's approach was thus to extend what was decided in Zhang, to a point not only where s 119J notices were issued long before a prosecution under the Criminal Procedure Act was commenced, but to an early point in Council's investigation of an alleged breach of the Environmental Planning and Assessment Act. At that point it seems unarguable that Mr Henderson exercised the power granted by s 119J, to enable the Council to exercise its investigatory functions under the Act, in relation to the alleged breaches drawn to its attention by the complaint.
Such a construction failed to pay necessary attention to what was decided in Zhang, in respect of notices issued to third parties.

The proper construction of s 119J

As discussed in SAS Trustee Corporation v Miles [2018] HCA 55 at [20]: "The starting point for ascertainment of the meaning of a statutory provision is, of course, the text of the provision considered in light of its context and purpose. Where the text read in context permits of more than one potential meaning, the choice between those meanings may ultimately turn on an evaluation of the relative coherence of each with the scheme of the statute and its identified objects or policies." (Citations omitted)
Taking necessary account of the provisions of s 119C, there is no warrant in the statutory language, or indeed in the balance of the Environmental Planning and Assessment Act, for interpreting s 119J so as to limit its operation as his Honour did. His Honour's approach led to the result that subpoenas issued to third parties after the later commencement of a criminal prosecution for alleged breach of the Act are rendered invalid, because before the commencement of those proceedings, when the s 119J notices were issued during the investigation of a complaint of alleged breach of the Act, it was in contemplation that criminal charges might be laid for the breaches which appeared to have occurred, thereby rendering the notices ultra vires.
The starting point for this conclusion is that there was no issue between the parties that the Environmental Planning and Assessment Act contemplates that a council will pursue an investigation into alleged breaches of that Act, given the functions there conferred upon it, when apparent breaches of the Act come to its attention by way of complaint.
In 2015 when it received the complaint, the Council was an "investigating authority": s 119A of Division 1C Investigative powers of Part 6 Implementation and Enforcement of the Act. It had appointed Mr Henderson as an "investigation officer" under s 119B. Such officers were granted investigative powers under Division 1C of Part 6 Implementation and Enforcement of the Act, which included the power to issue notices under s 119J.
"Investigation purpose" was defined in s 119A to mean "a purpose for which a power may be exercised under this Division". As decided in Zhang, a notice issued by a Council for the purpose of conducting proceedings which it has already brought for breach of the Act is not such a purpose, because the prosecutorial function was conferred by the Local Government Act, not the Environmental Planning and Assessment Act. But under the Environmental Planning and Assessment Act councils did have both the function of investigating such breaches, before any prosecution was brought and also of taking various other actions, in respect of such alleged breaches.
Section 119C(2) specified the purpose for which s 119J notices and other powers conferred on investigation officers could be exercised.
Mr Mansfield accurately submitted s 119C(2) did not include a provision such as s 119C(1)(b), which enabled departmental investigation officers to use the Division 1C powers to determine whether there had been compliance with or a contravention of the Act. But s 119C(2)(a) empowered council investigation officers to exercise their powers, to enable the council to exercise its functions under the Act.
"Functions" was defined in s 4 to include "powers, authorities and duties".
Accordingly, s 119C(2)(a) empowered Mr Henderson to utilise the powers granted to investigation officers by s 119J, to enable the Council to exercise its powers, authorities and duties under the Act. Relevantly, they included: Acting as a "relevant planning authority" in respect of environmental planning instruments, for the purpose of environmental planning in its local government area: Division 4 of Part 3 Environmental Planning Instruments; and Acting as a "relevant planning authority" in respect of development control plans: Division 6 of Part 3; and Acting as a "consent authority" in relation to development applications: under Part 4 Development Assessment; and Acting as a "certifying authority'' under Part 4A for the certification of developments; and Making specified orders under Division 2A of Part 6 Implementation and enforcement, including orders under s 121B(1), to "cease carrying out specified building work or subdivision work" in circumstances where "(a) Building work or subdivision work is being carried out in contravention of this Act" and to rectify breaches; and Issuing certain penalty notices under s 127A.
It follows, understandably given the nature of this statutory scheme, that the powers, authorities and duties imposed on councils by the Act, included relevantly in this case, investigating whether the building work Mr Mansfield was carrying out involved a breach of the requirements of the Act and if it did, acting to deal with that contravention, including by ordering such building work to cease, or that rectification work be undertaken.
It is also relevant that at the time when such orders are made, it may be obvious to an investigation officer that a breach has occurred, which will necessarily later result in criminal proceedings being brought by the council. But that cannot render ultra vires steps taken by the investigation officer, in the course of the investigation, to enable the council to exercise its functions under the Act, including by issuing stop work or rectification orders.
It is in that statutory context pertinent that neither s 119J, nor any other provision of the Act, drew a distinction between an investigation of an alleged breach which finally results in a criminal prosecution being instituted and one which results in some other outcome. Such outcomes include the council concluding that there: has been no breach; has been a breach, but that no further action should be taken; has been a breach and that: steps such as issuing a stop work or rectification order under s 121B should be taken; or class 4 civil proceedings should be pursued under the Act; or class 5 criminal proceedings should be pursued under the Local Government Act.
The reason for councils being given wide investigative functions under the Act, given all that it regulated, was thus obvious. Long before a council makes a decision to prosecute a breach of the Act, it will have to investigate whether breaches have occurred and in some cases, deal with them swiftly, in the public interest, consistently with the objects of the Act. For example, the breach in question might give rise to urgent safety or environmental concerns.
The objects of the Act are relevant in that context. Section 5 provided that they were relevantly: "(a) to encourage: (i) the proper management, development and conservation of natural and artificial resources, including agricultural land, natural areas, forests, minerals, water, cities, towns and villages for the purpose of promoting the social and economic welfare of the community and a better environment, (ii) the promotion and co-ordination of the orderly and economic use and development of land, (iii) the protection, provision and co-ordination of communication and utility services, (iv) the provision of land for public purposes, (v) the provision and co-ordination of community services and facilities, and (vi) the protection of the environment, including the protection and conservation of native animals and plants, including threatened species, populations and ecological communities, and their habitats, and (vii) ecologically sustainable development, and (viii) the provision and maintenance of affordable housing, and (b) to promote the sharing of the responsibility for environmental planning between the different levels of government in the State, and (c) to provide increased opportunity for public involvement and participation in environmental planning and assessment."
It follows that to construe s 119J in such a way that its powers were not available to be used by council investigation officers, when a council is investigating alleged breaches of the Act, when a later criminal prosecution is likely, would not accord with these objects.
Also relevant to that conclusion are other powers conferred on council investigators by the Act, which may be exercised when alleged breaches of the Act are being investigated. They include powers to enter premises and to take specified actions there: ss 119D, 119E and 119F; to apply for the issue of a search warrant: s 119G; to require persons to answer questions in relation to a matter connected with an investigation purpose if the officer suspected specified matters, on reasonable grounds: s 119K; and to cause any questions and answers to questions given to be recorded: s 119L.
Pertinently, in s 119F(1)(j), an investigation officer is also empowered to "seize anything that the officer has reasonable grounds for believing is connected with an offence against this Act" and by s 119F(2): "(2) The power to seize anything connected with an offence includes a power to seize: (a) a thing with respect to which the offence has been committed, and (b) a thing that will afford evidence of the commission of the offence, and (c) a thing that was used for the purpose of committing the offence. A reference to any such offence includes a reference to an offence that there are reasonable grounds for believing has been committed."
Further, it is also relevant that s 119S contemplates that during an investigation information will be gathered which will be used in a later prosecution. It provided as follows: "(1) Warning to be given on each occasion A person is not guilty of an offence of failing to comply with a requirement under this Division to furnish records or information or to answer a question unless the person was warned on that occasion that a failure to comply is an offence. (2) Self-incrimination not an excuse A person is not excused from a requirement under this Division to furnish records or information or to answer a question on the ground that the record, information or answer might incriminate the person or make the person liable to a penalty. (3) Information or answer not admissible if objection made However, any information furnished or answer given by a natural person in compliance with a requirement under this Division is not admissible in evidence against the person in criminal proceedings (except proceedings for an offence under this Division) if: (a) the person objected at the time to doing so on the ground that it might incriminate the person, or (b) the person was not warned on that occasion that the person may object to furnishing the information or giving the answer on the ground that it might incriminate the person. (4) Records admissible Any record furnished by a person in compliance with a requirement under this Division is not inadmissible in evidence against the person in criminal proceedings on the ground that the record might incriminate the person. (5) Further information Further information obtained as a result of a record or information furnished or of an answer given in compliance with a requirement under this Division is not inadmissible on the ground: (a) that the record or information had to be furnished or the answer had to be given, or (b) that the record or information furnished or answer given might incriminate the person."
Sections 119F and 119S by their terms thus expressly contemplate that information or things obtained by an investigation officer as the result of the exercise of these powers, even from a contemplated defendant, may be used in criminal prosecutions later brought for breach of the Act. It is also relevant that the protections afforded by s 119S do not apply to records or information obtained from third parties.
This, too, tells strongly against the conclusions Sheahan J reached, that the s 119J notices Mr Henderson issued to both Mr Mansfield and the third parties were not "legitimate", in the Zhang sense, but were ultra vires, given that when they were issued, Mr Henderson had in contemplation that a prosecution would likely be brought by Council against Mr Mansfield and the information so obtained could be used for the purpose of that prosecution.
It also tells against the conclusion that the Council later had no legitimate forensic purpose, when it issued the subpoenas to the third parties, after the prosecution for breaches of ss 76A and 76B were commenced.
In our view, it is only when an investigation has led a council to bring a criminal prosecution under the Local Government Act, that an investigation officer cannot use s 119J of the Act to issue a notice in order to advance that prosecution, because that is not a function conferred on the Council by the Act.
A s 119J notice issued earlier, whether to a person who later becomes a defendant in criminal proceedings or to a third party, while a council investigation officer is investigating an apparent breach of the Act, is one issued for the purpose of enabling the council to exercise its functions under that Act. That remains the case, even if the officer then considers it likely that a prosecution for breach of the Act will later be brought by council against that person.

The application of these conclusions to the facts found

It follows that on Sheahan J's findings, there can be no question that in issuing the s 119J notices as he did in late 2015 and 2016, Mr Henderson was exercising the powers granted to council investigation officers such as him, to enable the Council to exercise its investigation functions under the Act, in relation to Mr Mansfield's alleged breaches of the Act, which had come to its attention in September 2015 and was then being investigated. Those notices were accordingly not ultra vires.
The fact that it was then apparent to Mr Henderson that a prosecution was possible or even likely to be brought against Mr Mansfield, did not alter that position, even though the result was likely to be that information and documents would be produced in answer to the notices, which could be used in such criminal proceedings, if they were brought. That is what s 119S expressly contemplated might occur.
After Council decided in 2017 to exercise its prosecutorial function under the Local Government Act to commence class 5 proceedings against Mr Mansfield, and he had been given the opportunity to show cause why they should not be brought, they were commenced in accordance with the procedures prescribed by the Criminal Procedure Act. Thereupon Council could not issue any further notices under s 119J of the Act to Mr Mansfield as the defendant in those proceedings. There was, however, nothing which precluded the Council from issuing subpoenas to third parties in those proceedings.
Indeed, Preston CJ considered in Zhang that s 119J could even then have been utilised to issue notices to third parties, but that is not what the Council did. The subpoenas which it issued in the criminal proceedings were thus not invalid.
In the result, the following orders should be made: 1. Grant leave to appeal. 2. Allow the appeal. 3. Set aside the orders made by Sheahan J on 16 July 2018. 4. Remit the matter to Sheahan J for determination in accordance with the decision of this Court.

Amendments 26 February 2019 - Amend typographical error in Catchwords 01 March 2019 - Amend date of orders 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: 01 March 2019

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