THE STATE OF SOUTH AUSTRALIA (Appellant) v PAMELA EDNA CLARK, DAVIDS

THE STATE OF SOUTH AUSTRALIA (Appellant) v PAMELA EDNA CLARK, DAVIDS - [1997] SASC 6175 - SASC 1997 case summary — Zoe

[34]

After the PAR had been sent to the Minister, the Council proceeded with its negotiations with Woolworths. At a meeting on 15 April 1996, it resolved to proceed with the development on the footing that Woolworths would own the site. By letter dated 6 May 1996, the Council informed the Minister to that effect and stated that the written document give effect to that agreement was being prepared. The Council also informed the Minister that it no longer sought approval under s197 of the Local Government Act. There is no evidence as to the current state of the negotiations with TAFE or the extent to which either the Council or Woolworths has acquired other land for the shopping centre site. The Council's negotiations with Woolworths continue. Although the nature of the Council's interest has altered, it still has a direct financial interest and, importantly, that interest in November and December 1995 was quite substantial." 5. The legislation under consideration in the Whyalla Council case, supra, was the Planning and Development Act, 1967, the predecessor of the Planning Act, 1982. The Whyalla Council desired to arrange for the provision of funeral services in its area. It obtained an option to purchase premises and negotiated with undertakers for the establishment of a funeral parlour thereon. The undertakers applied to the council for consent to use the premises as a funeral parlour. After a hearing at which the council heard arguments for and against the application, it granted the application. King CJ and Wells J, White J dissenting, refused an application for certiorari to quash the council's decision on the ground that there was a reasonable likelihood of bias. At pp389-390 King CJ said: "There are, however, considerable difficulties about the application of the common law rule [of natural justice] to the situation created by the Planning and Development Act, 1966, as amended. Section 36 of that Act authorises the making of regulations to, inter alia, 'prescribe the cases and circumstances in and under which ... the use of any land within the planning area shall not be changed from its existing use without the consent of the Authority or the Council.' The Council which is to be empowered by regulation to grant or withhold consent is the Council constituted under the Local Government Act, 1934, as amended, to carry out the usual functions of local government and with powers conferred by that Act. It is evident that the discharge of those functions and the exercise of those powers might very well involve the Council in transactions which would give it a financial interest in a decision as to a change of use to which land might be put. Moreover many changes of use of land tend to alter the value of the land and improvements and have implications for the rate revenue of the Council. It is a proper function of local government to foster and encourage the provision in the area of needed services and to encourage the use of land in the area in particular ways. Such initiatives must from time to time give the Council an interest in the outcome of an application for consent to change of use of land. If the Council must refrain from those activities in order to discharge its planning functions, the conferral of the planning powers on the Council has diminished considerably its capacity to discharge its primary functions as a local government body. I cannot think that Parliament intended by conferring planning powers on the Council to diminish its capacity to discharge its local government functions.

[35]

I have no doubt that the Council, in considering applications of this kind, is required to act judicially in the broad sense of that expression and is bound by the common law rules of natural justice so far as they may be applicable to the situation created by the statutory provisions: The Queen v. Medical Board of South Australia; Ex parte S (1976) 14 SASR 360. Parliament may, however, by the scheme which it creates or authorises, impliedly exclude or modify the common law rules. In Jeffs v. New Zealand Dairy Production and Marketing Board [1967] AC 551, the Privy Council considered the problem which arose from New Zealand legislation which established a Dairy Production and Marketing Board with zoning powers and also authorised to the Board to make loans to companies which would be affected by the zoning decisions. It was held that the legislature had shown a clear intention to make an exception to the general rule that a person should not be a judge in his own cause, and that the Board was required to determine zoning questions even though its pecuniary interests might be affected. I appreciate that it is not mandatory under s.36 of the Act for the Council to be the consenting body. The Regulations, consistently with s.36, could have made the consenting body the Authority either alone or concurrently with the Council. I think, however, that the legislative intention that the Council should make planning decisions is so clear and the area of potential interest, financial and otherwise, of the Council in those decisions so wide, that there must be implied a statutory exclusion of the common law rule that no one may be judge in his own cause, to the extent that the Council's interest arises out of the exercise or purported exercise of its local government functions. At the very least, in my opinion, the regulation-making power in s.36 should be construed as authorising regulations which exclude the common law rule to that extent." 6. At p400, Wells J said: "I conclude, therefore, that the combined effect of the Planning and Development Act and of the zoning regulations is to modify the rules of natural justice, and that, provided in all other respects the Corporation went about the business of considering the application fairly and objectively, its decision to give consent cannot be challenged on the ground that it was patently interested in the outcome of the application.

[41]

The role of a council in promoting a supplementary development plan is important but limited. It may initiate the amendment but thereafter its function is essentially advisory. Certainly it will be in a position to press its views on the Minister, but that is as much as it can do. If the Minister finds the original proposal unattractive he may reject it out of hand: see subs (5). If he is willing to let the proposal go forward, the council is given the responsibility of convening a public meeting and receiving written submissions, and of conducting the public hearing and listening to anyone who wants to speak in favour of, or in opposition to, the supplementary development plan or the written submissions relating to it. It must send the written submissions to the Minister, although with its own recommendations in relation to them. That appears to be the extent of the council's involvement under s41. The Minister by this time will already have had advice in relation to the plan from the Advisory Committee on Planning constituted under Pt II of the Act and if, after the public hearing, the Minister is satisfied that there is substantial public opposition to the proposed amendment or if the council has at that stage recommended substantial alterations to its original proposal, the Minister must refer the matter to the Advisory Committee again. Indeed, the Minister may request a report from the Advisory Committee on his own initiative, without assigning any reason at all. At this stage, again, the Minister may decline to approve the plan and that will be the end of the matter. If he does approve it, it still has to run the gauntlet of the Joint Committee on Subordinate Legislation with a further possibility, if the Joint Committee does not approve it, of disallowance by either House of Parliament. There are also certain powers of amendment that the Minister may exercise at different stages of the scheme. Finally, if all these hazards are surmounted, the plan may be referred by the Minister to the Governor who may declare it to be an authorised supplementary development plan and fix a day on which it will come into operation. By the time this happens, the proposal will have long been out of the council's hands.

[42]

One properly approaches an Act such as the Planning Act with the presumption that the common law rules of natural justice will apply to it. However, the limited and inconclusive role of a council in the making of any supplementary development plan, and the nature of the plan itself, tell against the application to it of the common law rules. The Solicitor-General argued that a council's decision to propose an amendment to the Development Plan is not one that affects rights ad interests of individuals in a direct and immediate way (cf Kioa v West [1985] HCA 81; (1985) 159 CLR 550 at 584), but that may depend on the nature of the amendment. Nevertheless, it is generally true to say that the courts will be more inclined to find that the rules do not apply where the function in question is substantially legislative in character. It is a very different situation from the grant of a planning consent. A council might be the relevant planning authority to give such a consent under s47, but if the development proposal relates to an undertaking of the council itself the South Australian Planning Commission becomes the planning authority from which the consent must be obtained: see s8. Section 41, however, does not involve any form of planning authorisation by the council. Mr Beamond, for the plaintiffs, pointed out that it is always possible for a council to request the Minister to prepare a supplementary development plan - the section expressly provides for it (subs (2)(a)(ii), and submitted that this is the only course for a council to take when it has a direct financial interest in the proposed amendment. The submission is superficially attractive but not, in the end, persuasive. It would deny to the council the right to take the initiative in what might be an important commercial development for its area. It would leave the council wholly dependent on the inclination of the Minister to promote the amendment. There could be political considerations that would disincline the Minister from preparing the supplementary development plan although he might be willing to accept it if the council took the initiative and it survived the vicissitudes of s41's normal operation. The council is likely to have a better understanding of what is in the interests of its ratepayers and the local community generally than ministerial advisers whose attention and time must be shared between the whole of the State. At best, relying upon departmental initiative is likely to mean delay. It is not as though no other work for par (a)(ii) of subs (2) can be found. Preparing a supplementary development plan will often be an elaborate and costly matter, requiring expertise that a small council may not have and an expense that it could not afford, and it may have little choice but to ask the Minister to act on its behalf. A council may also decide to request the Minister to act where the proposal relates to a very large undertaking, with important implications for the whole State, though situated only in the area of the council. It is noteworthy that there is nothing in s41 or in s8 that applies to s41 the express prohibition against being in any sense judge in its own cause that Parliament has made in the case of a planning authorisation. Finally there is the uncertainty that would necessarily accompany any rule that disqualified a council under s41 for self-interest. It is one thing to identify a council as 'proposing to undertake development' for the purpose of s8 and therefore disqualified from granting a planning authorisation. It is a different and more difficult thing to decide what kind and degree of financial involvement would disqualify a council, if the plaintiffs' argument is sound, under s41. What of an amendment to the Development Plan that would bring increased business to the council's car parks? What if the effect of the present proposal were to benefit the council financial but to only a quite minor extent? Mr Beamond said that it would be a matter of degree, but that would inevitably cause problems in practice.

[182]

The scheme of the Act, as related to an amendment of the Development Plan, may be summarised in these terms:- * the Corporation is required, initially, to prepare a Statement of Intent, which is submitted to the Minister for his agreement; * if that agreement is forthcoming the Corporation must next prepare the requisite PAR; * the PAR is then to be referred for comment to any department or agency of the Government which may be interested in the amendment; * upon receipt of comments from such organisations, the Corporation may, if it chooses to do so, amend the PAR; * upon finalising the PAR in light of comments received, the Corporation is then to submit it to the Minister, who may either accept it as a basis for public consultation, require it to be amended before release for public consultation, or reject it; * upon approval of the PAR by the Minister, or amendment as directed by him, it may be released for public consultation; * that process requires giving a public notice of the amendment and of the PAR, an opportunity for public inspection of the relevant documents, an opportunity for interested persons to make written representations to the Corporation, and a public hearing at which the Corporation is to hear persons desirous of making oral representations upon the submission; * following the prescribed process of public consultation, the Corporation is required to report to the Minister on the matters arising out of the consultation (both in relation to oral and written submissions); and also on any alterations which it recommends to the proposed amendment in light of those matters; * in the event that there is substantial opposition to the proposed amendment, or if the Corporation recommends substantial alterations at that stage, the Minister is required to refer the PAR to the Advisory Committee which is constituted pursuant to the Act; * upon receipt of the response of the Advisory Committee, it is then for the Minister to approve the amendment, approve it as altered, or decline to approve it. 40. It should be mentioned that the foregoing procedure is that prescribed by section 25 of the Act. It is applicable in situations in which a Council itself desires to initiate an amendment to the existing Development Plan.

[195]

Without reciting his reasoning in extenso the principal points made by him, apropos the circumstances now before the Court, were:- * The Corporation was required to make a number of decisions during the section 25 process. These embraced deciding to institute the amendment process; the terms of the PAR; whether, after the process of public consultation, the proposed amendment should go forward, with or without alterations, or at all; what ought to be in the content of the report prepared for the Minister in relation to the outcome of the public consultation process; and what final recommendation to the Minister ought to be made. * In this regard he stressed that there was no statutory obligation on the Corporation to disclose a financial or other interest in the land sought to be affected by the proposed amendment and that the Corporation had the real power, by its report and recommendations, to influence the decisions of either the Minister or the Advisory Committee. He drew attention to a number of dicta bearing on this type of situation, including that of the author of the 4th edition of de Smith, Judicial Review of Administrative Action, to the effect that the normal standards of adjudication cannot, meaningfully, be applied to a body entitled to initiate a proposal and then decide whether to proceed with it, in the face of objection. He observed that the force of such an observation is the greater when the body hearing submissions also has a financial interest in securing the amendment. It was his contention that, because the statutory hearing by the Corporation was the only opportunity for those whose interests were perceived to be adversely affected by an amendment, the hearing process would be a somewhat futile gesture if the relevant Council had an interest in securing the proposed amendment. Procedural fairness required that the hearing be conducted before an impartial and objective person or body. * In the present circumstances, the Corporation's financial interest in procuring the amendment had the consequence that the public hearing was not to be perceived as an impartial and objective process. * The failure of the Corporation to comply with procedural fairness was not cured by the later consideration of the amendment by the Advisory Committee and the Minister because they did not have the benefit of hearing relevant submissions and had, of necessity, to rely on the Corporation's report. The utility of that report depended entirely on the extent to which it was accurate and complete and, in any event, it was no substitute for an actual hearing of the direct oral submissions. He contended that an impartial body might ask questions and thereby elicit further information or submissions on some particular aspect. 55. On that basis of reasoning, he concluded that, if the rules of natural justice were applicable to the circumstances, then they had not been observed and the processes complained of had been vitiated.

[208]

As to this, he commented:- "It [the Council] may initiate the amendment but thereafter its function is essentially advisory. Certainly it will be in a position to press its views on the Minister, that is as much as it can do. If the Minister finds the original proposal unattractive he may reject it out of hand. See subsection (5). If he is willing to let the proposal go forward, the Council is given the responsibility of convening a public meeting and receiving written submissions, and of conducting the public hearing and listening to anyone who wants to speak in favour of, or in opposition to, the Supplementary Development Plan or the written submissions relating to it. It must send the written submissions to the Minister, although with its own recommendation in relation to them. That appears to be the extent of the Council's involvement under section 41. The Minister by this time will already have had advice in relation to the Plan from the Advisory Committee on Planning constituted under Part II of the Act and if, after the public hearing, the Minister is satisfied that there is substantial public opposition to the proposed amendment or if the Council has at that stage recommended substantial alterations to its original proposal, the Minister must refer the matter to the Advisory Committee again. Indeed, the Minister may request a report from the Advisory Committee on his own initiative, without assigning any reason at all. At this stage, again, the Minister may decline to approve the Plan and that will be the end of the matter. If he does approve it, it still has to run the gauntlet of the Joint Committee on Subordinate Legislation with a further possibility, if the Joint Committee does not approve it, of disallowance by either House of Parliament. There are also certain powers of amendment that the Minister may exercise at different stages of the scheme. Finally, if all these hazards are surmounted, the Plan may be referred by the Minister to the Governor who may declare it to be an authorised Supplementary Development Plan and fix a day on which it will come into operation. By the time this happens, the proposal will long have been out of the Council's hands."

[212]

"It is noteworthy that there is nothing in section 41 or in section 8 that applies to section 41 the express prohibition against being in any sense judge in its own cause that Parliament has made in the case of a planning authorisation. Finally, there is the uncertainty that would necessarily accompany any rule that disqualified a Council under section 41 for self-interest. It is one thing to identify a council as 'proposing to undertake development' for the purpose of section 8 and therefore disqualified from granting a planning authorisation. It is a different and more difficult thing to decide what kind and degree of financial involvement would disqualify a Council, if the plaintiff's argument is sound, under section 41. What of an amendment to the Development Plan that would bring increased business to the Council's car parks? What if the effect of the present proposal were to benefit the Council financially but to only a quite minor extent? Mr Beamond said that it would be a matter of degree, that would inevitably cause problems in practice." 73. He later summarised his ultimate conclusions in these terms:- "I have drawn attention to the limited power that a Council has if it wishes to secure an amendment to the Development Plan. Furthermore, those who suspect a Council of partiality are given every opportunity under section 41 to make their concern, and the reasons for it, known to the Minister and others in whose hands the fate of any amendment proposal will lie. No doubt they will make written submissions to the Council itself under subsection (8) and voice their opposition at the public hearing. The Council is obliged to forward copies of the written submissions to the Minister. The proposal has to pass the scrutiny of the Advisory Committee on at least one occasion, possibly more. The objectors can lobby the Advisory Committee and the Minister himself and also the Joint Committee on Subordinate legislation. The practical safeguards against pre-judgment or self-interest on a Council's part proving decisive are considerable.

At a glance

Court

Decision date

Before

Source

Judgment (249 paragraphs)

HIS HONOUR: That sounds like you're having a bit both ways. Are you saying that they have a particular purpose and that is a purpose to which regard should be had for the purpose of determining bias? If that's all you're putting then I understand it and

Parties

Legislation Cited (6)

Cases Cited (17)