Woollahra Municipal Council v Minister for Local Government

Catchwords

(2006) 151 LGERA 229 Annetts v McCann [1990] HCA 57(1990) 170 CLR 596 Applicant S214 of 2002 v Attorney-General (Cth) [2004] FCA 1635(2004) 40 AAR 155 Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 72(2005) 225 CLR 88 Arnold v Minister Administering the Water Management Act 2000 [2014] NSWCA 386 ASIC v Rich [2005] NSWSC 149(1981) 180 CLR 404 Briginshaw v Briginshaw [1938] HCA 34(2011) 195 FCR 318 El Cheikh v Hurstville City Council [2002] NSWCA 173(2006) 69 NSWLR 156 Gold and Copper Resources Pty Ltd v Minister for Resources and Energy [2013] NSWLEC 66(2013) 211 LGERA 196 Government Employees' Health Fund Ltd v Private Health Insurance Administration Council [2001] FCA 322(2001) 65 ALD 377 Hillpalm Pty Ltd v Tweed Shire Council [2002] NSWLEC 17(2002) 119 LGERA 86 Kioa v West [1985] HCA 81(1986) 162 CLR 24 Minister for Immigration and Border Protection v MZYTS [2013] FCAFC 114(2013) 230 FCR 431 Minister for Immigration and Citizenship v Maman [2012] FCAFC 13(2012) 200 FCR 30 Minister for Immigration and Citizenship v SZGUR [2011] HCA 1(2011) 241 CLR 594 Minister for Immigration and Citizenship v SZIAI [2009] HCA 39

Judgment (36 paragraphs)

[1]

Friends of Turramurra Inc v Minister for Planning [2011] NSWLEC 128 Gales Holdings Pty Ltd v Minister for Immigration and Planning [2006] NSWCA 388; (2006) 69 NSWLR 156 Gold and Copper Resources Pty Ltd v Minister for Resources and Energy [2013] NSWLEC 66; (2013) 211 LGERA 196 Government Employees' Health Fund Ltd v Private Health Insurance Administration Council [2001] FCA 322; (2001) 65 ALD 377 Hillpalm Pty Ltd v Tweed Shire Council [2002] NSWLEC 17; (2002) 119 LGERA 86 Kioa v West [1985] HCA 81; (1985) 159 CLR 550 Lake Macquarie City Council v Australian Native Landscapes Pty Ltd [2015] NSWLEC 92 Litevale Pty Ltd v Lismore City Council (1997) 96 LGERA 91 McHugh Holdings Pty Ltd v Director General Communities NSW [2009] NSWSC 1359 Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 Minister for Immigration and Border Protection v MZYTS [2013] FCAFC 114; (2013) 230 FCR 431 Minister for Immigration and Citizenship v Maman [2012] FCAFC 13; (2012) 200 FCR 30 Minister for Immigration and Citizenship v SZGUR [2011] HCA 1; (2011) 241 CLR 594 Minister for Immigration and Citizenship v SZIAI [2009] HCA 39; (2009) 83 ALJR 1123 Minister for Immigration and Ethnic Affairs v Haj-Ismail (1982) 57 FLR 133 Minister for Local Government v South Sydney City Council [2002] NSWCA 288; (2002) 55 NSWLR 381 Notaras v Waverley Council [2007] NSWCA 333; (2007) 161 LGERA 230 Oates v Attorney-General for the Commonwealth of Australia [2001] FCA 84; (2001) 181 ALR 559 Ogawa v Minister for Immigration and Citizenship [2011] FCA 1358; (2011) 199 FCR 51 Potato Marketing Board v Merricks [1958] 2 QB 316 Prasad v Minister for Immigration and Ethnic Affairs (1985) 6 FCR 155 Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 Rexstraw v Johnson [2003] NSWCA 287 Riverside Nursing Care Pty Ltd v Bishop [2000] FCA 1147; (2000) 100 FCR 519 Saeed v Minister for Immigration and Citizenship [2010] HCA 23; (2010) 241 CLR 252 Sharples v Minister for Local Government [2008] NSWLEC 328; (2008) 166 LGERA 302 Smith v Wyong Shire Council [2003] NSWCA 322; (2003) 132 LGERA 148 Sutherland Shire Council v Finch [1970] HCA 49; (1970) 123 CLR 657 Videto v Minister for Immigration and Ethnic Affairs (1985) 8 FCR 167 Waitemata County v Local Government Commission [1964] NZLR 689 Walsh v Parramatta City Council [2007] NSWLEC 255; (2007) 161 LGERA 118 Wei v Minister for Immigration and Border Protection [2015] HCA 51; (2015) 90 ALJR 213 X v University of Western Sydney [2014] NSWSC 82 Zentai v O'Connor (No 3) [2010] FCA 691; (2010) 187 FCR 495 Category: Principal judgment Parties: Woollahra Municipal Council (Applicant) Minister for Local Government (First Respondent) Dr Robert Lang (Second Respondent) Chief Executive, Office of Local Government (Third Respondent) Local Government Boundaries Commission (Fourth Respondent) Representation: Counsel: Dr C J Birch SC with Ms T L Phillips (Applicant) and Mr B W Walker SC with Ms T L Phillips (on 28 June 2016) (Applicant) Mr N C Hutley SC with Mr J J Hutton, Mr T E O'Brien and Mr D Birch (Respondents)

[2]

Solicitors: Speed and Stracey Lawyers (Applicant) Crown Solicitor's Office (Respondents) File Number(s): 40297 of 2016; JL No. 151926 of 2016 Publication restriction: No

[3]

A council challenges a proposal for amalgamation

The Minister for Local Government ('the Minister') on 6 January 2016 made a proposal under s 218E(1) of the Local Government Act 1993 ('the Act') for the amalgamation of the local government areas of Randwick, Waverley and Woollahra ('the proposal'). The Minister referred the proposal 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 Dr Robert Lang ('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 the proposal for the amalgamation of the areas. The Delegate gave notice of the holding of an inquiry by placing advertisements in various newspapers on 13, 20 and 27 January 2016. The Delegate held the inquiry in Rose Bay on 4 February 2016.
In late March 2016, the Delegate completed his examination and provided a report entitled "Council Boundary Review Examination Report". The Delegate recommended that the proposal be implemented. In late March 2016, the Delegate furnished the report to the Local Government Boundaries Commission ('Boundaries Commission') for review and comment. The Boundaries Commission was required under s 218F(6) of the Act to review the Delegate's report and send its comments to the Minister. On 22 April 2016, the Boundaries Commission sent its comments on the Delegate's report to the Minister. The Minister currently has the Delegate's report and the Boundaries Commission's comments on that report. He is poised to make a decision as to whether to recommend, or decline to recommend, to the Governor that the proposal be implemented.
Two of the councils affected by the proposal, Randwick City Council ('Randwick Council') and Waverley Council support the proposal for amalgamation but the third council affected, Woollahra Municipal Council ('Woollahra Council') is opposed to the proposal. Woollahra Council has brought judicial review proceedings challenging the legality of certain steps in the process for the amalgamation of the areas and seeks to restrain the Minister from recommending to the Governor that the proposal for amalgamation be implemented.
Woollahra Council claims that the Delegate: 1. did not give reasonable public notice of the holding of the inquiry, as required by s 263(2B) of the Act; 2. did not hold an inquiry into the proposal in accordance with s 263(2A) of the Act; 3. did not examine the proposal in accordance with s 218F(1) and s 263(1) of the Act; and 4. did not accord Woollahra Council procedural fairness in connection with the inquiry or examination.

[4]

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. 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.
Division 2B of Pt 1 of Ch 9 of the Act prescribes the process that must be followed before the Governor can 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.
The first step in the process prescribed in Div 2B is the making of a proposal under s 218E of the Act to amalgamate 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).

[5]

The public notice that was given

The Delegate arranged for public notice of the holding of the inquiry to be given by way of advertisement published on 13 January 2016 in the Daily Telegraph and the Sydney Morning Herald and, on 20 and 27 January 2016, in the Wentworth Courier. The notice was in the same form. It 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: Randwick, Waverley and Woollahra 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: Club Rose Bay: Thursday, 4 February 2016 1:00pm - 5:00pm and 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 www.councilboundaryreview.nsw.gov.au Rob Lang Delegate
Notice in the same form was given on the Office of Local Government's Council Boundary Review website from 12 January 2016.
By letter dated 14 January 2016 the Delegate asked each of Randwick, Waverley and Woollahra Councils if they "could assist in the promotion of the details of the public inquiry, including by bringing the attached public notice to the attention of as many people in the Council's area as possible; for example by placing a copy of the public notice on the Council's website".

[6]

Woollahra Council's claim that reasonable public notice was not given

Woollahra Council claimed that the public notice given in the newspapers and elsewhere by the Delegate was legally deficient in three main respects, causing it not to be "reasonable public notice" as required by s 263(2B) of the Act.
The first deficiency, Woollahra Council submitted, was that the public notice did not clearly state what was the proposal. The heading of the notice was ambiguous: "Notification of public inquiry into the proposal to amalgamate or alter the boundaries of local government areas". An amalgamation of local government areas was a quite different proposal to the alteration of the boundaries of areas.
Whilst the public notice identified the local government areas in relation to which the Minister had made a proposal, namely Randwick, Waverley and Woollahra, Woollahra Council submitted that it did not state what was the proposal in relation to those areas. The notice simply said that the Minister had referred a "proposal" in relation to those areas. The ambiguity in the heading compounded the problem. Woollahra Council asked rhetorically: was the proposal to amalgamate two or all three of the areas into one or more areas, or was the proposal to alter the boundaries of one, two or three of the areas, or was the proposal a combination of the amalgamation of areas and the alteration of boundaries of areas? The reader of the notice would have no way of knowing from the terms of the notice. Certainly, Woollahra Council submitted, the reader was not notified that the proposal was the "forced amalgamation" of all three local government areas of Randwick, Waverley and Woollahra.
The second deficiency, Woollahra Council claimed, was that the public notice that was given was not "reasonable" public notice. First, there was limited circulation of the notice to residents and ratepayers in the affected areas (which contrasted with the widespread consequences to the relevant communities in the event of the amalgamation proposal being implemented). Second, on the occasions when public notice was given, many residents and ratepayers of the Woollahra local government area were on vacation at locations outside Sydney. Third, there was insufficient time between the publication of the notice and the holding of the inquiry for an interested resident or ratepayer wishing to participate in a meaningful fashion at the inquiry to be able to do so. Woollahra Council referred in particular to the various publicly accessible documents prepared by KPMG concerning the financial benefits of the amalgamation of the areas and the complexity of the financial analysis that an interested resident or ratepayer would need to absorb in order to make an informed submission to the inquiry. Fourth, Woollahra Council submitted that the notification process did not enable interested persons to lodge and access submissions in connection with the proposal in advance of the inquiry or to discuss other submissions at the inquiry since the meeting was held three weeks before the closing date for written submissions.

[7]

The respondents' claim that reasonable public notice was given

The respondents submitted that the Act does not prescribe how the Delegate is to give "reasonable public notice" of the inquiry. They submitted that it is sufficient if the notice is of a kind "likely to draw the attention of the public" to the holding of the inquiry into the proposal, referring by analogy to Bartzios v Leichhardt Municipal Council [1978] 1 NSWLR 7 at 10-11.
The respondents rebutted Woollahra Council's claim that the notice was not reasonable because the notice was placed in newspapers circulated in Sydney at a time of year when residents and ratepayers were likely to be on vacation at locations outside Sydney. That claim, the respondents submitted, ignored the fact that the notice was also given in various other ways, including on the websites of Woollahra Council, the Council Boundary Review and at least one community group, and therefore might have come to the attention of persons outside Sydney. Notice was also given by the letters and emails from the Mayor of Woollahra Council to residents and ratepayers. The respondents also pointed to the fact that a large number of submissions were received (approximately 450), suggesting that the notice was effective in bringing the proposal to the attention of the ratepayers and residents of the areas.

[8]

The statutory requirement to give public notice

Neither the Act nor the regulations made under the Act prescribe the public notice that is required to be given under s 263(2B) of the Act. Nevertheless, 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 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.
The second content requirement is to state what is the particular inquiry that is to be held. Subsection (2B) refers to the holding of "an inquiry under this section". An inquiry under s 263 may be held in certain circumstances (under s 263(2)(a)) and must be held in other circumstances (under s 263(2)(b) and s 263(2A)). However, irrespective of whether an inquiry may or must be held, it is to be held in relation to "any matter with respect to the boundaries of areas and the areas of operation of county councils which may be referred" to the Boundaries Commission or Departmental Chief Executive by the Minister for examination and report (see s 263(1) of the Act). The matters with respect to the boundaries of areas that the Minister may refer for examination and report are a proposal for the amalgamation of two or more areas (see ss 218A and 218D-218F) and a proposal for the alteration of the boundaries of areas (see 218B and ss 218D-218F). The public notice that must be given under s 263(2B) needs to specify the matter that the Minister has referred for examination and report and in relation to which the inquiry is to be held. In this case, the matter in respect to the boundaries of areas which the Minister had referred to the Departmental Chief Executive for examination and report was the proposal for the amalgamation of the local government areas of Randwick, Waverley and Woollahra that had been referred in accordance with s 218F. The public notice required to be given under s 263(2B) needed to specify that the inquiry was to be held in relation to that proposal for the amalgamation of those areas.

[9]

Reasonable public notice was given

In this case, the Delegate of the Departmental Chief Executive who was obliged under s 263(2A) to hold the inquiry in relation to the proposal to amalgamate the local government areas of Randwick, Waverley and Woollahra was under the duty to give reasonable public notice of the holding of the inquiry. The public notice of the holding of the inquiry that was actually given or caused to be given by the Delegate comprised: first, the notice of the inquiry that was published as an advertisement in various newspapers; second, the notice of the holding of the inquiry that was published on the Council Boundary Review website (which was the website referred to in the notice published in the newspapers but which has now changed to www.strongercouncils.nsw.gov.au); third, the Delegate's letters of 14 January 2016 to the General Managers of Randwick, Waverley and Woollahra Councils notifying them of the holding of the public inquiry and attaching the same public notice as was published in the newspapers and requesting that the Councils bring the attached public notice "to the attention of as many people in the Council's area as possible; for example, by placing a copy of the public notice on the Council's website"; and fourth, the notice of the holding of the inquiry that was given by the Councils in response to the Delegate's request, including the public notice placed on Woollahra Council's website. These are the forms of notice that collectively make up the public notice that can be said to have been given of the holding of the public inquiry and which need to be assessed in order to determine whether "reasonable public notice" was given of the holding of the inquiry.
The content of the public notice given satisfies the three requirements arising from s 263(1), (2A) and (2B). First, the notice specified when and where the inquiry was to be held. The notice specified that the date and time of the inquiry was "Thursday 4 February 2016" at "1.00pm - 5.00pm and 7.00pm - 10.00pm" and that the venue was to be "Club Rose Bay". A street address for the venue "Club Rose Bay" was not given. Woollahra Council took no issue with the absence of a street address. Presumably, the venue of "Club Rose Bay" is sufficiently well known in the Woollahra area that the specification of the name of the venue was adequate to identify the place at which the inquiry was to be held.

[10]

The inquiry that was held

The Delegate held the inquiry at Club Rose Bay on 4 February 2016. There were two sessions, the first from 1.00pm to 5.00pm and the second from 7.00pm to 10.00pm.
The public notice that was given of the holding of the inquiry requested persons who wished to attend the inquiry to register at the Council Boundary Review website or by telephoning a free call number. Persons who wished to speak at the inquiry were requested to indicate that they wished to do so when they registered to attend. A total of 140 speakers registered to speak at the inquiry, 80 persons at the 1.00pm session and 60 persons at the 7.00pm session.
At the start of each session, the Delegate made an opening statement, explaining amongst other things that: 1. he was the Delegate of the Departmental Chief Executive appointed to examine and report on the Minister's proposal to amalgamate Randwick, Waverley and Woollahra Councils; 2. he was holding the inquiry as part of the examination and reporting process into the amalgamation proposal; 3. his role was to examine the proposal and to provide a report to the Minister and the Boundaries Commission; 4. the inquiry would provide members of the public with the opportunity to provide their views on the proposal directly to him; 5. members of the public could provide their views by speaking about the proposal at the inquiry and/or by making a written submission about the proposal (through the process stated on the Council Boundary Review website); 6. in preparing his report, he was required to consider the 11 factors in s 263(3) of the Act (which he outlined); 7. at the conclusion of the process, he would provide a report to the Boundaries Commission and the Boundaries Commission would review and provide comments on his report to the Minister; 8. the Minister would consider both the Delegate's report and the comments from the Boundaries Commission and may or may not recommend to the Governor to implement the amalgamation proposal with or without modifications; 9. in order to allow the hearing of the inquiry to be conducted fairly and efficiently, the inquiry would be very formally structured and a schedule of speakers and time limits would be imposed (which the facilitator would subsequently explain); and 10. his role at the hearing of the inquiry was to listen to all submissions and to consider them and other material provided throughout the course of the examination process in the preparation of his final report. He stated that he did not have the power to resolve any specific issues or identify solutions or to take action on any complaints that any individual may raise; he was at the inquiry "just to listen".

[11]

Woollahra Council's claim that there was no valid inquiry

Woollahra Council claimed that the inquiry held by the Delegate did not meet the statutory description and requirements of an inquiry under s 263(2A).
Woollahra Council submitted that, in determining what is required by an "inquiry" held under s 263(2A) of the Act, it is necessary to consider the text of that provision, the context in which it appears, and its general purpose and policy, citing Botany Bay City Council v Minister for Local Government [2016] NSWCA 74; (2016) 214 LGERA 173 at [37]. Woollahra Council contended that, in discerning what an "inquiry" under s 263(2A) entails, significant weight needs to be given to the following features of the statutory scheme: 1. while proposals to constitute or alter the boundaries of a local government area must be subject to examination and report (ss 204, 218, 218B, 218F(1)) and may be the subject of an inquiry (s 263(2)), amalgamation proposals must be subject to examination and report and also must be subject to an inquiry for that purpose (ss 263(1) and (2A)); 2. the subject matter of the inquiry mandated by s 262(2A) is the particular proposal that has been referred by the Minister for examination and report (s 263(1) and see also Botany Bay City Council v Minister for Local Government at [38]-[40] and Minister for Local Government v South Sydney City Council [2002] NSWCA 288; (2002) 55 NSWLR 381 at 439 [264]). Notably, the relevant statutory duty is to "hold" an inquiry, not to make an inquiry into an amalgamation proposal in a general sense; 3. the function of conducting the inquiry may fall to be exercised by either the Departmental Chief Executive (or their Delegate) or the Boundaries Commission, but the inquiry is to be performed in the same manner irrespective of the person or entity that is presiding: ss 218F(2), 263 and see also Botany Bay City Council v Minister for Local Government at [24]. It is relevant in considering the kind of process that is envisaged, that the Boundaries Commission is a body consisting of commissioners appointed for five year terms who are independent of the political process: s 261 and cl 1 of Sch 2 and see also Minister for Local Government v South Sydney City Council at [37]; 4. an inquiry held before the Boundaries Commission and, by extension, before a Delegate of the Departmental Chief Executive, is described as a kind of "proceeding" at which submissions are made, material may be "tendered" and persons are capable of "appearing" (s 264) and such an inquiry must be capable of being "attended" by members of the public (s 263(5)). The language connotes a structure and forensic process similar to that of an administrative tribunal; and 5. the scheme enacted in relation to boundary proposals clearly distinguishes between the concepts of an "inquiry" on the one hand, and an "advertised public meeting" on the other. The latter is referred to in s 218F(3)(a)(i) in connection with a joint proposal of two or more councils for the amalgamation of two or more areas. Effect must be given to this difference in language.

[12]

The respondents' claim that there was a valid inquiry

The respondents disputed that the inquiry held by the Delegate did not meet the statutory description or requirements of an inquiry under s 263(2A).
First, the respondents noted that the nature of the "inquiry" to be held by the Delegate is not prescribed by the Act (this is in contrast to a "public inquiry" held under Pt 8 of Ch 13 of the Act, which does prescribe the procedure). In Bushell v Secretary of State for the Environment, 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 Minister or appointed inspector empowered to hold that inquiry (at 95). 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. This aspect of Bushell v Secretary of State for the Environment was cited with approval in Kioa v West [1985] HCA 81; (1985) 159 CLR 550 at 629.
The respondents submitted that various features of the Act made 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 a Royal Commission, involving summonsing of witnesses, compulsory production of documents, cross-examination, admission or rejection of evidence, and so forth. First, the Boundaries Commission and Departmental Chief Executive (or his or her delegate) do not have the powers needed to conduct a formal inquiry of that kind. Second, 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). 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 fee or reward in proceedings before the Boundaries Commission or the Departmental Chief Executive (or his or her delegate). The procedures typically engaged in a coronial inquiry or a Royal Commission would be completely inappropriate, and in many cases unjust, in those circumstances.
The respondents submitted that 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 Delegate went about his task did not fall short of meeting the statutory description of "inquiry". The Delegate's report shows a close and careful consideration of the proposal and the written and oral submissions made. The Delegate did not fail to carry out an "inquiry" because he did not question speakers at the public inquiry or because he imposed a time limit on them. Nor did the Delegate fail to carry out an inquiry because he did not require KPMG to provide its modelling and assess that modelling. An administrative process does not cease to be an "inquiry" because an expert opinion is not tested in the manner that might occur in adversarial litigation or because every assumption is not scrutinised.

[13]

The statutory requirements for the inquiry

Section 263 of the Act distinguishes between the functions of examining and reporting on any matter with respect to the boundaries of areas, including a proposal for the amalgamation of areas referred by the Minister under s 218F, and the holding of an inquiry under s 263. An inquiry under s 263 is to be held for the purpose of the Boundaries Commission or Departmental Chief Executive, to whom a matter with respect to the boundaries of areas, including a proposal for the amalgamation of areas, has been referred, exercising its functions to examine and report on the matter.
The inquiry is not itself the examination of the matter or proposal that is required to be undertaken; rather, it is held for the purpose of exercising the function of such an examination.
The importance of this distinction is that it means that the inquiry that is to be held under s 263 is not itself required to be conducted as an examination of the matter or proposal that has been referred by the Minister. The obligation under s 263 is to hold an inquiry, not to inquire in the sense of examine.
Section 263 identifies that an inquiry under the section is to be conducted in public. The obligation is to "hold" an inquiry: s 263(2) and (2A). Reasonable public notice is to be given of the "holding" of the inquiry: s 263(2B). Members of the public must be allowed "to attend any inquiry held" under the section: s 263(5). This means that an inquiry under the section is only that process that is held in public. The Boundaries Commission or Departmental Chief Executive holding an inquiry under the section may make other inquiries and receive information and submissions other than during the public hearing of the inquiry, as part of its examination of the matter or proposal referred to it under s 218F. However, such examination is not part of the inquiry held under s 263.
Section 263 does not prescribe the practice or procedure by which an inquiry under the section is to be held. As the respondents have noted, this stands in contrast to public inquiries held under Pt 8 of Ch 13.
Section 264 does prevent a person attending proceedings before the Boundaries Commission from being represented by an Australian lawyer or any other person acting for a fee or reward (s 264(1)) except in certain circumstances (s 264(2)). A lawyer may, however, prepare any documents or submissions or tender any legal advice in connection with any proceedings before the Boundaries Commission: s 264(2)(c). The reference to "proceedings before the Boundaries Commission" may include an inquiry under s 263 held by the Boundaries Commission or the Departmental Chief Executive: see s 218F(2).

[14]

A valid inquiry was held

Woollahra Council has not established that the inquiry held by the Delegate did not meet the statutory description or the requirements of an inquiry under s 263 of the Act. First, I do not agree with Woollahra Council's interpretation that an inquiry under the section requires "a structure and forensic process similar to that of an administrative tribunal". Nothing in s 263 supports that construction. The restrictions on representation in s 264 also do not support that contention. Section 264 merely provides what cannot be done, not what must be done, in proceedings before the Boundaries Commission (or Departmental Chief Executive).
Second, whilst it is correct to note that the statutory scheme with respect to boundaries of areas distinguishes between "advertised public meetings" (s 218F(3)(a)(i)) and an "inquiry" (s 263(2) and (2A)), this difference in language does not illuminate how an inquiry under s 263 must be conducted. Advertised public meetings are prescribed as one of the ways in which the Boundaries Commission or Departmental Chief Executive must seek the views of electors of each of the areas that are the subject of a joint proposal of two or more councils for amalgamation. An inquiry under s 263 is held for the different purpose of exercising the functions of examining and reporting on a matter with respect to the boundaries of areas, including a proposal for the amalgamation of areas. It is apt to use the language of an advertised public meeting as a means to seek the views of electors and to use the language of holding an inquiry for the purpose of exercising the functions of examining and reporting on a matter, including a proposal.
But it does not necessarily follow from this use of different language that an advertised public meeting and an inquiry must be held according to different procedures, or more particularly that an inquiry under s 263 cannot be held in the same manner as an advertised public meeting might be held.
Third, I do not agree with Woollahra Council's submission that the inquiry "entails the entire process at which materials are advanced and arguments are made in relation to an amalgamation proposal" and that the inquiry "was required to cover 'whatever was material to an informed decision' as to the merits or demerits of the proposal", and that this entire process must be held in public and be capable of attendance by the public. This "entire process" referred to by Woollahra Council is part of the functions of the Boundaries Commission or Departmental Chief Executive in examining and reporting on the matter, including a proposal, referred to it by the Minister under s 218F. An inquiry under s 263 is held for the purpose of exercising those functions but it is not itself the exercise of the functions. Section 263 does not require that the Boundaries Commission or Departmental Chief Executive carry out its function of examination of the proposal in public at an inquiry.

[15]

The examination and report that was undertaken

The proposal for amalgamation of the local government areas of Randwick, Waverley and Woollahra was referred on 6 January 2016 to the Departmental Chief Executive, who in turn delegated his functions to the Delegate, for examination and report.
At the time of the referral of the proposal on 6 January 2016, the Minister provided the proposal document, being the "Merger Proposal: Randwick City Council, Waverley Council, Woollahra Municipal Council" dated January 2016. The proposal document was also published on the Council Boundary Review website on or about 6 January 2016. That document set out the case in favour of the proposal. It referred to analysis by KPMG, which showed that the new council had "the potential to generate … more than $124 million in net financial savings in 20 years".
On 7 January 2016, the Delegate wrote to the General Managers of the affected councils about the proposal for amalgamation. From 12 January 2016, notice of the holding of an inquiry in relation to the proposal for amalgamation was posted on the Council Boundary Review website. The notice invited submissions on the proposal for amalgamation. Other documents were posted, and hence made publicly available, on the Council Boundary Review website and were also made available to the Delegate. These documents provided further information about the KPMG analysis of the proposal for amalgamation. These documents included: 1. on 18 December 2015, a document prepared by KPMG entitled "Local Government Reform Merger Impacts and Analysis"; 2. on 20 January 2016, a document entitled "Outline of Financial Modelling Assumptions for Local Government Merger Proposals Technical Paper"; and 3. on 5 February 2016, documents entitled "List of Council Data Sources used by KPMG" and a spreadsheet summarising outputs from KPMG's modelling.
On 12 January 2016, the Delegate met with the Mayor and General Manager of Randwick Council and Waverley Council about the proposal for amalgamation of the three areas. On 18 January 2016, the Delegate met with the Mayor and General Manager of Woollahra Council about the proposal for amalgamation of the three areas.
On 14 January 2016, the Delegate wrote to each affected council giving notice of the inquiry to be held on 4 February 2016.
On 14 January 2016, a "delegate briefing", co-ordinated by the Department of Premier and Cabinet ('DPC'), took place for the various delegates of the Departmental Chief Executive appointed to examine and report on different proposals for amalgamation of local government areas. The Delegate in this case was one of the persons who attended the briefing. At the briefing, KPMG gave a presentation entitled "Overview of assumptions underpinning financial modelling".

[16]

Woollahra Council's claim that there was no valid examination and report

Woollahra Council submitted that the Delegate failed to examine and report on the proposal as required by s 218F(1) and s 263(1) in two main ways.
First, Woollahra Council submitted that in order to examine the proposal, the Delegate needed to scrutinise, test and interrogate the claims made by the Minister in support of the amalgamation proposal, particularly the claimed financial benefits of the amalgamation in the KPMG analysis. Woollahra Council contended that the Delegate failed to do this.
Woollahra Council submitted that the Delegate simply assumed the correctness of the central assertion made in the proposal document as to the financial consequences of the proposed amalgamation, namely that the amalgamation would lead to more than $124 million in net financial savings over 20 years for all of the areas combined. In so doing, the Delegate failed to properly "examine" the proposal.
Woollahra Council submitted that the Delegate's report did not disclose any independent investigation or analysis on the part of the Delegate with respect to the financial modelling undertaken by KPMG. While the report refers to KPMG's assumptions having been questioned by some councils, it did not scrutinise or otherwise address the appropriateness of those assumptions or of KPMG's methodology or conclusions. Woollahra Council cited Minister for Local Government v South Sydney City Council at [35]-[37] in support of its submission that the most detailed consideration of the relevant issues had to occur at the first stage of examination and report by the Boundaries Commission or Departmental Chief Executive.
Woollahra Council submitted that if the Boundaries Commission or Departmental Chief Executive (or his or her Delegate) is asked by the Minister under s 218F(1) to "examine" a proposal and that proposal is said to be supported by financial analysis and modelling, the examiner cannot simply take the proposal or financial modelling at face value, but must scrutinise, test and interrogate the claims that are made. This is all the more important where, as in the present case, the proposal was made by the Minister himself. That process of "examination" is impossible where the Delegate is denied access to the material and modelling information that is relied upon to support the claims made in the proposal document about the financial sensibility of the amalgamation. In this regard, Woollahra Council submitted, the KPMG analysis that had been made public, and upon which the Delegate relied, did not provide the reader with any reliable basis upon which to decide whether any of the headline figures set out therein were reasonable or achievable. Woollahra Council submitted that the Delegate's non examination of the KPMG financial analysis was not cured by the Delegate's reliance on different, unexamined financial analysis by SGS Economics and Planning. As a result, Woollahra Council submitted, the Delegate cannot be said to have discharged his duty under s 263(1) to "examine" the proposal.

[17]

The respondents' claim that there was a valid examination and report

The respondents disputed that the Delegate had not undertaken the examination and report on the proposal that was required by s 218F(1) and s 263(1) of the Act. The respondents submitted that the Delegate's report carefully evaluated the proposal against the statutory criteria in s 263(3). The Delegate's report also examined the submissions made to the Delegate against those statutory criteria. The Delegate referred to the inquiry that was held and the 449 written submissions that had been received and stated that he carefully considered "all written and oral submissions" that had been made. The Delegate recommended that the proposal be implemented but subject to further recommendations addressing the concerns that had been raised by stakeholders. For instance, the concerns raised by Woollahra Council and Woollahra residents concerning potential increased rates were addressed through a recommendation that minimum rate provisions be amended.
The respondents disputed Woollahra Council's claim that the Delegate simply assumed the correctness of the KPMG analysis and conclusions and did not examine the financial advantages and disadvantages of the proposal. The Delegate noted that KPMG identified financial benefits of $149 million over 20 years (including a $25 million grant from the NSW Government if the amalgamation proceeded). The Delegate also noted that KPMG's conclusion of the financial benefits was based on a set of assumptions that had been questioned by some councils. The Delegate referred to alternative analysis done by SGS Economics and Planning that estimated higher financial benefits than KPMG's work, namely $235 million net benefit over 10 years (and an ongoing surplus after that). The Delegate was aware that these different financial analyses were based on different assumptions. The Delegate noted that, despite these different assumptions, there were clear financial benefits, ranging from $149 million to $235 million of the proposed amalgamation compared with any stand-alone option.
The respondents submitted that this analysis showed that the Delegate did not uncritically adopt KPMG's analysis and claimed financial benefits, but instead considered the factors of the financial advantages and disadvantages of the proposal.

[18]

The statutory requirements for examination and report

On making or receiving a proposal, either for the amalgamation of areas or the alteration of the boundaries of areas, the Minister must refer it for examination and report to the Boundaries Commission or the Departmental Chief Executive: s 218F(1).
In this case, the Minister referred the proposal for the amalgamation of the local government areas of Randwick, Waverley and Woollahra to the Departmental Chief Executive. Sections 263, 264 and 265 apply to the examination of the proposal by the Departmental Chief Executive in the same way as they apply to the examination of a proposal by the Boundaries Commission: s 218F(2).
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 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 matter with respect to boundaries that was referred by the Minister was the proposal for the amalgamation of the local government areas of Randwick, Waverley and Woollahra.
In exercising the functions of examining and reporting on the proposal referred by the Minister, the Boundaries Commission or Departmental Chief Executive may or must do two things. First, 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 its functions of examining and reporting on the proposal: s 263(2) and (2A).

[19]

There was a valid examination and report

Woollahra Council has not established that the Delegate's examination and report on the proposal for the amalgamation of the local government areas of Randwick, Waverley and Woollahra fell short of what was required by s 218F(1) and 263(1) in either of the two ways claimed by Woollahra Council.
As to the first way, the Delegate was not legally obliged to "scrutinise, test and interrogate" the claims made by the Minister and KPMG in the proposal document accompanying the referral of the proposal or in other KPMG documents, or to "scrutinise, or otherwise address the appropriateness" of KPMG's assumptions, methodology or conclusions.
First, the Delegate's duty under s 263(1) is to examine and report on the matter with respect to the boundaries of areas which was referred by the Minister. This was the proposal for the amalgamation of the local government areas of Randwick, Waverley and Woollahra. The proposal referred by the Minister for examination and report was not all that was said in the proposal document, including the claimed financial benefits of the proposed amalgamation, or in other KPMG documents containing KPMG's assumptions, methodology or conclusions. Hence, the Delegate was not obliged to "examine" the claims of the Minister or KPMG or KPMG's assumptions, methodology or conclusions by reason of the duty to examine the proposal.
Second, the proposal document and KPMG documents, in which the claims and conclusions about the financial benefits of the proposed amalgamation were made, stood in no privileged position compared to other submissions, information and material received by the Delegate in the exercise of his functions of examining and reporting on the proposal. The Delegate received 449 written submissions and oral submissions from 100 people at the inquiry. The three affected councils, including Woollahra Council, made oral and written submissions to the Delegate. Amongst the matters addressed, the submissions included claims and conclusions about the financial advantages and disadvantages of the proposal, both advocating their own position as well as criticising the claims and conclusions of the Minister and KPMG as to what would be the financial advantages and disadvantages of the proposed amalgamation.
Woollahra Council rightly did not suggest that the Delegate was legally obliged to "scrutinise, test and interrogate" every claim and conclusion in every written and oral submission made to the Delegate, including in the submissions of the affected councils. If the Minister's submissions on the proposal, including in the proposal document and the KPMG documents, stood in no different position to any other person's submissions on the proposal, it follows that the Delegate was under no different obligation in considering the Minister's submissions compared to his obligation in considering other persons' submissions.

[20]

The Boundaries Commission's review and comments

On 18 March 2016, the Delegate furnished a copy of his report on the proposal for amalgamation of the local government areas of Randwick, Waverley and Woollahra to each of the Minister and the Boundaries Commission. The Boundaries Commission reviewed the Delegate's report and provided its comments on it to the Minister on 22 April 2016.
The Boundaries Commission started with a summary of the Boundaries Commission's comments (part 1). The Boundaries Commission has reviewed the Delegate's Report on the proposed merger of Randwick City Council, Waverley Council, and Woollahra Municipal Council to determine whether its shows the legislative process has been followed and the Delegate has taken into account all the factors required under the Local Government Act 1993 (the Act). The Commission has assessed that: ● the Delegate's Report shows that the Delegate has undertaken all the processes required by section 263 of the Act, ● the Delegate's Report shows that the Delegate has adequately considered all the factors required by section 263(3) of the Act, and ● the Delegate's recommendation in relation to the proposed merger is supported by the Delegate's assessment of the factors.
The comments summarised the amalgamation proposal (part 2), explained the role of the Boundaries Commission (part 3) and set out the Delegate's recommendations (part 4). The comments then provided the Boundaries Commission's detailed comments (part 5). The Boundaries Commission first reviewed the process followed by the Delegate (part 5.1): Under the Act, the Delegate is required to undertake certain processes in examining a merger proposal. These processes include holding an inquiry, allowing members of the public to attend meetings as part of the inquiry and calling for submissions. As part of the review of the Delegate's Report, the Commission has looked at whether these processes were followed. In total the Delegate considered 449 written and oral submissions from the public, community and other organisations and councils. The Delegate held two public inquiries on Thursday, 4 February 2016 at Club Rose Bay. The Commission's view is that the Delegate has met the relevant requirements.
The Boundaries Commission next reviewed the Delegate's consideration of the factors specified in the Act (part 5.2). In the opening section, the Boundaries Commission stated: Under section 263(3) of the Act, the Delegate is required to have regard to a range of factors when considering a merger proposal. Overall the Commission's view is that the Report shows the Delegate adequately considered all the factors. The Commission has formed this view based on its review of the discussion presented in the Delegate's Report. The Commission specifically considered whether the extent of that discussion adequately canvassed the range of issues raised in the written submissions made to the Delegate, the views expressed at the public hearings and other information that would have been available to the Delegate.

[21]

Woollahra Council's claim that there was no valid review and comment

Woollahra Council claimed that the Boundaries Commission, in performing its statutory obligations of reviewing and commenting upon the Delegate's report under s 218F(6), improperly constrained the matters to which it should have had regard by deliberately eschewing both any re-examination of the advantages and disadvantages of the amalgamation proposal and any consideration of whether the advantages and disadvantages identified by the Delegate supported the implementation of the proposal. In so doing, Woollahra Council contended, the Boundaries Commission had restricted its review and comments to the narrow assessment of whether the Delegate had adequately discussed the factors that he was required to consider in performing his statutory functions.
Woollahra Council submitted that it should be inferred from the Act that the broad power of the Boundaries Commission to review and comment upon the Delegate's report extended to include a consideration of whether or not, in light of the Delegate's report, the proposal ought to be implemented, with or without modifications by the Minister. It was contended that the Minister's discretion to modify a proposal under s 218F(7), prior to recommending that the Governor implement a proposal, supported the inference that the Boundaries Commission's power of review extended to the consideration of whether or not comments ought to be made that would warrant modification of the proposal by the Minister. Woollahra Council submitted that this inference was also implicitly supported by the subject matter, scope and purpose of the Act.
First, the structure of the Act makes clear that the subject of the review is the report prepared by the Departmental Chief Executive (or his or her delegate) following holding the inquiry. The purpose of the Boundaries Commission's review is to provide public confidence in the statutory process, ensure accountability and assist the Minister in making his determination of whether or not to recommend the implementation of the proposal. It was submitted that this inference was supported by the justification given in Parliament for the amendment to the Act which empowered the Boundaries Commission to review a report by the Departmental Chief Executive (citing New South Wales Legislative Council, Parliamentary Debates (Hansard), 1 July 1999 at 1895).

[22]

The respondents' claim that there was a valid review and comment

The respondents claimed that the Boundaries Commission's comments to the Minister demonstrated that it had properly discharged its statutory duty under s 218F(6) of the Act to review and comment upon the Delegate's report. The respondents characterised Woollahra Council's interpretation of the Act as having required the Boundaries Commission, in exercising its functions of review and comment, to have re-examined the advantages and disadvantages of the proposal in order to have made a recommendation to the Minister as to whether or not the proposal should be implemented, with or without modifications. The respondents submitted that s 218F imposed no such obligation on the Boundaries Commission and that Woollahra Council's interpretation wrongly conflated the roles of the different administrative functionaries set out in this section. This interpretation was said to confuse the functions of the Boundaries Commission with the Minister (comment versus recommend) and the object of the Boundaries Commission's function with that of the Minister (report versus proposal). These contentions were said to be supported by the following features of the Act.
First, the respondents submitted that under s 218F only the Minister may make or decline to make a recommendation on an amalgamation proposal: s 218F(7) and (8). The language of s 218F does not entail the Boundaries Commission itself making a recommendation to the Minister on the proposal. Second, under s 218F, the object of the Boundaries Commission's functions of review and comment is the report of the Departmental Chief Executive (or his or her delegate), while the object of the Departmental Chief Executive's examination and reporting functions and the Minister's recommendation function is the "proposal": s 218F(1) and (2) and s 218F(7) and (8). Third, 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). Fourth, the Act does not provide the Boundaries Commission with the power to compel the production of documents or require that submissions be provided to the Boundaries Commission.
The respondents submitted that this construction is supported by the ordinary meanings of "review" and "comment". There was nothing in the ordinary dictionary range of meanings of "review" and "comment" that requires the taking of any particular position either for or against the object of the review and comment. Whilst the ordinary dictionary meanings of "review" and "comment" do require some degree of critical engagement with the object of the review and comment, they do not require any particular position to be taken in respect of it. It was within the discretion of the Boundaries Commission to choose how to review and comment upon the Delegate's report.

[23]

The statutory requirements for review and comment

The Minister may elect to refer an amalgamation proposal for examination and report to either the Boundaries Commission or the Departmental Chief Executive: s 218F(1). If the Minister refers an amalgamation proposal to the Departmental Chief Executive, the Departmental Chief Executive must furnish the Departmental Chief Executive's report to the Boundaries Commission for review and comment: s 218F(6)(a). The Boundaries Commission must review the report and send its comments to the Minister: s 218F(6)(b).
The Minister may recommend or decline to recommend to the Governor that the amalgamation proposal be implemented: s 218F(7) and (8). The Minister may recommend that the amalgamation proposal be implemented with modifications, including modifications as arise out of the Boundaries Commission's report (if the Boundaries Commission undertook the examination and report) or the Departmental Chief Executive's report, and, if applicable, the Boundaries Commission's comments on that report (if the Departmental Chief Executive undertook the examination and report): s 218F(7)(a). The Minister may not recommend that the proposal be implemented with modifications if the Minister is of the opinion that the modifications constitute a new proposal: s 218F(7).

[24]

The review and comment were valid

Woollahra Council has not established that the Boundaries Commission misdirected itself or improperly constrained itself in exercising its functions of reviewing and commenting on the Delegate's report.
First, Woollahra Council's argument depends on establishing a statutory requirement to undertake the function of reviewing and commenting on the Delegate's report in the manner argued by Woollahra Council. Woollahra Council argued that the Boundaries Commission did not, but should have, expressed a "view of its own as to the merits of the proposal or whether the advantages and disadvantages identified in the report would merit the implementation of the proposal with or without modification". Woollahra Council submitted that the Boundaries Commission, by "deliberately eschewing any re-examination of the advantages and disadvantages of the proposed merger", improperly fettered the broad power of review conferred by the Act.
However, the statutory function of reviewing and commenting on the Delegate's report does not mandate that the Boundaries Commission express its own view of the merits of the amalgamation proposal or whether the advantages or disadvantages merit implementation of the proposal. Where the Minister has referred a proposal to the Departmental Chief Executive, rather than to the Boundaries Commission, for examination and report, the function of examination of the proposal, having regard to the factors in regard to s 263(3) and evaluating whether the advantages or disadvantages merit implementation of the proposal, is to be undertaken by the Departmental Chief Executive. The function of review and comment on the report of that examination is a separate function and is not to be interpreted as co-terminous with the function of examination and report.
The distinction between the functions is made plain by the use of different language to describe what is involved in the exercise of the function (the Departmental Chief Executive is to "examine and report" while the Boundaries Commission is to "review the report and send its comments") and the object of the exercise of the function (the Departmental Chief Executive is to examine and report on the proposal referred by the Minister while the Boundaries Commission is to review and comment on the report of the Departmental Chief Executive).
In these circumstances, as Garling J noted in Botany Bay City Council v The State of New South Wales and Minister for Local Government [2016] NSWSC 583 at [136]: The statutory obligation, in the particular circumstances here, falling upon the Boundaries Commission is not to undertake an inquiry of the kind which it would do had the Minister's proposal been forwarded to it by the Minister pursuant to s 218F(1) of the Act. If it had received the Minister's proposal pursuant to that section, then it would have been obliged to apply the provisions set out in s 263 of the Act, which mark out its functions in such a circumstance. However, what it is required to do here is to review the report of the Departmental Chief Executive (or his delegate). Having reviewed that report, it is tasked to comment upon it and send its comments to the Minister.

[25]

The claims of denial of procedural fairness

Woollahra Council claimed that it was denied procedural fairness at two stages in the process in relation to the proposal for the amalgamation of the local government areas of Randwick, Waverley and Woollahra: first, at the stage of examination and report on the proposal by the Delegate of the Departmental Chief Executive and, second, at the stage of review and comment on the Delegate's report by the Boundaries Commission.

[26]

Woollahra Council's claim that it was denied procedural fairness by the Delegate

Woollahra Council claimed that the Delegate was under a duty to accord procedural fairness to it in the Delegate's exercise of the functions of examination, including holding the inquiry, and report on the amalgamation proposal referred by the Minister, relying in particular on Minister for Local Government v South Sydney City Council at [39]-[43] and [142]-[143] and generally on Annetts v McCann [1990] HCA 57; (1990) 170 CLR 596 at 598 and Saeed v Minister for Immigration and Citizenship [2010] HCA 23; (2010) 241 CLR 252 at 259 at [11]-[15].
The Delegate was bound to have regard to the factors in s 263(3) in considering the amalgamation proposal. Woollahra Council claimed that the duty to accord procedural fairness required the Delegate to give Woollahra Council a reasonable opportunity to address these factors in s 263(3). In order for Woollahra Council to be able to address these factors, the Delegate was required to provide to Woollahra Council and give it the opportunity to deal with information that was "credible, relevant and significant to the decision to be made", citing Kioa v West at 628-629 and Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 72; (2005) 225 CLR 88 at [15]-[17]. Woollahra Council submitted that information falling into this category included the KPMG analysis and all documents underpinning the KPMG analysis as well as the submissions of Waverley and Randwick Councils and the SGS Economics and Planning report relied on by those councils advocating the financial benefits of the amalgamation proposal.
Woollahra Council submitted that the Delegate's duty of procedural fairness required the Delegate to make Woollahra Council aware of his intention to rely upon the SGS Economics and Planning material in preparing his report on the proposal.
Woollahra Council argued that the Delegate, in failing to provide Woollahra Council with that information, which was adverse to Woollahra Council's interests in opposing the amalgamation, and giving it an opportunity to respond to the information, denied it procedural fairness in relation to the Delegate's examination, inquiry and report on the amalgamation proposal.

[27]

The respondents' rebuttal that the Delegate did not deny Woollahra Council procedural fairness

The respondents did not dispute in principle that a duty to accord procedural fairness may attach to the exercise of the statutory power under s 263 to examine and report on an amalgamation proposal. The respondents did, however, contest that the content of the duty to accord procedural fairness required the disclosure of the particular documents contended by Woollahra Council and that there was any denial of procedural fairness to Woollahra Council.
The respondents submitted that the statutory scheme does not require a council affected by an amalgamation proposal to have access to and an opportunity to comment on submissions made by other persons that are adverse to the affected council's interests. An obligation with such content was rejected in Minister for Local Government v South Sydney City Council per Mason P at [251], [264]-[268] and Spigelman CJ agreeing at [1] and [44].
The respondents also submitted that any obligation on the Delegate to disclose adverse material to an affected council is severely qualified or attenuated. The content of the obligation to afford procedural fairness is not as wide as Woollahra Council submitted it was, namely, to give an opportunity to deal with "adverse information that is credible, relevant and significant to the decision to be made". An obligation with that content was also not accepted in Minister for Local Government v South Sydney City Council at [260] per Mason P, Spigelman CJ agreeing at [1] and [44] and Ipp AJA agreeing at [297].
The respondents, therefore, submitted that the content of the obligation to accord procedural fairness to Woollahra Council did not require the Delegate to disclose the submissions of Randwick and Waverley Councils or the SGS Economics and Planning report on which those councils relied or documents that Woollahra Council described as KPMG modelling or analysis.
The respondents submitted that there was no denial of procedural fairness by Woollahra Council not being given an opportunity to respond to the KPMG modelling or analysis that was provided to the NSW Government. Woollahra Council claimed that there was modelling or analysis by KPMG provided to the Government which showed or supported KPMG's assessment of the financial benefits of the amalgamation proposal, in particular the estimated net savings of $124 million over 20 years and $10 million every year from 2020 onwards, but which was not made publicly available.

[28]

Woollahra Council's reply to the respondents

In response to the respondents' reliance on the decision of Minister for Local Government v South Sydney City Council in rebutting the claim that the Delegate denied Woollahra Council procedural fairness, Woollahra Council asserted that this decision did not assist the respondents. First, Woollahra Council submitted that, in the present circumstances, the Delegate had not engaged a consulting firm to assist him in verifying the financial claims of the proposal document. Rather, the Delegate simply assumed that these claims were correct. Second, Woollahra Council said that the comments made by the Court of Appeal regarding procedural fairness in Minister for Local Government v South Sydney City Council had to be understood in the context that no inquiry had been held, citing [240] of that judgment. Third, Woollahra Council distinguished its case on the basis that it did not contend that the Delegate ought to have adopted an "open file policy" allowing Woollahra Council access to, and the opportunity to respond to, all submissions made by other stakeholders adverse to its interests. Rather, it was only contended that the Delegate ought to have facilitated a process whereby "key materials, evidence and submissions were brought to the attention of key stakeholders" so as to enable such stakeholders to address the matters therein. It was said by Woollahra Council that this was "hardly an onerous requirement".
Woollahra Council recognised the principles identified by the respondents that constrain the content of a duty to afford procedural fairness to an individual who falls within a wide range or class of persons who may be affected by a decision. However, Woollahra Council submitted that these principles did not apply to it because, as an entity which stood to be dissolved by the amalgamation proposal, it fell within the narrower class of being an entity with "particular interests", citing Minister for Local Government v South Sydney City Council at [263]. Woollahra Council submitted that it had real interests upon which the Delegate's report, which affects the entire statutory amalgamation process, impinged.
Finally, Woollahra Council rejected the respondents' claim that any obligation owed to Woollahra Council was discharged because the relevant publicly accessible documents provided an adequate summary of the non-public documents, including the various undisclosed KPMG materials, such that "the gist of any adverse information" was disclosed. The adverse information was, Woollahra Council submitted, tolerably clear. Yet, the process adopted by the Delegate was procedurally unfair because Woollahra Council was deprived of the means by which to test, and thus properly respond to, that adverse information, citing X v University of Western Sydney [2014] NSWSC 82 at [180], [193], [202]-[203].

[29]

The Delegate did not deny Woollahra Council procedural fairness

Woollahra Council has not established that the Delegate denied it procedural fairness by not disclosing and giving it an opportunity to make submissions on the various submissions and documents it identified. My reasons are those advanced by the respondents in their submissions summarised above.
The duty to accord procedural fairness (where it applies) attaches to the exercise of statutory power: Minister for Local Government v South Sydney City Council at [15]. Here, the statutory power is the function under s 263 requiring the Boundaries Commission or Departmental Chief Executive (or his or her delegate) to examine and report on the proposal for the amalgamation of local government areas that has been referred to it by the Minister (s 263(1)). For the purpose of exercising that function, the Boundaries Commission or Departmental Chief Executive is to hold an inquiry (s 263(2A)). When considering the proposal, the Boundaries Commission or Departmental Chief Executive is to have regard to the factors in s 263(3).
The duty to accord procedural fairness that attaches to the statutory power under s 263 rests on the Boundaries Commission or Departmental Chief Executive who exercises the statutory power. The content of the duty also is defined by the statutory power under s 263 and the statutory scheme in which that power is found.
The statutory power under s 263 and the statutory scheme in which it is found do not require the Boundaries Commission or Departmental Chief Executive in exercising the statutory power to examine and report on a proposal to disclose to "affected" persons all of the "adverse" submissions of all other persons. An obligation of procedural fairness with such content was not accepted in Minister for Local Government v South Sydney City Council per Mason J at [257], [267], [268] with whom Spigelman CJ agreed at [1], [44] and Ipp JA at [297]. I do not accept that the matters raised by Woollahra Council in its submissions in reply distinguish the decision of Minister for Local Government v South Sydney City Council or put Woollahra Council into a special class of persons to whom the Delegate was obliged to disclose all adverse submissions and give Woollahra Council an opportunity to respond.
Relevantly to this case, the Delegate was not obliged to disclose to Woollahra Council, and give it an opportunity to respond to, the submissions that Waverley and Randwick Councils had made to the Delegate or the SGS Economics and Planning report on which those councils relied. Those councils' submissions stood in no special category to other submissions so as to oblige the Delegate to disclose them but not other submissions or to warn that he might rely on them but not other submissions.

[30]

Woollahra Council's claim that it was denied procedural fairness by the Boundaries Commission

Woollahra Council submitted that it was denied procedural fairness by the Boundaries Commission as a result of the Boundaries Commission's failure to afford it, as an entity directly affected by the amalgamation proposal, a reasonable opportunity to respond to the Delegate's report and have this response considered as part of the Boundaries Commission's review and comment.
Woollahra Council submitted that its interests were prone to be directly and adversely affected as a result of the exercise of executive power at each stage of the amalgamation process, namely: the Delegate's examination and report (s 218F(1) and (2)), the Boundaries Commission's review and comment (s 218F(6)) and the Minister's recommendation: s 218F(7). However, it was conceded that the requirements of procedural fairness would differ at each stage. Woollahra Council claimed that the inclusion in the statutory scheme of some matters concerned with natural justice, such as the requirement to give reasonable public notice of the holding of a public inquiry (s 263(2B)), did not manifest any legislative intention to exclude natural justice from the Boundaries Commission's process of reviewing and commenting upon the Delegate's report. Woollahra Council noted that the exclusion of the requirements of natural justice should not be assumed in the absence of plain words of necessary intendment (citing: Saeed v Minister for Immigration and Citizenship at [14]-[15]) and that the Act did not lay down a complex or highly prescriptive scheme for stakeholder participation in or notification of the amalgamation process, citing Riverside Nursing Care Pty Ltd v Bishop [2000] FCA 1147; (2000) 100 FCR 519 at 521-522 and Hillpalm Pty Ltd v Tweed Shire Council [2002] NSWLEC 17; (2002) 119 LGERA 86 at [127].
Woollahra Council claimed that the Act imposed upon the Boundaries Commission a procedural fairness obligation towards it for four reasons.
First, Woollahra Council contended that regardless of whether the Boundaries Commission was exercising the functions of examination and report under s 263 or review and comment under s 218F, the Boundaries Commission is an important independent safeguard or check upon the exercise of executive power in relation to boundaries matters, citing Minister for Local Government v South Sydney City Council at [36]-[37]. It was said that in order for the Boundaries Commission to provide this effective oversight intended by s 218F(6), the Boundaries Commission should be willing to receive and consider, at the very least, submissions from councils affected by the amalgamation proposal on the views expressed by the Delegate.

[31]

The respondents' rebuttal that the Boundaries Commission did not deny Woollahra Council procedural fairness

The respondents denied that the Boundaries Commission was required to provide Woollahra Council with an opportunity to make submissions in respect of the Delegate's report prior to providing its comments to the Minister for five reasons.
First, the respondents submitted that Woollahra Council had already been afforded the opportunity to make oral and written submissions in relation to the proposal and took advantage of each such opportunity. The statutory scheme for amalgamations is a clear example of Parliament having decided what opportunity to be heard should be afforded, being a public inquiry during the examination and reporting phase under s 263(2A). Reasonable public notice was required to be given of that inquiry under s 263(2B), to ensure that affected persons, including affected councils, knew of their opportunity to be heard. The central importance of this stage of the process, and the need to provide an opportunity to be heard at this stage, was stressed in Minister for Local Government v South Sydney City Council at [35]: The statutory scheme indicates that the most detailed consideration of the relevant issues is to occur at the first stage, namely by the Boundaries Commission. It is the Commission and the Commission alone that is empowered to conduct a public inquiry. It is the Commission and the Commission alone that is obliged to take into account a range of relevant considerations. (See also at [267]).
Second, the respondents submitted that the Boundaries Commission's process of review and comment was not intended to be open to the public because the Act did not require public notice to be given that the Delegate's report had been furnished to the Boundaries Commission (in contrast to the requirement to give public notice of an inquiry under s 263(2B)) and only charged the Boundaries Commission with providing its comments on the Delegate's report to the Minister.
Third, the respondents submitted that Woollahra Council's construction of the statutory provisions in relation to the Boundaries Commission's review and comment is unworkable. If the Boundaries Commission was required to allow Woollahra Council to make submissions on the Delegate's report, all affected persons would have to be afforded the same opportunity. The interests of Woollahra Council are not relevantly different to other persons affected by the amalgamation, including landowners and employees, citing Minister for Local Government v South Sydney City Council at [264]. It was claimed that such an obligation would also presumably give rise to Woollahra Council being permitted to make submissions in relation to other submissions made to the Delegate, a proposition that had been rejected in Minister for Local Government v South Sydney City Council. Further, it was said to follow that all affected persons would also need to be allowed to make written submissions to the Minister, prior to his making of a recommendation. To give all affected persons these multiple opportunities to be heard would, however, be entirely unworkable. That is why Parliament, having turned its mind to the manner in which affected persons would have an opportunity to be heard in respect of an amalgamation proposal, mandated that a public inquiry be held during the first stage of the statutory process, and not at all stages.

[32]

The Boundaries Commission did not deny Woollahra Council procedural fairness

Woollahra Council has not established that it was denied procedural fairness by the Boundaries Commission. The Boundaries Commission was not obliged to furnish Woollahra Council with a copy of the Delegate's report, give Woollahra Council an opportunity to comment on that report or consider Woollahra Council's comments in reviewing the Delegate's report and sending its comments to the Minister. I agree with and adopt the respondents' submissions summarised above.
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.

[33]

The claim of misleading statements Woollahra Council's claim that misleading statements invalidated the amalgamation process

Woollahra Council contended that the statutory amalgamation process undertaken in respect of the proposal was invalidated because it was conducted on the misleading premise that KPMG had provided independent analysis of the proposal. Woollahra Council's argument proceeded in three steps: first, there were representations that the proposal was supported by "independent" analysis and modelling by KPMG and that KPMG was engaged to prepare "independent modelling of the potential financial impacts" of the amalgamation; second, those representations were false and misleading because KPMG's analysis and modelling were not in fact independent; and third, that non-independence invalidated the statutory amalgamation process.
As to the first step, Woollahra Council contended that the proposal had been consistently publicised as a proposal supported by "independent" KPMG financial analysis and modelling. Woollahra Council referred to two Government media releases published on 18 December 2015 and 6 January 2016 as evidence of this. The 2015 media release, which was published before the Minister made the proposal and referred it to the Departmental Chief Executive for examination and report, contained a statement that "[i]ndependent analysis by KPMG of the NSW Government's proposed mergers shows significant financial benefits for NSW of up to $2 billion". The 2016 media release, which was made at the time of the referral of the proposal by the Minister, contained a materially identical statement by the Minister. Woollahra Council also referred to the statements in the publicly available proposal document dated January 2016 and the KPMG Technical Paper entitled "Outline of Financial Modelling Assumptions for Local Government Merger Proposals" (dated 19 January 2016). The proposal document stated that "the proposal … is supported by independent analysis and modelling by KPMG" and KPMG's analysis "shows the proposed merger has the potential to generate a net financial saving of more than $124 million to the new council over 20 years". The KPMG Technical Paper stated that "KPMG was engaged by the NSW Department of Premier and Cabinet to prepare independent modelling of the potential financial impacts of selected council mergers".
As to the second step, Woollahra Council claimed that these statements conveyed two representations: (a) KPMG was independent of the Government and uninfluenced by the Government and its policy in favour of council amalgamations; and (b) KPMG had independently assessed the Proposal which had been initiated by the Government.

[34]

The respondents' rebuttal that the statements were not misleading and did not invalidate the amalgamation process

The respondents submitted that the public statements that KPMG's modelling and analysis was "independent" were not misleading but even if such a factual finding were to be made, it would not follow that the Delegate's report was invalid on any of the bases put by Woollahra Council.
The respondents submitted that the Court, in deciding whether or not the representations alleged were actually made and were misleading, must proceed on the basis that Woollahra Council bears the onus of proof, citing Minister for Immigration and Citizenship v SZGUR [2011] HCA 1; (2011) 241 CLR 594 at [67] and the principle in Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 at 362.
The respondents submitted that in determining what a reasonable interested person would understand the public statements relating to the "independence" of KPMG's analysis and modelling (and not KPMG itself) to mean, the "ordinary speech" meaning of "independent" should be applied, citing Rexstraw v Johnson [2003] NSWCA 287 at [62], [69]-[70]. The respondents said that, while always a matter of context, the "independence" of the work of a professional consultant conveys at most that the professional consultant has exercised his or her professional judgment and has not been overborne or dictated to, citing Potato Marketing Board v Merricks [1958] 2 QB 316 at 335; Construction, Forestry, Mining and Energy Union v McCorkell Constructions Pty Ltd (No 2) [2013] FCA 446; (2013) 232 IR 290 at [93]-[96].
The respondents submitted that the statements concerning the independence of KPMG's analysis did not convey either of the representations alleged by Woollahra Council. As to the first representation, a reasonable member of the public would not expect the Government to engage a consultant who was ignorant of or uninfluenced by work that had already been done on local government reform and the opinions that had been previously expressed. A consultant who was not ignorant or uninfluenced by the existing body of knowledge and opinion could still give an independent opinion. Independence does not equate to ignorance.
As to the second representation, the statements made did not convey that the proposals were initiated by the Government if initiated means that the Government developed the proposals unassisted. It was quite clear from many documents that the development of the various proposals for amalgamations had been informed by extensive council and community consultation and assisted by the work of others, including consultants. At most, the statements implied that the proposals were "of" (that is made by) the Government and had been "analysed" by KPMG.

[35]

Statements were not misleading and did not invalidate amalgamation process

Woollahra Council has not established that statements concerning the independence of KPMG's analysis and modelling were false or misleading or, even if they were to be, that this invalidated the statutory amalgamation process in respect of the proposal. My reasons are those advanced by the respondents and summarised above.
In summary, I do not accept that the statements in the publicly available documents concerning "independent analysis and modelling by KPMG" conveyed the representations claimed by Woollahra Council but instead I find that they conveyed the representations submitted by the respondents. I find that the latter representations were not false or misleading. KPMG exercised its professional judgment in undertaking the analysis and modelling of financial impacts of the proposal made by the Minister and was not dictated to or overborne by the government. None of the matters relied on by Woollahra Council falsified the representations, for the reasons given by the respondents.
Nevertheless, even if the statements concerning KPMG's independent analysis and modelling were to be false or misleading, this would not have the legal consequence of invalidating any step in the amalgamation process, for the reasons given by the respondent. The allegedly misleading statements were not in any notice required to be given under the Act or in any document required to be produced or publicly exhibited by the Act.
The statements were not in the public notice that was required (under s 263(2B)) to be given of the holding of the inquiry. It is true that the public notice that was given referred to the Council Boundary Review website and that at least two of the documents relied on by Woollahra Council as containing misleading statements were able to be publicly accessed via that website. However, the statements said nothing misleading about the proposal that was the subject of the inquiry (the amalgamation of the local government areas of Randwick, Waverley and Woollahra) or about the statutory process for considering that proposal. There was, therefore, nothing misleading that was said that could cause the public notice that was given not to be a "public notice" within the meaning of s 263(2B) of the Act.
There was no statutory requirement to publicly exhibit any document as part of the process of holding the inquiry or examining and reporting on the proposal. Hence, any allegedly misleading statement in documents accessible on the Council Boundary Review website could not cause the documents not to be documents required by the Act.

[36]

Conclusion and orders

Woollahra Council has not established any of its grounds of challenge. The proceedings should therefore be dismissed. The usual order for costs, namely that costs follow the event, should apply.
The Court orders: 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: 13 April 2018

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