Wykanak v Rockdale City Council and Anor.

In support of this interpretation, the Council points to the fact that the words "resident or ratepayer" are not expressly limited to resident or ratepayer "within the municipality". Alternatively or additionally, the Council urges a purposive interpretation of s 10A(2)(b) to give effect to the apparent purpose of preserving the confidentiality of matters of personal hardship of residents or ratepayers which fall for discussion by the Council at its Meetings.

In my respectful opinion, the Council's argument that s 10A(2)(b) should be interpreted purposively or literally so as to apply to persons who are residents or ratepayers outside of, or beyond, the local government area of the council concerned, produces an interpretive result which is beyond the legitimate bounds of statutory interpretation.

In effect, the Council's argument invites a re-interpretation of the statutory phrase, as if it read "the personal hardship of any person".

It may, I think, be readily accepted that the apparent purpose of s 10A(2)(b) is to preserve the confidentiality of matters of personal hardship affecting relevant persons so that a council's discussion of such matters at its meetings may be conducted in private. However, the identity of the class of relevant persons is fixed by the statutory language employed namely "residents or ratepayers". The question is who comprises the delineated class?

In the context of the LG Act which focuses attention on local government and local communities, there is, in my judgment, a necessary implication that the reference to "resident or ratepayer" in s 10A(2)(b) is a reference to a resident or ratepayer within the relevant local government area.

The LG Act at times employs very broad terms. For example, as noted earlier, s 9(1) requires a Council "to give notice to the public of the times and places of its meetings". What is meant by "the public" in this context? Surely it is the public comprising the community of the local government area.

The LG Act, s 705 confirms this conclusion. It imposes requirements on the giving of public notices by a council. Subsection (3) provides:

The notice is to be given in a manner determined by the council with the object of bringing the matter notified to the attention of as many people in its area as possible.

Similar confirmation is provided by s 707 which deals with the publication of notices in the Government Gazette and newspaper, the latter term being defined in the Dictionary to the LG Act as follows:

newspaper means a paper containing news, which is printed, for sale or free distribution, at intervals not exceeding 26 days and which circulates within the area with respect to which the term is used.

"Area" is defined in the Dictionary to the LG Act to be a local government area constituted under Division 1 of Part 1 of Chapter 9, noting that in terms of the LG Act, cl 21 of Schedule 7, Municipalities and Shires existing at the commencement of Div 1 of Pt 1 of Chapter 9 are continued and "taken to be constituted under this Act".

To similar effect is the Local Government (Meetings) Regulation 1999, cl 5(2) which requires notice of a meeting of a council "to be published in a newspaper circulating in the area…"

Similar considerations and results apply, in my respectful opinion, in respect of other wide ranging terms employed by the LG Act eg (i) "everyone" employed in s 10(1) and s 12(1) and (2); (ii) "electors" employed in s 14; and (iii) "any person" employed in s 11(1).

The legitimacy of reading down such all encompassing terms ("the public", "everyone", "any person", "electors") so to refer to persons who comprise the local community within the local government areas constituted by or under the LG Act is supported by the stated purposes of the Act in s 7 which include: (b) to regulate the relationships between the people and bodies comprising the system of local government in NSW; (c) to encourage and assist the effective participation of local communities in the affairs of local government.

Accordingly, I must reject the Council's argument that s 10A(2)(b) refers to residents who reside either inside or outside of the relevant local government area.

A more difficult question of interpretation that was not raised by the Council's argument (save for its submission that given the apparent purpose of s 10A(2)(b) to preserve the confidentiality of matters of personal hardship, the word "resident" should be construed "broadly") concerns the question of the time that the relevant "residency" within the municipality must exist for the purposes of s 10A(2)(b).

Is it, as the Applicant's case would have it, residency at the time that the Council purports to exercise the statutory power conferred by s 10A(2)(b) or does the Council's submission that the term be broadly interpreted justify an interpretation that would cover situations of past or previous residency in the municipality, and if so, how far past - occurring very recently or occurring within the past six months or whatever other period?

The interpretive task must, I think, begin with the ordinary meaning of the word "resident". That meaning is well known. According to the Shorter Oxford English Dictionary, it means inter alia: "One who resides permanently in a place".

To similar effect, is the meaning given by the Macquarie Dictionary: "One who resides in a place", the word "reside" having the following meanings:

to dwell permanently or for a considerable time; having one's abode for a time.

The expression "ordinary resident" is often encountered in legislation and has been the subject of many judicial decisions. For example in R v Barnet London Borough Council: Ex parte Shah (1983) 2 AC 309 (a case involving the expression "ordinarily resident in the United Kingdom" in the context of the Education Acts) Lord Scarman said at 343:

Unless, therefore, it can be shown that the statutory framework or the legal context in which the words are used requires a different meaning, I unhesitatingly subscribe to the view that ordinarily resident refers to a man's abode in a particular place or country which he has adopted voluntarily and for settled purposes as part of the regular order of his life for the time being (my emphasis) , whether of short or of long duration.

In its context in s 10A(2)(b), I think it clear that the word "resident" is to be given its ordinary meaning such as is provided in the standard English dictionaries and that in that context, prima facie it is residency at the time that the statutory power is exercised that is meant.

The Council's argument urging a purposive construction justifying a broad meaning of the word "resident" encounters the obvious difficulty of precisely delimiting the extent to which prior and past residency by a person qualifies that person as a "resident" within the meaning of s 10A(2)(b). Granted that the clear purpose of the statutory provision is to preserve the confidentiality of the personal hardship of a resident would, prior residency within living memory qualify the person as a "resident"? Such an open-ended result, I think, demonstrates the intrinsic difficulty and ultimate illegitimacy of departing from the ordinary meaning of the word "resident" and of ignoring the contextual considerations which indicate that what is required is current residency at the time the statutory power is purported to be exercised. The decision of the Court of Appeal in Perez v Leslie (1973) 1 NSWLR 195 can be cited as an example where the Court interpreted the defined term "resident" in the context of the Landlord and Tenant (Amendment) Act 1948 to mean resident at the time that a current value rental determination is made by the Fair Rents Board rather than a resident living at the demised premises in the past (eg during the immediately past financial year).

It must be acknowledged that in some cases where genuine ambiguity as to the meaning of an expression exists, the Court adopting a purposive construction will depart from the ordinary or more obvious meaning.

An illustration of such a result is provided by the majority judgments of the Court of Appeal in North Sydney Council v Lycenko & Associates Pty Ltd (1988) 67 LGRA 247 where the expression "used as a boarding house" appearing in a State Environmental Planning Policy was held to mean "used as a boarding house" when the State Policy came into force, rather than when an application under that Policy for demolition consent was made and was determined.

However, the powerful justification for adopting a purposive interpretation in Lycenko in order to promote the policy of the State Policy is simply lacking in the present case where the following factors must be noted - (i.) s 10A(2)(b) provides an exception to the prevailing norm imposed by the LG Act, s 10(1)(b) that all meetings of the council be open to the public; (ii.) there is no ambiguity as to the meaning to be given to the expression "resident" appearing in s 10A(2)(b); (iii.) the use of the word "resident" with its ordinary meaning in the context of the exercise of a statutory power to exceptionally close to the public part of the meeting, prima facie indicates that it is residency at the time that the statutory power is exercised that is required by, and is relevant to, the statutory provision; and (iv.) a purposive construction of s 10A(2)(b) does not require or justify a departure from the prima facie meaning of "resident" and the prima facie requirement that it is residency at the time the statutory power is exercised that is relevant and is required.

For all the foregoing reasons, I hold that the Council, in closing to the public that part of its Meeting held on 16 August 2000 to receive and discuss the Confidential Item concerning the recovery of legal costs from the Applicant in purported reliance upon s 10A(2)(b), committed a breach of the LG Act because the power conferred by s 10A(2)(b) was not available by virtue of the fact that the Applicant was not at that time relevantly a resident of the Rockdale Municipality.

In so concluding, I hasten to observe that there is no suggestion that the Council acted improperly or untowardly. Indeed, it appears that it was simply mistaken in its belief or understanding that the Applicant was still a resident within its municipality. Moreover, that mistake was clearly an innocent and understandable mistake, despite the fact that the transcript of the recent examination in the District Court of the Applicant, as a judgment debtor, (which transcript had been included in the Confidential Business Paper) had indicated that he was no longer a resident of the Rockdale Municipality. Nor has there been any suggestion other than that in so acting, the Council was seeking to preserve the confidentiality of the personal hardship of the Applicant insofar as the examination of him as a judgment debtor had revealed the existence of virtually no assets or wherewithal to pay the large judgment debt obtained against him in respect of the Council's assessed costs in the proceedings unsuccessfully brought by the Applicant against the Council in this Court between 1997 and 1998 and in the Court of Appeal in 1999.

Although all these considerations are relevant to the exercise of the Court's discretion to "remedy" a breach of the Act, they are not relevant to the question of whether the Council's relevant action constituted a breach of the LG Act.

In the light of the foregoing, my finding that there has been established a relevant breach of the LG Act, means I have concluded that there has been a "non-compliance" within s 10 and s 10A without there being any "fault" on the Council's part cf Fidler. Indeed, I am prepared to find that the non-compliance is unintentional or inadvertent.

What are the legal consequences of the found breach of the LG Act? This matter was not explored at the hearing. Nor is it directly raised by the relief claimed by the Applicant. In these circumstances, it is not appropriate that I consider the question whether the found breach of the LG Act invalidates the Council's resolution passed in respect of the Council's consideration of the Confidential Item on its Business Paper concerning the Applicant's indebtedness to the Council for the assessed legal costs.

However, in this respect, I would only make three preliminary observations - (i.) Part 1 of the LG Act contains no express provision concerning the consequences of a breach of any of its provisions; (ii.) s 374 of the LG Act contains express provisions concerning the non-invalidation of "proceedings at a meeting of a council" by virtue of the existence of specified circumstances, including the following: (e) a failure to comply with the code of meeting practice; (iii.) if s 374(e) does not apply in respect of a breach of the LG Act, Pt 1, then the question of whether such a breach of Pt 1 (and more particularly the breach held to have been committed in the present case) would invalidate the Council's decision in relation to the Confidential Item concerning the Applicant's indebtedness to the Council is to be determined in accordance with the established principle, namely, whether upon the proper construction of the LG Act, the statute discloses an intention that a relevant breach invalidates the decision emanating from the process affected by that breach: see Tasker v Fullwood (1978) 1 NSWLR 20; Leichhardt Municipal Council v Minister for Planning (1992) 78 LGERA 306; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355.

There remains the need for me to consider the Council's argument that even if the Council's reliance upon s 10A(2)(b), in closing to the public part of its Meeting held on 16 August 2000 be held to be not justified (either in fact or in law, as I have already held to be the case) the action in closing part of the Meeting is nonetheless legally sustainable by recourse to an alternative source of available power.

In Minister for Urban Affairs v Rosemount Estates Pty Ltd (1996) 91LGERA 31 the majority in the Court of Appeal were prepared to uphold the Minister's decision upon the basis that an alternative source of power to the one purportedly exercised (that are being the subject of legal attack in the proceedings) was available to sustain the decision. Cole JA (with whom Sheller JA agreed on this point) in so holding, cited at 85 the following dictum of Brennan J (as he then was) in Johns v Australian Securities Commission (1993) 178 CLR 408 at 426:

When a power is exercised, a mistake in the source of power works no invalidity. Validity depends simply on whether a relevant power existed.

However, as Cole JA went on to observe at 85, the alternative source of power is only available, provided that any conditions necessary for its exercise have been satisfied.

This proviso presents immediate and insurmountable difficulties for the Council's argument because it is clear that the power to close part of the Council's Meeting must be exercised according to a number of important procedural constraints - eg the requirements of s 10D for the particular grounds in s 10A(2) to be stated in the decision (and in the minutes) closing the meeting and for there to be an explanation why discussion of the matter in an open meeting "would be, on balance, contrary to the public interest".

Obviously none of these important conditions have been satisfied in the present case and this fact alone excludes the application of the principle of the availability of an alternative source of power to sustain the impugned decision.

Moreover, and apart from those fatal consequences, the Council's suggested source of alternative power, namely s 10A(2)(g), simply has not been substantiated in any shape or form. On the contrary, it is clear from those parts of the Confidential Item on the Council's Business Paper that were tendered, that the principal item received and discussed at the closed Meeting was the Report of the Council's Director of Corporate Development. Clearly, that Report does not fall within the ambit of s 10A(2)(g), particularly given the additional constraints on the availability of that ground that are imposed by s 10B(2). By maintaining its claim to legal professional privilege and not tendering the Council's Solicitor's advice that was annexed to the Director's Report, the Council has denied itself the opportunity of even arguing that the requirements of s 10B(2) have been satisfied.

For all these reasons, I hold that the Council's action in closing to the public part of its Meeting held on 16 August 2000 is not legally sustainable by reference to any alternative source of available power. Accordingly, a breach of the LG Act has been established.

F. SHOULD THE PROVEN BREACH OF THE LG ACT BE REMEDIED?

As I have earlier stated, the LG Act, s 676 vests the Court with a very wide judicial discretion (i) as to whether it should make an order "to remedy" a breach of the Act; and (ii) as to the nature of any such remedy which "it thinks fit" to grant.

The nature and scope of the Court's powers and jurisdiction conferred by the equivalent provision that is contained in the Environmental Planning and Assessment Act 1979, s 124 were comprehensively expounded in the classic judgment of Chief Justice Street in F Hannan. I confine quotation to the following key passages at p 311:

Well-established canons of construction require a mandatory significance to be placed upon the phrase in subs (1) may make such order as it thinks fit to remedy or restrain the breach . Where an actual or threatened breach has been established the Court is obliged to consider what should be done to remedy or restrain the breach. In determining this, the Court is given an extremely wide charter. Falling expressly within that charter are the powers in subs (2) to restrain an infringing use, to require demolition or removal of an infringing building or work and to require reinstatement so as to efface the consequences of the infringement. These are but three ways open to the Court to discharge its duty under s 124(1) to make such order as it thinks fit . This last-mentioned phrase empowers the Court to mould the manner of its intervention in such a way as will best meet the practicalities as well as the justice of the situation before it. In Re Victorian Farmers' Loan and Agency Co Ltd (1897) 22 VLR 629 it was stated (at 635):

it must be remembered that under s 145 the Court may make such order as to it may seem fit, which means, as I understand it such an order as the Court thinks just.

This was quoted with approval in Queensland Estates Pty Ltd v Co-Ownership Land Development Pty Ltd [1969] Qd R 150 at 157. If, in a particular case, there is an actual or threatened breach, but either within its discretion or for other valid reasons, the Court does not think that any order is fit to remedy or restrain such breach, then relief will be withheld. Its obligation to make such order as it thinks fit necessarily postulates being able to formulate such an order. If the court ultimately decides that there is no order fit or just to meet the case, a decision to this effect will be a proper discharge by the court of its jurisdictional duty under s 124.

The reasoning of the Chief Justice applies with equal force in elucidation of the breadth of the judicial discretion and power vested in this Court by the LG Act, s 676.

In addition to the matters concerning the breach of the Act that I have found to have been innocently and inadvertently committed by the Council in this case, which I have earlier identified and which are relevant to the question of the exercise of the Court's discretion, the Council's Solicitor has argued (i) that there is no utility in granting relief in respect of the breach of the LG Act because the Council is free to make the same decision "tomorrow as it were" that it made at its Meeting held on 16 August 2000; (ii) that as the Applicant was afforded the opportunity of addressing the Council at its earlier Meeting held on 12 April 2000 and availed himself of the opportunity in making his representations to the Council, no further opportunity is required to be given; and (iii) that the Court has no power to grant the relief claimed in par 5 of the class 4 application, namely that the Council be ordered to afford the Applicant the opportunity to address the Council before deciding to close to the public any meeting at which it discusses and considers the question of recovery from the Applicant his indebtedness to the Council comprising the assessed legal costs in the unsuccessful legal proceedings he brought against the Council between 1997 and 1999.

On the opposing end of the scales and weighing in favour of the grant of relief in respect of the proven breach of the LG Act are the following considerations - (i.) a breach of the Act has been established in the proceedings, notwithstanding the Council's defence of the allegations made against it; (ii.) the proven breach of the LG Act, Pt 1 is a matter of significance, notwithstanding the finding that the breach in this case was innocently ignorant and inadvertent, because the provisions of Pt 1 mandate that council meetings be open to the public as the norm (s 10(1)), subject only to the limited exceptions specified in s 10A; (iii.) the Applicant is vitally affected by the Council's resolution passed at its Meeting held on 16 August 2000 to instruct its solicitors to commence bankruptcy proceedings against him because if he becomes bankrupt, as a result of such proceedings his civic office as a Councillor of Waverley Council, will become vacant by virtue of the LG Act, s 234: cf Bryant v Commonwealth Bank of Australia (1996) 90 LGERA 126 at 134 which will adversely affect his personal and economic interests.

Balancing these competing considerations leads me to the firm conclusion that appropriate relief should be granted to remedy the proven breach of the LG Act.

In particular, declaratory relief should be granted to vindicate in the wider local government community, the public importance of councils conducting their affairs at meetings that are normally open to the public. The Minister for Local Government in his Second Reading Speech on the Local Government Amendment (Open Meetings) Bill (see NSW Parliamentary Debates 13 November 1997 at p 1838 to p 1842) emphasised the importance to public accountability of "(T)he ability of the public and the media to attend council meetings and observe the deliberations and decisions of elected representatives" (1839).

He also noted the fact "that in too many cases the matters addressed in these closed sessions are not truly confidential, rather, they are controversial" (1839).

A declaration that there had been a breach of the important provisions of Pt 1 of the LG Act is in the circumstances of this case, an appropriate judicial response, particularly in circumstances where it appears that there is no ground available to the Council to discuss in closed session the matter involving the Applicant's indebtedness. In so concluding, I do not regard the question of the Applicant's indebtedness to the Council by virtue of the judgment debts (totalling some $160,000) comprising the assessed Council's costs of the litigation brought by the Applicant against the Council as merely involving a private affair or matter between the Council and the Applicant

In her judgment ordering the Applicant to pay the council's costs, the Chief Judge found that the litigation brought by the Applicant was "public interest" litigation in which he "had no personal gain out of this litigation - he brought the proceedings to make the council accountable for its dealings with land which it held" (par 3 of the costs judgment delivered on 23 October 1998) and in which he "had some public support in taking the proceedings" (par 4).

In these circumstances, it would not appear appropriate for the Council to regard the question of recovering the legal costs from the Applicant as simply raising a private matter between the Council and the Applicant.

Having decided that declaratory relief is appropriate relief, is there justification for further relief? Again, on balancing the competing factors, I think that it is just and appropriate that the Applicant receive some further substantive relief. That further relief is a mandatory order that will require the Council to reconsider the question of the recovery of costs from the Applicant and that in so doing, it afford the Applicant a reasonable opportunity of addressing the Council at a Meeting that is open to the public, in which the Council reconsiders that question.

Of course, it is a matter entirely for the Council's discretion as to what the Council will decide upon its reconsideration. However, it is important that that decision, whatever it be, be the result of a proper reconsideration of the question at a meeting that is open to the public and at which the Applicant is given a fair opportunity to put his case to the Council.

Since the Council has apparently not yet commenced bankruptcy proceedings against the Applicant pursuant to its resolution passed on 16 August 2000 (presumably because of the pendency of these proceedings) there is no need for any injunctive relief to be granted on the basis that the Council can be expected to observe the terms of the mandatory order for reconsideration of the question of the recovery of legal costs from the Applicant.

For all the foregoing reasons, I make the following orders

1. Declare that the Council, in closing to the public that part of its meeting held on 16 August 2000 to receive and discuss the Confidential Item on its Business Paper relating to the Recovery of Legal Costs from Wykanak, breached the provisions of the Local Government Act 1993, s 10(1) and s 10A(2)(b).
2. Order the Council to reconsider the question of the recovery of costs from the Applicant at a further meeting to be open to the public and at which the Applicant is given a fair opportunity to address the Council.
3. Reserve the question of costs.
4. The exhibits may be returned.

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.