High Court Allows Municipalities to Challenge Commission Reports

OUTCOME: Allowed

High Court of Australia [NAME]. [NAME] JJ. [NAME] v [NAME] [1969] HCA 40

ORDER Appeal allowed. Set aside the whole of the determinations made by the [NAME] judge in his order of 24th December 1968, and substitute therefor the following, namely:

(1) The [NAME] have a sufficient interest to maintain an action for a declaration that no valid report under s. 14 (1) has been made to [NAME], or that all or certain of the reports purported to have been made by the Municipal Commission to [NAME] under s. 14 (1) have not been validly made under that section.

(2) The report or reports of the Municipal Commission is or are not void on the ground that the [NAME] were not heard as claimed.

(3) The [NAME] to have liberty to add parties and to amend the relevant paragraphs of the statement of claim to specify with particularity the report or reports in relation to s. 14 (1) (a) (i), (ii), (iii), (iiia) and (iv) which is or are claimed to be void and to relate thereto the allegations of fact founding the claim to invalidity of any such report or reports.

No order as to the costs of the proceedings in this Court. Costs of the proceedings in the Supreme Court of Tasmania to be in the discretion of that Court.

Cur. adv. vult.

The following written judgments were delivered:—

Sept. 4 [NAME] [NAME].

This appeal from the order made by the Supreme Court of Tasmania ([NAME].) in this action on 24th December 1968 [1] is brought by the special leave of this Court given in Hobart on 12th February 1969. The order under appeal was made with respect to certain preliminary points of law set down for argument pursuant to an order of the Supreme Court of Tasmania made on 8th October 1968. The points of law as described in that order were:

2.

(i) Whether the amended statement of claim is bad in law and discloses any cause of action against the [NAME] on the ground that there is no jurisdiction in the Court to grant the declaratory relief sought for the following reasons:

(a) There is no existing justiciable issue or controversy between the parties hereto because no legally recognized interests or rights of the [NAME] are sufficiently affected by the said report.

(b) That the provisions of the Act preclude the [NAME] from obtaining the declaratory relief sought because exclusive remedies in relation to the said report are provided for in the said Act.

(c) That the [NAME] have no locus standi to obtain the relief sought because they have no sufficient interest in the subject matter of the action or the declaratory relief sought.

(d) That the declaratory relief sought cannot be granted as against the [NAME] because

(i) Neither they nor the Commission have power to implement or direct implementation of the said report;

(ii) Such relief is not available as against a statutory body such as the Commission acting pursuant to s. 14 of the said Act.

(ii) Whether the amended statement of claim is bad in law and discloses no right to the declaratory relief sought on the ground that the facts disclosed therein do not and could not justify the exercise of a discretion (if any) to grant such declaratory relief.

(iii) Whether in fulfilling its duty to inquire and report to [NAME] under s. 14 of the Act the Municipal Commission was bound to observe the rules of natural justice.

(iv) Whether the determination of any of the above points of law disposes or substantially disposes of the action or any cause of action and whether or not it should be dismissed.

1. (1968) 16 L.G.R.A. 223.

The [NAME] [NAME] judge by his order determined the preliminary points of law as follows:

1. The amended statement of claim in this action is not bad in law and does not fail to disclose any cause of action. [ADDRESS] is not precluded from exercising jurisdiction to grant declaratory relief for any of the reasons set forth in pars. 2 (i) (a); 2 (i) (b); 2 (i) (c); 2 (i) (d) (i) and (ii) of my order dated 8th October 1968.

2. The amended statement of claim in this action is not bad in law and does not fail to disclose a right to the declaratory relief sought on the ground that the facts disclosed therein do not and could not justify the exercise of a discretion to grant such declaratory relief.

3. That in fulfilling its duty to inquire and report to [NAME] under s. 14 of the Act the Municipal Commission was bound to observe the rules of natural justice.

The action arises out of the activities of the Municipal Commission constituted under Div. II, Pt II of the Local Government Act 1962-1966 of the State of Tasmania (the Act). The Commission consists of a [NAME] (who is a barrister), a civil [NAME], a member nominated by the Treasurer, two members nominated by the Municipal Association and the Town and Country Planning Commissioner who is a member by virtue of his office: see s. 13 (1) of the Act.

The [NAME]' amended statement of claim, inter alia, seeks declarations that:

(a) the plaintiff [NAME] and each of them have been denied natural justice by the Municipal Commission;

(b) the Municipal Commission has wrongfully failed to make effectively available to the plaintiff [NAME] and each of them certain statements received in connexion with the matters into which the Commission inquired;

(c) the report is ultra vires the Municipal Commission;

(d) the recommendation by the Municipal Commission to His [NAME] that the plaintiff [NAME] and each of them be abolished is ultra vires;

(e) the recommendation by the Municipal Commission to His [NAME] that the proclamations of the several towns referred to in the report be rescinded is ultra vires;

(m) the recommendations by the Municipal Commission to His [NAME] that the City of Glenorchy be abolished is ultra vires;

(n) the report is void and of no effect;

(o) the Municipal Commission is not presently empowered to do any act or to make any report under s. 15 of the Act.

By s. 13 (2) of the Act, as amended by No. 68 of 1966, it is provided that the Municipal Commission shall be deemed to have been appointed by [NAME] by letters patent by virtue of the Act to inquire into and report upon matters provided for in s. 14 and any matter raised by a petition or counter petition under s. 15. It is only necessary to note in passing that by s. 13 (2A) it is said:

(2a) Notwithstanding anything contained in subsection (2) the Municipal Commission may not inquire into—

(a) any proposed litigation; or

(b) any point of law which may be raised in litigation,

in respect of the Commission's reports or proceedings.

The exact meaning of this quaint provision is anything but clear but fortunately nothing, in my opinion, turns upon it in this case.

Section 14 (1) (a), as amended by No. 80 of 1963, provides:

14—(1) The Municipal Commission shall—

(a) as soon as possible, but not later than two years, after the commencement of this Act inquire into and report to [NAME]—

(i) whether any existing [NAME] has insufficient financial resources for the proper performance of its functions and, if so, what re-arrangements are best for strengthening or disposing of it;

(ii) whether any town has boundaries substantially different from those of the actual town and, if so, what ought the boundaries to be;

(iii) on the division of the State into counties and how that division may best be brought into conformity with this Act;

(iiia) on the division of the State into [NAME] and whether any and, if so, what changes in that division by the enlargement and contraction of municipal boundaries and the creation and abolition of [NAME] should be made by reason of changes in population, industry, [NAME] and secondary, means of communication and transport, and urban development; and

(iv) whether the establishment of the county council is a reasonable alternative to a recommendation under sub-paragraph (i) or sub-paragraph (iiia) and, if so, what special powers it should have in what [NAME] and whether any of those [NAME] should be reduced in status.

Section 15 of the Act provides as follows:

15—(1) Subject to subsection (7) [NAME] may give effect as a whole to the proposals contained in any report made under paragraph (a) of subsection (1) of section fourteen by action under section seven notwithstanding that no petition has been made.

(2) When a report made under that paragraph is received by [NAME]—

(a) a copy thereof shall be made available for public inspection at a place appointed by the Minister; and

(b) an advertisement shall be published in a newspaper circulating in the [NAME] affected by the report—

(i) containing a summary of the action recommended in the report; and

(ii) stating where and when the copy thereof may be inspected.

(3) A [NAME] by action so recommended may at any time within six months from the day of publication of the advertisement petition [NAME] not to give effect to the report, setting out in the petition his reasons for asking and an address for delivery of the answer thereto.

(4) The answer to the petition shall be delivered to that address and shall be—

(a) that [NAME] will not act on the report, in which case he has no power to do so; or

(b) that the petition will be referred to the Commission, which shall then be done.

(5) On receipt of the petition the Commission, after taking such evidence and hearing such argument as it thinks proper, shall report to [NAME]—

(a) that other action should be taken than that previously recommended by it; or

(b) that notwithstanding its reconsideration it adheres to its former report.

(6) Where a report is made under paragraph (a) of subsection (5) the original report shall be deemed to have been amended thereby and may be acted on accordingly unless [NAME] thinks that justice requires that the procedure under subsections (2) to (5) should be gone through again.

(7) [NAME] may proceed in accordance with subsection (1) when—

(a) no petition has been lodged under subsection (3) within the time therein mentioned; or

(b) that time having run out and such a petition having been duly lodged, proceedings thereon are at an end,

and not before.

(8) For the purposes of subsection (3)—

(a) a [NAME] whose existence or boundaries are recommended to be ended or altered is a [NAME];

(b) [NAME] shall advertise his petition similarly to the report; and

(c) any person, including a [NAME] thereby affected, interested in upholding the report against [NAME] may counter-petition within such time as [NAME] thinks fit, and such a counter-petition shall if the petition is referred to the Commission be referred with it.

Section 7 provides:

7—(1) Subject to sections nine, fifteen, nineteen, twenty, twenty-three, and twenty-nine to thirty-three, [NAME] may by proclamation—

(a) create, unite, abolish, alter the boundaries of, give a name to, and alter the name of, counties, [NAME] other than cities, wards of such [NAME], towns, and hundreds; and

(b) alter the boundaries of cities.

(2) A proclamation under this section shall state the date from which it shall take effect; and no proclamation constituting any new county shall be published unless a plan of the county to be constituted has been laid before Parliament for thirty days.

Section 23 (1) provides:

2—(1) [NAME] shall not exercise his powers under section seven in respect of [NAME] and wards of [NAME] except—

(a) upon and in accordance with a report of the Municipal Commission as provided in section fifteen;

(b) in respect of a [NAME] or portion of a [NAME] in which there is at the time no council or insufficient councillors to form a quorum of the council; or

(c) upon petition in accordance with section twenty-four.

Section 165 in Pt VII headed Counties in subsection (2) provides:

(2) On a petition under subsection (1) or a report under paragraph (a) of subsection (1) of section fourteen [NAME] may by proclamation—

(a) order the establishment of the required county council;

(b) confer on it the required special powers and functions; and

(c) declare the [NAME] in which it may exercise those special powers and functions.

The only other provision which I ought to incorporate in these reasons is s. 810 (5) which reads:

(5) No proclamation purporting to be made under, and within the powers conferred by, this Act shall be deemed invalidated merely by reason of some non-compliance with any requirement of this Act preliminary thereto.

According to the amended statement of claim in the action the [NAME] are [NAME] incorporated pursuant to the provisions of the Act. The only [NAME] to the suit are those persons appointed to form the Municipal Commission who remain members of it. It is said that in purported pursuance of the powers conferred by s. 14 (1) (a) of the Act the Commission "reported" to [NAME] on 22nd October 1965, that is to say, within the period of two years prescribed by s. 14 (1). What is not clear in the pleadings is whether the Commission reported separately as to each matter listed in s. 14 (1) or at any rate as to such of those matters into which it had inquired. The [NAME] for his purposes treated the writing by which the Commission made its report as the report for the purpose of the assertions made by the pleading: but as will appear later, a question yet to be investigated is whether that writing comprised a series of separate reports each in relation to one of the matters listed in s. 14 (1), or comprised though not in segregated form a report on each of those matters, or such of them as had been the subject of inquiry, the appropriate conclusions and recommendations, if any, having to be extracted from the writing taken as a whole or whether that writing constituted only one indivisible global report.

A substantial contention raised before the Supreme Court by the [NAME] with which I would first deal was that the common law requirements of natural justice were not excluded by the Act from the proceedings of the Commission when inquiring into any of the matters listed in s. 14 (1) but particularly items (i) and (iiia) and that the Commission had not complied with those requirements before making its report. Consequently, it was submitted that for that reason the report was a nullity and void. The particular aspect of those requirements upon which the respondents fastened was the necessity to hear the person to be affected. The consequences of applying this part of the rules as to affording natural justice in this case according to the respondents' submission is that the Commission was bound to inform the respondents of all the factual material which it had in hand and which it might consider when forming its opinions upon which its report to [NAME] would or might be founded and, also, to inform the respondents of any tendencies of mind which the Commission had developed in relation to the matters in hand. In short, the submission was that the Commission was bound in hearing the respondents to expose to the respondents all the material available to the Commission and any tentative views as to the matters to be reported upon as and when the Commission formed them. Of course, what is in this respect true of the respondents is also true of every other person or body about whom or with respect to whose affairs the Commission are at any time minded or even perhaps might be minded to report to [NAME] in pursuance of s.

14. The [NAME] [NAME] judge in a careful judgment accepted the respondents' submission and answered question three in the form I have earlier set out.

With due respect, however, it seems to me that the first step is to construe the relevant portions of the Act and to educe therefrom the scheme of inquiry, report and subsequent action which it contemplates. I do not regard it as appropriate in this case first to presume that the requirements of natural justice would be applicable to the first stage of the statutory scheme of inquiry and report because the conclusions of the Commission expressed in the report may adversely affect some person or body and then to search for some displacing or contrary provision or indication in the statute. It is in relation to the carrying out of the whole process prescribed by the statute that the question as to the requirements of natural justice is to be considered.

Sections 14 and 15 together form the statutory scheme. A report of the Commission is not self-executing nor is it the end of the prescribed process; and it is not permissible, in my opinion, to detach the first part of the process from the entirety. No doubt it affords a basis for action on the part of [NAME] in Council who may only implement it in whole, or reject it in whole; also it may be said in [NAME] terms that those against whose interests recommendations are made by a report are in a less favourable position if and when they petition under s. 15 than they would have been if no such recommendation had been made. Further, it may be that such a person may have had an easier task in counselling the Commission not to make a recommendation than he would have in persuading the Commission upon a petition under s. 15 to change the recommendation once made. But these are not, in my opinion, relevant considerations in relation to the entire scheme of ss. 14 and 15. Moreover, I might say in passing that with due respect to the [NAME] judge, I do not regard the fact that the existence of the recommendation places a person under the necessity to petition [NAME] in Council in order to protect himself or itself, and in consequence to expend money by way of legal costs and expenses in the prosecution of the petition as a relevant matter either in considering whether the making of the report is an act which itself causes injury or in considering whether the person or body affected by the recommendation has an interest to sustain a suit in relation to the report.

To return to the question under immediate consideration, I may say that if s. 15 were not [NAME] in the Act there would, in my opinion, be much to be said for the proposition that before reporting to [NAME], the Commission was bound to hear persons in the situation of the respondents, notwithstanding the fact that the report was not self-executing and that the discretion of [NAME] in Council stood between it and the carrying out of the recommendation. Such a person, quite apart from the presence of s. 15 (3) and (8), might well have had sufficient interest to have sought certiorari at common law. It may be that because of the provisions of the Tasmanian Supreme Court Civil Procedure Act 1932-1965 some remedies or writs may not be available against the Commission on the footing that the Commission is an agent of the Crown—a proposition which with due respect would for my part need further examination: but, at least, in my opinion, a declaratory decree could in such circumstances be made, a matter to which I shall return later. That is to say, so far as my own view is concerned, I would not regard the fact that the report is not self-executing or that the discretion of the Executive is interposed between it and any actual consequence to the person in the situation of the respondent as necessarily preventing the making of the appropriate order at the instance of such a person. The decision in [COMPANY]. v. Tait [1] depends, in my opinion, upon its own particular facts and statutory circumstances. But that matter does not now, in my opinion, fall for decision because s. 15 is [NAME] in the Act and occupies a significant place in the entire statutory scheme. There is thus no [NAME] need to discuss the authorities decided here and in the United Kingdom to which the [NAME] judge has made reference, including R. v. Electricity Commissioners; Ex parte [NAME]. (1920), [COMPANY] [1] , all of which would bear upon the definitive resolution of that matter.

1. (1963) 109 C.L.R. 353. 2. [1924] 1 K.B. 171.

In passing, I might mention that, since the reasons for judgment of the [NAME] judge were published [COMPANY]. v. Foreign Compensation Commission then decided by the Court of Appeal [2] , has been the subject of appeal to the House of Lords [3] with significant modification of some of the views in the Court of Appeal. That case and the case of [NAME] v. [NAME] [4] , no doubt are important in relation to the judicial control of administrative bodies.

1. [1968] 2 Q.B. 862. 2. [1969] 2 A.C. 147. 3. [1967] 2 A.C. 337.

The Commission is to submit a report to [NAME] in Council and in doing so to make appropriate recommendations. These of necessity under the scheme of the Act containing s. 15 must be tentative. Section 15 requires them and the reasons on which they are founded as expressed in the Commission's report to be available to all who may possibly be concerned to contest them. Such persons are to be alerted by further advertisement to the existence of the recommendations and to the opportunity afforded for the ascertainment of their precise nature by inspection of the report itself. [NAME] by the recommendation is entitled to petition, requesting that the recommendation be not acted upon, giving as required his reasons for so requesting [NAME] in Council. The class of persons [NAME] is extremely wide and quite clearly is not limited to [NAME] who in this respect cannot, in my opinion, be said to represent their ratepayers. If [NAME] in Council is not prepared out of hand to accept the views of the petitioners and to reject the Commission's recommendations, the petition is to be considered by the Commission and its earlier recommendations reconsidered. Unlike the stage under s. 14 before the Commission's recommendations are formulated, at the time the opportunity to petition and [NAME] the [NAME]'s views is afforded under s. 15 the actual recommendations are known and their possible disadvantage to the particular citizen or [NAME] able to be perceived. No action can be taken on them till the views of the [NAME] have been considered. It is not necessary to decide whether the Commission at this juncture is bound to hear [NAME] or to receive relevant evidentiary material proffered by him. The opportunity to put forward his views and the supporting material in the form of a petition would seem to me in this type of statutory scheme to satisfy the common law requirements of natural justice. But in any case s. 15 is a clear indication by the legislature of the nature of the opportunity which it will afford the [NAME] to make known their views and the material upon and by which they seek to support them. The case is not one in which the legislature is silent as to the right to be heard, so that the common law can fill the void. The legislature has addressed itself to the very question and it is not for the Court to amend the statute by engrafting upon it some provision which the Court might think more consonant with a complete opportunity for an [NAME] to [NAME] his views and to support them by evidentiary material. It is for this reason that I express the view that in any case the provisions of s. 15 represent the extent of the legislature's provision for the hearing of the [NAME]'s objections to the Commission's recommendations. To require a hearing or an opportunity to participate in the formation of the Commission's recommendations whilst the inquiry under s. 14 is in progress would in the presence of s. 15 be to do more than natural justice requires.

But in so expressing myself, I would not be taken to encourage the view that the expression in s. 15 (5) "after taking such evidence and hearing such argument as it thinks proper" affords the Commission a charter to refuse to hear any evidence or any argument. Rather, I should think, as at [NAME] advised, that the quoted expression means no more than that the Commission can decide for itself upon the relevance of evidence offered to it and regulate the extent of the argument it will allow to be presented, which is a far cry from a power to refuse to hear anything at all.

Consequently, I am unable to agree with the answer given by the [NAME] [NAME] judge in his third declaration.

The second and only other point that arises at this stage of this litigation is the question whether the [NAME] have such an interest as affords them the necessary standing to maintain a suit for a declaration that the writing furnished to [NAME] by the appellant members of the Municipal Commission is ineffective as a report under s. 14 of the Act, and so far as it purports so to be, void.

It would seem clear enough and it is my opinion that the operation of s. 15 depends upon the receipt by [NAME] of a report conforming to and not exceeding the requirements of s. 14 (1). Unless such a report is to hand, [NAME] may not take any of the steps permitted or required by s.

15. If he should do so, without having received such a report, his acts will be ineffective to advance any of the purposes of s. 15 and of the other portions of the Act (e.g. s. 7) which may depend upon action properly taken under ss. 14 and 15.

The attack made upon the report upon the ground that in the inquiry which preceded it, the principles of natural justice were not observed with the result, so it was submitted, that the report itself was void, in my opinion, as I have already indicated, fails. But the respondents assert other grounds of invalidity. I have no need to detail them. Suffice it for [NAME] purposes to say that they include allegations of irregularity or insufficiency in the composition of the Municipal Commission at various meetings, at some of which evidence was taken and at others of which decisions were reached; that improper criteria were adopted for the resolution of matters on which the Commission purported to report; and also an allegation that the report in its recommendations travelled beyond the authority given to the Commission by s. 14 (1).

Whether or not the matters alleged if established are capable of founding a conclusion that the report is void is not a matter raised in these proceedings. The only remaining question at [NAME] is whether the respondents could be held to have a sufficient interest to warrant the making of a declaratory decree, if the Court in the circumstances was minded so to do.

A suit for a declaration of invalidity is a suitable proceeding where it is likely that the Executive will take some step only warranted by statute if a valid instrument satisfying a statutory description is in existence. Persons who would or might be affected in their person or property by such an exercise of Executive authority are, in my opinion, clearly entitled to sue for such a declaration of invalidity as a means of precluding such Executive action. Here if the report is valid, the necessary advertisements may be made and, although a petition may be lodged and heard, the recommendations of the report in the result may be confirmed and carried into effect. If the report is invalid, none of these steps may be taken or results ensue. The recommendations of the report clearly affect the [NAME], who, in my opinion, not only have a corporate existence, but corporate property and rights which they can protect and defend against divesting and extinction by the Executive without lawful authority. If the report be invalid, yet put into execution, the property of the [NAME] may be divested and the statutory powers may be destroyed by action under s. 7, although the taking of steps under s. 15 without the existence of a valid report may be defeated by litigious action to prevent any steps being taken under s. 7—a matter I have no [NAME] need to resolve. I merely observe in passing that, in my opinion, contrary to the submission of the [NAME], the provisions of s. 810 (5) would not save a proclamation made under s. 7 in the absence of a valid report under s.

14. Section 810 (5) is directed to formalities and not to such matters of substance as the making of a valid report under such provisions as are here under discussion.

It was submitted that the necessity to expend money in the prosecution of a petition which the [NAME] would be bound to lodge in an endeavour to forestall the implementation of the Commission's recommendations established a relevant interest in the [NAME]. That the [NAME] could petition is established by s. 15 (8). But with all due respect to the [NAME] [NAME] judge who in his careful reasons for judgment thought otherwise, I do not think that either the need to make any such expenditure, or the making of it, either constituted a relevant interest in any [NAME] or a relevant detriment to or invasion of right of any such [NAME].

I agree with the [NAME] judge that the statement of claim raised justiciable issues. We are not concerned here with a case of an attempt to obtain a declaration that a judicial proceeding or order is void. The case as I see it is one in which a declaration is sought that a statutory step which is a prerequisite to the exercise of a statutory power has not been validly taken. Clearly, in principle and consistently with the many authorities on the subject of which a number are referred to in his reasons for judgment by the [NAME] judge such a declaration is within the competence of a court such as the Supreme Court of Tasmania with the power to make declaratory orders and decrees. The question whether the allegations of the statement of claim, if established, would lead the Court to exercise its discretionary power is not presently under debate. As I have said, the sole question is whether the [NAME] have a sufficient interest to maintain in the circumstances such a suit.

Before finally expressing my opinion on that matter, I should point out two matters. First, the reference to the report in the statement of claim might well be regarded as embarrassing and be the subject of particulars. The question whether the claim of the plaintiff is that there was one report in which subject matters were inextricably intermingled but which travelled beyond the statutory authority to inquire and report, or is that there were several reports, each or some of which so travelled beyond authority needs to be explicated. The same is true of the other allegations of invalidity. They need to be properly related to the several reports if the claim is not that there was only one report.

The other matter is as to parties. It seems to me, without expressing any view upon the matter, that the question whether the [NAME]-[NAME] should be a party needs examination.

Having indicated the directions in which the proceedings may be defective, I would proceed to answer the substantial question on this aspect of the matter by saying that, in my opinion, the [NAME] have a sufficient interest to maintain an action for a declaration that no valid report under s. 14 (1) has been made to [NAME], or that all or certain of the reports purported to have been made by the Municipal Commission to [NAME] under s. 14 (1) have not been validly made under that section. In my opinion, the proper order to be made is to set aside the whole of the determinations made by the [NAME] judge in his order of 24th December 1968: to substitute therefor the following, namely:

[NAME].

I agree with the judgment of the Chief Justice.

[NAME].

I have had an opportunity of considering the judgment which the Chief Justice has prepared. I agree in it.

Sept. 5 [NAME].

Yesterday we made the order in the matter and there is no need for me to refer to it again. [ADDRESS] is of opinion that there should be no order as for the costs of the proceedings in this Court and that the costs of all the proceedings in the Supreme Court in Tasmania, and that will include the proceedings before [NAME]. out of which the appeal arose, are to be in the discretion of the Supreme Court of Tasmania. I think that is clear enough so that you can argue out the details of the costs in Tasmania.