Minister for Local Government v Blue Mountains City Council

1. [1]

   BATHURST CJ: I agree with the orders proposed by Leeming JA and with his Honour’s reasons.

2. [2]

   McCOLL JA: I agree with Leeming JA’s reasons and the orders his Honour proposes.

3. [3]

   LEEMING JA: The applicant Minister seeks leave to appeal from an injunction which issued from the Common Law Division of the Supreme Court initially on an ex parte application and was left undisturbed following a contested hearing the following day, on which the primary judge also ordered that the proceedings be transferred to the Land and Environment Court. The form of the injunction is:

4. [4]

   The two statutory provisions which are central to this litigation are ss 438I and 438K of the Local Government Act 1993 (NSW). Those provisions are reproduced and analysed below. Section 438I empowered the Minister to “suspend a council” and to appoint an interim administrator, for an initial period not exceeding three months, “if the Minister reasonably believes that the appointment of an interim administrator is necessary to restore the proper or effective functioning of the council”. The effect of the suspension and the appointment, speaking generally, was that the interim administrator had all of the functions of the council and its councillors, while the latter were suspended from office. A precondition to exercising the power under s 438I was giving notice under s 438K. As is plain from the terms of the injunction, notice was given by letter dated 14 February 2018, and it was that letter which prompted this litigation.

5. [5]

   The primary judge was satisfied that there was a serious question to be tried, that there was likely imminently to be an appointment of an interim administrator contrary to the Act, and that the balance of convenience favoured granting relief.

6. [6]

   Leave to appeal is required because, inter alia, the injunction is interlocutory: Supreme Court Act 1970 (NSW), s 101(2)(e). The application for leave was heard concurrently with the appeal. The facts were, for present purposes, uncontroversial and wholly documentary. The issues were:

   1. (1)

      did the Supreme Court lack jurisdiction to issue the injunction?

   2. (2)

      did the primary judge err in being satisfied that there was a serious question to be tried?

   3. (3)

      did the primary judge err in considering that the balance of convenience favoured granting relief?

   4. (4)

      should there be a grant of leave, and if so and if the answer to any of (1), (2) or (3) be affirmative, what relief should issue from this Court?

7. [7]

   The first issue, as to jurisdiction, was raised by the Court. The parties were both of the view that the Supreme Court had jurisdiction. On the second and third issues, the Minister submitted that both aspects of the test for interlocutory relief disclosed appellable error and, on the fourth issue, that there should be a grant of leave because the construction of ss 438I and 438K of the Local Government Act 1993 (NSW) raised a question of principle. The respondent Council denied any error, and further submitted that in any event leave should be refused. The Council also submitted that if this Court were minded to set aside the interlocutory injunction on any basis, its order should be stayed, briefly, so as to permit a further application to be made to the Land and Environment Court. The Minister said nothing in opposition to that course.

8. [8]

   For the reasons which follow, I have concluded that the Supreme Court had jurisdiction to issue the injunction, although not for the reasons given by the Council. However, I have also concluded that the primary judge erred in construing ss 438I and 438K, with the consequence that her Honour was wrong to conclude that there was a serious question to be tried. Each of those matters warrants a grant of leave. I propose that the appeal be allowed, and the order be set aside, the latter order to take effect 7 days after the delivery of reasons.

Factual background

1. [9]

   The only evidence before the primary judge was an affidavit sworn by the Council’s solicitor annexing some 300 pages of documents. Neither party sought to adduce evidence of what occurred in the three months following the hearings before the primary judge.

2. [10]

   By the end of 2017, the Council had received a series of “improvement notices” and “clean up notices” concerning the handling of asbestos at various council owned sites within its area. There were at least 23 such notices, some of which had been resolved, others of which were ongoing, involving no fewer than 12 sites.

3. [11]

   In November 2017, the Council resolved to engage an independent investigator to investigate and report on its management of asbestos, including asbestos in council owned properties. It also resolved to commission a separate independent investigation of issues relating to its retaining Mr Mark Mulligan as a safety consultant in 2016 and its employment of him as Acting Director, Service Delivery, in 2017. Mr Michael Tooma, a partner of the law firm Clyde & Co, was retained to undertake the asbestos handling investigation. Another solicitor, from a different firm, was appointed to investigate the issues relating to Mr Mulligan’s appointment. Mr Tooma was asked prior to his appointment whether there were any conflicts and advised that there were none.

4. [12]

   On 13 December 2017, the Minister served a notice under s 438K. It is desirable, in light of the reliance upon this notice by the primary judge and by the parties, to reproduce it in full. It was addressed to the Mayor and provided as follows:

5. [13]

   To anticipate what follows, it may be noted that this first s 438K notice invoked s 438I in terms, in its opening paragraph, and expressed a “preliminary belief” in terms of that section in its third paragraph.

6. [14]

   In accordance with the invitation to provide a written response within seven days, the Council responded under cover of a letter dated 20 December 2017. The letter invited the Minister, instead of appointing an interim administrator, to issue a Performance Improvement Order and to appoint a temporary advisor who had the requisite experience in safety and asbestos management in accordance with Part 6 of Chapter 13 of the Act. The letter stated that:

7. [15]

   The submission attached to the letter gave some prominence to the Council’s prompt decision to appoint two independent investigators. It said that this had occurred promptly, at the first meeting after allegations had been made by the media. It stated:

8. [16]

   The Minister’s response, by letter dated 22 December 2017, was to advise that she had decided not to suspend the Council, but (as the Council had proposed) to consider putting in place a Performance Improvement Order. Such an order may only be made if the Minister “reasonably considers that action must be taken to improve the performance of the Council”: s 438A(1). The balance of the letter gave notice of intention to issue such an order and, in accordance with the Act, gave the Council an opportunity to make submissions. The period for submissions was until Friday, 19 January 2018.

9. [17]

   In due course, on 22 January 2018, the Performance Improvement Order was made and served on the Council. It was in slightly different terms from what the Council had sought (in particular, it did not include the appointment of a temporary adviser). The submissions (if any were made) in response to the Minister’s letter of 22 December 2017 were not in evidence, and in any event, no challenge is made to that order in this litigation.

10. [18]

    The evidence includes a transcript of a talkback radio program on the morning of 13 February 2018. Mr Ray Hadley of 2GB stated that the Council’s Acting General Manager had said that Mr Mulligan’s employment with the Council would cease effective close of business that day. Mr Hadley described this as “sacking” Mr Mulligan. Mr Hadley then turned to what he described as “the connection” between Mr Mulligan and Mr Tooma. He read from a document said to have been dated 24 July 2013 but otherwise undescribed, which has the flavour of a professional reference, in which Mr Tooma had written that he had had the privilege of working with Mr Mulligan between 2004 and 2012 while the latter was at Country Energy. The document was said to be full of praise for Mr Mulligan, saying that he was “passionate about safety” and “would be an asset to anyone seeking to improve the safety of their company”. Mr Hadley then said:

11. [19]

    On the same day, the Mayor and Acting General Manager sent a further letter to the Minister, saying that they were shocked to have heard the allegation made on the Ray Hadley breakfast program. Their letter enclosed a letter from the Council’s solicitor, Mr Cork, to the Director of Legal Services of the Office of Local Government of the same date. That latter letter confirmed that Mr Mulligan had been engaged as a safety consultant for the period August 2016 to November 2016, and then had been employed as Acting Director, Service Delivery, with effect from 1 November 2017. The letter stated that the employment ceased the previous day, 12 February 2018.

12. [20]

    The solicitor’s letter advised that Mr Tooma had been unaware that Mr Mulligan was working for the Council when he was appointed, and that when he became aware, he did not consider that their prior association constituted a conflict of interest or was a matter that required specific disclosure.

13. [21]

    The letter attached an email from Mr Tooma to Mr Cork, sent at 12.36pm that day, which stated that Mr Mulligan had been Chief Safety Officer at Essential Energy, then known as Country Energy, and that Mr Tooma as a solicitor had worked on a series of matters with that company arising out of two fatal workplace accidents (including one defended prosecution, two coronial inquiries, and proceedings in the Supreme Court to quash the first inquest). Mr Tooma said that “Mr Mulligan was a key witness in those matters”. He said that he also met Mr Mulligan socially, and indeed in 2008 or 2009 acquired a 10% interest in a country based race horse with a number of executives, one of whom was Mr Mulligan. He said that the horse was sold later in 2009. Mr Tooma also wrote that he had given a “LinkedIn” reference to Mr Mulligan, and that he had been asked by Mr Mulligan to act as his referee for a position at Council. He said that he could not recall whether he was called for a reference, and that he was unaware that Mr Mulligan got the job until his (Mr Tooma’s) involvement with the Council.

14. [22]

    Mr Cork’s letter continued:

15. [23]

    Mr Cork advised that there was no basis for concluding that the councillors were careless or acted inappropriately in approving Mr Tooma’s appointment. He concluded:

16. [24]

    On the following day, 14 February 2018, the Minister issued a second letter pursuant to s 438K. It is that letter which is the subject of this litigation. In its entirety, it provided as follows:

17. [25]

    Once again, the Council responded within the time specified. The parties’ submissions on appeal did not focus on that response, which was provided to the Minister on 22 February 2018, and these reasons will adopt the same course.

18. [26]

    Later that day, the Council approached the Court.

19. [27]

    The Council seems to have intended to apply, ex parte, to the Land and Environment Court but, for reasons which are not totally clear, and which seem to have involved a misunderstanding on the part of either those acting for the Council or persons within that Court’s registry, the application did not proceed.

20. [28]

    The Council thereupon applied, ex parte, to the primary judge, sitting as Duty Judge at Common Law in the Supreme Court, apparently at around 6pm. The Council filed a summons seeking final orders preventing the Minister from suspending the Council based on the letter dated 14 February 2018, and a notice of motion seeking interlocutory relief in the same terms. Notwithstanding the apparent urgency of the application, there was time to prepare written submissions which included reference to the issue of jurisdiction. Those submissions wrongly stated that the proceedings fell within Class 2 of the jurisdiction of the Land and Environment Court but then added:

21. [29]

    Notwithstanding the lateness of the hour, the primary judge, commendably, gave an ex tempore judgment: Blue Mountains Council v Minister for Local Government [2018] NSWSC 183. The primary judge repeated the error that the proceedings were Class 2 proceedings within the jurisdiction of the Land and Environment Court, but accepted the submission that the Supreme Court had jurisdiction pursuant to ss 23 and 66(4) of the Supreme Court Act 1970. There is nothing to suggest that the primary judge was directed to the provisions governing Class 4 of the jurisdiction of the Land and Environment Court (no transcript of the ex parte application is available).

22. [30]

    Her Honour was persuaded that there was a serious question to be tried, as to whether the Minister was proceeding in accordance with s 438I. Her Honour said at [9]-[12]:

23. [31]

    Her Honour also relied on the possibility that the Minister “may be proceeding on the basis of factual errors regarding the nature of the employment of a Mr Mulligan, who was understood to have been the Chief Safety Officer of the Council. But he has never held that position” (at [13]).

24. [32]

    Her Honour was of the view that the balance of convenience favoured granting relief, stating at [15] that:

25. [33]

    That passage, together with the portion of her Honour’s reasoning as to the existence of a serious question to be tried reproduced in bold above, suggest that her Honour had accepted the Council’s argument, for the limited purpose of granting interim relief, that the Minister needed to hold the reasonable belief referred to in s 438I at the time the notice was issued.

26. [34]

    The primary judge then made orders, expressed to be interlocutory (“until further order”), notwithstanding that the application was made ex parte. Her Honour also stood the matter over before her at 10am the following morning. It appears the Minister was provided with the orders and the documents on which the Council relied at around 7.30pm that evening.

The contested application

1. [35]

   On the following day, 23 February 2018, the primary judge entertained an application by the Minister to dissolve the application which had been made ex parte on the application of the Council. Once again, her Honour gave ex tempore reasons: Blue Mountains Council v Minister for Local Government (No 2) [2018] NSWSC 193.

2. [36]

   The Minister submitted that the legislation did not require her to reasonably hold the belief that the appointment of an interim administrator was necessary at the time the s 438K notice was given, as opposed to the time any such appointment was made. The primary judge rejected that submission. This occurred in two portions of the judgment. The first, which the Council emphasised in submissions in this Court, was at [6]-[8]:

3. [37]

   The Minister emphasised what was said at [11]-[13]:

4. [38]

   In this Court, the Council stressed what the primary judge had earlier said in her second judgment, to the effect that it was necessary only for the Minister to take account of the requirements in s 438I when issuing a s 438K notice. The Council pointed to the passage emphasised above, and in particular the reference to “the conclusion which I reached yesterday”, which it submitted was to be understood as a reference to the passages at [12] and [15] reproduced above.

5. [39]

   On that basis her Honour remained persuaded that there was a serious question to be tried, and continued to be of the view that the balance of convenience favoured granting interlocutory relief, especially since it remained open to the Minister to issue a further notice which accorded with the requirements of the statutory scheme.

6. [40]

   In consequence, the order made on 22 February 2018 continues in force and is the subject of the present application for leave to appeal.

The injunctive relief ordered at first instance

1. [41]

   The Minister confirmed in oral submissions that she took no point as to either (a) the issuing of an interlocutory (as opposed to interim) injunction on the Council’s ex parte application, or (b) the shifting of the onus to the Minister on the following day to apply to discharge that injunction. So be it. However, both those aspects and others are irregular, and I would not wish what occurred to be regarded as a precedent. I say this without any criticism of the primary judge, who was called upon after hours to grant what her Honour was told was extremely urgent interlocutory relief, and who did not receive the assistance to which she was entitled.

2. [42]

   First, I doubt whether an ex parte application was appropriate. The parties had been in communication on this issue over many weeks, both at the level of Mayor and General Manager to the Minister, and also the Council’s solicitors to the departmental lawyers. Both had written to their counterparts on 13 February 2018. And yet there seems to have been no evidence even of a request which had been refused not to exercise the power without giving, say, 24 hours’ notice so as to enable the Council to apply to a court. (I note that the Council’s submissions stated that “the Minister had declined to give an assurance that she would restrain herself”. No evidentiary reference was given for that proposition, and I have been unable to locate such evidence, but to the extent that there was such evidence, then this concern would be allayed.)

3. [43]

   Secondly, had the application been made at some time earlier than the evening of the last day of the 7 day period after service of the notice, the urgency would have been commensurately less extreme. Ordinarily, it is not appropriate for a litigant to manufacture urgency by leaving its application until the last moment.

4. [44]

   In particular, the idea that a duty judge should be disturbed out of hours by reason of a party’s delay is to be deprecated. This Court is available for urgent applications at any hour of the day or night. However, it is quite wrong for a litigant to permit an application to become urgent by its own delay, especially if that involves, as it did in this case, opening the court after hours. It was known on 15 February 2018 that the Minister was threatening to exercise the power to suspend the Council at a time after 22 February 2018. The resolution which was ultimately supplied to the Minister on that date had been carried unanimously by the councillors on 20 February 2018. It may be that there was a proper explanation for the delay, which was not the subject of evidence because of the stance taken by the Minister. Absent a proper explanation, there was no basis for an after hours ex parte application.

5. [45]

   Thirdly, I appreciate that the need to obtain information and instructions may produce the result that an application can only be made immediately prior to the expiry of a deadline. In such a case, attention should be given to limiting the relief which is ordered ex parte. Often an order for short service will suffice. In the present case, the Council would have been adequately protected by a lesser order than was sought, for example, an order that the Minister take no step to gazette an order under s 438I pursuant to the notice dated 14 February 2018 without first providing 24 or 48 hours’ notice of her intention to do so. A less intrusive order will minimise the prejudice to the party who has not been heard, and reduce the applicant’s potential liability pursuant to the undertaking as to damages.

6. [46]

   Fourthly, the order which issued ex parte should not have been framed as an interlocutory order, expressed to continue “until further order”. It should have been expressed as an interim order, expiring in one or two days’ time, leaving it to the Council to renew its application after the Minister had been notified.

7. [47]

   Fifthly, the Minister should not have been placed in a position the following day of being required to move for the dissolution of the order which had been made in her absence and without notice to her. The onus to renew the order at all times lay with the Council. In Resort Hotels Management Pty Ltd v Resort Hotels of Australia Pty Ltd (1991) 22 NSWLR 730 at 731, McLelland J observed that even if the injunction which issued on an ex parte application was expressed until further order, it should be discharged on the return date unless the plaintiff showed sufficient reason for its continuation. In Ross v Internet Wines Pty Ltd (2004) 60 NSWLR 436; [2004] NSWCA 195 at [109] this Court said:

8. [48]

   Those five principles are generally applicable to ex parte applications for injunctive relief, whether the applications be made in litigation which has a private law or a public law character.

Jurisdiction

1. [49]

   The Minister not having sought to challenge any of those matters, they may be put to one side for the purposes of resolving this appeal. However, the preliminary question of jurisdiction cannot be put to one side.

2. [50]

   In response to this Court’s request in advance of the hearing, both parties supplied written submissions as to the Supreme Court’s jurisdiction at first instance. Both relied upon s 23 combined with s 66 of the Supreme Court Act 1970 (NSW); the Council also invoked the “inherent and general” jurisdiction of the Supreme Court to act in aid of other courts.

3. [51]

   The parties’ common position does not relieve a court from its obligation of satisfying itself that there was subject matter jurisdiction: Cockle v Isaksen (1957) 99 CLR 155 at 161; [1957] HCA 85; PT Garuda Indonesia Ltd v Australian Competition & Consumer Commission (2012) 247 CLR 240; [2012] HCA 33 at [16]. The position is no different on appeal. The result for which the Council contends is to leave in place an injunction ordered by the Supreme Court. It would be inappropriate to refuse leave or to dismiss the appeal unless this Court were satisfied there was jurisdiction to sustain that injunction. And, as was properly realised by Mr Singleton, who appeared for the Council at first instance and in this Court, there was a real issue as to jurisdiction (hence his submissions addressed the question of jurisdiction in terms, as did the reasons of the primary judge).

4. [52]

   The starting point was the Council’s submission, made to the primary judge and in writing and orally in this Court, that the proceedings were proceedings under s 673 of the Local Government Act 1993 (NSW). That section provides:

5. [53]

   There is no “other court” specified in the Local Government Act in which proceedings of the nature brought by the Council are authorised to be brought. Thus, by definition, proceedings under s 673 are proceedings in the Land and Environment Court.

6. [54]

   The Council’s submissions in this Court collected authorities as to the generality of the jurisdiction of the Supreme Court, including its inherent jurisdiction. They sought to invoke the Supreme Court’s jurisdiction to supervise and aid inferior courts, relying on what was said in Principal Registrar of the Supreme Court v Tastan (1994) 75 A Crim R 498 at 503. The Council’s submissions gave examples including cases where the Supreme Court could deal with contempt of an inferior court or issue a subpoena to assist an inferior tribunal or grant collateral declaratory relief in respect of pending proceedings in the District Court. In substance, the Council’s submission was that although the proceedings fell within Class 4 of the jurisdiction of the Land and Environment Court, that jurisdiction was not exclusive of the Supreme Court’s jurisdiction, which it had invoked and which was available to grant urgent injunctive relief.

7. [55]

   The existence of jurisdiction or power in any of the cases to which the Council referred is not to the point. For one thing, they were cases where an inferior court seized of the matter lacked power to make a particular order. The Land and Environment Court is a superior court of record, with ample power to make precisely the orders which the Council sought. There was no gap in power on the afternoon and evening of 22 February 2018. Rather there was a practical difficulty, arising for reasons which were not explored in the evidence or submissions, but which arose in part because the application was being made late on the last day of the seven day period in the Minister’s notice. As the Chief Justice asked during addresses, was it to be suggested that the jurisdiction of the Supreme Court turned upon the unavailability on extremely short notice of a judge of the Land and Environment Court to make the order sought by the Council? No authority was cited in support of the availability of jurisdiction or power because of a practical difficulty, as opposed to the legal limitations of the other court.

8. [56]

   For another thing, this was not what the Council had sought to do. The Council filed a summons in this Court seeking final orders. It also sought interlocutory relief to protect the subject matter of that summons. The Council did not, for example, file proceedings in the Land and Environment Court and then seek urgent interlocutory relief in the Supreme Court. The substantive proceedings are now pending in the Land and Environment Court, but as the primary judge noted at [2] of her second judgment, that is a result of the Minister’s application, which the Council neither consented to nor opposed.

9. [57]

   Thirdly and most fundamentally, it is axiomatic that there is no Australian court with unlimited jurisdiction. Numerous authorities are conveniently collected in the joint judgment in State of NSW v Kable (2013) 252 CLR 118; [2013] HCA 26 at [30]. The critical question in the present case is whether statute, in the form of ss 20 and 71 of the Land and Environment Court Act 1979 (NSW), denied jurisdiction to the Supreme Court. General propositions about the breadth of jurisdiction of superior courts of record are no answer to this basic feature of the Australian legal system.

10. [58]

    The Minister’s submissions did address the critical issue. She submitted that there was a general principle that statutes were not to be interpreted as depriving superior courts of power or jurisdiction absent an intention to do so appearing clearly or unmistakably, citing Magrath v Goldsbrough, Mort and Company Ltd (1932) 47 CLR 121 at 134; [1932] HCA 10. She submitted that s 673 of the Local Government Act did not expressly or by implication exclude the pre-existing jurisdiction of the Supreme Court, because (a) the words in s 673 “may bring proceedings in the Land and Environment Court or such other court as may be specified in this Act” were permissive, not peremptory, (b) those words were to be contrasted with express provisions such as s 486A of the Local Government Act (which conferred exclusive jurisdiction on NCAT) and (c) when the Supreme Court’s jurisdiction was ousted, that too was done expressly (the example given was s 263). Section 71 was said to be confined to the matters specified in s 20(1)(e) and did not apply in relation to s 20(1)(d). However, no submission was made in writing, or orally when the point was raised, in answer to the seeming force of the text and structure of s 20(1).

11. [59]

    I have concluded that if the proceeding were brought pursuant to s 673 of the Local Government Act, then the Supreme Court would have lacked jurisdiction. The proceeding would have been within Class 4 of the jurisdiction of the Land and Environment Court, and within that Court’s exclusive jurisdiction. Indeed, I favour the view that the entirety of Class 4 of the jurisdiction of the Land and Environment Court is exclusive to that Court, although that conclusion does not stand in the way of the Supreme Court having jurisdiction to make orders which are ancillary to the exercise of that Court’s jurisdiction (one example would be an order granting leave to proceed pursuant to s 471B of the Corporations Act 2001 (Cth) to a corporate respondent to Class 4 proceedings to which a liquidator had been appointed). But, contrary to Council’s submissions, that is not the nature of the jurisdiction it sought to invoke.

12. [60]

    All proceedings brought pursuant to s 673 of the Local Government Act are proceedings in the Land and Environment Court. That is a simple consequence of the nature of the right conferred by s 673. (I have put to one side the special considerations that may apply in federal jurisdiction to which Mason J referred in John Robertson & Co Ltd (in liq) v Ferguson Transformers Pty Ltd (1973) 129 CLR 65 at 95; [1973] HCA 21; there was no suggestion of federal jurisdiction here.)

13. [61]

    However, as the Minister submitted, s 673 of the Local Government Act does not necessarily exclude the jurisdiction to grant injunctive relief from another court where there has been shown to be a breach of that Act. No doubt the existence of s 673 might be a powerful discretionary factor for declining to grant such relief. There may perhaps be an argument, the force of which is enhanced by the open standing provision in s 674 permitting any person to apply for similar relief, that the existence of ss 673 and 674 precludes another court from granting any injunctive relief, even on the application of a person who has standing under ordinary principles. On that issue I express no concluded view. However, the point is one of jurisdiction, and I do not think that the jurisdiction of the Supreme Court to grant an injunction in support of a statutory right, in favour of an applicant with standing, has been excluded. The Council, whose functions will be removed from it for a period of 3 months if an interim administrator is appointed, plainly has standing at general law.

14. [62]

    In order to explain those conclusions, it is necessary to reproduce, and consider in some detail, the two critical provisions, namely, ss 20 and 71 of the Land and Environment Court Act 1979 (NSW). The central propositions which emerge from an analysis of those provisions are:

    1. (1)

       Class 4 of the jurisdiction of the Land and Environment Court has two components: (i) the proceedings listed in s 20(1) of the Land and Environment Act, being (for the most part) proceedings brought under particular sections of particular statutes and (ii) proceedings in the nature of enforcement, review or seeking declaratory relief in respect of rights, obligations and duties conferred or imposed by a “planning and environmental law” as defined in s 20(3);

    2. (2)

       the second component of its Class 4 jurisdiction is made exclusive to the Land and Environment Court by s 71 of the Land and Environment Court Act;

    3. (3)

       although s 71 of the Land and Environment Court Act has no operation in relation to the first component of Class 4 jurisdiction, the first component of its Class 4 jurisdiction is also, at least in very large measure, exclusive to the Land and Environment Court, because that component is defined by reference to proceedings in that Court (rather than by reference to the subject matter of or relief sought in those proceedings);

    4. (4)

       the proceeding commenced by the Council in the Supreme Court did not fall within either component of the Land and Environment Court’s Class 4 jurisdiction.

15. [63]

    At all times since its creation in 1979, the jurisdiction of the Land and Environment Court has been divided into classes. At all times since 1979, much has turned upon this delineation of jurisdiction, including the composition of the Court, the procedural rules applicable, and the nature of any appeal. At all times since 1979, a proceeding in Class 4 of the jurisdiction of the Land and Environment Court must be heard by the court constituted by a judge (s 33(2)) and an appeal lies to the Court of Appeal from most final decisions as of right and not confined to questions of law: s 58(1) and (3).

16. [64]

    Section 71 of the Land and Environment Court Act addresses the jurisdiction of the Supreme Court. It provides:

17. [65]

    Section 58 concerns appeals, and is irrelevant for present purposes. It may be noted that s 71(1) contains a double prohibition. It does not merely impose a prohibition upon the commencement of proceedings (which is primarily directed to parties and which may or may not impact upon jurisdiction: see 2 Elizabeth Bay Road Pty Ltd v The Owners – Strata Plan No 73943 (2014) 88 NSWLR 488; [2014] NSWCA 409 at [89]-[105]). Section 71(1) also imposes a further prohibition upon such proceedings being entertained.

18. [66]

    The prohibitions in s 71(1) would not prohibit the Supreme Court from dismissing proceedings commenced in contravention of it. As presently advised, I see no reason why s 71(1) would stand in the way of transferring those proceedings to the Land and Environment Court pursuant to s 149B of the Civil Procedure Act 2005 (NSW). That is an element of the Supreme Court’s jurisdiction to determine whether it has jurisdiction: see LDF Enterprise Pty Ltd v State of New South Wales (2017) 95 NSWLR 70; [2017] NSWCA 89 at [48] and the cases there cited.

19. [67]

    However, I see no way of construing s 71 other than as preventing any substantive exercise of jurisdiction in relation to the proceedings to which it applies. As much is confirmed by the opening words of s 20(2):

20. [68]

    Those words are consistent with no position other than that the jurisdiction of the Supreme Court to hear and dispose of a certain category of proceedings is excluded by the operation of s 71. In any event, that was what was held in LDF Enterprise Pty Ltd v State of New South Wales, which in many respects resembled the present case, in which urgent interlocutory relief was sought from the Common Law Division of the Supreme Court notwithstanding the proceedings fell within s 20 of the Land and Environment Court Act.

21. [69]

    Section 20 of the Land and Environment Court Act is now a very lengthy section. The form taken by s 20 in February 2018 is reproduced in the Annexure to these reasons. Its length hinders an appreciation of its legal effect. However, its essential structure remains unchanged. As originally enacted in 1979, s 20 took the following much simpler form:

22. [70]

    Each of the sections mentioned in paragraphs (a), (b) and (c) of s 20(1) authorise proceedings to be brought in the Land and Environment Court. Section 153 of the Heritage Act 1977 (NSW) provided:

23. [71]

    Section 123 of the Environmental Planning and Assessment Act 1979 (NSW) provided:

24. [72]

    Section 35 of the Environmental Planning and Assessment Act, the section mentioned in paragraph (c) of s 20(1), is a little different. It provided:

25. [73]

    It is readily seen that the three sections specified in each of paragraphs (a), (b) and (c) of s 20(1) all identified proceedings which were authorised to be brought in the Land and Environment Court.

26. [74]

    The structure of s 20 in 1979 was that there were two conferrals of jurisdiction upon the Land and Environment Court, which together comprise the entirety of Class 4 of that court’s jurisdiction. The first was effected by the particular categories of proceedings enumerated in paragraphs (a), (b) and (c) of s 20(1), all of which referred in terms to proceedings in the Land and Environment Court. The second was proceedings in the nature of enforcement, review or for declaratory relief in relation to a larger category of laws defined in s 20(3) as “planning or environmental laws”.

27. [75]

    The two conferrals of jurisdiction overlapped, for the Heritage Act and the Environmental Planning and Assessment Act were “planning or environmental laws”. Thus a proceeding seeking an injunction under s 123 of the Environmental Planning and Assessment Act would answer both the description in s 20(1)(c) and s 20(2)(a). Nothing turned on that. Either way, such a proceeding could only be heard and determined by the Land and Environment Court.

28. [76]

    What matters for the purpose of construing the effect of the limited exclusion in s 71 is that the laws defined to be “planning or environmental laws” which were picked up by paragraph (d) of s 20(1) read with s 20(2), unlike the three sections mentioned in paragraphs (a), (b) and (c) of s 20(1), extended beyond particular provisions conferring rights to proceed in the Land and Environment Court. Many planning or environmental laws conferred rights or granted powers or imposed prohibitions without in terms specifying how they were to be enforced or in what court. That generality was addressed by s 71. Section 71 took away what would otherwise have been the Supreme Court’s jurisdiction to hear and determine proceedings in the nature of enforcement, review or declaratory relief in relation to such laws. But there was no occasion for s 71 to extend to the first component of Class 4 jurisdiction, that conferred by s 20(1)(a), (b) and (c). That component was delineated not by reference to the enforcement, review or granting declaratory relief in respect of such rights, powers or prohibitions. It was delineated by reference to proceedings in a particular court, namely, the Land and Environment Court.

29. [77]

    Thus in 1979, the entirety of Class 4 of the jurisdiction of the Land and Environment Court was exclusive to that Court.

30. [78]

    As much is borne out by s 20(4). The effect of that subsection was, broadly speaking, to equate proceedings in Class 4 of the jurisdiction of the Land and Environment Court to proceedings in the Supreme Court. That reflected the fact that the Land and Environment Court was established as a superior court of record, of specialised jurisdiction, and that litigation within that jurisdiction was to be conducted in the same way and was to have the same consequences as litigation in the Supreme Court.

31. [79]

    At least in very large measure, the summary just given remains true notwithstanding the alterations to s 20.

32. [80]

    There has been no material alteration to the second half of Class 4 jurisdiction, for enforcement, review or declaratory relief in respect of planning or environmental laws, save that that category of legislation has been expanded. Section 71 still provides that such proceedings may only be brought in and entertained by the Land and Environment Court.

33. [81]

    There has been a very substantial expansion to the list of legislation in s 20(1). In very large measure, the new sections adhere to what was apparent when s 20(1) was first enacted: the provisions are limited in their own terms to proceedings in the Land and Environment Court. Some are materially identical to s 151 of the Heritage Act or s 123 of the Environmental Planning and Assessment Act (for example, s 282 of the Fisheries Management Act 1994, s 193 of the National Parks and Wildlife Act 1974, s 10 of the Uranium Mining and Nuclear Facilities (Prohibitions) Act 1986). Some are very similar, for example, s 69S of the Forestry Act 2012, which permits proceedings to be brought in the Land and Environment Court but only by a Minister, for an order to restrain or remedy a breach of an integrated forestry operations approval. Some refer to appeals to the Land and Environment Court (for example, s 60B of the Pipelines Act 1967 and s 91H of the National Parks and Wildlife Act 1974).

34. [82]

    A small minority of the provisions now specified in s 20(1) are not in terms confined to proceedings to the Land and Environment Court, although all seem to be closely linked with the Land and Environment Court. One is found in s 20(1)(caa), insofar as it refers to Divisions 6 and 6A of the Contaminated Land Management Act 1997, which concern the recovery of costs and the provision of financial assurances for actions required by a management order. It is not necessary for the purposes of this appeal to consider whether they are exceptions to the general rule that Class 4 jurisdiction is exclusive.

35. [83]

    What matters for present purposes is that s 20(1)(d) now refers to “proceedings under sections 673 and 674 of the Local Government Act 1993”. As might be inferred by its being paragraph (d), this reflects the very first amendment to s 20 of the Land and Environment Act. The Land and Environment Court (Amendment) Act 1980 (NSW) relettered the existing paragraph (d) as (e), and inserted a new paragraph (d):

36. [84]

    Section 317JB conformed to the pattern of the existing paragraphs. It was a section which referred in terms to proceedings in the Land and Environment Court. When the Local Government Act 1993 (NSW) was enacted, paragraph (d) was omitted and replaced by the paragraph in its current form (see Local Government (Consequential Provisions) Act 1993 (NSW), Schedule 2). Sections 673 and 674, the sections in the current paragraph (d), refer in terms to proceedings in the Land and Environment Court.

37. [85]

    I do not accept the applicability of the Minister’s first submission, that the legislation should be construed as not depriving a superior court of jurisdiction absent a clear and unmistakable intention. The reasons are as identified in LDF Enterprise Pty Ltd v State of New South Wales at [21]:

38. [86]

    There is some force, however, in the Minister’s reliance on the privative clause in s 263(7) of the Local Government Act to protect decisions of the Boundaries Commission. This provision is supportive of the conclusion that the Supreme Court is not deprived of jurisdiction. Like most expressio unius arguments, it is of limited weight. However it is true that if the effect of the inclusion of s 673 in the list of provisions specified in s 20(1) was to deprive the Supreme Court of jurisdiction to issue an injunction to remedy a breach of the Act, then s 263(7) would, to that extent, be otiose.

39. [87]

    It is not necessary for the purposes of this appeal to express a concluded view on the exclusiveness of the entirety of Class 4 of the jurisdiction of the Land and Environment Court. It is sufficient to note that the paragraph on which the Council relied, s 20(1)(d), “proceedings under sections 673 and 674 of the Local Government Act 1993”, once again refers to sections which in terms are confined to proceedings in the Land and Environment Court.

40. [88]

    Contrary to the Council’s submission, its proceeding was not a proceeding within Class 4 of the jurisdiction of the Land and Environment Court. A summons seeking an injunction filed in the Supreme Court of New South Wales is not a proceeding in the Land and Environment Court, even if it seeks relief for a threatened breach of the Local Government Act. Thus, the proceeding commenced in the evening of 22 February 2018 was not a proceeding falling within s 20(1)(d).

41. [89]

    Nor was it a proceeding “of the kind referred to in section 20(1)(e)”. It is true that “Part 2 of Chapter 6, Chapter 7 or Chapter 15 of the Local Government Act 1993” are now within the category of legislation defined to be a “planning or environmental law”. However, those three portions of the Local Government Act are not relevant to these proceedings. Section 673 of the Local Government Act falls within Chapter 17, and is thus not a planning or environmental law.

42. [90]

    It is also true that had the Council filed originating process on 22 February 2018 in the Land and Environment Court, which was evidently its intention until late that afternoon, there would have been proceedings in Class 4 of that Court’s jursidiction. However, the summons filed in the Supreme Court did not answer the description of a proceeding in s 20(1)(d) and did not fall within Class 4 of the jurisdiction of the Land and Environment Court. It should be regarded as an application for an injunction to enforce a statutory scheme, brought by a directly affected party with standing to do so, in accordance with the principles stated and applied in King v Goussetis (1986) 5 NSWLR 89 at 93-94. That is the “similar jurisdiction” available in the Supreme Court to which reference was made in Community Housing Limited v Clarence Valley Council (2015) 90 NSWLR 292; [2015] NSWCA 327 at [9]. There was jurisdiction to order an injunction.

Was there a serious question to be tried?

1. [91]

   The first and principal ground of appeal was that the primary judge erred in finding that there was a serious question to be tried. The Minister said that the primary judge erred in proceeding on the basis that before giving a Council notice under s 438K, the Minister must hold a belief that the appointment of an interim administrator was necessary to restore the proper or effective functioning of the council.

2. [92]

   There are two elements to this ground. The first is a question of statutory construction. The second is whether, if the Minister’s construction is correct, the primary judge in fact proceeded on the basis of an erroneous construction.

3. [93]

   Part 7 of Chapter 14 of the Local Government Act relevantly provides as follows:

4. [94]

   It was not suggested that there was any relevant authority. The following matters may be observed immediately in relation to those sections.

5. [95]

   First, the precondition to the exercise of the power in s 438I is a belief reasonably held by the Minister. If that belief be held, then s 438I confers a discretionary power upon the Minister (“may, by order published in the Gazette”) to suspend a council for a period not exceeding three months.

6. [96]

   Secondly, before exercising that power, the Minister is also required, by s 438K, to give notice in writing. There are a number of matters which are to be specified in the notice. It must specify the two things mentioned in s 438K(2): “the reasons why it is proposed to suspend the council” and “the duration of the proposed suspension”. Section 438K(3) requires that the notice must also contain an invitation to make submissions within the consultation period specified within the notice pursuant to s 438K(4). The consultation period is a period of not less than fourteen days, save if the Minister considers the suspension is required as a matter of urgency, in which case the notice must specify a period of not less than seven days.

7. [97]

   Thirdly, the Minister must have regard to any submissions made by the Council before exercising the power.

8. [98]

   Fourthly, the Minister must have regard to the suspension criteria made under s 438J. These are found in r 413E of the Local Government (General) Regulation 2005, as follows:

9. [99]

   Fifthly, it may readily be seen that those provisions do not exhaust the obligations upon the Minister before exercising the power. The effect of an interim administrator being appointed is that the councillors and the mayor are taken to be suspended from office: s 438L. Their interests may diverge from those of the council. The Minister accepted during argument that if a councillor made a submission then the Minister would be required to consider it before making an order suspending the council. That concession was properly made.

10. [100]

    I now come to the nub of the question of construction. What state of mind must the Minister hold when serving a notice under s 438K? A textual issue arises from the use of the word “intention” in s 438K(1). Plainly, that section looks forward in time to the possible exercise of the power in s 438I(1). But s 438K uses a different term from the “reasonable belief” in s 438I(1). One possibility is that the intention in s 438K is synonymous with the reasonable belief which is the condition precedent to the availability of the discretionary power in s 438I. Another possibility is that it is a rolled-up reference to both the reasonable belief and an intention to exercise that power. A third possibility is that it refers merely to the envisaged future exercise of the power to suspend.

11. [101]

    Certain textual considerations favour the third possibility. The first is the distinction in language between the “reasonable belief” in s 438I, and the “intention” in s 438K. Section 438K does not require notice to be given of the Minister’s reasonable belief that the appointment of an interim administrator is necessary to restore the proper or effective functioning of the council. Instead, it uses a different term, the Minister’s intention to suspend, which is future-looking and less unequivocal. The second is that in each of s 438K(2)(a), (b) and (3) there is reference to a “proposed” suspension. The sense of s 438K, read as a whole as it must be, is that the proposed suspension in (2) and (3) is no more and no less than the “intention to suspend the council” in (1).

12. [102]

    Structural considerations support that conclusion. It is quite clear that the Minister must possess the belief, and on reasonable grounds, that the appointment of an interim administrator is necessary, at the time the power under s 438I is exercised. The time that the s 438K notice is given is necessarily at least a week prior to the time the power may be exercised, and longer if there is no urgency. The belief at the time the s 438I power is exercised is also a belief which will be informed by the Council’s response to a s 438K notice. Why should the intention in s 438K be identical to the belief in s 438I, which is to be formed later in time and on additional information?

13. [103]

    Contextual considerations point to the same result. There will be cases where, following the receipt of submissions from the Council, the Minister may decide not to exercise, or to delay exercising, the s 438I power. That is, after all, what occurred in December 2017 between the parties to this litigation. It makes sense to construe the legislation so as to permit the Minister to give notice even in circumstances where the Minister, at that time, holds a belief which falls short of a belief that the appointment of an interim administrator is necessary to restore the proper or effective functioning of the council. That does not stand in the way of s 438K requiring that it be proposed to exercise the power, and that the reasons for the proposed suspension be provided in the notice in order that the Council may make meaningful submissions by way of response.

14. [104]

    There is a final point. The Council’s submission tends to prove too much. The reasonable belief as to the necessity of appointing an interim administrator is but one of the mental states the Minister must have before exercising the power.

    1. (1)

       It is also necessary for the Minister to consider the suspension criteria in s 438J and the submissions received from the Council. It is plain that the latter cannot be considered at the time of the issue of a notice under s 438K (because the submissions will not exist).

    2. (2)

       It is almost as plain that the s 438J suspension criteria are to be considered at the time the suspension is ordered, rather than at the time the notice is issued. It is clear that consideration of the suspension criteria must precede any exercise of power to suspend: s 438J(2). It surely cannot be the case that the Minister could consider the criteria say, one month before exercising the power, and then defend the validity of the exercise of power on the basis that those matters were considered earlier, in advance of receipt of the submissions. That would serve no useful purpose, and would be contrary to the legislative purpose of ensuring that the criteria be borne in mind at the time consideration was given to suspending a Council. It follows that the words “to be considered by the Minister in suspending Councils” in s 438J(1) must be understood as referring to the time at which the power to suspend is exercised, not a week or a fortnight earlier when a notice is issued.

15. [105]

    What follows from the foregoing is that there are two matters – the Council’s submissions and the suspension criteria – which are to be considered at the time the s 438I power is to be exercised and which cannot or need not contribute to the Minister’s state of mind at the time s 438K notice is given. That tends to highlight the unlikelihood, as a matter of construction, of an obligation upon the Minister at the time of issuing a notice to hold the reasonable belief required by s 438I.

16. [106]

    For those reasons, I accept the construction propounded by the Minister. The Minister may serve a notice under s 438K despite not having formed the belief that suspension of the Council is reasonably necessary. It is necessary however that the exercise of power under s 438I to suspend the Council be proposed, and that the Minister’s reasons for that contemplated future exercise of power be provided in the notice.

17. [107]

    It should be noted that twice the primary judge was called upon to deliver ex tempore reasons, and those reasons should not be scrutinised over-zealously for error.

18. [108]

    The first matter which supports a conclusion that the primary judge applied the wrong test was that the primary judge said that she rejected the submissions of the Minister (second judgment at [4]), and the Minister had advanced that construction. Mr Emmett (who appeared on short notice before the primary judge for the Minister) had contended that “s 438K can only sensibly be read as a requirement to form a preliminary intention subject to anything that may be received”, and rejected a construction that it was necessary for the Minister to have formed a belief that it was necessary to appoint an administrator, for it that were so, it might “be open to attack as indicating a pre-judgment by the Minister”.

19. [109]

    The second matter which supports the conclusion that her Honour applied an erroneous test is that that was what the Council asked her to do, orally and in writing. The Council’s written submissions were that “the Minister has not addressed herself to the correct statutory test (and therefore has not formed the required belief) and that any such belief is or would be unreasonable” (submissions dated 22 February 2018, para 10). The submissions went on to say:

20. [110]

    The Council then pointed to the failure in the letter to cite the test, the fact that the letter does not convey that the Minister held that view, and the statement at the end of the letter that “I consider that a period of external management is also a possible solution”; this, so it was said, was “hardly an emphatic statement of necessity” (paragraph 34).

21. [111]

    The Council’s position was put even more plainly in oral submissions:

22. [112]

    That is to say, those submissions attacked the notice because it failed to express a statement of belief that the appointment of an administrator was necessary, being the belief required if and when an administrator were appointed under s 438I.

23. [113]

    Thirdly and most importantly, on a fair reading of the two judgments as a whole, I think it is clear that her Honour was of the view that the Minister was required, in issuing a notice under s 438K, to hold the belief in s 438I.

    1. (1)

       That was the gravamen of her Honour’s observations that the 14 February 2018 letter did not refer to s 438I, or the limitation in that section.

    2. (2)

       It was the point of her Honour’s statement that there was a question whether the Minister “has indeed acted in accordance with s 438I” (in [12] of her first judgment).

    3. (3)

       It was also the point of her Honour stating that “it is not clear at all that the Minister is acting on a reasonable belief ‘that the appointment of an interim administrator is necessary to restore the proper or effective functioning of the council’” (at [15] of her first judgment).

24. [114]

    I respectfully disagree with the inference sought to be drawn by the Council, and relied on by the primary judge, from the different wording in the first and second letters.

25. [115]

    The Minister was responding in her second letter to a letter from the Mayor and Acting General Manager, which enclosed a letter from the Council’s solicitor. All four people were fully aware of what had occurred two months earlier, namely, the service of notice of an intention to suspend the Council, which had not been carried through.

26. [116]

    Further, the two letters were closely related. The inference I would draw from the correspondence is that the Minister regarded as a serious possibility, in December 2017, that an interim administrator might be needed in light of the history of difficulties with the Council’s management of asbestos. The action taken by the Council in November 2017, appointing Mr Tooma, and offering to subject itself to a Performance Improvement Order, confirms that there was, at the least, a serious problem in relation to this issue. The Minister chose not to exercise the power to appoint an interim administrator on 22 December 2017, but on the basis of the steps which Council had put in place. There is nothing remarkable in the Minister reviewing her position when it became known that Mr Tooma had a hitherto undisclosed professional and social relationship with Mr Mulligan (going so far as a moderately effusive reference and previous co-ownership of a race horse), and that Mr Mulligan had continued until 13 February 2018 to be employed by the Council. With that additional knowledge, it is unsurprising that the steps taken by the Council to allay the Minister’s concerns in December seemed less effective the following February.

27. [117]

    I do not agree that, when the correspondence is viewed as a whole, and in particular when the letter the previous day from the Council’s solicitor referred to the consideration of appointing an interim administrator, it was necessary for the Minister’s notice to reproduce a sentence identifying the belief which was needed in order for the power in s 438I to be available. Nor would I draw any inference that the Minister was unaware of the constraints upon the exercise of that power by its omission from the letter. Although there were two notices issued under s 438K, the correspondence is nevertheless best seen as a single chain between the same parties and on the same subject matter. It was not necessary to rehearse in the second s 438K notice the statutory test which had been set out in the first notice, and I would draw no inference from the failure to do so.

28. [118]

    The Council also pointed to, and the primary judge relied upon, the factual error concerning Mr Mulligan’s role with the Council. On the basis of the evidence available to this Court, the preferable inference is that Mr Mulligan had been the Chief Safety Officer of an energy retailer, but had never held that position in the Council. On that basis, the Minister was incorrect to state, twice, that he had held that position.

29. [119]

    I do not consider that this gives rise to a serious question to be tried, warranting quia timet relief, that the power might be invalidly exercised. There are two reasons for this.

30. [120]

    First, the gravamen of the letter was that the relationship between Mr Tooma and Mr Mulligan had not been disclosed, and that Council had not explained the sudden termination of Mr Mulligan’s employment the previous day.

31. [121]

    Secondly, it may be that the source of the factual error was what had been said by Mr Hadley on the radio. But at least part of the purpose of the requirement to give notice was to permit a Council to correct any such errors which the Minister might have made. I do not agree that the making of a factual error is itself sufficient to give rise to a serious question to be tried that the error would be repeated in such a way that the future exercise of the power, this time with the benefit of Council’s response to the notice correcting the error, should be the subject of an injunction.

Conclusion and orders

1. [122]

   For those reasons, the discretion of the primary judge miscarried. Based on the evidence in this Court, there is not a serious question to be tried, either because of the failure to mention s 438I or the erroneous description of Mr Mulligan as Chief Safety Officer.

2. [123]

   If I were wrong about that, I would not conclude that there was error in her Honour’s assessment of the balance of convenience. Recognising, correctly, that this ground of appeal was substantially weaker than the balance of the appeal, the Minister did not seek to elaborate this aspect of the appeal orally.

3. [124]

   If follows that in my view there should be a grant of leave, the appeal allowed, and the injunction set aside. The orders I propose will, in accordance with the Council’s submission, delay the discharge of the injunction so as to permit a further application to be made.

4. [125]

   I favour making no order as to costs. Although the Minister has been successful, her success was premised upon the utility of this Court clarifying the law, for the benefit of the exercise of this power in later cases. Thus the Minister’s interest, and the primary basis on which she contended there should be a grant of leave, went beyond the facts of this case.

5. [126]

   I propose these orders:

Annexure

1. [127]

   Section 20 of the Land and Environment Court Act 1979 (NSW), in the form it took in February 2018.