Cornish v Secretary, Department of Planning, Industry and Environment

1. [1]

   BASTEN J: Marcus Cornish is a councillor on Penrith City Council. He has been a member of the Council since 2012. Almost five years ago, in November 2014, the Council was debating whether to consent to a development application for a place of worship and community centre in Kemps Creek. The application was approved at a Council meeting held on 24 November 2014; on 8 December 2014 the Council considered a rescission motion.

2. [2]

   On 19 December 2014 a complaint was made concerning Mr Cornish’s conduct at these meetings, alleging breaches of the Council’s Code of Conduct. Through a process which will be outlined below, some three and a half years later, on 12 July 2018, the Civil and Administrative Tribunal (“NCAT”) imposed a disciplinary sanction on Mr Cornish, suspending his right to payment of emoluments for a period of three months from the date of the decision.

3. [3]

   On 31 July 2018 Mr Cornish brought an appeal from that decision pursuant to Sch 5, cl 29(2)(b) of the Civil and Administrative Tribunal Act 2013 (NSW) (“the Tribunal Act”). There is no appeal to an Appeal Panel of NCAT, but only to this Court. In February 2019 the summons was amended to add a claim for relief pursuant to s 69 of the Supreme Court Act 1970 (NSW) in the supervisory jurisdiction of the Court, quashing the decision of NCAT. There is no need to stay to consider whether either jurisdiction is inappropriate. It is convenient to refer to Mr Cornish hereafter as “the applicant”. For reasons which follow, the decision of the Tribunal must be set aside, with consequential orders as to costs.

4. [4]

   Two changes to the legislative and administrative regimes took place during the long procedural history of this matter. First, in late 2014 when the conduct occurred, disciplinary functions were conferred on the Director-General of the Department of Local Government. In July 2017, the matter was referred to NCAT for consideration by the Chief Executive, Office of Local Government. That office was abolished and replaced by the Department of Planning, Industry and Environment with effect from 1 July 2019. [1] The defendant in the current proceeding is the Secretary of that Department.

5. [5]

   Secondly, the statutory scheme was amended in November 2015 by the Local Government Amendment (Councillor Misconduct and Poor Performance) Act 2015 (NSW). The Act commenced on 13 November 2015. That date was after the misconduct complained of on the part of the applicant, but before the matter was dealt with the Chief Executive, Office of Local Government. Where the legislative provisions as in force prior to the amendments are the applicable provisions, that will be noted in setting out the relevant sections below. Where no relevant change has occurred, the current version of the legislation will be set out.

Factual background

1. [6]

   The conduct of the applicant underlying the disciplinary steps taken against him may be summarised briefly and in terms which do not purport to resolve disputes as to the precise order of events, nor what was said. The first matter arose at an ordinary Council meeting on 24 November 2014. Whilst a speaker was addressing the Council in support of a motion that a development application for a Muslim place of worship in Kemps Creek be granted consent, the applicant asked the speaker if she lived in the Penrith District. The mayor directed that the question need not be answered and the applicant rose to take a point of order. The mayor then requested the applicant to resume his seat on two occasions. He did not immediately sit down.

2. [7]

   The second incident occurred at an extraordinary meeting on 8 December 2014 during discussion of the rescission motion, when another person was addressing the Council in favour of the development. The applicant asked him whether he believed in Sharia law, a question which was said to have “incited the crowd in the gallery.” [2] The mayor rose to intervene and the applicant rose to take a point of order. It was alleged that the applicant continued to stand and pursue the matter despite requests by the mayor, who was also on his feet, for him to be seated and silent.

3. [8]

   On 19 December 2014 a complaint with respect to these incidents was referred to a member of the Council’s “Code of Conduct Review Committee”, pursuant to cl 6.1 of the Procedures for the Administration of Model Code of Conduct (the Procedures). A conduct reviewer determined that an investigation should be carried out pursuant to cl 6.10(e) of the Procedures. The final investigation report found that the conduct in question constituted a breach of cll 1.9(a) and (b) (of the meeting code), and 3.3, 3.4, 3.5, 3.7, 6.5 and 6.6 of the Model Code of Conduct, which had been adopted by the Council. (The terms of these clauses are not presently relevant.)

4. [9]

   The applicant was not satisfied with the findings of the reviewer and sought to exercise an internal right of review by the Department, provided under Pt 9 of the Procedures, apparently in relation to an interim report prepared by the reviewer. The Pt 9 review was rejected, and is of no immediate relevance except to the extent (if at all) that it provided a form of merit review of the conduct reviewer’s investigation and findings. Such a review is, however, limited to an assertion that the reviewer has “failed to comply with a requirement prescribed under these procedures”. A Pt 9 review can only be obtained from a “final report” and not where the “sanction imposed” involves censure and referral to the Department for consideration of misconduct proceedings. This matter fell into the latter category.

5. [10]

   On 21 April 2015 the investigator made recommendations for certain steps to be taken in accordance with cl 8.35 of the Procedures. The recommendations were as follows:

6. [11]

   At its meeting on 27 July 2015, the Council proceeded in two stages. First, a Committee of the Whole adopted a recommendation, the operative part of which read:

7. [12]

   The applicant failed to acknowledge the findings of breach, failed to offer the unqualified apology and to give the required undertaking; he also refused to participate in code of conduct training.

8. [13]

   Following the failure of the applicant to take the necessary steps within the three month period specified in the resolution, on 30 October 2015 the Council’s general manager referred the matter to the Office of Local Government as involving a possible breach of the misconduct provisions of the Local Government Act 1993 (NSW). [3] The Acting Chief Executive of that Office found in May 2016 that there was sufficient evidence to conclude that the applicant, in failing to take the relevant steps, had breached cll 8.8 and 8.10 of the Code of Conduct. A breach of those provisions was said to constitute “misbehaviour of a councillor” within the terms of s 440F of the Local Government Act.

9. [14]

   On 10 July 2017 the Acting Chief Executive lodged with NCAT an application for disciplinary findings and orders, [4] alleging a breach of cl 8.10 (only) of the Penrith City Council Code of Conduct. The Council had adopted the Model Code, cl 8.10 of which read as follows:

10. [15]

    The “action” which was particularised was the failure to comply with the requirements of acknowledgment, apology, and giving undertakings not to commenting and to undertaking a course of training, within the time specified.

11. [16]

    The proceedings were heard by a principal member of the Occupational Division of NCAT (Mr R C Titterton) on 14 February and 20 April 2018. On 12 July 2018 the Tribunal made the following order:

Issues on appeal or review

1. [17]

   Of critical importance to the steps taken to discipline the applicant are the powers conferred on a council under the Local Government Act. The primary proposition relied on by the applicant was that the scheme of the Act did not permit the Code of Conduct and the Procedures to impose disciplinary penalties for the breach of their own provisions. If that proposition were made good, NCAT had no power to discipline the applicant for breach of sanctions invalidly imposed by the adoption of Council resolution CW11.

2. [18]

   The second proposition relied on by the applicant was that, assuming the resolution was valid and acknowledging that the applicant had not complied with it, NCAT erroneously limited its jurisdiction to a consideration of those facts and declined to consider whether the sanctions imposed by the Council were appropriate, having regard to the conduct which occurred at the two Council meetings in 2014. If the applicant were successful on this ground, but not on the first ground, he accepted that the matter would need to be remitted to NCAT to complete the exercise of its functions.

Powers of Council

1. [19]

   Part 1 of Ch 14 of the Local Government Act is headed “Conduct”. Division 1 deals with “Conduct generally” and includes ss 440 and 440AA set out below. Division 2 deals with “Serious corrupt conduct” and provides for circumstances in which both the Governor and the Minister may suspend, dismiss or disqualify a person from holding civic office (including a councillor). Those powers were not invoked in the present case. Division 3 is headed “Misconduct”; it provides for suspension of a councillor from civic office, either by the Secretary or by the Tribunal on referral by the Secretary. There is only one provision conferring powers on a council to deal with misbehaviour, namely s 440G, which, in November 2014, provided as follows:

2. [20]

   The motion passed by the Council on 27 July 2015 included censure of the applicant. That step was one available to the Council: it did not form the basis of the proceedings in the Tribunal. The question is, on what basis did the Tribunal have power to make the other orders, requiring the applicant to take action of the kinds specified?

3. [21]

   It should be noted that, pursuant to s 360 of the Local Government Act, a council was empowered to adopt a “code of meeting practice”, which incorporated provisions in the regulations. That code dealt with “acts of disorder” at council meetings and conferred power on the Chair to require a councillor to apologise and to expel a person, including a councillor, from a meeting. [5] No action was taken under these provisions, although breaches of the code were noted by the conduct reviewer in her report.

4. [22]

   In November 2014, s 440 and s 440AA provided for the prescription of model codes in the following terms:

5. [23]

   Pursuant to the Local Government (General) Regulation 2005 (NSW), as then in force, the Model Code of Conduct and the Procedures, as published in the Gazette on 7 December 2012, were prescribed for the purposes of those provisions: cl 193. The introduction to the Model Code stated:

6. [24]

   As noted above, Div 3 is entitled “Misconduct”; in November 2014 the term was defined in s 440F as follows:

7. [25]

   The significant feature of this definition is that misconduct means, amongst other things, a failure to comply with a requirement of a code of conduct: s 440F(1)(b). There follows in Division 3 a carefully modulated scheme for dealing with complaints of misconduct.

8. [26]

   First, as already noted, there is a power conferred on a council to censure a councillor for misconduct: s 440G, set out at [19] above.

9. [27]

   Secondly, powers are conferred on the Departmental Chief Executive [6] to conduct an investigation to determine whether a councillor has engaged in misconduct. Such an investigation may be carried out “if the general manager of a council refers an allegation of misconduct by a councillor to the Departmental Chief Executive”: s 440H(2)(b). The council itself may, by resolution, refer an allegation of misconduct: s 440H(2)(c). In the present case, the step was taken by the general manager.

10. [28]

    Thirdly, the Departmental Chief Executive may arrange for a “departmental report” to be prepared in relation to an investigation: s 440H(5). A report may also be prepared without an investigation where the Chief Executive is satisfied that the report may be based on the findings of an investigation conducted by or on behalf of the council: s 440H(5A)(a). [7] That occurred in the present case. Importantly, “[t]he preparation of a departmental report is a pre-requisite to a decision by the Departmental Chief Executive to take disciplinary action against a councillor”: s 440H(6). [8]

11. [29]

    Fourthly, the Departmental Chief Executive is given power to take disciplinary action himself or herself for misconduct, if satisfied that a councillor has engaged in misconduct and that disciplinary action is warranted. The forms of disciplinary action are identified in the following terms:

12. [30]

    The relevance of s 440I(2) is that it identifies steps which may be taken, by way of disciplinary action, including, in pars (d), (e) and (f), action of the same kinds as those which the Council purported to take in the present case.

13. [31]

    Fifthly, there are (and were then) other options available to the Departmental Chief Executive:

14. [32]

    In the present case, the Departmental Chief Executive referred “the matter” to NCAT “for consideration”, pursuant to s 440J(2)(b). The scope of the referral was the subject of the second ground relied on by the applicant.

15. [33]

    Finally, Pt 1, Div 2 of Ch 14, dealing with serious corrupt conduct, provides a link between the provisions of the Independent Commission Against Corruption Act 1988 (NSW) and powers to suspend, dismiss and disqualify for a period of up to five years from civic office, if the person has been the subject of an adverse finding by the Commission. These powers, which are not engaged in the present case, are to be contrasted with the powers and procedures with respect to misconduct generally.

16. [34]

    Although not directly relevant to this case, s 440L provided that a councillor against whom disciplinary action had been taken by the Departmental Chief Executive, could appeal to NCAT. [9] The nature of such an appeal was discussed in another decision of NCAT relied on by the applicant.

17. [35]

    The applicant submitted that the referral to NCAT was not under s 440J, but under a different provision, namely s 440N, which applied to “former councillors”. He submitted that he was, by the time the matter came to the Chief Executive, a “former councillor” because he had served the term during which misconduct occurred and had been re-elected. It is not necessary to determine whether that is so for present purposes; s 440J is stated to apply to the referral of the matter to the Tribunal in any event: s 440N(4). However, the better view is that the applicant was not (and is not) a “former councillor”, but a serving councillor. On that basis, s 440N was not engaged.

18. [36]

    Finally, Ch 14, Pt 3 deals with proceedings before NCAT. Relevantly for present purposes, the powers of NCAT with respect to misconduct matters are set out in s 482A:

19. [37]

    Aspects of this statutory scheme for disciplinary action are unclear. For example, the reason for conferring on the Chief Executive a power to counsel or reprimand a councillor, but not to censure, whereas a council is given power to censure but not to counsel or reprimand, is obscure. It may be that the different formulations of broadly similar actions turn on the identity of the party exercising the power. However, what is quite clear is that the directions contained in s 440I(2)(c)-(f) and the powers of suspension granted under pars (g) and (h) are distinct and more serious forms of disciplinary action than the power of censure conferred on the council. A regulation which sought to subvert that scheme by conferring on the council powers only conferred by the legislature on the Chief Executive would, absent express authority, be inconsistent with the statute and, according to conventional principles, invalid. However, s 490B, which appears in Pt 5 of Ch 14 reads as follows:

20. [38]

    The same principle applies to the powers conferred on NCAT, which include a power to counsel and reprimand, but extend to suspension from civic office for a period not exceeding six months and disqualification from holding civic office for a period not exceeding five years. Any regulation which purported to permit the Chief Executive (or a council) these extended powers of disciplinary action would be invalid.

Code of Conduct and Procedures

1. [39]

   Against this statutory background, it is convenient to turn to the content of the Model Code of Conduct and the Procedures, as in force at the time of the impugned conduct of the applicant.

2. [40]

   The Model Code of Conduct is designed, amongst other purposes, to ensure that council officers act in a way “that enhances public confidence in the integrity of local government.” [10] It includes provisions prohibiting behaviour which “causes, comprises or involves intimidation, harassment or verbal abuse” (cl 3.1(e)) and positive obligations to “treat others with respect at all times” (cl 3.3). Part 4 deals with conflicts of interest and Pt 5 with personal benefits. Part 6 includes obligations which will arise in relation to other public officials, including a requirement to show respect to the chair, other council officials and members of the public present during council meetings: cl 6.6. Clause 6.7 prohibits a number of “inappropriate actions”. Complaints about the applicant included alleged breaches of aspects of Pts 3 and 6. However, neither the purpose or the construction of these provisions is presently important.

3. [41]

   Of central importance is Pt 8, entitled “Maintaining the integrity of this Code”. It requires that a councillor not engage in conduct that is “likely to undermine confidence in the integrity of this Code or its administration.” That includes an obligation not to make a complaint for an improper purpose or take reprisals for a complaint that has been made against the officer. Clause 8.7 prohibits conduct “calculated to impede or disrupt the consideration of a matter under this Code”; cl 8.8 requires compliance with a “reasonable and lawful request” made by a person exercising a function under the Code and cl 8.9 requires compliance with a “practice ruling made by the Division of Local Government.” Clause 8.10 has been set out above and it will be necessary to return to it in due course.

4. [42]

   The “Model Code Procedures” were made pursuant to s 440AA of the Local Government Act. They require that a council establish a panel of conduct reviewers. A complaint of a breach of the Code of Conduct may be made under Pt 4 and the manner in which the complaints are to be handled is set out in Pt 5. References in the Code to the “Division” referred to the Division of Local Government in the Department of Premier and Cabinet. Complaints about councillors were required to be dealt with by the general manager of the council, in the following manner:

5. [43]

   The complaint concerning the conduct of the applicant was referred to a conduct reviewer under cl 6.2; she made a preliminary assessment determining that it should be investigated, pursuant to cl 6.18. The investigation itself was undertaken pursuant to Pt 8 of the Procedures.

6. [44]

   The process of investigation results in a “draft investigation report”; such a report was prepared by the conduct reviewer on 22 March 2015. That report was required to be submitted to the councillor affected for consideration and submissions. Following receipt of those submissions, a “final investigation report” is prepared pursuant to cl 8.32, unless the investigation is discontinued. The final report is required to include findings of fact, a determination as to whether there has been a breach of the Code of Conduct and reasons for that determination: cl 8.34. The final investigation report in the present case was dated 21 April 2015.

7. [45]

   The powers of the conduct reviewer, also referred to as the investigator, and the immediate source of the recommendations in the present case, were to be found in cl 8.35 of the Procedures which read as follows:

8. [46]

   Part 8 then makes specific provision as to the consequences of recommendations under par (a) (cl 8.41), pars (b) or (c) (cl 8.42) and pars (d)-(h) (cl 8.43). With respect to the last category, the following provisions related to consideration of the report by Council:

9. [47]

   Clause 8.56 provides that “[a] council may by resolution impose one or more of the following sanctions”, which mirror the form of the recommendations under cl 8.35. Clause 8.57 provides that the council is not obliged to adopt the investigator’s recommendations, but where it does not, it must state in a resolution the reasons for its decision.

10. [48]

    There is a power in Pt 9 for a councillor subject to a “sanction imposed under Part 8” to seek review, not of the council’s resolution, but of the investigator’s determination and recommendation, such review to be carried out by the Division. The grounds of review are limited to the following, pursuant to cl 9.7:

Consistency of provisions of Codes and the Act

1. [49]

   There can be no objection to a resolution in the terms of pars (a) or (g), nor indeed par (h)(i) and (ii). Whether the referral to the Chief Executive in this case was in part a referral to consider further action with respect to the first order misconduct was unclear. The referral by the Chief Executive to NCAT was in terms directed to the second order misconduct, namely failure to comply with the resolution CW11, as required by cl 8.10.

2. [50]

   Putting to one side the terms of cl 8.35 of the Procedures, it is inconsistent with the structure of the legislation that a council can confer on itself a power to discipline a councillor. No doubt it is true that the steps which the Council required the applicant to undertake were to be found in a “resolution requiring you to take action as a result of a breach of this code”, within the wording of cl 8.10 of the Code. However, the power of the Council to pass such a resolution must be found elsewhere: cl 8.10 must be read as confined to resolutions otherwise within the power of the Council.

3. [51]

   The Procedures do not provide a source of disciplinary powers: cl 8.35 of the Procedures should not be read as conferring a disciplinary power on the Council which is not to be found in the legislation. Some steps, such as the publication of a report, may be reasonably incidental to other powers of the Council, including the power to refer a matter for independent review and the power to censure a councillor as a result of that review. However, the incidental powers do not extend to requiring a councillor to take the steps identified in pars (b), (c) or (d). There are a number of reasons for adopting that construction.

4. [52]

   First, s 440AA permitted the regulations to “prescribe a procedure… for administering the model code”. There were to be procedures “for dealing with alleged contraventions of the model code.” Those purposes should not be read as permitting Procedures which conferred disciplinary powers on a council.

5. [53]

   Secondly, a construction which did permit the Procedures to confer disciplinary powers would be inconsistent with the structure of Ch 14, Pt 1, Div 3, which limits the disciplinary power of a council to that of formal censure for misbehaviour. There is no reason to read s 440AA as providing a power by regulation to go beyond that specific power.

6. [54]

   Thirdly, to allow the combination of cl 8.35 of the Procedures and cl 8.10 of the model code to create a new scheme of misconduct by regulation, and engage the more extensive powers of the Tribunal and the Secretary in imposing penalties for its breach, would require clearer language than that adopted in the Act. The effect is to create a second order of disciplinary actions available to a council where a councillor’s initial misconduct has not been effectively dealt with. The Act provides a scheme for second order offending to be dealt with by the Chief Executive.

7. [55]

   Finally, it is by no means clear that cl 8.35 of the Procedures was designed to permit the imposition of mandatory penalties requiring conduct of the councillor under investigation. First, cl 8.35 starts with a recommendation that the council revise any of its policies or procedures; that has nothing to do with disciplinary outcomes. Secondly, formal censure, the only disciplinary sanction conferred by the Act on a council, is the last step in the list of possible recommendations. It may be inferred that the earlier steps are not to be seen as disciplinary penalties. Rather, they are steps which might be taken by a council short of a formal censure. Thus, the second most serious step is to make public findings of inappropriate conduct. That too might be averted by the councillor voluntarily undertaking one or more of the steps contained in the earlier possible recommendations. Thus, an apology or undertaking as to future conduct could be understood as a means of seeking absolution or forbearance to avoid a penalty. So read, cl 8.35 would not be inconsistent with the scheme of the legislation. However, other provisions including cl 8.10 of the Code of Conduct make it difficult to read down cl 8.35 of the Procedures in this way.

8. [56]

   There are circumstances in which apologies may be required by force of law, but more usually, an apology is valued only because it is voluntary. Similarly, there are circumstances where particular professional groups may be required to undertake training or education as a condition of their continuing to operate; nevertheless the imposition of an obligation on someone in public office to undertake compulsory education or training, under pain of disciplinary action for failure to do so, would at least be unusual. It is an imposition which may be accepted voluntarily; however, the power to require it, under pain of suspension or monetary penalty for failure to comply, must find its source in the statute or regulations made in exercise of a statutory power.

9. [57]

   Absent such a statutory source, the power to compel such conduct by a council resolution is beyond the lawful authority of a council. If cl 8.35 goes so far as to purport to confer such a power, it is to that extent ineffective. Resolution CW11 lacked authority to require the applicant to undertake the actions it purported to mandate.

10. [58]

    It follows, in my view, that the failure of the applicant to take the steps required by the Council resolution of 27 July 2014 could not constitute a breach of the code of conduct and could not, therefore, form the basis of a disciplinary order in the terms made by the Tribunal.

Refusal of relief

1. [59]

   The Secretary submitted that the present proceedings are “an inappropriate vehicle for review of the validity of [Council resolution CW11] and, at least by inference, because the Council was not joined as a defendant.

2. [60]

   A ground challenging the validity of Council resolution CW11 was expressly raised in this Court, although it was not placed at the forefront of the grounds supporting the summons. Ground 13 stated that the resolution was “unauthorised because it erroneously reached outside the limited power of censure which the Council had under ss 440AA and 440G of the Act” and that “[t]he Council transgressed its powers and the resolution was ultra vires.” The result, ground 13 continued, was that “there was no foundation for any subsequent exercise of power by the [Office of Local Government] or NCAT.”

3. [61]

   With respect to the absence of the Council as a party, the Court drew to the parties’ attention the possible relevance of this omission prior to the hearing. However, there are three reasons for concluding that the absence of the Council should not preclude a grant of relief to the applicant on this ground.

4. [62]

   First, it is by no means clear that the ultimate question is one involving the validity of the Council’s resolution. Rather, the question is whether the Acting Chief Executive of the Office of Local Government, being the predecessor to the Secretary, correctly identified the form of misconduct relied upon before the Tribunal. The Council had no power to take the forms of disciplinary action which were available in the Tribunal: it could only refer the matter to the Chief Executive. It did not itself have authority to commence proceedings in the Tribunal; that authority was vested in the Chief Executive. It was the validity of the Chief Executive’s referral to NCAT, as a basis for NCAT’s jurisdiction which was directly in issue. Appropriately, the successor to the Chief Executive is the active respondent in this Court.

5. [63]

   Secondly, if it mattered, the issue was raised before the Tribunal, albeit in a somewhat convoluted form. [11]

6. [64]

   Thirdly, the absence of jurisdiction in the Tribunal is not a matter which can be disregarded. [12] Jurisdiction cannot be conferred by agreement between the parties, or silence as to its existence. With respect to the Tribunal, absent jurisdiction, its decision is void. The Council was not a party to the proceedings in the Tribunal.

7. [65]

   If there were an issue as to whether the Secretary has had an opportunity to respond with respect to jurisdiction, procedural fairness would demand that that opportunity be accorded. However, the issue was squarely raised in this Court by the grounds of the application and the written submissions, as noted above. It was agitated in the course of oral argument. There is no reason to decline to grant relief, on that basis.

Scope of NCAT hearing

1. [66]

   On the assumption that cl 8.10 of the Code of Conduct was valid, and the referral by the Chief Executive to NCAT for breach of that provision was also valid, there was a second issue as to the scope of the jurisdiction conferred on NCAT. In particular, were the factual matters for determination and assessment limited to the failure of the applicant to comply with Council resolution CW11, or was the applicant entitled to raise with NCAT challenges to the factual findings on which the resolution was based?

2. [67]

   There is no dispute that this issue was squarely raised before NCAT and considered by the Principal Member. He took a limited view of the scope of his powers. The Tribunal’s reasoning was as follows:

3. [68]

   The Principal Member also called in aid the reasoning of Deputy President Haylen in the matter of Phillips v Director General, Department of Premier and Cabinet. [13] In fact, as counsel for the applicant submitted in this Court, the Principal Member may have misconstrued what was said in Phillips. However, it is convenient to commence by considering the statutory scheme under which NCAT operated.

4. [69]

   The process in the present case commenced with a letter from the general manager of the Council to the Chief Executive, Office of Local Government, dated 30 October 2015. After setting out the Council’s resolution of 27 July 2015, together with a reference to subsequent communications between the Council and Councillor Cornish, the general manager advised that, despite the period of three months having passed, the “sanctions” imposed by the Council had not been complied with. It would appear that that letter constituted a referral by the general manager of a complaint of breach of Pt 8 of the Code, an obligatory step pursuant to cl 5.16 of the Procedures, set out above.

5. [70]

   Failure to comply with an applicable requirement of the Code of Conduct constitutes “misconduct” within the terms of s 440F(1)(b) of the Local Government Act. On receipt of a complaint of misconduct, the Chief Executive was empowered to carry out an investigation: s 440H(2)(b). However, the Chief Executive could also arrange for a “departmental report” to be prepared without an investigation being carried out where the matter had been referred by a council and the report could be based on the findings of the investigation conducted by or on behalf of the council: s 440H(5A)(a).

6. [71]

   Following the preparation of a departmental report, the Chief Executive had alternative courses between which to choose. One was to take disciplinary action for misconduct pursuant to s 440I, a precondition to which was the preparation of the departmental report: s 440H(6). The alternative course was to refer the matter to NCAT pursuant to s 440J. (The applicant asserted that because, by the time the matter reached this stage, he had been re-elected to council, he was a “former councillor” and that the relevant power was to be found in s 440N: because s 440N(4) states that s 440J applies to the referral of a matter to NCAT, it was not necessary to resolve this issue.)

7. [72]

   In the present case the Chief Executive adopted the second course, namely referral to NCAT. In June 2017 a document entitled “Report to NCAT under s 440J of the Local Government Act” was prepared and provided to NCAT. It annexed the conduct reviewer’s report.

8. [73]

   Although the Chief Executive did not take disciplinary action in this case, one aspect of the process relevant to such a step should be noted. The powers of the Chief Executive in taking disciplinary action for misconduct, set out in s 440I(2), have been referred to above; if the Chief Executive takes such action, the councillor against whom it is taken has a right of appeal to NCAT. The matter of Phillips, referred to above, involved an appeal pursuant to s 440L. If the councillor against whom action is taken by the Chief Executive has a full appeal on the merits, including the right to challenge findings of a conduct reviewer, it would seem anomalous if, where the Chief Executive did not take disciplinary action but referred to the matter to the Tribunal, NCAT could not adopt a similar approach. Of course, if it is correct to say that the function of NCAT in determining an appeal under s 440L is limited to consideration of a failure to comply with the Council resolution, it may be reasonable to conclude that the same regime should apply with respect to the hearing before NCAT on a referral by the Chief Executive.

9. [74]

   Ultimately, the present issue must be resolved by considering what is the “matter” which the Chief Executive may refer to NCAT for “consideration.” Is it in fact limited, as NCAT determined, to a breach of cl 8.10 of the Code of Conduct?

10. [75]

    Pragmatic considerations may, as the Principal Member explained in the passages set out above, militate in favour of the view that there should be a limited role for NCAT. In other words, where the councillor has had ample opportunity to present any evidence and explanation of his conduct to the conduct reviewer, and the conduct reviewer’s recommendations have been accepted by an elected body, namely a council, it is unlikely that the legislature intended that the councillor would have any right of merit review.

11. [76]

    There are, however, powerful factors favouring a broader approach.

12. [77]

    First, while not all complaints of misconduct investigated by the Chief Executive will involve second order breaches, such as a breach of a resolution of council under cl 8.10, it is clear that no such limited form of referral will operate in the other cases, where first order misconduct forms the basis of the referral.

13. [78]

    Secondly, where the Chief Executive is required to obtain a departmental report before exercising disciplinary powers, which themselves extend across a range of levels of severity, it is clear that the Chief Executive will need to understand any specific conduct in its factual setting. Indeed, even with respect to a case of second order misconduct, it may be assumed that the Chief Executive would wish to understand the full context in which the conduct occurred. It is unsurprising that the report to NCAT in the present case contained statements such as the following: “Councillor Cornish has demonstrated an entrenched and unremitting recalcitrance” and that “the breaches giving rise to the complaint and the nature of the ongoing disregard demonstrated by Councillor Cornish to his responsibilities under the Act and the Council’s code bring Penrith City Council into disrepute.” [14]

14. [79]

    Thus, if the Chief Executive can rely upon, or make, such an assessment of the applicant’s conduct in determining a disciplinary action, NCAT must be able to do the same on a referral. It would be perverse to conclude that, faced with such submissions, or findings, the councillor could not challenge any aspect of the reviewer’s conduct with which he or she disagreed.

15. [80]

    Finally, the language of the referral power is not confined in its terminology. Section 440J refers to referral of a “matter”, not for determination by NCAT, but for “consideration”. Such language is expansive and not constraining. There is no restriction to referral of a complaint of misconduct, or an allegation of misconduct; the term “matter” has no such precise denotation. Indeed, the powers of the Chief Executive to investigate conduct are not limited to circumstances in which there has been a complaint in any formal sense: s 440H(2)(a).

16. [81]

    Finally, although the present assumption is that a second order form of misconduct may validly be created by the Code of Conduct and the Procedures, it is nevertheless relevant that the structure of the Act confers different disciplinary powers on a council, the Chief Executive and NCAT. It would be anomalous if misconduct which could properly be dealt with by a council, with its limited powers of disciplinary action, could engage disciplinary action of far greater severity in a case where the councillor simply declined to accept the findings made against him or her by an investigator in circumstances which permitted no right of factual review. Yet in every other case, the underlying misconduct would itself be open to independent review by NCAT.

17. [82]

    It is true that NCAT has taken a restricted view of its powers in earlier cases. The Tribunal in the present case specifically placed reliance upon its earlier decision in the matter of Ticehurst, referred to in the extracted reasons at [124] (set out at [67] above). Mr Ticehurst was a member of Lithgow City Council. The general manager of Lithgow City Council was appointed as general manager of Eurobodalla Shire Council. A press release relating to his appointment stated that he held a Masters of Business Administration qualification. Mr Ticehurst believed that to be untrue and sent emails to both the general manager and to the councillors of Eurobodalla Shire Council. The mayor of Eurobodalla Shire Council objected to the emails and complained to Lithgow City Council which, in due course, passed a resolution requiring Councillor Ticehurst to make a formal apology to the general manager of the Eurobodalla Shire Council. He did not take that step. The matter came before NCAT to determine what action should be taken against him for his refusal to apologise. Mr Ticehurst objected that what he had said in the email was true. The Tribunal (constituted by Adrian Galasso SC) stated:

18. [83]

    While it may be open to NCAT to treat a failure to apologise as warranting a severe sanction, fairness would suggest that NCAT should be able to consider the propriety of requiring the apology.

19. [84]

    The other matter relied upon by the Tribunal in the present matter was the reasoning of Deputy President Haylen in Phillips. As noted above, that matter involved an appeal under s 440L of the Local Government Act from disciplinary action taken by the Director-General (the predecessor to the Chief Executive).

20. [85]

    Councillor Phillips was initially disciplined for disclosing confidential information provided by a developer with respect to a development application. After obtaining a conduct review report, the Marrickville Council upheld the reviewer’s recommendation finding misconduct, and required Councillor Phillips to apologise to both the Council and the developer for his actions. [15] Councillor Phillips asserted before NCAT that the information he released to the media was not in fact confidential and therefore the basis of the finding of misconduct was erroneous.

21. [86]

    The appeal under s 440L was in far more constrained terms than that of referral of a “matter” to NCAT for “consideration”; rather, it provided for an appeal “against the decision of the Director-General to take disciplinary action.” The Director-General submitted that NCAT was not concerned with the validity of Council’s resolution, but only with Councillor Phillips’ failure to comply with the resolution. The Director-General relied upon the pragmatic considerations as to the “administrative burden” which will be imposed on the Division if it were necessary to investigate the underlying misconduct. [16]

22. [87]

    The Deputy President was unimpressed by the complaint of “administrative burden” [17] correctly preferring to consider the operation of the statutory scheme as a whole. He noted that in relation to complaints of failure to disclosure a pecuniary interest, another statutory authority would be involved in making relevant findings. He also accepted that there would be no direct appeal to NCAT against a council’s censure resolution under s 440G. [18] In a passage, part of which was relied upon by the Principal Member in the present case, the following appeared in Phillips:

23. [88]

    In the present matter, the Principal Member emphasised the words shown above in italics, but did not refer to the following sentences. Nor did he refer to the fact that Deputy President Haylen then proceeded to make his own findings as to the confidentiality of the material disclosed, concluded that it had not been confidential and, on that basis, set aside the suspension imposed by the Director-General.

24. [89]

    For the reasons set out earlier, in my view the approach adopted by Deputy President Haylen in Phillips should be accepted with respect to a referral to NCAT under s 440J(2) of second order misconduct, namely failure to comply with a council resolution. Indeed, the basis for that conclusion is stronger in one respect than the reasoning set out from Phillips. The “underlying finding” (that is as to the first order misconduct) would only be open to challenge by way of judicial review on the conventional grounds of jurisdictional error or error of law on the face of the record. There would be no opportunity for independent review of the exercise of fact-finding undertaken by the conduct reviewer, unless the council could be persuaded to undertake that task in determining whether to accept the recommendation of the conduct reviewer. Both the council’s role as a possible complainant and the inappropriateness of council as a forum for conducting an investigation or inquiry of that kind (which is no doubt the reason for the use of conduct reviewers) make the possibility of any such merit review unrealistic. Such a course would go well beyond the procedure envisaged by cl 8.47 of the Procedures, set out at [46] above.

25. [90]

    However, whether or not the reasoning in Phillips is accepted, Phillips did not provide support for the approach adopted by the Principal Member in this case. For the reasons set out above, the Tribunal, on being invited by the person brought before it for disciplinary action to consider the basis on which the resolution had been made by Council and his reasons for not complying with it, ought to have conducted an inquiry as to the justification for the recommendations.

26. [91]

    Although it may be said that this conclusion undermines the integrity of the process and the outcome adopted by an elected body of councillors, it must also be recognised that the role of councillors in disciplining their own members is an unusual aspect of the functions of a council. Whilst there is no doubt that the Chair of a meeting must have powers to maintain order and good conduct, it is also true that beyond immediate steps to maintain order, the only statutory power of disciplinary action conferred on a council is that of censure. If there is a concern that NCAT may, by inquiring into first order misconduct, undermine the role of the council, that provides some further support for the view that the council is not able under the statutory scheme to render its members subject to more serious discipline simply by passing a resolution requiring affirmative action from a councillor in a way which is not provided for in the Local Government Act.

Orders

1. [92]

   In the event that the Court were minded to set aside the decision of NCAT, a question arose as to whether consequential relief should be provided. The order suspending the applicant’s rights to payment as a councillor for three months has apparently been carried into effect. Once that order is set aside, the councillor may have some entitlement to recoupment of those payments from the Council. However, the Council is not a party to these proceedings and both the applicant and the Secretary accepted that no relief should be address that issue.

2. [93]

   If the Tribunal had erred in failing to take matters into account which properly lay within its statutory function, the appropriate order, as the applicant accepted, would be to remit the matter to the Tribunal to be determined according to law. On the basis of the primary submission, namely that so much of the Council resolution CW11 as imposed obligations on the applicant was invalid, there was no breach of cl 8.10 of the Code of Conduct and, accordingly, there was no basis for a referral to NCAT. Having succeeded on his primary argument, the applicant is entitled to have the decision of NCAT set aside and the application to NCAT dismissed.

3. [94]

   The Court makes the following orders:

   1. (1)

      Set aside the order of the Civil and Administrative Tribunal made on 12 July 2018.

   2. (2)

      In lieu thereof, order that the proceedings commenced by the predecessor to the Secretary in the Tribunal be dismissed.

   3. (3)

      Order that the Secretary pay Mr Cornish’s costs in this Court.