Port Macquarie-Hastings Council v Mansfield

1. [1]

   THE COURT: Port Macquarie-Hastings Council seeks leave to appeal pursuant to s 5F of the Criminal Appeal Act 1912 from an interlocutory decision of Sheahan J in the Land and Environment Court published on 16 July 2018 setting aside two subpoenas issued by the prosecutor. Leave is required in accordance with s 5F(3)(a) of the Act as the prosecutor made no application to his Honour pursuant to s 5F(3)(b) to certify that the decision is a proper one for determination on appeal.

2. [2]

   The interlocutory order or judgment appealed from concerns Sheahan J’s discretionary decision to set aside the subpoenas by reason of the prosecutor having issued them without a legitimate forensic purpose. In order to succeed, therefore, the Council must demonstrate the kind of error identified in House v The King (1936) 55 CLR 499; [1936] HCA 40.

3. [3]

   The single ground of appeal upon which the Council relies is in the following terms:

4. [4]

   With respect to whoever drafted that ground of appeal, it is in those terms susceptible to being misunderstood. For clarity we note that the words “in circumstances where it had not decided to commence criminal proceedings” represent the Council’s contention concerning the factual state of affairs at the time it issued the relevant s 119J notice. In other words, the ground of appeal should be read to mean that the Council takes issue with his Honour’s finding that the Council had already decided to commence criminal proceedings when it issued the notice.

Background

1. [5]

   Mr Mansfield has been charged with two offences. It is alleged that between 1 November 2013 and 30 November 2015 he carried out development which was prohibited, in breach of s 76B of the Environmental Planning and Assessment Act 1979 and that he carried out development without development consent, in breach of s 76A of that Act. In each case the development is alleged to include earthworks, the construction of a facility that appeared to be a recreation hall with toilets, showers and an internal kitchen, and the construction of a bunkhouse with seven units, all with en-suites. No date has yet been set for trial.

2. [6]

   On 15 December 2015, some 21 months before the commencement of proceedings, Craig Henderson, a Council investigation officer appointed by the Council, issued Mr Mansfield with a notice to answer questions and produce records pursuant to what was then s 119J of the Act (now s 9.22). The notice required him to provide details of who carried out the work, the dates when the work was undertaken and the plans for the work.

3. [7]

   Mr Henderson was the Council’s compliance coordinator. A complaint had been made to the Council about illegal building works by Eagle Nest Park Pty Ltd. He attended the site, witnessed some works and interviewed a relative of Mr Mansfield. He gave evidence that he issued the notice to investigate what had been built, who had authorised the work, and who undertook the work. He said when he issued the notice there were a number of options on the table. Those options included prosecuting or commencing civil proceedings for demolition or modification of the development. He needed to know who authorised the work, if civil proceedings were to be commenced. This was because that would identify the person the Council would take action against to rectify the problem.

4. [8]

   Mr Mansfield responded to the notice without raising an objection pursuant to s 119S(3) of the Act.

5. [9]

   Investigation of the matter continued, including the issue of further s 119J notices on or about 13 April 2016 to various parties, and the contractors who carried out the work.

6. [10]

   On 7 September 2016, Mr Mansfield lodged a development application with the Council for an eco-tourism facility, seeking approval for the works. On 24 May 2017, the development application was approved.

7. [11]

   On 21 September 2017, the Council commenced proceedings in the Land and Environment Court charging Mr Mansfield with the offences.

8. [12]

   The Council subsequently issued subpoenas to Eagle Nest Park Pty Ltd and King & Campbell Pty Ltd. In each case the subpoenas sought documents relevant to the work alleged to have been carried out by Mr Mansfield. He was the sole director and major shareholder of Eagle Nest. There was evidence before the Council that Eagle Nest had paid and instructed contractors to carry out the work the subject of the charges and that King & Campbell had been retained by Mr Mansfield to seek development consent for that work. The application lodged on behalf of Mr Mansfield identified when the work was carried out and Mr Mansfield’s intended use of the development. There was also evidence that a complaint had been made on 23 September 2015 (before the s 119J notices were issued) advising that the “owner of Eagle Nest Park PL had built a shed without Council approval”.

9. [13]

   Documents were produced by King & Campbell to which Mr Mansfield was granted first access. After reviewing those documents, he sought orders that both subpoenas be set aside. Various grounds of challenge to the subpoenas were raised, but one proved decisive. Mr Mansfield argued that the s 119J notices had been issued for the impermissible purpose of a criminal prosecution, and that the Council could not use this illegal conduct as a launching pad to then issue a subpoena seeking documents that it had been informed about through that illegality.

10. [14]

    Mr Mansfield contended that there is no power under the Environmental Planning and Assessment Act to prosecute. Accordingly any notice issued under s 119J is invalid if it is issued with a view to commencing criminal proceedings. Mr Mansfield says that Sheahan J made a factual finding that the Council had decided to commence criminal proceedings before it issued the notices so that the notices were issued for an ultra vires purpose.

11. [15]

    On 16 July 2018, his Honour made an order setting aside the subpoenas. He upheld Mr Mansfield’s principal challenge, finding that the s 119J notices had been issued unlawfully. The fact that the information and documents produced in response to the notices was later used to frame the subpoenas meant that the subpoenas should be set aside.

Zhang v Woodgate and Lane Cove Council

1. [16]

   It was uncontroversial that in arriving at his decision, Sheahan J relied substantially upon the decision of Preston CJ in Zhang v Woodgate and Lane Cove Council (2015) LGERA 1; [2015] NSWLEC 10. In that case the Council prosecuted Mr Zhang for carrying out development in breach of the Environmental Planning and Assessment Act. After the prosecution had commenced, a Council officer issued a notice to a third party requiring him to answer questions about the subject matter, and for the purposes, of the prosecution. The notice was issued on 29 August 2014. At that time, s 118BA of the Environmental Planning and Assessment Act permitted a Council officer, in terms similar to s 119J, to issue a notice requiring a person to answer questions. The power under s 118BA, alike with s 119J, was only available to enable a Council “to exercise its functions under this Act”.

2. [17]

   Mr Zhang commenced proceedings challenging the validity of the notice. He argued that s 118BA could be used to require a person to answer questions to enable the Council to perform regulatory or administrative functions under the Act, such as determining whether criminal proceedings for an offence against the Act should be instituted. However, it could not be used to obtain information to enable the Council to exercise prosecutorial functions after criminal proceedings had already been commenced by the Council.

3. [18]

   Preston CJ found that the notice was invalid. He reasoned as follows:

Sheahan J’s findings

1. [19]

   In the present proceedings the Council contended that his Honour had determined, as a matter of fact, that the s 119J notice issued by the Council had been issued so as to enable the Council to perform regulatory or administrative functions, such as determining whether criminal proceedings for an offence against the Act should be instituted. The Council maintained that the s 119J notice had not been used to obtain information to enable the Council to exercise prosecutorial functions after criminal proceedings had already been commenced by the Council.

2. [20]

   His Honour found that it was clear to the Council from 30 November 2015 that offences might have been committed in developing the subject land, and that the Council might consider bringing charges for carrying out the development without consent. By 15 December 2015, on which date the first s 119J notice was issued, Mr Henderson’s position had moved beyond issuing an order under s 121B of the Environmental Planning and Assessment Act, or a penalty infringement notice. The s 119J notice was issued because he said he “needed some kind of follow up” or a “better picture” to inform a “final view” on taking some more serious action (i.e. in class 4 or 5). The reference to class 4 proceedings was a reference to civil proceedings brought in the Land and Environment Court seeking orders to remedy or restrain a breach of the Act. The reference to class 5 proceedings was a reference to a prosecution brought in the Land and Environment Court.

3. [21]

   When the development application was lodged on 7 September 2016, the Council deferred its consideration of whether or not to take action against the respondent. On 24 May 2017, the development application was approved. Between 14 August and 19 September 2017, the Council (i.e. Mr Henderson in consultation with his bosses) decided to bring the proceedings. Sheahan J found that Mr Henderson, by his use of s 119J in 2015-2016, was seeking to clarify matters, which would later found particulars of charge.

4. [22]

   His Honour found that Mr Henderson may well have had a dual purpose, but the criminal option was a very “substantial”, if not his only, or his primary, purpose in using s 119J.

5. [23]

   As the Council could not satisfy the Court that the s 119J process was truly legitimate “in the Zhang sense”, the Council could not satisfy the Court that its forensic purpose in issuing the subpoenas was legitimate.

6. [24]

   His Honour rejected the Council’s submission that investigating possible offences was a Council function under the Environmental Planning and Assessment Act. His Honour accepted Mr Mansfield’s submissions which were first, that documents may be sought and later used in criminal proceedings, provided that was not a substantial purpose for the issue of the notice and secondly, that a council was restricted to issuing a s 119J notice for the purpose of enabling it to exercise its functions under the Environmental Planning and Assessment Act, and a criminal prosecution was not one of those.

7. [25]

   In accepting Mr Mansfield’s submissions, his Honour found that s 119J did not permit the Council to issue a notice for the purposes of gathering evidence of an offence for the purposes of criminal proceedings. Because of his Honour’s finding that Mr Henderson decided to commence criminal proceedings some 18 months after issuing the first s 119J notice, his Honour effectively found that such a principle applies during the investigation phase and before a Council has decided to prosecute.

8. [26]

   Given that there was no challenge to his Honour’s findings of fact, or to the process by which he arrived at those findings, it becomes instructive to consider precisely what his Honour said in this context. Paragraphs [306] to [322] are as follows:

9. [27]

   The Council did not challenge his Honour’s finding at [315]. The correctness of Zhang was also not challenged by the Council in this Court.

Legislation

1. [28]

   Section 119C was at the relevant time in the following terms:

2. [29]

   Section 119J was also in the following terms at that time:

3. [30]

   An “investigation purpose” is defined in s 119A as “a purpose for which a power may be exercised under this Division”. This refers to the purposes outlined in s 119C.

4. [31]

   It is unnecessary for present purposes to reproduce other provisions of the Act.

The issue

1. [32]

   Having regard to the terms of these relevant sections of the Act, and to the findings made by his Honour as to the relative timing of the issue of the s 119J notices and the commencement of the prosecution, the question for determination by his Honour became in effect whether the issue of the notices requiring the recipients to furnish information or records occurred “in connection with an investigation purpose”. His Honour held that it did not and that the subpoenas should therefore be set aside. The issue for consideration in this Court is whether his Honour’s conclusion was erroneous.

Comment

1. [33]

   Much has been made both in this Court and in the Court below of Mr Henderson’s motivations in the context of attempting to determine whether criminal proceedings were contemplated at the time when he issued the s 119J notices. The order in which certain things were done by him and others was examined by his Honour in arriving at his conclusions. It is important, however, to observe that the question at hand is whether the issue of the notices occurred in connection with an investigation purpose. The fact that criminal proceedings may or may not have been contemplated or already instituted at the time the notices were issued is but one factor informing the assessment of whether the issue of the notices did or did not occur in connection with an investigation purpose. It follows that the relative timing of the issue of the notices on the one hand and the institution of criminal proceedings on the other hand is a persuasive, but is not a determinative, consideration in deciding whether or not the issue of s 119J notices occurred in connection with an investigation purpose. It is ultimately beside the point and cannot be conclusive or decisive of the question of whether or not the Environmental Planning and Assessment Act confers a power to prosecute upon the Council.

Consideration

1. [34]

   The essential proposition propounded by the Council is that at the time it issued the s 119J notices, it had not decided either wholly or substantially to commence criminal proceedings. The Council challenges his Honour’s conclusion, consequent upon his finding that the Council had decided to commence criminal proceedings when it did so, that the issue of the s 119J notices was therefore ultra vires. The Council contended that the question posed by this appeal is whether the Environmental Planning and Assessment Act confers powers of enforcement upon it.

2. [35]

   The Council commenced by submitting that the purpose of investigating the possible breach of the Act is not only to discover whether a breach has been committed, but also to determine whether any regulatory action should follow and what it should be. The Council’s choices extend from taking no action or sending a warning letter, to issuing a penalty notice, taking civil proceedings or issuing an administrative order to restrain or repair the breach, or prosecuting the alleged offender. The Council’s submissions also included the following:

3. [36]

   The issue for present purposes is not whether the Council has power to prosecute or not prosecute but what is the source of that power, or, in other words, is criminal prosecution a function of a local council under the Environmental Planning and Assessment Act? We do not understand the legal position, in the sense of the applicable, albeit renumbered, provisions of the Act, to have changed since Preston CJ’s analysis in Zhang, especially at [70] and [71] in that case. Sheahan J’s equivalent factual analysis is recited above at [26].

4. [37]

   In issue below was whether the subpoenas which the Council had issued in the criminal proceedings it had brought against Mr Mansfield for breaches of ss 76A and 76B of the Environmental Planning and Assessment Act lacked legitimate forensic purpose.

5. [38]

   On Mr Mansfield's case, the subpoenas involved an abuse of process because their issue was based on information obtained by Council as the result of its s 119J notices issued before the proceedings were commenced. He claimed that all of those notices were ultra vires, having been issued for an improper purpose, that is, to obtain information and documents to be used in criminal proceedings that the Council intended at the time to bring against him.

6. [39]

   While the Council accepted that it had a number of purposes for issuing the notices, Mr Mansfield's case was that its substantial purpose was to enable it to exercise its prosecutorial function. That was not a function given to the Council by the Environmental Planning and Assessment Act and was not therefore a relevant point of distinction to what had been decided in Zhang v Woodgate and Lane Cove Council [2015] NSWLEC 10, that when the s 119J notices were issued, criminal proceedings had not yet been commenced: judgment at [106]-[107].

7. [40]

   Sheahan J accepted Mr Mansfield's case.

8. [41]

   In resolving whether his Honour erred, it is important to bear in mind that these issues turned on a s 119J notice which the Council issued to Mr Mansfield in December 2015, not long after the investigation into the complaint which it had received in late September about the commencement of building works he had undertaken in 2014 and 2015. This notice was answered in 2016, before criminal proceedings were commenced.

9. [42]

   Seven further s 119J notices were issued to third party contractors in April 2016. Some of the responses received to those notices were inadequate and were later followed up by the Council's solicitor, once again before the criminal proceedings were commenced.

10. [43]

    In 2016, Mr Mansfield also made an application for building approval of an eco-tourism facility, which the Council considered and finally approved in May 2017. The criminal proceedings were commenced after Mr Mansfield responded to the Council's August 2017 notice to show cause why criminal proceedings should not be brought against him.

11. [44]

    Sheahan J purported to apply the conclusions reached in Zhang to find that the subpoenas in issue were invalid. In our view, that necessarily involved an incorrect extension of what was decided in Zhang, in a way not only inconsistent with what that case decided, but also inconsistently with the proper construction of s 119J when considered in its statutory context and in light of the purpose of the Environmental Planning and Assessment Act.

12. [45]

    Given the functions which the Environmental Planning and Assessment Act imposes on councils and the powers it grants to investigation officers who they appoint, including those granted by s 119J, which s 119C provides are to be exercised so that councils may undertake their statutory functions, there can, in our view, be no question as to the validity of either the s 119J notices issued to Mr Mansfield and third parties before the criminal proceedings were brought, or the subpoenas later issued to third parties, after they were commenced. As explained below, the s 119J notices were all issued for an investigation purpose as s 119C required.

13. [46]

    In Zhang, Preston CJ considered that the function of bringing a criminal prosecution for breach of the Environmental Planning and Assessment Act was not conferred on councils by that Act, but rather, "either directly or indirectly" by ss 21, 684 or 687 of the Local Government Act 1993: Zhang at [66]-[67]. As there discussed, those proceedings had to be brought in accordance with the requirements of ss 172 and 173 of the Criminal Procedure Act 1986.

14. [47]

    However, there is no reason why the Legislature cannot confer on councils the function of investigating all breaches of the Environmental Planning and Assessment Act, by that Act, including those which ultimately result in a council bringing a criminal prosecution under the Local Government Act. This is supported by the fact that the Local Government Act does not confer on councils the function of investigating breaches of the Environmental Planning and Assessment Act, even if they result in a criminal prosecution. That is a function conferred by the Environmental Planning and Assessment Act.

15. [48]

    Section 21 of the Local Government Act provides that councils have the functions conferred on them by that Act. Section 22 provides that they have the functions conferred or imposed on them by or under any other Act or law. Section 23 provides that councils could also do all such things as are supplemental or incidental to, or consequential on, the exercise of their functions. Given the investigative function expressly conferred on councils by the Environmental Planning and Assessment Act, s 23 of the Local Government Act is not the source of their power to investigate alleged breaches of the Environmental Planning and Assessment Act.

16. [49]

    Enforcement is dealt with in Chapter 17 of the Local Government Act. It provides in Division 1 Legal Proceedings of Part 1 General, how breaches of the Local Government Act are to be dealt with. In Division 1 General of Part 2 Proceedings by the council or its employees, s 684 deals with laying of an information "for an offence" and s 687 with appearances in the Local Court for the enforcement of a penalty or criminal proceedings. But breaches of the Environmental Planning and Assessment Act are not there dealt with expressly, which explains Preston CJ's view in Zhang, unchallenged in these proceedings, that the function of bringing a criminal prosecution for breach of the Act was conferred on councils "either directly or indirectly" by the Local Government Act.

17. [50]

    It follows that to draw a distinction between an investigation conducted by a council into alleged breaches of the Environmental Planning and Assessment Act for the purpose of a criminal prosecution and investigations of such breaches conducted for the other purposes for which they may be pursued under the Environmental Planning and Assessment Act, is not only artificial, but not one drawn by that Act. Nor is it to be found in the Local Government Act. To the contrary, express provisions in the Environmental Planning and Assessment Act actually envisage that investigations into breaches of that Act will result in the gathering of information which may be used in subsequent criminal proceedings: s 119S.

18. [51]

    The fact that the Environmental Planning and Assessment Act empowers councils to take various other steps to deal with breaches of the Act during their investigations, including the issue of notices under s 119J, before any criminal charges are laid, must also be taken into account when considering whether Sheahan J erred in arriving at his conclusions.

19. [52]

    The parliament cannot have intended that a s 119J notice, issued during an investigation in order to obtain information about to whom a council should direct a stop work or rectification order, might be ultra vires simply because a criminal prosecution was then contemplated.

20. [53]

    When the s 119J notices were issued, the Council had not commenced criminal proceedings against Mr Mansfield even though Mr Henderson contemplated at that time that it was possible or even likely. This did not invalidate the s 119J notices: they were not ultra vires. It follows that the commencement of criminal proceedings some years later did not mean that the subpoenas later issued to third parties in the criminal proceedings were also invalid.

What was decided in Zhang

1. [54]

   Zhang was concerned with s 118BA, the predecessor to s 119J, in circumstances quite different to the present case. In Zhang, after proceedings had been commenced in the Local Court by a court attendance notice under s 173 of the Criminal Procedure Act for an offence against s 125(1) of the Environmental Planning and Assessment Act, the Council purported to issue a notice under s 118BA. It required a third party to answer questions about the over-excavation of the property Mr Zhang owned, which was the subject of the criminal prosecution then on foot.

2. [55]

   Preston CJ upheld Mr Zhang's first statutory construction argument that a notice issued in aid of the pending criminal proceedings was ultra vires, because it had been issued to enable the Council to exercise its function of prosecuting an offence against the Environmental Planning and Assessment Act, which was not a function of the Council under the Act: at [64]. His Honour said this:

3. [56]

   In the present case, by comparison, Mr Henderson issued the s 119J notice to Mr Mansfield in December 2015, by which time the Council had already received a complaint about the unapproved development in September. He also issued the notices to contractors in April 2016, before Mr Mansfield answered his notice: at [199]-[200]. The work had been stopped, but there were no criminal proceedings on foot when any of these notices were issued. Still, such a prosecution was plainly then possible, as Sheahan J found on Mr Henderson's evidence.

4. [57]

   Preston CJ did not, however, uphold Mr Zhang's second statutory construction argument, namely, that the power in s 118BA should be read down so as to prevent the issue of a notice requiring any person to answer questions after proceedings for an offence had been commenced, taking the view that "that is too sweeping a proposition": at [72]. His Honour's reasons for that conclusion were as follows:

5. [58]

   Preston CJ concluded, however, that the relevant notice was ultra vires for two reasons. First, it was issued to enable the Council to exercise its prosecutorial function in aid of the pending criminal proceedings, which was not a function it had under the Environmental Planning and Assessment Act. Secondly, the notice failed to identify to the addressee the matter in relation to which the questions were directed. Even though the notice was declared invalid, injunctive relief was refused, because his Honour considered that those conclusions did not mean that the Council could not validly exercise the power under s 118BA to give a notice to a person other than Mr Zhang, notwithstanding that criminal proceedings were already pending against him: at [122]-[123].

The facts found

1. [59]

   Sheahan J found that Council's decision to prosecute was not made until 2017, after Mr Mansfield was given the opportunity to show cause why a prosecution should not be brought against him.

2. [60]

   The Council had received the complaint about Mr Mansfield's building work in September 2015. Mr Henderson began investigating in November. Sheahan J noted at [189]-[190] that by 30 November 2015, Mr Henderson had established that the work “was obviously beyond exempt development” and so he advised Mr Mansfield by email that:

3. [61]

   It was Mr Henderson's decision to issue the December 2015 s 119J notice to Mr Mansfield, his view being then that the Council was likely to take further steps, by taking class 4 or class 5 proceedings: at [192].

4. [62]

   Under the heading “Chronology”, Sheahan J recorded the following:

5. [63]

   His Honour also considered at [306] that:

6. [64]

   By email dated 30 November 2015, Mr Mansfield was put on notice of the Council investigations, the need to cease work, and to not use the premises for some purposes, and the requirement that he provide information, but he was not specifically warned of criminal proceedings: at [307].

7. [65]

   The s 119J notice was issued to Mr Mansfield on 15 December 2015 because, even though he told the Court he may have ultimately decided on taking "no action", Mr Henderson said that he "needed some kind of follow up", or a "better picture" to inform a "final view" on taking some more serious action (i.e. in Class 4 or Class 5): at [308].

8. [66]

   By 4 February 2016 when the parties' competing interpretations of Zhang were known, criminal proceedings were "a possibility": at [309].

9. [67]

   Mr Mansfield had responded comprehensively to the s 119J notice by May 2016 and the Council then issued further notices to others: at [310].

10. [68]

    When the DA was lodged on 7 September 2016, the Council's consideration of taking action or no action against Mr Mansfield was deferred, but the Statement of Environmental Effects prepared by one of the subpoenaed companies acknowledged on his behalf that works had been undertaken on the site without consent during 2014-2015: at [311].

11. [69]

    The DA was granted in May 2017 and in the following August the Council issued a "show cause" notice, which indicated that criminal proceedings were contemplated. The notice emphasised the absence of consent in 2014-15, in probable "breach" of the Act: at [312].

12. [70]

    The decision to prosecute was made between 14 August and 19 September 2017 by Mr Henderson in consultation with his "bosses" at the Council: at [313].

13. [71]

    The proceedings were commenced in September 2017 and the subpoenas were issued to third parties in February 2018: at [314].

The extension of Zhang

1. [72]

   The difficulty with Sheahan J's conclusions is that it is not clear what his Honour meant when he said that the council could not establish that "the s 119J process was truly ‘legitimate’, in the Zhang sense". His Honour's view was that in 2015-2016, Mr Henderson was seeking to "clarify" matters, which would later found "particulars of charge", rather than to inform any later decision he made as between Class 4 and Class 5 proceedings. But that could not make the s 119J notices then issued ultra vires.

2. [73]

   His Honour also considered that Mr Henderson may well have had a "dual purpose", with the criminal option being a very "substantial", if not his only, or primary, purpose in using s 119J. But the Environmental Planning and Assessment Act does not draw such a distinction. Rather, what s 119C(2) is relevantly concerned with is that council investigation officers exercise their powers, including the power to issue a s 119J notice, in order to enable a council to exercise its functions under the Act.

3. [74]

   On Mr Henderson's evidence, his Honour certainly made no firm finding that the only purpose for the issue of the s 119J notices was the pursuit of a prosecution. Nor did he find that the notices had not been issued in order to enable the Council to exercise its functions under the Act.

4. [75]

   The result of his Honour's approach was thus to extend what was decided in Zhang, to a point not only where s 119J notices were issued long before a prosecution under the Criminal Procedure Act was commenced, but to an early point in Council's investigation of an alleged breach of the Environmental Planning and Assessment Act. At that point it seems unarguable that Mr Henderson exercised the power granted by s 119J, to enable the Council to exercise its investigatory functions under the Act, in relation to the alleged breaches drawn to its attention by the complaint.

5. [76]

   Such a construction failed to pay necessary attention to what was decided in Zhang, in respect of notices issued to third parties.

The proper construction of s 119J

1. [77]

   As discussed in SAS Trustee Corporation v Miles [2018] HCA 55 at [20]:

2. [78]

   Taking necessary account of the provisions of s 119C, there is no warrant in the statutory language, or indeed in the balance of the Environmental Planning and Assessment Act, for interpreting s 119J so as to limit its operation as his Honour did. His Honour’s approach led to the result that subpoenas issued to third parties after the later commencement of a criminal prosecution for alleged breach of the Act are rendered invalid, because before the commencement of those proceedings, when the s 119J notices were issued during the investigation of a complaint of alleged breach of the Act, it was in contemplation that criminal charges might be laid for the breaches which appeared to have occurred, thereby rendering the notices ultra vires.

3. [79]

   The starting point for this conclusion is that there was no issue between the parties that the Environmental Planning and Assessment Act contemplates that a council will pursue an investigation into alleged breaches of that Act, given the functions there conferred upon it, when apparent breaches of the Act come to its attention by way of complaint.

4. [80]

   In 2015 when it received the complaint, the Council was an "investigating authority": s 119A of Division 1C Investigative powers of Part 6 Implementation and Enforcement of the Act. It had appointed Mr Henderson as an "investigation officer" under s 119B. Such officers were granted investigative powers under Division 1C of Part 6 Implementation and Enforcement of the Act, which included the power to issue notices under s 119J.

5. [81]

   "Investigation purpose" was defined in s 119A to mean "a purpose for which a power may be exercised under this Division". As decided in Zhang, a notice issued by a Council for the purpose of conducting proceedings which it has already brought for breach of the Act is not such a purpose, because the prosecutorial function was conferred by the Local Government Act, not the Environmental Planning and Assessment Act. But under the Environmental Planning and Assessment Act councils did have both the function of investigating such breaches, before any prosecution was brought and also of taking various other actions, in respect of such alleged breaches.

6. [82]

   Section 119C(2) specified the purpose for which s 119J notices and other powers conferred on investigation officers could be exercised.

7. [83]

   Mr Mansfield accurately submitted s 119C(2) did not include a provision such as s 119C(1)(b), which enabled departmental investigation officers to use the Division 1C powers to determine whether there had been compliance with or a contravention of the Act. But s 119C(2)(a) empowered council investigation officers to exercise their powers, to enable the council to exercise its functions under the Act.

8. [84]

   "Functions" was defined in s 4 to include "powers, authorities and duties".

9. [85]

   Accordingly, s 119C(2)(a) empowered Mr Henderson to utilise the powers granted to investigation officers by s 119J, to enable the Council to exercise its powers, authorities and duties under the Act. Relevantly, they included:

10. [86]

    It follows, understandably given the nature of this statutory scheme, that the powers, authorities and duties imposed on councils by the Act, included relevantly in this case, investigating whether the building work Mr Mansfield was carrying out involved a breach of the requirements of the Act and if it did, acting to deal with that contravention, including by ordering such building work to cease, or that rectification work be undertaken.

11. [87]

    It is also relevant that at the time when such orders are made, it may be obvious to an investigation officer that a breach has occurred, which will necessarily later result in criminal proceedings being brought by the council. But that cannot render ultra vires steps taken by the investigation officer, in the course of the investigation, to enable the council to exercise its functions under the Act, including by issuing stop work or rectification orders.

12. [88]

    It is in that statutory context pertinent that neither s 119J, nor any other provision of the Act, drew a distinction between an investigation of an alleged breach which finally results in a criminal prosecution being instituted and one which results in some other outcome. Such outcomes include the council concluding that there:

13. [89]

    The reason for councils being given wide investigative functions under the Act, given all that it regulated, was thus obvious. Long before a council makes a decision to prosecute a breach of the Act, it will have to investigate whether breaches have occurred and in some cases, deal with them swiftly, in the public interest, consistently with the objects of the Act. For example, the breach in question might give rise to urgent safety or environmental concerns.

14. [90]

    The objects of the Act are relevant in that context. Section 5 provided that they were relevantly:

15. [91]

    It follows that to construe s 119J in such a way that its powers were not available to be used by council investigation officers, when a council is investigating alleged breaches of the Act, when a later criminal prosecution is likely, would not accord with these objects.

16. [92]

    Also relevant to that conclusion are other powers conferred on council investigators by the Act, which may be exercised when alleged breaches of the Act are being investigated. They include powers to enter premises and to take specified actions there: ss 119D, 119E and 119F; to apply for the issue of a search warrant: s 119G; to require persons to answer questions in relation to a matter connected with an investigation purpose if the officer suspected specified matters, on reasonable grounds: s 119K; and to cause any questions and answers to questions given to be recorded: s 119L.

17. [93]

    Pertinently, in s 119F(1)(j), an investigation officer is also empowered to "seize anything that the officer has reasonable grounds for believing is connected with an offence against this Act" and by s 119F(2):

18. [94]

    Further, it is also relevant that s 119S contemplates that during an investigation information will be gathered which will be used in a later prosecution. It provided as follows:

19. [95]

    Sections 119F and 119S by their terms thus expressly contemplate that information or things obtained by an investigation officer as the result of the exercise of these powers, even from a contemplated defendant, may be used in criminal prosecutions later brought for breach of the Act. It is also relevant that the protections afforded by s 119S do not apply to records or information obtained from third parties.

20. [96]

    This, too, tells strongly against the conclusions Sheahan J reached, that the s 119J notices Mr Henderson issued to both Mr Mansfield and the third parties were not "legitimate", in the Zhang sense, but were ultra vires, given that when they were issued, Mr Henderson had in contemplation that a prosecution would likely be brought by Council against Mr Mansfield and the information so obtained could be used for the purpose of that prosecution.

21. [97]

    It also tells against the conclusion that the Council later had no legitimate forensic purpose, when it issued the subpoenas to the third parties, after the prosecution for breaches of ss 76A and 76B were commenced.

22. [98]

    In our view, it is only when an investigation has led a council to bring a criminal prosecution under the Local Government Act, that an investigation officer cannot use s 119J of the Act to issue a notice in order to advance that prosecution, because that is not a function conferred on the Council by the Act.

23. [99]

    A s 119J notice issued earlier, whether to a person who later becomes a defendant in criminal proceedings or to a third party, while a council investigation officer is investigating an apparent breach of the Act, is one issued for the purpose of enabling the council to exercise its functions under that Act. That remains the case, even if the officer then considers it likely that a prosecution for breach of the Act will later be brought by council against that person.

The application of these conclusions to the facts found

1. [100]

   It follows that on Sheahan J's findings, there can be no question that in issuing the s 119J notices as he did in late 2015 and 2016, Mr Henderson was exercising the powers granted to council investigation officers such as him, to enable the Council to exercise its investigation functions under the Act, in relation to Mr Mansfield's alleged breaches of the Act, which had come to its attention in September 2015 and was then being investigated. Those notices were accordingly not ultra vires.

2. [101]

   The fact that it was then apparent to Mr Henderson that a prosecution was possible or even likely to be brought against Mr Mansfield, did not alter that position, even though the result was likely to be that information and documents would be produced in answer to the notices, which could be used in such criminal proceedings, if they were brought. That is what s 119S expressly contemplated might occur.

3. [102]

   After Council decided in 2017 to exercise its prosecutorial function under the Local Government Act to commence class 5 proceedings against Mr Mansfield, and he had been given the opportunity to show cause why they should not be brought, they were commenced in accordance with the procedures prescribed by the Criminal Procedure Act. Thereupon Council could not issue any further notices under s 119J of the Act to Mr Mansfield as the defendant in those proceedings. There was, however, nothing which precluded the Council from issuing subpoenas to third parties in those proceedings.

4. [103]

   Indeed, Preston CJ considered in Zhang that s 119J could even then have been utilised to issue notices to third parties, but that is not what the Council did. The subpoenas which it issued in the criminal proceedings were thus not invalid.

5. [104]

   In the result, the following orders should be made:

   1. (1)

      Grant leave to appeal.

   2. (2)

      Allow the appeal.

   3. (3)

      Set aside the orders made by Sheahan J on 16 July 2018.

   4. (4)

      Remit the matter to Sheahan J for determination in accordance with the decision of this Court.