Mauloni v Fraser[2007] QSC 14

SUPREME COURT OF QUEENSLAND

[1] The Constitution of Queensland provides that a local government be an elected body that is charged with the good rule and local government of the particular area allocated to it.  The Constitution also allows for the enactment of provisions whereby one or more bodies or persons perform all or any of a local government’s functions during suspension of a local government’s councillors, or if a local government is dissolved.[1] 

[2] The Council of the Shire of Johnstone (“the Council”), is a body corporate, pursuant to the provisions of the Local Government Act 1993 (“the Act”) and is responsible for the local government of a defined area centre upon the town of Innisfail.  Its nine councillors were elected at the last round of local authorities elections held in March 2004. 

[3] The applicants are two of those councillors.  They bring this proceeding in their own right.  No issue is taken as to the applicant’s standing to bring the application independently of the other councillors or the corporate entity. The respondent is the present Minister for Local Government, Planning and Sport (hereinafter “the Minister”). 

[4] Allegations that differences and disruption within the ranks of the councillors impacting on the conduct of Council meetings and the carrying out of Council operations have been made.  These have become the subject of an investigation initiated by the departmental chief executive officer pursuant to s 167 of the Act.   The report of that investigation dated 25 July 2006 sets out details of the allegations, responses to the allegations and findings of the investigator.[2]  The report was of some 27 pages in length and contained a number of comments adverse to certain councillors identified, not by name but as members of a group (the “gang of five”).  The report concluded with a recommendation that the Council be asked 10 questions concerning the future conduct of meetings and the carrying out of Council responsibilities.  

[5] On 2 August 2006 the then Minister gave notice pursuant to s 160(1) of the Act.  In it she stated that she proposed to recommend to the Governor in Council that the powers under s 164 of the Act be exercised on the grounds “that the Council has acted in a way that puts at risk its capacity to exercise properly its jurisdiction of Local Government”.[3]  The document then referred to the report on the investigation and the Minister expressed her view that the adverse matters in the report were of a “serious nature and call into question the continued solvency of the Council and its ability to properly exercise the jurisdiction of local government”.  The notice concluded by inviting a written submission as to why the Minister “should not recommend to the Governor in Council that the Johnstone Shire Council be dissolved and administrator appointed”.[4]

[6] Stripped of any commentary about the investigator’s report the notice does expressly state that it was issued pursuant to s 160(1) on the grounds stated above but does not give any particulars as to what actions the Minister herself regarded as causing that risk to the Council’s capacity to exercise properly its jurisdiction.

[7] Three responses to the notice were received from different groupings of councillors.  Four councillors, including the Mayor, made a response to questions 8, 9 and 10 in which all councillors agreed but the four challenged the findings upon which questions 1 to 7 were based.  The applicants, whilst agreeing with the majority of councillors’ response to all questions, reserved the right to argue that the notice was not lawfully issued.[5]  It is that reservation which is being tested in these proceedings.

[8] In the period between the commencement of these proceedings and the hearing of argument, a State election was held and a new Minister (the present respondent) appointed.  By a letter to the Council and councillors dated 16 October 2006 (ex 1), the Minister advised of a further opinion having been received from consultants retained to review the conduct of the councillors and gave the Council a further opportunity to make submission.  The issues however, remain to be determined on the nature and function of the notice dated 2 August 2006. 

The issues

[9] By their amended application the respondents seek, pursuant to Judicial Review Act 1991 (“JRA”), a statutory review of –

(a) the decision by the Minister to issue the said notice together with the making of the report by the investigator;

(b) the conduct of the issuing of the notice and of the inquiry which led to the issuing of the notice.

[10] On its face then the application seeks a review pursuant to ss 20 and 21 of the JRA.  In argument the applicants also relied upon the provisions of R 569 of the Uniform Civil Procedure Rules which allows the Court to give relief or remedy pursuant to Part 5 of the JRA in the event that the Court considers the decision is not one which falls within the definition of “decision to which the Act applies” as defined in s 4 of JRA.  The basis of seeking this extension of the Court’s consideration is to pursue an allegation that the investigative process was attended by a lack of procedural fairness on the part of the investigator.  Effectively, the applicants seek a declaration to this effect and an injunction to restrain the Minister from further proceeding with the proposed action until the process has been properly undertaken.

[11] The respondent by leave has applied to have the applicants’ proceedings dismissed pursuant to s 48 of JRA.  This application is made upon the grounds that:-

(a) The alleged decision is not, in truth, a decision to which the Act applies” but rather a mandatory statutory duty cast upon a Minister intending to invoke the powers of intervention as provided for in Chapter 3 Part 2 of the Act and further that the conduct of an inquiry is not integral to the “decision” made pursuant to s 160 of the Act; and

(b) That “the conduct” did not relate to a report or recommendation before the making of an administrative decision, as contemplated by s 6 of JRA but rather was independent of the exercise of the ministerial duty imposed by s 160 of the Act.

[12] The questions which these competing applications give rise to are:-

(i) Whether there is a reviewable decision within the meaning of s 20 of the JRA;

(ii) Whether there is reviewable conduct related to the decision within the meaning of s 21 of JRA; and

(iii) Whether there is any basis for a prerogative order or a prerogative injunction pursuant to s 47 of JRA.

Statutory provisions

[13] The statutory regime, pursuant to which the decision now sought to be impeached was taken, is found in Chapter 3 Part 2 of the Act and concerns the intervention by the State into the affairs of a local government.  The powers of intervention by the Governor in Council are set out in division 1 of that Part.  The chief executive officer’s right to undertake inquiries, investigations and inspections are found in Divisions 2 and 3.  The following provisions are relevant:-

Division 1   Powers of intervention

160 Procedures before exercise of certain powers

(1) Before the Governor in Council or Minister exercises a power under this decision in relation to a local government, the Minister must give written notice of the proposed exercise of the power to the local government.

(2) However, notice need not be given if –

(a) The power is proposed to be exercised at the local government’s request; or

(b)  In the Minister’s opinion, giving notice –

(i) Is likely to defeat the purpose of the proposed exercise of the power; or

(ii) Would serve no useful purpose.

(3) The notice must state –

(a)the reasons for the proposed exercise of power; and

(b)a time within which the local government may make submissions to the Minister about the proposed exercise of power.

(4) Reasons stated in the notice are the only reasons that can be relied on in support of the exercise of the power.

(5) The Minister must have regard to all submissions made by the local government within the specified time.

(6) If –

(a)the proposed exercise of power is to proceed despite submissions of the local government; or

(b)    no submissions of the local government are received by the Minister within the specified time;

the power may be exercised without further notice to the local government.

…

164 Dissolution of local government

(1) The Government in Council may, by regulation, dissolve a local government if the Minister is satisfied that the local government–

(a) has acted unlawfully or corruptly; or

(b)has acted in a way that puts at risk its capacity to exercise properly its jurisdiction of local government; or

(c)is incompetent or can not properly exercise its jurisdiction of local government.

(2) Subsection (1) is subject to the Constitution of Queensland 2001, chapter 7, part 2.

(3) If the Legislative Assembly ratifies the dissolution of the local government under subsection (1) –

(a)    the local government’s councillors go out of office; and

(b)       the local government continues in existence as a body corporate and continues to be constituted by the local government’s administrator.

Division 2Inquiries, investigations and inspections

167 Inquiries, investigations and inspections by authorised persons

(1) The chief executive of the department may appoint an officer of the department or another appropriately qualified person (an authorised person) to conduct an inquiry, investigation or inspection about –

(a) the functioning of local government in the State; or

(b)  any matter relevant to the administration of this Act.

(2) However, subsection (1) does not permit the chief executive to appoint a person to conduct an inquiry, investigation or inspection about a reviewable local government matte.

(3) A local government must cooperate fully with an inquiry, investigation or inspection by a person appointed under subsection (1).

168 Reports on inquiries, investigations and inspections

(1) When an authorised person has completed the inquiry, investigation or inspection for which the person was appointed, the authorised person must, as quickly as possible, give the chief executive of the department a written report on the inquiry, investigation or inspection.

(2) The Minister may table a copy of the report in the Legislative Assembly.

[14] It is necessary to set out the relevant provisions of Chapter 7 Part 2 of the Constitution of Queensland 2001.  They are:-

74 Suspension until dissolution ratified

From the time an instrument purporting to dissolve a local government is made until it is ratified under section 75 or its effect ends under section 76, it has the effect only of suspending the local government’s councillors from office.

Note-

Section 71 permits another Act to provide for the appointment of 1 or more bodies or persons to perform all or any functions and exercise all or any powers of the local government and to be taken to be the local government during the suspension.

75 Ratification of dissolution

(1) The Legislative Assembly, on the Minister’s motion, may ratify the dissolution of the local government within 14 sitting days after a copy of the instrument purporting to dissolve the local government is tabled.

(2) If the Legislative Assembly ratifies the dissolution, the local government is dissolved in accordance with the instrument from the time of ratification.

76 No tabling or ratification of dissolution

(1) This section applies if –

(a) a copy of the instrument purporting to dissolve the local government is not tabled under section 73; or

(b) the Legislative Assembly refuses to ratify the dissolution of a local government moved by the Minister; or

(c) at the end of 14 sitting days after a copy of the instrument purporting to dissolve the local government is tabled –

(i) the Minister has not moved that the dissolution be ratified; or

(ii) the Legislative Assembly has not ratified the dissolution, even though the Minister has moved that it be ratified.

(2) The effect of the instrument purporting to dissolve the local government ends.

(3) The suspension from office of the local government’s councillors ends and they are reinstated in their respective offices.

(4) The appointment of a body or person appointed to perform all or any function s and exercise all or any powers of the local government because of its purported dissolution ends.

[15] I should note also that the ratification process is to be undertaken within the system of responsible government which would require the Governor in Council, acting pursuant to s 164 of the Act, to act on the advice of executive government.  Whilst there is no direct reference to the executive or cabinet in the statutory provisions (or in the evidence), I accept that this is the process which will necessarily be followed.

Was the decision of an administrative character?

[16] The applicants acknowledge that s 160 of the Act created a statutory duty on the Minister but argue that in the exercise of that duty the Minister was required to make a decision having regard to both the public interest and the private interests of individuals affected by any such decision.  Thus the Minister had an obligation to act in accordance with the principles of natural justice.  The applicants contend that the notice lacks particularity as to the allegations made against the councillors generally and, that it adopts from the investigator’s report allegations on which the applicants have been given no opportunity to be heard.  In such circumstances the applicants contend that there has been a denial of natural justice such that the notice is invalid.  Accordingly the Minister should be restrained from acting on the report or seeking the Governor-in-Council’s intervention.

[17] The Minister contends that the process for the dissolution of a local government is legislative in character and does not involve the making of any decision of an administrative nature.  The Minister points to the fact that none of the mandatory steps ordained by s 160 of the Act is of an administrative nature but rather the performance of a parliamentary or ministerial function.  The jurisdictional fact which is a condition precedent to the Governor-in-Council acting is the “ministerial satisfaction” as to the existence of one or other of the three criteria for dissolution as identified in s 164(1) of the Act.  This does not involve a decision but rather the holding of an opinion.  The Minister contends that s 6 of the JRA only has application where the effect of a report is to inform a “decision” and thus does not apply in these circumstances.

[18] At the heart of this issue is the characterisation of the function of the s 160 Notice.  It cannot be doubted that the actual dissolution of a local government, pursuant to s 164 of the Act, is a legislative action. By its own terms the issuing of the Notice was undertaken to satisfy the requirements of subsections (1)(3) and (4) of s 160 of the Act.  Subsection (5) sets out the remaining obligation before the Minister may exercise the power to propose the dissolution namely, due consideration of timely submissions made by the local government.  Because of these proceedings the process leading to dissolution has not moved beyond this point.   

[19] The means by which a minister, intending to exercise the power under Division 1, may inform himself or herself is not prescribed.  It would seem to be not subject to any limitation.  The only check and balance mechanism is provided by the requirements that the reasons for the ministerial satisfaction are to be set out in the Notice, that those reasons be exhaustive and further, that the local government’s submissions in response be considered.  There is no express requirement that the factual basis upon which the minister’s satisfaction is founded be disclosed nor that the Minister’s satisfaction be reasonably held.  However, once the Minister is so satisfied he or she would have a duty to act in the public interest.

[20] As to the question of the whether the Council and the councillors have the right to be heard in accordance with the principles of natural justice when a minister proposes to move the dissolution of a Council, I have been referred to a number of cases in which the general application of the principle of audi alteram partem has been discussed.  See Kioa v West[6]; Australian Broadcasting Tribunal v Bond[7].  It is sufficient to observe that though the requirement of a decision maker to act fairly is easily stated, its application depends on the statutory framework and the circumstances of a particular case.

[21] Counsel for the Minister referred particularly to Ex parte The Queen ex rel. Warringah Shire Council; ex parte Barnett[8] where the New South Wales Court of Appeal considered the rights of councillors who had been removed from office by proclamation of the Governor-in-Council.  The relevant statutory provision (s 86) was in terms that:-

“(t)he Governor may, if in his opinion circumstances render it advisable to do so, by proclamation, remove members of the Council from office.”[9]

[22] The Court of Appeal considered whether the right of a councillor to be heard applied in circumstances where a minister proposed to exercise such a power having regard to the decisions of the House of Lords in Ridge v Baldwin[10] and the Privy Council in Durayappah v Fernando[11].  The latter case dealt with an application by the Mayor of the local council which had been dissolved by executive order based on the minister’s opinion of the council being incompetent.  There, the Privy Council, whilst noting that there no exhaustive classification which can or should be given of cases where the audi alteram partem principle applies, held that where the minister acting solely on his own decision the council (but not an individual councillor) did have the right to be heard.

[23] But the legislative provisions in Re Barnett were different.  There, as here, the power to dissolve is to be exercised by the Governor-in-Council.  The Court of Appeal stated (at p 76):-

“For the power given by s 86 is to be exercised by the Governor on the advice of the Executive Council not simply when “circumstances have arisen” but when “in his opinion circumstances have arisen which make it advisable”.  This is thus more than an opinion that “circumstances have arisen”, there is involved also as part of the foundation of the power an opinion as to the advisability of dismissing the councillors and holding an election.  These considerations, unlike those under s 219, are subjective, vague and difficult to define, and Parliament has enacted that they are to be determined by the formation of the opinion of the Governor in Council.  The considerations have been made vague and subjective doubtless because of the subject matter of the power and of the results of its exercise, namely the dismissal from office of councillors who administer local government within an area.  It seems to us that the legislative intendment as revealed in s 86 on such a subject (not dissimilar in some respects from the power of the Governor to dismiss Parliament itself in certain circumstances) is antithetical to the concept that Parliament has intended that the councillors should be heard before the Executive Council makes a decision to advise the Governor.  The position under s 86 may be contrasted with that under s 219 where the existence of facts are tabulated as a condition precedent to the creation of the power and in respect of which different considerations may well apply.

Other features which lead away from any implication of a legislative intendment that the principle of audi alteram partem applies to an exercise of power under s 86, and which support the view that “a completely open discretion not conditioned on any factual evaluation” has been given to the Governor in Council emerge from the nature of the powers and the results flowing from its exercise.  There is here no dissolution of the council or deprivation of its property.  No specific charge needs to be made against the councillors or any of them in order that the circumstances in which the power is operative may exist.  The subject matter of s 86 of the Local Government Act is the acceleration of the time within which an election of councillors may be held and provision for the interim administration of the council.  The dismissal of the councillors as a body can take place without culpability existing in them or in any of them, for reasons which in the circumstances are characterised as advisable, not necessarily because of turpitude or fault or breach of the law but because of the Governor’s opinion that any of an innumerable variety of circumstances make fresh elections “advisable”.  Emoluments or fees are compensatory for time spent and are not of the same nature as property or salaries.  All this is far removed from deprivation of status or of property in the sense in which these terms have been used, and finally it is to be observed that the tenure of office as an alderman or councillor is subject to and upon the terms of the Act read as a whole and that all or any of the dismissed councillors can be re-elected if not otherwise disqualified.

In the result, we are of opinion that the terms of the section and the nature and the subject matter of the power given by it are such that the principle of audi alteram partem does not apply to the Governor when exercising his powers under s 86 of the Local Government Act.”

[24] Not all cases which involve decision making by the Governor in Council result in the rules of natural justice being excluded.  In Kioa v West (supra) Mason J (as he then was) said:-

“Where the decision in question is one for which provision is made by statute, the application and content of the doctrine of natural justice or the duty to act fairly depends to a large extent on the construction of the statute.  In Mobil Oil Australia Pty Ltd v Federal Commissioner for Taxation, Kitto J pointed out that the obligation to give a fair opportunity to parties in controversy to correct or contradict statements prejudicial to their view depends on ‘the particular statutory framework’.  What is appropriate in terms of natural justice depends on the circumstances of the case and they will include, inter alia, the nature of the inquiry, the subject matter, and the rules under which the decision maker is acting.”[12]

[25] An examination of the circumstances as to the point where the right to be heard might be denied, was undertaken by the High Court in State of South Australia v O'Shea[13] where a parole board had recommended that a prisoner with an indeterminate sentence be released on licence on various conditions.  The legislation provided that the Governor in Council might, on the recommendation of the Board, direct the prisoner’s release.  The Governor in Council however without further hearing from the prisoner refused to direct the release.  The High Court found that the prisoner had no right to be heard at that executive level.  The distinction was made between matters touching personal rights and matters of policy which might nonetheless touch an individual’s rights quite significantly.  Wilson and Toohey JJ said (at p 401):-

“The nature of the decision of the Governor stands in contrast to that of the Board.  For its part, the Board, assisted by medical reports, draws on the expert qualifications and experience of its members in law, criminology and medicine in determining whether an offender detained under s 77a of the Criminal law Act is fit to be at liberty or should be released on licence subject to certain terms and conditions.  Clearly, the legislature believes, that without more, the recommendation of the board may not offer sufficient protection to the community.  The operative decision, given the provision of expert medical opinion supported by the judgment of the board, is reserved to a political institution, the Governor in executive council.”

Their Honours then referred to In re Findlay[14] where the House of Lords differentiated between the roles of a parole board and the executive and they concluded (at p 402):-

“In the same way, the duality of the legislative scheme embodied in s 77(a) of the Criminal Law Act characterises the Governor’s decision as an expression of an unfettered discretion as to what the public interest requires in the instant case.  It may be that a system of judicial review would ensure greater protection for the individual than the present scheme, but that is not what the legislature has provided.”

[26] At p 409 Brennan J said:-

“It is not a general rule of administrative procedure as it is of judicial procedure that a person who hears should decide.  Taylor v Public Service Board; Sean Investments v McKellar; Kioa v West.  A need for further hearing by a repository of power after a hearing by an expert board may arise if, in the particular circumstances, the interests of a party are affected by some new fact or matter which the decision maker proposes to take into account and which the party has had no opportunity to deal with.  But there does not have to be a further hearing on matters of policy alone.”

[27] So the question arises whether the rules of natural justice will apply in the statutory framework within which this case is to be determined.  Here the legislation specifically provides for the Governor in Council to act upon the Minister’s satisfaction about one or other of the three concerns identified in s 164(1) of the Act.  Two of those concerns (including the one relied upon here) are matters of judgment or opinion.  They are not so obviously susceptible to being particularised.  Moreover, the fact that subsection 2 of s 160 allows the Minister, in certain circumstances, to proceed without giving notice at all, emphasises the critical nature of the ministerial opinion.  It is the state of the ministerial satisfaction which obliges the Minister to act.  This is the ‘jurisdictional’ fact and it is a decision which is “not directed to the exercise of a discretionary power”.  See Minister for Immigration and Multicultural Affairs v Eshetu per Gummow J at p 650.[15]  Ultimately, it seems to me, that the statutory process for the dissolution of a local government clearly indicates that it is a governmental or parliamentary act.  The delineation of the process in the Constitution of Queensland serves to confirm this.  The outcome will be determined by policy considerations rather than the resolution of factual questions concerning the conduct of individual councillors.

[28] I take the view that the Minister’s action in issuing the notice pursuant to s 160(1) of the Act was the first step in that parliamentary process and as such is not reviewable under the Judicial Review Act.  

[29] Consequently, the investigator’s report was not made for the purpose of any reviewable decision such as to attract the operation of s 6 of JRA.  It was, in any event, a report intended to inform the departmental chief executive officer.  The form in which it might have been provided to the Minister or the weight the Minister might attach to it are not matters for inquiry.  As it happened the report was simply identified as part of the information placed before the Minister.  Even if, in the preparation of the report, some breach of procedural fairness was established (and I do not so find) it is not germane to the point of whether the Minister in fact held the required opinion. 

[30] The remaining issue of whether prerogative orders should be made may be quickly dealt with.  There seems little doubt the action of the Minister in issuing a notice was in compliance with the statutory duty was “for the purposes of or incidental to, transacting the business of the Assembly” within the meaning of s 9 of the Parliament of Queensland Act 2001.  As such it attracts the immunity of s 8 of that Act which provides that such proceedings “cannot be impeached or questioned in any court or place out of the Assembly”.   This immunity is intended to have the same scope as that provided by Art.9 of the Bill of Rights (1688) had in relation to the business of the Assembly immediately prior to the commencement of the Parliament of Queensland Act.  The scope of that immunity has been well considered and does not need further elaboration now.  See Rowley v O'Chee[16]; Corrigan v Parliamentary Criminal Justice Committee[17].  In my view no such prerogative orders cannot be made in the circumstances of this case.  In these circumstances I should allow the application by the Minister and dismiss the application as filed by the applicants.

Orders

[31] 1. The amended application by the applicants is dismissed.

2. I give leave to the parties to make submissions on costs within 14 days from the date hereof.