Toogood v Graffen[2022] QSC 53

SUPREME COURT OF QUEENSLAND

1. [1]
   The respondents seek the summary dismissal of Mr Toogood’s application for a statutory order of review of two decisions. 
2. [2]
   I note at the outset that Mr Toogood’s application also refers to conduct in connection with the decisions but it is necessarily the decisions, not the conduct, to which the application relates.  I similarly note there were times during Mr Toogood’s submissions when he appeared to be submitting on the legality of other, earlier decisions of Cassowary Coast Regional Council (‘the Council’), but the interference sought by the application is necessarily confined to interference in the two decisions nominated in the application.
3. [3]
   The first decision is said to be that of Andrew Graffen, the Chief Executive Officer of the Council, of 11 November 2021 to authorise a costs agreement with a law firm, Connolly Suthers, to represent the Council, James Gott (a former Chief Executive Officer of the Council), John Kremastos (a former Mayor of the Council), Ricky Taylor (a former Councillor of the Council) and Tracy Taylor (Mr Taylor’s wife) as respondents in an appeal against a Federal Circuit Court order by Mr Toogood and his wife.
4. [4]
   The second decision is said to be that of the Council at its meeting of 25 November 2021 at which it resolved in item 1 to note a so-called Confidential Report – Legal Matters Update and, in item 2, to oppose the appeal proceedings and request the Chief Executive Officer to action a security for costs application.
5. [5]
   The security for costs application referred to in the above resolution of the Council is apparently to be pursued in the Federal Court in the appeal by the Toogoods against orders made by Judge Jarrett of the Federal Circuit Court, making a sequestration order in bankruptcy against the estates of Mr Toogood and his wife and ordering the costs of the proceeding to be paid from their estates.^[1]  The successful applicants in that proceeding and the respondents in the Toogoods’ appeal against Judge Jarrett’s decision are the respondents to Mr Toogood’s application for a statutory order of review. 
6. [6]
   The substantive orders sought by Mr Toogood’s application are:

1. “1.A Declaration that the Decision to enter into Costs Agreement by the Chief Executive Officer and the Costs Agreement itself are void ab initio, pursuant to s 30(1)(c) or s 47(1) of the JR Act, s 10 of the Civil Proceedings Act 2011, or the Court’s inherent jurisdiction. or, in the alternative,

1. 2.An Order quashing or setting aside the Decision to enter into the Costs Agreement from the date of the Decision pursuant to s 30(1)(a) of the JR Act, s 10 of the Civil Proceedings Act or the Court’s inherent jurisdiction.

1. 3.A Declaration that the 25 November 2021 Council Resolution Number LG1159 is ultra vires, or in the alternative,

1. 4.An Order quashing or setting aside the adoption by Council of Items 1 and 2 of the 25 November 2021 Resolution Number LG1159 …”

7. [7]
   The respondents seek summary dismissal, relying upon three arguments which are, in summary:

1. 1.the issues raised by the application can be determined in the Federal Court on appeal;

1. 2.the decisions do not attract the operation of the Judicial Review Act 1991 (Qld) because they were not made under an enactment; and

1. 3.there would be no utility in the alternative pathway to the relief sought, namely a declaration in the exercise of the court’s inherent jurisdiction or per s 10 Civil Proceedings Act 2011 (Qld).

8. [8]
   The first of those arguments seeks to invoke s 13 Judicial Review Act on the premise the issues in the present application can be dealt with in the Federal Court appeal.  It was submitted that further to the appellate jurisdiction conferred under s 24 Federal Court of Australia Act 1976 (Cth) the Federal Court has such further powers as are necessary or incidental to the exercise of the appellate jurisdiction so conferred.^[2]  Such powers doubtless include the Court’s inherent power to protect its own processes which may on occasion include restraining legal practitioners from acting in a given matter in the exercise of the Court’s supervisory jurisdiction.  A well-known example arises when a legal practitioner is in a position of apparent conflict because of having previously acted for and or received relevant confidential information from a now opposing litigant.^[3]  However, no instance was cited in argument of a Court interfering with the contractual arrangements between legal representatives and clients where that representation is funded by a public authority without proper authority to so fund it.  That very issue appears to be touched on by Mr Toogood’s grounds of appeal, though it relates to the decision about funding of the hearing below, not a decision about the funding of the appeal.
9. [9]
   I refrain from expressing a concluded view regarding the respondents’ first argument. It need not be resolved, for, as the ensuing analysis demonstrates, the second and third arguments are correct and the respondents’ application should therefore be granted. 
10. [10]
    It is convenient to preface the analysis with some observations of relevant legal principle.
11. [11]
    Firstly, to attract the operation of the Judicial Review Act in the circumstances of this case it is necessary, per s 4, that the decisions at issue were made “under an enactment”.  As will be seen, the decisions complained of do not meet that requirement. 
12. [12]
    Secondly, it is well established that a declaration is a discretionary remedy.  In the High Court in Ainsworth v Criminal Justice Commission,^[4] the plurality observed of declaratory relief:

“It is a discretionary power which “[i]t is neither possible nor desirable to fetter … by laying down rules as to the manner of its exercise.”  However, it is confined by the considerations which mark out the boundaries of judicial power.  Hence, declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions.  The person seeking relief must have “a real interest” and relief will not be granted if the question “is purely hypothetical”, if relief is “claimed in relation to circumstances that [have] not occurred and might never happen” or if “the court’s declaration will produce no foreseeable consequences for the parties.”^[5]

The power to grant declaratory relief is to be exercised “where it is appropriate and required to do practical justice”.^[6]  Such relief may be refused as a matter of discretion where the circumstances justify the remedy to be withheld. One circumstance is where “no useful result could ensue.”^[7]  In short, declaratory relief will not ordinarily be granted if there is no utility in doing so.  For reasons developed below, there would be no such utility in the present case.

13. [13]
    Turning then to the decisions in question, the first decision is that of Mr Graffen to authorise a costs agreement with Connolly Suthers solicitors.  That agreement, which was signed by Mr Graffen as the Council’s Chief Executive Officer on 11 November 2021, was between Connolly Suthers, described in short form in the agreement as “us”, and the Council, Mr Gott, Mr Kremastos, Mr Taylor and Mrs Taylor, described in the agreement collectively as “you”.  The work Connolly Suthers is instructed to perform under the costs agreement is described in clause 2.4 thereof as:

1. “(a)
   Represent you and your interests in the Federal Court bankruptcy appeal proceeding lodged by Steven and Julianne Toogood (“Toogood”)

1. (b)
   Oppose the orders sought by Toogood so that they remain bankrupt pursuant to sequestration orders made 22 October 2021.

1. (c)
   If instructed and there is a reasonable prospect of success, bring an application for security for costs in the appeal proceeding.”^[8]

14. [14]
    Mr Toogood’s grounds complain Mr Graffen did not have power or authority to enter into the costs agreement, his argument being, in essence, that he had no authority to do so because the decision to do so should have been one made by the Council.  Mr Toogood alleges this infected the legality of the second decision but it is not apparent how that could be so. 
15. [15]
    In any event, as Chief Executive Officer, Mr Graffen did have power to sign a costs agreement pertaining, as this agreement did, to legal proceedings.  The Local Government Act 2009 relevantly provides at s 240:

“240 Acting for a local government in legal proceedings

1. (1)
   In any proceedings, the chief executive officer, or another employee authorised in writing by the local government—

1. (a)
   may give instructions and act as the authorised agent for the local government; and

2. (b)
   may sign all documents for the local government.

2. (2)
   A local government must pay the costs incurred by the chief executive officer or other employee in any proceedings.”

16. [16]
    It is noteworthy that “another employee” referred to in s 240 requires authorisation in writing to be empowered to act as contemplated under the section, whereas the Chief Executive Officer does not.  Section 240 is a complete answer to Mr Toogood’s complaint that the Chief Executive Officer needed to have the express authority of the Council before signing the costs agreement for it.  It is inherent in acting as the Council’s authorised agent and giving instructions in the appeal proceeding that the Chief Executive Officer was empowered as the Council’s agent to engage legal representatives, that being an essential part of the process of giving instructions to such representatives. 
17. [17]
    It is important to appreciate that the proceedings in contemplation in this instance are not proceedings being advanced by the Council, for it prevailed at first instance.  The proceedings are an appeal to which the Council and the others are respondents.  It would be a curious situation that having prevailed below, the Council and the other respondents would thereafter give in, surrendering that favourable result, just because an appeal was filed.  The inference that a solicitor should be engaged by the Chief Executive Officer to resist the appeal was so obvious in the competent discharge of the Chief Executive Officer’s role as to be irresistible.
18. [18]
    Even if the declaration sought was made there is no evidence to suggest the respondents would likely concede Mr Toogood’s appeal and it is inevitable that at least the Council will appear to resist the appeal.  It follows Mr Toogood’s personal position as an appellant would be unaffected even if this court granted a declaration. 
19. [19]
    Mr Toogood presses the broader public interest of ratepayers in the declaration sought.  There have certainly been cases where Courts have restrained statutory bodies from misapplying public funds.^[9]  There might potentially be cases where there could be utility in making a declaration to guard against such misapplication.  However, it is difficult to perceive any utility in such a declaration where it will likely make no difference to the amount of public money being applied.  That is the position here, because the solicitor’s role (and that of counsel briefed) in the substantive argument in the appeal would in effect be the same whether acting for the Council alone or for the other respondents as well.   That role would be to resist the appeal and preserve the decision below.  Whether it mattered below that the present citizen respondents enjoyed an advantage different than that enjoyed by the Council by reason of the joint representation is not presently to the point, for this application is solely concerned with decisions about the appeal representation. 
20. [20]
    Perusal of the judgment at first instance demonstrates a simple and unsurprising unity of respondents’ interests in resisting the appeal.  This means that the cost of resisting the appeal on behalf of the Council alone would not likely exceed the cost of resisting it on behalf of all respondents.  No submission or evidence was advanced to suggest otherwise.
21. [21]
    The public interest in expenditure of ratepayers’ money not exceeding that which the Council is in any event obliged to expend in discharge of its obligations as a respondent litigant is in no practical jeopardy by reason of the decisions the subject of this application.  This is to say nothing of whether that interest was jeopardised by the Council’s funding decisions in respect of earlier litigation, which decisions are not the subject of the present application.
22. [22]
    The second decision was two resolutions on the following terms:

1. “1.Note the Confidential Report – Legal Matters Update;

1. 2.Note that a decision has been handed down in Bankruptcy Matter BRG337/2019, an appeal to the decision has been lodged by the respondents and Council has adopted the model litigant principles, is opposing the appeal proceedings and requests the Chief Executive Officer to action a security of costs application …”^[10]

23. [23]
    Those resolutions were not decisions to do anything other than “note” the progression of the litigation in which the Council was involved and which was, by then, proceeding to the appeal stage.  For that reason alone there would be no utility in this Court interfering in those resolutions. 
24. [24]
    Even if the second “decision” is construed in the way Mr Toogood appears to have construed it – as the Council’s decision to oppose the appeal and request the Chief Executive Officer to action a security for costs application – it is not a decision which would itself be rendered invalid or beyond power merely on the basis that its Chief Executive Officer should have awaited that decision before entering into the costs agreement as part of the process of giving instructions about opposing the appeal proceedings. 
25. [25]
    It was pointed out to Mr Toogood in the course of argument that even if the alleged lack of authorisation to enter into the costs agreement did invalidate the second decision, it is quite apparent that the Council, which has clearly decided to oppose Mr Toogood’s appeal, could and likely would pass repeated or more specific resolutions confirming that it wants Connolly Suthers to act for the respondents in the appeal on terms of the kind contained in the earlier generated costs agreement.  Mr Toogood responded that his complaint goes deeper than the technical point about the Chief Executive Officer’s power to have entered into the costs agreement, namely to the legality of the Council funding the appeal on the basis contemplated by the costs agreement. 
26. [26]
    His principal two complaints in that regard go to the lawfulness of the Council funding the litigation costs of the individual respondents as distinct from the Council itself as a respondent, and that clause 12.1 of the agreement involves an unlawful loan, guarantee or indemnity by the Council.  In deference to the thought Mr Toogood has given to these complaints I tarry to review them, even though they are not determinative of the issues in the application for summary dismissal.
27. [27]
    Clause 12.1 reads:

“12.1 The Cassowary Coast Regional Council hereby guarantees to us the due and punctual performance by you of all the terms and conditions of the costs agreement and further agrees to indemnify and keep us indemnified against any loss or damage however arising which we may suffer in consequence of any failure by you to perform your obligations under the costs agreement (including those relating to the payment of the Fee, interest, costs and expenses) or for any other reason whatever and this guarantee shall not be effected or discharged by the granting to you of any time or other indulgence or consideration or transaction whereby the liability of those signatories would, but for the provisions of this clause, have been effected or discharged.”

28. [28]
    The effect of that clause is that the Council guarantees the due and punctual performance of all the terms and conditions of the costs agreement, which of course includes the obligation to pay bills rendered under the agreement and to provide timely, accurate and proper instructions and agrees to indemnify the Council against loss flowing from a failure to meet such obligations.  In short, by clause 12.1 the Council assumed the responsibility of ensuring Connolly Suthers would receive timely, accurate and proper instructions and the Council assumed the responsibility of ensuring that Connolly Suthers’ bills rendered under the agreement were paid.
29. [29]
    Mr Toogood complains this breaches s 111 Local Government Act 2009 (Qld) which relevantly provides:

“111 Councillors liable for loans to individuals

1. (1)
   A local government must not, either directly or indirectly, make or guarantee a loan to an individual.

1. (2)
   Guarantee a loan includes provide a security in connection with a loan.

1. (3)
   The councillors who knowingly agree to loan the money are jointly and severally liable to pay the local government—

1. (a)
   the amount of the loan; and

1. (b)
   interest on the amount of the loan, …; and

1. (c)
   any fees, charges, penalties or other expenses incurred by the local government in relation to the loan.”  (emphasis added)

30. [30]
    Mr Toogood submits the effect of clause 12.1 is to “make or guarantee a loan”, in breach of s 111(1).  He seizes upon the observation of Gleeson CJ in Prime Wheat Association Ltd v Chief Commissioner of Stamp Duties^[11] that:

“The essence of a loan is an obligation of repayment.”

31. [31]
    Reliance on that sentence alone overlooks that the very next sentence by Gleeson CJ was:

“Here what was involved on the part of the purchasers was payment, not repayment.”^[12]  (emphasis added)

What is involved under clause 12.1 of the costs agreement is payment to Connolly Suthers for their services, not repayment to them or anyone else.  It is not, and does not evidence, a loan or a guarantee of a loan. 

32. [32]
    Moreover, the words of clause 12.1 are inconsistent with a co-ordinate right to seek contribution from co-obligors.^[13]  Section 54 (1) Property Law Act 1974 (Qld), in speaking of a promise by two or more persons being construed as a promise made jointly and severally, does so “unless a contrary intention appears”.  Clause 12.1’s reference to indemnity evidences such contrary intention.
33. [33]
    Mr Toogood seized upon the presence of the word “guarantee” in clause 12.1 but s 111’s reference to that word is in the phrase “guarantee of a loan”.  That requires that there at least is a loan and there was not a loan.
34. [34]
    Mr Toogood alternatively submitted clause 12.1 constituted a gift, which he submitted would be unlawful, although he could not identify a statutory provision to that effect.  In any event the payment arrangement contemplated by clause 12.1, the Council’s assumption of the obligation to pay the solicitors’ firm for its services to all respondents, does not evidence a gift.  It says nothing as to any separate financial arrangement as between the Council and the other respondents.  If there was some other decision regarding such an arrangement it was not either of the decisions which this particular application targeted.  It is difficult to avoid the impression that earlier decisions of arguably more relevance to the arguments Mr Toogood now advances were necessarily not relied upon in this application because of the 28 day period within which to apply for review provided for by s 26 Judicial Review Act.
35. [35]
    Mr Toogood also placed reliance upon Statutory Bodies Financial Arrangements Act 1982.  That Act applies to statutory bodies which includes local governments, per s 52(e).  Mr Toogood seizes upon ss 60A and 61A of that Act, which respectively provide that a statutory body may, with the Treasurer’s approval, enter into a type 1 financial arrangement or a type 2 financial arrangement.  The schedule to the Act relevantly defines type 1 and type 2 financial arrangements as follows:

“type 1 financial arrangement means an arrangement that provides for, relates to, is directed towards or includes 1 or more of the following— …

5. (e)
   entering into an arrangement, covenant, guarantee, promise or undertaking to meet liabilities or obligations incurred by or to a person, whether or not the person is a party to the arrangement, covenant, guarantee, promise or undertaking; …

type 2 financial arrangement means an arrangement, other than a type 1 financial arrangement, that provides for, relates to, is directed towards or includes 1 or more of the following—

1. (a)
   borrowing an amount;

2. (b)
   lending an amount; …

7. (g)
   granting financial accommodation by or to a person, whether or not the person is a party to the arrangement; …”

36. [36]
    Mr Toogood contends that the effect of clause 12.1 of the costs agreement is that it is either a type 1 or type 2 financial arrangement and there did not exist Treasurer’s approval for the entering into it.  Clause 12.1 is not a type 2 financial arrangement, for it involves no borrowing or lending and cannot be described as a grant of financial accommodation.  Indeed, as earlier mentioned, it says nothing as to any financial arrangement as between the Council and the other respondents.  It is, however, an arrangement or guarantee to meet liabilities incurred, as its use of the term “indemnify” shows, and thus comes within the definition of a type 1 financial arrangement. 
37. [37]
    The Treasurer has power to grant general approvals under the Act and on 13 October 2017 did so on terms published in the Queensland Government Gazette relevantly including:

“Approval

1. 1.Pursuant to sections 60A and 70 of the SBFA Act, I grant a general approval for all statutory bodies to enter into type 1 financial arrangements, being the provision of an Indemnity. …

Definitions

1. 2.For the purposes of this approval, the following definitions apply: …

• ‘Indemnity’ means an indemnity in an arrangement entered into for the purpose of undertaking activities associated with discharging its statutory functions; …”^[14]

38. [38]
    On the face of it, clause 12.1 involves provision of an indemnity and it appears to have been given in an arrangement entered into for the purpose of activity associated with the litigation of an appeal in which it is a named respondent.  It is arguable, though not necessarily clear, that resisting such an appeal is within the Council’s statutory functions. 
39. [39]
    If clause 12.1 was not caught by the above approval, it is somewhat less arguable such approval was not needed.  The Statutory Bodies Financial Arrangements Act relevantly caters for the circumstance where there is no express power in the statutory body’s authorising Act or another Act to enter into a type 1 financial arrangement. Section 11(4) states:

“If there is no express power in the body’s authorising Act or another Act to enter into a type 1 financial arrangement, the body’s power to enter into the type 1 financial arrangement is limited to part 7, division 3.”

40. [40]
    In those circumstances, one goes to s 60A, which requires an approval from the Treasurer to enter into a type 1 financial arrangement. However, s 60A does not apply where there is express power within the authorising Act or another Act to enter into a type 1 financial arrangement.  Importantly, the apparent effect of s 11(5) is to confirm that an “express power” is not constituted by a mere general provision in the authorising Act stating the body has the powers of a body corporate, the power to enter into contracts or to do all things necessary or convenient for or in connection with its functions.  A more specific empowering provision is required.  Counsel for the respondents did not identify such a provision.
41. [41]
    I ventilate the latter aspects of the argument to acknowledge there is arguable substance to the points made by Mr Toogood about the Statutory Bodies Financial Arrangements Act. Such arguments would of course remain for determination at the substantive hearing if the present application for summary dismissal were to fail.  So too would arguments advanced by Mr Toogood about the decisions being contrary to the Council’s policy for funding legal assistance. 
42. [42]
    Returning though to the application for dismissal, let it be assumed for the sake of argument that neither the Chief Executive Officer nor the Council should have agreed to, in effect, fund the legal costs of the citizen respondents to the appeal.  Where does that leave the application?  As an application for a declaration it suffers from the flaws already explained, that there would be no utility in granting it.  I would for that reason decline to exercise the discretion to make a declaration.
43. [43]
    It follows the application can only live on, solely, as an application for judicial review and thus only if the decisions were decisions made under an enactment.  In the High Court decision of Griffith University v Tang^[15] the plurality observed:

“The determination of whether a decision is “made…under an enactment” involves two criteria: first, the decision must be expressly or impliedly required or authorised by the enactment; and, secondly, the decision must itself confer, alter or otherwise affect legal rights or obligations, and in that sense the decision must derive from the enactment.” 

Applying that test, to the circumstances of this case, the decisions did not confer, alter or otherwise affect legal rights or obligations so as to derive from an enactment.

44. [44]
    As to the first decision, the Chief Executive Officer’s broad power to enter in contracts^[16] is not sufficiently directly influential upon legal rights and obligations to satisfy the test in Tang.  The Court’s observations in JJ Richards & Sons Pty Ltd v Bowen Shire Council^[17] are apposite here:

“The decision of the High Court in Tang makes it clear that a decision by a governmental agency to enter a contract is not a decision under an enactment merely because the agency is a creature of statute which confers a legal personality in the capacity to contract upon the agency.”

45. [45]
    The decision to enter into a costs agreement is not a decision which affects legal rights and obligations in a way deriving from an enactment, such as the Local Government Act.  Rather it is an incident of the Council’s activity as a corporate citizen engaged in litigation. 
46. [46]
    Of course, the Council’s involvement in the litigation, specifically Mr Toogood’s appeal, may affect Mr Toogood’s interests.  However, as was observed in Holzinger v Attorney-General^[18] “a decision to commence (or defend) litigation does not create rights, does not extinguish rights, does not impose liabilities, and does not impose a legal disability”.  Here the decision to oppose an appeal is even further removed from doing so.  It is merely a conventional attempt to maintain the status quo and alters no existing legal rights or obligations.
47. [47]
    As to the second decision, as already explained, it was no more than a decision to note something.  It cannot sensibly be regarded as creating or impacting rights or liabilities.  However, even if the two resolutions are given the meaning Mr Toogood would ascribe to them - as the Council’s decision to oppose the appeal and request the Chief Executive Officer to action a security for costs application – the above observation in Holzinger v Attorney-General makes it plain such a decision does not confer, alter or affect legal rights or obligations.  It is merely the decision of a litigant relating to the conduct of litigation.  It is not a decision deriving from an enactment. 
48. [48]
    In light of those conclusions it would be inappropriate for the application for statutory order of review to continue and it should be dismissed in exercise of the power conferred by s 48 Judicial Review Act.
49. [49]
    It seems inevitable any costs ordered ought follow the event.  However, if the respondents wish to press for a costs order, Mr Toogood should be given an opportunity to be heard on the topic.  To that end I will incorporate a liberty to apply order, leaving the choice of pursuing a costs order to the respondents.
50. [50]
    My orders are:

1. 1.Mr Toogood’s application filed 8 December 2021 is dismissed.

1. 2.The respondents have liberty to apply to be heard as to costs on the giving of two clear business days’ notice in writing to Mr Toogood.