Land and Environment Court of New South Wales CITATION : Nettheim v Minister for Planning and Local Government & Anor [1988] NSWLEC 138 APPLICANT David Cosman Nettheim FIRST RESPONDENT Minister for Planning and Local Government PARTIES : SECOND RESPONDENT Bevelon Investments Pty. Limited FILE NUMBER(S) : 40139 of 1988 CORAM: Cripps J KEY ISSUES: :- LEGISLATION CITED: Heritage (Amendment) Act 1987. lee Smith v. East Elloe Rural District Council, [1956] ; Calvin v. Carr [1980] ; CASES CITED: Forbes v. N.S.W. Trotting Club Limited,; Limited v. Glasson & Anor., (1987) ; Sydney Municipal Council v. Campbell [1925] DATES OF HEARING: 14/03/88 DATE OF JUDGMENT: 09/21/1988 APPLICANT Ms. Kirillova LEGAL REPRESENTATIVES: RESPONDENT David Brigden Christine Hanson JUDGMENT: His Honour: The applicant seeks a declaration that the decision of the Minister for Planning and Local Government on 4 July 1988 to revoke Permanent Conservation Order No. 151 was invalid. The decision of the Minister on 4 July 1988 was the second decision to revoke PCO No. 151 and was taken during the hearing of the challenge to the first. On 16 August 1988, I published reasons for my conclusion that the decision of the Minister for Planning and Local Government on 12 April 1988 to revoke PCO No. 151 was invalid. On 30 August 1988, I made a declaration to that effect. The judgment and the order in matter No. 40086.88 have been tendered in these proceedings and the findings of fact are not challenged in these proceedings. In Nettheim v. The Minister and Bevelon (No. 1), I determined that the Minister's decision on 14 April 1988 to revoke PCO No.151 was vitiated by the circumstance that he failed to have sufficient regard to the report of Commissioner Simpson presented to him pursuant to s.54 of the Heritage Act and that he failed to have regard to identifiable and available material of relevance and significance to the subject matter of his decision which was within the knowledge of the Department. With respect to the last mentioned matter, I was of the opinion that the Minister was obliged to have regard to certain material in Exhibits 'AG' and 'AJ' concerning the future of the Capitol Theatre. However, I rejected the submissions that the Minister was required to take into account a number of other matters nominated by Mr. Nettheim and that the Minister had denied procedural fairness to the applicant or to Actors' Equity in the course of making his decision. Further, I was of the opinion that although the amendments to the Heritage Act in 1987 had the effect that the Minister no longer has the power to revoke a PCO unless he receives a recommendation from the Heritage Council so to do, the decision of the Minister in April 1988 was saved by the transitional provisions of the Heritage (Amendment) Act 1987. On the first day of the hearing of suit No. 40086/88, I was informed that the Minister, on that day, had purported to exercise his powers under s.55 of the Heritage Act to revoke PCO No. 151. The present proceedings concern the power of the Minister to make the decision he made on 4 April 1988 and, upon the assumption that he had the power to make such a decision, whether that power was lawfully exercised. The applicant submits that the decision of the Minister was vitiated because the Heritage Council had not recommended to revoke PCO No. 151. The same submission with respect to the first decision was rejected in Nettheim No. 1. On behalf of the applicant it is formally submitted that my decision with respect to the effect of the transitional provisions of the Heritage Act, 1977 is wrong. On behalf of the Minister and Bevelon Investments that it submitted my earlier decision to the effect that the Minister is now required as a precondition to the exercise of his powers to revoke permanent conservation orders to have a recommendation from the Heritage Council to that effect is also wrong. On behalf of the applicant, it is submitted that the decision on 4 July 1988 is invalid. It is submitted that at the time it was made, the decision of the Minister made on 14 April 1988 had not been declared void and was, therefore, a decision valid for all ostensible purposes. It is submitted that the Minister having purported to validly exercise his power under s.55 to revoke PCO No. 151 in April 1988 was then "functus officio" at the time of the making of his second decision. It is also submitted that the second decision is invalid in that the Minister acted "in bad faith and/or for an improper purpose and/or took into account irrelevant matters". The particulars given were that: "a) The second decision was made against the contingency that the first decision may be held to be invalid. b) Alternatively, the second decision was made not because the first decision was regarded as being invalid but because it had been brought into dispute by proceedings No. 40086/88. c) The second decision was made so as to create a fact which could be adverted to in proceedings No. 40086/88 as a reason why the Court, if it held the first decision to be invalid, ought to decline to grant relief declaring the first decision to be invalid, which relief would otherwise ensue." Finally, it is submitted that the decision made on 4 July 1988 is invalid because the Minister failed to consider adequately, or at all, matters of relevance "with respect to the status of the Capitol which were significant and credible and within the knowledge of the ... Department". In matter No: 40086/88, although I was informed that the Minister made a second decision on 4 July 1988, I declined to consider the propriety of the second decision until I had determined whether the first decision was valid. After I had published my reasons, it was agreed by all parties that a declaration should be made although the form of the declaration was subject to some dispute. In the present proceedings, the circumstances leading to the decision of the 4 July 1988 were investigated. Mr. Brigden, the Manager of the Legal Branch of the Department and the solicitor having the carriage of the proceedings on behalf of the Minister, deposed that on 1 July 1988 he met with the Minister, together with Mr. Peter Stavely, the Minister's Senior Adviser and previously an employee of the Department, and Ms. Hanson, a legal officer employed by the Department of Planning. Mr. Brigden prepared a document summarising the matters discussed at the meeting and the document has been tendered in evidence. The document sta tes: "1/7/87 (9.35 -12.25) Meeting with Minister and Peter Stavely, his Senior Policy Adviser with David Brigden and Christine Hanson, Manager Legal Branch and Legal Officer, respectively. (The meeting began at 9.35, Miss Hanson arrived at 9.45). David Brigden said that both the Applicants, the owner and the respective legal representatives had been afforded the opportunity of attending this meeting and making oral submissions to the Minister. This invitation had been declined by the Applicant although it was his request which had initiated the meeting. In view of the Applicant's refusal to attend the meeting the owner and his representatives also declined to attend. Mr. Brigden gave an initial briefing saying that the purpose of the meeting was to inform the Minister of all available material, including Affidavits filed in legal proceedings presently before the Court and Commissioner Simpson's Report, in respect of the Regent Theatre and the question of its conservation, to enable him to make a decision as to whether the Regent Theatre should be given protection under the Heritage Act. Mr. Brigden said that the Minister would need to consider the matter and exercise his powers with an open mind. Specifically that he was to regard this decision as one that was separate and discrete from the one made in April. The new decision was to be made not because the first decision was regarded as being invalid but because it had been brought into dispute by the present proceedings. Mr. Brigden gave Miss Hanson's observations to Counsel to the Minister to read. This constituted a chronology of the history of the action taken by the Heritage Council and the Government in respect to the preservation and conservation of the Regent Theatre. The Minister read the observations only so far as they related to the chronology of events preceding the litigation. Mr. Brigden then showed the Minister certain documents from the relevant departmental files beginning with the initial decision to place an Interim Conservation Order on the building, and including the recommendation of the Goodwin Inquiry to make a Permanent Conservation Order on the facade foyer staircase and vestibule of the Theatre. The report of Commissioner Simpson was then given to the Minister. He was directed to the summary of the Report which he read in its entirety. Miss Hanson then guided the Minister through the Report in some detail. Specifically she brought the Minister's attention to the summaries of the submissions made by each party to the Inquiry, including the submissions of Actors' Equity and the owner of the building. Miss Hanson then specifically referred the Minister's attention to the sections of the Report headed "Submissions re Need for a Lyric Theatre", "Comments and Findings", "Heads of Consideration", "Need for a Lyric Theatre in Sydney and Role of the Regent Theatre" and "Development Options for Regent Theatre Site". Finally the Minister was directed to the recommendations of the Report which he read. Mr. Brigden then guided the Minister through each of the Affidavits filed in the present proceedings, specifically directing the Minister to the matters canvassed in the Affidavits which could be categorised as disclosing changes that have occurred since the Simpson Inquiry was held. The Minister was left with all the departmental files relating to the Regent Theatre together with copies of the Annexures to the Applicant's Notice to Answer Interrogatories, the Verified Answers to these Interrogatories and all the Affidavits filed in the present proceedings. The Minister also retained a copy of Commissioner Simpson's Report. Mr. Brigden then again advised the Minister that he should apply his mind afresh to the materials before him in order to make his new decision in respect of the Regent Theatre. Mr. Brigden also advised the Minister that the Heritage Act gave him the responsibility of determining his own decision. The Minister said that he would consider the materials over the week-end and would make his decision in due course. The meeting concluded at 12.25 p.m.. This and the preceding page are Annexure "A" referred to in the Affidavit of D.G. Brigden affirmed on 5 September 1988 before me. (Signed) J. Scholtz J.P." Prior to the meeting of 30 June 1988, Mr. Brigden wrote to Mr. Nettheim's solicitor, Ms. Kirillova, telling her that he had arranged for a meeting with the Minister on 1 July 1988 at 11.00 a.m. at the Minister's office and to give her the opportunity of placing before the Minister whatever information Mr. Nettheim or his advisers wished and to make such submissions as might be appropriate. Ms. Kirillova was informed that the Minister would consider what was said at the meeting, together with other material "presently available to the Department of Planning, including the affidavits filed on behalf of your client in the present litigation", prior to making his decision whether to protect the Regent Theatre. Mr. Brigden stated in the letter that the decision was to be made "having regard to the doubt which presently exists as to the validity of the Minister's previous decision to revoke the permanent conservation order and then to revoke the s.130 order in respect of the Regent Theatre, the Minister now propose s to consider the issues raised by those decisions in the light of the material presently available to those issues, including the report of the Inquiry under the Heritage Act and material presently before the Land and Environment Court in proceedings the hearing of which is due to commence on 4 July 1988". Ms. Kirillova was then told that if after consideration of the material referred to above, the Minister was of the opinion that the Regent Theatre should not be the subject of a permanent conservation order, he would make a further decision revoking the original PCO "against the contingency that his earlier decision may be held to be invalid". He stated that if, on the other hand, the Minister formed the view that the Regent Theatre should be protected, he "will make an appropriate decision in accordance with that view". Ms. Kirillova declined to attend the meeting claiming that Mr. Nettheim was not able "to prepare adequately submissions directed to the merits on the very short notice given ..." and asserted that it was not open to the Minister to make another decision. Evidence has also been given by Patricia Forsyth that on 30 June 1988 she attended a meeting with the Minister, Mr. Collins, the Minister for the Arts, Mrs. Kibble, Director of Planning, Mr. Oakes, Commissioner for the Sydney City Council, together with representatives of the Ministry for the Arts, the Labor Council, The Theatre User Group, the Department of Planning and the National Trust. At that meeting she said a number of matters were discussed including the up-to-date material concerning the Capitol Theatre. With respect to the purported exercise of the Minister's power, it is submitted that the Minister failed to approach the second decision with "an impartial and open mind". In particular, it was asserted that the Minister "knew what result he wanted to achieve and then set about going through the motions of decision making, trying to overcome the problems identified by the applicant in the first decision". It is submitted that the meeting on 1 July was convened with undue haste as evidenced, inter alia, by the circumstance that the interested parties (other than Mr. Nettheim on behalf of Actors' Equity and Bevelon) who had been represented in the Inquiry, were not given the opportunity to attend the meeting and by the failure of the Minister to extend the period of time within which Actors' Equity could present submissions. It was submitted that the failure of the Minister or his advisers to request a further submission from the Heritage Council was consistent only with inference that he wished to rush through the decision making process. The Minister was criticised for not waiting for the Court "to clarify the legal scope of and manner in which his powers under s.55 should be exercised" before embarking on a reconsideration of the matter. In particular, it was submitted that in making his decision, the Minister proceeded upon the erroneous supposition that the first decision he made was valid. In addition, it was submitted that I should also have regard to the fact that the briefing session was attended by two solicitors and a policy adviser who had joined the Minister's staff in May and who had no real "experience or knowledge in heritage matters generally or the Regent in particular". Finally, it was submitted that I ought have regard to the "concerted attempt by the Minister during the first proceedings to adduce evidence on the fact of the second decision". In Nettheim No. 1, I expressed the opinion that the making of the decision on 4 July 1988 did little to promote public confidence in good administration. Nothing that has emerged in these proceedings has persuaded me to change that opinion or my reasons for arriving at it. It would have been open to the Minister to revoke his earlier decision to revoke PCO No. 151 and to make a new decision to revoke PCO No. 151 (see s.43(2) and s.48 of the Interpretation Act 1987) or he could have waited the outcome of the legal challenge before taking any further steps. If, as was proposed, the revocation decision on 4 July 1988 was gazetted, there would have been two revocations, one in April 1988 and one in July 1988, both apparently valid. However, as I am reminded, it is my function in these proceedings to determine whether it was open, in law, for the Minister to make the decision on 4 July and if it was, whether the decision was vitiated by bad faith, improper purpose and/or the taking into account of irrelevant matte rs. On behalf of the applicant, it is submitted that the decision of the 14 April 1988 remained valid and had legal effect and consequences until it was declared invalid on 30 August 1988. It is submitted that to invalidate retrospectively the decision of 14 April 1988 would be to rewrite history. It is said that between 15 April 1988 and 30 August 1988 the Minister's decision as published in the Gazette had legal effect and legal consequences. It is submitted that, by way of illustration, during that period Bevelon would have lost the benefit of a rebate on rates since it no longer owned an item of environmental heritage and that Bevelon in fact commenced demolition work before being restrained by interlocutory injunction. It is submitted that it would be a scandalous state of affairs that Bevelon could be liable to prosecution for an offence under the Heritage Act for activities undertaken by it during the end of April 1988. It would seem to me, however, that although the invalid action by the Minister might have had some legal consequences, the problem in the present case is identifying the legal consequence. One legal consequence might be that a person could not be convicted of an offence acting upon the bona fide assumption that the order was validly made. Certainly such a person would have the defence of honest and reasonable mistake. Another might be that the Council could not recover outstanding rates had they been claimed. The present matter for determination is whether a legal consequence was that the Minister could not make another decision while the first decision was under challenge. I think it is unnecessary for me to refer to all the decisions mentioned in argument and to the many learned text writers cited. (See Smith v. East Elloe Rural District Council, [1956] AC 736, Calvin v. Carr [1980] AC 574, Forbes v. N.S.W. Trotting Club Limited, 143 CLR 242. I am of the opinion, however, that the observations of the Court of Appeal in Parkes Rural Distributions Pty. Limited v. Glasson & Anor., (1987) 7 NSWLR 332 at 337-8, are apposite to this issue. In Parkes, the Court of Appeal considered the legal consequence of the successive existence of two certificates issued under s.8(3) of the Petroleum Products Subsidy Act, 1965 (N.S.W.). The first was issued in February certifying an amount of $152,317.70 to be repayable by the plaintiff to the State of New South Wales. The second, 13 November 1984, certified an amount of $134,065.27. The first certificate was void because the plaintiff was not given the opportunity to be heard. It was submitted that at the time the second certificate was issued, the first was still valid and operative and that because it was not possible in law to have two inconsistent certificates, the second certificate was a nullity. In that case the Trial Judge had found that the first certificate had been withdrawn and replaced by the second and it was submitted in the Court of Appeal that the authorised officers had no power to do this. Glass JA said: "The power to issue certificates granted by s.8(3) of the Act is elaborated by the Interpretation Act 1897, s.32, [now 1987 s.48] which permits its exercise from time to time. It has been held that a power exercisable from time to time may be so exercised as to add to, subtract from or reverse the result of the previous exercise: Lawrie v. Lees, (1881) 7 AC 19 at 29. In other words, the donee of such a power is never functus officio. Accordingly, the existence of the first certificate does not render void a second certificate issued in lieu of it. There is in my opinion a further reason why the validity of the second certificate cannot be impugned. According to my understanding of what was said by Aitken J in Forbes [a reference to Forbes v. N.S.W. Trotting Club, (1979) 143 CLR 242] and of the similar observation of Lord Wilberforce in Calvin v. Carr, [1980] AC 574 at 590 the validity of the act under challenge endures only until the challenge is upheld. Thereafter, it is to be treated as void ab initio. Acco rdingly, once his Honour had decided that the first certificate was void and proceeded to consider the challenge to the second, there was then no valid certificate extant with which it could be inconsistent". It is true in Parkes there was a finding of fact that the first certificate had been withdrawn and replaced by the second. Nonetheless I do not read the observations of Glass JA that the "donee of a power is never functus officio" as a conclusion limited to the facts of that case. In reaching his conclusion, Glass JA followed Lawrie v. Lees, (1881) 7 Appeal Cas 19 at 29. In Lawrie at 29 Lord Penzance made the following observation: " ... the words 'from time to time' are words which are constantly introduced where it is intended to protect a person who is empowered to act from the risk of having completely discharged his duty when he has once acted, and therefore not being able to act again in the same direction". (Underlining mine) For these reasons, I have come to the conclusion that it was open, as a matter of law, for the Minister to make the decision on 4 July 1988. Conformably with the findings I made on 16 August 1988, I am of the opinion that if the Minister considered the material placed before him by his advisers on 1 July 1988 and was not actuated by bad faith or improper purpose, it was open to him to revoke PCO No. 151. Not only did the Minister have before him the material which Mr. Nettheim had unsuccessfully argued that he should have had before him in April, he also had material before him which Mr. Nettheim successfully argued was not before him in April. It has been submitted on behalf of Mr. Nettheim that because the Minister believed his first decision to be valid, it is difficult to see how he could have approached the making of the second decision otherwise than by assuming he should make the same decision he had made earlier. I think it is reasonable to infer that the Minister believed his first decision was valid but could not ignore the possibility that it might be determined to be invalid by the Court. But the Minister was advised not only that he h ad the power to revoke PCO No. 151 but that he had the responsibility of making up his own mind about the matter. He took all the material home with him to consider over the weekend. In these circumstances, to find that the Minister was acting in bad faith or was motivated by improper purpose would be a large step indeed. It must be borne in mind, I think, that I am not required to pronounce upon the motives, hopes and expectations of the Minister's advisers. I am prepared to assume that the legal advisers were hoping that the Minister would do that which they had previously thought was properly done in April 1988. I am also prepared to assume, without making a finding to this effect, that the Minister's advisers hoped to frustrate the legal challenge or, as Mr. Meagher has put it, "repel" the Court. It must be remembered that the April decision was not challenged on the basis that the Minister was acting in bad faith or motivated by improper purpose. It was said that the decision was invalid because Mr. Nett heim and Actors' Equity had not been given the opportunity to be heard and because the Minister failed to take into account material he was bound to consider. This is not a case like, for example, Sydney Municipal Council v. Campbell [1925] AC 338, where the Council's purpose in passing a resolution to acquire land was really no more than giving a "new form" to an earlier resolution void for improper purpose. The first question for determination in the present case is whether it has been demonstrated there was an improper purpose operating on the Minister's mind and, if there was, whether the power would have been exercised by the Minister without having had regard to that illegitimate purpose. It is not difficult to understand the suspicion of Mr. Nettheim and Actors' Equity that the Minister was endeavouring, on advice, to give an appearance of rectitude to an action which lacked it. But this issue is to be determined upon the evidence before the Court and not upon the applicant's suspicion. On the material before me, I am not prepared to come to any conclusion other than that the real purpose, or at least the dominant purpose of the Minister, was to consider the matter afresh taking into account those matters which Mr. Nettheim and Actors' Equity said he ought to have taken into account. I have had regard to Mr. Meagher's submission that I should infer that the Minister could not have approached the matter with an open mind because he believed his earlier decision was, more probably than not, valid. But I do not think the Minister's belief in this regard necessarily precluded a proper decision being made. Although expressed in terms of purpose, it is, I think, the applicant's case that the process was a sham the only purpose of the Minister being to frustrate the legal proceedings in the Court without applying his mind to the real question for determination, namely, whether PCO No. 151 should be revoked. I do not think the applicant's case has been made out. For the abovementioned reasons, I am of the opinion that the application should be dismissed. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.